The Gods' Lookout
The Gods' Lookout
By Albert Jay Nock, February 1934, republished in Free Speech and Plain Language, 1938
NOT long ago I glanced at a book called Natural Law in the Spiritual World, which had a great vogue in its time, half a century ago. Having never read it, I had a moment's curiosity to find out why it was so popular. I did not get far with it, because I saw at once that it dealt mostly with "great matters which are too high for me," and, like the Psalmist, I was diffident about meddling with them. The title, however, served to precipitate a notion which had been vaguely in my mind for some time, that, whatever may be the case in the spiritual world, certain laws and principles have a wider application in the material world than they are commonly supposed to have. I had been thinking in particular of three laws that are officially recognized in economics, but I believe nowhere else, and it seemed to me that they operate about as regularly and powerfully outside this restricted sphere as they do inside it. The first of these is called the law of diminishing returns, the second is called Gresham's law, and the third one is so seldom cited that it has no pocket-title. I shall say a word about the first two now, and consider the third later.
The law of diminishing returns is fundamental to industry. It formulates the fact, which strikes one as curiously unnatural, that, when a business has reached a certain point of development, returns begin to decrease, and they keep on decreasing as further development proceeds. Thus I suppose, according to the logic of the deacon's one-hoss shay, it is theoretically possible for a business to be so big that it would not bring in any returns at all. I know nothing of such matters, having never been in business, but I am told on good authority that the law of diminishing returns is much more effective than the antitrust laws for protecting society against the oppression of industrial monopoly. The idea is that when a business becomes overgrown and returns decrease, small independent concerns can begin to compete profitably, eating in around the edges of the big concern, and meanwhile reaping the fruit of the big concern's labours in developing the market.
Gresham's law has to do with the nature of currency, and the common formula for it is that "bad money drives out good." That is to say, it is always the worst form of currency in circulation that fixes the value of all the others, and causes them presently to disappear. This law bears the name of Sir Thomas Gresham, an eminent English financier of the sixteenth century, who made observations on the law, but was not the first to formulate it. Gresham's law usually comes into play whenever a government undertakes to settle a bill for its misfeasances by the larcenous expedient of "managing" its currency; hence of late years this law has been very busy with the currency of many countries. In Germany, for example, shortly after the war, the flood of paper money sent all metallic money out of circulation in a hurry, because it was worth more as old metal than as currency. For the same reason, whenever a paper or silver token is no longer the same thing as a gold token, gold tokens disappear at once; and then, if a government resorts to highwaymanry and forcibly robs its subjects of whatever gold may be in their possession, as our government lately did, it can do quite nicely by itself.
The Belgian Government raided its currency after the war, cutting down the franc from twenty cents to three cents and less, and the mint began putting out an odd- looking sort of one-franc piece that seemed to be made of tin. A few days after this, a man gave me a pre-war silver franc as a curiosity; he had got it somewhere in change. I have never seen another. As far as I know, silver francs have not been demonetized or confiscated, certainly they were not at that time,
The term "natural law" is a pocket form of expression, handy enough, but inexact and easily lending itself to improper assumptions. As a matter of fact, what we call a natural law is nothing more than a registration of experience. If human experience of some natural phenomenon has been uniform, it sets up a correspondingly strong expectation that subsequent experience will be likewise uniform, and we call the formula for that experience a natural law, even though the term be a misnomer, strictly speaking, for we actually know of no "law" anywhere in the universe that guarantees the fulfillment of our expectation. It is always with this understanding
Mr. James Truslow Adams and others have commented on the social incidence of the law of diminishing returns, so we need give only two or three illustrations showing how this law works in the realm of aesthetics and culture. There is a whimsical saying current among music-lovers that the way really to enjoy the music of a string quartette is to have the performers group themselves around your chair. This is no great exaggeration. Let us suppose that a string quartette plays the Kaiserquartett to an audience of five qualified amateurs in a music-room of ordinary size. The five get a distinct aesthetic experience in a high degree, probably the highest of which they are capable. It is the nearest thing to a sense of actual participation. Logically, if five get this, forty should get it in the same degree, so next evening they ask in as many amateurs as the room will hold comfortably, say thirty-five, the strings play the Kaiserquartett again, but the thirty-five do not have the same experience to the same degree, nor do the original five have it. Next evening the strings play the Kaiserquartett to three hundred qualified amateurs in a public hall, and while all hands get something very interesting, pleasant, delightful, nobody gets just that. It is simply not there to be had; it is gone.
We all remember how our tourists used to plume themselves on the nice little places they had found in Europe, "where nobody ever goes," and we may remember, too, that we were sometimes tempted to put this kind of talk down to snobbishness. Far be it from me to suggest that snobbishness is not an inveterate trait in our nation, but I think that in this instance our tourists are entitled to a clean bill. I think instinct warned them that a great influx of qualified seekers after an aesthetic experience similar to theirs would carry their own experience over the margin of diminishing returns; and their instinct was sound, for that is precisely what it would do.
I spent a month last summer on an island in the Mediterranean, a small one, difficult of access, and almost uninhabited. It has great natural beauty, but no doubt other islands have as much. Its peculiar charm is in the sentimental associations created by an unbroken run of rich and fascinating history which reaches far back beyond the Christian era. Hence, from the time of Nostradamus and Rabelais down to the present, men of letters have sung this island's praises, poets and romancers have found in it an abundant source of inspiration. The few qualified persons who go there have an experience so rewarding that I know of none of the same kind to compare with it. Suppose now that other persons, persons well furnished with the rather special qualifications necessary for the purpose
We may take one more illustration, this time recalling the old and sound definition of a university as a student sitting on one end of a log and Mark Hopkins on the other. One may assume that the student was a qualified person, for otherwise Mark Hopkins would not be sitting there; he would have got up and gone home. That student got a specific return, peculiar to just those circumstances. Suppose now that twenty qualified persons notice this, think it is a good thing, go in for it; well, they too get pretty much the same thing in the same degree, but probably not quite. Hopkins is still there, the log is still there, but the margin of diminishing returns is close at hand. Then a hundred come in, three hundred, five hundred, only to discover that the margin was crossed somewhere far back in the beginning of the stampede, and that nobody is getting anything like what the original student got, or even the next twenty.
In the foregoing illustrations I have been careful to premise that all the persons cited are qualified. The listeners to the concert, the visitors to the island, and Mark Hopkins's students, are all supposed to be qualified in intellect, character, temperament, and a certain degree of preparatory experience, to take in and assimilate whatever benefit the several occasions may offer. I do this to show what happens when the law of diminishing returns works "straight" and without any complications; in other words, to show what happens on the theory so commonly held, that if a few qualified persons get a certain benefit, any number of qualified persons may get the same benefit under the same circumstances.
If, now, we substitute the theory which is much more widely held, that if a few qualified persons get this benefit, anybody, qualified or unqualified, may get it, we may perceive at once, I think, that the margin of diminishing returns would move considerably forward; also that the more unqualified persons tend to predominate, the further forward it would move. Going back to our illustrations, the larger the proportion of unqualified persons among the concert-audience, the visitors, and the students, the sooner the law of diminishing returns would set in. This is a matter of such common experience that it needs no comment, so we will pass on to consider the appearance of a second "natural law" in the premises.
Suppose the concert-audience of three hundred or more were made up largely of casual and miscellaneous persons; the natural thing for the musicians to do would be to change their programme. They would not play the Kaiserquartett; they would play something that they thought would hit nearer to a common denominator of their audience's capacities. In fact, it occurs to me at the moment
The current repertory of the radio shows this, quite as the current repertory of the cinema shows the same law at work in the field of drama. The radio enables Mr. Damrosch to pick up eligible persons, one by one, all over the country, and offer them advantages which they would otherwise be unlikely to get. The gramophone performs a like service, and it is a very great one. But the stated repertories of both instruments are evidence of the continual tendency of an enormous volume of indifferent music to press upon Mr. Damrosch and crowd him out; they, like the repertory of the cinema, are an impressive study in the operation of Gresham's law. It is the worst music in circulation, and the worst motion-pictures, that fix the value of all the others, and continually tend to drive them out.
By way of example in another field, two or three recent experiences have made me wish that some competent person like my friend Mr. Duffus would undertake a study of literacy in the light of Gresham's law and the law of diminishing returns. Not long ago I looked over a library said to contain a copy of every book published in America down to the year 1800. It bore witness that in those days reading was a fairly serious business; I could find nothing resembling what we should call popular literature on the shelves. The inference was that literacy was not general, and that those who read did so for other purposes than mere pastime, purposes that were pretty strictly non-sensational; and there is every collateral evidence that such was the case.
Mr. Jefferson laid great stress on literacy as an indispensable asset to good citizenship and sound patriotism. He was all for having everybody become literate, and those who have examined his own library (it is preserved intact in the Library of Congress) may easily see why. Mutatis mutandis, if everybody read the kind of thing he did, and as he did, he would have been right. But in his laudable wish to make the benefits of literacy accessible to all, Mr. Jefferson did not see that he had the operation of two natural laws dead against him. He seems to have jumped to the conclusion that, because certain qualified persons got a definite benefit out of literacy, anybody could get the same benefit on the same terms; and here he collided with the law of diminishing returns. He seems also to have imagined that a general indiscriminate literacy would be compatible with keeping up something like the proportion that he saw existing between good literature and bad; and here the great and good old man ran hard aground on Gresham's law.
I spent some time last year in Portugal, where the status of literacy and the conditions of the book-market are about what they were in Mr. Jefferson's America. One saw very little "popular literature" on sale, but an astonishingly large assortment of the better kind. I made my observations at the right moment, apparently, because, like all good modern republicans, the Portuguese have lately become infected with Mr. Jefferson's ideas about literacy, and are trying to have everybody taught to read and write; and it interested me to see that they are setting about this quite in our own incurious, hand-over-head fashion, without betraying the faintest notion that anything like a natural law may be a factor in the situation.
Doubtless what has happened elsewhere will happen there. In the first place, the Portuguese are likely to discover that, while no illiterate person can read, it is a mere non distributio medii to conclude that any literate person can read. The fact is that relatively few literate persons can read; the proportion appears to be quite small. I do not mean to say that the majority are unable to read intelligently; I mean that they are unable to read at all
To cite a rather comical illustration of this truth, a clerical friend lately told me of the troubles that a candidate for confirmation was having with the Nicene Creed. This candidate was a man of more than middle age, completely literate, and of considerable prominence and wealth. The article that he balked at, curiously, was non-theological and non-metaphysical; it was the one which sets forth that the Saviour "was crucified also for us under Pontius Pilate." He wanted to know why they crucified Pontius Pilate. He knew who Pilate was, and what his role was in the great drama, but he had never before heard anything about Pilate's being crucified, and he wondered why the circumstance should be brought in here as one of those things which a Christian should know and believe to his soul's health.
A person of any literary experience, even the slightest, sees such instances time and again, not usually so bizarre perhaps, but essentially quite the same
As for the operation of Gresham's law, one need say little; it is so easily discerned that a glance at the nearest news-stand will show it well enough. The average literate person being devoid of reflective power but capable of sensation, his literacy creates a demand for a large volume of printed matter addressed to sensation; and this form of literature, being the worst in circulation, fixes the value of all the rest and tends to drive it out. In this country, for example, it has been interesting to see the reluctant and gradual submission of some of our few "serious" publications to this inevitable fixing of value. They have brought their aim continually closer to the aim of journalism, addressing themselves more and more to sensation, less and less to reflection, until now their policy favours almost exclusively the kind of thing one would naturally look for in an enterprising Sunday newspaper. Only the other day I came across a market- letter put out by a firm of literary agents, and I observed with interest that "the serious essay, travel, foreign-affairs type of article is unlikely to find a good market, unless by a well-known name."
I had occasion lately to look up something that one of our "quality" magazines published in 1874, and as I went through the two bound volumes I noticed the relative space they gave to material addressed to the power of reflective thought. For curiosity I made a comparison with last year's issues of the same magazine; and I can not suggest a more convincing exercise for any person who doubts the validity of Gresham's law in the premises, nor can I suggest a more substantial basis for generalization.
Gresham's law has, in fact, done far more than revolutionize publishing; it has set up a brand-new business. In the face of this fact, which seems none too well understood, we see publishers and authors occasionally showing something of the splendid intrepidity that one admires in the leader of a forlorn hope, and one thinks of them as perhaps the most public-spirited of all created beings. A little while ago my friend Mr. van Loon, for example, who is a very learned man, brought out a superb book, quite the kind of book that he himself would be glad to read; one need say no more for it than that. He and his publisher must both have known that they could not turn a penny by it; if it paid for itself it would be lucky. The full force of Gresham's law was pressing them instead to put their time and money into another of Mr. Van Loon's ingenious and attractive vulgarizations of history, which would be "sure fire" with a large literate public; yet they went on
What I have been driving at in all this is the suggestion that if we must reexamine our social theories we should do so with an eye to natural law. Everyone seems a little uneasy about these theories at the moment, and many of our leading publicists say that they must be overhauled; well, if that be so, the practical thing would be to keep on the lee side of natural law while we do it. We have been a little careless about this hitherto, and the consequences are suggestive. Our idea of mass-education, for example, does vast credit to our intentions; like perpetual motion, the thing would be fine if it would work, but the mischief of it is to keep it from colliding with natural law. As results stand now, a graduating class of two, three or five hundred persons is practically nothing but a tableau-display of what the law of diminishing returns can do when it tries. Again, the promotion of mass-literacy is a noble experiment, but apparently there is no way to accommodate our idea of it to the insidious action of Gresham's law. With regard to these and all other aspects of our equalitarian social theory, my only aim is the humble one of suggesting that we bear in mind the disregard that nature has for unintelligent good intentions, and the vixenish severity with which she treats them.
Finally, since various aspects of political theory are much to the fore just now, I suggest that we follow the same procedure with regard to them. Our ideas about the function of government may be very praiseworthy, very creditable, but surely the first thing is to find out whether natural law is with them or against them; and it is in this connexion that I cite the third law which I mentioned at the outset. This law is fundamental to economics, though for some reason our professional economists seldom say much about it; its formula is, Man tends always to satisfy his needs and desires with the least possible exertion. Not, it must be understood, that he always does so satisfy them, for other considerations
A candid examination will show, I think, that this law is also fundamental to any serious study of politics. So long as the State stands as an impersonal mechanism which can confer an economic advantage at the mere touch of a button, men will seek by all sorts of ways to get at the button, because law-made property is acquired with less exertion than labour-made property. It is easier to push the button and get some form of State-created monopoly like a land-title, a tariff, concession or franchise, and pocket the proceeds, than it is to accumulate the same amount by work. Thus a political theory that admits any positive intervention by the State upon the individual has always this natural law to reckon with.
At the time our government was set up, a century and a half ago, some political thinkers, notably Franklin, had perceived the incidence of this law. Their idea was that it should be no function of the State to intervene upon society's economic life in a positive way, but only negatively as occasion required, to punish fraud and to safeguard the general régime of contract.2 Aside from this, the State's only function should be that of safeguarding the lives and liberties of its citizens.
Contemporary British liberalism had the same idea; it advocated a rigid policy of State abstention. Liberalism's career was remarkable in presenting a most instructive object-lesson to those who study it in the light of natural law. Its programme missed one point, admitted one exception; and the consequences of this imperfection forced liberalism in the end to turn squarely around on its basic principle, and become godfather to the most elaborate series of positive interventions ever conceived in England.
This imperfect policy of non-intervention, or laissez-faire, led straight to a most hideous and dreadful economic exploitation; starvation wages, slum-dwelling, killing hours, pauperism, coffin-ships, child-lab our
But the State had intervened; that was the whole trouble. The State had established one monopoly,
Franklin saw this clearly; he used Turgôt's language almost word for word to show that the "labour-problem," qua labour-problem, really does not exist
Manufactures are founded in poverty. It is the number of poor without land in a country, and who must work for others at low wages or starve, that enables undertakers [i.e., enterprisers] to carry on a manufacture....
But no man who can have a piece of land of his own, sufficient by his labour to subsist his family in plenty, is poor enough to be a manufacturer and work for a master.
But liberalism did not see this, never saw it; and the consequence was that in the end it was forced by political necessity to sponsor an ever-lengthening, ever-widening programme of regulations, supervisions, exemptions, subsidies, pensions
When the State has granted one privilege, its character as a purveyor of privilege is permanently established, and natural law does not permit it to stop with the creation of one privilege, but forces it to go on creating others. Once admit a single positive intervention "to help business," as our euphemism goes, and one class or group after another will accumulate political power in order to command further interventions; and these interventions will persist in force and frequency until they culminate in a policy of pure Statism
Such is the grim testimony borne by the history of six civilizations, now vanished, to the validity of the law that man tends always to satisfy his needs and desires with the least possible exertion. We ought to be quite clear about this, as a matter of understanding the course of our present governmental policy. Some of us incline to regard the New Deal as something out of the run of our national history and unrelated to it, whereas it is exactly what the run of our history must inevitably have led up to.
One need only shift a switch in the New York Central's yard some three inches to determine whether a train shall go to Boston or to Chicago. We shifted the switch a hundred and fifty years ago, and set the national train going toward the Chicago of hundred-per-cent Statism, with our old friend natural law furnishing abundant steam. The New Deal means merely that we are now somewhere near South Bend, Indiana, and going strong; and if anyone knows how to reverse that train and head it toward Boston without an awful catastrophe, he is just the man that a good many of us would like to see.
The American State at the outset took over the British principle of giving landlords a monopoly of economic rent. That shifted the switch; it established the State's character as a purveyor of privilege. Then financial speculators sought a privilege, and Hamilton, with his "corrupt squadron in Congress," as Mr. Jefferson called them, arranged it. Then bankers, then industrialists; Hamilton also arranged that. Then, as the century went on, innumerable industrial subgroups, and subclasses of special interest, were heard from, and were accommodated. Then farmers, artisans, ex-soldiers, promoters of public utilities, began to accumulate political power with a view to privilege. Now, since the advent of universal suffrage, we are seeing the curious spectacle of the "unemployed" automatically transformed into the strongest kind of pressure-group; their numerical strength and consequent voting-power compelled Mr. Roosevelt to embrace the extraordinary doctrine that the State owes its citizens a living
Moreover, as we saw in the case of Mr. Bottles and Mr. Plugson of Undershot, when the State confers a privilege, natural law impels the beneficiary to work it for all it is worth; and therefore the State must at once initiate a whole series of positive interventions to safeguard, control and regulate that privilege. A steady grist of "social" legislation must be ground; bureaus, boards and commissions must be set up, each with its elaborate mechanism; and thus bureaucracy comes into being. As the distribution of privilege goes on, the spawning of these regulative and supervisory agencies also goes on; and the result is a continuous enhancement of State power and a progressive weakening of social power, until, as in Rome after the Antonines, social power is quite extinguished
In a sense, no doubt, it seems officious to write a paper that squints toward a vindication of natural law, because natural law is quite competent and handy at vindicating itself; it needs no help, and has no notion of being any man's debtor. Tiberius Cæsar said in his strong commonsense way that "offenses against the gods are the gods' lookout," and perhaps it would be as well, certainly less thankless, if one should leave in their hands such little matters as those I have been discussing. Indeed, one must do that finally, for one can not hope that criticism based on nothing more pretentious than the plain natural truth of things will be much regarded; so probably as much or as little would be gained by doing it in the first instance.
Yet, in another view, it may be worth while to point out to simple-minded persons like myself, who are perhaps a little confused by the outpourings of publicists and the din of eager innovators, that natural law still exists and is still a respectable force. I have read many words about social reconstruction, industrial reconstruction, political reconstruction; in fact, as I write this paper I am inspired by the latest efforts in the great new enterprise of "economic planning." All these, in their innocent disregard of natural law, remind me of a piece of music I once saw, written for a cornetist. The music was good, but the composer had not put in any rests for the cornetist to take breath; well, as soon as one saw that, one knew that further examination of the piece was pointless. So, in what the journalists call "these hectic days," a suggestion that natural law is still at work, and that there is really not much that one can do about it, may be somewhat of a time-saver and trouble-saver to minds of the simpler sort, like my own; and to such, and such only, I offer it.
New York, February, 1934
1 In the interest of accuracy, I submitted these statements to a prominent educator who says that his experience fully bears them out. He carried on experiments over a dozen years with college freshmen
Hardly anyone could do it. He made the interesting remark that the reflective faculty is more easily stirred by speech than by print, because the communication of ideas by hearing is an older racial practice; their communication by sight is something comparatively new, to which the race's capacities are not as yet well adjusted. Therefore, he said, the indiscriminate spread of literacy puts into people's hands an instrument which very few can use, but which everyone supposes himself fully able to use; and this, obviously, is mischievous.
2 Franklin wrote, "Perhaps in general it would be better if government meddled no farther with trade than to protect it and let it take its course. Most of the statutes or acts, edicts, arrets and placarts of parliaments, princes and States, for regulating, directing or restraining of trade, have, we think, been either political blunders or jobs obtained by artful men for private advantage, under pretense of public good." Works, Vol. II, p. 401.
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