Nature of Society and other Essays

By Leon Maclaren

1936, aided by his father Andrew MacLaren, The Auhtor began an economic study group based on the Socratic method of inquiry that became The School of Economic Science

• Language: English
• Publisher: The School of Philosophy and Economic Science.
• Release date: Sep 16, 2022
• ISBN: 9781838058357

Book preview

PART ONE

NATURE OF SOCIETY

CHAPTER I

The Challenge of our Time

TIME was when all men believed that the earth was flat. It would be difficult now to trace all the errors into which this assumption led the thinking of those days, or to ascertain how many practical comforts and advantages which we now enjoy would have been missed had not this conceit been exploded. The first serious challenge to this theory raised a storm of abuse which came not merely from the vulgar and superstitious but from the leaders of science and religion. It was a grave shock to human vanity to be told that the natural universe did not revolve round the planet which man occupied, that, on the contrary, the earth was one of many satellites of a greater sun and that, consequently, there was no solid reason to believe that man was the king of creation.

It is usually some quiet assumption taken for granted by men of every degree that blocks the road to the great advancements of which mankind is capable. These false beliefs, if they persist too long, are very dangerous to human progress. Except for those involuntary and instinctive actions of which most people are ashamed, men’s actions are directed by their minds. The beliefs which they hold will dominate their activity and, if these beliefs are false, they must lead to bad practices. History is full of the astonishing cruelties which have been bred of superstition. When the superstition went these particular cruelties ceased. Such is the power of human thought for good and for evil.

This civilization has scored its greatest success in the material sciences. Its glory is the willing application of these teachings to daily life. In them it has found the way of truth, but in the study of the forces governing relations between men, it has shown little aptitude.

So tragic is this failure that it turns the masterpieces of the material sciences into engines of destruction which threaten to annihilate the civilization which produced them.

This is the challenge of our time : either we must find the way of truth in the government of our relations one with another, or we must succumb to the results of our own ignorance.

An idea, which prevails these days is that the only choice before society is either to continue to suffer the evils of unemployment, poverty and all that follows upon them ; to see the fruits of industry denied to the many and secured to the few ; or to change over to a condition where organized government will take control of all the major industries of the world, and take charge of the life of the peoples down to the most domestic details. Except amongst those who are ardent advocates of one or other condition, there seems to be a feeling of revulsion against both, with the result that people weigh the merits of the two systems by judging which is the lesser evil. The notion that the state should care for the birth of the baby, educate the child, employ the man, care for the aged and bury the dead, seems the contradiction of all those conceptions of individual freedom which have become so dear to the English speaking races. On the other hand it is being more widely recognized that war and disaster are bred of those injustices which allow babies to be born amidst squalor and disease, which deny that education without which the child cannot attain to full development, which condemn the willing man to unemployment and allow the old to struggle to the end of life in poverty.

It would be surprising that men should see no way to solve the economic problems which harass them, save by abandoning the scope and freedom of action so hardly won in recent times, were not this view the logical deduction from a deeper belief. This fundamental notion, seldom expressed but almost universally held, is that unemployment, poverty and wars are of the very nature of things, and are bred of Nature red in tooth and claw.

If this idea of the natural order in human relations be right, then the conclusion drawn is inevitable. If natural forces are such that the relations between men are by nature chaotic and cruel, then it behoves man, as best he can, to restrict the play of these forces, to harness and organize society, so as to protect himself from the frightful consequences of nature’s way.

On examination, however, the fundamental assumption that the law of nature is strife and conflict seems open to serious doubt and the conclusion drawn from it is even more startling.

The material sciences, in which such wonderful progress has been made, have taught us that there is nothing chaotic in the operation of natural forces in their fields of study. On the contrary they speak of forces at play in the universe which are far beyond man’s control, which always operate in the same way and upon whose consistent action man is entirely dependent. Man’s life would come to an end were it not for the order of the seasons, the perpetual succession of spring, summer, autumn and winter. It is established that this is the result of the rotation of the earth round the sun. In turn this rotation is due to the operation of natural forces which, it is believed, operate in solar systems other than our own and which maintain the ordered harmony of the constellations.

One of these forces, the operation of which is known as the law of gravity, holds us to the surface of the earth and enables us to move right round the circle of the globe. How utterly are men dependent upon this natural law. What a magnificent pattern it reveals. Many and various are the natural forces which material sciences have discovered. Each new discovery reinforces the truth that there is a perfect pattern in the natural world. Each new discovery explains away an apparent inconsistency in observed facts.

The material sciences have taught yet another powerful lesson, which has led to great achievements. Men have long wanted to fly, but it was not sufficient to manufacture a pair of wings which looked more or less like a bird’s : first they had to discover the natural laws governing the flight of a body through air, having learnt these they had to build a machine which conformed to them. When they succeeded in doing this, they flew. If, however, the aircraft designer failed to conform to natural law, his plane was no better than a stone. In all the material achievements of this age, the principles of progress are the same. First comes the patient search to discover the ways of nature, then the building of machines or the planning of processes in conformity with natural law so that the powerful and consistent forces of nature could work for the gratification of men’s desires.

In face of these established facts, it is strange that people should tacitly accept the view that the relations between human beings in society are governed by chance.

The classical economists during the last two centuries proclaimed their study as a science. The best known and more respected of them reached the conclusion that the poverty and injustice in society were the inevitable result of the operation of natural forces and that nothing could be done about it. Paradoxically, they taught that pestilence and war were nature’s devices for checking the full horror of these natural forces.

In an age where the Christian conception of the brotherhood of man had taken deep root and was slowly gaining ground, such ideas brought their inevitable reaction. Men came who said that the economists were wrong to call their study a science, it was ridiculous to believe that the operation of these natural forces was inevitable. True, if things were left alone, in accordance with the policy of laissez faire as it was called, these evil consequences would be inevitable, but the task of the economists was constantly to study the tendency of the times and to propose measures for checking its evil inclinations. So the economists set out to do what the physicists, chemists, astronomers and others had shown to be hopeless, they set out to check the operation of natural law. Immediately there sprang up like mushrooms a hundred different quarrelling sects of economists. Acknowledging no principle on which their study operated, their devices were as various as the features of their faces. The result is that to-day, for every proposition an economist makes, many may be found to contradict him.

It is interesting to observe that the modern schools, which rejected the classical economists because they conceived their study as a science, quietly accept the conclusion of the classical economists that social injustice is of the very nature of things. May it not be that this conclusion was reached as the result of some very grave error of observation or reasoning ? May it not be that man has failed to understand the natural forces at work in society or has failed to comply with them ?

Certainly the practical action in the social sphere that has resulted from this kind of thought has failed to secure any real advancement. True, many measures have been taken for the alleviation of the suffering of those reduced in poverty. Though the free schools, free medical services and social insurances have improved the health and general standard of life of the people, yet this improvement being slower than that attained in the material sciences, the general standard lags farther and farther behind that which could be achieved. More important, however, with this extension of state services, and even more with the extension of subsidies, quotas and production controls, there has come a decline in initiative, a decline in boldness and the spirit of adventure, and a decline in the level of politics that recently threatened this civilization with disaster.

Clearly, unless men generally come to understand how properly to govern their relations in society, this crisis will recur. They must understand how to use the giant powers which the material sciences have put at their disposal, unless they would continue to be, like boys in a laboratory mixing the coloured chemicals, ignorant and careless of the consequences. To attain this understanding it would seem that a new and more humble approach to the study of social relations is required. First, it is essential to find and measure the natural laws at work in society for they are above man’s control and govern his every activity. An understanding of these laws must reveal the realities of the situation and show the constant factors in social life. Once ascertained, this knowledge will make easy the further understanding of how to shape society so that natural forces may operate to the greatest good.

Man has a freedom of choice for he may choose to do right or wrong. Once having chosen, however, the consequences of his act follow inevitably. The law of gravity is of sovereign good to the whole of natural creation but if a man throws himself from the top of a cliff the operation of this same law will dash him to pieces. In order to progress men must understand the forces which dominate their life, and having understood them they must bring their institutions into conformity with them.

It is in an attempt to set down afresh the principles which govern us in society and how these principles may be turned to the general good, that these pages are written.

CHAPTER II

Production of Wealth

THE things which surround us have each very many functions. In trying to understand their true nature, men following different lines of study consider them in different aspects, and group them into classes according to those aspects. Thus, a botanist, going into a garden, looks at the flowers, shrubs and trees and, for the purpose of his science, classifies them into families and species. A chemist going into the same garden would not see flowers, shrubs or trees at all, but would see combinations of the elements of oxygen, hydrogen, carbon and the like. His classification would, consequently, be very different from the botanist’s. The economist would view the same garden in yet a different way, for he would see land, labour, wealth and capital.

It is important that from the outset the things which together make up the universe should be classified according to their several economic functions. In defining each class, each factor in the life of a community, care must be taken not to confuse together, as though they belonged to one factor, things which operate differently in social economy. Clearly, if this confusion is allowed, further confusion will follow when an attempt is made to trace the effect of each factor through the pattern of social relationships. Conversely, unnecessary difficulties must ensue upon dividing into two classes, as though they belonged to different factors, things which are alike in their economic operation : to make distinctions where no differences exist always leads to useless subtlety. In short, the definition of each factor must be exhaustive, in that it includes everything having the same economic function ; and exclusive, in that it does not include two things having different economic functions.

To each factor, as it is defined, a name will be given : and thereafter the selected word will be used solely to mean the factor to which it will have been attached, and will not be used in any other sense.

NATURAL RESOURCES

The first great factor is the natural resources of the universe. Abundantly different as are the forms which they take, all have the same economic purpose and display the same peculiarities. Together they constitute the storehouse from which man draws all he possesses. Year in and year out, unless disturbed by man, they remain or reproduce themselves in numbers and quantities so nearly the same, that only after very long periods have elapsed can any substantial change be noted. Man may discover new possibilities in these resources, but he cannot add an ounce to their weight. Indeed, it is the secret of their creation which baffles science and is the subject of disputes among religious teachers. To them, men must daily return for both the necessities of life and its luxuries and refinements.

These natural resources are known in the language of economics as land. The word land, used in this sense, includes, not merely the minerals which lie in the earth, but the wild beasts and birds which live upon it and the oceans and waterways which flow in its hollows. It may be defined as all natural resources exterior to man himself. The use of the word in this broad and sweeping sense is not peculiar to economics. For example, in English law a man’s land includes all that lies beneath the surface down to the very centre of the earth and all that rests upon it even up to the heavens.

Thus, in England, if straight lines are drawn from the centre of the earth passing through the boundaries of a man’s estate and on up to infinity, all that by nature lies between those lines is that man’s land. This was the reason why the Air Navigation Act, 1925, was passed. Before its passage, according to this conception of a landowner’s rights, aeroplanes passing through the air over the surface of a man’s land, no matter how high, were trespassing.

This view of a landowner’s powers, adopted by lawyers and economists, is not the product of a fevered imagination, but is the appreciation of hard facts. Man by his nature must operate from the surface of dry land. If he penetrates below the surface, as in mining, he must frequently return to it. If he flies into the air, he must land again. If he sails across the oceans, he must return to port. It has been said that the highest which a man has ascended into the air, added to the deepest he has penetrated into the earth, are to the diameter of the earth but as the skin of an apple to its diameter.

The man who controls a piece of the earth’s surface effectively controls all the natural resources to which access may be had from that point. If one person owns all the land which in a particular part of the world is suitable for airfields then he effectively controls the air routes concerned. This is a common lesson of war. Should one party gain the land suitable for airfields, then the aeroplanes of the other are of little use. Again, control of the land suitable for ports will give command of the oceans. Should a company have control of all the land suitable for ports in a given area, then clearly that company could quickly gain control of the exporting industries whose products must pass through the ports. That is why Governments have found it necessary to limit the powers of port owners and compel them to accept all goods and ships upon payment of a fixed scale of dues. Where such governmental control has not been exercised, then the exporting industries have inevitably become dependent upon the port owners. Again, there are many parts of the British coast where holiday-makers who would enjoy the air and sunshine must pay a toll to the landowner for the privilege, for he controls the salt air and warm sun. It is for these reasons that the law recognizes that the man who has the control of the surface of the earth controls all that lies below it and all that, by nature, rests above it, even to the sunshine which plays upon it and the winds which blow over it. For the same reason, economists, by very nearly universal consent, a most remarkable condition, have called these natural resources land.

As has been said, the natural resources are the first factor in our economic life. In this book they will be called land and the word will not be used in any other sense.

In this book "land" means all natural resources.

"A man’s land" means all the natural resources which the man controls by reason of his ownership of part of the earth’s surface, or by reason of the rights which he possesses over land occupied by others.

THE HUMAN FACTORS

Without land there would be no human existence ; but the earth and all its riches will not maintain human beings unless they work. Man’s life and progress are dependent on the direction he gives to his activity, and the energy, skill and knowledge he puts into it. This human element in life may be considered from two aspects : the motivation which starts and gives direction to it, and the work itself.

HUMAN DESIRES

It does not lie within the scope of this enquiry to probe into the inner workings of the human being ; to enquire how far his wish to live, mate or have children is instinctive ; or how far his wish to live in a particular manner, or to marry according to particular rites or rear children in particular ways, springs from his native genius or from the tradition of his race, the customs of his time or the instruction of his teachers. Whatever the springs or sources of his actions may be, they will flow together, intermingle and formulate themselves in his conscious mind as his desires. Desires are the beginning and their resolution the object of all human activity. No sooner is one of them gratified than another comes in its place. Human desires are the second great factor in social life. They may be in turn, generous or mean, wise or foolish, but in each case they will rule the conduct of a man or woman and, at times, will guide the conduct of the greater part of a nation.

Fortunately it is not necessary to define what is meant by human desire, for though it would baffle definition everyone knows what he means by it.

LABOUR

Most people desire to live, but man cannot live unless man works ; his life and progress are dependent upon his energy, skill and knowledge. These last form the third great factor in economic life. They are the human and individual contributions to life and in this book will be called labour. It is by this application of human energy to the natural resources of the world under the direction of human desire, by labour applied to land in order to gratify human desires, that man lives. From these three factors have risen a hundred empires. Without their interaction man would not be. For him they are the daily support of life. Land must be constantly tilled and sown, quarried and mined, and men must wish to do it. Were this continual work upon the natural resources suspended for a short time, famine would afflict the world.

For some reason, which seems to have no scientific foundation whatever, it has become popular to distinguish between different occupations as though they were different in kind. Thus organization, which is clearly part of human effort, has been classed apart from all the rest, and the reward for organization has been dignified by the special tide of wages of superintendence. It is a little difficult to see why this should be done unless it is an attempt to justify the undue reward which under modern conditions goes to those holding high directorships or whose occupation is company promotion. Apart from any other considerations, these occupations are not of such an importance as would justify their being put on a higher plane than the work of the scientist, the engineer and the scholar. In truth, differences between occupations may call for different degrees of ability, knowledge and skill, but clearly the difference is one of degree and not of kind. All useful human exertion in our economic life serves the same purpose, which is either to make the things or to do the things which will gratify human desire. Every occupation, however menial, requires some knowledge, some skill and some power of organization. All perform the same function and all are labour.

In this book the word "labour" means all human effort.

LAND, HUMAN DESIRES AND LABOUR

Land, human desires and labour are the three primary factors in economic life. On them all else depends. This has always been and, so far as we can tell, always will be. This rule applies in Russia as it does in England ; in China as it does in America. No differences in human outlook, and no human devices can change this elementary truth, Obvious as this is, yet, as will be demonstrated later, it is just such elementary truths which are ignored in daily practice. The inevitable sequel of this is that in every part of the social structure difficulties arise which seem to have no relation to each other upon a superficial view, but which really result from the denial of truth.

Man is utterly dependent on land, human desires and labour, but of the three land must come first. Obviously, labour could produce nothing without land and under such conditions labour would quickly cease to exist. On the other hand, land is in no way dependent on labour. Some power greater than man must account for its existence.

To sum up, human life requires first the land, then desires to gratify, and finally the application of labour to land. This is a universal truth which knows no exception.

WEALTH

The multitude of things which man may win from the earth by the cunning of his crafts is truly wonderful. By their agency he constantly expands his powers to make and to do, so that there seems no limit to what human ingenuity can perform. Even daily use and long acquaintance seem unable to dull man’s wonder and delight at his own achievements. When man makes anything, however, the product of his hands differs in many important respects from the land from which it came. These differences are of fundamental importance and set very definite limitations on man’s activity. They may best be illustrated by taking an example of man’s products, such as a loaf of bread, and contrasting it with the natural resources from which it came.

First it is apparent that without the land there would be no bread, whereas without bread there certainly could be land.

Next, without labour there would be no bread, but labour is not required for the existence of land, on the contrary labour is dependent upon land.

Again, as soon as the loaf is complete, it begins to moulder and decay. Land, on the other hand, if left undisturbed by man, goes on for ever. The great primitive forests and the little woods, the giant rivers and the little streams, the animal, bird and fish life continue year in and year out much as they have always done. True, there are in progress great changes, but these are slow in their operation and dominated by forces which as yet man cannot understand. However, though the forms change, the life and energy locked in them go on. So soon, however, as man interferes with the natural balance, forces come into play which tend to restore it. Processes of decay put a limit to the life of man’s products as though Nature were reclaiming that which she has allowed to be taken from her. In consequence of this, man must constantly be repairing and replacing that which he makes. He may devise means of protecting his manufactures from destruction, but these very means must be maintained by constant effort. Thus with refrigeration, the power must constantly be supplied to maintain the required temperature and the refrigerators themselves must be kept in repair and working order.

Lastly, there seems no limit to what man may produce from the land provided he has access to it. If he lacks bread, he may make more loaves. He cannot, however, increase the natural resources in the smallest degree.

From all this it is clear that these things which man makes and which are the means of his existence must be set aside in classifying the factors of our life and put under another heading.

In this book the great family of human products will be called "wealth".

From what has gone before it is clear that these things, which will be called wealth in these pages, must not be confused with the land from which they came, or with the energy, skill or knowledge which gave them birth. Land is not wealth. On the contrary, it is the source of all wealth—something which must come before wealth can exist. It is one, and only one, of the factors in the production of wealth.

Much confusion seems to arise because, it is said, a man who owns land is wealthy. A moment’s thought will show, however, that it is not the land which makes him wealthy, but the things he obtains from it or in exchange for the use of it. By such means he may acquire food, clothing, houses, cars and the like. If, though he has the land, he can obtain none of these things, he will die. It is not the land that makes him wealthy but the things he acquires from it. If he has a house it will shelter him ; if he has food he may eat it ; if he has clothes he may wear them ;