Property And Effort: Practically speaking, theories of reward have divided themselves into four main classes. There is the general communist case for equality of income. The argument on its behalf is a much stronger argument than is generally admitted. A man’s “pull” upon society is very largely what his purchasing power is if, therefore, we are to equalize his access to society with that of his neighbor, it is advisable to make his income equal to his neighbor’s. Once, moreover, we introduce distinctions, they are bound to rest upon an arbitrary foundation.
The difference between the income of a judge and the income of a bricklayer is nothing more than a very rough and ready estimate of the price at which the services of each can be obtained. In fact, good judges are obtained at a much lower salary in the United States than in Great Britain and the salary of a successful bricklayer, is, proportionately, much higher than in this country.
Nor must we neglect the eugenic argument which Mr. Bernard Shaw has adduced with so much point. I Practically, as he insists,the main distinctions between classes are economic distinctions and even if the Duke can on occasion marry the factory girl, his sister does not dream of marrying the factory “hand.” If a royal princess marries a commoner, it is always a well-endowed commoner.
Choice in marriage is, outside one’s class, very largely determined by considerations of wealth. The English peerage has even established a kind of commodity-price on the American market. Equality of income would, as Mr. Shaw points out, have the excellent result of making the whole community inter-marriageable. There can be little-doubt of the benefit that would accrue therefrom to the quality of the race.
But equality of reward meets certain difficulties to which, in our situation, there is at present no adequate reply. When chart is demanded of all if we are to live at all amply, there seems no justice in an equal reward for unequal effort. Nor does it seem just to reward equally where needs are unequal. The miserly bachelor, the church-devoted spinster, ought not, surely, to receive the same remuneration as the parents-who have live or six children to maintain.
Nor can we neglect the psychological argument that, granted the mental habits of Western civilization, equality of income could only be secured by a revolution and, probably, one of the chief features of that revolution would be the award of a special rate of pay to the soldiery in order to persuade them to be loyal to the government. It seems clear, moreover, in the experience of Russia that at least in the early stages of a new social order habits of differentiation must be given concessions. There , seems no reason to suppose that there is an atom of logic about the present disparities.
But, however greatly we bridge them, we cannot as yet travel the whole road to equality. The communist doctrine insists upon the vital truth that a society which mainly judges men in the terms of their economic possessions is morally unsound but, for a long time ahead, the means to a better judgment must be found along different paths.
Not less inadequate is the antithesis of the communist scheme which urges that remuneration should be fixed by the higgling of the market. Supply and demand, we are told, are an index to the social appreciation of the labor man has to sell. Their operation offers to his service a “natural” reward, No other index has the same merit of obvious charity. .All this would be admirable if it were
- In the least true and
- If it Were morally adequate.
But, in the first place, before supply and demand can genuinely operate all countervailing factors must be withdrawn.
The remuneration for medical officers of health is not fixed at what will attract competent medical men, but at the figure at which the British Medical Association will allow competent medical men to be attracted. The incomes paid in justified industries are often specially fixed not by the demand and supply of services there, but by the special position a monopoly entails.
A judge’s salary is largely a Customary figure many men would accept the position, as many do, at great financial loss for the honor it implies. Supply and demand would only be a true index to income if there Was an equal opportunity to apply for the post involved. In fact, most posts involve a kind of customary standard of living, and the incomes of the given profession are probably Gaussian curve about the mean of that standard.
Nor I have said, is the higgling of the market a morally adequate test of worth. It leaves one-third of the average industrial community on the verge of starvation. For them it means poor health, undeveloped intelligence, miserable homes, and work in which, broadly speaking, the majority can find no source bf human interest.
Because the determination of wages has been left to the higgling of the market we have had, by Trade Boards and Minimum Wage Legislation, to redress the balance due to the taking of an undue advantage of weakness The higgling of the market is the , apotheosis of inequality. It emphasizes all the advantages the employer of labor has in the fact that the average worker cannot afford to wait.
The competition involved is not a fair competition because its essence is that freedom of contract is absent. For freedom of contract, as I argued earlier, is present only where there is equality of bargaining power. It is of the heart of modem industrialism that equality of bargaining power should be non-existent as between master and man. There are, it is true,pivotal trades in which the relationship is, in the mass more nearly equal But this is the exception and not the rule.
Nor can supply and demand in any way indicate a genuine social value in the reward secured treat fortunes are made in advertising enterprise but, broadly speaking, advertising enterprise indicates the pathology of modern industrialism. The art of salesmanship, if it is an art, represents, in the mass, the ability to suggest that a commodity is what in truth, it is not, and, in the individual instance, the capacity to sell a purchaser something that in fact he does not need.
The incomes made by skillful special pleaders in the days before the reform of judicial procedure largely represented wealth secured in an effort to defeat the ends of justice. Great fortunes-have been made in slum houses but society has paid over and over ageing a bill many times greater than those fortunes m repairing the damage they wrought.
The lady who invented the “Kewpie” doll is said to have made a large sum from her patent but the social value of the source from which her wealth was derived is, at the best, not immediately obvious. The creator of a famous pill compounded soap and water in faxed proportions but the social value of his mixture was considerably ices than the millions he amassed.
The theory that the price system fixes the “Value” of service rendered omits the fact that the “value” Considered has merely the connotation at effective demand. That value bears no necessary relation to the values which are socially important. If it did, our houses, the food we eat, the clothes we wear, the schools other than the public schools, we provide, would be very different from What they now are.
The present distribution of rewards is an interesting index to the demands that are in fact effective but we can only discover whether each demand and, therefore, each reward ought to be effective by a scrutiny of it. And, even then, we should have to determine whether the demand supplied, even when desirable, ought to give rise to, the reward it involves.
The merit of the present system is that by making entire abstraction of moral considerations it presents a facade of simplicity. But no system can hope to endure which in its nature makes abstractions of those elements which give permanence to social systems.
And, in fact, at least by implication, we condemn it ourselves. For there are ranges of service where we think reward in terms of income morally inappropriate and we distinguish with an interesting sharpness between industry and the professions. No man would have respected Pasteur if he had demanded the market-price for his discoveries.
The fame of Sir Ronald Ross is not in small part due to unending travail in a cause where there was no hope of financial gain. We realize that the great discoverer, the great artist, the great statesman, can only be paid in moral coin and we do not even attempt the measure of then services in money-terms.
The whole ethos of a profession, as distinct from industry, is that it measures the value of its effort by the service it renders to the public. It has standards to preserve, of competence,of method, of motive. It involves, at least at a certain level the element of disinterestedness.
A man can be expelled from industry only by bankruptcy or the commission of crime but the professions have types of conduct they will not permit even though the courts will not take cognisance of them. The very essence of these things is that the well-being of society demands therein the abrogation of the motives with which a theory of reward in terms of supply and demand would rest contented.
Nor is it, I think unworthy of remark that the nations which went to war in 1914 were compelled to limit the operation of commercial motives. The very name of profiteer connoted dishonor to those who made fortunes from. the misery of their country.
A minister of the Crown who explained in defense of the business man that it was his nature to sell in the clearest and buy in the cheapest market was felt thereby to have lowered his reputation. The idea was widespread that the operations of trusts and combines must be limited on behalf of the consumer. The ideas of priority and price fixing were significant admissions that the higgling of the market, so far from being a measure of social value, was like to destroy all social value.
Those who gained esteem were those whose services could be measured by their contribution to the end of the State. The atmosphere of course, was surrounded by the dramatic penumbra of war. Yet there emerged from the conflict great numbers of men who believed that such theses as these were not less applicable to peace.
The strength, for instance, behind the demand for a capital levy (whatever may be its economic validity) came most largely from the perception that a State which hold the lives of its citizens at its disposal is entitled, in fat higher degree, to hold their property at its disposal also. We have returned to the pre-war mood. Yet the exposure in those feverish years of the assumptions of a commercial civilization are of high importance.
What Mr. Tawney called the acquisitive society revealed itself as unfounded in the moral allegiance of men. It could win the acceptance of fear it could not win the loyalty of faith. But no society is likely to endure in which men cannot believe with passionate conviction. That is why we require a principle of remuneration, and, therefore, an economic order, different from the one we have inherited.
A third theory of reward is more attractive, and it has, at least, foundations in moral principle. It rejects alike the theory of equality, and the view that supply and demand can regulate adequately. It demands that each contribute to society according to his powers, and be rewarded by society according to his needs.
The claim is an historic one, and it has attracted distinguished men. But it is its transparent vice that it bears the appearance of a simplicity which, upon examination, will be found unrelated to reality. Let us take needs first. Obviously, we cannot take the idea of needs at , their face value. We could not proffer a clerk a reward which enabled him to purchase the quartos of Shakespeare, however urgently he demanded their possession.
The only needs we can recognize are the needs that are common to, all men. And, even here, there must be a maximum beyond which we do not go. A clerk who decided to have thirteen children would have greater needs than a clerk with a family of four but response to those needs is an undiscriminating endowment of stupidity.
Needs can only mean average needs. We have to assume some mean of citizenship and make our principle of reward hinge upon that mean. We must therefore fix our standard remuneration at a level which does not take account of individual idiosyncrasy. Our effort can apply to the general only, the particular, beyond that effort, must look to itself.
Nor is the notion of powers much more helpful. If it means that each man must perform his function as best he may, the statement is a truism which no one would deny. Does it mean the duty to experiment with one’s powers, until one finds the function which makes possible the maximum return.
Does it mean the fixing of a minimum product to which each man, in his particular sphere, will be held. Are we to penalize those who fall below that minimum ? Are we to expect greater productivity from those whose powers are obviously greater.
What is to be the test of one’s powers in the incommensurable sphere of intellectual work? If a judge gives a decision as he hears the case, while another delays the courts by reserving judgment, are we to hold that the latter does not act as his powers would warrant? What, in brief, is to be the best of a man’s powers, especially in mental work? Are we to judge him by his own standards, or some common standard? Even, it may be noted, in manual labor, the task of measurement is difficult enough.
The miner, for instance, may have a difficult place, he may not be in good condition the tubs for his coal may not arrive as he wants them. So, too, in a textile factory. Light, temperature, humidity, period of work, existence of rest periods, proper methods of supplying the material, good supervision of machinery, may make all the difference to a worker’s output.
He may be blamed for “slacking” when, in fact, the blame rests on conditions over which he has no control. Obviously the only sense in which a man’s powers are genuinely measurable is when he affirms honestly that he is doing his best. But no social system will rest satisfied with a purely subjective test of this kind, and that the more certainly when we know that the machine-technology of large scale industry fails to secure the interest of the worker. For, it is obvious that no man will work his best unless his heart is given to the task that he performs.
We are therefore driven back to a more complex view. Any principle of reward must satisfy the two complex conditions, that it enables the individual to reach out towards his best self, while, simultaneously, it preserves and develops the necessary functions of society.
We have somehow to reconcile the interest of the individual with that of the community. We have therefore to meet the needs of citizens in the degree of their importance, while we do not, in meeting those needs, impair the general productive fabric. We have also, of course to meet the demands of classes, children, old people, disabled and defective persons, who cannot pay their way.
We have to make provision for the wastrel and the criminal in such fashion as will, at the worst, prevent their further degradation. Our basic condition must obviously be that every need related to the civic minimum, every need, that is, which, when unsatisfied, prevents the attainment of effective citizenship, must be satisfied before we deal with needs above that civic minimum. There is, therefore, as a primary level in remuneration a point below which no person can be permitted to fall who is capable of acting as a citizen.
But, secondly, no person can be permitted to secure remuneration except on the condition of performing work recognized as useful. He earns wages as a return for personal effort. What he does must be labor that adds to the national wealth. He can have no means of life at his disposal save on the condition that he has a useful function to perform.
Once he performs work recognized as necessary he must be entitled to a reward which gives him the means of civic completeness. It must keep him in good health. It must give him room for the development of his faculties It must enable him to build a home and pay such family-costs as the community does not provide. Such a reward is inherent in his quality as a human being.
It is said, of course, that such an ideal is illusory. Many workers would simply not pay their way at such increased labor-costs, and at that rate there would he an increase in the number of the unemployed But the history of wages in the nineteenth century has been the history of a very substantial rise in real wages without any correlated rise in unemployment.
The higher the wage, indeed, the greater is the personal quality of the worker’s hie. His demands grow in width and depth, and the economic organization of society shifts to meet those new demands. Mr. Hobson has shown that the inadequate and unequal distribution of purchasing power is, indeed, one of the main causes of unemployment. In general, an increase in the rate of wages is attended by more good than an increase in the rate either of profit or of interest.
And further, it is one of the valuable results of the leveling up of the standards of consumption that it tends to shift the emphasis of business enterprise over to those aspects of organization in which the great defects can be mainly observed. No one can read evidence like the inquiries into the coal industry, both in England and America, or the railways of the Uni ted States, without seeing that the percentage of preventable waste is enormous.
The scientific study of fatigue alone is likely to result in greatly reduced costs. What is called labor turnover is, again, an obvious source of improvement. There are vast possibilities of saving in the marketing of products, of which recent experience in coal is only an obvious example! There is the possibility that the stabilization of currency and credit contains the seed of great hopes.
We are not entitled, in short, to predicate the danger of high wages until we have experimented adequately with the reduction of cost in other directions. The standards of reward, doubtless, will always be lower in a poor community like Norway than in a rich community like the United States. But, in general, a society which aims at preserving its institutions will seek a level of reward at the highest rate compatible with its industrial existence. And it will, if it is wise, make the maintenance of that level the first charge upon the productivity of the society.
I have spoken of a common civic minimum. But I do not conceive that this civic minimum is the same for all members of the community. While there is an irreducible minimum of human want which each citizen must be able to satisfy, those wants are not identical in all.
An agricultural worker, a miner, a stevedore need, for example, a more costly. dietary than a clerk or an architect’s draughtsman. The minimum we settle for each occupation will clearly involve differences built upon the costs that occupation involves. And here it is worth while to point out that difficult as intellectual work is, it is at best dubious whether it involves greater costs, training apart, than work mainly of a physical kind. Certainly if effort is the test of pay, it is not improbable that the present scale of wage-values will have to be almost nearly inverted.
But there here enters the second element in the fixing of a just principle of remuneration. It is one thing-and it is a great thing-to pay to the worker a wage that covers the cost of his effort. But we must also pay wages in such a fashion that we attract into each social necessary occupation a sufficiency of talent to run them adequately.
We need enough miners but we need also enough judges and enough doctors. Probably no judge works harder, even if he works differently, than a miner in the sea-pits of Durham. If we base our remuneration on effort alone, we should pay miner, and judge at equal rates. Any deviation from this conclusion must be justified with some care.
The true method of approach is, I think, to analyze the position from the standpoint of the social result we require. We must, I think, admit that the value to society of a great judge or a great doctor is greater than the value of a miner whose output stirs the imagination. The effort may be equal. For us, then, the justification for any difference in reward must lie in the probability that such difference will provide us with the service we require in greater numbers than would be true were equality of reward to obtain.
Here, I submit, we must begin by insisting that far too much emphasis has been laid on the importance of economic reward. The great artist, whatever his genre, pursues his end for its own sake, independently of financial gain. Men like Leonardo, Newton, Pasteur, Darwin, are not seeking monetary wealth. The great soldier finds his reward not in the income he receives, but in the public esteem that is the measure of his repute.
The average high civil servant could , earn far more than his salary in the business world but the consciousness that he has his hands on a great machine more than compensates for a comparatively modest income. Even with the average man, the desire for gain in itself is probably far more rare than we are content to imagine. Those who seem to pursue wealth for its own sake are, more frequently in fact, seeking those standards which, in a commercial civilization, bring standing and power.
Yet, also, it is beyond doubt true that wealth can bring to life inducements which men of ability and attractive. Every society contains men who will endure the difficulties and irksomeness of a long training for the position and contingent affluence which lie at their end.
Others there are who will take the adventurer’s risk in the hope that some bold tempting of fate may land them in the harbour of case. In cases such as these, payment by achievement as distinct from payment by effort seems, therefore, to have a real place in an imperfect world. In this aspect, we should then have a reward for most men based upon their output, and so calculated that the least skilled worker necessary to the industry ,would be able to earn his civic minimum.
When we pass from manual work that is quantitatively measurable, we come to different considerations. We cannot, I think, really establish any satisfactory criterion of comparison between the work, say, of a Permanent Secretary of the Treasury and a judge of the High Court. All we can do is to set our rewards at the figure which gives us a full supply of the necessary services.
That figure would, upon considerations I discussed earlier in this book, not involve anything like the present disparities between rich and poor. A great lawyer, one imagines, is not, save in an acquisitive society, only to be purchased at seven or eight times the price of a great university teacher. And it would, upon the same considerations, be urgent so to organize our society that no person capable of the highest effort was excluded from the chance to practice it by lack of opportunity.
So far as organization permitted, men would start equal in the race. So far as legislation could effect it, wealth, where it came, would be based upon function alone. There would be paid to all a, reward that enabled them to give of their best and to be, so far as they knew, the best that they desired.
Differences in reward would be built either upon effort or ability. But the difference would never permit the accumulation of reward so as to benefit other men. No one would be paid save for personal achievement. No one would earn save by the contribution he made to social good. And since each aspect of social life would lie open to him who would take advantage of it, we should, at the least, abolish that hereditary poverty that is the main feature of the present order.
Two other remarks may be made here. The reward each citizen earns must be his own to do with as he will. He may choose, as is so typical of America, to sacrifice the creature comforts of his home to the possession of a motor-car, or he may wish, as in the case of many Londoners, to endure the discomfort of a long railway journey for the pleasure of cultivating a garden.
The more a man is tempted to experiment with his own standards of consumption, the better it is for society. The one thing we want to avoid are those long rows of villas with identical wall-paper, identical books, and identical standards of pleasure.
Life is an art which we can know only by experience. And the experience must be fully our own, shot through with the texture of our unique personality, if we are to realize the things within us that make us different from our fellows. If this be true, a society is well advised which avoids controlling the standards of consumption which exist.
If the worker chooses to buy a piano upon which he cannot play, it is his business. If the business man desires a house with endless bedrooms he can never Occupy, equally it is his business and his alone. The sphere of social control lies in the realm of production. If it desires, as it may desire, to prohibit the consumption of alcoholic liquor, it is by the prevention of manufacture that it should proceed.
What it must seek to avoid is the creation of class standards in consumption. The prohibitions therein that it enacts must be enforceable on all alike, or they are without validity. Things like the medieval sumptuary laws are inapplicable because they assume a society in which the hypotheses of democracy do not apply.
If we have abandoned such effort in strict fact, we have not abandoned them completely in actual life. To know one’s place in the standards of consumption is still a demand tacitly applied to the weaker classes of society. It is inapplicable because no member of society has any place save that which he gains by the exercise of his powers.
This view of reward, moreover, applies equally to a collectivist and a non-collectivist society. It is a general principle of justice which arises from the fact that men live together without taking special account of how they ought to organize their common life. It assumes
- That all alike are entitled to find the means of full life, and that
- Beyond those means differences must be required by the common good of society.
It attempts, that is to say, to found a theory of wages in the common consent of men.
It removes from all that haunting dread of insecurity and inadequacy which now poisons the lives of most. It offers to some access to comforts which are paid for by the greater value they contribute to society in a realm where, admittedly, only the roughest estimate of value can be made.
Ideally, doubtless, men should give of their best to their fellows for the sheer joy of giving. But, ideally also, Nature would have fashioned a world from which pain and danger were absent. We are not yet confronted by those conditions.
We can only win what we have by the sweat of our brow. We can only maintain the scale of our civilization by a division labor which, unless we are careful, diminishes the moral stature of most. We must set, our ideals by the facts we discover. Other solutions will, in the end, serve not to assist our progress but to betray our hopes.