mand for them. And because there are not enough goods and services to go around, men compete for them. Professor Carver has enumerated the various ways in which men may compete with one another, and has pointed out that capitalism attempts to shunt individuals into the most useful form of competition, i.e. productive competition. The relation of this to other forms of competition he explains in the following passage: The forms of conflict, or the methods of struggling for existence, Professor may be classified as follows: Carver's diagram of the forms of conflict. tion among the lower animals compared with com petition among men. It will be apparent to anyone who will study the diagram Competithat among animals the destructive and deceptive methods are the characteristic forms of struggle. They kill, maim, injure, rob and deceive one another with no moral or legal restraints. They may sometimes rise to the level of persuasion, as in the courting process, but never to the level of production; that is, no animal ever tries to beat its rival by producing a larger or better product or rendering a greater or better service. Among human beings who have no moral sense, and who are unrestrained by law and justice, the destructive and deceptive methods of struggle will be followed, as well as the Significance of compe tition. Friendly competition is possible. The growth of economic freedom. persuasive and productive methods; but the destructive and deceptive methods are precisely the things that morals and laws are designed to prevent. In any civilization worthy of the name, and under any government worthy to stand overnight, men are actually restrained by their own moral feelings, by the respect for the good opinions of their fellows, and by the fear of legal penalties, from attempting to promote their own interests by destruction or deception. During the entire life of man on this planet he has had to struggle in one way or another. The reason why we are here to-day is because our ancestors were successful in their struggles. . . . One reason why they struggled so successfully was that they were valiant enough to wage their fight with vigor and with spirit. That spirit we have inherited to such an extent that we cannot even amuse ourselves without some kind of competition or struggle. It is as the breath of life to our nostrils. It will be well for us if we can harness this spirit to productive work rather than allow it to waste itself in destruction, deception, or even in some fruitless kinds of persuasion. The nation which succeeds best in so harnessing this spirit to production is the nation which should normally grow rapidly in wealth, prosperity, and power. . . . In assuming the universality and permanence of competition in some form it is not necessary to exclude such things as love, friendship, neighborliness, and coöperation. Competitors in a friendly game may be none the less friendly because they are competing. It is only when they care more for victory or the prize of victory than they do for friendship that there is any conflict between competition and friendship. The cure for this, however, is not the abolition of competition, but the learning to care for the right things and to evaluate things properly. . . 1 58. Kinds of economic freedom 1 The citizens of modern industrial countries are so accustomed to a large measure of economic freedom that this type of liberty is generally taken as a matter of course. And yet it is only a few centuries ago that business was impeded and repressed by numerous 1 From Edwin R. A. Seligman, Principles of Economics. Longmans, Green & Co., 1995; pp. 165–170. laws and regulations. In the Middle Ages, for example, the industrial activities of the individual were relatively restricted. After that period, however, economic freedom developed rapidly, until to-day it is one of the dominant characteristics of capitalistic industry. The various kinds of economic freedom are described by Professor Seligman in the following language: (1) The first and most obvious form of freedom is that of marriage The freedom of and divorce. . . . Freedom of marriage especially is a product of marriage the modern economic life. Restrictions on the right of marriage and divorce. were in the Middle Ages an attribute of personal subjection, and were utilized as fiscal resources by the lord. Even with the advent of physical freedom, however, we find the right of marriage dependent on certain property qualifications, as in Southern Germany at the beginning of the nineteenth century. This also was merely a survival of aristocratic traditions, like the still existing property qualifications for marriage in the case of army officers in continental Europe. . ... (2) Next we have freedom of movement. In the Middle Ages the Freedom of right of internal migration was often restricted. Under the settle- movement. ment laws in England, for instance, it was virtually impossible for a workman to leave his native parish. In modern times the growth of freedom has brought the right not only of internal but of international migration. . . . occupation. (3) We come next to the freedom of occupation. The right of Freedom of choosing one's profession was in former times hedged in by all manner of barriers. At its worst the system of caste and custom prevented progress because it put men into vocations for which they were not fitted. Freedom of occupation insures as far as possible the right man for the right place, and this leads to enhanced production and better distribution. The only restriction which modern society permits is the evidence of fitness, in those occupations where incompetence would imply irresponsibility and involve injury to others. as well as to oneself. The certificates required from doctors, dentists, engineers, plumbers, pilots and the like are not a hindrance, but an aid, to true liberty. . . (4) Another kind of freedom is the freedom of association. The Freedom of chief forms of association for economic purposes are combinations association. It of labor and combinations of capital. Even after the right of ... Freedom of (5) The fifth category, freedom of consumption, needs only a consumption. word. [When in modern society] it becomes desirable in the interests of the public health or safety to prohibit the use of certain commodities, like over-ripe fruit, or infected meat, or opium, the end is attained far better by a prohibition of sale, under the police power of the state, than by a restriction of consumption. Freedom of production. Freedom of trade. (6) We come, sixthly, to freedom of production, including freedom of contract and enterprise. The complex requirements of modern life have necessitated a governmental regulation of many business enterprises in behalf of producers, of consumers, of investors or of the general public. The difference between medieval and modern interference is to be found chiefly in the fact that the one sought to prevent competition, while the other endeavors to enlarge its domain and to raise its level. The only exception to the rule that rational modern interference is not designed to prevent competition is found in those few cases where competition itself becomes wasteful and inefficient. The modern aim, however, is always to increase liberty through the attainment of equality and responsibility. Factory laws give the operatives a fair chance; railway regulation attempts to secure equal treatment of shippers; supervision of banks, insurance companies and other corporations is designed to enforce financial responsibility. In all these cases interference is justified only as leading to a surer and greater general liberty. We have to deal with the positive, not the negative, conception. (7) Finally, we have freedom of trade. This is virtually included under the last head, since trade is a species of production. 1 demand. 59. Production in anticipation of demand Men engage in economic production in order to satisfy human Production wants, that is to say, because they anticipate that the goods being anticipates produced will later be in demand, either by themselves or by others. Even among savages, production pays attention to the probable future demand, but it is in modern industry that this anticipation of wants assumes its greatest significance. This is discussed by Professor Clay as follows: We enter a shop, pay ten shillings, and a shirt is given to us. The An example. shirt is the product of the labor of hundreds of people, the materials of which it is made were drawn from two or three continents, the machinery required to make it took months to construct; yet we get the shirt without waiting. For us to get it the shopkeeper must have stocked shirts, for him to do so the wholesaler with whom he deals must have stocked shirts, for the wholesaler to do so some one must have manufactured shirts, some one have manufactured the flannel from which they are made and the thread with which they are sewn, and further back still, some one must have made the machinery with which all these manufacturers work. That is to say, in anticipation of our want of a shirt, a complex organization must have been at work for months and perhaps years before we announced our want. We bought a-woollen shirt; suppose we had wanted a cotton one. The The retailer would probably have been able to supply us. The example extended. demand for the different kinds of shirts is fairly steady, and it is the retailer's business to know what to stock. But multiply our case a thousandfold, and suppose he has not anticipated our wants so exactly. What is the result then? First, he has woollen shirts which are not wanted, and all the series of people behind the counter, who have been contributing to the making of his woollen shirts, have been making something which, as it happens, is not the thing wanted. Secondly, the shopkeeper, being unable to sell woollen shirts, orders fewer, and this check to the demand for woollen shirts is transmitted right through to the people who grow wool and make woollen-working machinery. 1. From Henry Clay, Economics for the General Reader. The Macmillan Co., 1917; pp. 68-71. |