The Modern Appeal to Legal Forces in Economic Life

John B. Clark
1894 Publications of the American Economic Association  
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more » ... out Early Journal Content at http://about.jstor.org/participate--jstor/individuals/early-journal--content. JSTOR is a digital library of academic journals, books, and primary source objects. JSTOR helps people discover, use, and build upon a wide range of content through a powerful research and teaching platform, and preserves this content for future generations. JSTOR is part of ITHAKA, a not--for--profit organization that also includes Ithaka S+R and Portico. For more information about JSTOR, please contact support@jstor.org. THE MODERN APPEAL TO LEGAL FORCES IN ECONOMIC LIFE. Two unlike movements born of discontent are now in progress. Anarchism aimis to cast off law; while socialism appeals to law, and proposes to place under its control activities that now are free. Common to both movements is embitterment against society; but anarchism assimilates to itself that hostility to law which naturally results from evil doing. The antipathy of the rogue for the halter reinforces this movement. It gathers to itself disreputable elements, and by its outbreaks nerves society to resistance. It is self-terminating. Socialism'appeals to better classes and has far more strength. Attack the state and you excite feelings of loyalty even among-the disaffected classes; but attack the industrial system and appeal to the state, and you may have loyalty in your favor. Socialism, moreover, has a theoretical backing that is stronger than any intellectual force lying back of anarchism. It claims to be able to prove that society is inherently dishonest. It is the nature of it, as is claimed, to defraud laborers of a part of their product. It does this by the regular working of its laws, and nothing could be worse than to so perfect the system as to make these laws operate without hindrance. If this theoretical point were completely established it is difficult to see how any good man could remain outside of the socialistic ranks. We shall never tolerate a systematic defrauding of laborers. Socialism has the advantage of making small begin-10 A merican Economic Associalion. [482 flings. There are two ways in which a socialistic plan of industrial life might come, by successive steps, to completion. The state might assume one industry after another, till none should be left in private hands. The new system would thus spread by local accretion. On the other hand the state might, at first, interfere with all industries in a slight degree, and gradually increase the measure of its control. Socialism would thus begin everywhere at once, and would grow from weakness to strength. It would be by intensive progress, rather than by extensive, that it would come, in the end, to fully possess the field. It is the beginnings of this movement that need to be carefully distinguished. The first issue to be settled is whether socialism has a right to exist. Are its allegations concerning the present system true'? Is industry proceeding on a principle of fraud? I wish to test the power of recent economic theory to give an exact answer to this question. In order to solve this very general problem, and thus to decide whether or not our industrial system deserves to be retained at all, we have first to see how competition adjusts wages, and, secondly, to ascertain whether competition as a force is still active. If we discover that the force is generally active, but is not unobstructed, we need to see whether civil law can remove the obstructions. In doing this we shall answer the second of the two general questions above stated, and determine what type of legal action will perfect the industrial system. If the natural law of wages is an honest and beneficent law, and if it works fairly well and can be made to work better, then we know, at least, at what we should aim in all civil law making. It will remain only to frame the statutes that will accomplish the purpose in view. Very decisive will it be of the trend of legislation, and of
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