Chapter XXXIII:
The Economy of Nature and the Economy of Mind.

The prodigality of nature is now a well-understood truth in biology, and one that every sociologist and every statesman should not only understand but be able to apply to society, which is still under the complete dominion of these same wasteful laws. No true economy is ever attained until intellectual foresight is brought to bear upon social phenomena. Teleological adaptation is the only economical adaptation. —Dynamic Sociology, I, 74-75.

The natural antidotes to monopoly (i. e., where no attempt is made at social regulation) are counter-monopoly and competition. But these two are essentially the same, counter-monopoly being only competition of monopolies.

There is a constant antithesis between competition and cooperation which applies as well to the non-producer as to the producer. Cooperation always tends to reduce competition, and competition denotes want of cooperation. Whether competition can be trusted to prevent monopoly depends upon the degree of cooperation, and no equitable adjustment of the various relations of industry can be made so long as different industries manifest different powers of cooperation. As society is now constituted, it is the nonproducing classes who cooperate most and compete least, while the producing classes cooperate very little and compete strongly. Cooperation is an artificial principle, the result of superior intelligence. Competition is a natural law, and involves no thought. Hence those who cooperate thrive at the expense of those who compete. —Dynamic Sociology, I, 594.

Nature is extremely practical, though not what men call economical. Nature's economics differ from man's in being genetic, involving great waste of products. In genetic economy, while no amount of cost is spared to produce the smallest result, nothing is ever done unless it produces some result, however slight. In human, or teleological economy, on the other hand, great parsimony is displayed in the outlay, and frequently much labor is expended without result, owing to erroneous interpretations of phenomena. Nature never errs, but she wastes. Man economizes, but often looses through error. Nature may be called practical, but not economical; man economical, but not always practical. —Dynamic Sociology, II, 494.

L'homme n'est ni ange, ni bête; et le malheur veut que qui veut faire l'ange fait la bête. — PASCAL: Pensées, I, 185.

English Translation

Man is neither angel nor beast; the sad thing is that anyone who tries to become an angel becomes a beast. (translation source: EarlyModernTexts.com)

C'est ainsi que c'est enfin trouvé provisoirement réalisé, autant que le comportent les tendances générales de la société moderne, l'étrange type politique propre à la philosophie négative, qui avait si longtemps demandé un système réduisant le pouvoir à de simples fonctions répressives, sans aucune attribution directrice, et abandonnant à une libre concurrence privée toute active poursuite de la régénération intellectuelle et morale. — Auguste Comte: Philosophie Positive, VI, 334.

English Translation

The great characteristic of the policy which succeeded the flight of the elder Bourbons was its implicit voluntary renunciation of regular intellectual and moral government, in any form. Having become directly material, the policy held itself aloof from doctrines and sentiments, and concerned itself only with interest, properly so called. This was owing, not only to disgust and perplexity amidst the chaos of conceptions, but to the increasing difficulty of maintaining material order in the midst of mental and moral anarchy (translation source: The Positive Philosophy of Auguste Comte)

Nos premières ressources ou, pour parler plus juste, tous les biens de l'humanité sont des conquêtes du travail.

L'homme ne peut ni créer ni détruire un atome de matière, mais il peut rapprocher de sa personne et s'assimiler tout ce qui le menace; il peut surtout adapter à son usage et tourner à son profit ce qui d'abord était indifférent ou même nuisible. Par le travail, il a toute à tout ce qu'il touche un caractère d'utilité et s'annexe ainsi toute la terre, petit à petit. — EDMOND ABOUT: A B C du Travailleur, p. 29.

English Translation

Our first resources, or, more properly speaking, all the gifts of humanity, are the conquests of labour.

Man can neither create nor destroy an atom of matter, yet he can assimilate and identify himself with whatever suits him;he can turn aside whatever menaces him; above all he can adapt for his use and employ for his profit that which was originally valueless or even dangerous. By means of labour he impresses the stamp of utility upon all he touches, and thus little by little annexes, as it were, the entire earth.
(translation source: Handbook of Social Economy)

I have from time to time shown that there are certain limitations to the application of the doctrines and methods of biology to sociology, and that in every case such limitation is the result of the introduction of some new principle characteristic of humanity as distinguished from animality, of reason as distinguished from instinct, of spirit as distinguished from matter. This is precisely what, even from a purely scientific point of view, we ought to expect, and is in fact necessary. For in the scientific hierarchy each science, in addition to the forces and phenomena of the lower sciences, deals with a new force and a new group of phenomena, and therefore with new doctrines and new methods. — Joseph Le Comte: Popular Science Monthly, Vol. XIV, February, 1879, p. 430.

To make a man a machine is to make him anything but productive. That such a result can never be realized in fact is self-evident; that it should ever be conceived of in thought is an evidence of how little trouble even the greatest writers on political economy have given themselves concerning the real nature of the being with whose actions they deal. If the laborer is an engine, his motive power is fuel; if he is a man, his motive power is hope. It is psychological rather than physiological forces which keep him in motion. His will, and not merely his muscle, is an economic agent, and he is to be lured, not pushed, in the way of productive effort. — J. B. Clark: Philosophy of Wealth, pp. 53-54.

In this chapter the word nature will be used to denote all classes of phenomena, whether physical, vital, or even psychic, into which the intellectual or rational element does not enter, while the word mind will, for the sake of brevity, be employed in the somewhat popular or conventional sense of rational or intellectual, the two terms thus mutually excluding each other, and taken together covering all possible phenomena. This broad classification will be seen to be useful and indeed necessary, although the specific object is somewhat narrower, viz., that of emphasizing the distinction between that system of economy which is based upon the actions of the human animal and that which is based upon the actions of the rational man. The former is the system of the Physiocrats,¹ Adam Smith,² Ricardo,³ Malthus,⁴ Herbert Spencer,⁵ and the modern individualists. The latter was foreshadowed by Auguste Comte, but has never taken any systematic shape except in Dynamic Sociology with which the present work naturally connects itself. Although its distorted image is reflected in numerous more or less obnoxious forms from the mirror of modern public opinion, its real character is quite unfamiliar to the greater number even of the best informed persons.

Comte recognized the influence of mind in society and placed psychology in its proper position in his hierarchy of the sciences, but he refused to regard it as a distinct science, and treated it under the name of “transcendental biology.” Nevertheless, in his discussions he gave considerable weight to it, and laid stress on the elements of prevision and the control of social phenomena. Spencer, on the contrary, while he treated psychology at length and assigned it the same position, viz., between biology and sociology, failed to make it in any proper sense the basis of either his sociology or his ethics, both of which are made to rest squarely upon biology. His psychology, therefore, which indeed, was written before his biology, and largely from the standpoint of metaphysics, stands isolated and useless in his system of synthetic philosophy.

It was early observed that astronomical and physical phenomena were uniform and invariable, and it was also perceived that the actions of animals, though much more complicated, follow fixed laws which could be understood and taken advantage of by man. That the simplest human actions, such as those of children, were equally uniform and determinable was scarcely more than the result of observation. Nothing was more natural than the generalization that the acts of adults do not differ generically from those of children, and the wider generalization that all human activities and all social phenomena are as rigidly subject to natural law as are the activities of children and animals and the movements of terrestrial and celestial bodies, was but an additional short step. The early political economists seized upon this specious bit of reasoning and made it the corner-stone of their science, formulating from it their great laws of trade, industry, population, and wealth.

It is curious that this altogether sound abstract principle, the indispensable foundation of all economic and social science, should have led to the greatest and most fundamental of all economic errors, an error which has found its way into the heart of modern scientific philosophy, widely influencing public opinion, and offering a stubborn resistance to all efforts to dislodge it. This error consists in practically ignoring the existence of a rational faculty in man, which, while it does not render his actions any less subject to natural laws, so enormously complicates them that they can no longer be brought within the simple formulas that suffice in the calculus of mere animal motives. This element creeps stealthily in between the child and the adult, and all unnoticed puts the best laid schemes of economists and philosophers altogether aglee. A great psychic factor has been left out of the account, the intellectual or rational factor, the cause, origin, and nature of which were considered in Part II. From what was there said it must appear that this factor is so stupendous that there is no room for astonishment in contemplating the magnitude of the error which its omission has caused.

Although the question is primarily a psychological one, still, it is, as we now perceive, also an economic one, and it will be profitable to consider it now from this latter point of view. There are two distinct kinds of economics which may be called biological economics and psychological economics, or the eco­ nomics of life and the economics of mind. The word economics is here used in its narrow or primary sense. The question is one of economy, and it is of the first importance to contrast sharply these two kinds of economy, the economy that prevails in the animal world, in the domain of life, in organic nature generally, with the economy that prevails in the human sphere, in the realm of mind, in the domain of reason.

Every one is now, since Darwin, familiar with the general nature of animal economics. It is the survival of the fittest in the struggle for existence. It is the mere physics of life, the pure unmodified and undirected psychic forces, as defined in Chap. XV, working themselves out in nature. Just as in the physical world and the great clash of mechanical forces the superior prevail and produce the observed results, so in this animal physics it is superior force that counts and might is ever uppermost. The animal forces are their instincts, appe­ tites, wants-in short, their desires. These are ever seeking satisfaction and only lack of strength can prevent them from attaining it.

It was formerly supposed that organic nature was economical of its energies. The facts of adaptation, while they gave rise to the theological error of special creation, gave rise at the same time to the biological error of natural economy. In the first place it was supposed that the adaptation was always perfect. This was repeatedly asserted and much dwelt upon in early ante-evolution days. It is still widely believed with the modification that while a changing environment constantly disturbs the equilibrium, natural selection as constantly tends to restore it. Weismann, in the authorized translation of his Essays, allows the statement to stand that "each existing species shows the purpose of its being in every detail of its structure, and in its perfect adaptation to the conditions under which it lives. But it is only adapted so far as is actually necessary, only so far as to make it fittest to survive, and not a step further."⁶ But even this much cannot now be admitted, since, as will be hereafter explained, the struggle for existence consumes the organic energy and dwarfs all beings that engage in it. The notion of perfect economy naturally goes along with that of perfect adaptation. Nature was regarded as the great economist from whom man was to copy. Biologists, of course, now know better than this, and yet it continues to be reaffirmed by popular writers. Even Mr. Spencer has failed to strike out of his revised edition of Social Statics (1892) the remark of the original edition (1850) that "with a perfect economy, Nature turns all forces to account.'⁷

It is indeed true that nature creates nothing that is necessarily useless, that everything produced has a possible utility. This follows from the genetic method of evolution. Everything that exists is pushed into existence by a vis a tergo. This is the efficient cause, and nature works only through efficient causes. The universal life force is perpetually creating new forms, and these must be adapted to their environment, otherwise they cannot even be brought into being. But this adaptation need only reach the minimum stage. If it is sufficient to insure continuance the end is attained, though higher degrees are always being aimed at. The means, however, through which this adaptation is accomplished are not the most economical means conceivable. They often seem to be the least economical conceivable. They are just those that all the circumstances of the case combine to produce. Provided the end be accomplished the character of the means is wholly immaterial from a purely biological standpoint.

The extravagance of these means has become a common subject of discussion, and the facts that have accumulated are of a surprising character. A few of these were enumerated in Dynamic Sociology (Vol. II, p. 87,) but any number of other cases might be adduced. Thus in a lecture on the herring by Prof. Huxley, after giving 10,000 as probably an underestimate of the number of ripe eggs shed in spawning by a moderate-sized female herring, he remarks: "Suppose that every mature female herring lays 10,000 eggs, that the fish are not interfered with by man, and that their numbers remain approximately the same year after year, it follows that 9,998 of the progeny of every female must be destroyed before they reach maturity. For if more than two out of the 10,000 escape destruction, the number of herrings will be proportionately increased."⁸

Darwin, as all know, was so struck with the redundant fertility of the organic world and the necessary destruction involved that he made it the starting point of all his investigations. One of his earliest observations is recorded in a footnote in his Journal of Researches,⁹ as follows: "I was surprised to find, on counting the eggs of a large white Doris [kind of sea-slug] how extraordinarily numerous they were. From two to five eggs (each three-thousandths of an inch in diameter) were contained in a spherical little case. These were arranged two deep in transverse rows forming a ribbon. The ribbon adhered by its edge to the rock in an oval spire. One which I found, measured nearly twenty inches in length and half in breadth. By counting how many balls were contained in a tenth of an inch in the row, and how many rows in an equal length of the ribbon, on the most moderate computation there were six hundred thousand eggs. Yet this Doris was certainly not very common: although I was often searching under the stones, I saw only seven individuals. No fallacy is more common with naturalists, than that the numbers of an individual species depend on its powers of propagation."

These, of course, are much more moderate cases than many that have been cited. According to M. Quatrefages two successive generations of a single plant-louse [plant-lice are parthenogenetic] would cover eight acres. The vegetable kingdom is equally full of examples. A large chestnut tree in June probably contains as much as a ton of pollen. Considering the size of a pollen-grain the number on such a tree would be next to inconceivable. Certain pines are almost equally prolific of their male spores, and these pine pollen-grains are very light so as to be wafted on the wind to immense distances. The "showers of sulphur" that are sometimes reported to have fallen in the states bordering on the great lakes have proved to consist of such pollen-grains that continuous south winds had borne from the great forests of the long-leaved pine that border the Gulf of Mexico. Many herbs, as orchids, the broom-rape, etc., produce minute seeds in vast quantities, and some of these are rare plants. Burst a puff-ball and there arises from it a cloud that fills the air for some distance around. This cloud consists of an almost infinite number of exceedingly minute spores, each of which, should it by the rarest chance fall upon a favorable spot, is capable of reproducing the fungus to which it belongs.

The defenders of natural economy who are acquainted with such facts excuse them on the ground of their necessity. They say that it is the only way in which organic life can progress. Thus Prof. Grant Allen, in treating the origin of fruits, remarks: "Those plants which merely cast their naked embryos adrift upon the world to shift for themselves in the fierce struggle of stout and hardy competitors must necessarily waste their energies in the production of an immense number of seeds. In fact, calculations have been made which show that a single scarlet corn-poppy produces in one year no less than 50,000 embryos; and some other species actually exceed this enormous figure."¹⁰ The late Prof. E. L. Youmans, the leading American disciple of Herbert Spencer, and an uncompromising individualist, once used the following language: "Nature seems to have been no more economical of her mental than of her material resources. There is a prodigality in her ways which a narrow philosophy cannot comprehend. Of her profusion of flowers, but few issue in fruit; of her myriads of eggs, but few are hatched; of her numerous tribes of life appearing in the remote past, multitudes are extinct; and, of the achievements of her intellect, the great mass is lost in oblivion. But, through all her seeming waste, Nature has, nevertheless, a grand economy. She gives the widest chances, under a system which favors the best; the failures are rejected and the fittest survive."¹¹ Spencer himself hints at an explanation of this wide-spread state of things when he says: "Those complex influences underlying the higher orders of natural phenomena, but more especially those underlying the organic world, work in subordination to the law of probabilities. A plant, for instance, produces thousands of seeds. The greater part of these are destroyed by creatures which live upon them, or fall into places where they cannot germinate. Of the young plants produced by those which do germinate, many are smothered by their neighbors; others are blighted by insects, or eaten up by animals; and, in the average of cases, only one of them produces a perfect specimen of its species which, escaping all dangers, brings to maturity seeds enough to continue the race. Thus it is with every kind of creature. And he goes on to show that civilization has developed in substantially the same way, ignoring, however, the psychologic factor.¹²

A few writers have taken a somewhat less optimistic view. Dr. Asa Gray remarks: " The waste of being is enormous, far beyond the common apprehension. Seeds, eggs, and other germs, are designcd to be plants and animals, but not one of a thousand or of a million achieves its destiny. Those that fall into fitting places and in fitting numbers find beneficent provision, and, if they were to wake to consciousness, might argue design from the adaptation of their surroundings to their wellbeing. But what of the vast majority that perish? As of the light of the sun, sent forth in all directions, only a minute portion is intercepted by the earth or other planets where some of it may be utilized for present or future life, so of potential organisms, or organisms begun, no larger proportion attain the presumed end of their creation." And he immediately proceeds to quote to the same effect from the article he has been considering in the Westminster Review; " When we find, as we have seen above, that the sowing is a scattering at random, and that, for one being provided for and living, ten thousand perish unprovided for, we must allow that the existing order would be accounted as the worst disorder in any human sphere of action."¹³

The last sentence quoted from this reviewer is precisely to our present point. No one denies that all this waste in the inorganic world is necessary, because neither man nor mind is responsible for it. No one either will contest that in the long run this method has actually resulted in what we recognize as general organic progress, although it is well established that retrogression may result as easily as progression, and certainly has resulted to a great extent. But the algebraic sum is what we have, and if there was a beginning in some primordial form, as most biologists suppose, that sum is quite a plus. Nor will any one object to having nature's method fully explained and exposed, and thoroughly taught as a great truth of science. It is only when it is held up as a model to be followed by man and all are forbidden to "meddle" with its operations that it "becomes necessary to protest. I shall endeavor still further to show that it is wholly at variance with anything that a rational being would ever conceive of, and that if a being supposed to .be rational were to adopt it he would be looked upon as insane.

Amid all this literature, only a small part of which can be noticed here, there has not been, so far as I am aware, any attempt to formulate the true law of biologic economics. Much has been said of the law of parsimony, which is a very subordinate one sometimes called into exercise. But of the great law of prodigality, which is universal, no adequate definition has yet been offered. We have seen that from its genetic character the organic force is incapable of producing any necessarily useless form. Its products, while they only rarely possess an actual value, nevertheless must all possess a potential value. This part of the law may therefore be expressed by the formula that every creation of organic nature has within it the possibility of success. Thus far the biologic law is economical. But, as we have seen, only the minutest fraction of that which is created becomes an actual success. The definition must therefore have another member to cover this part. Mr. Spencer, as quoted above, suggested that it involved the doctrine of probabilities. This does not seem precisely to express it. It is more correct to call it a process of trial and error. The fundamental principle may be called the necessity for certainty, or the paramount importance of certainty, while the process consists in the multiplication of chances. There seems to be no limit in nature to the degree of energy that may be put forth in the direction of securing certainty. The chances of survival, though they may seem to be abundant, will be multiplied a thousand fold in order that certainty may be made a thousand times certain. The complete law of biologic economics may therefore be expressed in the following form:

1. All organic energy results in potential utility.
2. Actual utility is secured through the indefinite multiplication of efforts.

It thus appears that in biology, while nothing takes place which does not secure some advantage, however slight, the amount of energy expended in gaining this advantage bears no fixed proportion to the value of the result. Nature acts on the assumption that her resources are inexhaustible, and while she never buys a wholly useless article she usually pays an extravagant price for it. The expressions natural selection and survival of the fittest both contain the significant implication that the bulk of things are not selected, and that only the select few who prove fit survive, while all else perishes. The first member of the biologic law of economy may be characterized by the term practical. The second member may in like manner be characterized by the term prodigal. Nature is therefore at once the most practical and the most prodigal of all economists; practical in that she never makes anything which has not the elements of utility, prodigal in that she spares no expense in accomplishing even the smallest result.

Nature may be said to be engaged in creating every conceivable form. Every one is familiar with the wonderful variety in the actual forms of vegetable and animal life. But these, innumerable as they are, only represent nature's successes. Intermediate between them there must be imagined an infinite number of failures—conceivable forms in the production of which the organic energy has expended itself in vain, and which really represent a much greater expenditure than that which has been required to create all that exists. Again, among the successful forms there are all degrees of success. There are the vigorous and robust, rejoicing in a full measure of vitality and marching forward toward the possession of the earth; and there are the weak and languishing, which the former class is gradually crowding out of existence. Between these there are all the intermediate grades. But even the successful are only temporarily so. Like human empires they have their rise and fall, and the path of natural history, like that of human history, is strewn with the remains of fallen dynasties and the ruins of extinct races.

This law may be illustrated in physics as well as in biotics. If the expenditure of energy be designated as the cost of any given result, then it may be said in general that nature tends to exaggerate the cost of whatever is produced. Thus, it may be assumed that the most economical way in which a river can flow would be in a straight line from its source to its mouth. But even if it were to begin in this way it would soon become irregular, sinuous, and crooked, and then more and more crooked, until at length the distance traversed by every drop of water would be at least doubled. This physical law which has been called "the rhythm of motion" and rests on the "instability of the homogeneous," prevails also in the organic world. The tendency is everywhere to exaggerate the irregularities of normal development. This is often carried so far as to result in the production of abnormalities that cause their own extinction. Such were doubtless the strange dragons of Mesozoic time, the perhaps stranger mammals of early Tertiary time, the still more recent mastodon and mammoth, the moa and apteryx, and other wingless birds, while the living elephant and other overgrown creatures must also doubtless soon disappear. In the vegetable kingdom the coal flora is full of examples, as is also the less known flora of the Trias and Jura, and we still have many waning types, such as the maidenhair tree and the mammoth and redwood trees, whose paleontological record shows that they are just passing off the stage. Many other living plants, either through parasitism, as the Rafflesia, or through extreme specialization, as many orchids and yuccas, further exemplify this law. Such monstrosities inevitably perish with the slightest alteration in their material surroundings. The progress of organic development has thus been to a large extent the successive creation of types that have contained within themselves the elements of their own destruction — that have, as it were, broken down with their own weight. New ones of course have succeeded them, adapted for the time being to their environment, but destined in turn to outgrow their conditions and perish from the same cause. This rhythmical character of organic progress is therefore essentially self-defeating, the only progress taking place, if any, being the marginal increment resulting from the excess of the pluses over the minuses. This is the characteristic of all genetic progress. Teleological progress takes place according to an entirely different law, involving a true economy of energy.

In this sketch of natural or biologic economics I have not gone into the physical explanation of the reason for the difference between it and what I shall now distinguish as human or rational economics, as set forth in Dynamic Sociology (Vol. I, p. 73; Vol. II, p. 99ff.,) viz., that in the former effects are only just equal to causes. The organic force is applied directly to the object to be transformed, and the forms to be created are molded into the required shape by an infinite number of minute impacts, the sum of which is represented by the transformation effected. No advantage is taken of any mechanical principle whereby the effect is made to exceed the energy expended, as was shown in the last chapter to be the normal characteristic of all intellectual action. There is, it is true, a certain class of facts in which natural selection imitates rational design so closely in its ultimate products that it was formerly supposed, and is still supposed by many, that they must be the result of intelligent direction. Sharp teeth and claws, for example, are similar to edged and pointed tools or weapons, and take advantage of the principle of the inclined plane in the form represented by the wedge, and this may in some cases be carried so far as to involve the principle of the screw, as in certain spirally arranged seed-vessels that bore into the ground to plant their seeds. Other cases were mentioned in Chap. XXVII. It is also a fact that in the arrangement of muscles and the passage of tendons through their cartilaginous sheaths the principle of the lever and fulcrum is utilized to a greater or less extent. All such cases, however, constitute exceptions to the law of biologic economy, and only serve to show how instinctively all men recognize the distinction, from the surprise and interest felt at seeing nature do anything that seems to involve rational economy. That distinction is, that the latter is teleological and deals with final causes, while the former is genetic and deals with efficient causes. This means that while organic forms are merely pushed into existence by the pelting of atoms from behind, and are fortuitous, or literally chance products, human creations are conceived in advance by the mind, designed with skill for definite purposes, and wrought by the aid of a variety of mechanical principles, such as those mentioned above, by which means the energy expended is small, usually trifling, in proportion to the result accomplished. The inventive faculty of man is the primary application of reason. No other animal possesses it, not even to the extent of wielding a weapon that is not a part of its organic structure.¹⁴ The beaver, indeed, builds dams by felling trees, but its tools are its teeth, and no further advantage is taken than that which results from the way the muscles are attached to its jaws. The warfare of animals is waged literally with tooth and nail, with horn and hoof, with claw and spur, with tusk and trunk, with fang and sting — always with organic, never with mechanical weapons. And whatever work is done b: animals is always done with tools that nature has provided through a long course of development, non of which takes advantage of any principle of physics further than as already stated.

It is in rational man, therefore, that the first application of anything worthy of the name of economy is made. Nature has no economy. Only through foresight and design can anything be done economically. Rivers thus constructed (canals, millraces, irrigating ditches, etc.,) are straight, or as nearly so as true economy requires, and Prof. Schiaparelli's inference, from the supposed existence upon the planet Mars of extensive water ways stretching across its disk in right lines, that it is inhabited by rational beings, is generally felt to be a legitimate one, if the facts are as alleged. Everything that is done under the direction of the intellect is as economical as the degree of intelligence will permit. All failures to attain this maximum economy are due to ignorance — to lack of acquaintance with the conditions of the problem. The degree of economy therefore for the same degree of intellectual penetration will be exactly proportioned to the amount of knowledge possessed.

Nature's way of sowing seed is to leave it to the wind, the water, the birds and animals. The greater part falls in a mass close to the parent plant and is shaded out or choked to death by its own abundance. Only the few seeds that chance to be transported by one agency or another to some favorable spot and further happen to be covered up, can grow. The most of those that germinate never attain maturity on account of hostile surroundings, and only the rarest accidents of fortune live long enough to continue the race. To meet this enormous waste correspondingly enormous quantities of seed are produced. Such is nature's economy. How different the economy of a rational being! He prepares the ground, clearing it of its vegetable competitors, then he carefully plants the seeds at the proper intervals so that they shall not crowd one another, and after they have sprouted he keeps off their enemies, whether vegetable or animal, supplies water if needed, even supplies the lacking chemical constituents of the soil, if he knows what they are, and thus secures, as nearly as possible, the vigorous growth and fruition of every seed planted. This is the economy of mind.

A closer analysis shows that the fundamental distinction between the animal and the human method is that the environment transforms the animal, while man transforms the environment. This proposition holds literally from whatever standpoint it be contemplated. It is, indeed, the full expression of the fact above stated, that the tools of animals are organic, while those of man are mechanical. But if we contrast these two methods from the present standpoint, which is that of economics, we see at once the immense superiority of the human, or psychological, over the animal or biological method. The economy is of two kinds, economy of time and economy of energy. It has taken much longer to develop any one of the organic appliances of animals, whether for supplying its wants or fighting its enemies, than the entire period during which man has possessed any arts, even the simplest. And yet such appliances, however complete or effective, have not sufficed to enable any species possessing them greatly to expand its territorial range, or to migrate far from the region to which it was originally adapted. Man, on the other hand, without acquiring any new organic adaptations, by the manufacture of tools, weapons, clothing, habitations, etc., by subjecting the animal and vegetable kingdoms to his service, and by the power of "looking before and after"—in short, by the aid of reason—has taken possession of the whole earth, and is the only animal whose habitat is not circumscribed. This, as just remarked, he has accomplished in a comparatively brief period, i. e., wholly since Tertiary time, and chiefly since the glacial epoch.

The economy of energy is fully as great as that of time, and may be regarded as the cause of the latter. It is the result of art. It has been seen that the mechanical products of rational design necessarily utilize some economic principle through which the muscular force necessary to be exerted is less for any given result accomplished than it would otherwise be. In the great majority of cases the result could not be produced at all without the aid of the proper implement or mechanism for producing it, and this becomes more and more the case as machinery gains upon hand labor. The sum total of all such devices forms the basis of the mechanic arts. Few realize how completely civilization depends upon art in this sense. The utter helplessness of man without the arts is well illus­trated in De Foe's Robinson Crusoe, but the author saw clearly that in order to enable his hero to survive at all, even in a tropical climate where nature's productions were exuber­ant, he must provide himself from stores of the wrecked vessel with a considerable supply of tools and other artificial appli­ances. What was true of Robinson Crusoe, thus circumstanced, is much more true of the great majority of mankind who inhabit what we call temperate climates, i. e., climates in which the temperature sometimes falls ten or twenty degrees below the freezing point, and where for several months each year all vegetative functions cease. One winter without art would suffice to sweep the entire population north or south of the thirtieth parallel off the face of the earth.

We are so much accustomed to the terms labor and production that we rarely stop to think what they really mean. Neither of these terms has any place in animal economics. All labor consists in an artificial transformation of man's environment. Nature produces nothing in the politico-economic sense of the word. Production consists in artificially altering the form of natural objects. The clothes we wear are derived chiefly from the sheep, the ox, the silk-worm, and a few other animals, the cotton plant, flax, hemp, and a few other plants; but between the latest stage at which nature leaves these latter and the final form in which they are ready for use there are many transformations r acquiring much art and great labor. The houses that man inhabits once consisted chiefly of trees, clay, and beds of solid rock. These, too, have been transformed by labor performed with tools and machinery. In like manner the entire cycle of human achievement might be gone through. It would be found everywhere the same.

The arts taken in their ensemble constitute material civilization, and it is this that chiefly distinguishes man from the rest of nature. It is due exclusively to his mind, to the rational or intellectual faculty. That is, it is an exclusively psychological distinction. Civilization, which is human development beyond the animal stage, goes forward under the economics of mind, while animal development takes place under the economics of life. The difference between these two kinds of economics is fundamental. They are not merely dissimilar, they are the direct opposites of each other. The psychologic law tends to reverse the biologic law. This latter law may be briefly defined as the survival of the best adapted structures. Those structures which yield most readily to changes in the environment persist. It has therefore been aptly called "survival of the plastic."¹⁵ The environment, though ever changing, does not change to conform to the structures but in the contrary direction, always rendering the partly adapted structures less adapted, and the only organic progress possible is that which accrues through changes of structure that tend to enable organic beings to cope with sterner and ever harder conditions. In any and every case it is the environment that works the changes and the organism that undergoes them.

But the most important factor in the environment of any species is its organic environment. The hardest pressure that is brought to bear upon it comes from the living things in the midst of which it lives, and though paradoxical, it is those beings which most resemble it that crowd it most severely. The least advantage gained by one species from a favorable change of structure tends to make it spread and infringe upon others, and soon to acquire, if not strenuously resisted, a complete monopoly of all things that are required for its support. Any other species that consumes the same elements must, unless equally vigorous, be crowded out. This is the true meaning of the survival of the fittest. It is essentially a process of competition, but it is competition in its purest form, wholly unmixed with either moral or intellectual elements, which is never the case with competition in human society.

The prevailing idea is wholly false which claims that it is the fittest possible that survive in this struggle. The effect of competition is to prevent any form from attaining its maximum development, and to maintain a certain comparatively low level of development for all forms that succeed in surviving. This is a normal result of the rhythmic character of all purely natural, i.e., not rational or teleological, phenomena, as explained a few pages back. The greater part of what is gained in the flood tide is lost in the ebb. Wherever competition is wholly removed, as through the agency of man in the interest of any one form, great strides are immediately made by the form thus protected, and it soon outstrips all those that depend upon competition for their motive to advancement. Such has been the case with the cereals and fruit trees, and with domestic animals, in fact, with all the forms of life that man has excepted from the biologic law and subjected to the law of mind. The supposed tendency of such forms to revert to their original wild state, about which so much has been said, is simply their inability when remanded to their pristine competitive struggle to maintain the high position which they had acquired during their halcyon days of exemption from that struggle, which they can no more do than they can attain that position while subjected to it.¹⁶ Competition, therefore, not only involves the enormous waste which has been described, but it prevents the maximum development, since the best that can be attained under its influence is far inferior to that which is easily attained by the artificial, i.e., the rational and intelligent, removal of that influence.

Hard as it seems to be for modern philosophers to understand this, it was one of the first truths that dawned upon the human intellect. Consciously or unconsciously it was felt from the very outset that the mission of mind was to grapple with the law of competition and as far as possible to resist and defeat it. This iron law of nature, as it may be appropriately called (Ricardo's " iron law of wages " is only one manifestation of it), was everywhere found to lie athwart the path of human progress, and the whole upward struggle of rational man, whether physical, social or moral, has been with this tyrant of nature—the law of competition. And in so far as he has progressed at all beyond the purely animal stage he has done so through triumphing little by little over this law and gaining somewhat the mastery in this struggle. In the physical world he has accomplished this so far as he has been able through invention, from which have resulted the arts and material civilization. Every implement or utensil, every mechanical device, every object of design, skill, and labor, every artificial thing that serves a human purpose, is a triumph of mind over the physical forces of nature in ceaseless and aimless competition. The cultivation and improvement of economic plants and the domestication of useful animals involve the direct control of biologic forces and the exemption of these forms of life from the operation of the great organic law which dwarfs their native powers of development. All human institutions — religion, government, law, marriage, custom — together with innumerable other modes of regulating social, industrial, and commercial life, are, broadly viewed, only so many ways of meeting and checkmating the principle of competition as it manifests itself in society. And finally, the ethical code and the moral law of enlightened man are nothing else than the means adopted by reason, intelligence, and refined sensibility for suppressing and crushing out the animal nature of man — for chaining the competitive egoism that all men have inherited from their animal ancestors.

One important fact has thus far been left out of view. Man, it is true, is a rational being, but he is also still an animal. He has struggled manfully against the iron law of nature, but he is far from having overcome it. He has met with wonderful success in this direction in his dealings with it in the physical world; he has laid a firm hand upon it in the domain of organic life; by the aid of well ordained institutions he has dealt it heavy blows in its social aspects; and the suicidal tendency which it exhibits when operating upon dense masses of people has enlisted against it with telling effect the counter-law of ethics. But all this has fallen far short of completely eradicating the deep-seated principle that lies at the foundation of animal economics. Aside from these few directions in which he has succeeded in partially supplanting the competitive economics of life by the cooperative economics of mind, he is still as completely under the dominion of the former as is any other organic being.

The fact thus far omitted in this chapter is the principal one that it was sought to enforce in the early chapters of Part II, viz., that the intellect itself was developed under the influence of the purely egoistic law. That extraordinary brain development which so exclusively characterizes man was acquired through the primary principle of advantage. Brain does not differ in this respect from horns or teeth or claws. In the great struggle which the human animal went through to gain his supremacy it was brain that finally enabled him to succeed, and under the biologic law of selection, where superior sagacity meant fitness to survive, the human brain was gradually built up, cell upon cell, until the fully developed hemispheres were literally laid over the primary ganglia and the cranial walls enlarged to receive them. The brain of man was thus itself originally an engine of competition. Intellect was a mere servant of the will. It was only by virtue of its peculiar character through which it was capable of perceiving that the direct animal method was not the most successful one, even in the bare struggle for existence, that it so early began, in the interest of pure egoism, to antagonize that method and to adopt the opposite and indirect method of design, calculation, and cooperation.

The competition which we see in the social and industrial world, competition aided and modified by reason and intelligence, while it does not differ in either its principle or its purpose from the competition among animals and plants, differs widely in its methods and its effects. We see in it the same soulless struggle, the same intense egoism, the same rhythm by which existing inequalities are increased, the same sacrifice of the weaker to the stronger, and the same frenzy of the latter to possess and monopolize the earth. But along with this the antagonistic principle is also in active operation. This is the law of mind making for a true economy of energy. It is mind alone that perceives that competition is wasteful of energy, and therefore in the interest of the very success that competition seeks, it proceeds to antagonize competition and to substitute for it art, science, and cooperation. By the aid of these the success of those who use them is increased many hundred fold. In society, therefore, competition tends to defeat itself by inciting against it the power of thought. It cannot endure. It is at best only a temporary condition or transition state. On the one hand the competition between men resolves itself into a competition between machines, and instead of the fittest organism it is the fittest mechanism that survives. On the other hand the competition between individuals becomes a competition between associations of individuals. Such associations are the result of cooperation which is the opposite of competition. Economists talk of free competition, but in society this is scarcely possible. Only the simplest operations, those conducted with the least intelligence, can continue for any length of time to compete. The least skilled forms of labor approach this condition most closely, but freedom is here limited by the relations that labor sustains to capital. The chief difference between employers and employed until recently has been that the former have used the rational method while the latter have used the natural method. Capital has always combined and cooperated while labor has only com­peted. But such is the power of the former method and its superiority over the latter that competing labor has had no chance in the struggle with combining capital. Latterly, how­ ever, labor has begun in a small way to call to its aid the psy­chological economy of cooperation. So strange and unexpected did this seem that it was at first looked upon as a crime against society, and many still so regard it. Indeed, all the laws of modern nations are framed on the assumption that capital naturally combines while labor naturally competes, and attempts on the part of labor to combine against capital are usually sup­ pressed by the armed force of the state, while capitalists are protected by the civil and military authority of the state against such assumed unlawful attempts. This enormous odds against which labor struggles in its effort to adopt and apply the eco­ nomics of mind will greatly retard the progress of industrial reform which aims to place labor on an equal footing with capital in this respect.

Competition between industrial associations, or corporations, follows the law of competition among rational beings in general, and is only a brief transition stage, to be quickly followed by further combination. Just as competition among individuals soon resulted in that combination by which corporations were formed, so competition between corporations soon results in the amalgamation of all in any one industry into one great compound corporation, now commonly under the form of a "trust." This process of compound cooperation does not stop until the whole product of the given industry is controlled by a single body of men. Such a body thus acquires absolute power over the price of the commodity produced, the only limit being that of the maximum profit that it can be made to yield. Thus, for example, all the petroleum a country pro­ duces may be under the control of a single trust, and in order to secure for the members of that association of capitalists the maximum return for the petroleum, its price will be placed at the highest figure that consumers of petroleum will pay, rather than, in whole or in part, return to candles or resort to gas or electricity. There is no necessary relation that this price shall bear to the cost of production. It may be twenty or it may be a hundred times that cost, and the profits accruing to the trust will be proportional. The same may be true of coal or iron or sugar or cotton, and even in the case of breadstuffs something analogous can occur through the device which is known as "cornering." All monopolies rest on the same principle, and they are as common in the industries of trans­portation and exchange as in that of production. Not only do the railroad¹⁷ and telegraph systems furnish illustrations, but they may be found in the mercantile business of every country, in all of which competition is short, heated and fitful, ending in the swallowing up of the small industries by the great ones in ever widening cycles.

Bad as all this appears to be, it is by no means an unmixed evil. This purely egoistic application of the law of mind to business interests still bears the marks of its economic superiority to the purely natural method by preventing the normal and necessary waste of competition. Although this immense saving nearly all goes into the coffers of the lucky few who chance to control these great currents of wealth, nevertheless the maximum cost to the consumers of all classes of commodities thus monopolized is usually less than it was when they were left entirely to the influence of competition. This may seem strange to those economists who look upon competition as the only antidote to monopoly, and who have been taught that its normal effect is to keep down prices. But the facts are against this view, and it may be worth our while to glance at a few of them. I cannot do this more effectively than by a few quotations from a remarkable paper by one of our leading representative political economists:¹⁸

"I use the term 'waste' in a broad way to indicate all those causes which keep the price of goods higher than they might be if the sellers made no effort to attract customers. In former times the sellers of goods remained quiet in their places of business and awaited the arrival of buyers. If one store sold cloth at a lower price than its competitors, the buyers of themselves sought out the place and made their purchases. But those good old days are gone. A seller must now be ever on the alert to attract trade or his rivals will soon displace him. His store must be upon a good street. He must pay large sums for advertising. Agents on large salaries must be sent out to induce customers to buy his goods. These and many other expenses must be met by any one who expects to be successful in trade at the present time. But what is the result upon prices? Are not prices in our stores much higher than they would be if the buyers sought the sellers instead of the sellers the buyers? Would not sewing machines and organs be cheaper if the persons who desired to purchase them should look up the dealer instead of the latter searching carefully all over the city for them? The number of dealers in any article is but a small fraction of the number of buyers, and they can find the proper store much more easily than the dealers could hunt up their customers. . . If a given merchant does not use all the familiar means to advance his interests some more pushing rival will steal away his trade; yet is the trade of the city as a whole increased by all these efforts to displace rivals? Is any more soap, coal, or shoes sold in this city because they are advertised in the street cars? Do all the circulars our grocery men leave at our doors, increase the quantity of coffee and sugar consumed in the city? Do the high rents paid for good localities increase the whole local trade, or does the rent merely indicate the advantage which one rival for the same trade has over another?

A little thought, I think, will show that a large part of these expenses do not add to the general welfare of the city. If they are incurred by one of a number of rivals he can gain trade at the expense of the others. But if they are incurred by all of the dealers alike no one gets more trade than he would have had without them. The merchants must all charge a higher price for their wares to make good this expense and the public have a burden without a corresponding benefit.

Another form of waste arises from a great increase of retail stores. Each new store has attractions by which it secures a share of the trade. Take the shoe stores of the city as a sample. Think how thick they are, sometimes several in a single block. As they must duplicate the stock of goods, employ many extra hands and pay rent on many unnecessary buildings, is it any wonder that the price of shoes is so high? Notice also the increase of milk and baker's wagons. The continuous rattle of their wheels on our streets every morning tells only too well the miles of useless journeying they neces­ itate. These causes are at work in nearly every line of retail trade. A recent investigation shows that the number of retail dealers in this country has increased four times as fast as population.

Keeping these facts in mind it is easy to see where a large part of the increase of productive power has gone. In propor­tion to their product our factories employ fewer men, but these displaced men have been to a large extent absorbed by the retail trade. . . The same tendencies show themselves in the wholesale trade. Each manufacturer or dealer must resort to many costly means of preserving his trade, which are of no advantage to the ultimate consumer. Each one must do what his rivals do to keep himself afloat, but the public must foot the bills. Do farmers get any advantage from the intense rivalry of the firms who resort to so many costly expedients to sell them their machinery? How much do the whole body of commercial travellers, who are said to cost the wholesale trade $200,000,000 a year, increase the quantity of goods which are annually sold to the American people?

This enormous waste is a leading cause of the present tendency to form trusts or similar combinations. As soon as a trade becomes united in some organized way the whole body of these useless expenses can be lopped off, and the resulting economy is the main source of the increase of dividends. A legitimate trust is an organization to save waste and it is not likely to continue long in existence if it tries to raise prices higher than they would have gone if a reckless competition had continued. Of course the results of the saving pass largely into the possession of the trust, yet saving is better than wasting, whoever may get the benefit. . .

The effect on prices of the modern system of competition encouraging waste is the same as that of a monopoly or combination. Prices are forced to the upper limit, above which they could not go without discouraging trade. When the conditions of a business are such that a large expenditure of money in attracting customers, will give a merchant an advantage unless his rivals follow his example, the general use of extensive advertising, traveling salesmen, expensive stores in fashionable localities, raise prices far above the cost of production. The small dealer who has not the capital to increase his trade by such expensive means moves his store nearer to the homes of the customers, so that the advantage of locality may in a measure counteract advantages possessed by richer rivals. A multitude of small stores spring up to profit by the advantage of locality, and prices are separated still farther from the cost of production to allow the dealer to pay his rent and secure his living from the small stock of goods demanded by the locality. When all these causes get in full operation, and each rival resorts to new expedients to draw the trade of others to himself, there is no limit to the rise of prices except at the point beyond which the people will cease to purchase in large quantities. So we have practically the same limit to the rise of prices for a system of wasteful competition as for monopolies. If they follow their own interest monopolies cannot force prices higher than a system of waste can. To the public as buyers, the effect on retail prices is the same under both systems. All is gotten from the buyer it is possible to do without preventing a sale.

In the leading professions the same influences are at work by which the price of services is forced to the upper limit. The tendency of lawyers' fees is not towards the real cost to the lawyer in time and energy, but towards the point beyond which people would cease to employ them. And with the doctors the same tendencies are even more easily seen. A young doctor could not rely upon cheapness to attract business. He must in some way get into the good graces of a part of the public, take an active part in some church, or society, and in other ways get himself into notice. But all these means of securing trade cost money, and he must make his bills large enough to get it all back and leave enough for a good living.

The old formula about competition reducing prices has yet so strong a hold on the public that they do not appreciate the changes in the business methods which are now in common use. They think that a multitude of competitors in any trade is a safeguard to low prices. Yet these rivals find that passive cheapness brings little trade. Costly aggressiveness brings ten customers where cheap passivity secures one. Doubtless the public desire cheapness, but they are willing to pay dearly to those who aid them in the search. When dealers recognize these facts and organize their business on an aggressive basis, real cheapness becomes a thing of the past, and prices, in such a business, approximate what they would if they were controlled by a trust or an intelligent monopoly.

There are, then, good reasons why we should think of the tendencies of wasteful competition towards higher prices as having the same results upon prices, and following the same laws that monopolies do. When we wish to ascertain the effects of present economic conditions we will arrive much more nearly the truth if we think of a multitude of our industries and trades as monopolies than if we adhere to the old hypothesis that an intense competition in them brings cheapness. The law of monopoly governs the price of drugs just as much as it does of sugar. The retail price has no more tendency to conform to the lowest cost of their production than the price of sugar does under the present trust. The difference is merely that in the latter case the increased price passes into the hands of the refiners, while in the former it is wasted by the large number of persons who get a living by handling and distributing them.

The public think that aggressive competition brings them cheap goods, because they assume that the reduction of price is a necessary result of the action of self interest in the sellers. But the action of self interest may lead a dealer to attract trade by expensive means as well as by mere cheapness. In which way his self-interest will prompt him to act is determined not by himself but by the social condition of the people with which he deals. If the people are easily misled and their standard of living does not require all their productive power, aggressive action on the part of the dealer counts for more than mere cheapness. The real limit of the upward movement of prices is fixed by the action of buyers and not of sellers. Prices cease to rise at that point above which the demand of the public would rapidly fall off. For this reason the upper limit of prices is the same for aggressive competition as for intelligent monopoly. The increased net revenue is the controlling motive of both competing sellers and monopolies. The price is fixed by that buyer who, if he ceased to buy, would reduce the net revenue of the seller."

I have quoted thus at length from this extraordinary document because it presents such an array of cogent facts in such a lucid manner. Although the authority for the statements made is as high and as sound as any that could be desired, still they are to so large an extent statements of facts of common observation that no authority is required in support of them. And still their statement is required, since, as is seen, notwithstanding their clearness, the error which they are calculated to overthrow is wide-spread and deep-seated. The author's purpose in presenting them is, however, widely different from the use which it is here proposed to make of them, and need not be discussed. Their value in the present connection is primary and fundamental, and fully justifies the space they occupy in this work. Better than any other class of facts they show the fundamental difference between competition under the influence of the rational faculty and mere animal or biological competition. And if there has been the change to which Prof. Patten alludes in the business methods of the present and the past, it is a change which has been wrought by the greater introduction of the mind element into business affairs. Increasing density of population, as all know, by the friction it produces of mind with mind, tends of itself to sharpen the wits and increase that practical form of intelligence which counts in the struggle for existence. But along with this there has gone an immense increase in the educational facilities offered in cities. Not to mention the improved public school system and lengthened terms of general study with the high schools added on, some of which fit their pupils for entering college, there are the multiplied business and commercial colleges specially adapted to teach young people how to transact business, conduct enterprises, and in general to "make money."

Notwithstanding all the hollow cant about the "dignity of labor," to work with one's hands in any productive occupation is looked upon by all as degrading, and those who do so are denied all social position. To avoid this worst of all conditions and live by his wits or by some of the more genteel and less debasing occupations is the supreme effort of every "intelligent" person. The effect is to throng the "learned professions" with aspirants to this honor; multiply the town lawyers, attorneys, constables, notaries, justices, and "officers"; breed swarms of real estate agents, insurance agents, bankers, brokers, and shavers; overdo all newspaper and literary enterprises; develop a vast army of reporters, stenographers, typewriters, and copyists; and make everyone fit himself to be at least a clerk, or something besides a mere laborer, mechanic, or artisan. Immensely overdone as all these departments arc, they still manage to exist and flourish, and they do this by increasing the cost of the products to the maximum limit at which the public will use them. How competition of this class can be kept up under such influences is well shown by the number of "first class restaurants" in all large cities, feeding only a few accidental stragglers or wealthy persons, and where one seems to be paying almost exclusively for the costly silverware and mostly idle retinue of attendants.

This "aggressive competition" also clearly reveals its origin in the mind element as described in Chapters XXIII and XXIV As the embodiment of business shrewdness it involves in a high degree the principle of deception. All forms of solicitation are conducted with a view to deceiving the customer. The essence of an advertisement is a falsehood. It is an intentional effort to make the public believe that the particular article advertised is either better or cheaper than the same article sold by rivals, which the dealer knows is not the case. Every sale thus secured is therefore really "obtaining money under false pretenses," which is nominally a punishable offence, but which is wicked at except in the most flagrant cases. In fact, society is based on the normal occurrence of this form of lying, and its legal recognition is embodied in the maxim of common law, caveat emptor.

Such is the legitimate effect of competition among rational beings. The law of nature quickly succumbs to the law of mind, and whether it continues for a time, or whether, as it sooner or later must, it defeats itself and results in monopoly, the general effect on society is the same. If it be regarded as a sad commentary upon the operations of a rational being that there is no escape from the necessity of paying the highest price for everything that will be paid rather than do without, and irrespective of the cost of production, it must be remembered that it is only the individual that is as yet in any proper sense rational. If society itself were rational this would indeed seem absurd, and if it shall ever become so no such absurdity will be tolerated for a moment. Those who compare society to an organism have failed to observe that in this respect it resembles only some of the very lowest Metazoa, such as the hydra, which possesses no proper presiding and coordinating nerve ganglia, or still more closely some of those lower colonies of cells, each of which, like the individual members of society, is practically independent of the general mass except that by the simple fact of coherence a certain degree of protection is secured to both the individual cells and the aggregated mass. And yet many advocate a still greater independence of the individual, and deprecate all steps in the direction of integration, which they know to be the only way in which organic beings can make any progress in organization. So little have the principles of biology impressed themselves upon the students of sociology, even those who profess a synthetic grasp of both fields!

The reader cannot have failed to perceive the fundamental difference between the social phenomena above reviewed and those that take place everywhere in nature below the level of man's rational faculty, and hence, even when dealing with the universal law of competition, an entirely different set of principles must be applied to man from those which can be applied to irrational life. There competition is free, or rather it is pure. It continues as long as the weaker can survive it, and when these at last go to the wall and the better adapted structures survive and triumph, it is the triumph of a real superiority, and the strong and robust alone are left to recruit the earth. But when mind enters into the contest the character of competition is at first completely changed, and later competition itself is altogether crushed out, and while it is still the strong that survive it is a strength which comes from indirection, from deception, artfulness, cunning, and shrewdness, necessarily coupled with stunted moral qualities, and largely aided by the accident of position. In no proper sense is it true that the fittest survive. If this were their only function it is evident that brains would be a positive detriment to society. Pure animal competition would be far better. It is probably the contemplation of the hopelessness of this state of things which has given the gloomy cast to Oriental philosophy, and it is no wonder that those moderns who consider the present order unalterable should maintain that we live in the worst possible universe. Those who can see a surplus of good in things as they are, or can hope for their improvement under the laws of evolution unaided by social intelligence must be set down as hopelessly blinded by the great optimistic illusion of all life.

While competition is not to be looked upon as a social desideratum, even in its pure animal form, much less in its aggressive human form, free individual activity under the full play of all natural motives is of the utmost importance. Among these motives those of friendly rivalry and honest emulation are legitimate, harmless, and powerful. These competition suppresses; it tends to choke individual freedom and clog the wheels of social progress. How can this true individualism be secured and complete freedom of individual action be vouchsafed? Herein lies a social paradox. It is clear from what has been said that this will never bring itself about. The tendencies are strongly in the opposite direction. Competition is growing more and more aggressive, heated, and ephemeral. Combination is growing more and more universal, powerful and permanent. This is the result of the most complete laissez faire policy. The paradox therefore is that individual freedom can only come through social regulation. The cooperative effects of the rule of mind which annihilate competition can only be overcome by that still higher form of cooperation which shall stay the lower form and set free the normal faculties of man. Free competition that shall be both innocent and beneficial may be secured to a limited extent in this way and in no other way.

As a single illustration of this, let us suppose a railroad to be constructed alongside of an existing canal. Negotiations will be at once set on foot on the part of the railroad company to purchase the canal, not because it is wanted, but merely to remove it from competition. Such negotiations would be sure to succeed and leave the railroad master of the field. Competition would be removed, rates of transportation increased, and a valuable water way would be abandoned. But suppose society in its collective capacity, however constituted, seeing the situation and the danger, were to step in and itself purchase the canal, and to continue in spite of the railroad to conduct it in the interest of traffic; here would be a case in which the law of mind would be directed to maintaining instead of destroying competition.

A new and revised political economy will doubtless be largely devoted to showing, not so much the glories of competition, which society does not enjoy, as how society may conduct itself in order to secure whatever benefits competition can offer, and also how the competition that cannot be prevented can be shorn of its wasteful and aggressive features. Neither should the higher attributes of reason and intelligence be discouraged. They represent the true elements of civilization and progress. But these, too, should be deprived of their fangs. The way to counteract the evil effects of mind operating in the individual is to infuse a larger share of the same mind element into the controlling power of society. Such a powerful weapon as reason is unsafe in the hands of one individual when wielded against another. It is still more dangerous in the hands of corpora­tions, which proverbially have no souls.¹⁹ It is most baneful of all in the hands of compound corporations which seek to control the wealth of the world. It is only safe when employed by the social ego, emanating from the collective brain of society, and directed toward securing the common interests of the social organism.

But the object of this chapter was not to point out remedies for social evils. It was, as stated at the outset, to show that any system of economics which is to deal with rational man must rest upon a psychologic and not upon a biologic basis. In full view of all the facts that have been set forth, facts that are for the most part obtrusive and have always been available to all, it is certainly remarkable that there should be any necessity for calling attention to this truth; but the only system of social economics that we possess, and the only social philosophy, other than the one referred to early in this chapter, that has been promulgated, completely ignore it and treat the human animal only as an animal. Not the economic writers alone, but the great philosophers as well, persistently cling to the law of nature and disregard the law of mind. A system of so-called "political economy," in which the political aspect, i. e., the relation of the state to society, is for the most part ignored, has grown up and been reduced to a series of dogmatic canons which until recently it was considered next thing to sacrilege to question or criticise. But partly with the increase of general intelligence, whereby the mind element is more clearly seen in industrial and social phenomena, and partly with the increase of critical independence on the part of economic students, the truth has at last begun to emerge that the greater part of these supposed economic axioms are not only open to criticism but positively untrue. So thoroughly current had most of them become that any fact established in opposition to them might appropriately be called a paradox, like some phenomenon that seemed to counteract the law of gravitation. On this ground was justified the title of a paper which I presented to the American Economic Association at Philadelphia in 1888,²⁰ in which a considerable number of these economic maxims were analyzed and shown to be true only when all their terms were reversed. A further examination of such maxims, in which I have been greatly helped by Dr. E. A. Ross,²¹ professor of political economy in Cornell University and secretary of the above-named association, has shown that this process of destructive criticism may be carried much further, and can scarcely stop until the entire fabric of which they constitute the timbers has crumbled and fallen. To substantiate these statements I will introduce here quite a list of the more important cases, preserving the form previously adopted and presenting the propositions which the industrial history of the world has established, although for the most part in direct opposition to the hitherto accepted tenets of political economy. They may therefore continue to go by the name of Economic Paradoxes.

1. Subsistence increases instead of diminishing with population (reversal of the Malthusian dictum).
2. The interest of the individual is rarely the same as that of society.
3. Owing to ignorance of the remote effects of actions men do not always do what is for their own interests.
4. Cheapness is a stronger inducement than quality, and the consumer cannot be depended upon to encourage the better producer.
5. Competition raises prices and rates.
6. Combination often lowers prices and rates.
7. Free competition is only possible under social regulation.
8. Private monopoly can only be prevented by public monopoly.
9. The hope of gain is not always the best motive to industry.
10. Public service will secure better talent than private enterprise for the same outlay.
11. Market values and social values are not identical.
12. The prosperity of a community depends as much upon the mode of consumption as upon the quantity produced.

1 It is not intended hereby to commit Dr. Ross to all or any of these propositions.

13. Private enterprise taxes the people more heavily than government does.
14. The social effects of taxation are more important than its fiscal effects.
15. The producer cannot always shift the burden of taxation upon the consumer, e.g., under monopoly and aggressive competition.
16. Protection may reduce the price of the commodity protected, not only in the protecting but even in the importing country.
17. Capital, as embodied in machinery, contributes more than labor to the production of wealth.
18. Wages are drawn from products and not from capital, and the "wage-fund" is a myth.
19. Increase of wages is attended with increase of profits.
20. Prices fall as wages rise.
21. Diminished hours of labor bring increased production.
22. Reduction of the time worked enhances the wages received.
23. A man working alone earns the same as when his wife and children also work.
24. Lowering the rate of interest may lead to increased savings.

This enumeration falls far short of exhausting the list, but must suffice for the present purpose. One may imagine a modern economist trained in the Ricardian, Malthusian, and Manchesterian schools which still prevail even in American universities, looking with an unbiased mind into such an array of facts and convincing himself of their substantial correctness. His situation would be naturally bewildering, and he might at first cast vaguely about for an explanation. If he should prosecute this search thoughtfully and fearlessly, intent only upon the truth, he must at length find the full and only explanation to be that the whole farrago which has so long passed for political economy is true only of irrational animals and is altogether inapplicable to rational man.

Darwin modestly confesses that he derived his original conception of natural selection from the reading of Malthus on Population.²² But he did not perhaps himself perceive that in applying the law of Malthus to the animal world he was introducing it into the only field in which it holds true. Yet such is the case, and for the same reason that has been already given, viz., that the advent with man of the thinking, knowing, foreseeing, calculating, designing, inventing, and constructing faculty, which is wanting in lower creatures, repealed to this extent the biologic law, or law of nature, and enacted in its stead the psychologic law, or law of mind.

Notes

1. ↩ "Pas trop gouverner."—Le Marquis D'Argenson
   English Translation

   "Govern not too much" (translation source: Laissez-faire, wikipedia)
   "Laissez faire et laissez passer."—De Gournay.
   English Translation

   "Let do and let pass" (translation source: Laissez-faire, wikipedia)
   "Qu'on maintienne l'entière liberté de commerce; car la police du commerce intérieur et extérieur la plus sûre, la plus exacte, et la plus profitable à la nation et à l'état, consiste dans la pleine liberté de la concurrence."—Quensay: Maxime XNV.
   English translation

   Let there be complete liberty in commerce; for the surest, most exact, and most profitable policy for interior and exterior commerce of the state and nation consists in the greatest possible freedom in competition. (translation source: Marxist Internet Archive
   "Tous les travaux des hommes peuvent, en quelque sorte, devcnir productifs par inhérence, au moyen d'un ordre de dépenses conforme à l'ordre naturel des besoins. Cet ordre s'établit de lui-même. La police ne doit point s'en mêler: En y touchant elle le confondrait, et elle contribuait à introduire le désordre qui peut rendre tous les travaux stériles."—Dupont De Nemours: Abrégé des principes de l'économie politique, 1772.
   English Translation

   "All human labor can, in a sense, become productive by its very nature, through an order of expenditure that conforms to the natural order of needs. This order establishes itself. The police should not interfere with it: by doing so, they would confuse it and contribute to introducing disorder that could render all labor fruitless." (translation source: DeepL Translate)
2. ↩ The views of Adam Smith relative to competition and the natural laws of trade are perhaps best set forth in Chap. VII of Vol. I of his Wealth of Nations, entitled: Of the Natural and Market Price of Commodities. In Chap. VIII they are applied to the wages of labor. He is, however, chiefly concerned with the freedom of trade, and his strictures upon all attempts on the part of government to regulate it are found in nearly all parts of the work. See especially Chaps. I and V of Vol. II. These strictures, of course, relate largely to transportation, and especially to bounties, duties, subventions, etc. The following passage, however, relates to exchange, and may be taken as indicating the attitude of his mind on the relations of the state to industrial action:

"When the Government, in order to remedy the inconveniences of a dearth, orders all the dealers to sell their corn at what it supposes a reasonable price, it either hinders them from bringing it to market, which may sometimes produce a famine even in the beginning of the season; or, if they bring it thither, it enables the people, and thereby encourages them to consume it so fast, as must necessarily produce a famine before the end of the season. The unlimited, unrestrained freedom of the corn trade, as it is the only effectual preventative of the miseries of a famine, so it is the best palliative of the inconveniences of a dearth; for the inconveniences of a real scarcity cannot be remedied; they can only be palliated."—Wealth of Nations, Vol. II, p. 103.

3. ↩ “ The natural price of labour is that price which is necessary to enable the labourers, one with another, to subsist and to perpetuate their race, without either increase or diminution.”—David Ricardo: Principles of Political Economy and Taxation, p. 70.
   “Like other contracts, wages should be left to the fair and free competition of the market, and should never be controlled by the interference of the legislature.” —David Ricardo: Ibid., p. 82.
4. ↩ The now so celebrated Malthusian law or doctrine, as stated in Chap. I of the Essay on the Principle of Population (pp. 4-6,) is as follows:

“Population, when unchecked, goes on doubling itself every twenty-five years, or increases in a geometrical ratio. . .

“Considering the present average state of the earth, the means of subsistence, under circumstances the most favourable to human industry, could not possibly be made to increase faster than in an arithmetical ratio. . .

“ The power of population being in every period so much superior, the increase of the human species can only be kept down to the level of the means of subsistence by the constant operation of the strong law of necessity, acting as a check upon the greater power.”

5. ↩ Social Statics abridged and revised; The Man versus the State; Justice; passim.
   The Malthusian doctrine is quite clearly restated and reaffirmed in his Principles of Ethics, Vol. I, p. 298. Adam Smith's remark relative to speculations in corn is almost exactly repeated in the Social Statics (Abridged ed. p. 104) and in the Sins of Legislators (see same volume, p. 339) the speculator is characterized as “ simply one whose function it is to equalize the supply of a commodity by checking unduly rapid consumption.”
6. ↩ Essays, Vol. II, Oxford, 1892, p. 29.
7. ↩ American edition, 1892, p. 178.
8. ↩ A lecture delivered at the National Fisheries Exhibition, Norwich, April 21, 1881. Nature, April 28, 1881, Vol. XXIII, p. 612
9. ↩ New York, 1871, p. 201
10. ↩ Cornhill Magazine for August, 1878, Vol. XXXVIII, p. 180.
11. ↩ Popular Science Monthly, Vol. V, New York, August, 1874, p. 494.
12. ↩ Social Statics abridged and revised, New York, 1892, pp. 237-238.
13. ↩ Darwiniana, by Asa Gray, New York, 1877, pp. 372-373.
14. ↩ See p. 184, supra. This statement, made in my address as vice-president of the Section of Economic Science and Statistics of the American Association for the Advancement of Science, at the Rochester Meeting in August, 1892 (Proceedings, Vol. XLI, p. 307), of which this chapter is an expansion, has been called in question as contradicted in accounts given by certain African travelers, especially Du Chaillu and Buttikofer, of the gorilla and chimpanzee. I have, therefore, taken the trouble to investigate the matter and I find that no modification of the text is required. The impression, indeed, prevails that these animals, at least the chimpanzees, sometimes employ clubs in self-defense ; but no writer has, I think, stated that he has seen them do so, or even himself believes that such is the case, although there is a common report in Western Africa to this effect, and the natives have fanciful notions as to the intelligence of these creatures. They usually confound the two animals, and from their observed resemblance to man attribute to them certain human actions. The following passage in Büttikofer's Reisebilder aus Liberia (Vol. I, pp. 229-230) probably contains all there is in these reports:—

"Der baboon — so wird in ganz Liberia der Chimpanse genannt — wird allgemein fiir ein iiber den andern Thieren stehendes Wesen gehalten. Man erzahlt unter anderm vom baboon, dass er auf zwei Beinen gehe, wie der Mensch, dass alte Exemplare nicht klettern, sich aber mit einem Prügel in der Hand gegen Angriffe zur Wehre setzen, mit geballten Fäusten auf der breiten Brust trommeln und brüllen, dass man es meilenweit in der Runde hören könne (also ganz das nämliche, was uns über den Gorilla berichtet wird)." .

English Translation

"The baboon —as the Chimpanzee is called in all of Liberia— is generally regarded as a creature that stands out among all other animals. It is killed here and there, but its meat— and this is of great significance among these omnivorous natives— isn’t eaten, as that of all other species of monkeys is; the baboon is, as the people express it, too much like man , meaning that it resembles man too closely." (translation source: Travel Sketches from Liberia, 2012. p.211)

The belief of some that the chimpanzee possesses the art of making fire rests on still more slender evidence. The same author gives (ibid., p. 230) the following account, made to him by an old African hunter who had spent his best years in the pursuit of these and other wild animals in that region, which doubtless furnishes the foundation for this and other prevalent notions:—

"Du hast gewiss auf deinen Jagden schon jene auffallenden, reingehaltenen, freien Stellen im Walde angetroffen, über die man sich gewöhnlich keine Rechenschaft geben kann. Das sind des baboons Feuerstatten. Die baboons haben nämlich die Gewohnheit, in alien möglichen Dingen den Menschen nachzuahmen. Auf diesen Plätzen nun tragen sie trockenes Holz zusammen und schichten es zu einem grossen Stosse auf. Hierauf thut einer der Bande, als ob er das Holz in Brand steckte, worauf dann alle zusammen das vermeintliche Feuer erst vorsichtig, nach und nach immer stärker anblasen, bis ihnen zuletzt fast die Zunge aus der Kehle hängt. Hierauf kauern sie rund um den Holzstoss nieder, setzen die Ellenbogen auf die Kniee und breiten, gleichsam um sich zu warmen, die Hände aus. So kann man sie bei nassem Wetter halbe Tage lang geduldig neben dem eingebildeten Feuer sitzen sehen."

English Translation

"On your hunting trips you must surely have already seen those conspicuous, open spaces in the forest, which are being kept clean in a mysterious manner, and for which one can find no normal explanation. These are the fire-places of the baboon . The baboons namely have the habit of imitating man in all of his manners. In these places they bring dry wood together and build it up into a large pyre. Now, one among the group will act as if he sets the wood on fire, upon which all of them, first carefully and then vigorously, will blow at the imaginary fire, until finally their tongues hang down from their mouths. They will then sit down around the pyre, place their elbows on their knees, and extend their hands as if to warm them at the fire. During wet weather one can see them sit down patiently at the imaginary fire for as long as half a day." (translation source: Travel Sketches from Liberia, 2012. p.212)

There can be no doubt that these animals, like all those of the ape family, have great powers of mimicry, and this might readily lead the natives into extravagant ideas of their sagacity. That nothing can be relied upon that is not carefully observed and verified by scientific men is clear from the following further remark of Buttikofer in the same work (Vol. II, p. 350):—

"Nach den Aussagen der Eingebomen zu urtheilen, würde ein ausgewachsener Chimpanse dem Gorilla so wohl an Grösse als auch an Körperkraft gleichkommen, und spielt derselbe überhaupt in ihren Sagen als Sinnbild von Kraft und Klugheit eine bedeutende Rolle. Einige ganz alte Exemplare beiderlei Geschlechts, die in unsern Besitz gelangten, haben jedoch den unumstösslichen Beweis geliefert, das die Erzahlungen der Eingebornen, wenigstens was die Grösse betrifft, in hohem Maasse übertrieben sind."

English Translation

"If one is to believe the descriptions of the natives, a fully grown Chimpanzee may be equal in size and strength to the Gorilla, and in their legends it plays an important role as a symbol of strength and cleverness.4 However, several quite old specimens of both sexes that we were able to obtain, have demonstrated beyond dispute that, at least when it comes to size, the stories of the natives are highly exaggerated.." (translation source: Travel Sketches from Liberia, 2012. p.710)

15. ↩ Address of Mr. Clarence King on Catastrophism in Geology, delivered at the Yale Scientific School in 1877. The principle is not as different from that of natural selection and the survival of the fittest as Mr. King seems to suppose.
16. ↩ I have long regarded this as one of the most important truths in biology, and am disposed to emphasize it the more because it seems to have been wholly overlooked and an erroneous view maintained by leading biologists. I first gave distinct expression to it in an article on the Local Distribution of Plants in the Popular Science Monthly for October, 1876 (Vol. IX, pp. 676-684), and have illustrated it on numerous subsequent occasions (see especially the Forum, December, 18S6, Vol. II, pp. 347-349).
17. ↩ "It soon became evident also that the competition on which the community had counted with so much certainty as a means of regulating the railway system failed utterly to be a satisfactory means of securing the reformation of abuses and the lowering of the fares. . . Now and then a struggle would occur between competing lines, but it did not last long and was generally followed by a relapse into the old way of doing things. Either some sort of agreement was arrived at by which both companies agreed to divide traffic or earnings, or to maintain rates, or some other device was adopted to abolish competition and put combination in its place. Ultimately one road would be bought up by the other, and the semblance even of competition would disappear. . The outcome would be an enormous loss of money, respectively capital, not merely to the men who had put their money into the concern, but to the country as a whole. It happened at times, indeed, that a road was built merely for the purpose of making some other competing road buy it out, which was nearly sure to be done in the long run." The Railway Question. Report of the Committee on Transportation of the American Economic Association. Publications of the Association, Vol. II, No. 3, July, 1887, pp. 28-29.
18. ↩ The Principles of Rational Taxation, by Prof. Simon N. Patten. Published by the Philadelphia Social Science Association before which it was read Nov. 21, 1889. 25 pp. 80.
19. ↩ "They cannot commit treason , nor be outlawed, nor excommunicate for they have no souls."—Sir Edward Coke: Reports, Vol. V, Part X, 32 b, London, 1826, p. 303 (Case of Sutton's Hospital).
20. ↩ Some Social and Economic Paradoxes. The American Anthropologist, Vol. II, Washington, April, 1889, pp. 119-132.
21. ↩ It is not intended hereby to commit Dr. Ross to all or any of these propositions
22. ↩ Autobiography. Life and Letters, Vol. I, p. 68.