The Present Economic System

The question is raised in many minds: If private property is not an absolute right, what shall be its limits? What changes should be made in it? These questions put one of the greatest economico-political problems of our day, one that contains within it, indeed, the many minor problems that have appeared in the foregoing pages.

§ 9. The monetary economy.

So greatly does the use of money facilitate the transfer, buying, and selling of private property, and so closely are property and pecuniary trade con nected in practice and in the thoughts of men, that every rad ical proposal or attempt to abolish private property, includ ing the recent marvelous performance of the Bolsheviki in Russia, has included a plan to do away with money also. But money and private property are not essentially and logically bound up together, for a certain measure of private property always has been found where money was little or not at all used. True, if there were absolutely no private property there would be little use for money, although it might still be used as a form of counter by the communistic state. We have already seen' how a monetary unit comes into use, and have treated of the nature of money. We note here that the use of money is an outstanding feature of the present economic system and gives rise to many of the problems of political economy.

§ 10. The competitive system.

The existing system is likewise characterized by competition 5 in the buying and sell ing of wealth and of the usances and of economic agents. By competition we mean here the condition of po litical freedom on the part of each man to trade his property (goods, uses, or services) as he chooses, and this combined with the disposition on his part to get what he values most highly for himself and his family. Whenever any one else (official or citizen) forbids and prevents a man from getting all he can, in so far competition is limited. Whenever any one is deterred by fear of, or by affection for, some other trader, from getting all he can, in so far competition is limited. Whenever any one conspires with another trader to act to + See Vol. I, p. 51, and above, ch. 2.

6

See Vol. I, p. 73.

gether with him to withdraw or to alter his bid, in so far com petition is limited. Private property and economic competi tion do not merely happen to exist side by side, forming more or less favored conditions each for the other; they are essen tially connected.° It is not our task at this point to present the advantages and disadvantages of competition, but merely to indicate its important place in the actual economic world. Like private

property, competition is not a universal feature of our pres ent system, but it is the most general and characteristic method of valuation, of price-fixing, and of trade.

§ 11. Limitation of competition by custom.' The rela tively large influence of competition in present society ap pears more plainly in comparing the present system with that of an earlier state of society or with that of a present savage tribe. A member of the lowest human societies is subject to law ; though he is a savage, he is not "untutored." On the contrary, he is bound in many ways to follow customary lines of conduct, and a large part of his time is given to learning the traditions and then to observing the ceremonials of the tribe. Primitive customs always take on a religious sanction, and every member of the tribe is piously bound to do as his fathers have done and as his neighbors are doing. This limi tation applies to the choice of food to eat, clothes to wear, time to hunt, plant, and harvest, weapons and tools to use, where and how to trade, how much to give or take, and to countless other details of economic choice. So, in early society, economic relations were complex and but slowly changing from generation to generation. Custom, rather than competition, ruled in manifold ways the economic actions of men.

Custom continued to rule a large share of the individual life 6 This will appear in comparing the competitive methods of distribu tion with other methods in ch. 34, §§ 7-11.

7 See Vol. I, p. 143, on medieval land tenures; p. 158, on customary rents; p. 190, on the effect of caste.

of the peoples of northern Europe through barbarian and feudal times. Its force has gradually decreased, but even yet is not entirely set aside. Political and economic interests were not clearly distinct in the Middle Ages. Land was the all-important kind of wealth. Military and other public serv ices were performed by the higher landlords (as vassals of their overlords), who in this way paid at the same time what we to-day would call rent and taxes. The landlord in turn received from his underlings services and goods in kind (food and supplies) and so (in modern eyes) was both a collector of taxes and a receiver of rent. The rent, however, was not a competitive price, but consisted of the dues and services that the forefathers had been accustomed to pay. In many ways also, in the towns, close organizations of craftsmen and of merchants regulated prices and kept others out of their industries. Industrial privilege pervaded the life of that time.