The Spirit of American Government Part 11

An investigation of the practical working of munic.i.p.al owners.h.i.+p in American cities will show that this danger is not purely imaginary. In the year 1899 53.73 per cent. of the waterworks in this country were owned and operated by munic.i.p.alities, public owners.h.i.+p being the rule in the larger cities. Taking the thirteen largest plants in the United States, all of which were munic.i.p.ally owned, the income from private users was $20,545,409, while the total cost of production, including estimated depreciation, aggregated only $11,469,732. If to this amount be added the estimated taxes, interest on total investment and rental value of the munic.i.p.ally owned quarters occupied for this purpose, the total cost of production would be $22,827,825. Private consumers, however, used only 80.2 per cent. of the water supplied. If the 19.8 per cent. supplied free for public purposes had been paid for at the same rate charged to private users, the total income from these 13 munic.i.p.ally owned plants would have been $25,817,720. This would have been $2,989,895 in excess of a fair return upon the total investment. No one would claim that the price of water has been increased under munic.i.p.al owners.h.i.+p. As a matter of fact, it has been substantially reduced and the quality of the water at the same time improved. The reduction in price, however, has been less than it would have been, had the interests of the consumers alone been considered. If the object of munic.i.p.al owners.h.i.+p is to supply pure water at the lowest possible price to the general public, there is no good reason why the city should demand a profit on the capital it has invested in the business. This would certainly be true where the earnings under munic.i.p.al owners.h.i.+p have been sufficient to pay for the plant. In this case it would be an injustice to consumers to make them contribute, over and above the cost of operating the plant, an additional amount sufficient to pay interest on the investment, inasmuch as they have supplied the capital with which the business is carried on. Any attempt to make munic.i.p.al owners.h.i.+p a source of revenue would mean the taxation of water consumers for the benefit of property owners. Nor is there any reason why the private consumers of water should be made to pay for the water used for public purposes. The water needed for public buildings, for cleaning streets and for extinguis.h.i.+ng fires ought to be paid for by those chiefly benefited--the property-owning cla.s.s.

If instead of considering these thirteen waterworks together, we take a single example--the third largest plant--the tendency to make public owners.h.i.+p a source of revenue is more clearly seen. The income from private users in the case of this plant was $4,459,404. The city used for public purposes 29.5 per cent. of the total amount supplied, which if paid for at the rate charged private consumers would have made the total income from operation $6,325,395. This would have been $2,929,232 more than was required to pay all expenses, including interest on the total investment.[169]

In the case of electric-light plants private owners.h.i.+p is the rule, only 460 of the 3,032 plants being under munic.i.p.al owners.h.i.+p. The Report of the United States Commissioner of Labor[170] gives the data for 952 of these plants, 320 of which are munic.i.p.ally owned and operated. Munic.i.p.al owners.h.i.+p, however, is mainly confined to the smaller cities and towns.

This is shown by the fact that although more than one-third of the 952 plants above mentioned are under munic.i.p.al control, only 30 out of 277, or less than one-ninth of the largest plants, are munic.i.p.ally owned.

This is to be accounted for by the more determined opposition to the policy of munic.i.p.al owners.h.i.+p by the capitalist cla.s.s in the larger cities, where private management is most remunerative. Munic.i.p.al plants, too, are often restricted to public lighting, not being allowed to furnish light or power for commercial purposes. This restricted form of munic.i.p.al owners.h.i.+p is merely a slight concession on the part of the private monopolist to the taxpaying cla.s.s. The general public, as consumers of light and power, derive no benefit from such a policy.

These and other facts which might be mentioned ill.u.s.trate the natural tendency of a system under which the power of the ma.s.ses is limited in the interest of the property-owning cla.s.s. The chief evils of munic.i.p.al government in this country have their source not in majority but in minority rule. It is in the city where we find a numerically small but very wealthy cla.s.s and a large cla.s.s owning little or no property that the general political movement toward democracy has encountered the most obstinate resistance. Only a small part of our urban population own land or capital. The overwhelming majority of those who live in cities are employees and tenants. In the year 1900 74.3 per cent. of the families in the 160 cities of the United States having 25,000 or more population lived in rented houses and only 14.5 per cent. in unmortgaged homes.[171] In the smaller towns the proportion of property owners was larger, while in the country the majority of the population belonged to the land-holding cla.s.s, 64.4 per cent. of the "farm" families owning their homes, 44.4 per cent. of such families owning homes that were unenc.u.mbered.[172]

"Much has been said concerning the necessity of legislative interference in some cases where bad men were coming into power through universal suffrage in cities, but the recent experience of the country shows that this has oftener been said to pave the way for bad men to obtain office or grants of unusual powers from the legislature than with any purpose to effect local reforms. And the great munic.i.p.al scandals and frauds that have prevailed, like those which were so notorious in New York City, have been made possible and then nursed and fostered by illegitimate interference at the seat of State government."[173]

The numerical preponderance of the property-owning cla.s.s in the country and of the propertyless cla.s.s in the cities must be taken into account in any attempt to find an explanation of the reluctance on the part of the state to recognize the principle of munic.i.p.al self-government. When we consider that the state government, even under universal suffrage, is largely government by taxpaying property owners, we can understand why the progress toward munic.i.p.al democracy has been so slow. Under universal suffrage munic.i.p.al self-government would mean the ascendency of the propertyless cla.s.s, and this, from the standpoint of those who control the state government, would jeopardize the interests of the property-holding minority.

This is doubtless one of the chief reasons why the state government has not been willing to relinquish its control over munic.i.p.al affairs. This fact is not recognized, however, by present-day writers on American politics. It is generally a.s.sumed that the corruption in state and munic.i.p.al government is largely due to the ascendency of the ma.s.ses.

This view of the matter may be acceptable to those who from principle or interest are opposed to democracy, but it ignores the facts which a careful a.n.a.lysis of the system discloses. Even in our state governments the changes that have been made as a concession to the newer democratic thought are less important than is generally supposed. The removal of property qualifications for voting and office-holding was a concession in form rather than in substance. It occurred at a time when there was an apparently inexhaustible supply of free land which made it possible for every one to become a landowner. Under such circ.u.mstances universal suffrage was not a radical or dangerous innovation. In fact, property qualifications for voting and office-holding were not necessary to the political ascendency of property owners in a community where the great majority of the citizens were or could become members of the property-owning cla.s.s. It is not likely that property qualifications would have been removed for state purposes without a more serious struggle, if the wide diffusion of property in the state at large had not appeared to be an ample guarantee that the interests of property owners would not be endangered by universal suffrage. It was probably not intended that the abolition of property qualifications should overthrow the influence of property owners, or make any radical change in the policy of the state government.

It is easily seen that the removal of property qualifications for voting and office-holding has had the effect of r.e.t.a.r.ding the movement toward munic.i.p.al home rule. Before universal suffrage was established the property-owning cla.s.s was in control of both state and city government. This made state interference in local affairs unnecessary for the protection of property. But with the introduction of universal suffrage the conservative element which dominated the state government naturally favored a policy of state interference as the only means of protecting the property-owning cla.s.s in the cities. In this they were actively supported by the corrupt politicians and selfish business interests that sought to exploit the cities for private ends. Our munic.i.p.al conditions are thus the natural result of this alliance between conservatism and corruption.

We can understand now why the state has been unwilling to permit the same measure of democracy in munic.i.p.al affairs that it has seen fit to employ for its own purposes. This is why our limited majority rule, which may be safe enough in the state government, is often deemed inexpedient for the city. It is also the reason for keeping the more important munic.i.p.al powers under the control of the state government, as well as the ground for continuing property qualifications in the city after their disappearance from the government of the state.

The checks above mentioned are not the only ones to be found, however, in our munic.i.p.al government. The city is organized, like the state government, on the plan of distributed powers and diffused responsibility. It contains, as a rule, an elaborate system of checks which affords little opportunity for the prompt and effective expression of local public opinion in the administration of munic.i.p.al affairs. At the same time, it gives the munic.i.p.al authorities power to inaugurate and carry out policies to which local public sentiment may be strongly opposed. This is seen in the control which the mayor and council quite generally exercise over the matter of munic.i.p.al franchises. Probably not a city of any importance could be mentioned in which the council has not granted privileges which have enriched individuals and private corporations at the expense of the public. This power has been the chief source of munic.i.p.al corruption, since it has made the misgovernment of cities a source of great profit to a wealthy and influential cla.s.s.

Those who imagine that the ignorant and vicious part of our urban population is the main obstacle to reform take but a superficial view of the matter. The real source of misgovernment--the active cause of corruption--is to be found, not in the slums, not in the population ordinarily regarded as ignorant and vicious, but in the selfishness and greed of those who are the recognized leaders in commercial and industrial affairs. It is this cla.s.s that, as Lincoln Steffens says, may be found "buying boodlers in St. Louis, defending grafters in Minneapolis, originating corruption in Pittsburg, sharing with bosses in Philadelphia, deploring reform in Chicago, and beating good government with corruption funds in New York."[174] This is the natural fruit of our system of munic.i.p.al government. The powerful corporate interests engaged in the exploitation of munic.i.p.al franchises are securely entrenched behind a series of const.i.tutional and legal checks on the majority which makes it extremely difficult for public opinion to exercise any effective control over them. The effort to provide a remedy for this condition of affairs took the form of a movement to limit the powers of the council. Boards and commissions have been created in whose hands have been placed much of the business formerly controlled by this body. The policy of subdividing the legislative authority of the city and distributing it among a number of independent boards has been carried so far, notably in New York, that, as Seth Low observes, the council has been largely deprived of all its legislative functions with the single exception of the power to grant public franchises.[175] It must not be inferred, however, that public opinion has favored the retention of this power by the council. The attempt on the part of the people to control the franchise-granting power has thus far largely failed, not because of any lack of popular support, but because our const.i.tutional and political arrangements have made it almost impossible for any reasonable majority to overcome the opposition of organized wealth.

Our efforts to bring about reforms in munic.i.p.al government have thus far largely failed to accomplish what was expected of them because we have persistently refused to recognize the principle of majority rule. We have clung tenaciously to the system of checks and balances with all its restraints on popular control. The evils of munic.i.p.al government are not the evils of democracy, but the evils of a system which limits the power of the majority in the interest of the minority.

CHAPTER XI

INDIVIDUAL LIBERTY AND THE CONSt.i.tUTION

The eighteenth-century conception of liberty was the outgrowth of the political conditions of that time. Government was largely in the hands of a ruling cla.s.s who were able to further their own interests at the expense of the many who were unrepresented. It was but natural under these circ.u.mstances that the people should seek to limit the exercise of political authority, since every check imposed upon the government lessened the dangers of cla.s.s rule. The problem which the advocates of political reform had to solve was how to secure the largest measure of individual liberty compatible with an irresponsible government. They were right in believing that this could be accomplished only by building up an elaborate system of const.i.tutional restraints which would narrowly limit the exercise of irresponsible authority. Individual liberty as they understood the term was immunity from unjust interference at the hands of a minority.

This was a purely negative conception. It involved nothing more than the idea of protection against the evils of irresponsible government. It was a view of liberty adapted, however, to the needs of the time and served a useful purpose in aiding the movement to curb without destroying the power of the ruling cla.s.s. Any attempt to push the doctrine of liberty farther than this and make it include more than mere immunity from governmental interference would have been revolutionary.

The seventeenth and eighteenth century demand was not for the abolition, but for the limitation of irresponsible authority. It was not for popular government based upon universal suffrage, but for such modifications of the system as would give to the commercial and industrial cla.s.ses the power to resist all encroachments upon their rights at the hands of the hereditary branches of the government. The basis and guarantee of individual liberty, as the term was then understood, was the popular veto such as was exercised through the House of Commons. This conception of liberty was realized for those represented in any coordinate branch of the government wherever the check and balance stage of political development had been reached.

The American revolution, which supplanted hereditary by popular rule, worked a fundamental change in the relation of the individual to the government. So far at least as the voters were concerned the government was no longer an alien inst.i.tution--an authority imposed upon them from above, but an organization emanating from them--one in which they had and felt a direct proprietary interest. It was no longer a government in which the active principle was irresponsible authority, but one which rested upon the safe and trustworthy basis of popular control.

The overthrow of monarchy and aristocracy necessitated a corresponding change in the idea of liberty to make it fit the new political conditions which had emerged. In so far as government had now pa.s.sed into the hands of the people there was no longer any reason to fear that it would encroach upon what they regarded as their rights. With the transition, then, from cla.s.s to popular sovereignty there was a corresponding change in the att.i.tude of the people toward the government. They naturally desired to limit the authority and restrict the activity of the government as long as they felt that it was irresponsible; but as soon as they acquired an active control over it, the reason which formerly actuated them in desiring to limit its powers was no longer operative. Their ends could now be accomplished and their interests best furthered by unhampered political activity. They would now desire to remove the checks upon the government for the same reason that they formerly sought to impose them--viz., to promote their own welfare.

This tendency is seen in the changes made in the state const.i.tutions at the beginning of the American revolution. As shown in a previous chapter, they established the supremacy of the legislative body and through this branch of the government, the supremacy of the majority of the qualified voters. We have here a new conception of liberty. We see a tendency in these const.i.tutional changes to reject the old pa.s.sive view of state interference as limited by the consent of the governed and take the view that real liberty implies much more than the mere power of const.i.tutional resistance--that it is something positive, that its essence is the power to actively control and direct the policy of the state. The early state const.i.tutions thus represent a long step in the direction of unlimited responsible government.

This, as we have seen, was the chief danger which the conservative cla.s.ses saw in the form of government established at the outbreak of the Revolution. They were afraid that the power of the numerical majority would be employed to further the interests of the many at the expense of the few, and to guard against such a use of the government they sought to re-establish the system of checks. The Const.i.tution which restored the old scheme of government in a new garb also revived the old conception of individual liberty. There is, however, one important difference between the eighteenth-century conception of liberty and that which finds expression in our const.i.tutional literature. Formerly it was because of the lack of popular control that the people generally desired to limit the authority of the government, but the framers of the Const.i.tution wished to bring about the limitation of governmental functions because they feared the consequences of majority rule.

Formerly the many advocated the limitation of the power of king and aristocracy in the interest of liberty; now the few advocate the limitation of the power of the many for their own protection. With the abolition of monarchy and aristocracy the att.i.tude of the few and the many has been reversed. The aristocratic and special interests that formerly opposed the limitation of political activity when they were predominant in the government, now favor it as a protection against the growing power of the ma.s.ses, while the latter, who formerly favored, now oppose it. The conservative cla.s.ses now regard the popular majority with the same distrust which the liberals formerly felt toward the king and aristocracy. In fact, the present-day conservative goes even farther than this and would have us believe that the popular majority is a much greater menace to liberty than king or aristocracy has ever been in the past.

"There can be no tyranny of a monarch so intolerable," says a recent American writer, "as that of the mult.i.tude, for it has the power behind it that no king can sway."[176] This is and has all along been the att.i.tude of the conservative cla.s.ses who never lose an opportunity to bring the theory of democracy into disrepute. The defenders of the American Const.i.tution clearly see that unless the fundamental principle of popular government is discredited the system of checks can not survive.

There is no liberty, we are told by the present-day followers of Alexander Hamilton, where the majority is supreme. The American political system realizes this conception of liberty mainly through the Supreme Court--an organ of government which interprets the Const.i.tution and laws of Congress and which may forbid the carrying out of the expressed will of the popular majority. It necessarily follows that the authority which can thus overrule the majority and enforce its own views of the system is an authority greater than the majority. All governments must belong to one or the other of two cla.s.ses according as the ultimate basis of political power is the many or the few. There is, in fact, no middle ground. We must either recognize the many as supreme, with no checks upon their authority except such as are implied in their own intelligence, sense of justice and spirit of fair play, or we must accept the view that the ultimate authority is in the hands of the few.

Every scheme under which the power of the majority is limited means in its practical operation the subordination of the majority to the minority. This inevitable consequence of the limitation of popular rule is not alluded to by the advocates of checks and balances, though it is obvious to any careful student of the system.

It would, however, do injustice to the intelligence of those who champion the scheme of checks and balances to give them credit for any real sympathy with the aims and purposes of democracy. Individual liberty as guaranteed by majority rule was not the end which the framers of the Const.i.tution had in view, nor is it the reason why the present-day conservative defends their work. The Const.i.tution as originally adopted did not contain that highly prized guarantee of personal liberty which democracy everywhere insists upon. The failure to make any provision for freedom of the press should be regarded as a significant omission. This, however, was not an essential part of the Federalists' scheme of government, which aimed rather to protect the property and privileges of the few than to guarantee personal liberty to the ma.s.ses. This omission is the more noteworthy in view of the fact that this guarantee was at that time expressly included in a majority of the state const.i.tutions, and that the temper of the people was such as to compel its speedy adoption as an amendment to the Federal Const.i.tution itself.

Liberty, as the framers of the Const.i.tution understood the term, had to do primarily with property and property rights. The chief danger which they saw in the Revolutionary state governments was the opportunity afforded to the majority to legislate upon matters which the well-to-do cla.s.ses wished to place beyond the reach of popular interference. The unlimited authority which the state government had over taxation and its power to restrict or abridge property rights were viewed with alarm by the wealthy cla.s.ses, who felt that any considerable measure of democracy would be likely to deprive them of their time-honored prerogatives. To guard against this danger the Const.i.tution sought, in the interest of the cla.s.ses which dominated the Federal Convention, to give the widest possible scope to private property. It prohibited private property in nothing--permitting it, as originally adopted, even in human beings. It may be said without exaggeration that the American scheme of government was planned and set up to perpetuate the ascendency of the property-holding cla.s.s in a society leavened with democratic ideas.

Those who framed it were fully alive to the fact that their economic advantages could be retained only by maintaining their cla.s.s ascendency in the government. They understood the economic significance of democracy. They realized that if the supremacy of the majority were once fully established the entire policy of the government would be profoundly changed. They foresaw that it would mean the abolition of all private monopoly and the abridgment and regulation of property rights in the interest of the general public.

The Const.i.tution was in form a political doc.u.ment, but its significance was mainly economic. It was the outcome of an organized movement on the part of a cla.s.s to surround themselves with legal and const.i.tutional guarantees which would check the tendency toward democratic legislation.

These were made effective through the att.i.tude of the United States courts which, as Professor Burgess says, "have never declined jurisdiction where private property was immediately affected on the ground that the question was political."[177]

"There can be no question that the national government has given to the minority a greater protection than it has enjoyed anywhere else in the world, save in those countries where the minority is a specially privileged aristocracy and the right of suffrage is limited. So absolute have property rights been held by the Supreme Court, that it even, by the Dred Scott decision, in effect made the whole country a land of slavery, because the slave was property, and the rights of property were sacred."[178]

In carrying out the original intent of the Const.i.tution with reference to property the courts have developed and applied the doctrine of vested rights--a doctrine which has been used with telling effect for the purpose of defeating democratic reforms. This doctrine briefly stated is that property rights once granted are sacred and inviolable. A rigid adherence to this policy would effectually deprive the government of the power to make the laws governing private property conform to social and economic changes. It would disregard the fact that vested rights are often vested wrongs, and that one important, if not indeed the most important, task which a government by and for the people has to perform is to rectify past mistakes and correct the evils growing out of corruption and cla.s.s rule. A government without authority to interfere with vested rights would have little power to promote the general welfare through legislation.

The adoption of the Const.i.tution brought this doctrine from the realm of political speculation into the arena of practical politics. The men who framed and set up our Federal government were shrewd enough to see that if the interests of the property-holding cla.s.ses were to be given effective protection, it was necessary that political power should rest ultimately upon a cla.s.s basis. This they expected to accomplish largely through the judicial veto and the power and influence of the Supreme Court. The effect of establis.h.i.+ng the supremacy of this branch of the government was to make the legal profession virtually a ruling cla.s.s. To their charge was committed under our system of government the final authority in all matters of legislation. They largely represent by virtue of their training and by reason of the interests with which they are affiliated, the conservative as opposed to the democratic influences. The power and influence exerted by lawyers in this country are the natural outgrowth of the const.i.tutional position of our Supreme Court. Its supremacy is in the last a.n.a.lysis the supremacy of lawyers as a cla.s.s and through them of the various interests which they represent and from which they derive their support. This explains the fact so often commented on by foreign critics, that in this country lawyers exert a predominant influence in political matters.

We are still keeping alive in our legal and const.i.tutional literature the eighteenth-century notion of liberty. Our future lawyers and judges are still trained in the old conception of government--that the chief purpose of a const.i.tution is to limit the power of the majority. In the meantime all other democratic countries have outgrown this early conception which characterized the infancy of democracy. They have in theory at least repudiated the eighteenth-century doctrine that the few have a right to thwart the will of the many. The majority has in such countries become the only recognized source of legitimate authority.

"There is no fulcrum _outside_ of the majority, and therefore there is nothing on which, as _against_ the majority resistance or lengthened opposition can lean."[179] This statement was made with reference to France, but it would apply as well to England, Switzerland, and all other countries in which the principle of majority rule has received full recognition.

On the other hand American const.i.tutional and legal literature still inculcates and keeps alive fear and distrust of majority rule. The official and ruling cla.s.s in this country has been profoundly influenced by political ideas which have long been discarded in the countries which have made the most rapid strides in the direction of popular government.

The influence which our const.i.tutional and legal literature, based as it is upon a profound distrust of majority rule, has had upon the lawyers, politicians, and public men of this country can hardly be overestimated.

It is true that many who have been most influenced by this spirit of distrust toward popular government would be unwilling to admit that they are opposed to majority rule--in fact, they may regard themselves as sincere believers in democracy. This is not to be wondered at when we consider that throughout our history under the Const.i.tution the old and the new have been systematically jumbled in our political literature. In fact, the main effort of our const.i.tutional writers would appear to be to give to the undemocratic eighteenth-century political ideas a garb and setting that would in a measure reconcile them with the democratic point of view. The natural and inevitable result has followed. The students of American political literature have imbibed the fundamental idea of the old system--its distrust of majority rule--along with a certain sentimental attachment to and acceptance of the outward forms of democracy. This irreconcilable contradiction between the form and the substance, the body and the spirit of our political inst.i.tutions is not generally recognized even by the American students of government.

Const.i.tutional writers have been too much preoccupied with the thought of defending and glorifying the work of the fathers and not enough interested in disclosing its true relation to present-day thought and tendencies. As a consequence of this, the political ideas of our educated cla.s.ses represent a curious admixture of democratic beliefs superimposed upon a hardly conscious substratum of eighteenth-century doctrines. It is this contradiction in our thinking that has been one of our chief sources of difficulty in dealing with political problems.

While honestly believing that we have been endeavoring to make democracy a success, we have at the same time tenaciously held on to the essential features of a political system designed for the purpose of defeating the ends of popular government.

CHAPTER XII

INDIVIDUAL LIBERTY AND THE ECONOMIC SYSTEM

The American doctrine of individual liberty had its origin in economic conditions widely different from those which prevail to-day. The tools of production were simple and inexpensive and their owners.h.i.+p widely diffused. There was no capital-owning cla.s.s in the modern sense.

Business was carried on upon a small scale. The individual was his own employer, or, if working for another, could look forward to the time when, by the exercise of ordinary ability and thrift, he might become an independent producer. The way was open by which every intelligent and industrious wage-earner could become his own master. Industrially society was democratic to a degree which it is difficult for us to realize at the present day. This economic independence which the industrial cla.s.ses enjoyed ensured a large measure of individual liberty in spite of the fact that political control was in the hands of a cla.s.s.

The degree of individual freedom and initiative which a community may enjoy is not wholly, or even mainly, a matter of const.i.tutional forms.

The actual liberty of the individual may vary greatly without any change in the legal or const.i.tutional organization of society. A political system essentially undemocratic would be much less destructive of individual liberty in a society where the economic life was simple and owners.h.i.+p widely diffused than in a community possessing a wealthy capitalist cla.s.s on the one hand and an army of wage-earners on the other. The political system reacts, it is true, upon the economic organization, but the influence of the latter upon the individual is more direct and immediate than that of the former. The control exerted over the individual directly by the government may, as a matter of fact, be slight in comparison with that which is exercised through the various agencies which control the economic system. But the close interdependence between the political and the business organization of society can not be overlooked. Each is limited and conditioned by the other, though const.i.tutional forms are always largely the product and expression of economic conditions.

Individual liberty in any real sense implies much more than the restriction of governmental authority. In fact, true liberty consists, as we have seen, not in divesting the government of effective power, but in making it an instrument for the unhampered expression and prompt enforcement of public opinion. The old negative conception of liberty would in practice merely result in limiting the power of the government to control social conditions. This would not necessarily mean, however, the immunity of the individual from external control. To limit the power of the government may permit the extension over the individual of some other form of control even more irresponsible than that of the government itself--the control which inevitably results from the economic supremacy of a cla.s.s who own the land and the capital.

The introduction of the factory system forced the great majority of small independent producers down into the ranks of mere wage-earners, and subjected them in their daily work to a cla.s.s rule under which everything was subordinated to the controlling purpose of the employers--the desire for profits.

The significance of this change from the old handicraft system of industry to present-day capitalistic production is fully understood by all students of modern industry. Even Herbert Spencer, the great expounder of individualism, admitted that the so-called liberty of the laborer "amounts in practice to little more than the ability to exchange one slavery for another" and that "the coercion of circ.u.mstances often bears more hardly on him than the coercion of a master does on one in bondage."[180] This dependence of the laborer, however, he regarded as unfortunate, and looked forward to the gradual amelioration of present conditions through the growth of co-operation in production.

Individualism as an economic doctrine was advocated in the eighteenth century by those who believed in a larger measure of freedom for the industrial cla.s.ses. The small business which was then the rule meant the wide diffusion of economic power. A _laissez faire_ policy would have furthered the interests of that large body of small independent producers who had but little representation in and but little influence upon the government. It would have contributed materially to the progress of the democratic movement by enlarging the sphere of industrial freedom for all independent producers. It does not follow, however, that this doctrine which served a useful purpose in connection with the eighteenth-century movement to limit the power of the ruling cla.s.s is sound in view of the political and economic conditions which exist to-day. The so-called industrial revolution has accomplished sweeping and far-reaching changes in economic organization. It has resulted in a transfer of industrial power from the many to the few, who now exercise in all matters relating to production an authority as absolute and irresponsible as that which the ruling cla.s.s exercised in the middle of the eighteenth century over the state itself. The simple decentralized and more democratic system of production which formerly prevailed has thus been supplanted by a highly centralized and thoroughly oligarchic form of industrial organization. At the same time political development has been tending strongly in the direction of democracy. The few have been losing their hold upon the state, which has come to rest, in theory at least, upon the wall of the many. A political transformation amounting to a revolution has placed the many in the same position in relation to the government which was formerly held by the favored few.

As a result of these political and economic changes the policy of government regulation of industry is likely to be regarded by the ma.s.ses with increasing favor. A society organized as a political democracy can not be expected to tolerate an industrial aristocracy. As soon, then, as the ma.s.ses come to feel that they really control the political machinery, the irresponsible power which the few now exercise in the management of industry will be limited or destroyed as it has already been largely overthrown in the state itself. In fact the doctrine of _laissez faire_ no longer expresses the generally accepted view of state functions, but merely the selfish view of that relatively small cla.s.s which, though it controls the industrial system, feels the reins of political control slipping out of its hands. The limitation of governmental functions which was the rallying-cry of the liberals a century ago has thus become the motto of the present-day conservative.