THE ECONOMIC PHILOSOPHY OF
GEORGE GUNTON

: Thesis for fhe Degree of M. A.
‘ MICHIGAN STATE COLLEGE

Lillian Makai‘ura Gottsegen
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This is to certifg that the

thesis entitled

The Economie Philasorhy of
3eorge Gunton

presented In]

Lillian Makatura Gottsegen

has been accepted lUWUI‘IlS fulfillment

of the requirements fur

MA. English

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THE ECONOMIC PHILOSOPHY'OP GEORGE GUNTON

by
Lillian Hakatura Gottsegen

A THESIS
Submitted to the Graduate school of Michigan State
College of Agriculture and Applied Science in
partial fulfillment of the requirements
for the degree of

MASTER OI.ARTS

Department of English
19u9

Tlilqe. 3

PREEACE

Although George Gunton was an economist, this paper is not an eco-
nomic treatise, nor does it attempt a definitive study of all of his eco-
nomic ideas. Such a specialized study belongs in the province of the pro-
fessional economist, and is not one which the student of literature is
equipped to handle. But, any knowledge of the literature of a specific
period is incomplete without some understanding of‘the major intellectual
dilemmas and syntheses which give to an era its peculiar character and
coloring. By using George Gunton as a focal point. this study has attempted
to capture something of the mood of the great upheaval in the American so-
cial sciences at the end of the nineteenth century, which resulted from
the impacts of the various forces of science, industrial conditions, po-
litical agitation. and foreign influences. I have tried to separate in
Gunton's ideas the unique and the representative. and have dealt more
fully with those economic doctrines which best reflect the swirling eco-
nomic currents of his age.

The short history of economic thought in America which appears in this
thesis may suffer from certain shortcomings, either through oversimplifi-
cation or faulty proportion. But I have been unable to find a cogent his-
tory of economic doctrines which deals exclusively with American. as dis-
tinct from hropean deve10pments. for this section I found most useful
L. E. Haney's figton of Econggic Thought and C. Gide and O. Rist's History
21'; Bcgnomic Doctrines for general analysis, and Joseph Dorfman's Thorstein
Veblen and His America for invaluable factual material.

he magazine which Gunton started in 1891 was called the Social Eco-
{1323:} until 1896. when the name was changed to Gunton's Mine. I have

assumed that the unsigned articles were either written by Gunton himself,

or received his approval as editor, and hence represent his opinions.
‘3‘"? ‘3‘?) .3“?

M5“) “-2

 

 

I wish to express my thanks to the staffs of the Michigan State College
Library. the Michigan State Library, and the John Grerar Library for their
friendly cooperation. I appreciate all the aid extended by the graduate
faculty of the English Departmentjand I am also indebted to Professor 7. B.
Smith of the Department of Economics for his helpful advice. For suggesting
the subject of this study. and for his sympathetic supervision. my deepest

thanks go to Professor Russel 3. Eye.

COHTENTS

Part Pages
I Introduction 1
II Gunton and the Rise of Economic Science in the
united States 13
1. The American Version of Classicism 18
2. The Turning Tide 23
3. !he lull Revolt 33
h. Gunton's Position #1

III Conclusion 89

IIThODUCTION

Perhaps at no time in American history has there been such radical
and widespread change on both the physical and intellectual levels, per-
meating every class of society, as in the latter part of the nineteenth
century. Not only was the basic structure of American institutions slowly
changing, but the more nebulous stream of prevailing ideas and faiths was
also soon to be swept off in startling new directions. The rush of events
was so rapid that most Americans were quite unaware of the significance of
the passing of the frontier and of the exceedingly swift and irreSponsible
expansion of industry; they trailed behind, panting and a bit short of
breath, dragging behind them the clumsy garments of outworn phiIOSOphies.
They did not realize that the day of the golden American dream was already
at its zenith and was about to fade.

In spite of the American tradition of change and unpermanence, strength-
ened by the influence of a beckoning frontier, the average American was not
quick to grasp these changes. He showed in the seventies a remarkable per—
sistence in clinging to the old faith in individualism and progress, and an
equally remarkable capacity for patience with or blindness toward the glar—
ing abuses of the day. As one historian has said,

The great body of wage earners was conservative along social

and political lines. America was not fertile soil for sowing

seeds of radicalism. The fact that from 1860 to 1908 the Re-

publican party was victorious in all but two presidential elec-

tions bears witness to the fundamental conservatism of farmers

and laborers as a class.1

Parringtcn also declares, "In the eighties American social thought was

I,
still naive and provincial."‘

 

1 George N. Stephenson, American History Since 1365) 101-2.
2 Vernon.Parrington, The'Beginnings of Critical Realism in America, 2&5.

 

 

' l l III {a l [

 

|[[[llll

Hardly more than the average American did the intellectual escape
from the confusion and perplexity of the Gilded Age. He did not, as he
should have done, emerge immediately as a forceful leader with a clear
vision of the times. Far too many intellectuals were evading the real
problems of the day by busying themselves in theories and abstractions.l
And even those who did hazard a role of action, bred as they were in the
refined and genteel tradition of the pre—1860 Golden Age, shrank from the
grosser contacts of political and industrial class strife.

The genteel culture of America was no better than bankrupt in

presence of brutal reality, uite unequipped to interpret the

sprawling America that was transforming itself before its eyes

into something it hated but did not understand.3

The Optimism and disinterest of the majority of the peOple appear all
the more striking when we examine a realistic picture of what was actually
happening in America. That in the midst of tremendous plundering, graft,
political scandals, exploitation, panics, most of the peOple should have
remained so hopeful, so untouched by real deSpair, so avid for polite sen-
timental literature, so captivated by the Horatio Alger stories --- this
fact suggests the defiant refusal of a basically troubled people to be
disillusioned.

There were, however, the important exceptions to the rule; the minority
who were troubled by what they saw and who actively voiced their disap-
proval.

Amidst the ruck and clamor of the times a tiny note of criti-

cism was listed up, timid and uncertain at first, but growing

more confident and more strident as the decade grew older. It
was not searching criticism. Sooner or later it was pretty cer-
tain to run into a blind alley of moral indignation, overlook-

 

IiParrington, op. cit., 104.
2 Merle E. Curti, The Growth of American Thought, 525.
Parrington, op. cit., 139.

ing the major issues and leaving the vital factors of the

problem unconsidered. Yet such as it was -—- shallow and

feeble enough often to excite wonder in a later generation

--- it marks the rise of a spirit of skepticism towards the

blowsy doctrine of manifest destiny that since the fifties

had been blowing about the land.1
The early criticism of the seventies and eighties rose mainly from those
who had suffered directly from the evils of a cut-throat, competitive so-
ciety. There were many obscure men, labor leaders or occasional radicals
like Wendell Phillips, who met the industrial problems squarely. Yet the
cities were themselves at odds in determining just what the basic and most
vital problems were, and what the cures. There were, too, some intellec-
tuals who faced up to the problems honestly -—- whether pessimistically,
as Henry Adams and James Russell Lowell, or Optimistically, as George
William Curtis, who felt that a good solution would be civil service re-
form to drive out the corrupt Spoils system. Still others, like Edwin Law-
rence Godkin felt that paternalistic government was the worst evil;2 and
that the remedy lay in the intellectual's resumption of civic leadership.3
There was particular significance, however, in the growing discontent of
farmers and workers who began to cry "unfair" and to join protest organiza-
tions aimed at curbing flagrant abuses and protecting their interests. The
Grange was formed in 1867, the Knights of Labor in 1369, and the Greenback
Party in 1876. Yet the numbers of farmers and laborers who recognized the
need for organized action were pathetically few. Only small groups really
became active in the fight outside of moments of crisis such as the general

Lg.

strike. Long before the Haymarket affair had crystallized public resent-

ment, majority Opinion generally regarded the worker as a trouble—maker

 

IParrington, 0p. cit., 137.
3 Ibid, 183-9.
9 Curti, 0p. cit., 526.
Stephenson, on. cit., 97, 100, 102.

 

or "anarchist." Against the wall of prejudice raised by the power of cor-
porate wealth, conservative churches, and antagonistic legislators, the
feeble outcry of labor Opposition was muffled.l Most of the discontent of
the two decades from 1876 to 1896 was manifested by independent farmers,
who were waging private political wars with capitalists and financiers.
though they had not yet formulated a cohesive philos0phy.2 All Of these
men voicing dissatisfaction, scattered and diverse as their Opinions were,
shared one thing in common. They looked at the facts of the economic,
social, and political scene before them. And it was these early protests
and efforts at stemming the tide of ruthless espansion that cleared the
way for the later, dynamic generation Of muckrakers and reforms.

We have seen the two main reactions to the drastic changes in economic,
social and political conditions of the later nineteenth century --- compla-
cence and indignation. We have now to analyze the chief aSpects of the
great shift in American industry that fomented such radical changes in the
composition of society and later in its patterns of thought.

If the War of 1812 introduced the factory system, the Civil War

effected an Industrial Revolution, and it is this develOpment

of the Industrial Revolution which has been the outstanding

featufie Of American economic life in the half century after

1860.

Here is an understandable cause for the national Optimism that characterized
America in its transition from an agrarian to an industrial society. Until
the eighties agriculture had been the most important source of wealth. By
1890 manufacturing had forged to the front; by 1900 the total Value of manu-

factured goods was more than twice that of agricultural products. Along

with this remarkable industrial eXpansion came a corresponding growth in

 

IStephenson, Op. cit., 105-6.
2 Charles A. Beard, Contemporary American Histogy, 147.
Harold U. Faulkner, American Economic Histogy, A78.

 

 

I I ‘ I ..l ‘.l

in economic independence. The United States was growing rapidly self-
sufficient, no longer dependent on EurOpe for manufactured articles. The
high protective tariff and steady stream of immigration from EurOpe, supply-
ing a needed cheap labor market. created most prOpitious conditions for de-
veIOping the natural resources and agricultural wealth, free from foreign
competition.1 In addition to these factors was the discovery Of revolu-
tionary techniques for producing steel in large quantities and for refining
Oil. These industries blossomed into gigantic corporations, driven by
shrewd, clever men who made themselves millionaires in the process.2 Keep-
ing up with the tremendous pOpulation increases caused by a prOpagandized
immigration that filled up the cities and overflowed into dismal slum areas.
and that strufik out hOpefully into the western expanses Of Wisconsin and
Minnesota, was the feverish construction of railways across the nation,
followed by their consolidation into lines and particular systems.3 The
contribution of railroad expansion to the develOpment of industry and agri-
culture, both of which leaned heavily on cheap and swift internal trans-
portation, was very great.

The scandal of the Credit Mobilier outfit, a sham company organized
to defraud the government Of money granted for construction purposes,
brought to light the infamous profiteering and graft practised by the rail-
road magnates, and even incriminated highly-placed legislators for accept-
ing bribes in return for silence. Yet no punishment was meted out. There
were many other instances of corrupt practices and questionable ethics that

went along with the new techniques of finance capitalism.

 

1 Faulkner, Op. cit., 478. H83.

2 John D. Hicks, ALShort Historygof American Democracy, nus-7.
3 Beard, Op. cit., 29-30.

4 Ibid, 31.

 

 

I I [ l I l I '1;

Men like Jay Gould and Daniel Drew controlled railroads not to

serve the public, improve the prOperty and make legitimate pro—

fits, but to manipulate the stock to build their fortunes.1

Yet the blame cannot be levelled only at the business man for his stock
watering, market manipulation, and illegal practices. The success of his
ventures depended in large degree on his ability to manipulate legislators.
‘ If there was a General Robert C. Schenk who participated in a scheme to sell
thousands of dollars of worthless stock to innocent British investors, there
was also a Boss Tweed maintaining his corrupt political power by sheer bri-
bery. At least the latter was punished.2 And on the national scene, Presi-
dent Grant's administration presented no better example to the nation. The
growing influence of wealth and big business on government was so noticeable
that the Senate was commonly referred to as the "House of Lords,"3 or as
"Millionaire's Club."4

One of the most outstanding features of industrial develOpment in the
eighties, however, was the trend toward the concentration of business. Trusts
became a pOpular form of organization by which large rival companies could
consolidate their interests. eliminate ruinous competition, and virtually
establish a monOpOly. Whether or not this movement toward consolidation is
inevitable in free capitalistic economy, this has been a marked trend in
American economic life. The growth of large scale business made large scale
production and marketing possible, introduced new labor-saving machinery,
and develOped highly efficient production methods by putting division Of
labor into effect.5

The advent of the huge corporation and trust also marked a new era in

the lives of workers. Personal contact between owner and employee became

 

IfiFaulkner, Op. cit., 595.

2 Hicks, Op. cit., 463, h65-7.

3 Stephenson, Op. cit., 133.

' Richard Hofstadter, The American Political Tradition, 166.

5 Faulkner, Op. cit., 519, 525, 533.

impossible by virtue of the mammoth proportions Of the business.1 The
accumulations of vast fortunes by captains of industry, while verifying
the American dream of success, really dramatized the poverty and low state
of the working man, and sharp class divisions began to form where few had
2

been before. The massing of workers in the slums of cities had another
effect on them also. They were able to mingle, exchange ideas, and become
slowly educated to the need for labor organizations to deal with the power—
ful combines that represented the employer.1 The bitter strikes of 1877
and 1886 with the subsequent ruthless suppression by state and federal trOOps
testified to the miserable position of the worker, eXploited by employers,
labelled "hoodlums, looters, communists, loafers, incendiaries, and felons"
by a jeering press, and unrepresented by a government and legal system that
pandered to the interest of capital.“

In the rural areas, farmers too were finding the new, turbulent condi-
tions difficult to keep up with.

So significant has been the industrial advance since 1560 that

it has obscured an agricultural development quite as momentous.

The half century from 1860 to 1910 witnessed an agrarian revo-

lution which included.both the introduction of agricultural

machinery and the increased adOption of scientific farming ...

Spurred on by the Homestead Act, by migration from EurOpe, and

by all Of the influences which have advanced our frontier, the

agricultural domain was pushed westward until most of the us-

able land was preempted.
This rapid physical expansion plus the introduction Of new machinery caused
overproduction and low prices, creating hardships for the farmer. The high

interest rates charged by eastern capitalists on money that farmers had to

borrow to equip their farms was another sore grievance, for as prices fell,

 

Ff“

Faulkner, Op. cit., 534.
Beard, Op. cit., 143.
Faulkner, Op. cit., 552—3.
Stephenson, Op. cit., 106-7.
Faulkner, Op. cit., uu7.

\nJ—de {OI—4

(D

the value of money increased, and many unfortunate farmers, unable to keep
up payments, lost their prOperty to the financiers. Exceedingly dependent
as they were on the railroads, they were also at the mercy of exorbitantly
high short haul rates, careless handling of products, and the gouging
middlemen of the grain exchanges. They suffered too from th financial
panics, depressions, and a deflating currency.1
In spite of all these signs of a new economic era Of consolidation and
stratification and in spite of the numerous sources of alarm and indigna-
tion, the worker, the farmer, and the laborer accepted their depressed posi-
tion willingly enough as only a temporary one, and as part of the natural
order of things. Eacn accepted these conditions because the golden promise
of the American dream still shed its radiance for him, overshadowing the
growing cracks in the economic system. He was unaware that th character
of the American dream had also undergone a change. Originally idealistic
and based on a romantic heritage of equalitarianism and Emersonian individ-
ualism, it had now become corrupted into a crude code to justify selfish
acquisitive desires, responding to the demands of an aggressive, assertive
business class. Moreoever, he fact that it was the business man who now
set the pace and moral tone in society also had repercussions on the in-
tellectual climate of the times. The professional classes, which had for-
+5
merly taken the lead, were now relegatedla subordinate position, and many
intellectuals, among them journalists, teachers, lawyers, ministers, began
almost unconsciously to defend the ideals and standards of the ascendant
class, elevating the value of prOperty, forsaking the cause of liberal arts

f'I

for that of "practical" studies, and praising the philanthrOpy I the rich.2

 

IFE‘aulkner, Op. cit., ##7—8.
curti, O o Cite, 508’ 517-200

illil-[ll‘l‘nlli

 

I [ll‘ll ll

By far the most significant factor in reinforcing and completely justi-
fying the rationale of predatory business ethics to the peOple was the
application to the social sciences of the Darwinian-Spencerian theories of
organic evolution. By this transfer of concepts, ruthless competition in
business became merely a human counterpart of the laws of struggle. adap-
tation, and.survival constantly Operating in nature. Thus, he who survived
was, by implication, the most fit to rule. Andrew Carnegie was only ex—
pressing a commonly accepted maxim when he said, "... while the law (of com-
petition) may be sometimes hard for the individual. it is best for the race,
because it insures the sgrvival of the fittest in every department."1 Another
writer defended the competitive principle thus:

It would be strange if the "captain of industry"did not some-

times manifest a militant Spirit for he has risen from the

ranks largely because he was a better fighter than most of us.

Competitive. commercial life is not a flowery bed of roses.

but a battle where "the struggle for eristence" is defining

the industrially "fittest to survive."

‘These ideas came to be associated.wi h the new phiIOSOphy of Social
Darwinism. which was actually based on the Spencerian version of the evolur
tionary theory, and which postulated an Optimistic doctrine of progress and
of laissez faire. Industrialists and intellectuals alike found the concept
of a natural, ordered progression of events extrem ly palatable, because
it helped to account for the great transformations of a shifting society,
and also because it provided a convenient excuse for justifying the status
quo and preventing unwanted government interference. The doctrine of de-
sign and progress was further enhanced by the reconciliation of the evolur

tionary theory with religious beliefs. Henry Ward Beecher and other liberal

theological leaders accepted and prOpagated the idea that evolution har-

 

1 Andrew Carnegie, The Gospel of Wealth, u.
2 Quoted in Curti (571) from Henderson's "Business Men and Social Theorists,"
American Journal of Sociology. I, (1896). 355. ff.

13

monized with the essentials Of Christian belief. The young philOSOpher.
John Fiske, was even more influential with his lectures, teaching that
natural laws had direction and purpose, and were God's method Of achieving
his divine will in society.

Thus the position Of the captain of industry was not only made secure
by virtue of his wealth and influence, it was also SUpported by the laws of
nature, since he was the fittest and had therefore survived, and by the
sanction Of God since the progress of society was planned and regulated by
divine power. Who would be so impious as to defy the law Of nature and the
will of God?

This was the general nature of the scene that greeted George Gunton,
who was newly arrived from England in 187b, penniless and minus his wife
and eight children.2 Against this background of economic, social, and poli-
tical turbulence, he was to play his role as labor leader and conservative
political economist. This was a fertile period for new develOpments in
the social sciences in the United States, for the great industrial boom had
created conditions that caused growing dissatisfaction with the complacent.
Classical economic doctrine that had formulated all the economic laws of the
universe once and for all, and that regarded all the disturbing facts which
did not fit into the picture as necessary deviations.3 Once the rebellion
had started, it did not take long for all manner of thoughtful men to come
up with a variety of economic ideas modifying or Openly challenging the pre-
conceptions of the classical school. The wealth of economic literature pro-

duced in this period reflects the same confusion and grOpings for a consis-

 

1 Curti, on. cit., 550-1.
2 Dictionarr Of gmerican Biography, 55.
3 Richard T. Ely, Ground Under Our Feet, 152.

'll{ll‘{l‘.

 

lllllll

ll

tent theory Of capitalism which English and continental economists had un-
dergone a few decades before.1 Now, America was coming of age, and among
the rising new crOp of economic thinkers was George Gunton.

Today George Gunton is little known. His works have not been reprinted
and are difficult to come by. He rates in most economic histories perhaps
a sentence, a passing reference, or a footnote. He is forgotten because his
ideas, so widely circulated in his time, were soon outmoded and died with
the past. Then too, more arresting economic thinkers have crowded him into
obscurity. Those who are remembered are those who had ideas that were radi—
cal and shocking in their day, but whose ideas have become accepted axioms
today. For these reasons, the work of Gunton has been largely forgotten.

Yet there is great value in studying his contribution to the economic
thought Of his time. He represents an interesting combination of both the
reactionary and enlightened thought of this period. Certain aspects Of his
thought cling fast to the rigid rules Of the Classical school; yet his
theories also embrace the new scientific approach Of the inductive school.
He was a sincere champion of both the workingman and the millionaire, and
as such, he represents a quixotic union of the two most sharply Opposed
groups of the day. Gunton anticipated certain fairly modern ideas in his
emphasis on labor as consumer, and his justification Of the reasonableness
of an eight-hour working day greatly aided the cause Of labor. However, be-
cause Of his Spirited defense of trusts, he was also an important apologist
for the wealthy industrialists, who were under withering fire a the turn of
the century. Gunton's doctrines became widely known through the distribu-
tion Of his magazine the Social Economist, founded in 1891, the beginning

of the critical era. He also helped to found an institute for the study of

 

1 Eric R0321, A History of Economic Thought, v.64.

 

 

. III II
I ll- I'll

12

political economy. In a period Of rival economic philOSOphies and rival
magazines, great controversies and lively verbal battles, we can learn much
about the nature and force of the Opposition to more radical thought by an
examination of the position Of a man whose ideas were, on the whole, fair-

ly representative Of the times.

GUTTON
AXE THE LISE CF ECOIOHIC SCIEICE

if TEE LT TED STATES

Gunton arrived in the United States at a time when the study Of poli-
tical economy was just beginning to emerge from a prolonged period of iner-
tia and stagnation. The economists, themselves, had been largely reSpon-

sible for the painful lack of vitality in the economic science of the six-

ties and seventies. They were, on the whole, an extremely narrow and doc-
trinaire lot, and precluded the possibilities of new developments by their
advocacy Of and slavish adherence to the doctrines of the British Classi-
cal school.1 Nor did they respond to the small but growing public dis-
satisfaction with industrial conditions, but continued solidly tO maintain
the absolute validity of the eterna "laws" Of economics, and the necessity
for a thoroughgoing policy Of laissez faire on the part Of the government.
In describing this unhealthy state Of affairs, Francis A. Walker, first
president of the American Economic Association, later commented:

... while Laissez fairs was asserted, in great breadth, in

England. the writers for the reviews exaggerating the utter-

ances Of the professors in the universities, that doctrine

was carefully qualified by some economists, and was held by

none with such strictness as was given to it in the United

States. Here it was not made the test of economic orthodoxy,

merely. It was used to decide whether a man were an econo-

mist at 811.2
The reaction against orthodoxy was compe‘atively late in arriving in America,
having started years earlier in EurOpe, partly because of the abject re—

liance on the English Classical school, and also partly because Of the

subsequent isolation of the American intellectuals in the field Of econo-

 

: Lewis H. Haney, History_of Economic Thought, 716-7.
Quoted by Richard T. Ely in Ground Under Our Feet, 127.

 

lb

mic thought.1 Once the standard had been set p_, and the laws formulated
once and for all, there vm s little need for communi.cation among the recog—
nized ecor omists. In their orthodoxy, they steam wtly i; :nored the heretical
zorks of more radical American writers, such as Faymond, Carey, and Henry
George, as well as those of the great Europe an left wing thin1:ers, such as
Sismondi, Saint-Simon, Louis Blane, Bastiat, Proudhon, Engels, and Marx.2
”with only such meagre requisites needed, economists had inclined toward the
opinion that no special training at all was necessary for the teaching of

political economy, and, th at any one was qua .lif ied and fit for the task who

had some little interest anl at least one "good" textbook. Amasa walker

father of Francis and also an economist, had wiit en in his da ,"Although
desirable thet the instr actor should be familiar wi h the subject h'mself,
is by no means indispensable."3 And Francis Walker had further described
the prevalent attitude of economists toward their field:
Jr“
I don't think that I exaggerate when I s y that, among those who
deemed themselves the guardians of he true faith, it was consi-
dered far he etter that a me“ should know nothing aoout econor ic
literature, and have no interest whatever in tb e subject, than
that, with any amount of learning and any degree of honest pur-
pose, he should have ac opted views varying from the standard that
was set up.
So hardened was the condition of economic science that the work of any man
who deviated from orthodoxy was considered valueless.
Since economics suffered from petrifaction, there was little reason to
hope for popular interest. The teaching of political economy had become

barren, and was frequently labelled the "dismal science" or "dry bones,"

particularly because of the pessimistic tone of the Manchesterie n Classical

 

Ely, 0p. cit., 129.

Vernon Parrington, The Beginnings of Critical Realism in nmarica, 105.
Haney, on. cit., 718.

Quoted in Ely, on. cit., 127.

Ely, ibid, 126.

 

m-C'U)NH

{...l
U1

school.1 The people could see no practical value in such abstract, cut-and-
Eried theories, which could not adequately emplain or handle the disturbances
of the new industrial era. When it came to practical matters, they ignored
the economic theorists in the colleges.2 One writer has described this
cleavage between theory and fact quite well.

ne Opinion prevails far too widely that political economists

.ust be mere doctrinaires and must contend for some set of Opi-

nions and some course of policy. Critical study of phenomena
is as unpOpular as free thinking in religion.

1+3

t

Certainly few of America's great men —-- Franklin, Jefferson, Hamiltox —--
who had possessed some economic talent, had ever devoted themselves to
working out a complete system of economic theory, finding themselves too
busy with solving the immediate and practical problems.“ Yet, while pOpu—
lar attention avoided the study of theoretical economics as dull and hate-
ful, interest was growing in specific economic problems, which were becoming
more insistent and more crucial every day. It is in the sphere of practical
economics that we find the major American achievements. As a critic of the
times pointed out:

Speaking generally ... the men best qualified to stand in the

front rank of American.Economists are not the authors of sys—

tems or general theories, or textbooks of principles, but writers

on special subjects ... Only since the Civil War has America

begun seriously to apply its mind to economic questions and

the number of powerful intellects it has brought to bear on r

them is a remarkable phenomenon in the history of philos0phy.

In the light of these facts, George Gunton, was in certain respects,

particularly well prepared for his career as a pOpular leader in American

economic thought. He was, first of all, a practical man rather than a

 

1 Ely, Op. cit., 125.

2 Parrington, Op. cit., 104.

. Ely (quoting Folwell), on. cit., 125.

A Ely, Op. Cit., 123.
Quoted in Haney (718) from Cliffe Leslie's ”Political Economy in the U. 8.,"
Fortnightly Reviev, 1880.

 

 

lo

purely speculative philosOpher, and therefore fitted into the vital tradi-
tion Of pragmatic, American economic thinkers. This aspect of his persona-
lity may easily have been reinforced by his lack of formal schooling, for
he had been forced early in life to rely on his own emperience and wide
reading to satisfy his thirst for knowledge.1 While Gunton might have felt
keenly the lack of such education, it was not necessarily a drawback for
him in a country where the novus homo was the rule, rather than the excep-

C

tion, even though a new professional class was arising. Moreoever, he
probably gained in intellectual independence,by being forced to trust his
own judgment and decide things for himself.

The fact that Gunton was a British emigrant must also have contributed
to his special ability to analyze the American scene, for he possessed a
valuable frame of reference, a basis for comparison. He was quite familiar
with English industrial develOpments and economic history, so that he
brought to the American labor scene a substantial background,3 as well as
the fresh outlook of a foreign observer. However, like many another immigrant
before him, he found so much of promise in America that his Opinions were,
on the whole, rather more Optimistic and hOpeful than otherwise.

One further aSpect Of Gunton's activities contributed to his competence
as an economist. He gained a great deal of insight from his emperience as
a labor leader. Although his complete Optimism seems at times to belie any
personal eXperience with real industrial strife, he was well acquainted with
the bitter and violent struggles between labor and management. When he was
active among textile workers in a Massachusetts Weavers Union. not only was

he blacklisted for his share in the unsuccessful strike, but also his wife

 

1 Dictionarypof American Biography, 55.

2 Haney, Op. cit., 718.
3 Who Was Who in America, M96.

17

and children, who were now in the United States, were ostracized in the
community so that it was impossible for him to get a job, and life was mi—
serable for them all. Gunton finally did get work through the intercession
Of his labor associates, Ira Steward and George McNeill, with Governor But-
ler. Eventually in 1878 he became manager Of a newspaper composed Of a

merger Of the Labor-Standard and the Fall hiver Labor Journal, but the paper

 

collapsed in 1882. While he was in Massachussetts, Gunton worked to put
through an amendment Of a ten-hour act, which the Massachussetts legisla-
ture had passed in 187D, restricting the labor of women and children. The
penniless emigrant from England had become so immersed in American affairs.
that in 1880. six years after his arrival, he ran for the Massachussetts
legislature on the Greenback ticket. And by 1887, he had produced his first
substantial work, Wealth and Prggress.l America had been both kind and cruel
to the political economist. Gunton apparently weighed the two treatments and
found this country benevolent.

Before we can attempt to estimate with any degree of validity the ori-
ginal parts of Gunton's thought and his prOper niche in the history of ideas.
it would be well to pause and examine the major doctrines and the shift in
economic theory that marked the last quarter of the nineteenth century as
well as the Opening Of the twentieth, here in America. After a brief eXpo-
sition Of the basic tenets and implied assumptions of the American brand of
Classical economics, which were so dogmatically accepted and applied, we will
be better able to interpret the reasons for the wave of Opposition which be-
gan to rise and threatened to inundate the sturdy bulwark of Classical doc-
trine. The revolt swept in a whole new outlook in methodology, as well as

philOSOphy, and penetrated all the social sciences. While Gunton was moved

 

1 Gunton declares in the Preface that the book was originally projected as a
combination of his own and Ira Steward's work. However, at the sudden death
of his friend, Gunton found his notes Of such an incomplete nature that the
book is chiefly the result of his own zork and ideas.

 

ll ll Ill. || ‘11" 1

18

by the refreshing current to adOpt the new approach, he still clung fast to
the old traditions, and his magazine emerged as a formidable reinforcing

plug in the weamening dike of conservatism.

The American Version of Classicism

Classical economics. as received in America via Adam Smith, Licardo.
and the English school. cas firmly based.upon the concept of laissez faire.
In practice, economists followed the principle faithfully, the one major de-
viation being their support of a high protective tariff. That, however, was
due to special condition .1 This firm belief in laissez faire was not ne-
cessarily occasioned by intentional conservatism but proceeded rather from
the whole philOSOphical position of the Classical school. Nevertheless, the
fact remains that the Classicist bias did have the practical result of justi-
fying the status quo and negating all attempts at reform, since most reforms
necessitate government intervention.

"Classicism," according to Haney's analysis, "is in essence the belief
that ‘laws' govern social phenomena, including values; ... (and) that causal
'forces' exist and tend to establish an equilibrium."2 The notion of natural
laws had been present in economic thought from the early days of Greek natu-
ralistic speculations on a simple and pure order in nature, which remained
yet visible although disturbed by human institutions, --- to the ordre natur
33; of the Physiocrats, :ho, to reinforce their theories. drew upon the ra-
tionalistic philos0phv of Locke, Descartes, and Malebranche, as well as the
discoveries in the natural sciences of Galileo, Harvey, and Rewton. As one

Physiocrat eXpress it,

 

1 Paul T. Homan, "Thorstein Veblen," American hasters of Social Science, 231.
2 Haney, on. Cite, 76LL—5.
Ibid. 23H-5. 178—9, 75M.

The social order is not the work of man, but is. on the contrary,
instituted by the Author of all nature himself, as all the other
branches Of the physical order.
John Bascom, a leader of the American Classical group, reveals both the abso—
lute faith in natural laws and the deductive quality of Classical theory in
this statement from his Political Economy, 1859:

Political economy is not a science varying with climate and country.

There is not an English and an American political economics distinct

from each other, and, in a measure, the reverse of each other. The

forces of human nature, the agents of production, the arithmetic of
gains, are the same everywhere, and lead to the same principles Of
economic action.
American economists of the early nineteenth century further develOped the con-
cept of natural laws by applying the Scottish Common Sense philOSOphy of Sir
William Hamilton. In Opposition to the skepticism of Hume, they insisted on
the intuitive obviousness and universality Of these laws, which they accepted
as general facts and upon which hey based all their subsequent reasoning.

These principles which the constitution of our nature leads us to

believe, and which we are under a necessity to take for granted in

the common concerns of life, without being able to give a reason

for them (are) self—evident truths ... (find) anything manifestly

contrary to them is what we call absurd.

By such "common sense“ reasoning. competition became "a beneficent, per—
manent law of nature," and the right to accumulate private prOperty, "a law
of nature justice ... (because) the producer would not put forth his force
and ingenuity if others deprived him Of their fruits." Hot only was the power
of nature invoked, but the will of God was also cited as sanctification. As

the Reverend A. L. Chapin wrote in his pOpular 1378 revision of BishOp Way-

land's 1837 economic text. "It is Obvious. upon the slightest reflection.

 

 

 

 

 

1 Quoted in Haney, on. cit., (178) from hercier de la.Eiviere, L‘ordre Yaturel, p.32.
2 Quoted by L. L. Bernard, Origins of American Sociology, 79.
3 Joseph Lorfman, Thorstein Veblen and His America. 22.
4 Quoted by Dorfman, ibid. (p. 1?) from Hauilton's edition of Tnomas heid's
work, An Inouiry_lnto the Eu an Bind, on the Principles of Common Srnse.

 

\n

Dorfman, on. cit., 23.

 

 

III ‘ I l‘ ill III | '7 J ill
‘ll'llllllll. Ill: 1 I i ll ll

q

That the creator has subjected the accumulation of the clessings of this li e

Fl)

to some determinate laws.1 And the Reverend lyman Atwater, lecturer on eco~
nomics at Princeton, another member of the large group of theological econo-
mists, declared with sincere reverence: "Civil government, the family, te-
nure of property ... are great ordinances of God for the social regulation
of man."2
Obviously, if such practices belonred to the natural order of the world,

and were, moreover, sanctified by God, it was wron' of man to try to interfere,

and laissez faire could be the only right course. Any attexpts to alleviate
the dreadful poverty of the poor, or to "relieve the natural penalties of in—
dolence and improvidence" as Chapin put it, could only result in "uneXpected
and severe evil."3 Thus was the idea of laissez faire justified and perpetu-
ated.

A second fundamental assumption which American economists had borrowed

h

from Classical economics was the concept of the "economic man," a hypotheti-
cal creature who was completely governed by a few fixed, powerful instincts,
and on the basis of whose absolutely uniform and predictable behaviour all
economic phenomena could.be eXplained. The problem of motivation had to be
reckoned with, since the laws pos ulated as absolute and universal had ori-
ginally been deduced from such observations on the nature of man and his pro-

5

bable conduct. Adam Smith had singled out self—interest, or "the natural

effort of every individual to better his own condition," as the mainspring of

economic activity. He had felt, moreover, that an "invisible hand" guided

6

man to achieve the best possible results in society. For John Stuart Mill,

 

Quoted by Dorfman, 0p. cit., 23.

Ibid. 26.

Ibid. 24.

Bernard, Op. cit., 521.

Haney, 0p. cit., 21h, 757.

Quoted by Karl W. Bigelow, "Economics," i'story;and.Prospects of the Socigl
Scienggg, 350.

(hm-(TUB) H‘

.14

21

too, self interest had been the motivating force in economic life, a self
interest based upon the hedonistic psychology of utilitarianism, which
found human economic behaviour automatically controlled by the desire to
achieve pleasure and to avoid.pain. As he expressed it, political economy
deals with men "solely as a being who desires to possess weal h" and
"makes abstraction of every other human.passion or motive," except the two
"perpetually antagonizing principles to the desire of wealth; namely, aver-
n

sion to labour, and desire of the present enjoyment of costly indulgences."‘
And Walter Bagehot had written of the Classical attitude toward motivation,
"Dealing with matters of ‘business', it assumes that man is actuated only
by motives of business."3

The majority of American economists had asserted virtually the same
ideas, juxtaposing the idea of natural laws upon this hedonistic conception
of human nature. Such an outlook was corroborated by he common sense
philosOphy expounded in works like Joseph Raven's floral Philosophy. The
Classical economists held that the basic and natural desire of man was
"happiness" or "self-love," and his greatest pleasure, the ability to exert
power. This could be best achieved by the possession of wealth, which i:
also an innate desire in the mind. Thus the pursuit of wealth could lead
to man's greatest happiness, and he had a natural right to the "possession
and enjoyment of whatever he may, by his own industry or good fortune, or

the gift of others, have honestly acquired."u This is the same kind of

a
K
J

rationale in defense of property which animated the Fourteenth Amendment,

and indicates to what extent economists were defending the values of the

 

1 Bigelow, op. cit., 361.
2 Quoted by I‘orfman, Op. cit., 7b.
Quoted by Bigelow, 0p. cit., 361.
Dorfman (quoting Haven), 0p. cit., 21.
Harold U. Faulkner, American Economic History, 517.

 

status quo. Although John Stuart Mill favored laissez faire, he had criti-
cized the doctrines of Hamilton's common sense philos0phy for holding up
conventional and favorite dormas as intuitive truths, and for hallowing
these intuitions with the authority of God.1

The logical consequence of this kind of reasoning based upon an "eco—
nomic man" was to separate ethics from economics, and to justify a narrow
treatment of economics as merely a science of wealth and individual profits.

All men in the pursuit of values desire the largest returns
with the least labor. Deny t is assertion. and the reason-
ings of Economics would at once fall to pieces. But this
assertion is so direct an expression of instinctive and ra-
tional action, conforms to completely to our ezprrience among
men, as to be readily and safely accepted as a universal
principle ... Enterprise enforces the largeness of the re-
turn, indolence the lightness of the labor. It matters not
to what mean. or to what magnificent purpose the values se-
cured by labor are to be devoted. the law of their acquisi-
tion remains the same.‘

This careful distinction between ethics and economics is perhaps more clear-
ly stated in this quotation from Arthur Latham Perry, another influential
leader in the Classical school:

As a science, it (political economy) does and must discuss and
decide all questions upon economical grounds alone. As a science,
it has no concern with questions of moral right. If it favors
morality. it does so because morality favors production. It
favors honesty because honesty favors exchange. It puts the
seal of the market upon all the virtues. Moral science appeals
only to an enlightened conscience, and certain conduct is
approved because it is right, and for no other reason. Poli-
tical Economy_appeals only to an enlightened selfishness, and
exchanges are made because they are mutually advantageous, and
for no other reason. Each of these two sciences therefore, has
a distinct basis and sphere of its own. The grounds of Economy
and morals are independent and incommensurable."

 

 

The Classical economists also reveal an implicit faith in man's ra—

tionality, and assume that man not only recognizes, but also follows his

 

l Lorfman, 0p. cit., 26.
John Bascom, Social Theory, 130.
Quoted by Bernard. op. cit., 29.

best interests rationally. "Every man is the proper person to order his

. I
own affairs."

This elevation of self—interest went hand in hand with an
assertive individualism and a reaction 9w gai: 1st government interference. A
man was justified in consulting merely his own private desires in pursuing

J.

economic and public aims, because whatever gave him pleasure was good for

’3‘

im, and since society was conceived as simply an aggregation of individuals,

J-

natever was good for the individual was good for the state.

The Turning Tide

As is usual when one set of ideas becomes too an wtho1it1rian and narrow-

a.

ly do rematic, a movement of res ction is not long in coming. Classical eco-
nomics had survived because it eXple ined the status quo and satisfied the
ruling classes. But the st; tus quo had changed and a revolt was definitely
brewing against economic orthodoxy. P2 rrington has described the occe asion

of the revolt thus:
By he end of the seventies the comp acency of the Gilded Age
was disturbed by the rise of pestilential heresies in the shap
of new economic dogmas. The surplus-value theory of Pb rx an“
the unearned-increment theory of Henry George were preading
widely through America, to the unsettlement of suscep ible

minds; nd the Knights of abor were preparing to launch a
general attack agains the whole system of capitalistic emploita-
tion.

a

There had been some early gre—C'vil Mar criticism of classical dog-
mas in the works of Henry Carey and the nationalist school.3 Carey had

attac ced the idea of the "economic nan" and the wages-fund doctrine. But

F1

in spite of a staunch protectionist stand, he had rem fned primaril
fender of laiss ez foiie, too. Moreover the impact of Carey's attack had

.ed by a whole new group of conservative postwar economists who

(3"
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{'3
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f?
(D
(1’

objected to his era ggera ted pessimism and pron'¢.n 1s tic style, and who

 

I_Pescom, on. cit., 33.
2 Vernon Parrington, ”ec‘nnine o
3 T'kaA 1053.

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orst on returning to the "sound economic principles"

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concentrtted their ef

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Smith, {althus, and.hicardo. They had found in 36st

into Lnglisn in 1860, an invaluable defer 1se of

{:1

Economio ues, translate
tin eir position, for it provided an ar1ologia for t111e' ascendant comm e1cial
and financial interests in its individu ”:11 em, Optimism, and espousal of
laissez faire. Classicale econom ists from Bescom to Sumner were familiar

l . . -
Thus even early criticism was either ignored or soon

zith this work.

forgotten, -nd the day of rebellion was pushed further offi nto the future.
The inception of the revolt and consequent great shift in economic

thought occurred about the year 1855. In addition to the Mt gnu m1t state

of economic theory itself, the radical changes in the industrial and.poli-

tical scenes, with the attendant dislocations and injustices, were demanding

new solutions for new problems. The labor movement, too, was growing rapid-

ly and presenting a challenge to outworn beliefs. Henry Ge01ge's pheno-

menal Progress and Povergg (1879) and the original contributions of F1an—

 

f‘

cis Walker added further sti1mulus to the growing atmosphere of criticism.”
It was a bitter commentary that George leveled at Classical economics.

The name of political economy has been constently invoked against
every effort of the wo1ciz1v classes to incre se their wages or
decrease their hours of le oour...Tace the best and most eziten-
sively circulated textoook. ifhile they insist up on f1eedom for
capital, while they justify on the giound of utility the self—
ish greed tliat see:s to pile fortune on fortune, and the niggard
snirit that steels the heait to the wail of distie ss, what a
sign of substantial promise do they hold out to the wo11in

man save that he should refrain from rearing children? ...j

And dri1ting across the ocean from Europe came the heady aroma of Social-
p

ism and Marxism and other new economic ideas. America became a beehive

of activity, sendi1g out eager young scholars like a swarm of bees to del

 

Balfintul‘d’ 0‘0. Cito, 517—3, 521-2.
Haney, op. cit., 719.
3 Parrington, Op. cit., 132, quoti11- from Life of Eenry George.

NH‘

W3

 

I‘)
U1

into he mysteries of the German Historical approach, and to bring back
home some of the precious pollen. After tasting the new and vibrant eco-
nomics ta *ht in Germany, the group of young Americans was impatient of a
sterile and inactive 613 si ism that dehbled in abstractions while an econo-
mic crisis loomed on the national scene. Richard T. Ely, one of the young
scholars, expressed his feelings on his return from EuIOpe thus:

We saw a multiplication of social and economic relations among

men which was changing the Chara ter of economic society. More

and more this dependence was becoming interdependence. The

forces of life were getting beyond the control of individuals.

It was not a question of what we wished, but a question of shag-

ing and directing the forces of life so as to prevent a disaster.

Everything that was happening was making it inevitable that we

should gef away from laissez faire as a condition of prosperous

survival.
One should not overlook still another force contributing to the new in-
tellectual era -*- the impact of science on the social sciences. Inter-
estingly enough, the science of the seventies and eighties gave birth to
two completely divergent currents of thought in the economic field. One
led immediately and directly to a powerful defense of conservatism and
laissez faire via a tough, deterministic social philos0phy concocted upon

0 a Q o 2 'l

biological evolution and tne theory of natural selection. Tne other con-
tributed, though less directly, to a critical and SEBptical attitude which
questioned the a priori assumptions, deductive approach, and aosolutism of
received economics, and gradually encouraged the growth of inductive methods
and a concept of relativism. It also stimulated the develOpment of new
concepts of human behaviour and psychology, which were to affect economic
theory significantly.3

Ultimately the entrenched economics were successfully undermined, but

for a long period of time, when Classicism was under attack, the new ra—

 

hichard T. Ely, Ground Under Our Feet, 152.
Richard Hofstadter, Social Larwinism in American Thought, 32.

William A. Scott, The Development of Economics, 3x5.

inhor+

3")

tionale in Social Darwinism provided a formidable reinforcement for the
conservative point of view.

The appeal to the authority of philosOphy and classical economy

in support of lzissez fair: came incieasingly to be overshadowed

by the doctrine of SoCial Darwinism.
Darwinian evolution and natural selection had, at first, a general demora-
lizing effect, because it seemed to contradict the old, secure beliefs in
Providence and the perfectability of man.

Darwinism threatened to take from the faithful all sense of

security just when security was desparately needed in a civi-

lization rapidly shifting from a rural to an industrial and n

urban basis. The foundations of life seemed to be crumbling.4
But soon the well—to—do and middle classes found that Spencer's Optimistic
social theories of the progress of society through strife and the survival-
of-the-fittest, offered a felicitcus rationale for perpetuating the very
conditions that troubled the Oppressed working classes, and justified the
entrepreneur's mad pursuit of wealth and enjoyment:3

The economist who perhaps best represents the attitude of the upper
class in this matter, and who used the arpealing, well-knit structure of
Social Darwinism as the framework for his theories, was William Graham
Sumner. Bred early on the Classical concept of an automatically benevolent,
free competitive system, .e found it a simple matter to transfer from one
absolutism to another -—— that of a thoroughgoing evolutionary determinism.
By Sumner's reasoning, the possession of wealth, wrested triumphantly out
of industrial strife, was an infallible sign of individual superiority, and
government's role, in this harsh but natural evolutionary process, must

be completely passive or it would interfere with the best interests of so-

ciety.

 

w

1 Merle n. Curti, Growth of gmerican Thoueht, ouO.
2 Ibid. 5&8—9.
9 Lichard Hofstadter, Social Darwinism in American Thought; 1

 

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Competition is a law of nature. hature is entirely neutral; she
submits to him who most energetically and resolutely assails her.
She grants her rewards to the fittest, therefore, without regard
to other considerations of any kind....Let it be understood that
we cannot go outside of this alternative: liberty, inequality,
survival of the fittest; not liberty, equality, survival of the
unfittest....hhat we mean by liberty is civil liberty. or liber—
ty under law; and this means the guarantees of law that a man
shall not be interfered with while using his own powers for his
own welfare.1

Following this line of thought to its logical end. Sumner holds up the
millionaire as the finest flower of the competitive order.

The millionaires are a product of natural selection, acting on

the whole body of men to pick out those who can meet the re-

quirement of certain work to be done....It is because they are

thus selected that wealth --— both their own and that entrusted

to them --- aggregates under their hands....There is the inten-

sest competition for their place and occupation. This assures

us that all who are competent for this function will be employed

in it, so that the cost of it will be reduced to the lowest

terms. '

In spite of the fact that Sumner apparently seems to be asserting the
same conservative point of view as the earlier American classicists, by
his rigid adherence to laissez fairs and this defense of prOperty rights,
he did add a new element to conservative philos0phy —-— the aura Of science
and scientific method. Sumner arrived at many of the same conclusions, but
he broke with the older school by his insistence on working with facts, and
by his condemnation of the inadequacy of the earlier Classical methods of
sheer speculation and a priori reasoning.3 In a sense, while Sumner denied
the validity of natural rights, he was closer to Adam Smith and the EurOpean
Classicists in returning to the more inductive method that had been employed,

before their words had become fossilized in the hard rock of American eco-

nomic thought. For this reason he fig*"es prominently in the revolt era,

 

1 William G. Sumner, "The Challenge of Facts," Essays of William Graham Sum-
Bfis II. 95’6.

2 Quoted by Hofstadter, 0p. cit., M4.
Sumner, Preface. g2; cit., I, xvii.

 

28

although he himself completely disagreed with the direction taken by the
majority of rebelling economists.

One further important aspect of Sumner's thought, which was also an
extension of the Classicist tradition, was his separation of ethics and
economics. At the base of his hard-bitten philos0phy lay the idea, "This

"1 This indifference

is a world in which the rule is, 'Eoot, hog, or die'.
toward the unfortunates in society, this cold "objectivity," or the even
more prevalent smug faith in progress and the rightness of the order of
things, did not sit well with the critical and idealistic young scholars
fresh from the enlightening influence of Germany.2 It was really from

his group of dissenters, who formed the nucleus of the American Eistorical
school, that the rebellion got its chief impetus, and one of their major
contributions was to bring ethics back into economics. Perhaps equally
important was the mere fact of the criticism they levelled at economic
orthodoxy, and the new life hey infused into the study of economics by
their practical activities.

With the foundation of the American.Economic Association in 1885, the
dissenters officially Opened the new era. This organization was to become
the center of economic thought and stimulation.3 Although the membership
was not completely homogeneous in outlook for the platform had been broad-
ened to include a variety of economic doctrines --- the majority did come
from the German-trained group and included men like Richard T. Ely, John
Bates Clark, Henry C. Adams, Eugene Seligman, Simon Patten, and Edmund J.

James.” They had chafed at the constricting bonds of American orthodoxy

 

1 Sumner, 0p. cit., II, 127.

2 Ely, 0p. cit., 140.

3 Lewis H. Haney, History_9f Economic Thought, 722.
4 Ely, on. cit., 121.

 

l7

and insisted that a fundamental purpose of the Association, which had been

partially modelled on the German Verein fflr Sozialpolitik, was the foster-

 

ing of complete freedom of thought and discussion at all times.1 From the
German economists Knies, Schmoller, Conrad, and Wagner, they absorbed the
idea of a social science based upon humgp relationships rather than on
abstract forces or laws, with man at the base of everything. If they diff-
ered on various points, they were all united in their humanitarian desires
as well as in their conviction that the labor problem was a real and serious
one. They were convinced the great inequalities of wealth were wrong/and
not to be tolerated.2
This reintroduction of ethics into American economics was significant
for two reasons. First, it brougr t to lie ht the growing conviction that
economics could no longer be treated as an isolated and distinct field,
having no relationship to politics, social life, or the.other social sci-
ences. The dissenting economists had come to see that ethical considera-
tions could not be left out of any attempt to understand all the forces at
work in society, since ethical influences wggg at work in society, just as

3

economic ones were. Thus the philOSOphical absolutism of orthodox eco-
nomics was being tempered by the concept of relativism, and the whole struc-
ture of the absolute, universal laws of Cl assicism could be questioned.
Economic laws might not Operate in all countries at the same time and in

the same way. Other factors might intervene. The second significant re—
sult of their conviction that ethics were essential was that the new eco—

nomists no longer felt bound to accept the iron clad rule of laissez faire,

when they saw that the industrial crisis could only be solved by collective

 

IfEly, on. cit., 132- -5.
2 Ibid. 146.
3 Ibid. 1A6.

30

action, and not by allowing competition free rein to regulate itself.1
They rejected laissez faire as not only unsafe economically but as ethically
wrong.

While this criticism was based on philos0phical grounds, the Historical
school also attacked the methodology and scepe of Classical economics. They
did not Oppose the deductive method pg; g2, but they felt that it had failed
to eXplain many of the current problems, and that the only way to tackle
these problems was to study them at first hand, with no prejudiced, a priori
notions about their nature. What they were actually advocating was a re—
liance on the scientific approach and the "look and see" method.2 More-
over, they had learned from the Germans the value of using statistics in
economic investigation. Thus the aim of the Historical school was to re-
place the abstract method of Classicism with a body of thought based on
historical research and statistical analysis.3 In the words of the Associ-
ation's Platform:

We believe that political economy as a science is still in an

early stage of develOpment. While we appreciate the work of

former economists, we look, not so much to speculation as to

the historical and statistical study of actual conditions of

economic life for the satisfactory accomplishment of that de—

velopment.”

This new emphasis on method and sc0pe was an important step in the
develOpment of economics. The Historical school, by its concern with
facts and particularities, stressing the concrete realities of time and
place, gave a new impetus to the application of practical economics, and
also widened the sc0pe of economics by using the methods of description,

5

analysis, comparison, and induction as well as deduction.

 

I Ely, Op. cit., 132-5.

Ibid, 154.

Haney, on. cit., 719.

Quoted by Ely, on. cit., luO.
William A. Scott, The Development of Economics, 310.

mtum

31

Almost simultaneously with the rise of the Historical school came the
influence of another European school, which further broadened the sc0pe
of American economic theory by its stimulative interest in the psycholOgy
of economics and by its recognition of subjective factors as determinants
of value.1 This new school, headed by John Bates Clark in America, and
reinforced by the Austrian economists, Menger, Wieser, and Bma-anerk,
represented another form of reaction against Classicism. This criticism,
however, was directed only at certain weak points and served rather to
revise and extend Classical theory than to replace it with a complete or
Opposing system. Clark and the Austrian school together exerted an im-
portant influence on the subsequent tendency of American economic thought
toward psychological analysis.2

The Subjectivists, as we may call them, felt that the significance of
the human factor had been overlooked in Classical economics, and that
value, always considered objectively in Classical theory, had also to be

\

considered from the point of view of human desires. The theory of margi—
nal utility was the offspring of this new subjective approach, explaining
price in terms of utility or the use value of the single unit of a commodity
and reversing the accepted relation between cost and price by suggesting
that cost could be determined by price, rather than vice versa. This new
heory arose from the recognition of the fact that commodities are desired
not in prOportion to their intrinsic qualities or their significance in
general, but in inverse relation to the available supply. It brought out
the idea that rarity was a factor to be considered in price, and that

cost might not be a determinant at all.

 

I H tney 9 OT; 0 Ci t o g 719 9 7614’ 0
id» 765: 72“-
‘ank 3. Knight, "Marginal Utility Economics," Encyclopedia of Social Sci-

 

 

... the effective use value of any good decreases rapidly as the
supply increases... The use value of a unit of either water or
iron is very small, because it is so abundant that it is avail-
able for trivial uses; but it would increase almost indefinitely
if the supply wer reduced, while gold and diamonds would be
little esteemed.1

The main achievement of the Subjective schoo lies in their focussing
attention once more on the importance of demand as an economic phenomenon.

istribution, where their

91

Their best single contribution was in the field

a

. 4 .
theory was a by—prOduct of the changed view of cost. as one authority

on economics has written, "That the Hedonistic school has tried to do is

(t'
f")
H
L!

y)
’1-

to distinguish between the good and the bad wor“ of he Classical w'

A

and to retain the one while rejecting the other.)

While the Subjectivists criticized certain elements of Classical doc—
trines, they remained Classicists in spirit, for they continued to use the
same abstract-deductive method, and tended, on the whole, to wind up es-

. a 0 L7 o '4 q q o
pous1ng a .heuonistic psychology. Their tendency toward a hedonistic

concept was plausible because they based their theories on the idea that a

H I

market was made up of individual and rational choices among utilities,'
and that market values were arrived at by the rational, S‘bjective selec-
tion of individuals.5 Hence it is not surprising to find eventually hat
the Subjectivists came under the same kind of a tack as the Classicists at
the hands of the completely unorthodox Institutionalists.

A few words more might be said here about John Bates Clark, who is
still considered by some as "the greatest constructive general theorist

6

hat America has yet produced." Clark had in common with the Historical

 

I Knight, on. cit., 359.

Ibid, 360.

Charles Gide and Charles List, A Histony of Economic Doctrines, 509.

Karl W. Eigelow, "Economics," Historypand Prospects of the Socia Sciences,

BEE—6.

Haney, on. cit., 53%.

b) h)

 

's
1‘

 

0\ kn
)J

)0

J

l

school a thorough schooling in the German universities, and an ethical

bent. On the other he nd, he post ala.ted the static state of the Classicists,
although he conceived of society as an organism and recognized the compli—
cated interrelationships of production and distribution. Mo: eover, Clark
also emulated the Classical tradition in his hedonistic treatment of human
behavior and in his support of laissez faire, which was bes do on his be-
lief in the natural tendency of economic conditions to equalize themselves.l
There is something characteristically American about Clark's position, for
while he sincerely favored a more equitable distribution of wealth, he fell
into the same easy but fatal optimism that kept American thought of the

eighties and nineties from facing its problems squarely.

The Full hevolt

Up to this point we have really been examining only the genesis and
first stages of systematic economic criticism in America. In the period
from 1885 up to about 1896, which has just been under discussion, while
economics had definitely emerged in America as a professional field of
study and as a distinct discipline among the social sciences, it was still
an infant science and needed deeper, more searching criticism of its basic
structure than had yet appeared. To be sure, the Historicists were con-
sidered "radical" in their time, and did add provocative and original c
tributions, but they had not really questioned many of the basic assump-
tions and established institutions of American society. They were essen-

o

tially conservative.” For example, the sanctity of private prOperty was
accepted by these economists as readily as by the most reactionary ones.

They criticized laissez fa sire, it is true, but they sugb vested only moder-

ate measures and supported only limited control by the government as a

 

I‘Iallebr ’ 0-D 0 C: t o g 725 o
2 Joseph Borfman, Thorstein Veblen an“ His America 75.

 

safeguard for the people against the mammoth industrial organizations.1 So—
cialism, which was a powerful counteracting force in EurOpe in the forties.
came to exert influence in the United States only after 138 ,2 and, at that.
was so diluted and watered down in the works of the average writers. who had
abstracted only portions of the theory, that it cannot be said ever to have
been a powerful force in professional economics. The more radical doctrines
of agrarian and proletarian economics were not at all represented in Ameri-
can colleges, and most professional economists followed either the subjecti-
vist school of John Bates Clark or Marshall's eclectic version of Classicism.3
Haney suggests that the buoyantly expanding economy of America was greatly
responsible for the lack of pOpularity of the more left~wing Eur0pean doc-
trines.

The absence of so widespread and acute a condition of class anta-

gonism and the evils accompanying it ma‘ explain in part the slight

importance of Socialism to date. It was characteristic of Ameri-

can economics at the end of the nineteenth century that relatively

little difference of opinion was to be found as to the tariff anl

government control in general, neither being entirely condemned.

If the early insurrection against orthodoxy did not produce a complete
regeneration of economic theory, it did accomplish semething else of a po-
sitive nature. It clarified the points of possible controversy and helped
to define and draw up the new lines of battle. The two major controversies
of the day involved the inductive-deductive question and the abstract-applied
methods problem. The former had been sharpened by the healthy attacks of
the Historicists, but still was weighted in favor of the deductive method.

The latter dispute had been intensified as a result of the increased in-

terest and activity of a number of economists in practical affairs. Spuried

 

1 Eorfman, on. cit., 62.
2 Haney. on. cit., 506-7.

Paul T. Roman, "Thorstein Veblen." American Masters 0: bocial Science, 233.
4 Haney, on. cit., 723.

 

on by the renascence of interest in economic problems, the*

,T
~x

had.plunged in-
to the thick of the battle with a sense of dedication, studying the rail-
roads, the trusts, the currency situation, and trying to get their con-
crete solutions put into effect through political activity. Many of them
were called to serve in government commissions and boards.1 Then there
were a host of other economists, who either disapproved or who simply pre—
ferred the theoretical approach and avoided any involvement in political
affairs. Their energies were directed instead in search of the laws of
value and distribution which might Operate in a hypothetical competitive

system.2

Thus the revolt was already beginning to produce its cathartic
effect on the "dismal science." It remained for the controversial figure
of Thorstein Veblen to carry the rebellion to its logical conclusion by re—
turning economic theory once more to its pristine state of illimitable com-
plexity.

The new school of economic thought headed by Veblen and growing up in
the years subsequent to the publication of he Theory of the Leisure Class
in 1399, came to be known as Institutionalism. Although the term applies
only to this specific group of American economists in this particular epoch,
it is by no means a completely original or isolated develOpment. for there
had previously been elements of the institutional approach in all the social

3

sciences both in Eur0pe and America. What makes Institutionalism differ—
ent from the other schools of economic thought, however. is its bolder,
more thoroughgoing application of science and scientific method to economic

theory. Veblen's extreme acceptance of relativism and induction represents

a complete reaction against the old orthodoxies, and thus completes the or-

 

Haney, on. cit., 735.
Homan, "Thorstein Veblein," American.Masters of Social Science, 233.
Homan, "The Institutional School," Encyclopedia of Social Science, 388.

 

mNH

bit of dissenting doctrine in its path from partial criticism to complete
rejection of absolutism and deduction.

The result of Veblen's relativistic approach was that economics, which
had once been abstracted from moral philOSOphy and singled out as a distinct
field of study, now came to be studied in the light of its manifold relation-
ships to other fields of thought, such as anthropolOEYo sociology, and psy-
chology. The Institutionalists were, in this respect, only advancing a bit
further a path already marked out by the early German Historical school,
whose members had also realized that the study of economics had to be re-
oriented back into the total framework of knowledge.1 Ingraham, an Eng—
lish economist of much the same convictions as the American Historicists
had said.

A separate economic science is. strictly speaking. an impossibility,

as representing only one portion of a complete organism, all of

whose parts and their actions are in a constant relationship of

correspondence and reciprocal modification. Hence, too. it will

follow that, whatever useful indications may be derived from our
general knowledge of human nature. the economic structure of so-

ciety and its mode of develOpment cannot be deductively foreseen,

but must be ascertained by direct historical investigation.

If the relativism of the Institutional approach was not novel, Veb-
len's concept of the truly scientific nature of economics, and his applica-
tion of the evolutionary sciences of biology. anthrOpology. and.psychology,
to economics was definitely new. Veblen had found in Darwinism and the
theory of evolution not merely a means of eXplaining and describing the
dynamic processes of social change and growth, but also the basis for a
new understanding of human nature and behavior. Earlier economists using

the principle of evolution had applied it literally to the social sciences

with a heavy hand, in order to defend the status quo. It affirmed for them

 

1 Haney, o . cit., 7MB.

2 Scott, 0p. cit., 515.

the dictum that whatever is. is right. Veblen's use of science was different,
and proved fruitful of new ideas and method. Hofstadter points out,

While other economists had found in Darwinian science merely a
source of plausible analogies or a fresh rhetoric to substanti-
ate traditional postulates and precepts, Veblen saw it as a model
by which the whole fabric of economic theory must be rewoven.
The prevailing line of thought had said that the existint is the
normal and the normal is the right, and that the roots of human
ills lie in the acts which interfere with the natural unfolding
of this normal process towards its inherent end in a beneficent
order. In so far as economists had taken hold of Darwinism, it
was only to fortify this theoretical st‘ucture. Hencefcrth eco-
nomics was to abandon such preconceived notions and devote it-
self to a theory of the evolution of institutions as they are.

What Veblen objected to in other economists was their underlying atti-
tudes toward their field. They were neither objective enough, nor skepti-

cal enough to be truly scientific. Too many of them were dissatisfied with

 

a bare cause and effect relationship and sought for some ultimate, systema-
tisation of facts. This had been the fault of the Classicists, according
to Veblen. More serious still, most of them unconsciously and with no
attempt to counteract the subtle influences, had assumed the predisposi—
tions and outlook of past eras, even while they were still convinced of
their objectivity because of their use of statistics, gathering of facts,
or their staunch refusal to support any overall integrating system. In
his famous essay, "hay Is Economics hot an Evolutionary Science?," which
laid bare the weaknesses of his contemporary economics as he saw them, Veb-
len wrote:

The difference between the evolutionary and the pre-evolutionary
science lies not in the insistence on facts ... Nor does the diff
erence lie in the absence of efforts to formulate and explain
schemes of process, sequ.nce, growth, and develOpment in the
pre-evolutionary days ... The difference is a difference of
piritual attitude or point of view in the two contrasted gene-
rations of scientists. To put the matter in other words, it

 

IwHofstadter, on. cit., 132-3.
Thorstein Veblen, Introduction, Portable Veblen, 20.

is a difference in tr e basis of va iuation of the facts for

the scientific purpose1 or in the interest from which the

facts are appreciated.

Veblen felt that, in his own time as well as historically, most of the
economists automaticau 1y aco uiesced to the existing state of aff airs and
took for granted t1 e notions which most needed proving. They also assumed
the exist ng allocation of wealth and power, so that their efforts at eco—
nomic analysis could be little more than "taxonomy," defining and demon-
strating the existing distribution of income among vs rious f: ctors of pro-
duction. The moral implication of such th i dug was, of course, rhat the
existent system became the best possible system of income and dis stribution,
and that the richness of the rich and the poorness of the poor seemed ne—
cessary and good for society.

while Veblen att ac‘:ed orthodox economics for being unskeptical and un-
scientific, he proceeded to build up his own relativistic, volitional theory.
He co ompletely denied the existence of iron economic lsws and felt that eco-
nomics must deal with the realities of man—made institutions, which, since
they had grown and developed, could change.3 Veblen regarded institutions
as decisive factors in determining human.behavior. Moreover, he considered
it imperative in the social sciences tlat real hurnan natnle be understood
and dealt with. A vague a straction of a man, a rational diagram of the
economic ma an's behavior would not do. Economics must deal with people and
facts as they age, not with a world created out of normalized data. Eco—
nomics we.s, for Veblen, a study of men in their constant adaptation to their
natural and social environment, an a stu‘v of the origin and develOpment

of institutions.

 

 

 

1 Veblen, on. cit., 213-9.

2 Ibid, "Introd ction," 20.

3 Ibid, 31.

b Paul T. Homan, "Thorstein Veblen," AmeriCan Fosters of Social Science, 265.

 

To lend authority to his view of human nature, Veblen drew upon the
work of psychologists William James, Jacques Loeb, and John Dewey, and pro—
ceeded to attack the Classical and Subjectivist "hedonistic man," who re-
acted automatically to pleasure and pain stimuli, and was incapable of do-
ing anything more about them than to react. Veblen was convinced that men
always desire to act, that the goals of action are set by man‘s instinctive

O I 0 O ‘\ l
propens1ties, and that instincts are relatively stable and permanent.

Economic action is teleological, in the sense that men always

and everywhere seek to do something. What, in Specific detail,

they seek, is not to be answered except by a scrutiny of the

details of their activi y; but, so long as we have to do with

their life as members of the economic community, there remains

the generic fact that heir life is an unfolding activity of
the teleological kind.‘

*3

his passage reveals not only the changed concept of human nature ---
which was possible for the Institutionalists because of the swift develOp—
ments in modern psychology ——- but also something of the scientific approach
and its Opposition to preconceived notions of every sort. Ho assumptions
are made as to possible human behavior without some data or facts, except,
perhaps, the one basic assumption that change is inevitable and that all
life is dynamic. The insistence on change also affected their attitude to-
ward the idea of laissez faire, :hich they rejected as inadequate. Things
change, and in definite predetermined directions because of the existence
of certain institutions and Various other social factors. But because a
simple cause and effect relationship can be studied, the economist can.
through his knowledge, alter the course of events and better the condition
of society. As a result of the Institutionalists' interest in practical
affairs, one economist has written of them,

heir orientation is primarily a welfare and reform orientation.
Centering their attention upon the mutability of institutional

 

I Homan, cp. cit., EMS.
2 Veblen, "Why Is Economics hot an Evolutionary Science?", op. cit., 234.

Cu

structure, they quite generally regard their function as that

of bringing disinterested human intelligence to the guidance

of social change.1 '

From the days of being an abstract, speculative, unpopular branch of
philOSOphy, American economics had develOped to a full-blown, highly-developed
technical tool in the hands of modern economists. The Institutionalists
are among the most active ones today. Of their contribution, it had been
said with scholarly understatement: "So far one effect of the movement
has been to wear down the entrenched authority of the orthodox discipline,
until it no longer can be regarded as providing the exclusively correct ex-
planation of economic phenomena or the exclusively accredited instruments
of economic analysis."2

While the influence of Institutionalism has been far reaching and bene-
ficial, stimulating research and analysis and infusing new and relevant
ideas into the study of economics, it cannot be empected ever to completely
replace the older system of Classicism. It suffers from certain short-'
comings of its own, some of them inherent in the nature of its method. The
very criticism Veblen made of Classicism --— that it sought to find a sys-
tematic, theoretical eXplanation of all the facts --- shows a flaw in Insti-
tutionalism, for it has been unable to construct any complete organon of
economic thought, and hesitates even to formulate any general laws of change.
The Institutionalists have been more concerned with specific matters of
public policy than with develOping economics as a pure science.

The tendency has been for institutional economics to make a vir-

tue of its shortcomings. It has not regretted its inability to

construct economic laws; on the contrary it has neglected and

tended to deride studies largely dependent upon formal economic
logic.3

 

1 Paul T. Homan, "The Institutional School," EncyclOpedia of Social Science, 371.
2 Ibid. 392.

For the fullest develOpment of economics as a scientific discipline,
there is still need for the stabilizing influence and imaginative theory
of the Classical approach. The Institutionalists, after all, have come no
nearer to establishing economics as an exact science. As Gide and Rist
point out in their excellent work, it is not necessarily the aim of science
to draw an exact realistic picture of society. Every science must have
some generalizations, some general postulates. A science must in the long
run be explanatory, not merely descriptive. Nor can one method be used at
the expense of another.1 Schmoller once said, "Induction and deduction are
both necessary for the science, as the right and left foot are needed for
walking."2

As for the Institu ionalist reliance on cause and effect --- can cause
and effect ever be definitely proven? The relationship can be suggested.
but that is all. It seems, therefore, unlikely that the disagreement over
method and what is the more truly "scientific" approach will ever be re-

solved. Most modern economists, however, feel that both views are equally

essential.3

Gunton’s Position
we have examined the development of American economic thought, in its
progressive and reactionary tendencies, from the post-bellum period up to
fairly recent times. It is now possible to attempt an analysis of George
Gunton's major ideas, to see what part he played in the history of econo-
mic thought. From the preceeding sketch of the outstanding doctrines of

the times, we should have a clear enough picture of the dominant economic

 

1 Charles Gide and Charles hist, égfiistory of Economic Doctrines, 404.
2 Quoted by Gide and Hist, 0p. cit., H01.
3 Gide and Rist, op. cit., nos-u.

“2

ideas to be able to distin- ish where Gunton's theories are merely repeti-
tive and represent existar t notions, and wh ere he has evolved a new concept
by his own peculiar combination of prevailing doctrines.

Looking first at Gunton's chronological position, we can observe that
the years of Gunton's most significant literary activity extended from 1587,

when w ealth and Pro; nee s appeared, to 1905, when Gunton's Hagazine, having

 

flourished for fourteen years finally expired. is was an extremely ac-

Th
tive period for economists of all points of view,1 and one in which the
Classicists were hard driven by the increasing he irrage of atta ore from all
quarters. Gunton was greatly influenced by the telling criticism of the
dissenters, and his work do oes reveal the impact of a stormy atmOSphere and
period of transition.

Gunton's economic’philosophy is really the product of the two major
warring doctrines of this period. He was a Classicist in his desire for a
logically unified system, and his belief in the Operation of absolute, uni-
versal laws. He was a dissenter in his eager applicati on of scientific method
and statistics, and a dynamistic psychology. Gunton's major problem as an
economist was the same one that faced the other economists of his day -~-

what to believe when the axioms of Classical doctrine no longer fitted the

facts of industrial civilization? Prom his own personal emperience, Gun-

 

l Fote: The years from 18 33 to 1590 alone produced a flood of economic trea-
tises and witnessed the rise of the professional journal. In 1383 appeared
F. Walker‘s Political Economy; in lEBu, Ely's The Pasta nd Present of Politi—
cal Economy and H. C. Adans' Taxation in the United Ste tte ; in 1885 J. 3.
Clark 's PM. losonhy of health, 5. Hewcomb's Princirles of Political Economy,
S. 11. Patten's Premises of Political Economv; in loot , Femis' Cooperation

in few England, and the Political Science Quzwrt rly and the gpnrterly Jour-
nal of Economics; 1887, Laughlin‘s Elements of Political Economy; 1539, ily's
Introduction of Political Economv; 1i90 annals of Amer ic: n Academy of Poli—
tical and Social Science, Journal of Politic 1 Econorv. This is only a list-
ing of the more outstanding, broader works. here we a great miny more which
could be listed.

 

 

 

 

 

 

 

to

ten could see that it was impossible for any intelligent person to cling
any longer to outmoded Classical theories in the face of great industrial
and political changes.

3‘ Economics, Gunton admitted

FJ.
I

In the Preface to his Pri n ciples cf Soc
the lag in economic theory; he blamed it on the fact that the accepted the-

1

ories rea.lly belor ged to the hand-labor conditions of the seventeenth and
eighteenth centuries, and bore no relation to nineteenth century industrial

society. He recognized that feudal economics had been oriented toward the

£1:
(+
DJ
m
:3
} J
CL
{‘4
*4
(D
O
H
91
m
U)

land—owners p01 int of view, and Adam Smith's theories toz.-en
point of view. Quite correctly he concluded, "... it is in the needs or
the masses that tn‘e economics of the future must be studied and statesman-

l .
5;"

shin determine and that "... through an effort to apply erroneous ante-

factory theories to factory conditions political economy has for three quar—
ters of a century been made a gospel of clw ap lahor and an enemy of social

~ "4
advance.

Yet, while Gunton considered himself in the vanguard of the revolt of

fie-minded men, and felt that he had deviated far from

F1.

practical and scient
orthodoxy, it is only the superficial characteristics of his work that tes-
tify to the influence of the Historicis ts and the inc active method. Gun-
ton did not alter the bas1c struct*“e of his theories as radically as the
Historicists did in order to fit the facts. It is this rather artificial
imposition of scien ti‘ f‘l 0 method upon a preconceived framework that leads
one to conclude t? at Gunton wa as basically Classical in outlook, and co.-

eervative in bias.

 

T"~-=--.~'~"- no :. *7 .° 0:
illneiples or social ”00301138, v11.

+

E George Gunton,
‘ Ibid, viii.

u.

However, oefoie we try to an Hl'ze tliese two diverse tendencies in Gun-
ton's philosoohy, end to place him in relation to the newer develOpments in
economic thought, perhaps it :ould be most useful to exunine first that as-
pect of Gunt on' 5 economic theor rv zhicl1 was most original and for which he
is best remembered. Such an examination wo 1d serve two purposes. first,
it should throw some light on Gunton‘s method of arriving at his conclu-
sions, whether he is primarily inductive or deductive in method. Second,
after we have a notion of the li.nited exten 1t of Gunton's originality, we
will be able to apprecia 1.te just how represents tive a fig re he is, and we
can thenp roceed with greater cl erit" to the prob1en of what Gunton owed
to the prevailing doctrines of the Classical and he dissenting schools.

1

As we "przo1cn the more original part of Gunton's thought, we will

nt to keep in mind Gunton's -ac:g:otnu as a labor leader. It is signi—

icant that Gunton's first book, wealth and lor ' ress, was written not pri-

 

marilv as a contribution to prrely ereculztive thought, but was animated
by Gunton‘ s aid Steward 's desiies as la oor leaders to find an acceptable
solution to the critical labor problem. The solution they had hit upon,
and had eXperimented with while in Massachusetts, was that of a shorter
Jorking day to improve the condi+ions of tlie wor cer, and even to further
the well-being of tr 1e manufacturer. Yet Gunton had no wish to claim sujrolt
for a measure on simply humane and ethical grounds. He was too hard—bitten
a realist to attach himself to a cause for purely emotional reasons. Thus
the whole purpose of t? e wort, Egglth and Progress, was to give a phi loso-
phical and economic ju st t11Wic tion for the specific reform he advocated; to
prove to recalcitrant employers that econc Mic ll: it could be to their ad-
vartage to shorten the working day. They could both follow their own in—

terests and accomplish a good deed at the same time.

l-—J
l

Gunton did not content himself on J with advocating particular measures.
He went on to develOp a whole logical structure of economic philosophy ugon

which to base his specific reforms. In 1891, four years after Health and

 

Progress, appeared Gunton's Erincigles of Social Economics, his first trea-
tise dealing with the purely theoretical side of economics. This book is
deeper. riper, and more speculative than the first. but it is primarily

just an extension and amplification of the same principles which were out—
lined in the earlier work. We find the point of view on specific issues in
Gunton's Magazine, some years later, also substantially the some. The inti—
mations of the essentially pragmatic nature of Gunton's thinking is suggested
in the fact that he should formulate and build a whole theory on he basis

of a particular reform. an early notion. actually, his most original con—
tribution to economic thought was this very particular doctrine that animated

and motivated his whole speculative theory. a. h. n. Seligman. a noted con-

temporaneous economist, pointed out in his review of Wealth and Froeress,

J-

 

 

that Gunton‘s main thesis -—- i.e., that wages depend on the standard of
living --- had been advanced by earlier writers like Smith and Ricardo.
"But no one has hitherto made it the central point of the doctrine; no on
has hitherto erected it into the fundamental law of wages; no one has hith—
erto added the important corollary that production depends on consumption
and that distribution is a necessary part of the process of production. In
this consists the importance of Mr. Gunton's contribution to the science

of economics."1

The main argument of Gunton's thesis runs like this. he condition

of the workers ought to be improved because "... poverty, igno‘ance, and

 

-. E. A. Seligman. Eeview. Political Science Quarterlv, II (1357), 639.

 

vice give despotism, while wealth, intelligence, and morality give freedom
(and) social progress depends upon improving the material conditions

"1 However, while Gunton is agreed as to the real existence

of the masses.
of the problem of poverty' , he does not feet that it is primarily a problem

of distribution. If you take from the rich and give to the poor, you are

 

levelling out society and destroying that disparity and "social dif feren—
tiation" which is a cause of and a si gn of progress. "While all progress
is change only those changes are piogressive wb ich tend to further social
differentiation."2 There would then be no new desires because of dull
equality, and all progress would cease.

Poverty is not a question of nal-distribution of wealth, as the Soci-
alists aver, but is due to the fact that the aggregate of wealth produced
is not large enough. "... the true remedy for poverty is not to be found
in any scheme for the artificial manipulation of profits, rents, or taxes
however equitable, because at best such an Operation would only be a trans-

"3

fer and not an ingreasc of wealth. The answer lies in greater production,
not in re—distribution. Gunton feels that it is a universal law in econo-
mics that the greater the total amount of wealth produced, the more equitable
will be its distribution. As the rate of production is increased, the

amount of wages paid will increase, and the workers will have more money

to buy the new goods and satisfy their newly-acquired wants. "Therefore

the quantity and quality of wealth permanently produced at any given time

under normal con ndi tions will ultimately be determined by the effectual de-

sires and wants of the community."

 

 

 

 

I George Gunton, WGFilth e.nd Proeress, 37E.

4 George Gunton, Principles of Socia.l: ccnomics, 22.
3 G mnton, wealth and Progress, 5.

u Gunton, Principles of Socia Economics, 83—1.

 

117

Since production is dependent on consumption, on what peOple will want

and buy, Gunton sees the ste1ti1ng point in the whole industrial cycle rest-

\—

ing upon the desires ant wants of he ir ndiv idual workers. "The individual
. O C II 0 '1
is the 1n itial point 0: soc1al movement." Yet wages cannot, must not be

increased arbitrarilv 1n the hOpe of stimulating new desires and wants.

Since he has he ad no Chang -e within him, in his own persor1al wants an no desires,
the worl {er would choose to wor: less re tlier thrtn S1zend the incree sed sum,
or he would only sper 1d the inc1eesed sala1y consuming alcoholic beverages
Increased desires and wants must precede any real wage increase; only if his
social appetites are increased and en larged can the worter pro1ite bly use

an increase in wages. Thus "... tlie standard of living is the law 01 wages,"

and peOple are paid in ac ccclclance to their needs and desires. The economic
law of wages is that the laborer‘s pay cannot be permanently much above l1is
wants --— which are expressed in his standard of living -—~ because wants
are the motive and measure of efforts, 9rd wages are the price give1 n for
effort. This whole elaborate netwo h of logic has been constiucted to
show tha :

overnmer t is constantly

uld only be made to want

hes en rgh to work for

self in a single decade.

is contented.with his slo-
o the race problem would

The first economic duty of soci t
to stimulate desire....lf ur 11d
houses and steam machinery and goo
them he Indian problem would solr
If the Southern negro could oe ma 1de d
venly hut, his scanty clothing a1d fo,

c

t

:J

m
()0
(+01?)

dissolve; if our own poorer clas d o:1ly as made to crave
better homes, better amusements, bet er food, with better sur—
roundings, the pr roblem of poverty would soc 11 disappear, since
they would un1ve1s1l‘" egin to get them.‘

U7
(T)
’13

How the whole problem of what to do about poverty has seen narrowed

down to 0 11s simple ouestim --— how can we enlo 11ge the social wants and de—

[-11

h)

Gur on, Pr
A
'J"

Til-.2! 1:11;.

(1'1

41 l x .5 w w v -‘ '1. 3 . -: o -1 -, 1w h .3 r W --«' -~
sires 0. he maeses? The auSLJI to th1s is to -301ease the s c1a1 on 01-
“ . I. 1- , ‘~ . A -!-v‘ .m 3 Q :a- ,x _ ~ .
tunities o t1e wor er :., to increase their leis11e time .01 ed1Cation aid

study, to deveIQp their tastes for culture and art. "“191 ever man's s -
ial Opportunities have been the most restricted, his wants, tastes, and

desires age he most limited, and his industrial an political character

has made the least progress, and vice versa." canton's solution foi i;—
creasing the Opportunities of workers, hence their desiies, their wages and

ultimately thei rconsumption --— wiich will keep the manm m's.cturers has and

0‘0

so balance society -—- is to inau*ura te o. eight—hour day with no out in
wages. A reduction in the hours of laoor will give the worzer the nece—

ssary leisure to cultivate and develop new tastes and wants. Moreover, the

Eusin ssman will be insuring his own success by improving the well—being
of the worzer. As a result, since no portion of societg c.n continuouslv
"t

0 n 1 1 4 a , .
improve witro t progress 01 the whole, Gunton concludes hat the tota
progress of society will thus be assured, by adepting an eight—hour welk

‘

ing "s3. This theolv we s Gunton's most significant co 1i

~ution to econo—

hhat is original in this contribution is not so much the fact of Gun—

fisn a “ '1‘- a v I‘ : NP" ‘1‘ .vs --‘- *1 -« I .- v-‘~’.‘ ‘\ ~' 4 ‘ -.
ton'° suppozt o; a slo1tel w0151nb day, out the na21-61 1n sn1ch ne dust1~

fied it, for there were many groups who advocated this measure on purely

ethical grounds and had no particular econ onic 1.:1tionaliza'ien inr 1ind.

Gunton acn eved his rotionalizution t1r'r ; a fusion of Classic"l and
Historical methods. for ,ie argument, he relie‘ on the Classical concept

of inCividualism, with its aswsui ”ti on that tne interests 01 the i1d1vidual

coincided with those of the state. At another point, he attempts to demon-

 

 

l

-. L \ fl .‘ A p. ., h'vf‘fi
O G1,;4‘1 Von, anez‘l.1t_1 (“AL I 4L \J;_1 e ( ~ , (.30) O
L q‘ o 1 11'

IClCL, O

O l" ‘

st12te historiczlly, by using rects and figures, t12 t1 1is law ofv v:ages
has alwa; 8 Opera Led in society. Thus, mu on of t‘1e origi1alit" 01 Gxntcn's
theory arises from his peculiar combination of prevailing economic doc—

trines. While he ventured into the new avenues of thought, science, in—

‘

duction, relativism, he really only seized upon the new ideas to use them
in vindicating the old, conservative platitudes of econo mics and the na-
ture of society. This fact becomes quite clear if we note that Gunton's

5

defense of the eight-hour day we s the only r:.dical position he took; on

all the other is sues wheie lie too: a stend, Gunton favored he reactionary
side and found hi1.1s elf in harmony with the millionaire cayitaiists.

There are several definite poi;1ts of simila11itv cetween G"11ton' s
philos0phy and that of the dissent i11g Histo Mic .l economists. Most ou -
standing is the emyhasis on science and scier tific method. Gunton was
con1inced of the necessi y for treating economics as a scientific stud;
replacing emotional prejudice with objectivity and disuassion. He we
further convinced that there were laws of economics, or at least cause and
effect rela.tions ships, which were discoverable through a close study of
history and through the application of statistics. Once the economist had
arrived at these relationships, he did not hive to stor with msrel1r esselt-
ing their validity, as Classical ec011omists had done; he could back then
v. In pr0pounding his own law

up with facts and demonstrate their validit

q.-
0.

of wages -—- that wages are detendent on the ste,n dard of liv1r g —-- Gunt on

painstakingly traced th rates of wages and the cost of livi ng thro ough

(

English economic history, quoting the :rices of staple articles and list-
ing the wages in key industries. He also made sje01fi1c comparisons be—

i "" U a w o 1 ‘ '
tween tne rates of anglisn wages and thos e 01 otner countries. In tAlS

 

\n
(,3

respect, Gunton was departing £10m the Anericsn les~ical tradition of
simply announcing a law as received truth and ignoring the groolem of es-
tablishing its accuracy. For the Class Ac st s the co; enC3 of an argument

had been sufficient. A theory was accepted because its soundness was evi-

dent to any $18 man, because one‘s common sense told one it was true.
Gunton was enough of a p: _ tical man to deman‘ more conrincin; evidence

than an apyeal to com :10n sense, an; so he followed the ways cf the induc—
tive econ mists in this matter.

Of course, not all of the economists who supposed themselves to be
using "inductive reasoning" Cid a truly "scientif ic" method were, in fact,

H

really doing so. Some of Gunton's facts" are neither reliable nor facts.

of S: ci 1 Eco—

(T)

For escamnle, he writes in the "Preface" to hi sPr inc )1—

 

In the following pages I have endeav01 ed to o.iscuss t1e prin—
ciples of social economics from the nineteenth century point

of view. If the facts of modern experience are to be the court
of final appeal. he great fundamental fact to be recognized in
our society is the democratic tzsis of industrv.

 

This is an assumption which Gunton never attempts to prove, historically
or otherwise; he simnly expects the reader to accept it as intu ti ely oo-
vious. There seems to be some confusion in Guntcn's mind as to just what

a fact is, and wiat is scientific asout fac -gathering. The scientific

method was, of course, still a novel tool; its use was not completely un-
derstood by either the His toricists or Gunton. fior is there complete ag-
reement toda3 as to exactly what the scien ititic method is in the field 0
economics. Accepting Veblen's analysis of the scientific afiaroach as not

being limited just to a specific method, cut dependins upon a w hole state

of mind —-— skepticism, inquiry, disinterest —-— we cannot too severely

 

1 Italics are Gunton‘s. p. viii.

censure this mis undei ste.ndi ng on Gunton' 3 part of just how scientific
methodology is ar plied to social studies and the frame of mind it necessi—
tates.l
Although Gunton was not correctly arplying the inductive historical
method as we {now it to oday, many of his contemporaries, lay and profession-
al, were impress ed by wh at they consixered to be his scientific arproach.
E. R. A. Selim men has no complaint to mal {e of his method, comnenting tha
Gunton's theory is consistent, broad, with a wide foundation, and that he
tests his law thoroughly by statistics and by history. Selig1an does
suggest that Gunton relies too heavily on one set of statistics, but other
wise approves. .(Gur nton‘ 3) method is truly historical and inductive;

his style is free from sentimentalism, his cor clusions are cons e1va tive

. . 2
and w1thout crotcnets." The 1:01t21 American review found Gunton' s work

 

notable "... for its close backing of all theory b7 practical demonstra—

‘4

tion." Perhaps the most sig nif icant comments are those from the Boston

 

Journal, the Eastern Argus, and the Hew York Star, which reveal the common
confusion about the nature of scientific, inductive method. The Boston
Journal states, "The author develOps his theory by historical illustration

and demonstration." The Eastein Ar {us 1m ites, ”(Gunton) announces the

 

natural laws which lie at the basis of the labor problem, elucidates them
by historical data, and enforces their soundness with a logical cogency
that carries conviction." The New Yoric St4r is the most outs; oken, "I
one can rise from the reading of ‘Wealth and Progress' without the pro-
found conviction that it contains the first attempt ever made to put the

claim for an ei'ht-hour system on a truly economic and scientific ”cams."3

 

; Veblen, "Why Is Economics Hot an Evolutionary Science, 'Pc1t: h 1e Ve olen, 218—9.
‘ E.R.A. Seligman, Political Science Quarterly, II (1387), 697—9.

3 The extracts from these reviews are quoted at he end of Gunton's Prin—

cinles of Social Economics.

 

 

Kn
N

A second point of resemblance between Gunton and the Historical school
is their acoption of tb e evolutionary point of view regarding the growth
and development of society. This was the period when Darwinism was really
beginning to penetrate into most of the economic ideas of the time. How-
ever, the evolutionary approach, like the inductive method, did not always
lead to the same results, nor did it have the same meaning to conservatives
and radicals. For flier ert Spencer and the Social Darwinists the evolution
or growth of society meant a develOpment from homogeneity to heterogeneity
and implied the idea of progress.1 For the more liberal economists, the
Histor icis Qts, the evolutionary idea had meant, more simply, detailed des~
cription nd a develOpmental, historical explanation of the evolution of
economic in stitutions, a scientific study similar to that of biology.2
They were concerned with grow h, but made no assumption of progress. The
Hi storicists were, in fact, qu 1'te bitterly Opposed to the Sper cerian philo-
SOphy of social evolution, an Ely had denounced this theory for misleading

3
too many economists.

Gunton's adaptation of the evolution; y view was, unfortunately,
closer to S1encer's than it was to th.t of the Historicists. However, he
did follow the notions of the latter to a certain extent, as we can see
by his quotation from his "Introductory Remarks" in the fir st volume of

he Social Economist.
A better society cannot be in vented, it must be evolved. r"he

constitution of he tule as already fixed must fuinish the great
lines of human ad w:nce...The principles of human society are

revealed in the history of human affairs. Indeed the history
of tr e pas t is the only safe text book for the futm

1:-

 

 

I lichard Hofstu dter, Social Em LinismLAZQ.

2 Gide and list, on. cit., LOL.

3 Hofstrdter, op. cit., 21.

4 Gunton, "Introd uctory heme 1:5," Social Economist (1891), 6.

 

z ’2
J‘o'}
This idea is fairly similar to the concept of the Historical school that.

"We must have some Knowled e of the previous stages of economic develOp-

ment if we ale to understand the economic life of th epreser.t. "1 But
Gunton had read Spencer and risks an nad taken up their evolutionary con-
cept that the developznent of societr was exactly conparahle to the biolo—
gical process of growth, and that glowth me; int p“05ress. It is revealing
to notice how easily and unco.1:ci0isl; Gunton slides into a substitution
of the term "progress” for that of "5rowth."

... the groxth or p10 Tess of or55nisms, both ve5eteo e aLd ani—

l
nal. consists of a series of strrctair l chzn5es iron a relative—
ly simrle to a rela ive ely comrL x state of organizatio

The doctrine of evolution is simply Wt leory of growth as dis-
tinguished from that of special providence. It tea hes that
whatever may have been the ori5in of thi15s, pregress to weids
higher forts of existen e in all cl:u ses of rghenornena trles
place ine accorfence with 115w of cause 311d effect, and that
higher and more comylex types of for anti and the existence

'3' 1‘

of new functions, gypenr only under Conditions invoruble to
tileir develorr ent.

1he ouestion of Gunton's theory of progress is an interestin
may more proPerly and more fully be t ken up later in connection with

Optimis ti and his Clas sica

H
H.
,0.
W
(n
O

Returnin" to the idea of growth, we fini the a nflt‘“ul result of
"etionorict ly co mtaiin the growth of society to that of a t' 010 ic l

3 '3 ‘5 1% ~- «2‘ . —v . . '- "h‘l‘. *: aw -\ 'V‘ ‘“ r ‘
organism, is tne concekt oi soc1et itself as an 01: 2_s . Syelcei haQ

arrived at this idea by pushing his eiSJOgg’to its lop ' a conclusion.
Thus do we find, not only ha the anal 53 between a society
and a liVin5 creature is borne out to a de5gree Q1 ite un St S“
pected by those qho commonly draw it, but also that the sane
definition of life ajjl ies to both. Thus the union of man;
ten into one C“*"‘llfy --- this increas'n; mdtnel dependence

 

 

A
T—
.. I a A I": _’ .
C'lCC‘. Clix... thstg O ,o Clto, L0,: “'0
f‘,
‘ f... T‘-“.. 'V‘ . 74-: '
L c nton, 111UC1.les of Sociel cono 1:1, L.
3 ‘-1 ‘. n0"
I{.\..C«’ L'dj.

 

of units 1%. ch were 01%inally indefe iient -—— his gradual
he dies, with recipro—

scb1e1at1o1 of citi; er 1s into sever‘te

cally suose11u.e:1t funo ti ions -—- this f“1;1t131 of a xxhole co:-
Slstlhg o: nu1m1ous essential parts —-— this bIOuth of an or-

Zanisn , of thich one portion cannot be injuied without the

rest 1eeling it ——— may all be generalized under the law of

individuation.

-his cozicept of societr as an orgcnism was also frequently aLOpted by eco-

! V o I t H a 1 '1'. o o t;
nomists of a n1stor1co-5001oio ‘NC 1 ca s1s, sucn as the nist0r1c1sts. Gun—

ton himself explicitly repu‘iated Spencer's theory of organism, 110t only

J.

w a

because such a view elevates society asove the indivi ual and hence con-
tradicts industrial individualism, but also because he felt that it was
not a necessary corollaryo f the theory of evolution. ”Society is not an
individual organism, but an association of individual organisms." Gun—

ton further elaborates his position:

q

0 ar from using an organic entiuv, soci
e"stematiz ed environment of associated individu .
for whom it is created, and upon whos e state 0
cial, 311d i; tellect nal develooment its e1 istene
character send.
Hor ise t1 is view inc nsistent with the doctrine of evolu-
tion. This t‘11eory does not involve t1 1e ass nuption that society
is an org;a nism. Evolution simply im_: ies a piogressive move—
ment from a less to a more definite, coherent, ordeilv ste te
of exis tence.k

etv is on v the

s tv whom and

ndu strial, so-
,form, and

U)

N.H,

.4

DJ:—

Yet while he specificallv denies the theory, at certain points in his eco-

U

nomic philosopFV, Gunton does seem to make the assumption implicitly

J.

“

complete his arg“nent. For he does conceim' or society as nar ing a kind
of unity, in which the orious parts make up the whole and are interrelated

with each other. Uhat happens in one area of soc1ety a1fects List he ppens

in another. For xample, Gunton held thst no one class of society could

 

1 Quoted bv Gunton i. Princi'ele s of Social Economics, 301.
2 Lewis H. H.'2ney, History 01 E onomic Thouth, 725.

3 Gunton. :"1n01el s of booial :c011omic..5.

4 1 Did, 305-6.

U1
Kn

continuously improve at the exnense of tie others without the oeterioration

and decline of thct societv. All classes must progres and move form.ird

. l n o w
Simultaneously. Si mi rly, :or soc1e 11 proe1es s to tace place, the over-

all development is dependent on the advances made in three sepe ate fields
of activity --- the material, intellectual, and moral. Each elenezit re—
presents and controls a different ghase or society, having its specialized

function and area, yet t1 e three are mutually dependent, and adve ices in

all three are necessary for total sociale vance. According to Gunton's
way f thinking,

If the develOpment of any one of these elements should be pro-
moted at the expense of the rest, it must necessarily fail of
ts function because not one of them can permaneztly exist with
out the sustaining incluence of the others. The increased pro-
duction and accumulation of ve 1th, for examjle, could not con-
tinue without the ir are ase ofi ntelligence to devise the means
necessarv to procuce it and a corresponding advance in the so-
ciel int grity to sustain it. A general advancement of the in-
telligence is imyossible without the relative elimination of
poverty and vice; and no considerable advance in ethics can

place withou a previous incree.se in material we11-tc1n

H. Lg

CT"?
0
(‘3

Yet Gunton does not con sis tently believe in the organic unity of so—

‘

ciety, and the point where his unity treats down is 1here he begins to di—

verge phil os0phica11y from the Historical school. Gunton does not con—

”.1

ceive of all the parts of society in vital relation to one snot M”e1 gor

this reason, he did not arrive at a vision of the relativity of economic
study and its necessary relationship to other areas of thought, as th
Historicists had. Gunton felt rather that economics existed as an autono-
mous and sene“e .te entity, having no direct connection with 1Woli1cs or
ethics. He was in favor of good governnent u he felt the t the sphere

of governmental activitr should be confined strictly to politice l matteis

 

 

T
A Gunton, L'ee 1th and Progress, M.
4 Gunton, Princinles of Ecom1ovics, 16.

 

m1d the deletgzm1on of powers. He was concern-d for the welfare of the

ocor, but felt that one' 8 ethics 1 con ictions had no place in a science of

m

7'

economics. :0 3.'eve1, he was convinced that as the economic, or material,
life improved, all the other areas of life -—- the political and social —-—
a 1‘ I s .L' 1 1
would also oe improved automatically.
In contrsst to Gunton, the Historic: 1 school? dfelt that economic

life could not be isolated from political and social life, since it in—

fluenced the latter aspects of society, and was in turn motified and 11mi-

H)

ted by them. Gide er d tist describe this eature of Historical thought

thus:

The economic action of men must influence his surroundines. The
character of such actio1 and the effects which follow fro1 it
differ according to the 11"sical 1nd social, the political and
religious surroundings wheiein they ere or; eretive. A country's
geograyhicsl situation, its natural resou1ces. the scier tific
and artistic trainine of its inhabitants, their moral and in—

 

tellectual che.1acte1, and e? - their system ofAvaern ‘_ent, must
determine the nature of its economic i11stitutions, and tl1e de-

gree of well —Ecing or pTOSPerlL: enjoyed by its izithitants.

D

Gunton agreed only partially with s1ch thorouinto111 "el ativism. H- a;
‘I

that the industrial well—being of he worker affected his capacity for

91 free dJOfl ans ethical henaviour; but he was not conceined mti w. the

O

politi
converse half of this trrtn -—- na1ely, that the rst11e of a gove; nmen
and the prevailing mores and social attitudes can regulate or afiect th
potential industrial v.'ell—heir1:of the worker. This blind sgot of Gun—

ton's comes out Luite clearly in such a statement as this:
The most superficial acouz*i;tance with the nistor~ 7 the Lnited
States is sufficient to show that our ref uh 1 can institutiOIm
are the consequence, and no the c1r_se, of our 1 terial pros-
I911 t". The Ben hlic wes born of the socirl and inte llectue;
Character growing out of a long period of nlevious i; « ustri1l

L
J-

s:
O
i {

 

 

3:" . ”J. £u‘ln " 4 '." m: "fi
cunton,P11:clo-~s or social -co1onlcs, 1(.

(1

g 01 , ,3. 1. -1 .11. {"1 *Lr1° ..
G1de azd .1st, 0U. cit., .u). talics 1a on“.

 

\n

t~', end this 31Io:j;-e1 it: '-..-'as due to causes long ante-
test ohseiva ole ue11ci« ic tendency in our

ions... oTois industrial prosperity made

dent of the cial and inte llectuol cherdcter of

The f; ct tiiet Gunton did not follow the Historicists 11 their pro-

5ressicn from an evolution mzryr coint of View to that of a relativistic

.51

one, indicates again verv Clea 15 his fund..: ente .1 alienation fro 3 them

1

and his basic conservatism. The whole basis of their similarity had as-
pended upon the universal influence of science and their common exselie: 106

a.

'0 . - ‘ "or" 1‘5“, a. 01'\ IN" 1‘: “-. . . r. '1‘”. - . '2 1 ...‘o-j‘A v
1 1t, and, Where they dis w,5iee and dive.5e, it is beC¢L$t oi tne11 ciiiel-

0

ing concepti3ns of eLectly shot science and sci1ntific method meant. The

idea of evolution and or hn5e hzd led the His toricists end Institutional-

ists to emlnrice a relativistic outlcoz, and they had probes 15 been stren5th—

in this attitude by their strong diste ste for the static quality and

n
L3
m
p.

- n '1. .L

authoritarianism of v essicsl doctrine. To canton, however. evolution
sugges ted a hosic stebility in the lows of social growth, and the abso-
lute e: mi tence and Operation of these laws. But the 512nificant laCt is,
that the relativistic approach led to a criticism of the old accepted

standards and, as a result of this s
A 1..

to intervene and o something about evil conditions. on one o ther Tend,

those v:ho built a Positivistic c.1locoour upon the evolutione‘y idea, as

Spencer had, inev it 115 wound up p10fessi115 a belief in gr05ress and de-

fending the natural order of the status quo. This is exactly what G2:-

on 0339 to prozess. although he stoitl1r mcint

0

so ie11tific meth01, and his 50 d will toward the poor in society. hhile

we can not question his mutin, we have questioned his method to reveal

 

1 G'dnton. Plinciolrs c

 

\

that w1e1ever Gunton's hflllOCO“f" lo.

('2
”3

3 its supe11icisl Isms me lznce to

.L

the basic structure of tire olde1 Cls LC.

H

that of the His orical school,

doctrine a1d me ethodolosv emerges t1iumpl.nt.

In order to discuss the Classical as: ects of Gunton's theories, 1e
must first clarifv and master a subtle prohlen which presents itself at

0381.5

’Jo
I

this point. When we eluci ated the simila1ities between Guntem1‘s

q

and those of the Historical school. there was a defi: 1te, circumscribed

9. .J
H
’D
}.1
pa
‘1
I
d

body of thought, hat naiticulzr group, zgninst whicn to contrast

' t

Gunton's thought. The Historicists had teen united in their sgi‘eement as

:J.

(D

to their revolt against orthodoxy, and their revolt took a é_efin te sisro
and pattern. When we come to assessing the Classical element in Gunton‘s

_. U

 

l1ough , we are not so fortunate in having anv one g1oup aLaiust which to
measure his ideas. The older generation of orthodox 1me1ican economists,
although they were the lore most proponents of Classicisn in America, re—
presented a specialized brand of Classicisn and cannot be tr*en as a norm.
Moreover, he newer school of marginal-utility economists, whom we have
Cesignated as the bchectiv‘st were also basically 018 ms sisal and tradi-
tional in their approach and methodclogy. It should ce recoEnized then
that when we discuss the "Classic 1" elements in Gunton's thou'ht. we are
referring to those ideas which all these growps hzive in coramon, and are
usiza r the ter ”01% sical" in its 0 Ho Wde t and most original sense. ”Classi—
cal" would also mean. by implicatisn, the agproach Opposed by the Histori—
cists, since they were avowedly anti-Classical. 121is metiod of analysis
should enable us to determine the salient points of agre ment between Gun-
ton and 00th the orthod r economists and the Subjectivis ts —-— to detect

what is has ic.lly Classicali in all tliree ——— without leading us to assume

falsely any idea of exact congruence in all parts of their doctrines.

g

Gunton had by no means aligned himself with the older generation of
American Classicists, who had so enervated the study of economics that,

Instead of being the beacon-light of industrial and social
affairs, the source to which all mav turn for safe instruc-

tion and honeful Tuidance --- it is the “dismal science“ which
1- E‘

‘

students avoid, statesmen and capitalists disregard, citizens
ignore, end laborers discredit.

Gunton was, in fact, more critical of this brand of Classicism, with its
dogmatic axioms and lack of touch with reality, than he was of the Histori—
cal school, with whose rebellion he sympathized. Gunton rather belonged
to the newer group of Classical economists, the Subjectivists, who based
their theories on accepted Classical princigles, yet introduced innovations
On the theory and extended the scope of Classical economics. In common
with John Bates Clnr, Frank Fetter, Irving Fisher, and Simon Patten, George
Gunton stressed the importance of the human elenent in economics, recog—
nizing that Values are determined by human desires. In making human wan
the ultimate causal force in economic life, as they did, they tended to
focus their interest more on the yrocess of consumption than of production,
and in this respect too, Gunton was very similar to them. However, this
question of human desire and the psychology of consumption belongs to the
more novel part of this group’s theories, and suggests more where Gunton
and the Subjective economists extended and added to Classical theory than
it adds to our knowledge of the basic Classicism of their philosophy. Leav-
ing the discussion of want and desire for a later point, we will take up
first the basic Classical precepts in which Gunton and the Subjectivists
and the orthodox economists generally agree.

An outstanding characteristic of Classical doctrine is its animating

‘

drive toward harmony and unity, a feature quite noticeably lacking in tne

 

1 Gunton. Princinles of Social Economics, v.

thought of the Historical school. This difference in outlook indicates
very clearly the antithetical drives of the two schools of thought. Gide
and Eist give a rather helpful analysis of this fundamental Opposition:

The stuCQ* of economic pd eno mena may be approached from two

oposite stan points s, which we may designate the mechanical and

the organic. The one is the vantage—ground of those thinkers

who love generalizations, and who seek to reduce the complexity

of the economic w01ld to the comoa 1ss of a few formulae; the

other of those writers who are attracted by the constant change

which concrete reality presents.

Gunton was primarily attracted to the mechanical approach, since it per~
mitted him to develOp an underly' n3 harmony and completeness in his thm g1t,
and did not prevent him from making generalizations. The inductive eco—
nor ists were, of course, quite restricted in this respect and frequently
wound up putting forth no generalizations at all. Gunton had deviate d

from them consciously for this reason, because he felt that their contri-
bution, while significant so far as it went, was limited merely to criti-
cism and had little to offer in the way of coxmst uctive policy or theory.

As a res alt. Gunton‘s his telica analyses are of little origi n al value,
because he was more interested in using the facts to demonst‘ate his own
theory than he was in correctly observing causal relationships; but he did
make useful contributions in theory oy his emphasis on consumption.

This belief in the underlyi1n311arnony and simplicity of causes in the
sprin éS of social tion is a concept fundamental to all Classical econo—
mists. It is a primary characteristic which de iinitely me he off hat which
is not Classical from that which is, and i.n this respect Gunton clearly he—

.1

longs to the Classical school. Such harmony is nossiole only if one be-

4.

M1 ves in the automr.tic Oper tion of natural laws or economic forces at

 

l Gide and 111st. 011. cit., 401.
I" w-q .
4 Gunton, Principles oi S cia aconom1cs, v

w-
1.}.
H.
O

the base of all econonic action -—- laws which operate universally and
eternally because the elenen ary needs of zantind are ever"ther - the sage.

Thus economic laws, which have teen discerr1ed throu3h reason and abstracted

. 4' ‘ n v '1‘. P! I ‘ . “ 1'! "v a / 3" 1“ - ': ‘2
s b19 la; or Vat s, sel: inte1est 1the necon1rt1c

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91
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principle), the law of growth and deve103men , the law of conje etiti on, the
low of prices, a1e i:1diS3e1.1sa le to Classical ‘octrine, vhich presurposes
he setting up of su h laws as prerequisite assumptions “pon which to gro—

ceed. Gunton, too, relies on similar natural laws, altho13h he believed

the? Operated at a slower p€.ce tha; menv other Classicists, feelin3 that,

tv

I” \ 9 ~ “-P 3 "I w _ _-.. 1 1 W‘ n -‘ . q *1 Q .
cause and e11ect 1n econom1c movements are saloon plon1nent1y 1n
.1 . 1: . .. m. 1- -1 -. —~ .. n31 '1 1 - :
11ew at the sa.e tine. -ne op¢1ut1on o1 nwt- 1 1911n escaom1cs
.-,.'.‘ -..... -..-” inf-l- «LT. .... a .C' ,, -- . ,1 1 - - .-
8 SO $110.17 {1.5.1.1 "_.L C'.(.A.-.~(_,..L 11.11:.b V116 C; .1...S 1;: S 0.1. (111“! I fifth]. L 111C. .73. 1 19.11611

:1variatlv to he soush

l.

indus rial ondit‘1ons is i

tances tha hs.wr ceas d to he prom11ent long he-
4- ! ‘1--~-1~ « nu.- N

ts aie 3.;1e1a11y 01se'r ”101

1.1...

‘T n“ 1‘ V :r‘L -~ '.r-v~‘ 1 , n- '3 ‘ . -v' u'fir.‘ ‘1'"
1ot all o1ass1c1s1s acce__ ted the same 1aws a U118 and ulchlLui. ‘ t the

U)

.0, .0 ‘n :1 ... _ \&.1\ "V D-u ‘~ .,~ '\ v .
1act o1 tn11r postulatinS such abst1.ct l ws reiains.
‘Q - J. 1 . r, : q n '1" 1 .~ - V. 1 'L‘ . D " ~ 2 V ‘A r~ ‘
Gunton not cn1y believed 1n an al 1am and their narnony; 1e a1so

1 1"...1 ..o 11.1,. -. , 1f. - .5” - ,...‘ 1- 1. no: . .L 1.1 ..-...
.nau 111M 131un 1n tnc11 hene11ce1ce and tneii lead1nh .c 1e 0. e;;.l 11o—

... .0 1 J.-- m x. 1: .‘ .... 1 -1 .11: .L '1. 19 - 1--.. 1.11.1 __
31ers o1 soc1e1..1o e1_ete in ha 3 nd and to Jol-eve 1n p1o3ress —

‘ L‘A .2 ‘ . a v I 9‘ '0 v -- gov. 4- ‘ *vv‘. * In-
these are .ne 1uent11 ing marge 01 an 0ot1M1s1, and Opti ism was not

Q 1'.

3r1narv characteristic or 1assicisn, but a secondarv one, as the pitch
and qua it? of the voice are not essential to tne “eternin1n3 o
Bastiat and the French oLtimists, for example, believed that, “The general
laws of the social world are in ha1m1ry with one another and in ev ry wa"

a

"J - a I ‘
1e 31e1f action of huncnity. 'unile Gunton o reed with this, there

I N

w're many ClaSsical ecom1 H1 ts who did not a cept this at all, who did

 

 

G 1.1.1

. - - " L .— ..,~- ’1’:
GJAlt'Oll’ H:— mha‘. CO¢LL.L ...J-O less, l‘f/O
[“Q a r‘_"- TI '1. _ ‘0' . “A”

1:. 19 6.1.(1 .lbu. 03- C‘to. ijo

not believe

ment of socie

-,
1’

oftMAAAl

. 1.
five I].

juugme
nomists were

1 ‘ ..1 :
6363.001 8 LL,

Classicism, Lut vm -s equzlly t2

n

V"211.18 U'

tion,

a

Ai rection to

ly so con"let:l

and equilit lium of society.

ther nA1ve

"5

per direction in his A;1Alysis of

that the
list, comj:eti1
lies in the

the worker,

poverty,

to the laws of

Also oecztuse of his Optimism, GuAto

t- 1e11,

it is ine

general misunderstanding,o
of the true laws of

a business crises are All tb e result of peOple‘s

L'~ .7! w'
U-In-e uetm- l—

O
1
’-

'Ac Ales

-:0 nor 3A1

:34;

Such eco—

It S110Llnc. ‘38

that G1L“to;1's Optimism was not necessarily

a
T
d-

.,
1r~ n47? \- ""
12.1.5. 7 '

I ‘ I : ‘
;31Ag -icu Darwinism.

Sgence

Aism :AS not its deriva-

V
k

tJo

unton's optm

‘P'J‘
A or

icably bound up witA his Classicism, giving shape and

his thoucAt. It is this Optimi'rn \.rAicll permits Gunton to re~

y on these naturAl laws not only to mAiAtAin tAe bAlAnce

1.
b

bu Also to CAuse it to AdVAAce. We see

faith that society, left to the pro—

I’W :3

ALV

denies

sis cause by Azy flaw intrinsic in tAe CApita—

.1

—h

tive S"stem, or from AAy meAIAess in human nzture. The fa; t

on the part of both the em} layer and

economic re e19 Ht ions. Mal—distribution,

J- - N . LI. ,1
Sec lJ LIES C 0.1L! rp‘l‘sr

(9

nature and so upsettin the delicate tAlAnce.

’1
C
Q

his theory All

 

 

\

tAose Classical laws which seemed to him pessimistic, and hence inAdmis saole
on 03th more 1 and economic grounds. Gunton criticized t1e uoctr ines of
Hill, Ricardo and MAltAus, that sugply and demand regulates price, And
tAAt wealth is only A matelial good.) He otjected to the gloomy conclu—
I G—ide and Rist, ooL_cit., 360,2.

G‘Atan, Leilth and Pretress, 353-9

Gunton, ”TrtrocActor" hemzlzs," SociAl Economist, I (1391), 2.

 

\1)

(H

L

+ u

sions of the 11:1.v mu io.n ren law.

that there is a certain inited ano

able to spend on w:.=15es,

decreasing the number of laborers or by decr

Gunton claimed that this doctrine was too easy

and denounced the waées

unt of money which

easing the w

-1und doctrine

the caoitalist is

and that wages can therefore only be increased by

c.ges of some others.

tool for employers to put

off workers' demon ds for raises.
It is his 03_1tim im too, the t stimulated Gm nton's aversion to strife
in society. Harlory is the nzatur l undeilying condi on of society. So

should relations be between worker

recognize heir true relation to each other.
0 O 0 v3.31:
nredatory warfare of early tri
being...The conflict is one of conditions

and capitalist,

r ooer lv

.A— ‘4

if they would

industrial warfare is no more needful than was the vast
bes to their own safety

nd well-

misunderstogd, of situ—

ations exylained after a false and misleading theory.
Gunton did not countenance either the gospel of strife prOpounded by the
Social Darwi: ;sts or the Ma xist interpretflz ion of the conflicting1 interest
of classes and the ultimate ne essity for revolt. For ore thing, he was
not convinced that a state of assoln te free competition was always condu-
cive to the survival of the fittest.

The idea that free competition always develOps the 1%: est

possibilitie sby enaolin: each to do that for \fliic21 he is

best fitted, is ... mileQding. Tl1e pepular idea of ree

comyetition is that it mis an unconditional stru55le for

existence among indi vio‘ol units, er 1d that is the sense in

which the term is usually employed by eco

is commonly regarded as the application of
and hence the poliCy

natural selection to society;
sez faire is claimed to be based pon the
lution...lf it were true that in physiCn
conditional str"'gle of units alway
end th greatest progress, it would not 1
should be tr ue in society.

G

¥

S prOduCES

rhis View

no of

of lais—
doctrine of evo-

l nhenomena an un-

the highes t t1‘Tes
that tne s we

nomists.
the doctri

ollnw

Put it is by no means cleai that

 

 

l G“nton, health and P10 ess, 35-5.
Gunton, “In 1tro€1ctory henar rks ," Social ;

coziomist,

(1291), 2.

 

l

(h
.1:

this is true even in the physical world....(U)nder a regime of
pure laissez faire ~-- the action and reaction of blind physi-

 

cal forces -—— progress may have been greatly retarded, while
inferior types for ages perpetuated their existence by pre-
venting the development of superior types.1

 

Furthermore, Gunton was so firmly convinced of the similaritv of interests

of all classes, that he considered all radical reformers who dramatized
class antagonisms and vilified the wealthy classes to be anarchists and so-
cialists. possessed of distorted and exaggerated visions of the evil nature
of the capitalist. and deceiving naive, innocent workers into betraying
their own interests.2 Gunton seemed to feel that the harsh. unflattering
picture of the millionaire which these reformers contemptuously painted
was intentionally drawn in a hard, glaring light that would magnify minor
blemishes and result in an ugly portrait. When Gunton turned his sympa—
thetic gaze upon the millionaire industrialist. he saw a much more plea—
sant figure, representing the blessings of prosperity and signifying a
bright hOpe for the worker. Gunton could see no antaeonism between the
interests of the rich and poor in a democracy, because he felt that a demo-
cracy embraced the welfare of the whole community.3 Thus Gunton's rosy
Optimism and desire for harmony led him to a false analysis of the nature
of the industrial problem. and made him a conservative thinker in his vin-
dication of the millionaire.

Not only did Gunton's application of the Classical doctrine of har-
mony and natural law result in his Opposition to any doctrine which sugges—
ted strife or imbalance in society ———, it also led him to resist reform

generally since he could place little faith in short cuts to harmony, or

 

1 Gunton, Principles of Social Economics, 233—90. -

fl - -r u I w- 0 I" \

4 Gunton. "IntrocuctO‘y nemarcs." SOCial ;conom1st, I (ld9l;, 5.
7 o 1
.LblCi, 6.

 

 

C\
\J\

court decrees to achieve the Social millenium.1 Gunt on felt that, "A

A

better society annot be invented, it must be evolved."“1 The safest poli—
cy :ould be to rely on th e Operation of . ture l laws, which were absolute
and universal.

Yet Gunton :as no t so Optimistic as to rely completely hese laws,
important and significant thou gh hey were. For society could only advance
easily if peOple followed their true economic interests, which were in ab—
solute accord with the natural laws of economics. Gunton recognized that
eople do not always know heir own true interests nor the lavs cf econo—
mics, but allow themselves to be pe mded and confused by the rantings
of mistaken reformers.

How the method of social advancement which is rapidly going on
as at present conducted is chiefly one of social warfare. Capi-
talists strive with workmen, and tflorcmen rail ag inst capital-
ists as if they were born enemies. The man that has is 1egar—
ded as the foe of them mn that he s not. Corporations are held
to be hostile to the lublic \we 1, and government is fro.ntically
invoked to repress the greed of piivate enterprise. Preventive
legislation on all subjects 109 ads down the stztue boocs with in-
Operative provisions, class decl aims against class, the farmer
organizes against the money lender, and the manufacturer against
the railroad, interest conflicts with interest and the air is
full of the cries of the va~ious combatants as if an interne-
cine strife w re calling our citizens to go forth to battle for
their rights.

Instead of loocing to politicians or demagogues, who he ave little or n
knowledge of economic matters, for political solutions to economic pro-
blems, the veeple should turn instee ad to reliable economic e17 certs who are
trained to handle industrial problems. The Sol Economist, in an unsigned
article presumably by Gunton, had nothing but harsh words for labor groups
that attempted to solve their economic difficulties by trusting in peOple

like Henry GBOTTB, Edward.3ellany, or others whom unton did not consider

 

 

l ”‘u 1L g - I —-‘~~ fi-v T1. 1‘ -.-‘— ’ r‘ -. r\ T ‘A 9 : ‘t '_ A‘ ‘. d
canton, 'IntIOc1ct11; Lena. s,’ one. 1 1co1on1st, I (loyl,, 3.
2 Tea: fl
3 7%: F. ’7
.L‘ in, go

 

to be trained econom s.ts, yet who nevertheless had solutions for all

manner of problems. Gunton also repreoended l1bor groups for having poli—
tical aims, bec'use, as he pointedo out ruineta11n51y, such gr cups proceeded
on the false assumption that social evils arise from political causee
whereas they are really due to strictly economic conditions. Thus, they
would so rcely be likely to accomplish any good for their group, and fre-

quently caused much harm by their m ists {en intm rence, as the garners'

1
Alliance had done.‘

This careful Lration of economics an‘ political act1vities is

m
m
d
" \

characteristic of Classicism in general, for the method of abstracting
economic lawsf rom other fields of activitv and thought was intrinsic to

the deduct 1ve aprCach of Classicism, although directly counter to the

T7

11:.

elativ sm of the histoiice 1 school. Such a method assumes the absolute
validity of the laws it maintains, their complete independence of any
forces outsi as themselves, and their fieedom from any restrictive limita-
tions. It is on the basi sof such Classical reasonin that Gunton denied
t11e complete ir tellelationship between government and economic life, as
has been pointed out earlier. Sir ce he viewed economics as the science of

a particular, Specialized field, Gunton could not see that political events

or developm1e11t s have any 0 nnection with what goes on in industry. Esform

{:1

in the governnent does not make for reform in the industrial world, accor

ing to Gunton. Most import ant of all, the material prosperity of the work—

er is neither dependent ur- on nor affected by his political liberty.
Freedom does not consist in the mere absence of legal barriers,
but in the actual power to go and do. The poor can never be
free in any true sense of the term. Whoever controls a man's

 

1 Gunton, "Folit ical Laoor Pa1ti cs," Social Econom’st, I (1391/, oo-ho.

 

{n\
‘3

living can determine his liberty. Freedom me ans inceronuerce,
. 1 o o i
which nothing but wealth can 1mgart.

Because of this Classical rel iarce on the absolutism and indePendence

of natural laws, Gunton also crossed off other social phenomena as not
\ .
ing directly concerned w1'th the econc nric well— leing of the worker. In-

C'1st1i al reform cannot be achicvcc t_11o1bh curlenCT r9111m either, jus t
as political reform has no effect on the worker's lot. Currency fluctua—

tions may impede business. bu it has no effect on wages, which are go—

at,

verned an* co trolled bT the w01:er's standr‘d of living and not by any

U...

other factors.

Yo industrial or social ingrovement could be troéuced bv any

changze in the qua ntity or quality of the currer CT, for the ob—
vious IEEd on that money, as such, ha'ing no otner f“nction
than a medium of exchange, sustains no important economic re-
lation to the soc: 'al forces which determine the amount of
wealth produces or the amount of the lacorer's income.

There can be no question of the basic Classicism of Gunton's econo—
mic theory once L8 hs.ve clear 11y aprrehended his belief in the existence
and Operation in society of Causal forces (natural laws) and their ten-
dency to establish an equilibrium (harmony) in society. The natural laws
v.hich Gunton finally accep ted, after rejecting. revising, and amending some

of the older Classical 01th c-oxies like the vu gee-fund and sucpl; and de-

mand theories. were the laws of free competition, self-interest. wages.

f‘

rent, orofit. and the law of growth ald develOpmr 1t or social nrobress.’

.L .I.
Is it not quite etide 1t now. how Gunton would naturally advance to the be-
lief that all social welfare and progress are dependent upon the unhanpered

operation of these at solut e and ‘1niversal lsts? Gunton has convinced the

 

I Gunton, Ie-rlth and horses. 205-6.
A o a A
Gunton uses these last two terms almost inter raz‘. fecbly, as we have pre-

viously noted.

 

laws would Operate, whether peOple recognized them or not, and therefore,
to enhance progress, it was their duty to study hem and to aid their de—
velOpment by acting in accordance mi h them. We cannot be wholly depen-
dent on the laws to periorm miracles. Gunton admitted, because they are
frequently hindered by men's ignorant interference and hindrance. More-
over, since all social progress is dependent on the material and economic

welfare of society, and no political reforms can have any permanent effect

'J.

'4)

large masses of peOple are poverty—stricken, it is the duty of everyone
to aid the Operation of the laws.1

The progress of society is adhieved, then, not so much by great poli—
tical reforms, as by non-interference with the natural sequence of events.
Here we see Gunton‘s basic conservatism plainly revealed at last, and can
inspect more critically the pseudo-enlightened purpose of his magazine,
which was "...to aid in promoting the natural advancement of society by

O

contributing to a better understanding of the principles which always

a
have governed and always must govern industrial and social progress.“
This is obviously an essentially conservative policy for an economics ma—
gazine to adOpt, both in its assumptions and in its lack of a definite
program of action. For not only does Gunton immediately assume, in the
use of the term "natural advancement," the assured progress of society, as
a matter of course and through natural laws, but also the only course of
action that he contemplates is simply to promote this progress, or at
least not to impede it. by helping to develop a hetter public understand—

ing of the natural laws, or "principles," which control progress. What

is this but a disguised form of laissez faire? Earlier in the course of

 

Gunton, health and FrOggess, 205-3.
Gunton, Social Economist, I (1391), l.

 

Fofi

 

this paper, the point was made that Cl% ical thesry, specially as inter-
preted and applied in America, led to political conse atism. We have now
seen the same phenomenon occuring again in tracing G iton' 3 Class icism.
Actually Gunton did not profess to believe in a strict laissez faire
policy, as. for example, William Graham Sumner did. Contrary to what we

.11 00--

t1.
hi

SC c

H,

might expect. Gunton spent several pages in his Principles 0

 

nomics specifically refuting the idea of laissez faire as a thoroughgoing
governmental policy. Quite correctly he pointed out that. while laissez
faire had been accepted as a guiding r ale by mos t leading economists it
had never been inductively established from any study of industrial pheno-
mena as a principle in society. He was aware that it had originally been
seized upon purely as a protest against the paternalistic mercantile sy -
tem, and not for its absolute validity as natural law. Gunton even ad—

mitted that. "... the claim that the theory of la aissez fairs represents

 

a universal principle in nature and society, and is entitled to the same
unquestioning acceptance in economics that is accorded to the principle of
l
cravitation in physics. is wholly unwarranted." Gunton rejected laissez
faire (at least nominally) because he disagreed with the assumptions made
by Classical economists in justifying it. They had pos m~lated tha self-
interest was a universe 31 quality in human nature, that each person knew
his own interest best and would be sure to follow it if left alone, and
that free competition always permitted the best to survive. Gunton agreed
with the principle of self-interest, but was not convinced, as we have seen.
that people always} {now their own interests or the t competitive strife is

h

1 1 0 - ‘l O C
tne most des1raoie economic system.

 

 

 

Gunton's final reason for the rejection of laissez faire is that it

is unscientific:

Considered as a fundamental principle in statesmanship,
laissez faire is essentially unscientiiic. It is necessarily
negative, while statesmanship is positive. All government,
order, and progress imply affirmative action, and therefore
are the opposite of laissez faire. Science is essentially
aggressive; it implies the active policy of investigating,
knowing, and controlling things....lnstead of adepting the
rule of laissez airs, and waiting till nature produces the
desired result, we have learned to bring the particular forces
together in just such relations as will produce that result
much quicker....

Since affirma ive statesmanship is necessary to govern—
ment, and government is necessary to civilization, it is a con-
tradiction in terms to speak of laissez faire as the basis of
statesmanship. The science of government is not the knowledge
of what not to do, but it is the knowledge of what to do and
how to do it....So long as government exists it must h-ve a
function --- a sphere of action. Scientific statesmanship im—
plies a knowledge of the principle by which that action should
be directed.1

 

Gunton goes further to reprimand those who maintained a belief in laissez
faire for the sole reason that "th history of state interference with in-
dustry is the history of mistakes."2 That is still no juS'ification for
inaction in the present, he states.

This long passage has been quoted for two reasons. Eor one thing, it
is useful to observe Gunton's verbalized attitude toward laissez fairs and
the kind of logic he employs. Secondly, it would be extremely difficu t
otherwise to demonstrate the fact that Gunton really d'd not reject laissez
faire at all, either logically or for practical purposes, in spite of his
sanctimonious pose of liberalism. The nain argument Gunton presents in
this passage rests upon one basic and serious fallacy. Once it is eXposed,

his whole position of liberalism begins to crumble.

 

 

«1

The fallacy lies in the we: in which Gunton uses the te1ms "laissez

faire" and "statesmanship," for he has set them up as bein dieo'ne M11 ally

é
Opposed to each other, and mutually exclusive. "Since affirm tive states-

nanship is necessary to goverinent, and government is necessary to civiliza-

 

tion, it is a contradiction in teims to speak of _§issez faire as the basis
of statesma.nship.' ut is this dichotomy really valid? Uhat Gunt n means

I!

by "statesmanship is obviously government, or contiol. Bhat he means by

"laissez faire" is non-control, or anti-government. By >osing the two as

'\

equated terms, Gunton really has rorced

d-

he meaning of "anarchy" upon lais—
sez faire --— since it is supposedly eprosed to gover ment. Yet laissez
faire is by no means commonly thought of as rearesentina no gov rnment at

.. V

all, or total lack of control. The dii fic1 11ty becomes clear when we con-
der exactly what is meant by ”laissez faire." "... the Classical school
...thought of laissez faire neither as a dogma nor a scientific axiom. It
was treated merely as a lactice 1 rule wl ich it was wise to follow, not in
every case, but wherever a better had not been discovered."
Laissez faire, then did not represent total ppos Mi ion to all govern—
ment. It merely suggested a policy to be followed giggin government; and

I

within a very srecial field within governmen --— the economic. Thus, the

m
P.

ign ficant q estion to 88:: would be whether or not the goverrnent should

Ho

pass legislation restricting ndustrv, not whether there should be govern-

ment or la is es fairs, and Gunton is careful not to bring up that question
at this point in his discussion. Yet we know from our earlier examination
of the reform qiestion that Gunton felt practically nothing could be achie—

ved in industry thro1éh the ena ct11ent of laws. He finally sums up his atti-

(4'

’JI

n5 out that the immortent

FJ-

tude toward governmental interfe rence by

a.

 

 

. . ... .3
siestion ls:-

.....hethe r the desired end Can 3e flare surel" OCtLlfiEC by inter-
venti n then cy the unaided OPElat on of unconscious forces. And
this will defe: d ent 1er those who maniju‘nte the
“C ions un;.erstand ne ln:s ne ghencnena with \.hich they
”denvorin; to deal, and t e1cre can correctly predicate
.2

*1: H)

 

 

e
the result. Igi orent or dnscieitif-c interfe: e1ce ;-y be worse
than lfiitcz fcire. Put this by no me ans inflim that laisseg
fri“e is sureiior to scientific "egilnt iol.

lem in definition. rrom our knowledge of his confdsed'understsnding of

science and scientific moth C, Le might be xer3ittcd to doubt its CLJuC‘
tivity. The fact that Gdrton insisted that notlisl lets thich he had
postulated were Vailu and desolate, and thnt all economic notion must be
in accordance with these lhws, should p1ovide a clue as to the "scientific"

. fl. :— 1~ 3.... s1 18' 4—. -. *1 "Fwy". C1
nnt11e cf u-Jnuon's a11t1cixgted interie :nce.” nor eith'le, 11e Object d

«t: -’\a:o\ 1" t,‘ (311‘ .--«-:7-: :--4‘. two "“.“'C ‘3 invfi~1‘-:tf. .-1~.‘- ’-
0 .LC VJ.‘ l1..S nOU U11 -1.» .....’.\.J..$U.LL«L.L 1119.1 lUU Oi QCMC¢L a, UBLU L1)-

to soci 1
Cause he felt t11ey were, as a whole, tr ing to Entici ate, not mr1fiote
social evolution; the function of the true social scientist, according to

adntcn, WELS to ascertnii the laws by thich socie etv moves 1r.m single to

V

A

complex and act accordin;ly.‘

Actually, the only sort of economic policy that Gunton seems really
concerned :ith, judgino from his enihz1sis on the in; rtonce of the
tical rulers involved, is that which p aces government in the hands of
the ri“11t p6 Ople —-- i.e., the peogle wiose cor cep of the "scientiiic"

principles of economics would coincide with Guntcn's. Since he feels thzt

t2 e wezlthy class 5 not only do, but should rule demo cratic soci . , be—

 

q
l

c: use they are ozviously the most engable a;1d srccessful, it is 'rcnient

 

 

 

thst to nim the ri ht peoIle are the venltky people. If the right peeple
1 Gu Mt n, Fr MC ,zles of Socinl Tcononics, 23?.

G I ' C .I I

: Gunton, "onltn and Progress, 213-0.

3 L - rfi/ H

o—Q’ LLC’ {a

a1e not in cont1ol of the government, then Gin on reall5 p161 fe1s a laissez
faire economy because "ignor nt 01 unscientific int 51 ference may be worse
than laissez fair ."

We can further demonstrate Gunton's basic allegiance to the laissez

ea by exaninins: his positive statements on the role of government:

p.

faire i

...it is the duty of the state to promote in every way possible
the develornent of the individuality of its citizens, increase
their mu ual dependence uron ee.ch other and to decrease their
dependence upon sove1nn nt....Paternalism fails to promote this
end, because it tends to lessen instead of inc ease the acti—
vities and respor sibilities 01 tne indivi‘ual.

...the control lin_: pr ncip le in public policy should ever be
to minimize the necessa15 srhere of governmental actio: and
authority, and to maximizez t‘: yossible srhere of individual
action and responsioilit5

{Q

Do these statements sound like the words 01 a man who is Opposed to the

q

(183. Ll EB for gu-

‘

p1inc ple of laissez faire? Not only so they reveal his

g

vernment control in his summary cismissal of paternalis1 but they also

show G 1nton' s be sic emphasis on individualism, a feature hich inva1ia sly

A O

accompanies an espousal 01 la1ssez faire. It is because the economist
does have so much faith in the individual's ability to do for himself,
that he desires no governmental restrictions. Gunton's faith in the indi-
vidual is not unlimited, but he prefers individ 31 action to collective

action of any sort.

q

Cn general principle, individi 131 action and responsibility are

preferable to state action or collective authority, because they
possess t e maximum ros sio ilit" of directness, efficiency, eco~
nomy andfiequity. State a tion...is necessarily indirect and ar—

bitrary.)

Gunton's ideas on laissez faire, complex as tliey may seem, are the

 

 

key to his economic nos iti.n Moreover, thev are inrortant insofar as
. ‘- U .L

l‘ 1 . 1 . 1,
Gunton, ILinci ples of o1e1al neon/31:10.0;L 211.

A ' Q -. P\ Q . I "x

: 1b1o, )12,(Gunton italic1zes th1s sta.enent).

2 Itii, 313.

they demonstrate his basic conservatism and his alliance with the Classi-
cal school of individu lism. notwi hstanding his own protestations of li-
eralism. Both laissez fairs and individualism are essential attributes
of Classicism, as are the belief in the absolutism of natural laws and the
abstract-deductive method. Gunton‘s reliance on these ideas form another
significant link connecting his theories to the Classical tradition.

Part of the reason for the difficulty of extracting a clear cut ste .te—

ment of intent from Gunton's wo1ks on the one sMi 10f laissez faire, lies

in the fact that there is a basic split or confusion in his thought con—

‘
w

cerning the issue of centralization or decentralization. This split is
clearly the result of the abstract-deductive method of Classicism which
compartmentalizes, and frequen1ly succeeds in isolating really rel:t .ted
factors from one another, as in the Classical division between econom'cs
and ethics. In this case, the senaration is the familiar one between po-
litics and economics. Gunton did not Oppose political reform of industrial
conditions because he was intentionally conservative. His Opposition came,
rather, ut of his conviction that politico—social progress is something
yuite different from industrial progress --— the two Operate on separate
planes and lead in different directions. On one plane, there is social
prOgress which relates to man's political and ethical life. On another,
there is economic progress, which relates to man‘s industrial life

Progress in politics and society ... mcy be defined as the

tendency to increase the sovereigr ity of the individual and

diminish the aroitraly authority of the state by establish—

ing greater democracy of administration. In economics it

may be defined as the tendency to centralize industrial ad—

ministration and responsibilit;n de-i ndividualize the laoo

rer as a producer and socialize the results in better and
cheaper products.

 

1 Gunton, P1 rincirl es of Social Economics, 1M.

 

Where gunton Opposes centralized control in the political 1:a m, he

a

maintains that centralization and de—izidiv idu aliza tion in industry is a
good thing, since it results in an increase in overall efficiency and in
the worker's capacity to produce wealth cheaply. Besides contributing to
industrial progress. centralization also helps indirectly to increase the
worker's social individualism.

As the laborer's industrial individuality diminishes, the in-

fluence of his social and political individuality increases

....In order ... to maximize man' s social individm ality, it

is necessary to minimize the expenditure of his physical ener—

gy. This is precisely what the division of lauor, the con-

centration of capital, and the develOpment of the factory
system promote.

There is a certain amount of truth in Gunton's observation that as

a workei gains in economic security he becomes better equi of ed to improve

.-

himself socially, and to play a more active role as a citizen. This is

admittedly a plausible result of he develOpment and concentration of in-

dustry. But what of the 1mportant corollary to the growth of mammoth
corporations and the centralization f business --— that the larger the
business, the Ereater t1 e power, political and othe1wise, they will wield
simply by virtue of their wealth and influence; and that this tremendous
power of the bested business interests can to all practical purposes com—
pletely negate not only the in1ividual worter' 5 increased awaleuess of
liberty but also his actual liberty?

There is no economic or social reason why the rise of improved

methods of production should be inimica l to social progress...

There is nothing in the division and concentrrtion of laoor and

the use of machinery that necessarily involves the physical de—
terioration of moral and social degraa tion of the laborer.

 

IGunton, Prir ci 1 s o
2 Gunton, health and Prorress, 3

This may also be true, but on he other hand, there is no more re as m1 to
assume its implied converse ——— that material prosperity will necessarily
guarantee the intellectual and moral growth of the worker. From our know-
ledge of the industrial condi ions of G‘iton's time and the shameful amount
of grafti ' nthe government, we can with more justice doubt the completely

'beneficial effects claimed for industrial centralization.

Gunton's s paration of political and industrial progress also results
in a false one-way causal relationshi 1p between the two f1elds of activity.
Zuiile inlustrial progress is assumed to aid political develOpment, politi-
coal activity is assumed to have no bearizg at allo on economic progress.

... the poPu dlar idea the pervades the literature a11d forms the
basis of statesmanship of the peiicd, which ascrioes our superior
civilization to our democratic institution ... is radicallv
and 1unornent ll" false . It is not true that our superior ci—
vilization is due to our democratic institutions; it is not and
never was true that liberty enligotens the world.

On the contrary, our democratic ins ctitutions are the na—
tural consequence of our industrial piosperit" and su3erior ci-
vilization; and liberty, lice morality, instead of enlightening
the world, is the golden result of the world's beiig nlighten-
ed by the material and social prog‘ess of society.

It is partly because of Gunton's disbelief in the power of government

i.)-

‘tCD alter industrial conditions that he ado3n ted the la ssez faire aporoacn,
Eilid laissez faire is, after all. only one practical solution, amone
“'hich an economist settles upon to solve th e economic problems of society.

59he answer to the question of whether or not the general welfare is in-

<2rea .sed.by intervention or non-interven tion depends entirely on the eco-

.L

Ilomist's own bias and h1s1 interpretation of the nature of economic prob—
:Lems. His decisions of what will be best for “c ety, and what is the

U

'best method of aidina the progress of society will reveal his fundamental

 

T

Gunton, Wealth e-d Progress. 200-7.

 

sssumpti ons an -d sympathi s, so thbt we CHCJ to what school of €00? omic
thought he really belongs. From our previous examination of Gunton's solu—
tions, we know that Gunton‘s answer to thi fine 1 question of proceture
was the Classical one of laissez fairs, and his basic assumptions in arri—
ving at that answer were 1% tinly Classical. He assumed the absolute exis-
tence and Operation of natural laws; he accepted the icea of an underlying
harmony which tends to mai.t in equilibrium in society; and
abstract— deductive met1od in settirg u: his natural laws. Th lese convictioz1s
are all intrinsic to Classical doctrine. In tne fidelity_ w'ith w11ic 1 G“1—
ton follo.ed them, he reveals himself to be oasically a Classicist.

One final aspect of Gunton's theory remains for discussion, dealing
with the question of the ps"cholog r of economic action. Here Guntoz1 te-
long 5 more definitel“ to fi1e contenroim“y Subjectivis t school of thought

rat1er than the Cla<sicist, even tho~gh this sc col is considered an off—

shoot of Classicism. imlil Class1cal theory had taken up the question and

}

ostulated the ahstlzct concept of the economic nan moved by motives of

’d

self-interest, Gun on and the Sub ‘ ti vists placed a great deal more em—

phasis on the problem of motivation and levoted much moic of tneil tine
to the analysis of individual Lnt and ‘esires as the wellspring of all

The significence of the individ 1al in Gunton's theory is tnat he is
the consumer, all social progress is promoted by increased consumption

11c ion and hence, the accumulation of greater

:1

stimulating increased pro
aggregate 1e alth. Poverty is. after all, only the result of an insrpfi—

cient amount of aggregate wealth. If the total wealt1 were inc1megsed so
that the poor culC have more, and nl-ne need have less, tlie p10 ress of

g — a

all soci etv wo lc ce assured. nu t wealth can only be augmented by in-

 

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a thine as peo nle's wants and desires. Gunton succeeded in perceiving
order and causal relationshirs in hun.an desire and so built his theory of
grogress on desire.

In our earlier dis ussion of the most crisinal contr11ut1on nude t:
Gunton ——— his no'el defense of tie eight—hour 5Q -~- we were firs t in—
trodu ced to Grnto n's idea of want and desire as the critical factor moti—
all economic action. This is whcie Gunton durlica tes some of the
ideas of the Sub ectivists. “In practice, the subjec1ve econor is ts make
the human want the ultimate causal £01 es in econcr ic liie...“l There-
fore it is Gunton's notions on what human wants are, how they are develo~

'—

pee, and how they produce their effect in societv with which we are con—

an

s that all progress is chieily

P-

Cne of his elementary assumptions
dependent upon human desires. "... the develOpment of Ian's social
werts, and the consequent increase in the general co1sd1 tion 01 wealth,

is the necessa1‘ procurs:or of social, intellect‘1al, and moral advance-

5)

sent." Here is still another reason why Gunton objects to government
interference, since he does not feel that desires can as cont"ol
ince pin siCal we nts are limited, it is social wants which contribute to
socia purogr ss, for they are unlimited. "Ultimately, then, social pro-
gress is neither more nor less than the change of h*m1rn hat its or, in
other words, the increase of human wants, which constit1 te the differenti-
113 m

social character. 1688 wants w11ich animeto the economic

d
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drive 1

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pee} le canzot be s'ngly longinas or ncn'ex1ngs. If that were

 

 

 

1 u 0v v of: _ ‘- ‘_‘ - _ .1 ‘ n I r-r- w“ ’1." r;~;3r\
0 Lewis :1. 311*:19;, 7111:1111; of _:..c.ono..11c. 11311 at, c,
L, . .L w 1,: - r.- 1, : ,.-1 ‘: .... ...]:
1 thton, 11-noixles o1 ooc1a1 nco1o11 s, 27.

a. ' J. ‘ 7‘ 1. e .1 r3” '
/ Ganton’ t.‘ :.l .1. C. -.L‘ :1 Ogot SS, 1 U-‘WO

 

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t.

H-

“n ‘v" ‘. “- -u :‘h C ...- {\‘L ‘, y ~‘ '3‘mv ~v- '--.‘ In: '~-- ~
.1ue, eve1done would hate whatever ne wanted mere1‘ b; 11sn11b :er

“,1 1 ' 9.01. 1' .- 1 1'. r- ..-. .1 .1.-. ~ 4. ,, ..r 1- -_.
“math, to es e11ect1ve es econen1c 111tes, must :e so strvnb and use:

N}

1.0!?

to the i21d1v idual that he su11ers more pain from the lack of the desired
obfect tzran from worcing to ect' in it

c.

human wants are nc on1y tne ceus of seeial erogress
act ancement toweld a higher plane of hacpineS' '

s , ~
place on the egoi stic piinciple of obtaining the maximum plea-
sure for the minim um pain.

We must recog i: e immediately the fa1* w: iar Classical princi
self—interest energ1ng in Gunton‘s ste1tcment. Similarily, the Subjecti—
vists had taken up the principle and made it a cornerstone of their doc-
trine. The notion of self—interest rested ujon common observations of
the sychology of human behaviour, that man always seeks pleasm*e and
avoids pain, getting as much of the former :itn as little of the latter
as he cei. Jevons, a leader of the Hed1nistic school, had written:

Pleasure and pain are u:1dodbtedly the ultimate objects of the

calcu1us of economics. To satisfy our vants to the utmost with
the least effort, to procure the greatest amount of what is

desirable at the e12pense of the least that :s unc esiraole, n a
other words, to mes :‘mise pl eesu'e, is the pr 0 '

lem of econo omics.“

The question of man's mo mtiv tion in economic action was recognized as one
of the fundamental nroblems hat hed to be solved in building any firm
structure of doctrine, for did not even all natural laws depend ultima sly
on t1 e behp iour of individuals to be carried out? has it not assumed
that in following his own self-interest, the individual was also ucti ng

in accords z1ce 'ith the gener a1 welfeie, and hence, the laws of economics?

he would then have to understand so:.1eth Oabout men's in erests.

 

In“

deial Lceuc71cs, 1;.
IF‘F‘

istozr of Lcenexic sectrines, eco.

1 Gunton, r11_Cl*17€ o
2 Quoted by Gide an d R's

 

,1:
d- (1'!
1.1.

L3

h

Cairnes, an English Classical economist, recognising the unpredic-

D
J.

table human element at the Ease 0 any theory of economics, had sncgested
that even the most general economic laws could not be definitely asserted
to be unixwer a1 and absolute completely independent of human will. fOI
,

such laws only state what men are most li”e “1.1 to do under 5i ven circum~
stances. uuzton apparently wished to avoid this equivocal position of
maintainine,both the predictability and the unpredictability of human be—
haviour, so he repudiated the reletm ne e of motivation in economics , de—
claring, “Economic law...dces not recognize motives, or li‘ees and dislikes;
it is con filed only with on see and effects. "1 He felt that the econo—
mist conld not concern himself with what men like to do, but rather with
what men actually do.

Althodeh this statement may appear to contradict what has been pre—
viously said of Gnnton's interest in want and des1re, it is actually in
complete agreement with Gunton's whole eXplanation of the causes of so—

1

cial progress. Gunton is not really philos0p1ically concerned with men's
des iIes, but merely is interested in their outward manifestation in eco-
nomic action. He can dismiss tn intricate problem of just how men‘s wants
and desires can be measured. because he has decided that "the amount and
direction of man's effort is finally governed by his wants.2 Elsewhere

he writes, "Wants are the motive andm easnre of effor 1"; Gunton has
simply assured that wants 11d effort are identical, a: d that me C 41 judge

a man's desires sitply from the direc i011 azid intensity of his efforts.

He ass-mes that in order to carry out the rest of his economic doctrine,

that the standard of living is the law of wages, that the worker's pay

on not be permanently much above his wants.

 

1 Gunton, health and.Progregs, Lo
2 Gunton. Principles of Socisl Economics, 80.
Gunton, Health and Iioarcse. 33

 

We have already met Gunton's assertion that all progress is caused

by desire. To qualify this, we must now add, "Only effectual desires

cause progress."l Since Ginton is only concerned with the practical re—
sults of desire, we naturally ask, what makes desires effectual? How is
their influence felt in the economic world?

...desires become economically effectual just in prOportion as
they grow in intensity and their non-gratification inflicts
more pain than is involved in the labor necessa y to satisfy
them. This explains why we see in some‘individuals, classes,
and countries, a willingness to put forth great effort, and
take great risk,—in order to obtain things which others, while
they might gladly receive, would do practically nothing to ob—
tain.

When we consider why there are such differences in human desires that

some are economically effectual and others are not, we are met again with

Gunton's hedonistic eXplanation of human nature. Gunton feels that man

is basically a lazy animal, refusing to exert himself except to gratify

some desire. Man is also essentially conservative, disliking change. and

only yielding when Opposition or lack becomes more painful than acquies—

cence or possession. The task of stimulating new desires and wants, so as

to promote progress, is not easy, Gunton feels. Men are so gregarious and
2

imitative that social change is a slow process. Yet, easy or not, that

is he only way in which society can progress. For, increased effectual

wants will encourate the manufacturer to greater output to satisfy the

prospective consumption; and the increased production will mean greater

aggregate wealth which is the fiial answer to poverty.

How, then, is the manufacturer to recog-ize the desires of the mul—

Cu

titu e as serious (effectual), and as no longer mere

 

l.

0)

E Gunton, Principles of Social Economics,
‘ Gunton, Wealth and ProgressL 198.

 

(0
TO

also, poses this question: "How...is this rela.tion cetwee n desire and
effort, consumpt tion and procuction, to be ascertained? .How do the pro-
ducers know when the desires -—- or wants —-— of the con surners have reached
the economic —-— or e1f=ctua ——— degree of intensity?" If this question
were_answered satisfactorily by Gunton, the validity of his theory micht
then be established. Gunton' 3 reply is simply: "...by the willin.-ness

0‘ t11e consumer to give the necessary effort, or its equivalent, to pro-

cure the satisfaction of his wants."l He does not s: ec1fic ally state
exactly what the "necessary effort" is. or its "eouivalent". Does he
mean that the co.ns umer is willin.: to pay hi5 er prices? This scarcely
seems plausible, because he very purpose of encouraging increased de—
m and is to render mass production possible so that prices will be lower
and the manrfactured articles will be within the reach of all. Does he
mean that the consumer, as wora:er, should work harder? Yet, unton ad-
vocates a shorter working day at no decrease in pay. F"”ther, he wM1r1s
that the cost of production can only be lowered as naturrl forces, such as
labor—savir 1g devices, predominate over human forces in t1 e process of rro~
duction.2 Gunton does not claiify any further the exact nat“re of how
these all—impeltant desires of the consufie are to be transmitted to the
manufacturer. Yet it is just this relationship which would need most in-
proving, since it is the crux of Gunton's theory that consumption controls
production. Jeverth 1e ess, putting aside for the moment this questionable
link in the chain of Gunton's ar ament, let us complete our examin1tion

of the part of Gunton' s doctrine which concern desire an.d consumption.

If we assume that tie consumer‘s wants are corrun1c ted to the msmr1'

facturer, how does that procuce econor ic proeres s? Gunton's solution run

 

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(11
I.

‘ r I: ---. ' . 3 -.v‘.-.- L ‘---— a - ., . . u -- " ..- 4.1».— 1m.
in his . :scnption one EJdt no tide. It SSLMS when ibis 11:91; tnct the

.‘fi '5 >1 uvl ‘J-\ 1 N ‘1 ‘ 1 RN -. L,.' .‘L t v" ‘A. ‘ ’- -' ,-. ‘ :1 9 ' —'~'.r~u
wo1.e1‘s fld-vb ans onsin,.13* d; restIiCUOc b ”ls Sb ncirn oi litinb

1-,‘1. 1- , ; ' ‘ W 4 .‘u‘ n 1

"“"' ‘5'.'.L-‘u in: 6;)..8 ELI- 1 1114.0 u') L-l.*C& .
fl“ « ~.. .L ...-fi : +1 L.-- 1: * a: - 1. in:
&.1‘3 19 ClSCd C-‘- 115;]. .-i\3t;0111>-llu‘ 0.: Gultgfl's c.1894... .LE L. .-.bf c0 nun-S

rather n=culinr ecolysis of why the living conditions in China were so

poor. Gunton declared that the reason Chinese workers‘ waves were so 107
is the his vents are so margcr; he ewe ires no more than he get" and 'ice
versa. The Englisn lcborer, on the other hand, dove hoied greitly increased

a 0.

wants; thus his consumption increase; grocuction, which in ti :1 rnis.ed ”is
wages to a hunired times more than his original wage.l
Gnnton‘s conviction of the priority of consumption was so compie e

that he even found the excl sive cause of business degressions in a lessen-
ing of consrm tion. ”Production being but the economic response to con—
sunption, it is to the iriincicis which cficct (sic) ggnsnmgtion that Le
snmntion shouid fall behind and thus create a cetlessl,n is the question
which syrin igs Lp immeiintely. If w““t is all the is retiivi', am‘ all

1

“ctions are directed tower gratif; 2g their desires. why~ should

('3
L)
U2
9‘

esire exist? Gunton‘s renlv was a rather ingenious In

}.J
m
0
(“I
o
f b
p.

‘wio QItion es t1 9 f: etc;
it tercs to molze the laborer more and no:

sod and qim -tit; of machinery is i:,
strain upon his phrsical and rm~1v we energy 18/ intensified
....118 ct vio as efzect of all thi sis to den.den the springs
of ambition and check the growth of ne -w des .ires e,nd supe-r o
tastes and habits of life. The 1e001 er -.hose energies a
hzustei in the mo.rkshoP is naturally impervious to mor

D

‘T S"stem in'rcves e
e s

p.m H

~ 0
1. 11L

vs Am

C
voting and refining infli noes. nis leisure ”,1 nts fin

 

Gnnton, Aewlth ans Fro rsss

 

, 1&3}.
sw "s-r‘fi :--1 4‘ ~"A -'~-'-1 H ”any“: an ”CA
2G “ton, riinc1,ies or QuC.¢- LCOu-m;L., jog.

 

 

v)
physically tired, mentzlly dull, and hence morn“ y e.nd socially
indifferent. The inevitable tendezicy of tlis is to co.use him

to greyite te towards the saloon rat oer than the re :Ein 3 room,

lecture hall, or tin -atre for his i st; uction and entertainment

.... (-his) condition ... will inevit 1y lesilt in stereotyp-

ing the soc 91 life of the masses a#d in chc kin* the lAClG“°¢

of their v.'ealth-c1rs.nin$ cognacitgxr.‘L

It sliould e reinted out here that the turden of the consumytion
which Gunton considered sthe precursor of progress, necessarily falls

upon the w rhing classes, beca‘se he conceived of an increased demand by
the many, not a hearty appetite of the few. He was quite righ in recdg~

nizin

that for mass :rod ction and Che up output a lerge demand is required.

(Tb;

"... under f;ctor" methc s of production materi: l pros; erit" and social
welfare finally depend ”p03 the con w.ption of wealth ty the lotoring
"2 4- 4-" 1:4.- "'4. ° 1 v - .. 4;-

classes. Ultimate 3, Gunton left th D it is only the multitude that
2 ~ " u2
can pa; ior tne most costlg.

If the workingman's wants and, zence his consumotion is so important
to the well—being ofs cie t", how are they to be stimulated and increased?
We must remember, however, that we are to deal only with true wants, not
wishes. I

A went, in the true sense of the term, is such a conscious need

of 811 “otject that its ahsence will cause sufficient pain to in-

duce the effort and sacrifice necessary to its attainment.”
Moreover, we are restricted to social, rather t1 an p1 wssical wants, because
the latter remain approximately the same, according to Gunton, and hence
do not affect progress. Lest --- the desires cannot te cons ious ones,

but lust have become so intim te a cart of the wo‘ker that thev are virtually
.L U

naoits. G‘nton's solution, then n, was to stimulate the desires of the masses

 

 

 

I Gunton, Princitles of occial :couoni:e, 33?—3.
2 I‘oid 1:38-

. , - O

7 o q— o O u
3 Gunton "Introductorv hemarcs," Soc1nl iconomist I (lc7l , H.
L: ’ ° '
-.' * . C’Z‘
Gunton, s.€:lth and P10»IBSS, co.

 

r '-
P
’.J
(D
P.
Q
h.
rn
'

-- . . 1:..1. ' ., ..: --.,_. 1‘ r.-. 1. .11. -, .. 1, .5-
t; inCIeas1n5 the and tnu s 5111“. then 51eater OffiOi uniL 1or

con r.ct w1‘ th an increasing va1iet3r of social influences.l Gunton felt

1

that the concentration of Loyu M1:

(+-

ion in cities was one good socializing

influence. Cities not only VJFliEQ to ether all else ses in mutualo @pen—

3

dence, but also served .5 centers of culture, luxury, and political free-

6

dorm.2 The purpose in advocating more leisure for the worker was to pro—
vide him with the spare time for reading, attending lectuies end conce1ts,
and geneielly increasing his "wants." This must, Gunton re e.sons, ead to
the consumption of a wide variety of goods, espec ciallv m‘<7"y goods. Cne
of the greatest oenefits of the industrial system, as Gunton s aw it, ea
the ma ss production of l‘*m“y goods. formerly prohibitively exyensive
luxury 5oods, that were now ave il .tttle to everyone.

All the threads of Gunton's intricately woven theory of cons nption

begin now to Iorm a pattern. 'ue ca.n understand wh3, in suite of his be-

sented t 1e best interests of the work r, he defended

Fl
..1.
G)
H)
(-1"
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f)
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(1)
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W)
‘7.

the wealthv classes and did 110t object to trusts. In Gunton‘ s ooinion,

U

the millionaire played a necessary role in society. He stood as an exam-

(D

ple of cultur. and taste, a fi5ur

of envy, to whet and stiniulate tlxe de—
sires of the lower classes so that he man‘m fiact“rers co ld produce and
all society could Wd' nce. Th e avera5e man \:ould have no des re for cer-
tain luxuries. Gunton felt, unless he learned from the exanyle of the
millionaire, how to enjoy and appreciate art, music, ballet, and Opera.
Gunton believed rather c01rectlv he the working man would not spend mo-
ney on Opera tickets. Hi hout the support of the wealthy, he advised,

A
there could be no Opera.) Gunton looked unon he wealthv classes as a

 

 

1 Gunton, health and P1r05ress, fjl.

’5 . . .

E Gunton, Princ1nles 01 Social Econc -m1cs, 321.
Gunton, lrusts and the SPuhlic, c4— —6.

 

kind of intellectual aristocracy, fossessina fine taste and culture, be-
cause he was convinced th: ult"“e care alon5 with \uee.lth. He was never
moved to ask if wealth might not be 5ained dwitiiout culture.
What we vant is to encourage our own wealtl 1v cla es to
eipend their ricrzes here, in America, so that satisfvin5 their

€‘_esi1es they snall at the some ire, in snite of hemselves
perhaps, be n~nmot1n£ in the highest and most efficient sense

.1.
Amerigan art, architecture and sciezice, and American social
life.

Gunton‘s defense of wealth and his belief in pr05ress weie made105i-
callvo p Hssi lv by his theory of consumption, which defended itself on the
assumption that social wants and desires were exactly reflected in con—
sumption. In thus focussing attention on the consumer as a motive1tin5
force in economic life, Gunton followed a course very similar to that of
the Subjective economists. In addition, both he and they arrived at a.
subjective theory of value, and both used a hedonistic 13:"cholo"v.

However, on the intricate roblem of cause and effect relationships,

*5

Gunton differed from he Subjectivists. In skis resyect he came closer
to the Classicists who also suffered fr. m similar difficulty of reversin5

causal relationships. While they had frequently been * of a circu-

I

lar process of reasonin5, makin5 causes effects, and efiects causes de-

pending on the particular oint at issue, Gunton had also been a fault

"d

for insisting on absolute, on ~way relationships. He had insisted, for
example, that production determined price, whereas most economists con-
o-a - ' fi 2 M‘- ' ‘ 1‘ ' “1“
Sicered t1 e reverse relations.h1p to oe true. 1ne attitude o1 tne out—
jectivists, and of most modern economists. tow ‘d this problem is a more
hat it is 'irtuw. y i1possible to treat

catholic one. Tney recognize t

senaratel" the factors of production, distribution, and price, for all

 

 

H "‘1‘“ - ‘\ :5
I ounton, Ticsts and
n C O
4 Gunton, Principles

are
(-1.4. \

co*n,1rrrr‘*qx"'

vain
It 9C0?
ueen cost of piodicticn an‘
gcti o- in irtue

17::re‘ive that
F nd
et

obviousl"
s1 Quid be ebundoaied
tne state-:10 at thst
here ex'sts a kind of equili Era.tin

t e qu
th m01

tat of any mysterious olidczi y which su‘sis‘s betuee en therrr,
b1t because the mere atsence ofe ;uilibxium Cue either to a
dimunition or an increase in the quantity of products imme—
diately sets uy forces mhicli tend to brim: t b¢c.: to a

This interdependent relation, which i
tent in itself and ugon LhiCh the Hedc nists
is simply one examgle tafi n
is just a function of

equi -brium.
iipor
store,
va lue of one tiiir g

tion of
extlemely
lay great
where the

..L 131‘ 0:1 111.1- AOlLt; H18,
1 “1
another.

1308]."
A

S

'1-

 

s o 1 ~ A , v- ,‘ . ..-, .... r7. 9 n
Harles Glee anu uhnrles LlSt’ A Eistfii1 Of ~0010Mlv

nn-Tn-rwr "-
uv

.J_USICJ

‘5 " a 7 ' v v 0 I‘ fi“ fr n r‘ “1 w? ‘ - . p. I». . r‘ “1‘
n1 nt tne AdEllCan ecoionic sce1e, 1rom tne 0105133 decedes 01

C
u

Loo‘

(t
F.)-

the nineteenth centiir" to t11e ozening years of the twentieth, and evalua—
t’ng George Gunton's nosition in it, we must admit thnt his role was essen-
tially a minor one. The period was tenpes nous, bitterly divided within

itse f by the violent clash of Opnosing doctrines. The fi: zed rules and

denounced. They were also, in turn, being stalwartly defended. From the

‘5.

rants of discontented workers, farmers, and militant reformers arose a

stea b'r1ace of criticism , riddling the cherished gospel of wealth and
success. Cn the economic level, the chemjions 01 s
metliod \-:ere hellenging the co m1ortable canons of Classical economics. Gun—

the impact of these con1lict s, resolved the cla.shinj forces

ameleam that would be satisfactory to both

V

I ‘- ‘V‘t‘. :r“ 0
into want he 1elt was a un

[.10
*9

p.

(D

...-I . " fl‘ r' ‘ 'n J ‘ ' "" '"V "‘1' V ‘ ‘3‘ 17““ ‘ h 1. r‘ -
cuoitnl and 14b01, and put soc1etJ Bene1n 1}, on tne SmCOtflEo 1 cc to
Iv, As! ~ 'V (N'fl "“ "‘ "' \‘I 'tr v .‘ .1 -.‘ ‘--Iu ‘fl"! «'L '2 ' "\ V : . "fl‘
u-o&1ess. Althc1¢n tne aene1al welfn1e was u.P;1meb 1n the consc1ence o1

Gunton, and he sincerely felt he was being faithful to labor and his lower

‘ I "' “ t “A" . 'l ‘ ‘«
se of tealtn and na~11n6ss

p’n‘

..1. .. r v, - .. - .. .z‘ .1
class backgrodnc, nis ceo Wdct1ons 1rom t
r " "" -- ‘V‘ .\Q' n fl-V-v -z- 'I‘ q " 'rV N: 4' 7' f‘ " . r ‘i .
101 eveivone, as we nave .ttenoteu to LEAOEStlnte, 1011CallJ c1111e; him
v . -. 0- : -- a :9 a Q -~ -’—‘ -‘ -»\
from the lir era 11 to the c011sse1vat1ue s1de of the soc1o—ec nonic 1ence. 101

this reason he has essent inllr ali

I.‘

. 7 .: ‘ ‘1- ,3. r‘ «L‘
ned, not w tn tne most 1111 tnought

.2 V

currents 1n his time, but witn a stagnant, conservative tradition that ger-
petuated the in: istices of the status quo Gunton was neither in the van—

guard of new thought, nor esre islly yrofound in Leinteryreting the old.

Thus, it is not surprizing that his fame died with him, and he remains a

q

Kevertheless, because of Ginton's ve13 conventionnlity and his eclec—

‘

' ‘ . 1‘ 1‘ a.-. 1A :xqm ~. . "Irv m.\r“ . —~. ,- . -~ » '\ 1 ‘ r V ‘
tic habit oi ooriowlné 1e1C3—nnoe 1de.s, ne fossesses an 11rort~1eoe3ond

his intrinsic actievement. In his works die mirrored significant frd5~C.ts
of the most influential and representative ideas of his time. Sttdylné his

*5, we are continnnll3 aware, for exnmrle, f the existence of a ten-

4. C
5, .L.

O

sion caused by the invasion of scientific ideas and method into his social

thought. He can also estima‘e something of tie bitterness of the attac; c1
veoltn 113m tne lndlén nt m1 er in which G‘rton ises to the defense c

Lillionoiies and trusts. Gunton reflects gerfectl; tire 3r: v .ilin- moo 0;

'Jo

'., .. .' -3 ,, Aw,.w ‘ .'..‘ 1.1' .1. ‘3 ,1 '1 '1, _ p - ., .-..n,‘ ._ 1... ‘1 .' .‘..'_.“ .‘.
tne Ane11Cnn fibdlnce in his wholenecited eel e1 1n n1o5.ess, individualism,

.3

b

F“

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P.
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(,0

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0

and these qinlities increase his relevance

Q.)

,s a represen—
tative figure. More imLortsnt for tne 3L1.cse of this paper, howevc r, ‘s
Genton's position in the great economic controversy over method and prec—
,icrl solutions. fiere Gunton succeeded in being most rC1resentative. ne

Q Q

enhitits in nis Jorr traces of both the enlly dis ssenti 5 schools, the His—

vc‘

torical 12nd Sdojectivist. and welds al the ideas to ether into a unified

theory b1 333 ying the logical deductive method of Classicism. The pri-

icarce of Gunton's economic philosophy, then, is that it is a
combination of warrin5 doctrines in a crucial era.
What Gunton owed to the Historical school \aS an increased ew.rene ss

A

of the necessity I or trans £91ming 3‘

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tel study of current economic conditions. They had succeeded in infusin5
life into the field '03 usin5 the new ind1ictive method ins 3i1'e ed by science.

Gunton. too, had felt the inadequacies of the older method of orthodox eco—

H)

nomics. and called or a new, hepeful science to re3loce the old d, dismal

one of Malthus ar d Eicoido.

Jd furnish the kn

AV’

to nature's

ver sc1ence * nich sh2" 1U
Fcrnties and tne light to humsn p1ow1ss become es unattractive
t3 the stuéent and rein H1 sive to the 1vera'e citizen, we may
be assured thrt there is something 1Lnoamcn'illy aiiss with
the conception and treatment of the suoject.
Tre Historicists had insisted on the imgcrtance of objective, cis;ca ssionate
study to achieve a greater degi-e of scientific validity, and carried out

their purpose by

5‘ ‘

Oral.“

«a

t sujeI1ic 11y

’JD

31 city of any economic law.
also alike in their
ever, the Historical economists simply
descrite the develOpmenta 1 evolution of
application of the theory was much less
into the s1htle Iallacy of $00110 .1 Darxwi

gress of society was a scientific law.

economists, he felt their contri oution was faultv, beca1se they

.11
k

Trim ‘ily c1 al,

of course. generall.y adapted a

formulation of ny centralized. overall

voluminous fact gatherizg

acceptance of the Larwinian theory

axolied the principle in order

and not constructive.

broad, relativistic outlook,

- a
C) Y‘ ‘ ’1 f“ “'.
(”L L ‘J- J J. O .é-

11

the inductive method of the his—

only way to estab—

Gunton and then oricists were

I
.‘

of evolut 1 n. how—

to

economic institutions; Gunton's
scientific, for he fell; ewr in m;

ism ——- and insisted that the pro—

lI‘EC.

Ulile Gunton admr the inductive

had been

Iv

'1‘ "19
&--e

theorists. His tor icists had,

which made the

theory virtually impossible for

them. G 1nton Mi not pursue their relativi ism very £91; he still preferred
to s.pa ate economics from ethics and politics, cleinzing that economics
had to be isolated to be truly oi spessionate and sc1enti fic Gunton may

not have penetrated very far into the

senting Histori al grouy, but he

scientific methods

‘

ano purposes of

:3
Law

did at lee.s t reco their im—

6:2,}
‘—

 

 

 

 

 

 

n Gunton. Priici rles of Sociuil Economics, v.

4 It is intere-1ing to note th at in the Principles of Social c0111ics,
nassim, Gunton quoted £10m, and so presumably read, not only Spencer' 5 ég-
Ciel Statics but also Fis:e's Cossic 1hilosonhy, and Nero's Eyns1ic So—
ciology, all books which contain the ideas of Social Darwinism.

ifil",
/ 1L:

econozic science, and

(D
r.)
d-
O
.-

portance as a v1te 1 force in the develOpn
tried to cull what he could from them for his own purposes.

In Spite of his superficial gesture toward Historicism, Gunton be—
longed basically, in syirit and method, to the Classical school. The idea
of the absclutisn of natural laws and their sutlime, harmonious Operation
in society aprealed to Gunton's own desire for legical unity and complete—
ness. There is an admirable losic and neatness in his doctrines; so in-
terlocked are his ideas that it is always difficult to extract one idea
for discussion without drawing along a whole network of related ccuse and
effect sequences clinging to the main notion like tangled seaweed. Classi-
cal theory exhibits a similar unity, for it too, is constructed on the eerie
deductive principles that Gunton used to build his doctrines. Gunten‘s
real disinterest in the inductive method is conclusively indicated in his
use of ded ucticn and lOIic. Further similarities between Gunton and the
Classical sch col are the preference ofa laissez faire policy in govern-
ment. and separation of ethics and economics; both Opinions arose out of
the abstraction and absolutism of their viewgoint and their feeling that
to be scientific. economics must deal with universal truths in specialized
fields. Gunton is also akin to the Classical economists i1 their generally
conservative political philosOphy, oojecting to control by government. re—
pudiating charity as ur scientific. and suggesting that free comoe ti tion and
the natural laws of economics will maintain the equilibrium of society.
Gunton's own 03inion is even more Optimistic. For him. the method of e-

form is extremely simple.

lflorc and system, organization and strug le for better
moteziils, more productive energies, wiser laws, clearer p1in—
c1iIlees. nature better understood and made more obedient, will
alw way 8 he the real agencies of amelioration.l

 

I Gunton, Princinles of Social Economics. “#0.

 

Yot only is reform simple, but

for Gunton progress

is 1:16. vita-17318 anyway .

... the world actually goes from good to cette1 nerpetually,
desoite ... awful predictions. lien are 1 ch orighter, m01e
virtuous and happy, wiser, st1.nger, a.nd healthier than they
ever were, and we have 91mplyc int out tie in nciples that
have brought them to tr1is finish.1

While Optimism w s not necessarily a feeture of Cl1r ssicism, it was the

rule rather than the erceI tion in Are -rica.

servatism, Gunton represented the viewpoint of

cist.

U

cally Classical orientation, was the fact
certain narrow fid outwo1n dogmas of ortho

‘
q

~{nat Gunton had in common witll the Su‘5jcctivi

In both his optimism 12nd con—

'
1 —
9+

the average AmeriCan Clas

sts, beside their basi—

that they did .t dis se..t from

dox Classicism. Gunton felt,

with them, that a m. jor mistake in Classical theorv had been its overea-
31h asis on oroduction at the expense of the equally important fa tor of

consumption. Both Gunton and the Sub

human factor had seen gros sly underestimat

and they proceeded to build up a theory which had 1

human will. Gunton went further than most

+9
V

in asserting that all economic ac
desire, dea Was that production i
tion, negating any possibility of a revers

the Subjectivists were more sophisticated,

teractions of all the various factors of production,

sumpticr ed flom an: foolhar

other resfiect their

hedonistic psychology. This was, of courg
human behavior, but it now as: -umed

jectivists were convinced that

on s: rings only

dy attempt to

ideas are reflected in Gunton

lalger proIewr

the
ed in previous economic doctrire

+1

vb

of the Suojectivist economists
from the individ“~l's

8 determined only by consump-

e relationshi1. In this respect,

because they recog1
and con-

A“.

\/ t.

In

s, and that is in their
e, not a new interpretation of

ions since it was great-

 

I—Gunton, Principles of Social Iconoaics,

 

\1)
\._)

p.

ly dr15atize in z philosopiy which made man, in 1s We ad of the ,roducticn of

p-)

wealth, the center of econ onlics. The idea of the "economic man" eventun11v

q

came un er vm11e11n- attack from Veblen nd the Institutionalists, because

of its exclusion of motives other than the acquisitive from any considera—

tion of economic action, and because it resrlted in a static, non-volition-
al concept of hu1ev.n oehavior.

It is the cha1acte1istic of man to do somethine, not simply to
suffer pleasures and Iains....He is...s coherent structure of
propensities and liahite w1ich seek ree Hli ation and e111ession
in an unfolding act

This brief restatement of the various parts of Gunton's economic theory
which reflect the shifting inte llectual cuzrents of the times, has necessa-

rily omitted any consideration of the orieinality of Gunton‘s doctrines. Gun-

ton's nain original contribution was his defense of an eight—hour day for

I
”115—

e.‘

the worker. Altho dgh this seems to im a liberz 11 attitude, Gunton's
tification of the mea su1e rested on the same sort of economic conservation
ted tie rest of his theoi ry anl enabled him to defend the trust in
almost toe sa me breath. Perhsns t 118 truth can best be grasped by a quo—

tation from Reverend B. Heber New on, a supporter of Gunton's.
Underlying his philos0ph3 of the eigh t hour movement, there is
... something for mor wiC1ely re.a.,hin;. You have g1ven in your
work a pnilOSOphy of social economics whic11 leads on to other
m1d larger measuies of refoim, ind e1initely, alone conservative
li es. hith.ut 1nvolvingia1; iugture with the oresent social

;e1, you point the war whereby hat order may ce lifted to a
Ler an d noble one.‘

(D

 

 

-—

Even Gunt on's later Opinions reflected his conservative outlook. he
was teenl " aware of the unrest and disseneion in the scene, but in inte
of his own personal and b tter looor erIeriences as a union leader, he

never condoned strife. Although we might enneet Gu-ton as a worker to on

J

 

E'Veblen, The Portahle V62 len. 21.
o ,1 I‘m 0
4 "Letter to Editor," Social Economist, I (1591), CL. It&nlCS 1 inc.

 

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’24

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' L

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