Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public PolicyClark, John Bates
General
Essentials of Economic Theory: As Applied to Modern Problems of Industry and Public Policy
Clark, John Bates
Economics
shall include an inquiry as to the means of removing it and restoring
industry to its normal condition. We shall find that this can be
done--that competition can be liberated, though the liberation can be
accomplished only by difficult action on the part of the state.
_The comparatively Narrow Field of Present Action by the
State._--Economic theory has always recognized the existence and the
restraining action of the civil law, which has prohibited many things
which the selfishness of individuals would have prompted them to do.
Certain officers of the state constitute, as we saw in an early
chapter, one generic class of laborers, one of whose functions it is
to retain in a state of appropriation things on which other men have
conferred utility--that is, to protect property, and so to cooeperate
in the creation of wealth. In a few directions they render services
which private employers might render in a less effective way. The
state, through its special servants, educates children and youth,
guards the public health, encourages inventions, stimulates certain
kinds of production, collects statistics, carries letters and parcels,
provides currency, improves rivers and harbors, preserves forests,
constructs reservoirs for irrigation, and digs canals and tunnels for
transportation. In these ways and in others it enters the field of
positive production; but in the main it leaves that field to be
occupied by private employers of labor and capital. Business is still
individualistic, since those who initiate enterprises and control them
are either natural persons or those artificial and legal persons, the
corporations.
_The Growing Field of Action by Corporations._--Until recently there
has been comparatively little production in the hands of corporations
great enough to be exempt from the same economic laws which apply to a
blacksmith, a carpenter, or a tailor. Individual enterprise and
generally free competition have prevailed. The state has not checked
them and the great aggregations of capital to which we give the name
"trusts" have not, in this earlier period, been present in force
enough to check them. The field for business enterprise has been open
to individuals, partnerships, and corporations; they have entered it
fearlessly, and a free-for-all competition has resulted. This free
action is in process of being repressed by chartered bodies of
capitalists, the great corporations, whom the law still treats
somewhat as though in its collective entirety each one were an
individual. They are building up a semi-public power--a quasi-state
within the general state--and besides vitiating the action of economic
laws, are perverting governments. They trench on the freedom on which
economic laws are postulated and on civic freedom also.
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