The Principles of Economics, with Applications to Practical ProblemsFetter, Frank A. (Frank Albert)
General
The Principles of Economics, with Applications to Practical Problems
Fetter, Frank A. (Frank Albert)
Economics
Are the rewards of the successful enterpriser greater than he deserves?
How shall it be judged what he deserves? The answer is in the form of a
question, Could society have the service without the reward? Society may
be thought of as hiring the services of the efficient business man at
the lowest price. Does it wish the services of Cornelius Vanderbilt in
organizing a great system of railroads, of Andrew Carnegie, of Pierpont
Morgan? What can it get them for? It must appeal not only to their love
of money but to their love of power. Large services and large results
can be bought only with large rewards. The shrewd enterpriser is not to
be paid with abstract social gratitude. He is not to be tricked, as is a
Chinese god, with tissue-paper gold.
[Sidenote: Unmeasured gains of vast wealth]
But in many ways fortunes appear to grow without social services, and
sometimes with social harm. Russell Sage, the noted capitalist (who
should know something of Wall Street), in speaking of the greatest of
American corporations, said: "They dominate wherever they choose to go.
They can make and unmake any property, no matter how vast. They can
almost compel any man to sell out anything, at any price." Henry Clews,
the well-known New York banker, said of a certain group of financiers:
"Their resources are so vast that they need only to concentrate on any
given property in order to do with it what they please.... There is an
utter absence of chance that is terrible to contemplate. This
combination controls Wall Street almost absolutely. With such power and
facilities it is easily conceivable that these men must make enormous
sums on either side of the market."
[Sidenote: Antisocial use of rare ability]
2. _The high pay of rare ability and skilled labor reflects in general a
high social service._ The large income of some men reflects service to a
narrow class, not to society as a whole. Lawyers as a class aid in
maintaining right, but a corporation lawyer may get enormous fees for
defeating just public claims; a skilful criminal lawyer may grow rich
aiding the guilty to escape justice. Other service ministers to the
whims, follies, and vices of the men who pay the bill. Such a service is
"social" in a mean sense, corresponding to the low standards of desire
in that social group. But what of the high rewards of skilled service
ministering to worthy ends? Such favorites of fortune as Jenny Lind and
Patti have received five thousand dollars for a single concert. Is this
because they are the lucky possessors of a rare gift, or because they
perform a social service deserving such reward? Certainly many of their
auditors get what they want and believe they are getting the worth of
their money.
[Sidenote: General social result of rewarding talent]
Public-domain text, read in full here on John Shaqi.
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