rather than the product to his desires may in some cases be held, if not in subservience to his desires, at least for what is commonly held to be his welfare in a hygienic, intellectual, or moral sense by altering and educating his desires or choosing for him in questions where he is not competent to speak for himself. If these do not fall in the acquisitive class, at least they are outside of the technological. And on the other hand some physical products are definitely out of accord with the common interest 2-poison gas, anarchist dynamite, impure foods, etc.

We may conclude, then, that technological magnitudes have the advantage of being easily and objectively ascertainable, and so, where it is only a question of the magnitude of a single item, like barrels of flour, they may be very useful. Furthermore, to employ them may be a good, quick way to unmask the intricacies of pecuniary and legal relationships, and to get at least a suggestion as to how the land lies. But the distinction between acquisitive and technological will be differently construed by people of differing class prejudices and is only roughly coincident with what we are seeking as a measure of business policy. It succeeds better in specifying policies which are dictated by purely differential advantage, than in offering a constructive standard of appraisal.

The human or psychological theories have in common that they measure welfare in terms of some biological or psychological trait of man. Hobson has given perhaps the most complete recent formulation of this type of theory, tracing in some detail the discrepancies between the pecuniary costs of production and the human costs and gains that the productive process entails on the one hand and between the pecuniary value of the product and the human gains and costs to which its consumption gives rise on the other. Hobson recognizes that the principal discrepancies are not those between the different human costs and gains and their pecuniary expression where only one person is involved, but rather between the human costs and gains for several different persons and the pecuniary estimates put upon them. It is, therefore, necessary to find some standard which will enable us to express A's desires and preferences and B's desires and preferences in common units. To do this we may resort to a "price

1 Cf. J. M. Clark, "Economics of Modern Psychology II," Jour. Pol. Econ., xxvi. 138 (tripartite theory of production.)

2 Commented on in another connection by Davenport, Economics of Enterprise, 126-7; Veblen, Place of Science, 357. The other type of exception would doubtless be admitted also.

3 J. A. Hobson, Work and Wealth, 1914.

system," or what comes to about the same thing, assign various weights, dispersions and skewnesses to the desires of the several persons. Or, as in the case of technological theories, we may shift to a socio-organic position, in which each man's interests are interests of the "collective personality." Hobson does both. In following the first method he criticizes the weights that price assigns today, and also the "every-man-to-count-as-one" theory and suggests that human cost of production varies inversely with worker's ability, while human gain from consumption varies directly with needs. But since his corrections are expressed in "psychological" magnitudes, it is difficult if not impossible to determine how large or how small the pecuniary corrections should be. Indeed, except in cases generally approved or generally condemned, it can be only a matter of opinion or taste whether to make the sign plus or minus.

2

A version, intermediate between the psychological and socioorganic types of theory, runs in terms of instincts. They are presumed to be the traits of individuals, but because their ground of survival can be understood in terms of the race as a unit, a judicious use of the concept of instinct-expression may make it possible to solve the difficulty of inter-individual conflicts. The use of instincts as a standard of socio-economic appraisal is suggested by several writers. But no two are agreed as to what instincts man possesses, still less as to what constitutes expression and what "balking"; and some hold a view of instincts which offers little basis for appraisal. Here too, then, we find that the psychological theories, however attractive in the abstract, are hopelessly ambiguous when it comes to any concrete application on which there is not already general agreement, and are lacking in the objectivity and definiteness to which science aspires. It may be that in some cases economists have no alternative but to attempt corrections of the pecuniary standard 1 Op. cit., 163ff.

2 Admitted, 165. But Hobson holds this no excuse for not trying,-his method.

3 Carleton H. Parker, "Motives in Economic Life," Amer. Econ. Rev., Supp. viii, 219-31. Ordway Tead, Instincts in Industry, 1918, ix, 220. And very guardedly, Veblen, Instinct of Workmanship, 1914, 24-25. L. F. Edie, Principles of the New Economics, 53-4, 67-8. "Adaptation involves an equilibrium between expression and repression of the instinctive tendencies." That is, human nature and institutions must be adapted to each other.

4 Cf. J. Watson, Psychology from the Standpoint of a Behaviorist, 1919, 268; J. R. Kantor, "A Functional Interpretation of Human Instincts," Psychological Review, xxvii, 52.

by estimating human costs and human gains; but in general it should hardly be their first resort.

Both in the case of the technological and in that of the psychological theories we found it possible to meet the need for an inter-commodity and inter-individual standard by resort to some sort of a group-personality, who should embrace within himself all desires for all goods and all dislikes for tasks and sacrifices, and somehow settle all their conflicts. This is the third type of theory in one of its extremer forms. The common point of all such socio-organic theories is that they regard certain groups of people as units, each unit bearing a greater or less resemblance to a living organism and that some of these resemblances give a basis of appraisal with respect to the group regarded as a unit. For those who do not hesitate to personify the group this basis is that the group personality has interests like the rest of us. The bearing of any development or situation upon the common welfare may be appraised in terms of its subservience to those interests.

But fortunately we do not have to choose between such a view and a complete denial of similarity on the part of any group of people to a single organism. The question is one of degree. We may attempt to specify a minimum limit of the organic character of a social group which we shall designate as "pecuniary society." In this group are included all parties currently and recurrently to exchange in any market throughout the world, and also the dependents of these parties. The following resemblances between pecuniary society and a typical metazoan organism may be listed:-(1) Pecuniary society is a complex of more or less highly differentiated and specialized individuals, while a metazoan organism is a complex of differentiated cells. The individuals like the cells of the organism are dependent on each other for the continuance of their specialized life. (2) The group has certain characteristics and behaves in certain ways in a large measure independently of the constituent individuals involved, just as a metazoan may replace worn-out tissue and regenerate, within limits, its parts and still maintain its identity structurally and functionally. Pecuniary society goes through an industrial revolution. and forward peoples exploit backward peoples without much reference to the rise of any single person to financial power or the death of any

1 A somewhat moderate and precise formulation is made by B. M. Anderson, Social Value, 1911, 83ff. Anderson, however, denies that social value in his sense throws any light on social welfare (196); but if only economic welfare is in question it is not clear why. To the present writer he seems to go too far in his animism and anthropomorphism, and to overlook important dissimilarities.

financier. (3) Certain sub-groups, or certain institutions (to analyze pecuniary society along somewhat different lines) can with as much propriety as bodily organs be construed as having special functions. And when we admit this resemblance we have it open to us, following the lead of the pathologist, to ask "Does this group or this institution perform its function properly? And if not, how does it come to function as it does?" Thus a socio-organic view becomes the basis of appraisal. We are at present, indeed, investigating just these questions in regard to the functions of money, price, and exchange,-coördination, apportionment, and distribution.

It may be the part of caution to set down here, by way of contrast, three of the distinguishing features of a biological organism which pecuniary society and (except possibly for part of the second) every other social group clearly lacks :-(1) definiteness of size, and of structure or of location of parts (2) reproduction of like organisms at roughly regular intervals of a generation, and death as the end of a fairly definite life-cycle and (3) contiguity of organic parts. With less confidence we may add that the cells, tissues, and organs of a metazoan-particularly of a human-organism do not prey upon and conflict with each other in their functioning in a manner fairly analogous to the conflict and predation among individuals and groups that characterize society, the functioning of the parts of society displays less perfect coördination than is to be found in the individual organism, unless perhaps we wish to compare society to a pathological specimen.2

To some it has seemed that by analyzing pecuniary society logically into the behavior of its constituent individuals they might somehow do away with pecuniary society. But surely logical analysis does not

1 Cf. L. S. Lyon, "A Functional Approach to Social-Economic Data," Journal Pol. Econ., xxviii, 563. But Lyon inclines to anthropomorphize.

2 This may be taken in lieu of the customary statement, "In an organism consciousness is concentrated in a small part of the aggregate, while in society consciousness is diffused." This involves needless commitment on a current psychological issue. The significant question is rather, Is the behavior of society so highly coördinated as to warrant our thinking of it as purposive, reasonable, consistent, sympathetic, truthful, righteous, loyal, or otherwise to conceive of it anthropomorphically?

8 To the present writer this appears to be Davenport's position, not so much in any explicit statement as in his system viewed as a whole. He does not much concern himself with synthesizing the simultaneous functioning of competing entrepreneurs into the behavior of pecuniary society. He will not study the whole play because he insists on taking the rôle of one actor at a time, and on taking that part only in its pure form bereft of content,-only insofar

necessarily invalidate the concept analyzed; nor does it destroy the thing conceived. Having made the analysis, it still remains to see how the activities of the constituent individuals articulate in the functioning of pecuniary society so, for example, as to produce the rhythmical movement of the business cycle. And this would seem to be the job of an economic price theorist.

But how far ought we to go in the direction of endowing pecuniary society with the traits of a living organism or with those of that very special case, man? Has pecuniary society a mind? Has it interests, desires, preferences? If not, will the sort of appraisal that the concept "function" permits suffice to arbitrate between the conflicting interests of individuals? Hobson, at any rate, is among those who do not hesitate to go the whole way. And on the hypothesis of a group personality, whose interests are versatile enough to embrace the interests of all men, the investigation of the settlement of conflicts of individual interest becomes a study in volitional "social" psychology. The economist is likely to make this into a social felicific calculus, taking place perhaps in the social subconscious.2

A somewhat similar effect is obtained by employing the situation in "collective society" as the antithesis to what pays differentially today. Thus for Davenport, money as a record of and incentive to individual performance and as a claim against the social product is absent. And he has the society (personified?) "making comparison ... according to considerations of utility-marginal utility, of a vague and average sort." His concept of a competitive economy logically implies such a régime. And yet, what has one whose "business is solely with the facts" to do with imagining a society so impossible as this collectivism? It is by no means clear that a society with labor as minutely divided as it is today could avoid exchange and price. And if it could, why study only the behavior of individuals in the one case and only the behavior of society (or its leader?) in the other? Why not espouse the "group mind" theory (or the heroistic interpretation of social process) in both cases or in neither? Are not separate individuals, each having his own interests

as it is like every other part. If so, as Anderson has remarked, Davenport's extreme individualistic position differs from the more moderate views of many economists chiefly in its greater consistency.

1 Op. cit., 350.

2 Cf. Anderson, op. cit., 85.

8 Economics of Enterprise, 31. Collective

no light on competitive economic welfare.

economics avowedly throws

"Value and Distribution," 144; and "group-marginal utility," 146; and yet

he inveighs against the social organism.