or to the effort and uncertainty of conceiving and working out some other substitute for individualism. After some trying experiences, business would probably learn to keep its exploitation within the limits of the people's toleration, not so much from shrewd calculation as from natural hesitation to break with custom and morals, and from the habit of feeling one's way in any new policy. And thus individualism might continue.

Thus it appears plausible that the strongest basis for individualism is not the intelligence of individuals and their irrevocable devotion to the pursuit of their own self-interest, but rather their stupidity and their susceptibility to moral suggestion. Individualism may be regarded, not so much as the system calculated to get the utmost out of a people of extremely high intelligence as the system in which human stupidity can do the least harm. All of which is not so very new, but is more akin to the general trend of Adam Smith's economics than to the Austrian school, and really harks back from marginal utility economics to the earlier classical proposition that individuals can choose for themselves-not with absolute accuracybut better than any government agent can do it for them. This is a theory of relativity rather than one of the absolute efficiency of individualism as a system by itself.

After all, at the present time one of the most important facts concerns, not the general level of intelligence, high or low, but the differing degrees of training and special information on different topics; the extent to which the specialist in this age of specialists has information beyond the unspecialized man in the street, and the ability of the unspecialized "people" to cope with the specialist who has his axe to grind. This is one of the very large problems for the "economic man" of the twentieth century.

Proposition 8. Capital, including machinery, consists of instruments of production utilized by human beings for the production of wealth.

Let me suggest the alternative proposition that human beings are instruments of production utilized by machines for the machines' increase and biological development. This is not a new idea. Samuel Butler carried it to the point of suggesting that machines might develop consciousness and thus enslave mankind, though in these days of behaviorist psychology the question whether the ruling race possesses consciousness or not bids fair to become obsolete. A more real question is: how many and how important and far-reaching are the things the machines have done to us which we did not intend nor foresee, compared to the things we specifically employed them to do?

On this point, some things have already been said (sections 2 and 3 above).

Among economists and social scientists, Veblen has described how machines train and educate human beings.1 A. S. Johnson has pointed out how the nominal captain of industry is ruled by the processes he presides over.2 Cooley has asserted the existence of impersonal forms of life with life-processes independent of those of the human beings who impinge on them and further their growth, and he mentions industrialism as one of these forms of life. The Economic Interpretation of History implies that the machines control human life and organization in its highest forms.

Machines may be conceived as making bargains with man in which they offer him things he very much desires, and in exchange bind him to serve and maintain them, to eliminate the unfit among them and promote their racial progress, and to alter his own social and political arrangements in whatever ways may be necessary in keeping pace with the increasingly complex social organization of the machines themselves, and in keeping the children of man faithful to the service the machines require. The full nature of the terms of these bargains are not revealed to man until he is so fully committed that it is too late to turn back, and thus the machines outwit him. For example, they took Adam Smith into their confidence, but only so far as suited their purposes. By such methods they have succeeded in imposing on man many things he never bargained for, some of which he finds extremely unwelcome.

Some might think this shows a low standard of honesty on the part of the machines, but we must remember that honesty is the morality of equals toward equals, not of superior to inferior races, and that our own conduct toward inferior races will hardly stand a critical examination. At least machines have not forced their culture upon us by armed violence. Among their own kind, they show a sense of the superior importance of biological progress to immediate gratification and a subordination of the interests of the individual machine to the progress of the race, which demonstrate a clear moral superiority. Seldom or never, as in Arnold Bennett's Milestones, does the older generation cramp the development of the younger. They give way without complaint, youth is served, and the interests of mechanical posterity are paramount.

The machines appear to have kind intentions toward man, but to

1 The Instinct of Workmanship, 311-27.

2 "The Soul of Capitalism,” Unpopular Review, April-June, 1914, 230-1. 3 Social Process, 6-26.

lack understanding of many of his feelings and needs; as is frequently the case with ruling and subject races. They have revolutionized both work and product, taking the element of universal individual initiative out of both. They have given man unnatural working conditions which are now leading to incipient revolt, and living conditions that go far to defeat democracy. They are responsible for the "industrial cycle," and as long as their own overhead costs are covered in periods of depression, they have not assumed full responsibility for the corresponding overhead costs of human beings. They have largely taken over the drama without caring to preserve what human beings regard as the highest standards of taste, and they have, intentionally or unintentionally, gone far to undermine the church and even religion itself. They have incontinently switched us from a paternalistic to a laissez-faire type of government and are now busily switching us back again, according to the temporary needs of the stage of development they have reached. These are merely examples.

As for their methods of maintaining control: some classes they bribe with large rewards, other classes, largely technicians, and technical-scientists, do not need to be bribed: their minds are captured by the material they work in. And the unspecialized "ruling classes," voters or congressmen or others, cannot cope with these specialists, who are left to do more and more of the governing in the shape of the actual working out of things. The ordinary man cannot even speak the dialect in terms of which many of these issues are settled; for example, the accounting language used in settling the justice of street-car fares.

The machines have cleverly limited human coöperation by splitting human language up into many dialects of many specialist groups, so that the highest common factor of intelligibility, so to speak, for humanity as a whole, consists of relatively simple ideas, largely obsolete in the sense of not actively gripping the newer issues. Among these ideas might be mentioned the simple ideas of public and private ownership. As men become more dependent on machines, the latter become able to rule by penalties as well as by rewards; witness our late heatless Mondays and other penalties imposed by failure to develop our railroad system to a continually increasing size and complexity of articulation. Thus mankind moves in directions it never intended, getting largely things it never definitely wanted as the unexpected result of engaging the services of unexpectedly powerful instruments.

What I have called Euclidean Economics, in general, serves the

interests of the machines. It directs attention to the bribe they offer, and away from the conditions they exact. It has countenanced the machines in neglecting to assume the burden of human overhead costs, and in this, as in other matters, by insisting on putting man on a higher level than machines in respect to freedom, it has sometimes put him on a lower level in respect to care for his material needs. This has its fine side, but by teaching man that he is the end of all things, when he is not, his subjection is concealed and thus perhaps perpetuated.

I do not advocate revolting against the machines and abolishing or subjugating them: all I aspire to is a reasonable degree of racial equality. This would make for more friendly relations and would help to allay the distrust of the purposes of the machines which now prevents us from getting all the benefits which they are able and willing to give us. This is peculiarly true of labor, but not of labor alone. We must become far better informed and surer of our own intentions before our dealings with the machine can be characterized by that confidence which marks the bargaining of equals. To attain this we must not merely develop the ability to rise superior, if necessary, to the immediate bribe that is offered us; we must become competent to bargain, as the machines do, with an intelligent eye to our long-run racial and social interests.

These interests are most seriously threatened in the case of labor. The machines tend to confine discretion in industry to the few whom they take into their confidence, while the bulk of labor has largely lost the power to make any constructive contribution to the technique of industry. The job belongs to the machine, and labor feels little. responsibility for it. Labor's state of mind and conduct shows the consequences of this, and many laborers appear to alternate between the slave-morality of getting as much as possible and giving as little, and the spasmodic need of exerting power of some sort. Under the circumstances this can only be power to interfere with the orderly progress of industry by strikes or sabotage, since power to improve on the operations laid down by the machines appears to be largely beyond labor's present reach, either for lack of competence, ambition, or opportunity. Racial equality can never be established so long. as the bulk of mankind are in this position of undignified and passive inferiority.

The situation demands social organizations capable of exerting the force of constructive human will, enlightened by collective intelligence, at the point where things are being decided, in the processes of industry itself, rather than waiting till the decision is made and

then, through our "political" machinery, taking belated and purely defensive action.

IV

MATERIALS OF SOCIAL ECONOMICS

Granted that these two types of economics both contain vital truth: can they be synthesized? In present treatises we find these two currents of thought, but in more or less thought-tight compartments. Alongside of Euclidean Economics is another large body of ideas, which some writers distinguish as the "art" of political economy, or "applied economics," in spite of the fact that it is chiefly other principles than those of the economic Euclid which are here applied. It may broadly be called "social economics" as distinct from the deductive, static economics of price, exchange value and distribution. Sidgwick's Art of Political Economy is a most valuable contribution in this field. John Stuart Mill enters it in his discussions of property and communism, land tenures and the sphere of government, and in his Essay on Liberty. Adam Smith's treatment of public expenditures belongs here, also a large part of J. B. Clark's Philosophy of Wealth, Carver's Essays in Social Justice and the writings of Veblen and Hobson.

Far removed as these are from each other, something approaching a synthesis may be possible, on two conditions. One is that description and judgment be kept distinct, with the result that descriptive economics may be free to describe what it pleases without the need of adopting a final yardstick with which to measure all the conflicting values it finds. Under these conditions, the values the market measures need not be the sole material of economics, nor price the sole recognized measure. Another condition is that selective generalizations be recognized and used as tools of analysis, and means of approach to truth, rather than as embodiments of ultimate and absolute verity. The marginal method, as a tool of analysis, is invaluable; but as the sole source of truth it is woefully inadequate.

The progress of inductive study is in a fair way to give us truly descriptive statements about prices and other tangible economic quantities in purely behavioristic terms. This should have the result of freeing the "laws of price" from dependence on generalities bound up with connotations of approval or disapproval. On these terms, inductive study may be allowed to range farther afield and gather materials for more fruitful generalizations on social economics than have yet been made.