Economic law

“ In carrying out this policy of government regulation and supervision of corporations he became involved in a great struggle with the powerful financial interests whose profits were threatened, and with those legislators who sincerely believed that government should solely concern itself with protecting life and property, and should leave questions of individual and social relations in trade and finance to be settled by the operation of so-called natural economic laws. ”

“ The common run of political economists confuse these together, under the designation of economic laws, which they deem incapable of being defeated or modified by human effort; ascribing the same necessity to things dependent on the unchangeable conditions of our earthly existence, and to those which, being but the necessary consequences of particular social arrangements, are merely co-extensive with these: given certain institutions and customs, wages, profits, and rent will be determined by certain causes ”

“ A community is forming, with its natural demand for revenue for common purposes. Here is the natural revenue. Here lies the fundamental principle which political economists call the Law of Rent. Here reposes the very essence of the law of compensation. Here also is found the basis principle of economic justice, which, traced to its last analysis, as civilization advances, [263] is capable of developing the highest expression of human society. Here is the answer to your question,
“Will universal happiness be the result of putting an end to private ownership of land?” ”

“ A government would, by prohibitory laws, put a stop to the importation of some commodity; and when by this it had caused the commodity to be produced at home, it would plume itself upon having enriched the country with a new branch of industry, would parade in statistical tables the amount of produce yielded and labour employed in the production, and take credit for the whole of this as a gain to the country, obtained through the prohibitory law. ”

“ First, I think it can be shown that the law makes ten criminals where it restrains one. On that basis it would not, as a matter of policy merely, be an economical institution. ”

“ A regulation of money, is always a regulation of prices, and an interposition by law, in the economy of individuals. It covers effort and competition in every shape, and combines in a mass the several evils which would flow from distinct legal prices, for each separate object of human industry. ”

“ It certainly follows from this, that some Economical laws must be more general than others, owing to a less variation in the human impulses concerned in them: it follows, for example, that the law of landed rents, or the law of the approach of the price of raw materials to that of the finished products, is more universal in its terms of generalization than most of the propositions of Money and Taxation can be. ”

“ And this concern and the policy based upon it * * * has expression * * * in a well-known national enactment. * * * competition, not combination, should be the law of the trade."
And so is established the proposition that the Statutory and Common Law, in relation to public policy, is that the public welfare is best served by giving the power and liberty of price fixing as to commodities to the whole body of our people, worked out through competition, and protected from control by any lesser group or groups, or even the Government itself. ”

“ It is not for courts to determine the course of the Nation's economic development. Economists may recommend, the legislative and executive branches may chart legal courses by which the competitive forces of business can seek to reduce costs ad increase production so that a higher standard of living may be available to all. ”

“ The ability of industry to divide property sufficiently to destroy political combinations, was demonstrated in England by the contrivance of the king and the judges, for letting her loose upon entails; and the ability of accumulating laws to destroy this wholesome operation, was subsequently demonstrated, by letting loose funding and banking laws upon industry. The idle, who seek for wealth by chartering laws, are wiser than their equalising brethren. Law has never been able to produce an equality of property, where industry exists ”

“ For example, it has been greatly the custom of English political economists to discuss the laws of the distribution of the produce of industry, on a supposition which is scarcely realized anywhere out of England and Scotland, namely, that the produce is “shared among three classes, altogether distinct from one another, laborers, capitalists, and landlords; and that all these are free agents, permitted in law and in fact to set upon their labor, their capital, and their land, whatever price they are able to get for it. ”

“ It is evident, in the first place, that the law of Wages is not affected by the existence or non-existence of Exchange or Money. Wages depend on the ratio between population and capital; and would do so if all the capital in the world were the property of one association, or if the capitalists among whom it is shared maintained each an establishment for the production of every article consumed in the community, exchange of commodities having no existence. ”

“ Commerce is called national like credit and currency. It is less capable of a division among the people than credit, or currency. Is it not a species of property, both publick and private? As publick, it is an object of taxation. As private and publick, our government cannot charter it entirely or in portions to corporations, because in our society, there exists only two appropriations of property, publick and private ; the first as payment for publick services, to be made by law : the second, the acquisition of private people, which no law can transfer to other private people. ”

“ The mechanical interest can have no aversion to it, when they are informed that an efficient government will protect and encourage commerce, which is the very soul of mechanism. ...Nor can the honest farmer have any objection; the increase of commerce will naturally increase the demand for such articles as he may have for sale; he will be enabled to pay his taxes and, if economy shakes hands with industry, increase his farm and live independent of troublesome creditors. ”

“ So, if two merchants going down town to their business agree in the street car that they will charge a certain amount for a barrel of flour or a ton of coal that week, this would probably be regarded as reasonable at the common law; but the common law, like these early statutes of England, looked primarily, if not exclusively, to the welfare of the consumer; they always speak of the common weal of the people, or of combinations to the general hurt of the people, and general combinations to fix prices or to limit output are therefore always unlawful ”

“ All such grants relating to any known trade or manufacture have been held by all the judges of England, whenever they have come up for consideration, to be void at common law as destroying the freedom of trade, discouraging labor and industry, restraining persons from getting an honest livelihood, and putting it into the power of the grantees to enhance the price of commodities. ”

“ Economic conditions require readjustment, important matters of trade must be regulated, vital questions of finance and taxation must be handled, in fact, the whole country must settle down to production, manufacture, distribution of merchandise, and the transaction of the nation’s regular business. ”

“ The law of interest is that the relation between wages and interest is determined [Pg 242] by the average power of increase which attaches to capital from its use in its reproductive modes. The law of wages is that they depend upon the margin of production, or upon the produce which labour can obtain at the highest point of natural productiveness open to it without the payment of rent. This law of wages accords with and explains universal facts, and shows that where land is free, and labour is unassisted by capital, the whole produce will go to labour as wages. ”

“ The question of the play of economic forces thus generally reduces itself to a problem which may be thus stated: What are the conditions of industrial equilibrium? How must prices, rates of wages, and profit be related in order that the various classes concerned may receive such proportions of produce as are compatible with the maintenance of the existing system of organisation? If any specified change occurs, if production becomes easier or more difficult, if a tax be imposed, or a regulation of any kind affects previous conditions, what changes will be necessary to restore the equilibrium? ”

“ To enable the Government to meet these obligations, legal tender currency should be substituted for the notes of the national banks, the national banking system abolished, and the unlimited coinage of silver, as well as gold, established by law.
3. That labor should be so protected by national and State authority as to equalize its burdens and insure a just distribution of its results; the eight-hour law of Congress should be enforced; the sanitary condition of industrial establishments placed under rigid control; the competition of contract labor abolished ”

“ Under the power to regulate commerce, they assume indefinitely that also over agriculture and manufactures, and call it regulation to take the earnings of one of these branches of industry, and that too the most depressed, and put them into the pockets of the other, the most flourishing of all. ”

“ Even when these vestiges of natural economy had passed away and payment in money had been introduced, the terms of exchange were frequently the subject of regulation. There was often a recognised rate at which dues in service, or in kind, could be commuted for money; or attempts were made to determine the prices of goods and the rates of wages by authority, either in the interest of the consumer or, at other times and places, in that of the producer. ”

“ In general, it is rights, rather than things, which pass in economic exchange. Physical delivery does not constitute selling. Delivering a load of wheat to a railroad does not constitute sale of the wheat to the railroad; selling a farm does not involve any physical moving of the farm. Rights, in personam or in rem, are objects of economic value, and the exchange of these rights makes up the bulk, if not the whole, of economic exchange. ”

“ Having fully acknowledged the temporary effects which, in particular employments of capital, may be produced on the prices of commodities, as well as on the wages of labour, and the profits of stock, by accidental causes, without influencing the general price of commodities, wages, or profits, since these effects are equally operative in all stages of society, we may be permitted to leave them entirely out of our consideration, whilst we are treating of the laws which regulate natural prices, natural wages, and natural profits, effects totally independent of these accidental causes. ”

“ Economists argue against government restrictions on trade and manufacture.
The economists wrote treatises on taxation, scattered pamphlets about, and conducted a magazine or two. They not only brought the existing economic evils home to the intelligent reader, but suggested remedies for them. ”

“ Whoever is thoroughly master of the laws which, under free competition, determine the rent, profits, and wages, received by landlords, capitalists, and labourers, in a state of society in which the three classes are completely separate, will have no difficulty in determining the very different laws which regulate the distribution of the produce among the classes interested in it, in any of the states of cultivation and landed property set forth in the foregoing extract. ”

“ Deduction from the Law of Competition Suppose, for instance, a community in which part of the labour and capital is devoted to agriculture and part to manufactures. The poorest land cultivated yields an average return which we will call 20, and 20 therefore will be the average return to labour and capital, in manufactures as well as in agriculture. ”

“ Whether a producer of goods should be permitted to fix by contract, express or implied, the price at which the purchase may resell them, and if so, under what conditions, is an economic question. To decide it wisely it is necessary to consider the relevant facts, industrial and commercial, rather than established legal principles. ”

“ Any regulations whatever, enforced by law, make it difficult for the producer to adopt new and improved processes. Further, the necessity of advancing the tax obliges producers and dealers to carry on their business with larger capitals than would otherwise be necessary, on the whole of which they must receive the ordinary rate of profit, though a part only is employed in defraying the real expenses of production or importation. The price of the article must be such as to afford a profit on more than its natural value, instead of a profit on only its natural value. ”

“ For this, at least, is now clear—that the cause which, in spite of the enormous increase of productive power, confines the great body of producers to the least share of the product upon which they will consent to live, is not the limitation of capital, nor yet the limitation of the powers of nature which respond to labor. As it is not, therefore, to be found in the laws which bound the production of wealth, it must be sought in the laws which govern distribution. ”

“ These laws differ wholly, in their objects, from the law to regulate commerce. Their main purpose is to collect revenues with which to meet the expenditures of the government, and those of their provisions, whereby congress seeks to so adjust rates as to protect American manufacturers and producers from competition by foreign low-priced labor, operate equally in all parts of the country. ”