Equality: Liberty and Equality

The test of a principle is that it can be generalized, so that the advantages of applying it are not particular, but universal. Since it is impossible for every individual, as for every nation, simultaneously to be stronger than his neighbours, it is a truism that liberty, as distinct from the liberties of special persons and classes, can exist only in so far as it is limited by rules, which secure that freedom for some is not slavery for others. The spiritual energy of human beings, in all the wealth of their infinite diversities, is the end to which external arrangements, whether political or economic, are merely means. Hence institutions which guarantee to men the opportunity of becoming the best of which they are capable are the supreme political good, and liberty is rightly preferred to equality, when the two are in conflict. The question is whether, in the conditions of modern society, they conflict or not. It is whether the defined and limited freedom, which alone can be generally enjoyed, is most likely to be attained by a community which encourages violent inequalities, or by one which represses them.

Inequality of power is not necessarily inimical to liberty. On the contrary, it is the condition of it. Liberty implies the ability to act, not merely to resist. Neither society as a whole, nor any group within it, can carry out its will except through organs; and, in order that such organs may function with effect, they must be sufficiently differentiated to perform their varying tasks, of which direction is one and execution another. But, while inequality of power is the condition of liberty, since it is the condition of any effective action, it is also a menace to it, for power which is sufficient to use is sufficient to abuse. Hence, in the political sphere, where the danger is familiar, all civilized communities have established safeguards, by which the advantages of differentiation of function, with the varying degrees of power which it involves, may be preserved, and the risk that power may be tyrannical, or perverted to private ends, averted or diminished. They have endeavoured, for example, as in England, to protect civil liberty by requiring that, with certain exceptions, the officers of the State shall be subject to the ordinary tribunals, and political liberty by insisting that those who take decisions on matters affecting the public shall be responsible to an assembly chosen by it. The precautions may be criticized as inadequate, but the need for precautions is not to-​day disputed. It is recognized that political power must rest ultimately on consent, and that its exercise must be limited by rules of law.

The dangers arising from inequalities of economic power have been less commonly recognized. They exist, however, whether recognized or not. For the excess or abuse of power, and its divorce from responsibility, which results in oppression, are not confined to the relations which arise between men as members of a state. They are not a malady which is peculiar to political systems, as was typhus to slums, and from which other departments of life can be regarded as immune. They are a disease, not of political organization, but of organization. They occur, in the absence of preventive measures, in political associations, because they occur in all forms of association in which large numbers of individuals are massed for collective action. The isolated worker may purchase security against exploitation at the cost of poverty, as the hermit may avoid the corruptions of civilization by forgoing its advantages. But, as soon as he is associated with his fellows in a common undertaking, his duties must be specified and his rights defined; and, in so far as they are not, the undertaking is impeded. The problem of securing a livelihood ceases to be merely economic, and becomes social and political. The struggle with nature continues, but on a different plane. Its efficiency is heightened by co-​operation. Its character is complicated by the emergence of the question of the terms on which co-​operation shall take place.

In an industrial civilization, when its first phase is over, most economic activity is corporate activity. It is carried on, not by individuals, but by groups, which are endowed by the State with a legal status, and the larger of which, in size, complexity, specialization of functions and unity of control, resemble less the private enterprise of the past than a public department. As far as certain great industries are concerned, employment must be found in the service of these corporations, of not at all. Hence the mass of mankind pass their working lives under the direction of a hierarchy, whose heads define, as they think most profitable, the lines on which the common enterprise is to proceed, and determine, subject to the intervention of the State and voluntary organizations, the economic, and to a considerable, though diminishing, extent, the social environment of their employees. Possessing the reality of power, without the decorative trappings-​-​unless, as in England is often the case, it thinks it worth while to buy them-​-​this business oligarchy is the effective aristocracy of industrial nations, and the aristocracy of tradition and prestige, when such still exists, carries out its wishes and courts its favours. In such conditions, authority over human beings is exercised, not only through political, but through economic organs. The problem of liberty, therefore, is necessarily concerned, not only with political, but also with economic relations.

It is true, of course, that the problems are different. But to suppose that the abuses of economic power are trivial, or that they are automatically prevented by political democracy, is to be deceived by words. Freedom is not only compatible with conditions in which all men are fellow-​servants, but would find in such conditions its most perfect expression. What it excludes is a society where only some are servants, while others are masters.

For, whatever else the idea involves, it implies at least, that no man shall be amenable to an authority which is arbitrary in its proceedings, exorbitant in its demands, or incapable of being called to account when it abuses its office for personal advantage. In so far as his livelihood is at the mercy of an irresponsible superior, whether political or economic, who can compel his reluctant obedience by force majeure, whose actions he is unable to modify or resist, save at the cost of grave personal injury to himself and his dependents, and whose favour he must court, even when he despises it, he may possess a profusion of more tangible blessings, from beer to motorbicycles, but he cannot be said to be in possession of freedom. In so far as an economic system grades mankind into groups, of which some can wield, if unconsciously, the force of economic duress for their own profit or convenience, whilst others must submit to it, its effect is that freedom itself is similarly graded. Society is divided, in its economic and social relations, into classes which are ends, and classes which are instruments. Like property, with which in the past it has been closely connected, liberty becomes the privilege of a class, not the possession of a nation.

Political principles resemble military tactics; they are usually designed for a war which is over. Freedom is commonly interpreted in England in political terms, because it was in the political arena that the most resounding of its recent victories were won. It is regarded as belonging to human beings as citizens, rather than to citizens as human beings; so that it is possible for a nation, the majority of whose members have as little influence on the decisions that determine their economic destinies as on the motions of the planets, to applaud the idea with self-​congratulatory gestures of decorous enthusiasm, as though history were of the past, but not of the present. If the attitude of the ages from which it inherits a belief in liberty had been equally ladylike, there would have been, it is probable, little liberty to applaud.

For freedom is always relative to power, and the kind of freedom which at any moment it is most urgent to affirm depends on the nature of the power which is prevalent and established. Since political arrangements may be such as to check excesses of power, while economic permit or encourage them, a society, or a large part of it, may be both politically free and economically the opposite. It may be protected against arbitrary action by the agents of government, and be without the security against economic oppression which corresponds to civil liberty. It may possess the political institutions of an advanced democracy, and lack the will and ability to control the conduct of those powerful in its economic affairs, which is the economic analogy of political freedom.

The extension of liberty from the political to the economic sphere is evidently among the most urgent tasks of industrial societies. It is evident also, however, that, in so far as this extension takes place, the traditional antithesis between liberty and equality will no longer be valid. As long as liberty is interpreted as consisting exclusively in security against oppression by the agents of the State, or as a share in its government, it is plausible, perhaps, to dissociate it from equality; for, though experience suggests that, even in this meagre and restricted sense, it is not easily maintained in the presence of extreme disparities of wealth and influence, it is possible for it to be enjoyed, in form at least, by pauper and millionaire. Such disparities, however, though they do not enable one group to become the political master of another, necessarily cause it to exercise a preponderant influence on the economic life of the rest of society.

Hence, when liberty is construed, realistically, or implying, not merely a minimum of civil and political rights, but securities that the economically weak will not be at the mercy of the economically strong, and that the control of those aspects of economic life by which all are affected will be amenable, in the last resort, to the will of all, a large measure of equality, so far from being inimical to liberty, is essential to it. In conditions which impose co-​operative, rather than merely individual, effort, liberty is, in fact, equality in action, in the sense, not that all men perform identical functions or wield the same degree of power, but that all men are equally protected against the abuse of power, and equally entitled to insist that power shall be used, not for personal ends, but for the general advantage. Civil and political liberty obviously imply, not that all men shall be members of parliament, cabinet ministers, or civil servants, but the absence of such civil and political inequalities as enable one class to impose its will on another by legal coercion. It should be not less obvious that economic liberty implies, not that all men shall initiate, plan, direct, manage, or administer, but the absence of such economic inequalities as can be used as a means of economic constraint.

The danger to liberty which is caused by inequality varies with differences of economic organization and public policy. When the mass of the population are independent producers, of when, if they are dependent on great undertakings, the latter are subject to strict public control, it may be absent or remote. It is seen at its height when important departments of economic activity are the province of large organizations, which, if they do not themselves, as sometimes occurs, control the State, are sufficiently powerful to resist control by it. Among the numerous interesting phenomena which impress the foreign observer of American economic life, not the least interesting is the occasional emergence of industrial enterprises which appear to him, and, indeed, to some Americans, to have developed characteristics, not merely of an economic undertaking, but of a kind of polity. Their rule may be a mild and benevolent paternalism, lavishing rest-​rooms, schools, gymnasia, and guarantees for constitutional behavior on care-​free employees; or it may be a harsh and suspicious tyranny. But, whether as amiable as Solon, or as ferocious as Lycurgus, their features are cast in a heroic mould. Their gestures are those of the sovereigns of little commonwealths rather than of mere mundane employers.

American official documents have, on occasion, called attention to the tendency of the bare stem of business to burgeon, in a favourable environment, with almost tropical exuberance, so that it clothers itself with functions that elsewhere are garded as belonging to political authorities. The corporations controlled by six financial groups, stated the Report of the United States Commission on Industrial Relations some twenty years ago, employ 2,651,684 wage-​earners, or 440,000 per group. Some of these companies own, not merely the plant and equipment of industry, but the homes of the workers, the streets through which they pass to work, and the halls in which, if they are allowed to meet, their meetings must be held. They employ private spies and detectives, private police and, sometimes, it appears, private troops, and engage, when they deem it expedient, in private war. While organized themselves, they forbid organization among their employees, and enforce their will by evicting malcontents from their homes, and even, on occasion, by the use of armed force. In such conditions business may continue in its modesty, since its object is money, to describe itself as business; but, in fact, it is a tyranny. “The main objection to the large corporation,” remarks Mr. Justice Brandeis, who, as a judge of the Supreme Court, should know the facts, “is that it makes possible-​-​and in many cases makes inevitable-​-​the exercise of industrial absolutism.” Property in capital, thus inflated and emancipated, acquires attributes analogous to those of property in land in a feudal society. It carries with it the disposal, in fact, if not in law, of an authority which is quasi-​governmental. Its owners possess what would have been called in the ages of darkness a private jurisdiction, and their relations to their dependents, though contractual in form, resemble rather those of ruler and subject than of equal parties to a commercial venture. The liberty which they defend against the encroachments of trade unionism and the State is most properly to be regarded, not as freedom, but as a franchise.

The conventional assertion that inequality is inseparable from liberty is obviously, in such circumstances, unreal and unconvincing; for the existence of the former is a menace to the latter, and the latter is most likely to be secured by curtailing the former. It is true that in England, where three generations of trade unionism and state intervention have done something to tame it, the exercise of economic power is, at ordinary times, less tyrannical than it once was. It still remains, nevertheless, a formidable menace to the freedom of common men. The pressure of such power is felt by the consumer, when he purchases necessaries which, directly or indirectly, are controlled by a monopoly. It is felt in the workshop, where, within the limits set by industrial legislation and collective agreements, the comfort and amenity of the wage-​earners’ surroundings, the discipline and tone of factory life, the security of employment and methods of promotion, the recruitment and dismissal of workers, the degree to which successive relays of cheap juvenile labour are employed, the opportunity to secure consideration for grievances, depend ultimately upon the policy pursued by a board of directors, who may have little love, indeed, for their shareholders, but who represent, in the last resort, their financial interests, and who, in so far as they are shareholders themselves, are necessarily judges in their own cause.

The effects of such autocracy are even graver in the sphere of economic strategy, which settles the ground upon which these tactical issues are fought out, and, in practice, not infrequently determines their decision before they arise. In such matters as the changes in organization most likely to restore prosperity to an embarrassed industry, and, therefore, to secure a tolerable livelihood to the workers engaged in it; methods of averting or meeting a depression; rationalization, the closing of plants and the concentration of production; the sale of a business on which a whole community depends or its amalgamation with a rival-​-​not to mention the critical field of financial policy, with its possibilities, not merely of watered capital and of the squandering in dividends of resources which should be held as reserves, but of a sensational redistribution of wealth and widespread unemployment as a result of decisions taken by bankers-​-​the diplomacy of business, like that of governments before 1914, is still commonly conducted over the heads of those most affected by it. The interests of the public, as workers and consumers, may receive consideration when these matters are determined; but the normal organization of economic life does not offer reliable guarantee that they will be considered. Nor can it plausibly be asserted that, if they are not, those aggrieved can be certain of any redress.

Power over the public is public power. It does not cease to be public merely because private persons are permitted to buy and sell, own and bequeath it, as they deem most profitable. To retort that its masters are themselves little more than half-​conscious instruments, whose decisions register and transmit the impact of forces that they can neither anticipate nor control, though not wholly unveracious, is, nevertheless, superficial. The question is not whether there are economic movements which elude human control, for obviously there are. It is whether the public possesses adequate guarantees that those which are controllable are controlled in the general interest, not in that of a minority. Like the gods of Homer, who were subject themselves to a fate behind the fates, but were not thereby precluded from interfering at their pleasure in the affairs of men, the potentates of the economic world exercise discretion, not, indeed, as to the situation which they will meet, but as to the manner in which they will meet it. They hold the initiative, have such freedom to manoeuvre as circumstances allow, can force an issue or postpone it, and, if open conflict seems inevitable or expedient, can choose, as best suits themselves, the ground where it shall take place.

“Even if socialism were practicable without the destruction of freedom,” writes Lord Lothian, “would there be any advantage in converting the whole population into wage or salary earners, directed by the relatively few, also salaried, officials, who by ability, or promotion, or ‘pull,’ could work their way to the top of the political machine or the permanent bureaucracy?…Is not that community the best, and, in the widest sense of the word, the most healthy, which has the largest proportion of citizens who have the enterprise, and energy, and initiative, to create new things and new methods for themselves, and not merelyu to wait to carry out the orders of somebody ‘higher up?’” In view of the practice, of some parts, at least, of the business world, the less said about “pull,” perhaps, the better. But how true in substance! And how different the liner looks from the saloon-​deck and the stoke-​hold! And how striking that the conditions which Lord Lothian deplores as a hypothetical danger should be precisely those which ordinary men experience daily as an ever-​present fact!

For, in England at any rate, as a glance at the Registrar-General’s reports would have sufficed to show him, not only the majority of the population, but the great majority, are to-​day “wage or salary earners,” who, for quite a long time, have been “directed by the relatively few,” and who, if they did not “wait to carry out the orders of somebody higher up,” would be sent about their business with surprising promptitude. Unless Lord Lothian proposes to abolish, not only a particular political doctrine, but banks, railways, coal-​mines and cotton-​mills, the question is not whether orders shall be given, but who shall give them; whether there shall be guarantees that they are given in the general interest; and whether those to whom they are given shall have a reasonable security that, when their welfare is at stake, their views will receive an unbiased consideration.

Freedom may be, as he insists, more important than comfort. But is a miner, who is not subject to a bureaucracy, or at least, to a bureaucracy of the kind which alarms Lord Lothian, conspicuously more free than a teacher, who is? If a man eats bread made of flour produced to the extent of forty per cent by two milling combines and meat supplied by an international meat trust, and lives in a house built of materials of which twenty-​five per cent are controlled by a ring, and buys his tobacco from one amalgamation, and his matches from another, while his wife’s sewing-​thread is provided by a third, which has added eight millionaires to the national roll of honour in the last twenty years, is he free as a consumer? Is he free as a worker, if he is liable to have his piece-​rates cut at the discretion of his employer, and, on expressing his annoyance, to be dismissed as an agitator, and to be thrown on the scrap-​heap without warning because his employer has decided to shut down a plant, or bankers to restrict credit, and to be told, when he points out that the industry on which his livelihood depends is being injured by mismanagement, that his job is to work, and that the management in question will do his thinking for him? And if, in such circumstances, he is but partially free as a consumer and a worker, is not his freedom as a citizen itself also partial, rather than, as Lord Lothian would desire, unqualified and complete?

Lord Lothian is misled as to liberty, because he has omitted to consider the bearing upon it of another phenomenon, the phenomenon of inequality. The truth is that, when the economic scales are so unevenly weighted, to interpret liberty as a political principle, which belongs to one world, the world of politics and government, while equality belongs-​-​if, indeed, it belongs anywhere-​-​to another world, the world of economic affairs, is to do violence to realities. Governments, it is true, exercise powers of a great and special kind, and freedom requires that they should be held strictly to account. But the administration of things is not easily distinguished, under modern conditions of mass organization, from the control of persons, and both are in the hands, to some not inconsiderable degree, of the minority who move the levers of the economic mechanism. The truth of the matter is put by Professor Pollard in his admirable study, The Evolution of Parliament. “There is only one solution,” he writes,