March 5, 1886.] 



SCIENCE. 



227 



Will not the confusion solve itself ? Will not our 

 interference only intensify the confusion? The 

 case which we are discussing stands before us as 

 one especially calling for stern common sense. 

 The problem has already been made far worse by 

 rash and ill-trained speculations about it. False 

 notions have been scattered, and impossible hopes 

 excited, making ultimately successful and fortu- 

 nate solution far more difficult. 



2. If I understand the teachings of history and 

 sociology, they show that it is not possible for any 

 civil authority to select points at which, or narrow 

 lines upon which, it can act upon the social organ- 

 ism only once, or only from time to time, and 

 thereby impose upon the energies of the people a 

 direction toward ends selected by the political 

 authority, and diverging somewhat from the ends 

 which self-interest would have led the same people 

 to choose ; self-interest being nothing but the 

 rational procedure which leads a man to make up 

 his mind what he wants, and to try to get it by 

 appropriate means. If a political authority tries 

 to do this, its subjects try to save their inter- 

 ests, and defeat its purposes, if they can. Hence, 

 either the state fails of its purpose, or it has to 

 •constantly extend the scope of its control. I hold 

 that an interference with freedom of contract 

 would either fail of what is attempted by it, or 

 would force a restoration of all that coercive 

 power and comprehensive regulation in the state 

 which it has been the work of three hundred 

 years to break down. The socialists describe com- 

 petition as the war of all upon all, — a description 

 of it which has neither truth nor sense ; but, if 

 the course which I have just described should be 

 taken by a modern democratic state, it would 

 realize the tyranny of a majority over the indi- 

 vidual, — the true socialistic tyranny, the most 

 powerful, far-reaching, cruel, and terrific tyranny 

 that could exist amongst men. 



3. Any interference with free contract would 

 lower the existing organization of society, be- 

 cause it would render insecure those manifold 

 relations of rights and interests by which the 

 organization of society is kept up. Society, how- 

 ever, keeps up its present rate of production only 

 by virtue of all the existing organization. If the 

 organization should be lowered, the production 

 would be lowered. If the relations of landlord 

 and tenant, lender and borrower, employer and 

 employee, are rendered insecure or indefinite, and 

 if a man who enters into those relations may 

 jeopardize his property and his rights, or find his 

 contracts subject to revision by outside and irre- 

 sponsible interference, few persons will venture to 

 enter into those relations. Industrial power to-day 

 depends upon the subdivisions and combination of 



all these relationships. To destroy or impair them 

 would be to lower the efficiency of capital, dimin- 

 ish production, impoverish us all, and, finally, either 

 lower the population, or reduce a large part of it 

 to distress. 



If there is to be any interference with freedom 

 of contract, it may be brought to bear either upon 

 the making of the contract or on the interpretation 

 and solution of it. 



Generally speaking, a man does not want any 

 interference with the formation of his contract. 

 When two men make a contract, they do it be- 

 cause both of them expect to gain by it. One of 

 them would therefore be just as much opposed to 

 any interference with it as the other. If, however, 

 one of the parties felt himself weak in the negoti- 

 ation, and desired the intervention of some third 

 party in his behalf, it is plain that it would be 

 necessary to add some coercion to make the second 

 party to the contract consent to go into it at all 

 on the imposed terms. The usury law is a case in 

 point. It has always been impossible to make it 

 work successfully, because there is necessary to its 

 successful operation a further stipulation, that any- 

 one who has capital shall lend it to anybody who 

 wants it at the prescribed rate. So with regard to 

 arbitration on wages. If it should attempt to de- 

 cide what wages ought to be paid, it would still be 

 necessary to enact that the employer must employ 

 the employee at those wages. 



4. If the interference is to be exerted on the 

 interpretation and solution of contracts, it must 

 be general in its terms, and apply to specific antici- 

 pated groups of cases. No such legislation can be 

 framed winch will not be harsh and mischievous 

 to a great degree. The bankruptcy law is already 

 a case of it, and no bankruptcy law has ever been 

 devised which does not work with great friction 

 and great injustice on the special cases to which it 

 is applied. The only excuse for a bankruptcy law 

 is the otherwise insoluble nature of the case. 



5. I have debated the question as if an inter- 

 ference with freedom of contract for adult men 

 was possible ; but the argument shows that it is 

 not possible. If there are any difficulties already 

 clearly defined as consequences of modern im- 

 provements, they consist in chances for combina- 

 tion. The correct inference is, that what is needed 

 is to take measures, if any, to restore free compe- 

 tition. What we want is not less of it, but more 

 of it. Our welfare lies in maintaining it, and 

 warding off interferences with it. If we intro- 

 duce any form of interference with it by law or 

 by administrative intervention, we shall open the 

 door to all sorts of corruption. There is no pos- 

 sible rule or principle of interference. Interfer- 

 ence has no tests or guaranties. It must necessarily 



