Economics and Politics [Reprint 2020 ed.] 9780520348523

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ECONOMICS AND POLITICS BY

MORITZ JULIUS BONN

BOSTON AND NEW Y O R K

HOUGHTON MIFFLIN COMPANY ®be fttoetfibe Cambrtoge 1932

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BARBARA WEINSTOCK LECTURES ON THE MORALS OF TRADE This series will contain essays by representative scholars and men of affairs dealing with the various phases of the moral law in its bearing on business life under the new economic order, first delivered at the University of California on the Weinstock Foundation.

ECONOMICS AND POLITICS THE last twenty-five years have seen a stupendous growth of government activities. This has been due partly to the rise of an industrialized urban society whose needs demanded far more centralized organization than the agricultural order which preceded it, and partly to a change in the conceptions of the sphere of government. I The earlier opposition to government intervention originated, on the one hand, in the hatred by religious bodies of despotic governments which tried to force them by brutal coercion into religious conformity, regardless of the danger the acceptance of such doctrines must bring to man's greatest

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possession, his immortal soul. It arose, on the other hand, in the resistance of a territorial aristocracy who defended their feudal liberties against the encroachments of the trained bureaucracy that modern absolutistic princes were trying to create. The religious individualism derived from the almost frenzied desire of the individual to save his soul from eternal perdition, and threatened through the interference of meddling priests and the hirelings of heretic princes, very nearly considered the State and everything connected with it as vile, and the power exercised by it as damnable. Its origin was anything but divine; its ways were the ways of the wicked; men bent on saving their souls must have nothing to do with it; its power must be limited wherever it was possible. The individual must be left unhampered; his essential spiritual isolation might be mitigated by voluntary associations of brothers and sisters, who worked as individuals for their own salvation and for

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some common practical purpose — and if needs be, by a contractual state, which could be dissolved at any time. For as the soul was indivisible in itself, it was unsocial too. As a political being, man needs must be an Anarchist. The political theory of the feudal aristocracies, independent municipalities, corporations, and guilds came to very similar conclusions. The State — that is, the central government — was in the habit of violating long established customs, deeply rooted inherited rights, some of them of such antiquity that no written evidence supported them, while others had been solemnly acknowledged by charters and bills of right. The State, such as outlined by its first modern advocate, Machiavelli, was evil in their eyes, the more so as it did not consider itself bound by moral obligations. It had to be properly restricted. For just as the priests, the officials of a Church-State, meddled with men's consciences in a vicious way, so did the

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tax collectors with their earthly possessions, unless the State was not severely limited to its most elemental functions. As long as the dualistic conception of splitting the commonwealth between rulers and ruled predominated, the State was the enemy. The advent of the parliamentary system did away with this dualism. After the rulers had become, so to speak, the delegates of the ruled, and after democratic franchise had universalized 'Ruling,' rulers and ruled were identical. In a democratic commonwealth the Nation and the State were thoroughly fused: Government was no longer an outside power, it represented the Nation. And as the Nation was omnipotent, so was Government, its delegate, as long as it enjoyed the Nation's confidence. This conception of the State reached its acme during the war, when individuals and groups completely abdicated their rights in favor of some national government.

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The end of the war was bound to bring about some sort of reaction. Centralized war economics had not been so successful as to endear them to the people. Political life in most countries had, moreover, been changed slowly but completely. The old issues dividing nations into parties were becoming obsolete: constitutional and religious issues were receding everywhere, while economic issues were coming to the front. In most countries party organization continued outwardly on the old political lines, but the real struggle between parties and within parties was mainly economic. The advent of Socialism as an economic creed tended to fix the main line of demarcation between the 'Haves' and the 'Have-nots,' but fortunately for most countries it was crisscrossed on many points by other lines of division, some of them mainly traditional, while others were regional or vocational. One feature, however, had become out-

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standing: the cleavage between political and economic power. Democracy had vested political power in the masses by giving them the vote; economic power to a considerable degree remained with the classes who either owned the wealth or were in a position to control it. Broadly speaking, the control of economic power is in the hands of a minority, who are fearful of being overruled by a majority holding political power. Being a permanent minority, they look for protection to permanent guaranties. As such guaranties in the form of restricted franchises, two-chamber systems, royal or presidential vetoes are no longer acceptable to a democratic age, they are to be derived from a kind of new 'Manchester Doctrine' which is trying to prevent Government from intervention in economic fields. The old ' laisser faire, laisser alter' school had based its political philosophy on the assumption of immutable economic laws, which might easily be disturbed, but could

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not be improved upon by government intervention. Later, it resurrected, in quite a new shape, the Marxian philosophy of historical materialism, according to which the forces of production dominate and determine both economic and political evolution. The State itself is rather the product of those economic forces, which run their course according to their own laws, from which they cannot be deflected by government action. Seen from this point of view, economics 1 are natural and necessary forces; politics, so far as they are not a mere index of economic evolutions, are arbitrary and artificial. It is somewhat amusing that the Marxian theory — rather discredited with the working class of the western world, who do lip service to it but bend all their energies on getting Government to interfere in economics — is being taken up by modern industrialist business men, who do not even know 1 For definition of 'economics' as here used see page 17 infra. Editor.

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the origin of this creed. They support it, however, not so much by philosophical speculation as by practical considerations. They allude to the incontestable fact that during the war and after the war government actions were often unwise. Though this foolishness was due less to a want of intelligence among political leaders than to their want of courage toward the passions of the hour, it is easy enough to brand politics in general as foolishness. Economics, on the other hand, are supposed to be 'rational.' Business is neither sentimental nor foolish. The business man engaged in his daily tasks is acting in a reasonable way, clearly foreseeing ends and soberly applying the necessary means to them. If the affairs of the world were run in the same spirit in which the business men run their concerns, catastrophes like the great war could never have happened. And if the control of the world's affairs after the war had been in the hands of business peo-

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pie, the aftermath of the war might long ago have passed away. In this presentation, economics are identified with reason and politics with passions. Again, reason permeating economics is supposed to be the exclusive demesne of the upper layer of the economic world, consisting of business men or entrepreneurs. The economic conceptions of the employees are either tacitly ignored or, if considered at all and found wanting, are ranged under politics, and if found wise, are considered as views of the business world. In a general way a legend is spread that most of the world's present troubles could have been avoided if the sane views of the business world had prevailed over the foolish views of the politicians. There is indeed a resemblance to the conceptions of the Manchester school, but the resemblance is indeed superficial. The Manchester school were clearly of opinion that their views on economics and on politics were sounder views

10 ECONOMICS AND POLITICS than those held by the governing classes, who clung to earlier views of the feudal ages. They boldly entered the field of politics in order to make their own views prevail; they wanted to draw limits to the activity of the State, but they did not try to transfer political power to a business community standing outside, or rather above, the political world. Ill The history of the last thirteen years is said to prove this alleged superiority of economics ( = business) over politics. Inflation in Europe is supposed to have been the result of the foolishness of politicians who forced it on a reluctant business world, whose members foretold the coming catastrophe from their intimate knowledge of sound money economics. I can state from my own personal experience that this is not the case. Inflation in Germany, for example, was not invented by scheming politicians as a clever device for defrauding their creditors. They

10 ECONOMICS AND POLITICS than those held by the governing classes, who clung to earlier views of the feudal ages. They boldly entered the field of politics in order to make their own views prevail; they wanted to draw limits to the activity of the State, but they did not try to transfer political power to a business community standing outside, or rather above, the political world. Ill The history of the last thirteen years is said to prove this alleged superiority of economics ( = business) over politics. Inflation in Europe is supposed to have been the result of the foolishness of politicians who forced it on a reluctant business world, whose members foretold the coming catastrophe from their intimate knowledge of sound money economics. I can state from my own personal experience that this is not the case. Inflation in Germany, for example, was not invented by scheming politicians as a clever device for defrauding their creditors. They

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drifted into it bit by bit. They were not warned by the business world; quite the contrary. The leading industrial interests opposed stabilization passionately, whenever there was proposed a scheme to undertake it. In a similar way the leading financial interests in France opposed stabilization when it was proposed by a radical Government. And the manufacturers of England fought bitterly against a return to the gold standard on the pre-war basis and were delighted when it was — temporarily (?) —abandoned. Whenever the world is devastated by a huge economic crisis, a movement for ' fiat money' is bound to arise. Some of its most vehement advocates can always be found in the business world, especially among those manufacturers whose unwise business expansion is partly responsible for the crisis. History does not read very differently when foreign affairs are concerned. Aggressive expansion threatening war, or leading to war, has often been brought about by mili-

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taristic politicians looking for new strategic frontiers; as far as sterile, rocks and otherwise unprofitable islands are concerned, theirs may be the responsibility. But when it is countries supposed to flow with milk and honey that have been annexed, the hands of the politicians have often been forced by business men bent on Empire building, regardless of political consequences. In fact, the Empire of business has often mixed itself up in a very definite way with the business of Empire. It is common knowledge today that the reparations problem was badly bungled by the politicians who made the Peace of Versailles. Theirs must be the formal responsibility for all the evil done in those days; but it is a great mistake to assume that all politicians were foolish, and all business men were wise. Lloyd George, no doubt, must be held responsible for some of the wild demands on Germany for reparation purposes, but the man who made it impossible for him to be

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wise in the question of reparations was the Governor of the Bank of England, England's greatest official currency and financial expert at that time, Lord Cunliffe, who assessed Germany's capacity to pay at that time at 120 billion dollars; while the politicians ultimately were satisfied with not quite 35 billion dollars. And this is not the whole story. The confiscation of enemy properties in the treaties of peace, which cut at the root of the principle of the inviolability of private property, would never have been attempted if influential business interests in the victorious countries had not seen in it an excellent opportunity to rid themselves of their German competitors, and to get possession cheaply of their ships, their lands, their coal, their iron mines, and their foreign investments. The over-expansion of the iron and steel trade from which Europe suffers today, was greatly accentuated by the political redistribution of these industries by the peace treaties, for

14 ECONOMICS AND POLITICS which business men pressed quite as strongly as did military men. The politicians indeed promised many things to their people, being well aware in their minds that they could never materialize. They can justly be blamed for the want of courage exhibited when insisting on terms which they knew could never be carried out. They often were very shortsighted, but scarcely more so than the business men. About three years ago the formulation of a new and final reparation plan was handed over by the several governments to a group of distinguished business men, the most prominent among them being Mr. Owen D. Young. They were allowed to scale down Germany's reparation burden considerably, and to make a guess of their own at Germany's capacity to pay. The politicians showed themselves willing to accept their findings as a basis of another—provisional (?) — arrangement. They were so successful in

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playing the game that the eminent business men who settled Germany's obligations and the method of paying them off afresh do not seem to have been aware themselves that they were playing at politics. They did not insist on starting their inquiries untrammeled by political conditions. In fact, by assuming that the claims of the United States must stand unaltered at a capital value of 6 billion dollars, the question they really tried to settle was not how much can Germany pay, but rather how can Germany be put in a position to cover the claims of the United States and the special claims of France. From the way in which later on they defended their work, it is quite evident that they did not consider the rearrangement of reparations payments over a period of fifty-nine years as going into politics. They seem to have forgotten that the essence of any reparation settlement, stripped of all its furbelows, is the substitution of the taxpayers of a vanquished country for the tax-

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payers of a victorious country. To do this successfully, technical economic knowledge is indispensable; it is nevertheless a thoroughly political business: levying taxes is the most important of all political issues. Moreover, the much vaunted wisdom of the business-economist has been completely disproved by the march of events. The settlement arrived at by the 'business men' was somewhat impaired by the politicians, though its main features were not altered very much. But it has not stood the test of experience. A t a time when prosperity was clearly ebbing, it was conceived to fit a period of permanent prosperity; it contained, it is true, some safety valves; if these had been allowed to work automatically, as the experts, in a sort of rather cheap optimism, had meant them to do, a financial collapse in Central Europe would inevitably have followed. The Government of the United States had to step in to save the world from a catastrophe by inducing all governments

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concerned to a complete suspension of the Experts' Plan for at least a year. If it had not done so, the panic brought about by the business men withdrawing their money from countries that had been given unwisely inflated credit, would have shattered Central Europe. If politics really represent passion, while economics represent reason, there is little to choose between foolish passions and reason which has gone astray. IV Activities designed for organizing governments and for making organized governments function properly may be called ' Politics '; activities directed toward the satisfaction of human wants with goods and services are called 'Economics.' But though definitions can easily keep things apart, human activities are closely interwoven. No doubt, some of the great aims toward the realization of which nations have organized their governments or made these organ-

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concerned to a complete suspension of the Experts' Plan for at least a year. If it had not done so, the panic brought about by the business men withdrawing their money from countries that had been given unwisely inflated credit, would have shattered Central Europe. If politics really represent passion, while economics represent reason, there is little to choose between foolish passions and reason which has gone astray. IV Activities designed for organizing governments and for making organized governments function properly may be called ' Politics '; activities directed toward the satisfaction of human wants with goods and services are called 'Economics.' But though definitions can easily keep things apart, human activities are closely interwoven. No doubt, some of the great aims toward the realization of which nations have organized their governments or made these organ-

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ized governments strive, have been noneconomical. Spiritual issues in the past and nationality issues in the present have been raised without regard to economic benefits, nay, even with the knowledge of economic sacrifice. The struggle for religious liberty or for national independence has often dominated politics to the exclusion of the economic welfare of everybody concerned. But even when economic motives are completely absent — and this never was true in respect to all groups or persons participating in the contest — economic consequences cannot be avoided. Even if the Thirty Years' War might be regarded as a purely spiritual struggle — an interpretation which is certainly not correct — its practical economic consequences were very far-reaching. The Indian Nationalist Movement, as represented by Gandhi, may be purely spiritual — its consequences, by excluding manufactured goods from all parts of the world, will be of the utmost economic importance.

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The objects of political strife have been changing considerably within the last century and a half. There still is a division of opinion over the forms of governments; and there still are a good many different views as to the scope of government action. But the old issues which have filled people's hearts with enthusiasm and with the spirit of self-sacrifice are not any longer very living issues. The struggle between kings and nations is at an end, even in countries like Germany, which have had no real political revolution. The struggle by which she changed her system was not on the grand scale that revolutions have taken in former days. It was an almost silent collapse of monarchical institutions which had outlived their usefulness. The same holds good of religious issues. Religious discrepancy has been at the bottom of many of the great political contests in days gone by. Most of the stirring arguments and most of the theories of the science

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of government originated in these religious controversies. These controversies have not completely ceased. People are still intolerant and occasionally given to violent outbursts, but broadly speaking, political life today is no longer dominated by religious issues. Fervor and Fanaticism are not dead, but they are transferred to a considerable degree to a sphere which is essentially nonreligious, to the sphere of economics. The issues which today divide the nations are the economic issues. The real line of demarcation between the Soviet Republic and its western capitalistic neighbors is not the religious persecution which the Soviet authorities have practiced against the various churches subject to their power. There is nothing new in this persecution but the fact that for once atheists persecute churchmen, while before churchmen persecuted atheists. The real cleavage is due to the peculiar economic system which Russia has evolved for herself and which she is desir-

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ous of imposing upon the world at large'by propaganda, and, if she have the power, by armed force. Again, the alignment of parties in most western countries is due to economic antagonism. Historical traditions and party affiliations still count for something in party life; constitutional issues play a certain part, religious issues are not quite dead, regional influences must not be neglected. But the decisive line of division is more and more the economic line, the division between those who believe in the capitalistic system of production and enjoy its benefit, and those who condemn it. It cannot be said that politics are replaced by economics, but it can be asserted without fear of contradiction that the main contents of politics have become economic. This being the case, politics can scarcely be expected to keep out of the sphere of economics. The claim of economics to be left alone can be justified only on the assump-

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tion that government intervention (for, after all, politics, in the form of government intervention, do interfere) is a futile play of ignorant wire-pullers, who know nothing of the eternal laws ruling the economic world. In taking up this attitude, however, the business men who advocate it are not very logical. They have no clear conceptions about what they really understand by economics. Instinctively they identify economics and business. From this point of view such actions only as are taken by the heads of the enterprise and the views announced by them would be economics proper. The activities of the employees and their views on the process of satisfying human wants by the production of goods and services would not be comprised within the term of economics. This limitation evidently gives merely a 'narrow' definition. It entails the claim of business men to the right not only to control their individual

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business, unhampered by employees and undisturbed by governments, but goes very much farther than this. It assumes an exclusive knowledge by business men of economic questions in general in which neither wage-earners nor theorists nor consumers are allowed to share. Such views might be maintained in countries which have never suffered from an economic crisis for which mistaken business policies must be held responsible and where everybody's wants are well provided for by the success of business policy and the wisdom of business leadership. For a very short period American business men laid claim to such achievements. But the 'glorious revolution' of the American industrial world has long ago passed into a dishonored limbo of forgetfulness. The infallibility of business men in general can scarcely be claimed in a time of never-ending failures of individual business concerns. Moreover, employers are but part of

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economics — an essential part, no doubt, but they cannot disqualify employees and consumers as full members of the economic world. They cannot even insist on a rigid separation of economics and politics, such as might prevent government intervention. It may be done in a country where the principles of free trade and non-intervention are really in full force and where profits and wages are the outcome of unhampered competition. But such countries scarcely exist. Protection of some sort or other is found everywhere, and its main object is the raising of prices by government intervention above their 'natural level.' For the introduction of a protective tariff is not due to the vagaries of the politicians. It is the pressure of economic groups, beginning as a rule with the agitation on the part of business interests, that is mainly responsible for it. If political wages have but lately become the order of the day — since the labor movement is now strong

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enough to influence government action — political prices due to logrolling and lobbying by business interests, are of long standing. It is really the business man who has forced Government to go into business. And he has been so successful that it is next to impossible, in our modern world, to get it out again. Business cannot even reproach politics with corruption, without, to a certain degree, inculpating itself: the politicians may take the bribes; they would never have got them if business interests had not offered them. The grant of a franchise for public utilities must always be a political act; railways cannot be run without some sort of government concession; light and gas and water works would never be erected if proper (exclusive) facilities to run them were not given. Political intervention is needed for the exploitation of these economic opportunities. This being the case, politicians often get a chance, no doubt, to blackmail pro-

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ducers, and indirectly consumers. But, on the other hand, they get a chance, too, to protect consumers against rapacious producers, and sometimes even to protect producers from stingy shortsighted consumers. Intelligent correlation between politics and economics may often be non-existing; but we cannot stultify ourselves and assume a state of affairs where such a relation is entirely avoidable. However much we may restrict the functions of the modern State, our demands on it are too big to make the collection of fairly heavy taxation avoidable. How can governments help being in business, when they are bound to take twenty to twenty-five per cent of its profits by way of taxation? V There is another side to the picture. If Government always is in business, business always is in politics. Even in the days when political parties were separated from one

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ducers, and indirectly consumers. But, on the other hand, they get a chance, too, to protect consumers against rapacious producers, and sometimes even to protect producers from stingy shortsighted consumers. Intelligent correlation between politics and economics may often be non-existing; but we cannot stultify ourselves and assume a state of affairs where such a relation is entirely avoidable. However much we may restrict the functions of the modern State, our demands on it are too big to make the collection of fairly heavy taxation avoidable. How can governments help being in business, when they are bound to take twenty to twenty-five per cent of its profits by way of taxation? V There is another side to the picture. If Government always is in business, business always is in politics. Even in the days when political parties were separated from one

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another by antagonistic political ideals or by different religious creeds, economic issues were by no means absent. It is possible to construct in a purely abstract way a type of government where all power is vested in a despotic ruler whose legislative and executive acts are in no way influenced by sectional economic interests. Such a despot may use his power for the welfare of the entire commonwealth and not for the benefit of individual sections. The despotic king whom the Physiocrats put at the head of their abstract commonwealth was of that type. But they simplified his task considerably, by insisting that the absolute ruler, as they conceived him, must do nothing beyond observing the natural laws of the economic world, and must in no way try to influence them. They advocated despotic government and opposed the parliamentary system because they could not imagine a parliament — a body representing voters — which was not swayed by

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sectional economic motives. And they were quite right. The earlier parliaments were composed of well organized representations of well defined, economic group-interests. Until late in the nineteenth century various groups calling themselves quite openly 'interests' dominated the different political parties in England. Modern developments are tending in the same direction. Many people who are dissatisfied with the cumbersome working of parliamentary government under modern conditions, where divergent economic interests thinly veiled by flimsy political garments make the formation of durable cabinets very difficult, advocate the return to an honest system of a vocational representation under which parliaments represent definite economic groups and not merely a mass of isolated individuals. Since Government has the power to interfere in economic life, and since its intervention can increase or lessen the share different economic interests and groups may

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expect to get from the Nation's annual income, it is but natural that these groups are trying to control politics. Sometimes they may influence the voters; sometimes they may influence the voters' representatives ; sometimes they may put pressure on the Administration; sometimes they combine the three different activities; but they always will be in politics somehow. It is quite possible that government intervention may not do any good when it is curing symptoms rather than causes. That will not be taken as an argument for nonintervention, but rather as a motive for re-intervention. Vocational groups are organized everywhere and must be organized everywhere where there are common vocational interests at stake. Manufacturers' associations in any given country cannot be expected to stand aside at election time when there is a tariff issue pending and tell the world that they object to lobbying and to logrolling and

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are not interested in the outcome. Bankers and investors will scarcely declare their neutrality toward the fiscal policy of a government which is bent on changing its monetary system and give it as their well-considered individual opinion that they are neither interested in inflation, nor deflation, nor stabilization. If labor members press for high wages, industrial members insist on low costs and high prices. Business is in politics quite as much as labor, and for the same reason, though with different arguments. Political action, legislative as well as administrative, is nearly always the result of pressure put upon the Government by economic groups whose voting strength is essential to the Government. This pressure is by no means always wise. But if it is foolish — and it often is foolish — this is not because politics are inherently foolish and economics inherently wise, but because interested economic groups who press for

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some piece of sectional legislation are quite as foolish in their views on economics as are the legislators whom they put into power and whom they force to pass foolish laws. If the business section of a given country refrains from demanding sectional legislation and opposes the legislation of other groups by advocating theories of non-intervention, this attitude is far less due to their distrust of state action in general than to their distrust of a particular government. And their general objection to government intervention is really based on the fact that they consider themselves a minority at the mercy of an intervening (permanent) majority. They object to the State in business in the same way in which religious minorities objected to the State in religion. Whenever they get hold of the power, they are quite as willing to wield it for business purposes as were the leaders of religious minorities when they succeeded in controlling the State.

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VI Government and the machinery of governing possess much greater efficiency today than formerly. This machinery is no longer restricted to mere administration, to foreign affairs, and to war; its energies must find an outlet in some other direction. It cannot do very much in the sphere of religion, for religious issues, as issues of politics, are receding into the background. It has not much scope for action in the more limited political field, for the days of constitution making, without regard to economics, have gone, if they ever really existed. Its main sphere of action is economics, whether we like it or not. This being the case, economics, and not the least those groups in economics which are identified with business, will try to exercise a decisive influence on the strong and active Government which is facing them. They do so in severe rivalry with other groups such as represent labor or land. As

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Government is in business, business is in politics and will remain in politics. The issue is not whether economics — and especially business economics — are morally superior to politics or not, but rather whether there is intelligent correlation. Economic politics comprise today the major part of those government activities we call politics. Sometimes they are wise and sometimes they are foolish. Matters are not settled by calling bad economic policy politics, and good economic policy economics. The real problem is the dualism between economic power as expressed by wealth, and political power as expressed by votes, which is shaking the basis of our present social structure. This dualism must not be overstated. Labor, after all, is part of economics and is not only possessed of political power but of economic power as well. On the other hand, the nature of wealth enables its owners to wield a great deal of influence in the mere political sphere. There are but two ways in which the

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dualism between politics and economics can be completely overcome. We might, on the one hand, return to the theory of eighteenthcentury liberalism and insist on Government being severely and completely kept out of economics. T o do this a state of affairs must be created in which natural economic laws can work without any social friction. Such a state of affairs has never yet existed; to create it was beyond the power of Liberalism, and a thorough liberal policy never has had a real chance. It is quite impossible to expect that, after a century and a half of government interference in most countries of the world, the policy of non-intervention may get the chance it originally desired and without which it cannot work. And it must be remembered that the early advocates of intervention were the business men who insisted on tariffs, long before the working class clamored for welfare work. There is, of course, the abstract possibility of handing over political power com-

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pletely to those who hold the main share of economic power. By restricting the vote to owners of property, as was formerly the case in many countries, this might be achieved. It is not likely that modern democracy will give back the vote, and will make a present of its political power to the holders of economic power. The other way to overcome the dualism is the way of the Russian Soviet system, where the entire economic power and all economic functions are handed over to a central government, controlled by the workers. The ultimate object of such a government is not to govern any more, but to administer the commonwealth economics for the benefits of its members, somewhat like a business man who administers his enterprise, but does not govern it. This is the only way, according to the Soviet theory, to bring about real democracy and to abolish the brutal power of the State as well as that of wealth. It is not very likely that the

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western world will follow the Russian example. If it cannot get rid of politics by handing over economics completely to private individuals, working under equitable and equal conditions, such as were foreseen by the Manchester school, and if it cannot invert the process and hand over all economics to the State, the holder of political power, the amphibious nature of politics and economics is bound to continue. We cannot abolish either. Our object must be a state of affairs where economics — the work of the business men as well as the work of the laborers — are protected against unwise and unfair political intervention, and where politics are kept free from sectional economic domination entailing impersonal corruption and class or group exploitation. A system of mutual checks will have to be devised, whereby political power and economic power, both changing and shifting continually, can balance each other.