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Sumner's Forgotten Classic

Tags Taxes and SpendingMonetary TheoryPhilosophy and MethodologyPolitical Theory

08/21/2003Christopher Mayer

"History is only a tiresome repetition of one story." –William Graham Sumner

Sumner was referring to the seemingly endless attempts to harness the power of the state to further one's own ends at the expense of other people. All human types — generals, millionaires, priests, scholars and so on — have made these attempts. The disease is not confined by race, color, or creed, by age or occupation, by democracy or dictatorship. All of it makes little difference. The desire to live at the expense of other men is a constant theme that runs through all of human history.

In a tightly argued book written in 1883 titled What Social Classes Owe To Each Other, Sumner packed penetrating observations about the nature of political relations, and the incessant struggle of power against liberty. Of particular interest too, is Sumner's widely known (but not as widely understood) concept of the Forgotten Man. Also central to the thesis of the book is Sumner's acute understanding of the role of capital in the toil of everyday life and its role in improving the standard of living.

In so many ways, the essential intellectual tussles of his day were similar to those we face today. The dragons that Sumner sought to slay are still threatening civilization. There are still those who think that you can get something for nothing, and the primary agent for such legerdemain is always government — an illusory horn of plenty.

Throughout Sumner's book he emphasizes that the very nature of mankind's existence entails a struggle against the tireless and ever-encroaching powers of nature, a theme later libertarians such as Rose Wilder Lane (in her classic The Discovery of Freedom) would echo. The facts of our existence include much effort just to maintain a standard of living, as the Red Queen in Lewis Carroll's Through the Looking Glass, seemed to appreciate when she said, "It takes all the running you can do to keep in the same place!" This is just the way things are. We have to work to feed ourselves and meet other basic necessities of life; and if we don't, then someone must do it for us. "We cannot get a revision of the laws of human life," Sumner notes. These basics are sometimes taken for granted, especially in the relatively rich countries of the West, as if they were always there and will always be there.

Sumner made an important distinction, though, about the nature of the struggle. "Certain ills belong to the hardships of human life. They are natural. They are part of the struggle with Nature for existence. We cannot blame our fellow-men for our share of these…. Certain other ills are due to the malice of men, and to the imperfections or errors of civil institutions."

The problems of old age, for example, are just a natural part of being human. Moreover, we all develop certain skills, are imbued with certain gifts and temperaments, and are born into different families in different geographical areas. All of these factors assure that each of us will deal with nature's challenges with varying degrees of success.

Other problems, like the burdens of chronic inflation, are the results of misplaced confidence in fiat currencies and the ability of governments to manage them. Many of these problems are foisted on the Forgotten Man. Look at the healthcare debate, where various proposals are put forth for the government to pay or subsidize medical costs. The politicians and policy wonks get all the attention, as do the alleged beneficiaries of their programs, but no attention is paid to the folks who have to pay for it all — Sumner's Forgotten Men. As Sumner writes, "In all the discussions attention is concentrated on A and B, the noble social reformers, and on D, the 'poor man'. I call C the Forgotten Man, because I have never seen that any notice was taken of him in any of these discussions."

The Forgotten Men are those who work and save and otherwise mind their own business. Whatever the government spends, it can do that only by "…taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man."

But it is upon the backs of such men that civilization advances and the standard of living is raised. Sumner understood that capital was the building block of civilization. In an eloquent passage, Sumner explains the role of capital in the advancing mankind beyond the status of brutes:

"Every step of capital won made the next step possible, up to the present hour. Not a step has been or can be made without capital. It is labor accumulated, multiplied unto itself — raised to a higher power…. The locomotive is only possible today because, from the flint-knife up, one achievement has been multiplied into another through thousands of generations…. We cannot build a school, a hospital, a church, or employ a missionary society, without capital, any more than we could build a palace or a factory without capital. We have ourselves, and we have the earth; the thing which limits what we can do is the third requisite — capital…. We get so used to it that we do not see its use."

Given capital's importance, you would think we would adopt attitudes and practices that encouraged and promoted the creation of capital. Instead, our government spends and borrows with no thought to the destructive consequences of their indulgences. Voters and lobbyists continue to push for more and the Forgotten Men are filched of their hard-earned wealth.

Many negative attitudes still prevail about wealth and the wealthy — the great accumulators of capital. Sumner will have none of it, offering a very simple explanation for the general wealth of industry's leaders. "Men of routine or men who can do what they are told are not hard to find; but men who can think and plan and tell the routine men what to do are very rare. They are paid in proportion to the supply and demand of them."

Creativity, leadership qualities and other skills are paid in proportion to the old forces of supply and demand. The same analysis could be applied to businesses as a whole, where those businesses whose services or products are in high demand are paid well and become wealthy, and others, such as American steel manufacturers, agricultural producers, and airlines seem to always be on the verge of disaster.

Going after the successful individuals or placing limits or penalties on accumulating wealth are shown to be the work of sheer folly, likened to "killing off our generals in war," as Sumner points out.

For Sumner, society needs no supervision imposed upon it by force and each man ought to be free to seek happiness in his own way. As a result, the only reforms Sumner advocated were those that would undo the work of the statesmen of the past. Sumner advised, "If the social doctors will mind their own business, we should have no troubles but what belongs to Nature. Those we will endure or combat as we can. What we desire is, that the friends of humanity should cease to add to them."

It may seem odd that a man writing at the tail end of the 19th century should have anything to teach us as we sit here in the opening years of the 21st century. However, timeless insights like Sumner's never grow obsolete. Today our government continues to play judge and jury with the fruits of other men's labors and many people think nothing of it. The Forgotten Men are still forgotten. Capital is still underappreciated or else confused with things that are not capital, such as Greenspan's waterfalls of credit. William Graham Sumner's ideas remain relevant today — painfully so. Sumner cherished liberty and concluded, as did Lord Acton and others, that liberty was not a means to social ends. Sumner wrote, "All institutions are to be tested by the degree to which they guarantee liberty. It is not to be admitted for a moment that liberty is a means to social ends, and that it may be impaired for major considerations." Too often today's leaders are quick to surrender liberties for mere trifles, and the population at large allows it to happen.



Christopher Mayer

Chris is the editor and founder of Capital & Crisis and Mayer’s Special Situations. He is also the author of Invest Like a Dealmaker and World Right Side Up.

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