Chapter XI: Prices Moralized

SOME progress has of late been made in the direction of moralizing wages. A still wider and more important question is the moralizing of prices. The practice of too many traders in all ages has always been to neglect ethical rules in business and get as much as they could for their wares. It is a peculiarity of recent times to deny that business is subject to ethical rules. We may take Mr. Joseph, Fellow and Tutor at Oxford, as an exponent of these modern economic views. In a recent book he tells us that economic value is a matter of economics, not of ethics. A bargain is settled on terms agreed on between buyer and seller. The buyer wants a commodity, the seller wants money. The buyer is prepared to give money for the commodity in proportion to the urgency of his want of it. One buyer wants the commodity more, another buyer wants it less, and the want of the same buyer varies at different times. A buyer who experiences a keener want is ready to give more money for what will satisfy his want. This is neither right nor wrong, it is neither just nor unjust, it is simply inevitable. It has no more to do with ethics and morality than the failure of the monsoon in India. A price is not unjust where no rule that it infringes can be produced. And in the absence of definite agreements and enactments we can produce no rule of universal application to which prices ought to conform.

That is the contention. Is it true? Mr. Joseph applies it to the wages of labour as well as to the price of commodities. We restrict ourselves here to the latter question.

It is certainly a question of economics. Economics are concerned with the production, distribution, and consumption of commodities. But it is also a question of morals, for the production, distribution, and consumption of commodities are human actions, and all human actions are subject to the moral law. It is possible to produce, distribute, and consume commodities, rightly or wrongly, and the moral law prescribes that those actions should be done rightly. Whether you eat or drink or whatever else you do, do all to the glory of God, says St Paul, and he is merely teaching a precept of natural ethics. All deliberate human action must be conformed to the supreme rule of all moral action; it must be conformed to the end of human existence and of human life.

But is there any definite rule of morality which tells us when buying and selling are conformed or not to the end of all human action? St Thomas and Catholic theologians answer this question in the affirmative, and their arguments show that they rest their conclusion on the law of right reason and nature. They use the arguments of Aristotle, Cicero, and other non-christian writers, and they confirm them by the teaching of Holy Scripture. I will try to state the Catholic doctrine as concisely as I can. A society is necessary in order that exchange of commodities may take place. Robinson Crusoe in his solitude had to satisfy his wants as far as he could by his own labour. He had to make his own clothes, obtain his own food, build his own hut. But when a number of families are grouped together the advantages derived from division of labour become apparent. One man takes to making clothes, another becomes the carpenter, another the smith, another an agriculturist, and so on. Money is soon invented and commerce arises. The different members of the society produce commodities not only for their own consumption, but for others. By exchanging their productions for those of others or by buying and selling they can satisfy their various wants. They produce with a view to this. They know beforehand what they can get for a garment, or a knife, or a measure of milk. The value of every commodity which is bought and sold is put on it by the community. What the fair and reasonable price of all that is bought and sold may be is matter of common estimation and common knowledge. This is a fact of experience and it is not limited to primitive village communities. It is valid for the complicated circumstances of modern English commercial life.

According to the Sale of Goods Act, 1893, if the price of what has been sold is not otherwise determined, the buyer must pay a reasonable price, obviously implying that it is not difficult to determine what a reasonable price is. The same was clearly implied by the Profiteering Act of 1919. Society, then, makes the buying and selling of commodities possible; moreover, it is the social estimate which gives commodities their exchange-value, and the social estimate is the measure of that exchange-value. The course of reasoning, indicated above, by which Mr. Joseph, like other modern economists, strives to settle the question of exchange-value, is beside the mark. It discusses the matter as if it concerned individual buyers and sellers, and comes to the conclusion that price is subjective and individualistic, whereas it is social in its origin, and depends on a social estimate for its very existence and measure. Every commodity, then, that is commonly bought and sold has a more or less definite exchange-value or price, and this is given to it, is put upon it by the common estimate in the place, time, and other circumstances of the sale.

Now, justice demands that everyone should have what belongs to him or its equivalent. And so in the contract of buying and selling justice requires that after the contract the parties should have the same exchange-values as they had before. Both, indeed, gain in usefulness from the contract. If a man buys a spade for ten shillings he does so because the spade will be of more use to him than the money. He gains, therefore, in use-value, but if he has not paid an unjust price for the spade he has the same exchange-value as before. This distinction is made by Aristotle, and it is fundamental in the whole question. It is lost sight of by Mr. Joseph and by other modern economists in their discussion of this question. The price, then, of commodities is not something arbitrary, subjective, and individualistic. It is fixed within certain limits, objective because social and not individualistic. Buying and selling, therefore, though a matter of economics, is also a matter of ethics, it is subject to the law of justice. St Thomas teaches that it is also subject to the law of charity. The law of charity to our neighbour is summed up in the maxim—Do to others as you would be done by. The rule was well known to the ethical writers of antiquity, and it is enunciated in the Old and New Testament. It is a fundamental rule of natural morality. Nobody likes, as a general rule, to give more for a commodity than it is worth. Do, then, as you would be done by, and do not sell a commodity for more than it is worth according to the common estimate.

There is, then, a fair, reasonable, and just price for things which are commonly bought and sold. Justice and charity are violated by demanding more or giving less than the just price. We should all be better, happier, and more contented if this moral rule were more strictly observed than it is in modern business relations.