of competitive examination and, after deciding the
number of applications they can pass on the basis
of the volume of resources which they can devote to
the future, award the places to those which head the
list.” Such a prospect is a nightmare of
officialism and delay. You would be driven to
formulate a simple, intelligible rule or measure, and
leave that rule to be applied by the unfettered judgment
of innumerable men to individual problems, as and
when they arose. And for such a rule or measure,
you could not do better than a rate of interest; you
would have to lay it down that only those projects
should be approved which promised a return of 6 per
cent, or whatever it might be. Even in deciding
what it should be, the limits of your choice would
be narrowly confined. If, for instance, you fixed
on 1 or 2 per cent, you would probably discover that
you had not achieved your object, that the undertakings
for distant returns which passed this test, still
consumed far more resources than you could spare.
You would be compelled then to raise the rate until
it had cut these enterprises down within manageable
limits. But, once more, what essentially would
you be doing? You would be using the instrument
of the rate of interest to adjust the demand for and
supply of capital, though indeed the interest might
not be paid away as now to private individuals.
You would be reproducing by the method of deliberate
trial and error, the adjustments which occur automatically
as things are, in the actual world. Once again
the most perfectly contrived Utopia would be compelled
to pay to the unorganized cooeperation of our epoch
the sincerest flattery of imitation.
Sec.6. The Fundamental Character of many Economic
Laws. But again perhaps a word of warning
may be desirable. There is much controversy in
these days about something called “Capitalism”
or “The capitalist system.” When
these words are used with any precision, they usually
refer to the arrangement so prevalent at present, whereby
the ownership and sole ultimate control of a business
rests with those who hold its stocks and shares.
There is much to be said upon the merits and demerits
of this system; something will perhaps be said upon
the matter in the fifth volume of this series; but
I shall not discuss it here. Nothing that I have
said so far has any real bearing on it whatsoever;
to suppose that it has, is indeed to miss the whole
point of this chapter.
The order, which I have sought to reveal, pervading
and moving the most diverse phenomena of the economic
world, would be a far less noteworthy and impressive
thing were it merely the peculiar product of capitalism.
Merchant adventurers, companies, and trusts; Guilds,
Governments and Soviets may come and go. But under
them all, and, if need be, in spite of them all, the
profound adjustments of supply and demand will work
themselves out and work themselves out again for so
long as the lot of man is darkened by the curse of
Adam.