The Promises Men Live By
by
[Random House, $3.00]
‘How,’ Mr. Scherman asks, ‘can a tariff on bread ever be acquiesced in, as it has been, by those who have to pay the extra price of it? The answer is obvious. Those most concerned do not know what is happening. They are totally unaware of the injury being done them, or of the greater benefit to be obtained by a different course of action.’ To do his part in altering this condition, to destroy ignorance and give light, he has written this book, ‘a new approach to economics.’ The approach is new because Mr. Scherman does not attempt so much to give clear definition to the terms of the economist as to define the actualities hidden in the terms. It is a difficult job, and well done.
I am so sympathetic to the conclusion quoted above, and to many others in this book, that I hesitate to record my dissent, which is with his premise: Mr. Scherman strips away layer after layer of words and discovers that the central relationship between human beings, as citizens, is a promise. A dairy delivers several quarts of milk to my house each day because it has my (unwritten) promise to pay at the end of the month. The man digging in my garden gives me his labor in exchange for my promise, also. In all types of promises an exchange is essential, and by tracing this exchange through our lives Mr. Scherman comes to the conclusion that production is based on the possibility of exchange, that profit comes from exchange (not from ‘price’), and that whatever blocks exchange is socially undesirable.
And what does block exchange? A government may do it by a prohibitive tariff; a monopoly may do it by a prohibitive price. In both cases the general welfare is sacrificed for a partial advantage, a short-term benefit or a gain to a small group. But there are other blocks. If I fail to pay my milk bill for two months, I shall get no milk; if a government refuses to pay its debts, it will have a hard time getting credit. And governments are notoriously dishonest. They ‘can invent words . . . like “devaluation” . . . [but] the stark fact is that every important sovereign government . . . since 1929 wiped out a good part of its promises by this device. . . . Our own nation, let it stand forever to our shame, was among these respectable pocket-pickers.’
I have been called, at worst, only a ’mild inflationist,’so this conclusion of Mr. Scherman does not anger me. Yet I find that my quarrel with his first pages makes me unsympathetic to his attack upon defaulting governments. The quarrel is simply that I do not believe that promises are the things men live by. They are an essential in the way we live, but we have to analyze them. As a consumer, a laborer, and an employer, I enter into three sets of promises, true; but the promise I make my gardener is totally different from the one I make my employer; for I can engage one of fifty gardeners, and am free in that negotiation, but I cannot, except in theory, engage myself to one of fifty employers, and am therefore compelled. Mr. Scherman has driven off the ‘economic man’ of the theorists; his promise is a human relationship; but abstraction has betrayed him. Every man who has to have a job in order to live knows that he is not exchanging promises with his employer; he is accepting terms.
Mr. Scherman says that, to our shame, we devalued; but in another place he says ‘governments always represent — they are, indeed, nothing but, — predominating groups within the population.’ Now predominating groups have always altered the value of money to suit themselves or taken advantage of alterations caused by others. Deflation, like inflation, is a change in value, and refusing to inflate may make me pay a thousand bushels of wheat or a thousand days’ labor when I had contracted to pay but five hundred, although the ' value ’ of currency remains untouched. There is something noble about ‘resumption of specie payment,’ but to the man with a handful of greenbacks it is ‘tampering’ of the worst sort. The kind of tampering we are afraid of is, of course, the kind which lowers the value of what we possess and of what is owed to us, and I suspect that morality has been dragged into the subject because devaluation has hurt the moralists.
There my quarrel with Mr. Scherman ends. It is serious. But it does not affect my admiration for the passion and clarity of his analysis, nor does it diminish my enthusiasm for his major conclusion. For Mr. Seherman does not want to see liberty destroyed, and he does see the connection between prosperity and freedom. I think he suspects government more than I do; I know that when he says our ‘immediate enemies remain, as they have always been,' our rulers, he is thinking of Washington and not of the ‘predominating groups’ which government always represents. But he is against tyranny and he is for distribution, of knowledge and of the satisfactions of life, so substantially he must let me agree with him, even if he does not agree with me.
GILBERTSELDES