Before business principles came to dominate everyday life the
common welfare, when it was not a question of peace and war, turned on the ease and certainty with which enough of the means of life could be supplied. Since business has become the central and controlling interest, the question of welfare has become a question of price. Under the old regime of handicraft and petty trade, dearth (high prices) meant privation and might mean famine and pestilence; under the new regime low prices commonly mean privation and may on occasion mean famine. Under the old regime the question was whether the community's work was adequate to supply the community's needs; under the new regime that question is not seriously entertained.
But the common welfare is in no less precarious a case. The
productive efficiency of modern industry has not done away with
the recurrence of hard times, or of privation for those classes
whose assured pecuniary position does not place them above the
chances of hard times. Distress may not be so extreme in modern
industrial communities, it does not readily reach the famine
mark; but such a degree of privation as is implied in the term
"hard times" recurs quite as freely in modern civilized countries
as among the industrially less efficient peoples on a lower level
of culture. The oscillation between good times and bad is as wide
and as frequent as ever, although the average level of material
well-being runs at a higher mark than was the case before the
machine industry came in.
This visible difference between the old order and the new is
closely dependent on the difference between the purposes that
guide the older scheme of economic life and those of the new. Under the old order, industry, and even such trade as there was, was a quest of livelihood; under the new order industry is directed by the quest of profits. Formerly, therefore, times were good or bad according as the industrial processes yielded a sufficient or an insufficient output of the means of life. Latterly times are good or bad according as the process of business yields an adequate or inadequate rate of profits. The controlling end is different in the present, and the question of welfare turns on the degree of success with which this different ulterior end is achieved. Prosperity now means, primarily, business prosperity; whereas it used to mean industrial sufficiency.
A theory of welfare which shall account for the phenomena of
prosperity and adversity under the modern economic order must, accordingly, proceed on the circumstances which condition the modern situation, and need not greatly concern itself with the range of circumstances that made or marred the common welfare under the older regime, before the age of machine industry and business enterprise.(1*) Under the old order, when those in whose hands lay the discretion in economic affairs looked to a livelihood as the end of their endeavors, the welfare of the community was regulated "by the skill, dexterity, and judgment with which its labor was generally applied."(2*) What would mar this common welfare was the occasionally disastrous act of God in the way of unpropitious seasons and the like, or the act of man in the way of war and untoward governmental exactions. Price variations, except as conditioned by these untoward intrusive agencies, had commonly neither a wide nor a profound effect upon the even course of the community's welfare. This holds true, in a general way, even after resort to the market had come to be a fact of great importance in the life of large classes, both as an outlet for their products and as a base of supplies of consumable goods or of raw materials, - as in the better days of the handicraft system.
Until the machine industry came forward, commerce (with its
handmaiden, banking) was the only branch of economic activity
that was in any sensible degree organized in a close and
comprehensive system of business relations. "Business" would then
mean "commerce," and little else. This was the only field in
which men habitually took account of their own economic
circumstances in terms of price rather than in terms of
livelihood. Price disturbances, even when they were of
considerable magnitude, seem to have had grave consequences only
in commerce, and to have passed over without being transmitted
much beyond the commercial houses and the fringe of occupations
immediately subsidiary to commercial business.