Social Process

Chapter 27: The Sphere of Pecuniary Valuation

Charles Horton Cooley

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IT seems that the distinctive function of money valuation is to generalize or assimilate values through a common measure. In this way it gives them reach and flexibility, so that many sorts of value are enabled to work freely together throughout the social system, instead of being confined to a small province. And since values represent the powers of society, the result is that these powers are organized in a large way and enabled to cooperate in a vital whole. Any market value that I, for instance, may control ceases to be merely local in its application and becomes a generalized force that I can apply anywhere. If I can earn a thousand dollars teaching bacteriology, I can take the money and go to Europe, exchanging my recondite knowledge for the services, say, of guides in the Alps, who never heard of bacteriology. Other values are similarly generalized and the result is a mobility that enables many sorts of value, reduced to a common measure, to be applied anywhere and anyhow that the holder may think desirable.

We have, then, to do with a value institution or process, far transcending in reach any special sort of value, and participating in the most diverse phases of our life. Its

(310) function resembles that of language, and its ideal may be said to be to do for value what language does for thought -furnish a universal medium of communicative growth. And just as language and the social organization based upon it are extended in their scope by the modem devices of cheap printing, mails, telegraphy, telephones, and the like, so the function of pecuniary valuation is extended by uniform money and by devices for credit and transfer, until the natural obstacles of distance, lack of knowledge, and lack of homogeneity are largely overcome.

This mobilization of values through the pecuniary measure tends to make the latter an expression of the total life of society, so far as the values that stand for this life have actually become mobilized or translated into pecuniary terms. Although this translation is in fact only partial and, as I have tried to show, institutional, still the wide scope of pecuniary value, along with its precision, gives it a certain title to its popular acceptance as Value in a sense that no other kind of value can claim.

This also gives it that place as a regulator of social activity which economists have always claimed for it. Pecuniary value provides a motive to serve the pecuniary organism, a motive that penetrates everywhere, acts automatically, and adjusts itself delicately to the conditions of demand and supply. If more oranges are wanted in New York, a higher price is offered for them in California and Sicily; if more dentists are needed, the rewards of the profession increase and young men are attracted into it. Thus there is everywhere an inducement to supply those goods and services which the buying power in society thinks it wants, and this inducement largely guides production. At each point of deficient supply a sort of

( 311) suction is set up to draw available persons and materials to that point and set them to work.

Thus our life, in one of its main aspects, is organized through this central value institution or market, very much as in other aspects it is organized through language, the state, the church, or the family.

It will be well to consider here the view that the sphere of pecuniary value, however wide, is yet distinctly circumscribed and confined to a special and, on the whole, inferior province of life. According to this view only the coarser and more material values can be measured in money, while the finer sorts, as of beauty, friendship, righteousness, and so on, are in their nature private and untranslatable, and so out of the reach of any generalizing process.

It seems doubtful whether we can admit that there is any such clear circumscription of the pecuniary field. All values are interrelated, and it may reasonably be held that none can stand apart and be wholly incommensurable with the others. The idea of a common measure which, for certain purposes at least, may be applied to all values is by no means absurd. The argument that such a measure is possible may be stated somewhat as follows.

Since the function of values is to guide conduct, they are in their nature comparable. Conduct is a matter of the total or synthetic behavior of a living whole in view of a situation: it implies the integration of all the motives bearing on the situation, Accordingly when a crisis in conduct arises the values relating to it, no matter bow incommensurable they may seem, are in some way brought to a common measure, weighed against one

( 312) another, in order to determine which way the scale inclines. This commensuration is psychical, not numerical, and we are far from understanding its exact nature, but unless each pertinent kind of value has a part in it of some sort it would seem that the mind is not acting as a vital whole. If there were absolute values that cannot be impaired or in any way influenced by the opposing action of other values, they must apparently exist in separate compartments and not in organic relation to the rest of the mind. It does not follow that what we regard as a high motive, such as the sense of honor, must necessarily be overcome by a sufficient accumulation of lower motives, such as sensuous desires, but we may be prepared to find that if the two are opposed the latter will, in one way or another, modify the conduct required by the former, and this I believe is usually the fact. Thus suppose a lower value, in the shape of temptation, is warring against a higher in the shape of an ideal. Even if we concede nothing to the former, even if we react far away from it, none the less it has entered into our life and helped to mould it-as sensuality, for example, helps to mould the ascetic.

And this weighing of one kind of value against another will take place largely in terms of money, which exists for the very purpose of facilitating such transactions. Thus honor is one of those values which many would place outside the pecuniary sphere, and yet honor may call for the saving of money to pay a debt, while sensuality would spend it for a hearty dinner. In this case, then, we buy our honor with money, or we sell it, through money, for something lower. In much the same way are the larger choices of society, as, for example, between power devoted to education and power devoted to war-

( 313) -ships, expressed in pecuniary terms. In general we do, in fact, individually and collectively, weigh such things as friendship, righteousness, and beauty against other matters, and in terms of money. Beauty is on the market, however undervalued, in the form, for example, of music, art, literature, flowers, and dwelling-sites. A friendly personality has a market value in salesmen, doctors, writers, and teachers; indeed in all occupations where ability to influence persons is important-and there are few in which it is not. I notice that if there is anything attractive about a man he soon learns to collect pay for it. And not less is it true that the need for righteousness finds expression in a willingness to pay a (reasonable) price for it in the market-place. Convincing preachers and competent social workers command salaries, and great sums go to beneficent institutions.

The truth is that the values we think of as absolute are only, if 1 may use the expression, relatively absolute. That is, they so far transcend the values of every-day traffic that we think of them as belonging to a wholly different order, but experience shows that they do not. Life itself is not an absolute value, since we constantly see it sacrificed to other ends; chastity is sold daily by people not radically different in nature from the rest of us. and as for honor it would be hard to imagine a kind which might not, in conceivable situations, be renounced for some other and perhaps higher aim. The idea of the baseness of weighing the higher sort of values in the same scale with money rests on the assumption that the money is to be used to purchase values of a lower sort; but if it is the indispensable means to still higher values we shall justify the transaction. Such exchanges are constantly taking place: only those who are protected by pecuniary

( 314) affluence can imagine otherwise. The health of mothers is sacrificed for money to support their children, and the social opportunities of sisters given up to send brothers to college. In the well-to-do classes, at least, the life of possible children is often renounced on grounds of expense.

There are, no doubt, individuals who have set their hearts on particular things for which they will sacrifice without consideration almost anything else. These may be high things, like love, justice, and honor; they are often ignoble things, like avarice or selfish ambition. And, in a similar way, nations or institutions sometimes cherish values which are almost absolute, like those of national independence, or the authority of the Pope. But in general we may say that if X and Y be among our most cherished objects, then situations may occur where, through the medium of money, some sacrifice of X will be made for the sake of Y.

I conclude, then, that it is impossible to mark off sharply the pecuniary sphere from that of other kinds of value. It is always possible that the highest as well as the lowest things may be brought within its scope.

And yet we all feel that the pecuniary sphere has limitations. The character of these may be understood, I think, by recurring to the idea that the market is a special institution in much the same sense that the church is or the state. It has a somewhat distinct system of its own in society at large much as it has in the mind of each individual. Our buyings and sellings and savings, our pecuniary schemes and standards, make in some degree a special tract of thought that often seems unconnected with other tracts. Yet we constantly have to bring the ideas of this tract into relation with those outside it; and likewise in society the pecuniary institution is in

( 315) constant interaction with other institutions, this interaction frequently taking the form of a translation of values. In general the social process is an organic whole somewhat clearly differentiated into special systems, of which the pecuniary is one.

There are many histories that fall mainly within this system and must be studied chiefly from the pecuniary point of view, not forgetting, however, that no social history is really understood until it is seen in its place as a phase of the general process. The histories I mean are those that have always been regarded as the peculiar business of the economist: the course of wheat from the grain-field to the breakfast-table, or of iron from the mine to the watch-spring, the growth of the social organizations created for purposes of manufacture, trade, banking, finance, and so on. There are other histories, like those of books, educational institutions, religious faith, scientific research, and the like, which must be understood chiefly from other points of view, although they are never outside the reach of pecuniary relations.

To say, then, that almost any kind of value may at times be measured in pecuniary terms is by no means to say that the latter are a universal and adequate expression of human nature and of society. On the contrary, pecuniary value is, in the main, a specialized type of value, generated within a specialized channel of the social process, and having decided limitations corresponding to this fact. I shall try to indicate a little more closely what some of these limitations are.

Let us notice, in the first place, that the pecuniary values of to-day derive from the whole past of the pecuniary system, so that all the wrongs that may have worked themselves into that system are implicit in them. If a

( 316) materialized ruling class is in the saddle, this fact will be expressed in the large incomes of this class and their control not only of the mechanism of the market but, through prestige, of the demand which underlies its values. If drink, child labor, prostitution, and corrupt politics are part of the institution, they will be demanded upon the market as urgently as anything else. Evidently it would be fatuous to assume that the market process expresses the good of society. The demand on which it is based is a turbid current coming down from the past and bearing with it, for better or worse, the outcome of history. All the evils of commercialism are present in it, and are transmitted through demand to production and distribution. To accept this stream as pure and to reform only the mechanism of distribution would be as if a city drawing its drinking-water from a polluted river should expect to escape typhoid by using clean pipes. We have reason, both in theory and in observation, to expect that our pecuniary tradition, and the values which express it, will need reform quite as much as anything else.

Indeed we cannot expect, do what we may to reform it, that the market can ever become an adequate expression of ideal values. It is an institution, and institutional values, in their nature, are conservative, representing the achieved and established powers of society rather than those which are young and look to the future. The slow crystallization of historical tendencies in institutions is likely at the best to lag behind our ideals and cannot be expected to set the pace of progress.

Suppose, however, we assume for the time being that demand does represent the good of society, and inquire

(317) next how far the market process may be trusted to realize this good through the pecuniary motive.

It seems clear that this motive can serve as an effective guide only in the case of deliberate production, for the sake of gain, and with ownership in the product. The production must be deliberate in order that any rational motive may control it, and the pecuniary motive will not control it unless it is for the sake of gain and protected by ownership. These limitations exclude such vast provinces of life that we may well wonder at the extent of our trust in the market process.

They shut out the whole matter of the production and development of men, of human and social life; that is, they indicate that however important the pecuniary process may be in this field it can never be trusted to control it, not even the economic side of it. This is a sphere in which the market must be dominated by other kinds of organization.

If we take the two underlying factors, heredity and environment, as these mould the life of men, we see that we cannot look to the market to regulate the hereditary factor as regards either the total number of children to be born, or the stocks from which they are to be drawn. I know that there are men who still imagine that "natural selection," working through economic competition, operates effectively in this field, but I doubt whether any one knows facts upon which such a view can reasonably be based. In what regards population and eugenics it is more and more apparent that rational control and selection, working largely outside the market process, are indispensable.

The same may be said of the whole action of environment in forming persons after birth, including the family,

(318) the community, the school, the state, the church, and the unorganized working of suggestion and example. None of these formative agencies is of a nature to be guided adequately by pecuniary demand. The latter, even if its requirements be high, offers no guarantee that men will be produced in accordance with these requirements, since it does not control the course of their development.

Let us observe, however, that even in this field the market may afford essential guidance to other agencies of control. If, for example, certain kinds of work do not yield a living wage, this may be because the supply of this kind of work is in excess, and the state or some other organization may proceed on this hint to adjust supply to demand by vocational training and guidance. Or the method of reform may be to put restrictions upon demand, as in the case of the minimum wage. Although the market process is inadequate alone, it will usually have some share in any plan of betterment.

Personal and social development must, in general, be sought through rational organization having a far wider scope than the market, though co-operating with that in every helpful way, and including, perhaps, radical reforms in the pecuniary system itself. It would be hard to formulate a principle more fallacious and harmful than the doctrine that the latter is an adequate regulator of human life, or that its own processes are superior to regulation. We are beginning to see that the prevalence of such ideas has given us over to an unhuman commercialism.

What I have been saying of persons and personal development applies also to natural resources and public improvements, to arts, sciences, and the finer human

( 319) values in general. All these have a pecuniary aspect, of more or less importance, but a money demand alone cannot beget or control them. Love, beauty, and righteousness may come on the market under certain conditions, but they are not, in the full sense, market commodities. Our faith in money is exemplified in these days by the offer of money prizes for poetry, invention, the promotion of peace, and for heroic deeds. I would not deprecate such offers, whose aim is excellent and sometimes attains the mark. They are creditable to their authors and diffuse a good spirit even though the method is too naive to be very effectual. If money is greatly to increase products of this kind it must be applied, fundamentally and with all possible wisdom, to the conditions that mould character.

These higher goods do not really come within the economic sphere. They touch it only incidentally, their genesis and interaction belonging mainly to a different kind of process, one in which ownership and material' exchange play a secondary part. The distinctively economic commodities and values are those whose whole course of production is one in which the factors are subject to legal ownership and controlled by a money-seeking intelligence, so that the process is essentially pecuniary. Thus we may say that ordinary typewriting is economic, because it is a simple, standard service which is supplied in any quantity according to demand. The work of a newspaper reporter is not quite so clearly economic, because not so definitely standardized and affording more room for intangible merits which pay cannot insure. And when we come to magazine literature of the better sort we are in a field where the process is for the most part non-pecuniary, depending, that is, on an interplay

( 320) of minds outside the market, the latter coming in only to set its very questionable appraisal on the product. As to literature in general, art, science, and religion, no one at all conversant with the history of these things will claim that important work in them has any close relation to pecuniary inducement. The question whether the great man was rich and honored, like Rubens, or worked in poverty and neglect, like Rembrandt in his later years, is of only incidental interest in tracing the history of such achievement. The ideals and disciplines which give birth to it are generated in non-pecuniary tracts of thought and intercourse, and unless genius actually starves, as it sometimes does, it fulfils its aim without much regard to pay. I need hardly add that good judges have always held that a moderate poverty was a condition favorable to intellectual and spiritual achievement.

I would assign a very large and growing sphere to pecuniary valuation, but we cannot be too clear in affirming that even at its best and largest it can never be an adequate basis for general social organization. It is an institution, like another, having important functions but requiring, like all institutions, to be brought under rational control by the aid of a comprehensive sociology, ethics, and politics. It has no charter of autonomy, no right to exemption from social control.

Thus even if market values were the best possible of their kind, we could not commit the social system to their charge, and still less can we do so when the value institution (?wing to rapid and one-sided growth, is in a somewhat confused and demoralized condition. Bearing with it not only the general inheritance of human imperfection but also the special sins of a narrow and somewhat

( 321) inhuman commercialism, it by no means reflects life in that broad way in which a market, with all its limitations, might reflect it. The higher values remain for the most part untranslated, even though translatable, and the material and technical aspects of the process have acquired an undue ascendancy. In general this institution, like others that might be named, is in such a condition that its estimates are no trustworthy expression of the public mind.

Having in mind these general limitations upon the sphere of pecuniary value, let us consider it more particularly as a motive to stimulate and guide the work of the individual. For this purpose we may distinguish it broadly from the need of self-expression, using the latter comprehensively to include all other influences that urge one to productive work. Among these would be emulation and ambition, the need of activity for its own sake, the love of workmanship and creation, the impulse to assert one's individuality, and the desire to serve the social whole. Such motives enter intimately into one's self-consciousness and may, for our present purpose, be included under the need of self-expression.

It is true that the pecuniary motive may also be, indirectly, a motive of self-expression; that is, for example, a girl may work hard for ten dollars with which to buy a pretty hat. It makes a great difference, however, whether or not the work is directly self-expressive, whether the worker feels that what he does is joyous and rewarding in itself, so that it would be worth doing whether he were paid for it or not. The artist, the poet, the skilled craftsman in wood and iron, the born teacher or lawyer, all have this feeling, and it is desirable that it should be-

( 322) -come as common as possible. I admit that the line is not a sharp one, but on the whole the pecuniary motive may be said to be an extrinsic one, as compared with the more intrinsic character of those others which I have called motives of self-expression.

When I say that self-expression is a regulator of productive activity I mean that, like the pecuniary motive, though in a different way, it is the expression of an organic whole, and not necessarily a less authoritative expression. What a man feels to be self-expressive springs in part from the instincts of human nature and in part from the form given to those instincts by the social life in which his mind develops. Both of these influences spring from the organic life of the human race. The man of genius who opens new ways in poetry and art, the social reformer who spends his life in conflict with inhuman conditions, the individual anywhere or of any sort who tries to realize the needs of his higher being, represents the common life of man in a way that may have a stronger claim than the requirements of pecuniary demand. As a motive it is quite as universal as the latter, and there is no one of us who has not the capacity to feel it.

As regards the individual himself, self-expression is simply the deepest need of his nature. It is required for self-respect and integrity of character, and there can be no question more fundamental than that of so ordering life that the mass of men may have a chance to find self-expression in their principal activity.

These two motives are related much as are our old friends conformity and individuality; we have to do in fact with a phase of the same antithesis. Pecuniary valuation, like conformity, furnishes a somewhat mechanical and external rule: it represents the social or-

( 323) -ganization in its more explicit and established phases, and especially, of course, the pecuniary institution, which has a life somewhat distinct from that of other phases of the establishment. It is based on those powers in society which are readily translated into pecuniary terms, on wealth, position, established industrial and business methods, and so on. Self-expression springs from the deeper and more obscure currents of life, from subconscious, unmechanized forces which are potent without our understanding why. It represents humanity more immediately and its values are, or may be, more vital and significant than those of the market; we may look to them for art, for science, for religion, for moral improvement, for all the fresher impulses to social progress. The onward things of life usually come from men whose imperious self-expression disregards the pecuniary market. In humbler tasks self-expression is required to give the individual an immediate and lively interest in his work; it is the motive of art and joy, the spring of all vital achievement.

It is quite possible that these motives should work harmoniously together; indeed they do so in no small proportion of cases. A man who works because he wants money comes, under favorable conditions, to take pleasure and pride in what he does. Or he takes up a certain sort of work because he likes it, and finds that his zeal helps him to pecuniary success. I suppose that there are few of us with whom the desire of self-expression would alone be sufficient to incite regular production. Most of us need a spur to do even that which we enjoy doing, or at any rate to do it systematically. We are compelled to do something and many of us are fortunate enough to find something that is self-expressive.

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The market, it would seem, should put a gentle pressure upon men to produce in certain directions, spurring the lazy and turning the undecided into available lines of work. Those who have a clear inner call should resist this pressure, as they always have done, and always must if we are to have progress. This conflict between the pecuniary system and the bias of the individual, though in some sort inevitable, should not be harsh or destructive. The system should be as tolerant and hospitable as its institutional nature permits. Values. like public opinion to which they are so closely related, should be constantly awakened, enlightened, enlarged, and made to embrace new sorts of personal merit. There is nothing of more public value than the higher sort of self-expression, and this should be elicited and rewarded in every practicable way. It is possible to have institutions which are not only tolerant but which, in a measure, anticipate and welcome useful kinds of non-conformity.

Pecuniary valuation, represented by the offer of wages, will never produce good work nor a contented people until it is allied with such conditions that a man feels that his task is in some sense his, and can put himself heartily into it. This means some sort of industrial democracy-control of working conditions by the state or by unions, co-operation, socialism---something that shall give the individual a human share in the industrial whole of which he is a member.

Closely related to this is the sense of worthy service. No man can feel that his work is self-expressive unless he believes that it is good work and can see that it serves mankind. If the product is trivial or base he can hardly respect himself, and the demand for such things, as Ruskin used to say, is a demand for slavery. Or if the em-

( 325) -ployer for whom a man works and who is the immediate beneficiary of his labors is believed to be self-seeking beyond what is held legitimate, and not working honorably for the general good, the effect will be much the same. The worst sufferers from such employers are the men who work for them, whether their wages be high or low.

As regards the general relation in our time between market value and self-expression, the fact seems to be something as follows: Our industrial system has undergone an enormous expansion and an almost total change of character. In the course of this, human nature has been dragged along, as it were, by the hair of the head. It has been led or driven into kinds of work and conditions of work that are repugnant to it, especially repugnant in view of the growth of intelligence and of democracy in other spheres of life. The agent in this has been the pecuniary motive backed by the absence of alternatives. This pecuniary motive has reflected a system of values determined under the ascendancy, direct and indirect, of the commercial class naturally dominant in a time of this kind. I will not say that as a result of this state of things the condition of the hand-workers is worse than in a former epoch; in some respects it seems worse, in many it is clearly better; but certainly it is far from what it should be in view of the enormous growth of human resources.

In the economic philosophy which has prevailed along with this expansion, the pecuniary motive has been accepted as the legitimate principle of industrial organization to the neglect of self-expression. The human self, however, is not to be treated thus with impunity; it is asserting itself in a somewhat general discontent and in many specific forms of organized endeavor. The com-

( 326) -mercialism that accepts as satisfactory present values and the method of establishing them is clearly on the decline and we have begun to work for a more self-expressive order.

Notwithstanding the insufficiencies of pecuniary valuation, the character of modern life seems to call for an extension of its scope: it would appear to be true, in a certain sense, that the principle that everything has its price should be rather enlarged than restricted. The ever-vaster and more interdependent system in which we live requires for its organization a corresponding value mechanism, just as it requires a mechanism of transportation and communication. And this means not only that the value medium should be uniform, adaptable, and stable, but also that the widest possible range of values should be convertible into it. The wider the range the more fully does the market come to express and energize the aims of society. It is a potent agent, and the more good work we can get it to take bold of the better. Its limitations, then, by no means justify us in assuming that it has nothing to do with ideals or morals. On the contrary, the method of progress in every sphere is to transfuse the higher values into the working institutions and keep the latter on the rise. Just as the law exists to formulate and enforce certain phases of righteousness, and is continually undergoing criticism and revision based on moral judgments, so ought every institution, and especially the pecuniary system, to have constant renewal from above. It should be ever in process of moral regeneration, and the method that separates it from the ethical sphere, while justifiable perhaps for certain technical inquiries, becomes harmful when given a

( 327) wider scope. As regards responsibility to moral requirements there is no fundamental difference between pecuniary valuation and the state, the church, education, or any other institution. We cannot expect to make our money values ideal, any more than our laws, our sermons, or our academic lectures, but we can make them better, and this is done by bringing higher values upon the market.

To put it otherwise, the fact that pecuniary values fail to express the higher life of society creates a moral problem which may be met in either of two ways. One is to depreciate money valuation altogether and attempt to destroy its prestige. The other is to concede to it a very large place in life, even larger, perhaps, than it occupies at present, and to endeavor to regenerate it by the translation into it of the higher values. The former way is analogous with that somewhat obsolete form of religion which gave up this world to the devil and centred all effort on keeping out of it, in preparation for a wholly different world to be gained after death. The world and the flesh, which could not really be escaped, were left to a neglected and riotous growth.

In like manner, perceiving that pecuniary values give in many respects a debasing reflection of life, we are tempted to rule them out of the ethical field and consign them to an inferior province. The price of a thing, we say, is a material matter which has nothing to do with its higher values, and never can have. This, however, is bad philosophy, in economics as in religion. The pecuniary values are members of the same general system as the moral and aesthetic values, and it is part of their function to put the latter upon the market. To separate them is to cripple both, and to cripple life itself by cutting

( 328) off the healthy interchange among its members. Our line of progress lies, in part at least, not over commercialism but through it; the dollar is to be reformed rather than suppressed. Our system of production and exchange is a very great achievement, not more on the mechanical side than in the social possibilities latent in it. Our next task seems to be to fulfil these possibilities, to enlarge and humanize the system by bringing it under the guidance of a comprehensive social and ethical policy.


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