THE phrase ethics of business means right conduct in business, not merely as a possibility or a desirability, but as an actuality; not as a dream of Utopia, but as the notion of conduct by which the relations of business men with each other, and with the community, are actually regulated at any given moment. Its gist is to-day, and long has been, the belief that the individual may rightly and justifiably promote his economic welfare in any way which the law as enforced by the courts does not explicitly prevent. It is negative rather than positive, specifying what the individual may not do, instead of what he may. To sell as dearly as possible, to buy as cheaply as possible, both produce and labor, are its maxims. Business is a bargain whose only requirement is that both parties be satisfied; it is a sort of fight where each individual has the same opportunities to help himself, and where the state merely undertakes to prevent actual foul play.

Of late, this existing ethics of business has been more and more frequently held responsible for many of the most serious economic, political, and social evils. Clearly, problems growing out of the existence of railroads, trusts, banks, the stock-market, -'big business,' result from the relation of business men with each other. Prices result from the contact of manufacturer, retailer, and consumer; while the relations of manufacturer and employee bring promptly to the fore such burning issues as the hours of labor,

wages, the closed shop, strikes, childlabor, and many more. Moreover, it is true that in the last analysis all these questions are psychological rather than economic, ethical rather than social. Their decision also will rest upon a standard of right conduct; for the laborer's proportionate share of the profits of production, the standard of living involved in the demand for a minimum wage, for a maximum length of the working-day, are all dependent upon the denial of the justifiability of paying as little as a man will work for, of allowing him to work as long as he will,-upon a denial of the rightness of the present ethics of business. In fact, it is hardly an exaggeration to say that every issue now largely discussed by the public is one which can be decided only by agreeing upon a standard of right and wrong.

It is, therefore, an exceedingly striking and significant fact that upon the ethical issue the warring parties fundamentally disagree. On the one hand, we find the business men firm in the belief that the great majority of transactions have been, and are, just and equitable, and according to all reasonable standards of right conduct. On the other hand, their accusers stand, equally insistent that the business men have done wrong, and loudly demanding legislation, constitutional amendments, and new political devices to make such conduct impossible in the future. It is not less remarkable that neither of the combatants seems to be conscious that the disagreement is

fundamental. In fact, the reformers are rather inclined to insist that the present standards of conduct in business proceed mainly from the intentional dishonesty of a few men who could be punished by the courts, thereby putting an end to the entire trouble, if the judges were not equally venal. They thus give the impression that the difficulty is superficial and in the main the work of a few individuals. Nor will they accept a denial as conclusive of anything but guilt.

The issue, thus misunderstood, has been raised by the discussions of the presidential campaign into a matter of national significance, and the rectitude or turpitude of business conduct is fast becoming the dominant note in discussions about the tariff, the railroads, the recall of judges, the initiative and referendum. It seems almost as if the strenuous declarations of the radicals, and the articles in some magazines, were fast creating in the public mind by the mere force of reiteration a growing conviction that business has been, and in the main still is, dishonest. The main difficulty the disagreethe disagreement on the vital and fundamental fact of what business ethics ought to be is accentuated by the failure of the average business man, and of the average reformer alike, fully to understand what the present ethics of business is, what its history has been, and what sanctions of tradition, law, philosophy, logic, and theology stand behind it. They do not thoroughly grasp the fact that the first step in reform is not vilification of the superficial, but comprehension of the fundamental. We shall not need to resort to the distortions of fact so common among the exponents of the materialistic theory of history, to find the past crowded with so many data adequately explaining the existence of the ideas of right conduct now prevalent in business, that a brief

article will barely permit their enumeration without the inevitable qualification or necessary proof which a scientific historian would demand. In fact, adequately to demonstrate the reasons for the present situation would be to write a history of the legal, social, philosophical, and ethical concepts of the race.

The earliest form of society of which we have definite traces in Europe was that of a 'family' composed of the actual or supposed descendants from a common mother. On this blood relationship, real or fictitious, were formed all the social units known to historic antiquity. Within these units, the blood-tie imposed upon the individual definite obligations toward the other members; toward aliens, the non-kin, the barbarians of the Greek writers, the individual assumed no obligations at all. In a primitive society whose ideas of private ownership of personal property were rudimentary, and whose ideas of property in land were nonexistent, and who still ate, like the Spartans, at a common table, the barter which went on was not considered trade, and was really inconsiderable in

amount.

Trade in antiquity took place between families, clans, cities, between the groups of blood-kin, and the merchant was always an alien. The only ethical or moral notions primitive man had did not apply to trade. The merchant was outside the pale; they might do to him or he to them anything either could. Trade was therefore dangerous. Phoenician and Greek merchants piled goods on the beach and retired to the long black ships; the natives, who refused to come out of the woods till the dreaded merchants had pulled offshore, then appeared, inspected the pile, made one of their own, and sought again the safety of the woods. The Greeks rowed in, looked over what was

majority of the towns, and administered with regularity and some uniformity by a well-known series of courts; a special house of merchants was for a time added to the national assembly in order to insure their payment of taxes.

Within the towns, the guild merchants and the craft guilds produced a series of rigid rules governing prices, wages, and all buying and selling, aimed wholly at aggrandizing themselves at the expense of the countryfolk who sold produce to them, and of the nobles who bought their silks and broadcloths. There was one price at which the guild member bought, and a higher at which the outsider purchased; but the latter must sell to the former for less than the guild allowed him to sell for to any one else in the market. Each market-day the mayor or wardens fixed all prices for all goods displayed. When the first bell rang the citizens might buy; after the second, if anything was left, others might buy.

The regulation of trade in all its branches was thus left for centuries in the hands of the merchants themselves, who naturally shaped its laws and its ethics in accordance with the feudal attitude toward it as a subject which really concerned no one but themselves, and which might very well therefore be regulated in their interest. With this Law Merchant and its courts, the royal courts the King's Bench, Common Pleas, and Exchequer - had nothing to do until the seventeenth century; and not, indeed, till the eighteenth century did Lord Mansfield really 'create' the present common law of trade by accepting much of the old Law Merchant and amalgamating it with the practices and dicta of the common law. Is it not a fact of extreme significance to the student of the present notion of business ethics that for only a little more than a century has the merchant been deprived en

tirely of his own law and his own courts? Is it, after all, so very remarkable that business men still think that their notions of right conduct, and not those of the general public, should regulate commercial transactions?

When, however, the mercantile community was firmly subject to the common law and its courts, the judges began to apply to the relations of merchants with each other, and with their customers, the same notion of individual freedom already worked out by generations of judges for other cases - the idea that the individual might do everything he pleased until he infringed some one else's rights sufficiently to cause the latter to sue him for redress in court. Remedy for infringement of another's rights would not be given, however, until the accuser actually demonstrated to the satisfaction of the court a breach of some explicit law; and, what was more, until he proved a substantial injury.

The common law was negative and not positive: it enumerated no general categories of acts which were legal, or ethical concepts by which right could be distinguished from wrong, but merely listed certain specific acts which were illegal. All else was permissible; the individual must act at his peril. He was safe-guarded, indeed, by the fact that the courts would not of themselves investigate his behavior, nor use their own knowledge of the law, or of his acts, against him: they would hold him guiltless until the accuser actually demonstrated in court an offense punishable by law, and actually proved his injury existent. One famous judge even went so far as to declare that if he saw a man commit murder and knew that he was the only witness, it would be his duty to acquit the man in court. The defendant at law was liable, not for what he had done, but for what the plaintiff could prove he had done.

Indeed, to break the law was not reprehensible or punishable; and the dialecticians eagerly argued that a crime unproven was no crime at all. Surely here are the clear outlines of the present notions of ethics as understood by the business world.

From the premises of the intellectual and philosophical revolution of the last four centuries this conception has drawn the subtlest of confirmations, partly from a misconception of the ideas of great thinkers, partly from the dissociation of those ideas from the general field of speculative thought to which they were intended to apply. It should never be forgotten that the force which has moulded history has been not so much the truth itself, what honest and sincere men understood to be the truth.

as

The basis of nearly all modern thought has been the individual, but at no epoch of recorded history has the individual held such prominence as during the Renaissance. In the attempt to free him from the restraints imposed by feudalism, the scholastic philosophy and theology, the guild and open-field systems, he was left without any restraint at all except the opposition he would naturally meet from other individuals. The means which most quickly and surely attained the end in view were those most applauded and approved; the possible became synonymous with the right; and men whose familiar weapons were assassination and poison can hardly have had scruples about misrepresentation of goods, under-selling, and low wages. The possession of wealth was the evidence of the possession of ability, and therefore of virtue.

From the Reformation came an entirely different, but not less powerful, sanction which appealed to another section of the community. The Renaissance sanctioned the ethics of business

as profitable; the Reformation added the weight of scriptural authority. It taught the individual that he was justified by faith alone; that he stood 'naked before God,' with none to help him; that with his own hands and his own learning he must save his soul. It told him, that, when wallowing in the Slough of Despond, he would find in the Bible an infallible counsel and direction which God had Himself given man for every emergency. The Puritan, thus seeking God's guidance in his daily tasks, found in Old Testament and New alike many a story of business dealing which explicitly showed patriarchs and prophets engaged in aggrandizing their personal fortunes by the same methods which his unconscious and instinctive preferences indicated to him, but which he could not accept without warrant of God's law. The Bible, in fact, was a vivid record of the primitive notion of trade, and based the conception of its ethics upon the blood-kin. The old sanctions, long dead, were thus revived by the literal acceptance of the Scriptures. In fact, the Puritans of New England became noted for real piety and scrupulous morality and for exceptionally sharp dealing in business, stretching at times to practices which less ostentatiously pious people began to stigmatize as 'ungodly.'

To the support of theology came philosophy and logic, teaching that the good of the individual was supreme. Metaphysical distinctions and assumptions the average man understood little or not at all, but he did distinctly obtain a strong confirmation of his own idea that the pursuance of his own selfish ends in any possible way was justifiable, and indeed, that in their fulfillment lay the reason for society's existence. Hobbes and Locke explicitly said that the state was created by the individual for the furtherance of