Saturday, October 30, 2010

William Graham Sumner (1840-1910)

William Graham Sumner
On this date 170 years ago, sociologist and economic historian William Graham Sumner was born. Sumner was an intriguing thinker who trained as an Episcopalian clergyman who sadly seemed to lose his faith in Christ and went on to teach at Yale for decades. Among his students were economists Irving Fisher and Thorstein Veblen. As a promoter of social darwinism, he certainly was not perfect, but who is? He was a classical liberal who favored economic liberty, free trade, and a gold standard, and advocated an anti-imperialist foreign policy, publicly opposing the Spanish-American War.

I have always had a soft spot for Sumner because his essay "The Forgotten Man" made a great impression upon me after I first discovered it by accident as an undergraduate student in my college's library. In this essay, written in 1883, Sumner lays bare the problems of income redistribution. In the third paragraph Sumner sets up the issue of his investigation.
As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X or, in the better case, what A, B and C shall do for X. As for A and B, who get a law to make themselves do for X what they are willing to do for him, we have nothing to say except that they might better have done it without any law, 'but what I want to do is to look up C. I want to show you what manner of man he is. I call him the Forgotten Man. Perhaps the appellation is not strictly correct. He is the man who never is thought of. He is the victim of the reformer, social speculator and philanthropist, and I hope to show you before I get through that he deserves your notice both for his character and for the many burdens which are laid upon him.
Later in the same essay Sumner makes the key economic observation that capital expended one way cannot be expended in another. Capital is scarce and its use incurs an opportunity cost. With this in mind, Sumner proceeds to explain the consequences of unwise philanthropy by looking at how its consequences fall on the Forgotten Man.
Now who is the Forgotten Man? He is the simple, honest laborer, ready to earn his living by productive work. We pass him by because he is independent, self-supporting, and asks no favors. He does not appeal to the emotions or excite the sentiments. He only wants to make a contract and fulfill it, with respect on both sides and favor on neither side. He must get his living out of the capital of the country. The larger the capital is, the better living he can get. Every particle of capital which is wasted on the vicious, the idle, and the shiftless is so much taken from the capital available to reward the independent and productive laborer. But we stand with our backs to the independent and productive laborer all the time. We do not remember him because he makes no clamor; but I appeal to you whether he is not the man who ought to be remembered first of all, and whether, on any sound social theory, we ought not to protect him against the burdens of the good-for-nothing. In these last years I have read hundreds of articles and heard scores of sermons and speeches which were really glorifications of the good-for-nothing, as if these were the charge of society, recommended by right reason to its care and protection. We are addressed all the time as if those who are respectable were to blame because some are not so, and as if there were an obligation on the part of those who have done their duty towards those who have not done their duty. Every man is bound to take care of himself and his family and to do his share in the work of society. It is totally false that one who has done so is bound to bear the care and charge of those who are wretched because they have not done so. The silly popular notion is that the beggars live at the expense of the rich, but the truth is that those who eat and produce not, live at the expense of those who labor and produce.
"The Forgotten Man" is very provocative and caused me to do some hard thinking about the nature and consequences of  true charity as well as the welfare state. Sumner expanded the theme of this essay into a book titled What Social Classes Owe Each Other, which Murray Rothbard said was the first libertarian book he read. He also wrote the highly regarded, A History of American Currency in which he documented the problem paper money in U.S. History through 1874.

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