ANALYSIS OF THE SERVICES RENDERED BY THE PUBLIC ADMINISTRATION.
§ 79. If we picture to ourselves a community situated in some remote Utopia, all the members of which are precisely equal in respect of means and wants, it would be an easy matter to devise an equitable mode of collecting from them the means required to meet the public expenses. Since, by the terms of the abstract supposition we have made, the benefit which they derive from the public establishments as well as the ability to contribute toward the maintenance of those establishments, is precisely the same for each of them ; therefore there could be no question of adopting any mode of contribution other than the simplest that is possible in any group of beneficiaries, that of apportioning the aggregate expense by a simple capitation.
If we make a search for such a Utopia in the real world sur rounding us we shall find that this form of social organization is possible only on a relatively very small scale—only in case of segments of the strongly differentiated society of today, which are enabled to afford some sort of exemplification of our hypoth esis only because they are far ffom being a reproduction of the community as a whole.
I will take as an example one of our ordinary reading clubs, such as go by the name of "museums" in German The membership in the case of these clubs is a strictly limited one. It consists of members of the middle or upper social strata, of approximately equal means, or at least practically so for the purpose in hand. The object sought is of such slight conse quence, as compared with the aggregate of ends for which men band themselves together in, or have coalesced into communi ties ; the difference between the advantages derived from the establishment by which this object is sought is so insignificant on account of its slight absolute value, that it is held to be per missible, indeed it seems imperative to disregard it altogether and proceed on the summary hypothesis of equal participation by all. It is to be added that there is a complete. absence of all such external coercion as would make membership, with its bur dens and benefits, an unavoidable duty incumbent on each indi vidual ; though, it is true, public opinion within the particular social circle concerned may exert a certain pressure, such as will somewhat modify this unconditional freedom with respect to participation in the payments.
At the same time it is not to be denied that, in spite of the fact of their belonging to a common social group, there do oc cur, among the hundreds of members that make up the club, a considerable number of instances in which the contrast in re spect of means is great. It is also plain that different members partake in very different degrees in the advantages offered. It may vary from the maximum exemplified by individual cases of people who make the club-house their home outright, to the minimum at which membership has shriveled up into a mere social duty owed to one's rank or reputable standing, and from which not the slightest direct personal advantage accrues. These institutions resemble banks of issue in proceeding on the expec tation that but a portion of the claims upon them will ever be presented at any one time ; but with this difference as com pared with banks of issue, that a part of the claims upon them are expected to never be presented at all.
80. As a matter of fact we find that even within the nar row limits of the clubs this convenient method of managing the accounts between the individual member and the aggregate is sometimes violated out of considerations of justice.
The first fact that brings about a graduation of the dues is the possibility of subdividing the privileges afforded by the club into separate items. The reading of books and periodicals at the club-rooms, the drawing of books by members, social entertain ment in addition to the mere privilege of reading, balls in addi tion to every-day visits to the club-parlors,— these constitute particular items in the aggregate of what the club has to offer its members, and they may be so subdivided and distinguished as to allow members to accept a part or the whole as they may choose, and to pay accordingly. It is looked on as undignified, as well as impracticable, to go the length of gradu ating dues according to the length of time members spend in the club-rooms, the number of papers made use of, and the like, but these other differences above cited seem readily distinguish able and sufficiently appreciable to be made the basis of such a graduation.
A second fact is to be noted. Difference in economic abil ity is also taken account of whenever it is indicated by some eas ily discernible external mark. It is true, the matter in question between the members being nothing more than a yearly fee of some 3o or 4o marks, it is not thought to be of sufficient impor tance to warrant an inquiry into the amount of income enjoyed by individual members, especially in face of the recognized difficulty of such an undertaking. But a difference in age and social position such as is indicated by a person's being a student resident at a university, as distinguished from the common run of members, affords an acceptable ground for some modera tion of the amount of the contribution in favor of this special class.
Accordingly we find that even in a body of this character, proceeding as it does on the simplest possible principle of dis tribution, the need of differentiation makes itself felt in both of the two directions above indicated, and presently breaks down the original simplicity of method.
In proportion as the necessity of differentiation becomes urgent in either or both of these directions, and also in propor tion as the amount of the contribution in becomes more considerable and so makes it impossible to disregard the question of greater or less benefit derived, or greater or smaller burden to be borne, in the same proportion will there present itself the ungracious urgency of a departure from this conveniently simple rule of equal contributions, and with it the need of seeking a more complex rule of equity.
Finally, when we come to consider the case of public admin istrations, we find that not only are all the above-mentioned elements present in their greatest intensity ; but there is also generally added, with all its grave consequences, the element of public coercion,—a fact which calls for redoubled mindfulness of all considerations in favor of equity.
§ 81. In order to apply these considerations to the problem in hand it will be necessary to make an economic analysis of the various classes of services rendered by the public administration.
The instant we abandon the utopian conception of a commu nity made up of typical individuals we are forced to take account of the two causes of differentiation above spoken of. A detailed scrutiny of these two causes of difference is necessary in order to arrive at any adequate norm of equity, for guidance in striking the balance between the individual and the aggregate.
One cause of differentiation lies in the variety of the benefits enjoyed by the individual at the hands of the community ; a second ground of differentiation lies in the variety of that which the individual members are in position to render in return. That is to say in other words : Difference of benefits received and difference in ability to contribute are the causes which decide us to enter on a closer scrutiny of the relations existing between the individual citizens and the commonwealths within which they are placed.
First as to the difference in respect of the benefits enjoyed by different members of the community. There is a large field within which a method of settling accounts in due accord with this class of differences seems practicable. Whenever the state or the commune sets up an establishment which tenders its ser vices to the citizen in such a form as to admit of their being subdivided and measured by tale or by quantity, an opportunity is afforded for making the individual pay pro rata for whatever benefit he receives, both as to quantity and kind. Post, tele graph, railroads, gas and water works, afford an opportunity for realizing this method of balancing accounts. The post tenders its services to all men, computing the remuneration on the basis of the number of parcels carried, their kind and weight, the dis tance and security against any extra risk. The dispatch of telegraphic messages is performed on analogous terms. In rail way transportation the like method is employed, with the prin ciple of gradation developed to its highest. In the passenger traffic regard is had to the number of persons, the distance, the class of coaches occupied, the speed of trains, and the like ; in freight traffic, number, weight, car-space, class and value of goods, length of haul, etc. Or in the case of gas or water works : in every house for which the municipal gas or water ser vice is desired there is placed an apparatus which, by a simple mechanical contrivance, indicates the consumption of the house hold, and this measurement gives a ready indication of the amount of benefit for which the community may require pay ment from each of its members.
§ 82. Unfortunately this simple method of keeping accounts between the individual and the community, based on the measure and quantity of benefit rendered to the individual, deserts us very early.
This is true even as regards the particular establishments cited. Letter-carriage, passenger and freight traffic, lighting, etc., may take on the character of services rendered directly to the community as an aggregate, instead of being distributed to individuals in measured quantities, and the instant this hap pens the simple and direct method of accounts breaks down. The individual citizen is no longer the direct beneficiary of any one particular service rendered, but the aggregate of citizens profit by the undivided aggregate of services.
This happens whenever the municipal gas works are employed to light the streets and squares of the city. The light that fills the public streets affords the aggregate of individual citi zens the needed artificial light without discrimination or admeas urement. Something analogous happens in the case of water works when employed for sprinkling the streets, in case of the postal service when employed to carry the mail for purposes of the public administration, in case of the telegraph when used, in peace and war, for the transmission of public dispatches, in case of the railroads when employed in the public service, and more especially if they are in the first place constructed for adminis trative or strategic purposes.
Moreover, this more difficult part of the keeping of accounts between individual and aggregate with respect to the benefits conferred on the individual by the aggregate by no means con cerns something incidental or accessory. As a matter of history, it is in this direction that the original motive for the undertaking of this class of enterprises is to be sought. We need only to call to mind what was the origin of the post and the telegraph, the rea sons which led to the introduction of municipal gas works, the fact that it was for military and administrative purposes, at least in the case of certain countries, that the earlier railways were constructed.
§ 83. But this second class of functions performed by these establishments only serves to direct attention to other much greater and more fundamental institutions to whose functions these are accessory.
I may here refer back to observations contained in chapter I. (secs. 37 et seg.) The elemental function of every civilized state organization, that which constitutes the basis of every other of its functions, consists in the establishment of an authority which will secure the peace ; and the authority performs this function all the more effect ively the less it obtrudes itself on the consciousness of the members of the community. At the lowest stages of undeveloped national life the abiding relation between the enjoyment of peace and the disposition necessary to the maintenance of peace is constantly enforced by the direct evidence of the senses. The more we succeed in surrounding the life of every member of the state with an atmosphere of peace, and the more we are able to remove from his sight the instruments necessary for securing the peace, the less evident to the mind of the individual does the connec tion between the result and the necessary means become. The squatter who builds himself a cabin on an isolated farm in the Far West, or the able-bodied man in the primitive common wealth, the pledge of whose security is his arms, or the burgher behind the walls of a mediaeval city ; to all these the correlation of the maintenance of peace and the enjoyment of peace is immediately and tangibly present. The modern man, the citi zen of the civilized state of today, enjoys the results not only of a long historical development of institutions, but also of the indis pensable permanent material instruments and structures. But they are both —the past and the present alike —so far removed from his perception that he has no appreciation of the manner in which alone this result can be attained.
Moreover, the farther the enjoyment of peace is dissociated in the mind of the beneficiary from the means by which the peace is maintained, the more difficult and complicated becomes the admeasurement of the benefit enjoyed. The isolated home steader knows to a nicety the proportion existing between the instruments by which peace is maintained and the advantage he enjoys. The citizen of the modern German Empire would be able to appreciate it with the same exactness only in case it were possible to retail to the individual citizens the atmosphere in which they live, as gas and water are measured out to the con sumer by a mechanical contrivance and paid for by the cubic foot.
§ 84. The development of that organized power which forms the basis of every civilized commonwealth is the foundation on which every branch of public administration rests.
The highest function of an imposing military power is the securing of the peace by convincing every intending disturber of the peace beforehand of the futility of such an attempt. With the European world in its present attitude this is the highest and best result we can soberly entertain hopes of reaching ; for the feeling of a need of peace is present in but an imperfect way, and the impulse to violence is constantly lurking under the sur face. So also is it in the internal domain of the administration of justice, which is concerned with deciding and enforcing dis puted or violent points of law between members of the same commonwealth. The highest efficiency at this point consists in impressing upon the entire people a conviction of the absolute authority of the law, while it is at the same time indispensable that a comprehensive apparatus for the administration of justice should be maintained by the state, as in this way innumerable temptations to exceed the law, innumerable desires to question the legal rights of a fellow citizen or to infringe upon them with a high hand will be suppressed by the fear of the power with which the administration of justice is clothed.
That there still remains a considerable residuum of doubts and malice is due in part to the stage of culture, or lack of cul ture, as yet attained, in part to the practical difficulty of so clearly enunciating the law as to resolve all doubt. This much, however, is certain : So far as concerns the maintenance of that atmosphere of legality in which the members of a modern civil ized community pass their lives, by far the greatest significance of the efforts actually put forth by the public administration of law, civil or criminal, lies in their serving as exemplary decisions that practically decide thousands of cases besides those imme diately dealt with.
But from these considerations it follows that, in like manner as we have found it to be the case with the military establishment, the chief service rendered the citizen by the public administra tion in enforcing the law is made up of that medium of morals and custom that can not be subdivided and measured in order to find how much of it goes to each individual.
That is no doubt an exaggerated rationalism and radicalism that would draw from this, or at least from closely related con siderations, the inference that the administration of justice should be gratuitous, as is advocated by Justi and repeated from his time down to the social-democratic programs of the present. But in all this exaggeration, it is to be said, expression has been found for a perfectly justifiable reaction against the opposite extreme—the tradition which had been handed down by the historical development of the public executive,—the one-sided exploitation of litigation and litigants for fiscal purposes.
The golden mean in this case is to be found in the acceptance of the principle of so-called gratuitousness accompanied by the requirement that the private individual who has brought on the litigation shall pay for the special expenses involved. For while it is true, in accordance with what has already been said, that the particular case which comes before the tribunal is of the nature of a precedent serving to decide a thousand other cases, yet the case is at the same time a concrete application of the law, and as such it has to do with the interests of certain specific private persons who, for their part, are accordingly bound to show some acknowledgment of the fact. On the other hand, if the case had been simply a typical decision, rendered directly in the interest of the community, it would also have been a matter of concern to the community only, and not of special concern to any one individual in particular.
85. The military establishment and the administration of justice are here selected for the purposes of an economic analysis, as typifying two great classes of the primary functions of the state. An exhaustive inquiry which should deal in detail with
every branch of the state's activity is hardly necessary.
What is wanted is simply to bring out whatever may offer any peculiar feature in the way of principle or of consequences, in virtue of which the defrayment of its expenses requires special treatment in a discussion of the public finances. But it is not desirable to canvass in detail everything which may partake of these principles and consequences.
We may therefore go on to the discussion of a different class of institutions.
There are certain great establishments belonging to the public economy which, so far as regards technical availability, are very well adapted to the employment of the simple and convenient means of accounting which we have become familiar with in treating of means of communication and gas and water works.
There is the educational system. There are numerous private enterprises of an industrial character, of different grades, which are devoted to the purposes of education in all its varieties and gradations. These undertakings demonstrate the possibility of conducting establishments of this class on the basis of the pay ment of an equivalent from each beneficiary. Whether it be the smaller primary schools, or the girl's boardihg-schools, or the commercial schools established by private enterprise, or the estab lishments devoted to preparing persons for the various civil service examinations (and so entering into a peculiar sort of com petition—concurrence deloyale— with the state schools established for the same purpose).; in every case we find examples at hand which go to prove that it is practicable for educational establish ments to dispense their services and to be paid for them by talc and quantity. It is nowise physically impossible in the case of these establishments, as it is in the case of the military establish ment and the administration of justice, to subdivide and measure the services rendered, for the purpose of keeping accounts with the persons benefited by the services.
It must therefore be in whole or in part on other grounds that the state desists from the employment of this method of balancing accounts. These other considerations belong in the second class of considerations above (sec. 81) pointed out as going to decide the choice of a method of payment for public services,—namely, the difference existing between the different individuals and classes in point of ability to pay.
§ 86. With the Reformation the church handed over to the state the control of the schools as well as of charities. In con sequence it has become the duty of the state to place the great business of popular education on a plane far higher than that indi cated by the payment of an equivalent for the advantages enjoyed. The proper solicitude of the commonwealth for its weaker mem bers, whether in spiritual or in worldly good, is a question of the first importance in this connection.
This thought has found legislative expression in the principle of obligatory attendance at school. It may have been embodied in an uninterrupted series of enactments reaching from the time of the Reformation down to the latest constitutional provisions adopted ; or it may, as in the case of England, France, etc., have found its way into legislation indirectly, as the occasion for its application has arisen, now through the growing needs of a civilized age, now through the evils of modern child-labor.
But the principle of obligatory school attendance has every where had a severe struggle to assert itself, not only from the failure of the people to appreciate the benefit conferred in the instruction, but also, and especially, on account of their straitened pecuniary circumstances. The surprising interval that frequently exists even today between the letter of the requirement and the actual facts of compliance is mainly traceable to the fact that the requirement of school attendance has conflicted with the pecuniary interests of the family. Any additional stringency in enforce ment, any raising of the legal requirements, such as now-a-days belong everywhere to the order of the day, is feasible only so far as it takes due account of the economic situation of the parents. A child that is withdrawn by the school from household employ ment, from the farm, the workshop or the factory, and is put to non-productive employment instead of being productively employed, becomes by this fact alone a pecuniary drain on the parents.
This state of the case—the existence of a conflict between the compulsory attendance at its schools required by the state and the pecuniary strain which the compliance with this requirement involves for the parents—makes it impossible, on grounds of expediency and of equity both, to apportion instruc tion and its attendant cost by number, length of time, etc., although such a method of admeasurement is not hindered by the intrinsic nature of our schools, considered from the point of view of industrial practicability.
§ 87. Such is the state of the case as regards that part of public instruction which is known as " popular instruction " in the narrow and everyday sense of the word.
As regards those grades of public instruction which rank above the lowest grade, the relation between the public adminis tration and the individual is essentially different.
In the first place, there can be no question of compulsory attendance beyond a certain minimum of instruction enjoined on the entire population. Beyond this minimum the state cannot use coercion. The most that can be done in this direction is gradually to raise the minimum required. The difficulties in the way of enforcing the law as it now stands are so great as to con stitute a sufficient warning against any headlong extension of the system of coercion.
It is further to be remarked that above a certain moderate grade of popular instruction the occasion for such coercion ceases. Those middle and upper strata of the population for whom the middle and higher grades of the public schools are intended, need no such coercion. They are in possession of the necessary economic means, and the inclination to afford their children a proper development is also present in a sufficient degree.
Indeed, the consideration of an insufficient economic ability has no meaning in connection with these higher grades of instruction. The fact is, rather, that if we confine our attention to these higher grades the whole state of the case tends to reverse itself. For while it may be reasonable enough, and may even be both expedient and equitable to bear lightly on the scanty means of the lower classes of the people in connection with any such work of public utility, there can be no sense in sparing the adequate, or rather abundant, means of the middle and upper classes in the compensation required of them for benefits which they derive from public institutions.
There must accordingly be some other reason present if any such element of gratuity appears in existing institutions of this class.
§ 88. This other reason is to be found in the conviction that the blessings a people derive from popular education are not confined to the benefits which the particular individual may , derive directly from the school, but that the indirect benefit con ferred on the entire body of the people, and therefore also on those who do not directly enjoy the middle and higher grades of instruction, is equally important. The conception is that the rays which science sheds penetrate with their heat and light every part of the social organism, and that those who are the immediate beneficiaries of the instruction imparted are but the bearers and dispensers of these benefits in behalf of the com munity.
How far this view is a true one is of course a question that admits of dispute. It will appear presently that this view involves peculiar dangers for the public administration, and that the exten sion of this view so as to include such other forms of state activity as in a similar manner serve the purposes mainly of the well-to-do portions of society, is to be admitted, if at all, only with the utmost caution.
It is therefore all the more imperative to take into considera tion the possible concurrence of reasons of another kind.
Such a reason is perhaps the following.
It has probably always been recognized that the instruction offered in the upper and highest schools is really offered to those strata of society which are best able to pay their way, and that such exceptional cases of neediness as constantly occur might be provided for as exceptions by suitable remissions. But at the same time there has been a feeling that, unlike the eagerly coveted material advantages of the business world, the benefits of education, even of the higher grades, would not be sought for with due earnestness, and that it is therefore expedient to render advantages which are of such importance to society as accessible as possible. Payment in full for university instruction might, in itself considered, not over-tax the means of the beneficiaries. Still it has been thought best, in view of the actually prevailing disposition of moderate zeal on part of these beneficiaries, to minimize the disagreeableness of the demand upon them, it having been conceived to be for the public interest to reach as large a number of beneficiaries as possible.
It is clear that the discussion at this point turns on a differ ence of opinion, and that for this reason alterations in the rela tions in which public institutions of this class stand to the indi vidual citizen are possible, such as would be impossible in a case where the decisive factor is the technical character of the institu tion itself.
§ 89. This fact, of a varying economic competency on the part of different portions of organized society, when developed in certain special directions, gives occasion for intervention on the part of the collective power in behalf of relative deficiency that may exist at any given point.
In the case contemplated, the deficiency exists not as a chronic debility on part of a particular stratum of society, but as an acute shortcoming on part of a portion of society which is temporarily in distress, or at any rate in need of assistance.
This fact seems to explain the numerous contrivances of the public administration by means of which it freely lends a hand to certain particular forms of industry. Agriculture, manufac tures, commerce, transportation continually demand such meas ures for their assistance ; whether it be that the private under takings of individual citizens are granted subsidies from the pub lic funds, or that public establishments for the like purpose are erected independently. State railways, or subventions granted to private undertakings ; model establishments for manufac tures, or protective duties and bounties ; state-owned studs, or corn and cattle duties ; these are all relief measures by which the surplus energy of the community is directed to the weaker spots.
Such weakness is most frequently due to imperfect develop ment. And so we find that the great industrial commonwealths have all and several laid their collective strength under contribu tion for the purpose of developing the various particular branches of their production and building up their manufactures, com merce, shipping, to the standard of efficiency existing at the time.
But even when this degree of efficiency has been achieved it is of itself no sufficient guaranty against seasons of exceptional disturbance, which may in their turn be productive of further progress, but which for the time being require the application of such remedial measures against imminent dangers as only the community as a whole is in a position to afford.
The central thought in this connection is ever that of a soli darity of all the parts of the whole. The ruling principle is the conviction that if one member suffers all the other members suffer in consequence ; so that for the maintenance of the com mon welfare the several members enter into a relation of the nature of a mutual insurance, in virtue of which now one now the other of the various members receives assistance.
§ 90. At the extreme limit, in contrast with the element of selfish interest and resting entirely on the fact of a difference in economic competency, is the provision made by the community for its paupers.
Here the decisive fact is the sensible difference in this com petency between the members of the various classes of the pop ulation ; a difference which at the lower limit merges into abso lute economic inability, not only to meet the demands which the public administration makes in order to satisfy its own needs, but even the ability to provide one's own livelihood.
It is this phase of public 'administration that puts to the severest test that moral sensibility which seeks to make the dif fering degrees of economic strength a criterion for the appor tionment of the public burdens.
This sensibility has stood the test so far without failure, being less beset by doubts as to practice than as to theory.' A variety of circumstances have contributed to this result.
The first point to be gained was the broadening of that prin ciple of nature according to which the able-bodied man is bound to support his needy relatives, so as to apply beyond the bounds of the very narrowest circle. In the original cantons of Switzer land the so-called kinship tax [Verwandtschaftssteuer] has sub sisted even down into our times.
In the second place the influence of the Christian church— and in this respect there are precedents to be found not only in Judaism, as asserted by current theological opinion, but also among the Greeks and Romans—has ever been directed toward a broadening of the sentiment of fellowship beyond the circle of consanguinity, and its extension to the entire congregation and even to the whole of Christendom. The state of the time of the Reformation has fallen heir to the responsibility of the mediaval church in this matter, as also with regard to the administration of the schools. Indeed, the duties of the modern state have grown greater with the growth of intercourse in modern society ; the progressive mobility of modern life has lessened the signifi cance of the remoter degrees of kinship and so has shifted the entire responsibility to the political organization.
The legislation of the different states (at least of the Protes tant states) has made so great an advance in this direction dur ing the past century, and especially during the last few genera tions, and has made such serious demands on the public admin istration—in spite of the theoretical doubts of individualistic economists, as formulated more particularly by Malthus—that doubts on this head are gradually disappearing ; and it is to be said they were also based on untenable theoretical ground. The feeblest of these objections, and at the same time the one most in vogue, was the position that while the moral obligation was not denied, the voluntary character of alms was made much of, and any legal claim to assistance was disputed. But if the moral obligation were once granted, the legal claim and therefore the public coercion followed as a matter of course in every case where voluntary charity proved insufficient.
§ 91. I believe the foregoing discussion has brought out the essential elements which it is necessary to consider in any analysis for economic purposes of the services and requisitions incident to public administration.
To summarize briefly what has already been said : We have, first, a class of services of such a character as to permit the account between the community and the individual members to be settled by the simple method of a quid pro quo.
A second class, comprising the fundamental institutions of the state, does not admit of such a simple method of accounting, for the reason that the benefit conferred cannot be subdivided and measured. Such a method of accounting is applicable only in cases where institutions of this kind render some specific ser vice to individual members.
A third class would admit of the method of accounting employed in the first class, but foregoes its employment in whole or in part, and 'substitutes payment according to ability in place of payment according to benefit received —with a view to the more general participation in the benefits conferred.
In addition to these there is also a fourth class, comprising cases of such disability, relative or absolute, on part of certain strata of society, as to constitute a claim on the greater ability of the other strata.
An analysis like the present can of course lay no claim to being a definitive exposition of the many complex elements which are to be taken account of in this connection. But it may at least be accepted as an attempt at presenting a simple and com prehensive view of the great complex of services rendered by the public administration, taken in their relation to the compensation required in return for them.