Manuscript notes by F.H.Giddings, 24 pages dated June 28-July 12,1887. June 28,1887.

Manuscript notes by F. H. Giddings, 24 pages dated June
    28-July 12, 1887. June 28, 1887.

 My inquiry will
then be two fold.
Is this
modem
distribution,
i.e. distribution
as
determined by
             combination
and residual competition,
one that satisfies econ-
omic and moral re-
quirements under our
other modern condi-
tions of whole-sale and retail trade [,] private proper-
ty in land and the
wage system? I
shall offer
certain criteria of dis-
tributive justice and
inquire whether either
perfect or limited com-
petition yields results
conformable to the
ethical standard.
I shall inquire what
we mean by the greatest
economy of produc-
tion and what con-
ditions greatest econo-
my of production de-
pends on.
 Rodbertus' theory of
depressions, and
diversification of
industry and increase
of personality as
an economic ne-
cessity.
(Does a
major part
of wealth go
to a minority),
Must be an
increasing reward of work-
ing class and development of their
personality.
I shall expect to show
that the modern organiza-
tion of trade is uneconomi-
cal, the alternative be
ing cooperation (over 1).
 That the distribution
between the laborer and the
capitalist is uneconomi-
cal and inequitable (over 2) so
long as
so much land is held as
private property that there
is an insufficient free re-
sort of workmen to it,
and the means of produc-
tion are owned by an employ-
ing class.
 As the offer of goods is
limited by cost of produc-
tion
at one extreme and by their
utility at the other, the
offer of labor is
limited by opportuni-
ties of self employment at
the one extreme, and by the
resort to support by other people 
at the other.
 Labor organizations are
a device for raising the limit
at which resort to charity begins.
(1) (a) Uneconomical in fact
description of present conditions
(b)
adulteration of goods and
rhythms of rising and falling
prices, of demand and
supply over and under
production.
(2) (a) Uneconomical in fact
wages system not calling
out full energies and
permitting the unemployed
class
(b) inequitable
in fact as shown by increase
and decrease of wages and sources
of profits as shown in Economic
Quarterly article. Kart Marx
(b) Necessarily inequitable etc. under pres-
ent land and wages system
 The organization of labor
has simply lessened the
inequality between em-
ployer and employee [,but] it
has not made them equal
as parties to a contract.
The organization of capital
may be offset by the or-
ganization of labor, but
nothing offsets the inequali-
ty due to capital itself
except a free resort to land
the rent of which is a gift
to the one resorting to it.
 The labor organization
will be broken
by residual competition
easier than the capital-
ist organization when the
latter is used as a wage
lowering device. The
point
at which the labor organ-
ization will break is this.
An individual man
having no alternative will
accept reductions of wages
till they get so low
that his condition as an earner
of such wages is all things con-
sidered, no better than that
of a recipient of charity.
As a member of an organiza-
tion he will leave it 
when it fails to secure
him as high wages as
he could get as an
individual and still
be above the rate of
wages that is equal
only to charity.
 The margin of action
by organizations is there-
fore very narrow.
Simply a means
of equalizing the workman
with the capitalist
they can never do it,
and any arbitration founded
on such organizations
can never be other than
the equivalent of what
the unequal strength of
the parties would bring
about.
 Unions can be a basis
of cooperative enterprise.
 But the workmen through
their political organization
can raise themselves to an
industrial equality. Here
they are equals. They
can compel the employers
to enter into and cooper-
ate with them in a general
cooperative system, one
amounting to perfect in-
dustrial partnership
and industrial federa-
tion with all necessary
restriction and regula-
tion of monopolies.
They can do this because
they have the power of
instituting the alternative
of some form of social-
ism.
 We have seen in our
studies so far that all
economic results are
the equilibrium of
opposed forces as com-
bination and competition
etc. So here. A
cooperative system
into which all social
economic intellectual
and moral elements en-
ter is the
compromise between
socialism and capitalism.
Studying the industrial fu-
ture as a problem of
social physics can
we expect to see in
the establishment of so-
cialism the complete
annihilation of one set
of forces by another?
Must we not admit
that capitalism is doomed?
 Demand and supply dependent
on something more than com-
mercial quantity, though
there is a popular economic
error to the contrary.
If
numerical quantity were
all, then, if there were
ten barrels of flour offered
for sale when only 8 were
needed, the price instead
of being reduced would fall
by competition to zero
after the manner pointed
out by
in regard to wages.
 The terms demand and supply
have become so associated
in the popular mind with
mere quantity of need or desire
and actual visible supply of
goods that I think the econo-
mist might as well abandon
them to that meaning and
for a more technical pur-
pose adopt the precise
words 'bid' and 'offer'.
The reason why prices do not
sink to zero when supply
exceeds demand is that at
a certain point above zero
offer ceases. Offer is limited
in the long run by cost of
production. Bidding is
limited by prospective
utility.

 Boycott and label
cooperation in
selling through divis-
ion of profit with
customer.
 ( ) according
to needs when there
is lack of opportun-
ity. Lack of oppor-
tunity the modem
( ).
 The unemployed,
unstable equilibri-
um resulting from
unequal distri-
bution of wealth
and equal distri-
bution of political
power.
 Gradual con-
trol of industry
through legisla-
tion.
 Laborer must seek his interest.
 Competition of laborers.
 Lines of competitive groups
that hinder transfer from
employed to employing class.
 Permanent size of employed
groups. Relative perma-
nent sizes of different groups.
 Rent of land fixes the rewards
of capital and wages of labor,
not conversely.

 Is there a law the reverse
or counterpart of Ricardo's
law of rent, that is seen
in case of new fertile lands
in great abundance?
 Demand and supply in the
sense of relative proportions
of men and capital does not
fix the rate of wages. Important
point to determine is point
at which capital ceases to
demand and point at which
laborers cease to compete
against each other in supply.
 Laborers cease to bid either at
the point at which they can
profitably resort to self employ-
ment on the land or at the
point at which they
prefer to be paupers rather
than work for lower wages.
These are the maxima and
minima points of labor supply.
 Trade unions are an organization
to raise the minimum
point by a resort to mutual
assistance instead of pauperism
as the alternative to accepting
lower wages. By this means
competition is stopped for
a time and labor supply ceases.
See letter to nation and chapter in ms book.
 The restriction of apprenticeship
analogous to the restrictions
attempted by employers combinations
see in review of Newcomb and Ely. Their
effect of diverting labor into new and higher channels.
 Profits of employer may be made
in part out of rewards that
under perfect competition on
equal terms would go to labor
show that this is so in fact
as per argument in article on
Profit Sharing and how it arises
as per that article and article in
W & W what is the labor question.
 Ethics of Distribution show
that just
distribution i.e. rendering to every
man according to value of his
services is same as perfect
competition on equal terms
would fix, and show as per
other notes that in average of
cases rewarding according to work
must be same thing as reward-
ing according to needs.
 Growing acceptance by pub-
lic opinion of standards of just
distribution and reform of laws
of property regulation etc. to cor-
respond.
 Effect of growing importance
of personality as an economic
factor.
 Supposing wages system
to survive it will
be as an alternative,
not the only system.
Cooperation (and to some extent profit-
sharing) will be the
alternatives. Cooperation
will give the workmen
a chance to turn to some-
thing in which he can
own an interest share the
control and have a perma-
nent place. To the extent it
succeeds it will react on
the wage system, making
the latter better for the
worker than now, making
it afford him more pay,
a share in naming the
conditions of employ-
ment and a permanent
security in his place.

            July 12, 1887

P.S.
The motive impelling the
worker to act as an
individual rather than
as a member of a union,
will be strongest with
the recruits from the
farms, not yet members
of unions. This likely
( ) be a permanent [source?]
of supply of non-
union labor.

           July 12, 1887.