If it is objected that demand and supply distribute incomes, we reply in the first instance: Are demand and supply blind powers independent of human influence? This year's crops depend on rain and sunshine, but the average results of our crops are a product of our cultivation. Demand and supply are summary terms for the magnitudes of opposing groups of human wills. The causes and conditions of these magnitudes are partly natural, mostly however, human relations and powers, human deliberations and actions.
If it is objected that nature conditions the wealth of a nation, we answer: She certainly does in part, and as far as she does, no one thinks it unjust that one nation is rich and the other poor. But when one nation enslaves, plunders and keeps in subjection another, we immediately find the wealth of the former and the poverty of the latter unjust.
If it is objected that the one man is wealthier than the other because he was not compelled to divide his inheritance with brother and sister, that the one has the good fortune to possess a healthy wife, the other not, we answer: No normal feeling of right wishes to do away with such chance of fortune. But the question is, if such effects of nature, not subject to our influence, which we call fortune or chance, are indeed the essential causes of the distribution of incomes and wealth. In such a case there could be no science of political economy or social policy, for the irregular game of chance cannot be brought under general points of view.
If it is objected that labor and not the State distributes incomes, we answer that this is a surprising objection in the mouth of one who declares strength and fortune both at the same time to be the causes of distribution. For the objection has meaning only when it signifies that different labor and different accomplishments produce correspondingly different compensation.
In our eyes, labor produces goods, builds houses, bakes bread, but it does not directly distribute incomes. The different kinds of labor will affect distribution only by their different valuations in society. The demand for this or that labor will influence its market price, but the moral valuation of this or that labor will influence the judgment whether this price is just. Thus labor influences, indirectly it is true, the distribution of incomes; but in such a case, and so far as it does so, it excludes the notion of luck or chance.
Both assertions, however, confine themselves too closely to the individual distribution of incomes, whereas for the economist the essential point is the distribution among the classes of society. For every more general scientific or practical inquiry it is not the important point whether Tom, the day laborer, has more than Dick or Harry, whether the grocer, Jones, earns more than Brown, whether the banker, Bleichroder, has better luck in his speculations than the banker, Hanseman; about this general judgments will only occasionally be formed. The average wages of the day laborer, the average condition of domestic workers, the average profits of the class of promoters, the average profits of grocers, of landed proprietors, of farmers on the other hand are considered by public opinion and judged to be justified or not.
And these earnings are surely not dependent on fortune or chance;they are the result of the average qualities of the respective classes in connection with their relations to the other classes of society; they are in the main the result of human institutions.