instance: We talk of buyers and sellers, as if they were independent of each other. We call those who have money buyers, and those who have goods sellers. We find, however, that no transaction can be correctly understood until we regard it as an exchange, having two parts, an action and a reaction, equal and opposite. In the language of the market, also, we speak of being long or short of the market, but every one who has either money or goods is in the market, and is both long and short of it all the time. He is either long of goods and short of money, or long of money and short of goods. The philosophy of the market can not be understood unless we study it from this point of view.
The fallacy of a great many doctrines in social science, and the philosophy of a great many errors in social policy, is that they divorce the action from the reaction. If there is not a reaction with equivalence and equilibrium, then there is an expenditure from one side toward the other, a drain of force from one side and all accumulation of it at another, until there come a crisis and a redistribution. When the return and equivalence are suspended, there is a necessary continuance of the movement, in the tendency toward a stable equilibrium of another kind, which would come about when all the force had been transferred. For instance: You give good schools for less than their market value; you must, then, give free schools; then you must give free books and stationery; then "hot breakfasts," and so on in succession. The fact that one thing has been given is made an argument for more. You are told: You have established free schools; "why should not you" do whatever else the proponent favors. The argument that, because you have given a man one thing, you ought to give him another, is not good in logic, but it is intensely strong in human nature and in history. The saying is attributed to Danton, the revolutionist: "The revolution came, and I and all those like me plunged into it. The ancien régime had given us a good education, without opening an outlet for our talents." The great fallacy of socialistic schemes is that they break off the social reaction. A man is to have something simply because he is a man—that is, simply because he is here. He is not to be called upon to render any return for it, except to stay. On the other hand, the tax-payer, who has provided all there is, is not on that account to be entitled to a recompense of any kind. He has only incurred a new liability—viz., to do the next thing which is demanded of him. The only stable equilibrium under this system would be universal contentment. But bounty does not lead to contentment, and can not, until the recipient has everything for nothing. The movement, therefore, runs to a crisis, a redistribution, a re-
- "The Economist," 1889, p. 430