第156章 SOCIAL SCIENCE AND SOCIAL ART(12)

This is why the 'great' business man often prefers to act by intuition than by express calculation.He recognises that, so far as the more delicate judgments are concerned, his 'feeling' of 'how things will go' is more trustworthy than any estimate.He does not act blindly.He feeds and forties his mind with facts and figures, until he is steeped in familiarity with the subject matter.But he does not deliberately balance against one another these measured forces and commit himself to the resultant.For he is aware that the problem is not one of mere mechanics, a counting-house proposition, but one involving for its solution sympathy and imagination.

But the crucial instance of the organic and spiritual nature of a distinctly economic problem is in the case of credit.The mathematical mechanical treatment claims to find its supreme justification in the part played by money, the most abstract of economic phenomena.Credit, in its objective sense, is the economic plenipotentiary, the absolute representative of economic power.For he who has credit has the command of land, capital, labour, ability of every sort, at any time and in any place.Credit is productive power and purchasing power, for he who possesses it can convert it into any sort of supply or demand he chooses.It is absolutely quantitative, fluid, divisible and measurable.Such is credit, treated objectively by economic science.But credit is also the heart and brains of the industrial system.Subjectively regarded, it is an essentially spiritual thing, a delicate, sensitive creature of human beliefs and desires.Its volume and its power for practical work are affected by this spiritual nature.For its springs are fear, hope, prestige, superstition, sympathy and understanding.

Its true basis is neither gold, nor goods, but credibility.And that quality of credibility is fluctuating all the time for every individual, every business, every state.New unpredictable events are constantly affecting it.No one can therefore say with any assurance of correctness "a Bank should keep 20% of its resources in reserve or at call," or put any such rigid limit for the operations of any Bank.If we do set any such quantitative limit, we should realise that it is only a rough practical rule, which, if interpreted with automatic rigour, leads to waste and error in the actual working of finance.For by no plotting of curves can you reckon the future flow of human credibility, or the application of a given amount of concrete credit to the ever-changing gains and risks of human industry.Take the critical case of a collapse of credit and the run upon a Bank.To predict with even approximate accuracy the course of such a run, or to check it by calculations, based upon past experience of similar crises applied to the records of present assets and liabilities, would be impossible.Why?

Chiefly because of the psycho-physical factors, the play of organic forces.

You can calculate with close exactitude the strain imposed upon a bridge of a given size, material and structure by a given weight, distribution and pace of traffic.You cannot calculate with equal exactitude the strain which a given quantity of liabilities, however carefully analysed and graded, will impose upon a Bank reserve of a given size.

The incalculable element consists of organic novelty, the changes due to having to deal with matter not dead and homogeneous but living and organised.

The citation of such instances is not designed to prove that monetary and other statistics are practically useless for the prediction and solution of social-economic problems.On the contrary, they are exceedingly useful.

But the formal exactitude which they carry in their method can never be conveyed into the work they are required to assist in doing.The most abundant supply of the most accurate statistics, utilised by the most approved methods of economic science, can only afford results of a rude approximate validity, expressed in tendencies.The practical man in business, in politics, in every mode of social conduct, will supplement and correct the application of the scientific rule by the play of private judgment and intuition.* * *§13 If this is true as regards all predictions of future economic happenings, it is till more true of the conscious purposive guidance of these happenings by the application of a human standard of values.The practical statesman or social reformer, confronted with a concrete social problem, e.g., the demand for a state enforcement of a national minimum of wages, local option for the closure of public houses, or a referendum for constitutional changes, will find himself 'paying attention' and 'giving weight' to a number of diverse and opposing considerations.How will the selection and the 'weighing' of these considerations be brought about?

Not directly and consciously by the application of what may be termed his social ideal, the image in his soul of the society which seems to him absolutely the most desirable.The relation of that ultimate ideal to the particular scheme under consideration, e.g., a national minimum wage, may be too distant and too dubious to afford valuation and direction.The operative ideal will be derivative, one of a related set of possible-desirables, limited and practicable ideals which form the most potent instruments of his statecraft.