§1. It is universally recognised that the present drift of opinion and practice is in the direction of increasing the range and volume of the interference of government in the affairs of individuals: and in current discussion the results of this tendency are not uncommonly lumped together under some such term as ``State-Socialism'' contrasted with ``Individualism''. It is, I think, important to remove the vagueness of thought that this simple antithesis is liable to involve, by distinguishing the very different issues that tend to be blended an confounded in this opposition of terms.
This has, I hope, been partly effected by the discussion in the preceding chapter. For we have seen that an important part of the increasing interference of Government which alarms old-fashioned advocates of laisser faire is not really distinguishable in its principles and aims from the kind of governmental action which the most vigourous Individualism has always regarded as indispensable. That is, its aim is the protection of individuals from harm to person or estate caused, whether intentionally or carelessly, by the action of other men: it merely seeks to make this protection more effectual and complete. Take, for instance, the important department of sanitary interference: it is obvious that the mischief which one private person may cause to others by making his house or business a focus of disease is of a kind which all rational Individualists have always considered it within the province of Government to prevent. It may happen, in any particular case, that the remedy applied is ineffectual, or even if effectual, on the whole more burdensome than the evil which it is sought to remedy: but this is liable to happen in any human adaptation of means to ends, and does not affect the question of principle. And it is easy to see how new occasions for this kind of interference may continually arise: either because the mischief in question has been increased or newly introduced through the closer massing and more complicated relations of human beings which the development of industry and civilisation brings with it; or because mischiefs of long standing have been unveiled by the increased insight of advancing science, or possible remedies hitherto unknown have been pointed out.
We have now to note further that the principle which limits governmental interference to the prevention of mutual interference among the governed, if maintained on utilitarian grounds, requires for its justification two distinct fundamental assumptions,---one of which belongs rather to psychology, while the other is purely sociological. It is to the first of these that chief attention has been paid; and it is this which is mainly important when the discussion relates to paternal interference. When the question is whether Government should coerce individuals in their own interest, it is argument enough on the negative side, if it be granted that, in the matter under discussion, men may be expected in the long run to discover and aim at their own interests better than Government will do this for them-from their better opportunities of learning what conduces to their own welfare, or from their keener and more sustained concern for the attainment of this; while, further, this habit of self-help will give not only knowledge, but also self-reliance, activity, enterprise.
But, granting all this to be true, it by no means follows that an aggregate of persons, seeking each his private interest intelligently, with the least possible restraint, is therefore certain to realise the greatest attainable happiness for the aggregate. It is, indeed, obvious that if the mode of action on the part of any one such individual which is really most conducive to his own interest diverges from that which is most conducive to the interest of all, then the more completely he is left free to pursue the former end, and the more skill he shows in the pursuit, the more certain it is that he will not promote the latter in the highest attainable degree. Hence, to complete the theoretical argument for laisser faire, we require, besides the psychological proposition that every one can best take care of his own interest, to establish the sociological proposition that the common welfare is best attained by each pursuing exclusively his own welfare and that of his family in a thoroughly alert and intelligent manner.
Now this latter proposition has been maintained, in a broad and general way, by the main tradition of what is called ``orthodox political economy'', since its emergence in France in the middle of the eighteenth century. The argument may be briefly stated thus: Consumers generally---i.e. the members of the community generally, in their character as consumers---seeking each his own interest intelligently, will cause an effectual demand for different kinds of products and services, in proportion to their utility to society; while producers generally, seeking each his own interest intelligently, will be led to supply this demand in the most economic way, each one training himself or being trained by his parents for the most useful---and therefore best rewarded---services for which he is adapted. Any excess of any claw of products or services will be rapidly corrected by a fall in the price offered for them; and similarly any deficiency will be rapidly made up by the stimulus of a rise. And the more keenly and persistently each individual---whether as consumer or producer---pursues his private interest, the more certain will be the natural punishment of inertia or misdirected effort anywhere, and the more complete consequently will be the adaptation of social efforts to the satisfaction of social needs.
Now no one who, under the guidance of Adam Smith and his successors, has reflected seriously on the economic side of social life can doubt that the motive of self-interest does work powerfully and continually in the manner above indicated; and the difficulty of finding any substitute for it, either as an impulsive or as a regulating force, constitutes the chief reason for rejecting all large schemes for reconstructing social order on some other than its present individualistic basis. The socialistic interference for which, in the present chapter, I propose to offer a theoretical justification is here only recommended as a supplementary and subordinate element in a system mainly individualistic. At the same time, I think it important to show by general reasoning that---even as applied to a society of ``economic men''---the sociological argument above given is palpably inadequate to establish the practical conclusion based on it by the more extreme advocates of the ``system of natural liberty''.
With a view to methodical clearness, it is convenient to begin by granting the assumption---tacitly made in the general economic argument that I have just given---that the higher market value of products and services consumed by the rich, as compared with those consumed by the poor, represents a correspondingly higher degree of utility to society. I shall presently point out how paradoxical this supposition is: but for formal clearness of discussion it is as well to begin by making it; since even on this supposition it can, I think, be shown that there are several distinct cases in which, under a strictly individualistic system of governmental interference, the individual's interest has no tendency---or no sufficient tendency---to prompt him to the course of action most conducive to the common interest.
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