• State and Federal Grants-In-Aid,

• State and Federal Grants-In-Aid,
Book by Henry J. Bittermann; Mentzer, Bush, 1938

CHAPTER XIV VOCATIONAL EDUCATION AND REHABILITATION

I. VOCATIONAL EDUCATION

Vocational education in schools below the college level represents one method of replacing the system of apprenticeship, now made largely obsolete by modern industrial conditions. At the same time the curriculum of the ordinary high schools has been largely constructed as training for pupils eventually going to colleges and professional schools, and so almost useless for pupils of less ability, or opportunity, or different interests. ¹

While public support of higher professional training has existed for centuries, little was done for the needs of manual workers. Before 1917 private commercial schools operated on a profit basis, and some industrial plants attempted to train their young workers. Trade schools for skilled manual workers had been established by a few private foundations, cities and states, largely as experiments reaching only a few pupils. ²

As early as 1883 the Blair Bill was introduced into Congress, providing for a federal grant-in-aid to such common schools as would supplement their curricula with courses in industrial arts and household work. Between 1885 and 1917, and especially after 1900 such bills were numerous, but Congress merely provided funds for agricultural education. A national commission was established, and its report in 1914 proposed the system substantially adopted in the Smith-Hughes Act of 1917. ³ This act provided for a grant-in-aid to the states for industrial,

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¹	Paul H. Douglas, "American Apprenticeship and Industrial Education," Columbia Studies, XCV ( 1921), pp. 80-84; cf. Emily Robinson, ed., Vocational Education, ( New York: Wilson, 1917), for a collection of articles on this topic, prior to the passage of the Smith-Hughes Act.
²	Douglas, op. cit., pp. 187-243; there is an extensive survey of the field in the Annual Report of the Commissioner of Labor, 1910.
³	For the Blair Bill, see 48 Cong. 1st Sess. (1884) Senate Report No. 101 (Congressional Documents, v. 2773), pp. 32-33; cf. "Report of the Commission on National Aid to Vocational Education," 63 Cong. 2nd Sess. House Document No. 1004, 2 vols. 1914; for the history of other bills, cf. L. E. Blauch, Federal Cooperation in Vocational Education (Ms. Ph.D. thesis, 1923, University of Chicago), published in revised form as "Federal Cooperation in Agricultural Extension Work, Vocational Education and Vocational Rehabilitation." U. S. Office of Education Bulletin, 1933, No. 15. The revised form includes the legislative history of the related grants-in-aid.

CHAPTER XVIII THE APPORTIONMENT OF STATE GRANTS-IN-AID (EDUCATION)

I. THE GENERAL PROBLEM

The preceding chapters have briefly traced the development of the grant-in-aid system in the United States and have indicated some of the financial and administrative factors responsible for this development. The effectiveness of the subvention system, however, depends largely upon the methods of apportioning funds, since the formulae used may, or may not, be well-adapted to the ends in view. Considered as a purely fiscal device the grant-in-aid distributes part of the centrally-collected revenues among local authorities. In this way it is similar to the use of shared taxes, except that the amount of the subvention need not depend exactly on the receipts from one or more taxes. In the latter system also there is a serious question as to whether the tax apportionment should grant each locality funds in proportion to the contribution of its citizens toward the tax, or whether the central tax should be apportioned according to local needs for revenues, however local need may be measured. The former principle employs central collection merely as a device for preventing evasion and multiple taxation, the latter recognizes the desirability of using the tax for a geographic redistribution of the burden of governmental cost. For example, an income tax may be levied, and part of the tax, say a half or a third, is necessary for the expense of the central government. If the balance is to be given to the local authorities, what formula of distribution should be used? Assuming a formula which would measure the geographic burden of taxation with sufficient accuracy, distribution according to local contribution appears contrary to the ability principle of progressive taxation. For if the wealthy are to be taxed more heavily relatively than the poor, there is no reason why this process should be limited to any 'specific geographic area, which may correspond to the organization of administration. Only practical considerations justify the limitation of the progressive tax to the area under the political jurisdiction of the authority levying it. For this reason a strong argument could be made, not

CHAPTER XXI CONCLUSION: AN EVALUATION OF THE GRANT-IN-AID SYSTEM

The major task of the preceding chapters has been to show the relation of the grant-in-aid to financial structure, to investigate the ways in which the grant-in-aid has been used to direct the policy and administration of inferior political authorities by superior jurisdictions and to analyze the formulae of apportionment in terms of certain assumed ends. Evaluation of practices has been incidental and confined to a judgment of their effectiveness as instruments of attaining ends. These assumed ends, it is hoped, have been explicitly stated, except perhaps such casual matters as that accounts should show what happened to the money, or that public funds are to be expended according to law for public purposes.

It must be frankly recognized at the outset that the evaluation of a public policy, a judgment as to what is desirable or preferable, cannot be based wholly on inference from assembled data. For scientific analysis, no matter how complete, can do no more than show the existence of relations among phenomena, it cannot even predict without making non-empirical assumptions. Data may refute or verify hypotheses, but that is all. An evaluation or value judgment must assume some values (in the philosophical sense) that are extra-scientific, and it may well be contended that these values are based on preconceptions, prejudices, emotions, will, rationalizations, derivations, or other condition, not part of the data valued. Their nonlogico-empirical character may rule them out of science, but they would seem to be a necessary adjunct to decision in matters of policy. ¹ This brief statement is made to indicate that the evaluation of the grant-in-aid system here made will not

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Obviously the methodological problems referred to cannot be elaborated here, where limitations of space necessitate a rather dogmatic statement. For recent discussion reference might be made to the first few chapters of Pareto's The Mind and Society and A. B. Wolfe, "Will and Reason in Economic Life," Journal of Social Philosophy, I ( April, 1936), pp. 218-243. Cf. J. H. Tufts, "Pareto's Significance for Ethics"ibid. ( October, 1935), pp. 64-77. Some amplification of the writer's views appears in his discussion of Pareto in Philosophical Review, XLV ( May, 1936), pp. 303-313. Old-fashioned positivists, of course, would reject the position here taken.

be acceptable to all. It is hoped that the value judgments made in the last chapter have not invalidated the inferences of existential import in the earlier part of the work.The grant-in-aid, it has been shown, is one of several...

The Problem of Unemployment,
Book by Frank Aydelotte, Aaron Director, Paul H. Douglas; The Macmillan company, 1931

CHAPTER I THE DAWN OF ASCIENCE

JACOB H. HOLLANDER

"In every department of human affairs," declared John Stuart Mill sonorously in the opening paragraph of his Principles of Political Economy, "Practice long precedes Science: systematic enquiry into the modes of action of the powers of nature, is the tardy product of a long course of efforts to use those powers for practical ends." ¹

Historians of thought, going beyond Mill's generalization, agree in recognizing two distinct stages in the evolution of a social science. There is first a period of specific and detached discussion of particular incidents, ordinarily evoked by association with practical affairs. There is later a systematic inquiry, inspired by philosophic interest, into the structure and sequence of the general subject matter.

In the history of English economic thought, the year 1750 serves as a convenient dividing line for this transition. Much was written upon economic matters before that date. An eighteenth-century bibliographer lists some twenty-three hundred such publications, issued in Great Britain from 1557 to 1764,² and the catalogue is far from complete. Ranging from mere broadsides to stout volumes, the bulk of this literature figures in the history of economic writing as ephemeral and local. But an appreciable part of it is significant. The tracts of John Wheeler,

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¹	Preliminary Remarks, op. cit. ( London, 1848), I, 1.
²	Joseph Massie; cf. infra.

CHAPTER II THE FOUNDER OF A SCHOOL

JACOB H. HOLLANDER

A distinguished critic has spoken of the Wealth of Nations as securing for its author "as near an approach to immortality as can fall to any economic writer." ⁵⁷ A formal treatise in two stately quartos, long years in the making, heralded by scholars as "equal to what has ever appeared on any subject of science whatever," ⁵⁸ the reception accorded the book was from the first impressive. David Hume had lamented within a month after its appearance that the treatise required too much thought and reflection to be popular, and the reader fresh from the pages of Gibbon Decline and Fall might well have found the Scotch philosopher turgid and prolix. ⁵⁹ But another and perhaps more judicial contemporary declared it doubtful even in 1793 "if there exists any book beyond the circle of the mathematical and physical sciences, which is at once so agreeable in its arrangement to the rules of a sound logic, and so accessible to the examination of ordinary readers." ⁶⁰ The actual demand for the book was significant. While Sir James Steuart's quartos gathered dust on Cadell's shelves, Adam Smith's work sold well, and a fifth edition ( 1789) was reached in the author's lifetime.

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⁵⁷	James Bonar, in Palgrave (ed.), Dictionary of Political Economy, sub nom.
⁵⁸	Adam Ferguson in 1773; see Rae, op. cit., p. 264.
⁵⁹	Ibid., pp. 285-86 <5263577>. Francis Horner, a faithful student of Smith's text, wrote in 1800 of "an hour immediately after dinner, while the rapid progress of digestion clouds the powers of apprehension, employed in the lighter labour of culling flowers from the style of Gibbon" ( Memoirs, I, 129).
⁶⁰	Dugald Stewart, Account of the Life and Writings of Adam Smith, LL.D., in Collected Works, X, 65.

CHAPTER III ADAM SMITH AND THE CURRENTS OF HISTORY

JOHN MAURICE CLARK

I. INTRODUCTION

There has recently been a revival of interest in that type of economics which interprets things in the light of their origins, the influences which have made them what they are, and the processes by which they have reached their present state. It is from this standpoint that I am asked to speak of Adam Smith. It is frequently said that the germs of all subsequent theories are to be found in his many-sided work, and accordingly one might fairly expect to find germs of this "genetic" type of thinking also. But in view of the fact that his system is in the main an exposition of the "natural laws" and of the "natural order" of liberty, we should naturally expect that such elements of the genetic method as we might find would be of a secondary and subordinate character. And this is, in fact, what we shall find.

But this is not the end of the story. Even more interesting and significant than the search for elements of the genetic method in Adam Smith is the application of this method to his work in its entirety, seeking to interpret his non-genetic theories and principles in the light of the influences which molded them and the forces and conditions to which they were a response. Such a study, if pursued in a captious mood or without a sympathetic sense of values, may have a belittling effect, making social theories seem the playthings of historical accident and robbing their makers of the credit of originality and independence. But if the research be animated by a more open-minded and appreciative

CHAPTER IV SMITH'S THEORY OF VALUE AND DISTRIBUTION

PAUL H. DOUGLAS

The contributions of Adam Smith to the theory of value and of distribution were not great, and in commemorating the publication of the Wealth of Nations it might seem to be the path of wisdom to pass these topics by in discreet silence and to reserve discussion instead for those subjects, such as the division of labor, where his realistic talents enabled him to appear at a better advantage. Yet the errors of an able thinker are, if properly interpreted, only slightly less illuminating than his substantive contributions, and deserve analysis in the history of economic thought. There is, however, another reason why Smith's doctrines on value and distribution merit examination. This is because Smith's formulation of the problems of exchange value and of the distribution of the national product among the factors of production was such as almost inevitably gave rise to the doctrines of the post-Ricardian socialists and to the labor theory of value and the exploitation theory of Karl Marx.

1. THE REJECTION OF UTILITY AS A DETERMINANT OF VALUE AND THE ACCEPTANCE OF THE LABOR THEORY

In a society with a highly developed division of labor, exchange necessarily becomes ubiquitous, and the ratio at which the goods or services one produces exchange for the goods and services one desires becomes an ingredient element in individual, and indeed in national, prosperity. It is not enough to produce a large physical quantity of goods. If one is to be comfortable it is also necessary, as the farmers in the United States have found,

CHAPTER V ADAM SMITH AND LAISSEZ FAIRE ¹

JACOB VINER

I. THE HARMONIOUS ORDER OF NATURE

An endeavor to make a just appraisal of Adam Smith's original contributions to economic doctrine would even today be a task of extraordinary difficulty. On the one hand, what was serviceable in his doctrines has become so thoroughly incorporated in our modern thinking that we discover it upon the slightest provocation in whatever we may read that was written before his day, and we are especially prone to make a virtue of obscurity in his predecessors by taking it for granted that it conceals premature insight rather than unduly prolonged lack of it. On the other hand, there is always great danger lest what we credit to a writer as priority of doctrine may not in reality be merely an indecent exposure of our own ignorance concerning his predecessors. There is much weight of authority and of evidence, however, that Smith's major claim to originality, in English economic thought at least, was his detailed and elaborate application to the wilderness of economic phenomena of the unifying concept of a co-ordinated and mutually interdependent system of cause and effect relationships which philosophers and theologians had already applied to the world in general. Smith's doctrine that economic phenomena were manifestations of an underlying order in nature, governed by natural forces, gave to

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¹	References to Adam Smith's writings are to the following editions: History of Ancient Physics, and Theory of Moral Sentiments, in "Essays Philosophical and Literary by Adam Smith" (Ward, Lock & Co., London, n.d.); Wealth of Nations, Cannan edition; Lectures, Cannan, editor.

CHAPTER VI ADAM SMITH: MORALIST AND PHILOSOPHER

GLENN R. MORROW

Once upon a time there was a man who read the Wealth of Nations; not a summary, nor a volume of selected passages, but the Wealth of Nations itself. He began with the Introduction, he read the famous first chapter on the division of labor, the chapters on the origin and use of money, the prices of commodities, the wages of labor, the profits of stock, the rent of land, and all the other well-known economic portions of the first book, not omitting the long digression on the fluctuation in the value of silver during the last four centuries, and the statistical tables at the end. Having completed the first book he went on to the second, not deterred by the fact that it is supposed to contain an erroneous theory of capital and an untenable distinction between productive and unproductive labor. In Book III he found an account of the economic development of Europe since the fall of the Roman Empire, with digressions upon various phases of medieval life and civilization. In the fourth book he came upon extended analyses and criticisms of the commercial and colonial policies of European nations, and a whole battery of free-trade arguments. Finally he attacked the long concluding book on the revenue of the sovereign. Here he found even more varied and unexpected matters: an account of the different methods of defense and of administering justice in primitive societies, and of the origin and growth of standing armies in Europe; a history of education in the Middle Ages and a criticism of eighteenth-century universities; a history of the temporal

CHAPTER VII THE INTRODUCTION OF ADAM SMITH ON THE CONTINENT

MELCHIOR PALYI

An attempt to trace the influence of Adam Smith on Continental economic thought involves in a striking degree the main kinds of difficulties which face the historian of the social sciences. The first difficulty arises from the fact that the influence may not have resulted simply from the development or propagation of certain ideas initiated by the hero. The influence of Smith's own ideas may have been, and, in the opinion of some, was, limited; in fact his fame was probably in part due to ideas not altogether his own. Who could dare to say exactly how much of his apparent influence on the Continental free trade movement was in reality due to other liberal thinkers? The second difficulty is the task of separating the practical influences from the scientific. Economic, like political, thought affects both science and practice; we have to confine ourselves here to purely literary tests. Furthermore, in the case of Adam Smith it would be very difficult indeed to state explicitly what proportion of his tremendous influence on the Continent was due to his ideas, and to what degree his style and the charming personality it expressed were responsible at least for his initial success. How far did his book merely present views which were already in the minds of the most prominent men of the time; how far was it only the expression of the trend which needed a formal statement of just this kind? At any rate, he was the "man of the moment." His style appealed to the scientist and the general

The Coming of a New Party,
Book by John Dewey, Paul H. Douglas; Whittlesey House, 1932

FOREWORD

There exist books giving a history of political parties in the United States; describing the rise and fall of new parties; giving an analysis of political tactics; diagnosing our present political ills; picturing our economic situation in its social effects; and arguing for a new party. Mr. Douglas has taken essential elements from all these fields, and has put them together in a single book. He has not laid them side by side in a mechanical way; he has combined them in a vital union. There are so few who have mastered the variety of facts which Mr. Douglas presents in this book that to most of its readers it will bring a genuine political education-and this quite independently of whether or no they agree with his conclusion about the necessity of a new party. The spirit, the ardor, the hope, which permeate the book make it an inspiration as well as an educative force.

We have here no remote academic argument for the coming of a new political movement. We have a vivid and authoritative picture of the existing American scene--documented, concrete, moving. The reader feels that he is not dealing with the opinions of the author as to why there should be a new party, but with the factors in our industrial and social life which are bound to bring one into existence. Mr. Douglas has so marshalled the material that we see political forces on the march. The difficulties in the way of creating a new party are not evaded; they receive full consideration. But as one reads one is made to see forces at work which will overcome these difficulties. The picture of the forces shaping

EPILOGUE

AS I finish this book, I am as conscious as the skeptical reader of the long hard road which lies ahead. The avalanches of public oratory and the oceans of pamphlets, the illimitable vistas of hot and crowded halls, the drudgery of committee meetings, the passing of bills on frosty mornings, and the incessant labor of oiling party machinery would almost discourage the sturdiest Samson. To those who love quiet and leisure over books or in the open air, or to those whose tastes are gayer, such a prospect is likely to excite as much disgust as those salutory but obnoxious medicaments which our mothers and grandmothers were so fond of administering.

This first wave is bad enough, but the second is worse. For sometimes when the victory has been won, trusted leaders will desert. A few will sell out crudely, but with the majority the process will be far more subtle. The thrill of putting their feet under rich men's tables will seduce many, and more particularly their wives. The desire for personal security and for what the world labels respectability will unconsciously sway others, and little by little the virtue will ooze out of them. The movement will go on without them, but there will be heartache by the way.

And in the offing there is the prospect of still a third breaker, more fearsome even than those that have gone before, which might well strike terror into the heart of the stoutest swimmer. It may be that the mighty who now rule both business and politics will, like the kings and emperors