The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-12-28
SOCIAL PROBLEMS
WERE DEALT WITH
BY President of the American
Economic Association
Thursday.
(NatiOnal News Asso,iatiou)

(NationaI News Asso,iati,u)
WASHINGTON, Dec. 2s-In an adj
dress before the twenty-fourth annual
meeting Of the American Economic
Association at the Hotel Raleigh today
the president. Professor Henry w. Far.
nam. reviewed extensively the econo
mic truths to be found in history His
speech will be followed by an address
from President Taft, on the federal
budget this afternoon.
President Farnam devoted himself
almost entirely to pointing out the eco
nomic propositions that have faced
humanity in the years gone by, com
menting upon the value Of these so.
cial evolutions and urging his fellow
economists to devote their attention
to the solution OF present day prob,
lens with the aid OF history
His only reference to the social
problems OF 1911 dealt with the tariff
and the bimetallism Of currency Re-
garding this subject Professor Farm
ham said:
Gold and Silver.
Some 35 years ago many ccOnO.
mists thought that the alternating de-
mand for gold and for silver which
would result from international himct-
allism would keep the ratio OF OK
change between the two metals con.
slant. AS the agreement necessary to
such a policy could not be carried in
to effect, our country endcavored to
raise the price Of silver by increasing
the governmental demand for it, and
Arst the Allison Act Of 1878 and then
the Sherman Act Of 1890 were passed
with this theory in view. The steady
fall in the price Of silver. In spite of
that demand. went far towards prov
Ing the great limitations Of the BIZ
metallic theory. The socalled Anti
Trust Law" of the United States
which is being so much discussed at
the present time, Is based upon the
theory commonly accepted from Adam
Smith down to the last quarter Of the
18th century, that free competition is
the best cure for the abuses of trade.
Many are now reaching the conclusion
that our experience with that law is
showing up many important limita-
tions upon that theory. Not only did
economic experiments rest as a rule
upon some hypothesis. but they often
rest upon the theories of the econo-
mists themselves. which though they
are often derided in the beginning,
slowly filter from the textbooks
through the magazines and newspa-
pers into the popular mind and influ-
ence public opinion, at times, long af-
ter the economists themselves have
ceased to believe them. The economist
has at least one attribute of divinity
in that his mills. like those of the
gods, grind slowly"
The "Parasitic" Rich.
Professor Farnam advocated an eco
|nomic expedition of exploration into
the homes of the rich as we'll as of the
poor and spoke extensively on the
parasitic" rich. He says:
1T Is a matter Of common observa-
Ition that wealthy families in our coun-
try often contain a number of para
s.sitic members, that is. members who
derive large income from society
without rendering any appreciable eco
,nomic or public service in return.
These general and obvious facts need,
however. to be examined historically
and statistically. in order to enable
ms to judge correctly of the reaction
|of prosperity on the human mind, and
tof the conditions which determine it.
Intensive studies Of heredity in fam-
q thncn h,,S
Icis Cation in England and Dr. Freder-
lick A. Woods and DIR. c. B. Davenport
Nm our country. are of great value. but
need to be supplemented by a study of
the economic reactions. In the case
OF animal life. the inherited character
1stics are all-important. and the skill
Iful breeder can reasonably expect to
md the qualities of the parent in
those OF the offspring But If cows had
the power to deliberately choose life
(of celibacy. We should find many a ped
|igreed Guernsey. with ancestors in the
advanced register. chewing her cud in
fdleness on the hillside and yielding
mo milk whatever. just as we often
ind sons Of distinguished parents dis
playing real ability. when put to some
academic test. and yet doing nothing
to make their lives either useful or
distinguished for lack of proper incen.
tive.
Make Good Specimens.
These parasitic members of the So
called Leisure class" should be pecu-
liarly useful specimens for economic
study in our country. because they arc
not under the social pressure of the
feudal system. inherited in the older
countries of Europe from the time
when wealth meant land ownership,
and land ownership Of necessity invol-
we'd public duties. Many of this class
In our country walk our streets. clio,
Quent but unconscious arguments for
eocialism. terrible examples for the
moralist. living texts for sermons. rich
material for the problem novelist. but
still comparatively neglected by the
economist. the sociologist. and the
stAtistician. We gather the budgets of
working men but not of club men: we
collect the statistics Of Involuntary
unemployment but not Of voluntary
ldteness: our study OF social cond- |
tons on the East Side has not been ex-
tended to the West Side And yet how
can We understand the causes of ma