The prevailing rights of property, inheritance and contract form the centre of the institutions which govern the distribution of incomes. Their forms for the time being determine a democratic or aristocratic distribution of wealth. Who, for instance, has made the division of landed property, which generally determines the distribution of both wealth and income? Is it nature, luck or chance, or demand and supply? No, in the first place the social and agrarian institutions of the past and present. Wherever small peasant proprietorship prevails to-day, it is derived from the mediaeval village community system and the law of peasant succession. Wherever we meet with a system of large estates we see a result of the baronial and feudal system, of the later manorial regime and of the system of estates; at present the institutions of mortgages and leases play a part; the legislation touching the commutation of tenures and system of cultivation were of the same importance to Germany as the colonial system of other governments to their colonies. In the distribution of personal property individual qualities are more prevalent than in that of real estate. But nevertheless the institutions of ancient and modern times seem to us the most important. The forms of undertakings and the legal status of the laboring classes are the essential points : wherever slavery prevailed it governed at all times the whole economic life, the whole social classification and the distribution of incomes; guilds were, at the time of their consistent maintenance, as much an institution of distribution of incomes as an organization of labor; and the same is true of the domestic system of industry of the seventeenth and eighteenth century with its governmental regulation; the ruling considerations were the needs of commerce and technical practice on the one hand, the situation of the laborers in a domestic system of industries on the other. And are not to-day the institutions of unrestricted trade and interest on loans, of the exchanges and the system of public debts, the forms of undertakings, the system of joint stock companies, of co-operative associations, the unions and corporations of employers and laborers, all labor law, the institutions of friendly and similar societies the material foundation and cause of our present distribution of incomes? The individual causes and the chance of luck effect within the bounds of these institutions the little aberrations of personal destiny; the position of social classes in general is determined by the institutions.
What are economic institutions but a product of human feelings and thought, of human actions, human customs and human laws? And just this causes us to apply the standard of justice to their results, just this makes us inquire whether they and their effects are just or unjust. We do not require the distribution of incomes or wealth to be just absolutely; we do not require it of technical economic acts which do not concern others; but we do require the numerous economic acts which on the basis of barter and division of labor concern others and entire communities to be just.
Where such acts come into consideration our observations discern moral communities, their common aims and the human qualities, which are connected with these aims.
The most primitive barter is impossible, unless. between the parties practising it regularly, a certain moral understanding exists. There must have been an express or silent mutual agreement to preserve peace. The barterers must have common conceptions of value, must recognize a common law. Every seller forms with the purchaser, who stands before him at the moment of the transaction, a moral union of confidence.
In epochs of primitive culture, in the social communities of families, of kinship, of tribes, of leagues, there exists an uncommonly strong feeling of solidarity which therefore leads to very far-reaching demands of justice within these circles, as well as to a complete obtuseness of the same feeling beyond them.