60 ECONOMIC ESSAYS IN HONOR OF JOHN BATES CLARK 
the interests of many groups are involved: stockholders, bond- 
holders, managing employees, laborers, those who sell to them, 
those who buy from them, those whose property values are 
affected by their operations, their competitors, and other fellow- 
members of the general business community. Some of these 
interests are expressed through the machinery of free contract, 
some by that of representative government, industrial or political, 
and some by no recognised machinery. Moreover, the real char- 
acter of the machinery is different from its nominal character, 
and is visibly changing, as a result of the fact that it is not 
uniformly appropriate to its task, and leaves some interests 
without adequate means of expression and protection. This 
evolution is one of the very vital things which is now 
going on in industry. The trade association is only one expression 
of it. 
Ue 
ky Lea Es 
In this economy of organizations, the motives of individuals 
shift from a simple and exclusive attention to personal self- 
interest, and come to involve a considerable measure of loyalty 
to collective interests. This loyalty may be made the best policy, 
up to a certain point, but not sufficiently so to prevent a director 
from being able at times to make more money at the expense 
of his company than by loyally serving its interests. And there 
are conflicting loyalties, as every schoolboy or union worker 
knows—the psychology of these two groups is in some respects 
quite similar. The contrast between public and private conduct 
of business is not the simple thing it once was, but is a contrast 
between two systems of exerting pressure on a large force of hired 
employees, the difference hinging on the incentives of those in 
ultimate control, but often taking very similar forms as it reaches 
the actual worker. 
7. Legal Institutions 
Passing on to the legal institutions which underlie all this, we 
may note that where the earlier economics was content to ask: 
what is the justification of private property or occasionally: what 
was its origin, the realistic economics asks the more inconvenient 
question: what is private property and what is it doing? And 
just as a commodity has been analyzed into a “bundle of utili- 
ties,” so property is analyzed into a bundle of rights and privi- 
leges, its content defined by law, varying significantly in different 
lecal systems and changing from time to time as the systems