CHAPTER XII.

THE AGRARIAN SOCIALISM OF HENRY GEORGE.

Mr. George sent his "Progress and Poverty" into the world with the

remarkable prediction that it would find not only readers but apostles.

"Whatever be its fate," he says, "it will be read by some who in their

heart of hearts have taken the cross of a new crusade.... The truth I

have tried to make clear will not find easy acceptance. If that could

be, it would have been accepted long ago. If that could be, it would

never have been obscured. But it will find friends--those who will toil

for it, suffer for it: if need be, die for it. This is the power of the

truth" (p. 393). Mr. George's prediction is not more remarkable than its

fulfilment. His work has had an unusually extensive sale; a hundred

editions in America, and an edition of 60,000 copies in this country are

sufficient evidences of that; but the most striking feature in its

reception is precisely that which its author foretold; it created an

army of apostles, and was enthusiastically circulated, like the

testament of a new dispensation. Societies were formed, journals were

devised to propagate its saving doctrines, and little companies of the

faithful held stated meetings for its reading and exposition. It was

carried as a message of consolation to the homes of labour. The author

was hailed as a new and better Adam Smith, as at once a reformer of

science and a renovator of society. Smith unfolded "The Nature and

Causes of the Wealth of Nations," but to Mr. George, we were told, was

reserved the greater part of unravelling "the nature and causes of the

poverty of nations," and if the obsolete science of wealth had served to

make England rich, the young science of poverty was at length to make

her people happy with the money. Justice and Liberty were to begin their

reign, and our eyes were to see--to quote Mr. George's own words--"the

City of God on earth, with its walls of jasper and its gates of pearl"

(p. 392).

The fervour of this first reception may--as was perhaps only

natural--have suffered some abatement since, but it affords a striking

proof how largely modern society is disquieted by the results of our

vaunted industrial civilization. Even those amongst us who are most

unwilling to disparage the improvement that has really taken place

during the last hundred years in the circumstances of the people, still

cannot help feeling that the improvement has fallen far short of what

might have been reasonably expected from the contemporaneous growth of

resources and productive power. But numbers of people will not allow

that any improvement has occurred at all, and deliver themselves to an

unhappy and unwarranted pessimism on the whole subject. Because

industrial progress has not extinguished poverty, they conclude that it

has not even lessened it; that it has no power to lessen it; nay, that

its real tendency is to aggravate it, that it increases wealth with the

one hand, but increases want with the other, so that civilization has

developed into a purely upper-class feast, where the rich are grossly

overfilled with good things, and the poor are sent always emptier and

emptier away. Invention, they tell us, has followed invention; machinery

has multiplied the labourer's productivity at least tenfold; new

colonies have been founded, new markets and channels of commerce opened

in every quarter of the globe; gold-fields have been discovered, free

trade has been introduced, railways and ocean steamers have shortened

time and space themselves in our service. Each and all of these things

have excited hopes of introducing an era of popular improvement, and

each and all of them have left these hopes unfulfilled. They think,

therefore, they now do well to despair, and they fortify themselves in

their gloom by citing the opinion of Mr. Mill, that "it is questionable

whether all the mechanical inventions yet made have lightened the day's

toil of any human being," without observing that Mr. Mill immediately

follows up that opinion by expressing the confident assurance that it

was "in the nature and the futurity" of these inventions to effect that

improvement. These gloomy views have in France received the name of

_Sisyphism_, because they represent the working class under the present

industrial system as being struck with a curse like that of Sisyphus,

always encouraged by fresh technical advantages to renewed expectations,

and always doomed to see their expectations perish for ever.

Now, it was upon these despondent and burdened souls that Mr. George

counted so confidently, and, as time has shown, so correctly, for his

apostles and martyrs; and he counted so confidently upon them because he

had himself borne their sorrows, and drunk of their despair, and because

he now believed most entirely that his discoveries would bring

"inexpressible cheer" to their minds, as, in the same circumstances,

they had already brought inexpressible cheer to his own. "When I first

realized," he says, "the squalid misery of a great city"--that is, of

the latest and most characteristic product of industrial

development--"it appalled and tormented me, and would not let me rest

for thinking of what caused it and how it could be cured" (p. 395).

Poverty seemed to him to be most abounding and most intense in precisely

the most advanced countries in the world. "Where the conditions to which

material progress everywhere tends are most fully realized--that is to

say, where population is densest, wealth greatest, and the machinery of

production and exchange most highly developed--we find the deepest

poverty, the sharpest struggle for existence, and the most enforced

idleness" (p. 4). Nay, poverty, he thought, seemed "to take a darker

aspect" in every community at the very moment when it might be

reasonably expected to brighten--at the moment when the community made a

distinct advance in material civilization, when "closer settlements and

a more intimate connection with the rest of the world and greater

utilization of labour-saving machinery make possible greater economies

in production and exchange, and wealth increases in consequence, not

merely in the aggregate, but in proportion to population" (p. 4). This

process of impoverishment might, he says, escape observation in an old

country, because such a country has generally contained from time

immemorial a completely impoverished class, who could not be further

impoverished without going out of existence altogether, but in a new

settlement like California, where he resided, poverty might be seen

almost in the act of being produced by progress before one's very eyes.

While the colony had nothing better than log cabins or cloth shanties,

"there was no destitution," though there might be no luxury. But "the

tramp comes with the locomotive, and alm-houses and prisons are as

surely the marks of 'material progress' as are costly dwellings, rich

warehouses, and magnificent churches" (p. 4). "In the United States it

is clear that squalor and misery, and the vices and crimes that spring

from them everywhere, increase as the village grows to the city, and the

march of development brings the advantages of improved methods of

production and exchange. It is in the older and richer sections of the

Union that pauperism and distress are becoming most painfully apparent.

If there is less deep poverty in San Francisco than in New York, it is

not because San Francisco is yet behind New York in all that both cities

are striving for? When San Francisco reaches the point where New York

now is, who can doubt that there will also be ragged and barefooted

children in her streets?" (p. 6). The prospect alarmed and agitated him

profoundly. It deprived him, as it has deprived so many of the

continental socialists, of all religious belief, for if the real order

of things make an ever-deepening poverty to be the only destiny of the

mass of mankind, it seemed vain to dream of a controlling Providence or

an immortal life. "It is difficult," says he, "to reconcile the idea of

human immortality with the idea that nature wastes men by constantly

bringing them into being where there is no room for them. It is

impossible to reconcile the idea of an intelligent and beneficent

Creator with the belief that the wretchedness and degradation, which are

the lot of such a large proportion of human kind, result from His

enactments; while the idea that man mentally and physically is the

result of slow modifications perpetuated by heredity, irresistibly

suggests the idea that it is the race life, not the individual life,

which is the object of human existence. Thus has vanished with many of

us, and is still vanishing with more of us, that belief which in the

battles and ills of life affords the strongest support and deepest

consolation" (p. 396).

The inquiry Mr. George undertook was consequently one of the most vital

personal concern to himself, and we are glad to think that it has been

the means of restoring to him the faith and hope he prizes so much. "Out

of this inquiry," he tells us, "has come to me something I did not think

to find, and a faith that was dead revives" (p. 395).

It may be ungracious to disturb a peace won so sorely and offered so

sincerely to others, but the truth is, Mr. George has simply lost his

faith by one illusion and recovered it again by another. He first

tormented his brain with imaginary facts, and has then restored it with

erroneous theories. His argument is really little better than a

prolonged and, we will own, athletic beating of the air; but since both

the imaginary facts and the erroneous theories of which it is composed

have obtained considerable vogue, it is well to subject it to a critical

examination. I shall therefore take up successively, first, his problem;

second, his scientific explanation; and third, his practical remedy.

I. _Mr. George's Problem._

He states his problem thus:--"I propose to seek the law which associates

poverty with progress and increases want with advancing wealth" (p. 8).

The first rule of scientific investigation is to prove one's fact before

proceeding to explain it. "There are more false facts than false

theories in the world," and a short examination whether a phenomenon

actually exists may often relieve us from a long search after its law.

Mr. George, however, does not observe this rule. He seeks for the law of

a phenomenon without first verifying the phenomenon itself--nay,

apparently without so much as suspecting that it ought to be verified.

He assumes a particular view of the social situation to be correct,

because he assumes it. But his assumption is a purely subjective and, as

will presently be shown, delusive impression. We imagine our train to be

going back when a parallel train is going faster forward, and we are apt

to take the general condition of mankind to be retrograding when we fix

our eyes exclusively on the rapid and remarkable enrichment of the

fortunate few. What Mr. George calls "the great enigma of our time" is

just the enigma of the apparently receding train, and he proceeds to

solve it by coiling himself in a corner and working out an elaborate

explanation from his own inner consciousness "by the methods of

political economy," instead of taking the simple and obvious precaution

of looking out of the opposite carriage-window and testing, by hard

facts, whether his impression was correct. Had he taken this precaution,

had he resorted to an examination of the actual state of the facts, he

would have found good reason to change his impression; he would have

found that on the whole poverty is not increasing, that in proportion to

population it is considerably less in the more advanced industrial

countries than in the less advanced ones, and that he had simply

mistaken unequal rates of progress for simultaneous movements of

progress and decline. His impression, it must be admitted, is a

prejudice of considerable currency; there are many who tell us, as he

does, that want is growing _pari passu_ with wealth, and even gaining on

it; that if the rich are getting richer, the poor are at the same time

getting poorer; but it is a question of fact, and yet no one has ever

seriously tried to prove the assertion by an appeal to fact. That Mr.

George should have neglected to submit it to such a test is the more

remarkable, because he was, as he has told us, "tormented" in mind by

it, and because he acknowledges that it is a "paradox"--_i.e._, against

the reason of the case, and that it is also, to some extent at least,

against appearances. He owns, for example, that "the average of comfort,

leisure, and refinement has been raised," and that though the lowest

class may not share in these gains, yet even they have in some ways

improved. "I do not mean," he says, "that the condition of the lowest

class has nowhere nor in anything been improved, but that there is

nowhere any improvement which can be credited to increased productive

power. I mean that the tendency of what we call material progress is in

no wise to improve the condition of the lowest class in the essentials

of healthy, happy human life. Nay, more, that it is to still further

depress the condition of the lowest class. The new forces, elevating in

their nature though they be, do not act upon the social fabric from

underneath, as was for a long time hoped and believed, but strike it at

a point intermediate between top and bottom. It is as though an immense

wedge were being forced, not underneath society, but through society.

Those who are above the point of separation are elevated, but those who

are below are crushed down" (p. 5). From this passage it would appear

that, according to Mr. George, the condition of all except the lowest

class has improved _in consequence of_ material progress, and that the

condition of the lowest class has improved _in spite of_ it. He does not

undertake, it seems, to affirm of any class that it has, as a matter of

actual fact, become impoverished in the course of social development,

but only that there is a tendency in the increase of productive

power--in "the new productive forces"--in "material progress"--to

impoverish the lower strata of society. But then he contends that these

forces are practising exactly the same tendency on some of the highest

strata, on classes that we know have been growing richer and richer

every day. For he tells us that these new forces, entering our social

system like a wedge, depress all who happen to be on the wrong side; and

we shall presently discover that this unhappy company on the wrong side

of the wedge embraces many groups of persons who will be excessively

astonished to learn that they are there. It includes, not only the poor

labourers who live on wages, but the great capitalists who live on

profits; the great cotton spinners, ironmasters, brewers, bankers,

contractors; the very men, in short, of all the world, whom the new

productive forces have most conspicuously and enormously enriched. I

shall revert to this preposterous conclusion later on, but at present it

is enough to say that a tide, which so many have swum against and swum

to fortune, cannot be very formidable, and at all events can furnish no

clue whatever to the possible condition of those who are exposed to it.

For that we have only one resort. It is a plain question of fact--is

poverty really increasing? Are the poor really getting poorer? And this

can only be competently decided by the ordinary inductive evidence of

facts. The data of this kind which we possess for settling the question

may not be so exact as would be desirable, but there is no higher

tribunal to which we can appeal. The question must be answered by them,

or not answered at all.

Now any data we have all conduct to the conclusion that poverty is not

increasing. If poverty were increasing with the increase of wealth, it

would show itself either in an increase of pauperism, or in a decline in

the general standard of living among the labouring classes, or in a fall

in the average duration of life, and these symptoms would be most acute

in the countries that are most wealthy and progressive. Now, let us take

England as a crucial case of a country in a very advanced stage of

industrial development. Is English pauperism greater now than it was

before the "new productive forces" entered the country? Is the general

standard of living among the labouring classes lower? Is the average

duration of life less? Are poverty and the various symptoms of poverty

more acute in England than in more backward countries?

In a foot-note to the passage last quoted from his book, Mr. George

explains that the improvement he recognises in the lot of the lowest

class does not consist in greater ability to obtain the necessaries of

life. Does he mean, because more things are now reckoned among the

necessaries of life? If so, we fear there is no chance of that

difficulty being removed, nor indeed is there any reason for desiring it

to be so. Men's wants will always increase with their incomes, and the

struggle to make both ends meet may in that case indefinitely continue.

But the fact remains that they have more wants satisfied than before,

that they realize a higher standard of life, and that is the mark, and

indeed the substance, of a more diffused comfort and civilization. It is

true that as the general standard of living rises, people feel the pinch

of poverty at a higher level than before, and become pauperized for the

want of comforts that are now necessary, but which formerly few ever

dreamt of possessing. To have no shoes is a mark of extreme indigence

to-day; it was the common lot a century ago. People may be growing in

general comfort, and yet their ability to obtain necessaries remain

stationary, because their customary circle of necessaries may be always

widening. The real sign of an advancing poverty is when the circle of

recognised necessaries is getting narrow, and yet men have more

difficulty in obtaining them than before; in other words, 1st, when the

average scale of living falls; and 2nd, when a larger proportion of the

people are unable to obtain it, reduced though it be. Now, in England,

the contrary has happened; the general standard of living has risen, and

the proportion of those who are unable to obtain it has declined.

In a preceding chapter I adduced evidence to show how greatly improved

the working-class standard of living now is from what it was two hundred

years ago, in the good old times socialist writers like to sing of, when

men had not yet sought out many inventions and the world was not

oppressed by the large system of production. But let us tap the line

between then and now at what point we may, and we find the same result;

the tendency is always to a better style of living. Mr. Giffen, for

example, in his address, as President of the Statistical Society, on

20th November, 1883, compares the condition of the working classes

to-day with their condition half a century since, and concludes from

official returns that while the sovereign goes as far as it did then in

the purchase of commodities, money wages have increased from 30 to 100

per cent., and, at the same time, the hours of labour have been reduced

some 20 per cent. Except butcher-meat and house-rent, every other

element of the working man's expenditure is cheaper, and butcher-meat

was fifty years ago hardly an element of his expenditure at all, and the

kind of house he then occupied was much inferior, as a rule, to what he

occupies now, bad as the latter may in many cases be.

But while the general standard of comfort has been rising, the

proportion of the population who are unable to obtain it has been

diminishing. I have already stated that King estimated the number of

persons in receipt of relief in England and Wales in 1688 at 900,000.

Now in 1882 the average number in receipt of relief at one and the same

time was, according to official returns, 803,719; and if we are right in

doubling that figure to find the whole number of paupers relieved in the

course of the year (that being the proportion borne in Scotland), then

we may conclude that there are some 1,600,000 paupers in England and

Wales at the present day. That is to say, with nearly five times the

population, we have less than twice the pauperism. The result is far

from being entirely gratifying; a million and a half of paupers (with

more than half as many again in Ireland and Scotland) constitute a very

grave problem, or rather ganglion of problems; but the fact supplies a

decisive enough refutation of the pessimist idea that the actual

movement of pauperism has been one of increase instead of one of

decrease.

During these two hundred years there is no period in which wealth and

productive power multiplied more rapidly than the last thirty years,

and, therefore, if Mr. George's ideas were correct, there is no period

that should show such a marked increase of pauperism. What do we find?

We find that pauperism has steadily declined in England during that

period. The decrease has been gradual and attended with no such striking

interruptions as were frequently exhibited in former times. But the most

remarkable feature about it is that the number of able-bodied paupers

has diminished by nearly a half; from 201,644 in 1849 to 106,280 in

1882. That is the very class of paupers whom Mr. George represents it to

be the special effect of increasing productive power to multiply, and

yet, though wealth and productive power have made almost unexampled

progress, and though the population has also considerably risen in the

interval, we have not more than half as many of this class of paupers

now as we had thirty years ago. No doubt this result is due in part to a

better system of administering relief, just as it is due in part to the

growth of trade unions and friendly societies, to the extension of

savings banks, and to other agencies. But if Mr. George's principle is

true, could such a result have taken place at all? If "material

progress" has a tendency to multiply "tramps" or able-bodied paupers,

the tendency must be weak, indeed, when a little judicious management on

the part of public bodies, or of working men themselves, would not only

counteract it, but turn the current so strongly the other way. But the

truth is that the "tramp" has never been so little of a care in this

country as at the present hour, and that it is to material progress we

owe his disappearance. He was a very serious problem to our ancestors

for centuries and centuries. The whole history of our social legislation

is a history of ineffectual attempts to deal with vagrants and sturdy

beggars, and we are less troubled with them now mainly because

industrial progress has given them immensely more opportunities of

making an honest and regular living. Industrial progress has all along

been creating work and annihilating tramps, but it has all along been

followed by absurd and perverse complaints like Mr. George's, that it

was only creating tramps and annihilating opportunities of work. Mr.

George says the tramp comes with the locomotive, but a writer in 1673

(quoted by Sir F. Eden, "State of the Poor," I., 190) declared that he

came with the stage-coach. He pictures the happy age before

stage-coaches, when (as Mr. George says of California) there might be no

luxury, but there was no destitution, when every man kept one horse for

himself and another for his groom. But with the introduction of the

stage-coach the scene was changed. People got anywhere for a few

shillings, and ceased to keep horses. They were so much the richer

themselves, but their grooms were ruined and thrown upon the world

without horse or home. Now class privations like these are incidental to

industrial transformations, and in an age of unusual industrial

transitions like ours, they may be expected to be unusually numerous.

But the effect of material progress on the whole is to prevent such

privations rather than cause them. It multiplies temporary redundancies

of labour, but it multiplies still more the opportunities for

permanently relieving them. Why are we now free from the old scourges of

famine and famine prices? Partly because of free trade, but mainly

because of improved communications, because of the steamer and the

locomotive. Even commercial crises are getting less severe in their

effects. The distress among our labouring classes during the American

Civil War was nothing compared with the suffering under the complete

paralysis of industry that followed the close of the great continental

war in 1815. Miss Martineau tells us of that time:--"The poor abandoned

their residences, whole parishes were deserted, and crowds of paupers,

increasing in numbers as they went from parish to parish, spread wider

and wider this awful desolation." (History of England, I. 39.) No such

severe redundancy of labour has taken place since then, and the

redundancies that attend changes of fashion or of mechanical agency,

though they undoubtedly constitute a serious difficulty, are yet

lightened and not aggravated by the various and complex ramifications of

modern industry. Except a new colony, there is no place where new-comers

are so easily taken on as in a highly developed industrial country.

There are more poor in Norway than in England, and they are increasing;

yet in Norway there is no rent and no great cities. Mr. George may say,

and in fact he does say, that in old countries the number of paupers is

reduced by simple starvation; but if that were so, the death-rate would

be increasing. But in England the death-rate is really diminishing. Let

us again quote from Mr. Giffen's address:--"Mr. Humphreys, in his able

paper on 'The Recent Decline in the English Death-Rate,' showed

conclusively that the decline in the death-rate in the last five years,

1876-80, as compared with the rates on which Dr. Farr's English Life

Table was based--rates obtained in the years 1841-45--amounted to from

28 to 32 per cent. in males at each quinquennial of the 20 years, 5-25,

and in females at each quinquennial from 5-25, to between 24 and 35 per

cent.; and that the effect of this decline in the death-rate was to

raise the mean duration of life among males from 39.9 to 41.9 years, a

gain of two years in the average duration of life. Mr. Humphreys also

showed that by far the larger proportion of the increased duration of

human life in England was lived at useful ages, and not at the dependent

ages of either childhood or old age. No such change could have taken

place without a great increase in the vitality of the people. Not only

had fewer died, but the masses who had lived must have been healthier

and suffered less from sickness than they did. From the nature of the

figures also the improvement must also have been among the masses, and

not among a select class whose figures threw up the average. The

improvement, too, actually recorded obviously related to a transition

stage. Many of the improvements in the condition of the working classes

had only taken place quite recently. They had not, therefore, affected

all through their existence any but the youngest lives. When the

improvements had been in existence for a longer period, so that the

lives of all who are living had been affected from birth by the changed

conditions, we might infer that even a greater gain in the mean

duration of life will be shown. As it was the gain was enormous. Whether

it was due to better and more abundant food and clothing, to better

sanitation, to better knowledge of medicine, or to these and other

causes combined, improvement had beyond all question occurred." The

decline of pauperism in this country then is not due to any increasing

mortality in the classes from which the majority of the paupers come;

but it is one among many other proofs that these classes have profited,

like their neighbours, by the course of material progress. They may not

have profited in the same degree as some others, or in the degree we

think desirable and believe to be yet possible for themselves. But they

have profited. The situation is really, as we have said, one of unequal

rates of progress, and not one of simultaneous progress and decline.

And this Mr. George seems, at a later stage of his argument, freely to

admit. For when he comes to state "the law which associates poverty with

progress and increases want with advancing wealth," he explains that he

does not contend that poverty is associated with progress at all, but

only that a lessening proportion of the gross produce of society falls

to some classes; that want may possibly not in the least increase with

advancing wealth; that all classes may be the wealthier for the growth

of wealth; and practically, that the only evidence of the poverty of the

poor is the greater richness of the rich. It seems he is not explaining

in any wise why the poor are getting poorer, but only why they are not

getting rich so fast as some of their neighbours. We must quote chapter

and verse for this extraordinary vacillation about the very problem he

wants to solve. "Perhaps," he says, in the last paragraph of Book III.,

chapter vi. (p. 154), "it may be well to remind the reader, before

closing this chapter, of what has been before stated--that I am using

the word wages, not in the sense of a quantity, but in the sense of a

proportion. When I say that wages fall as rent rises, I do not mean that

the quantity of wealth obtained by labourers as wages is necessarily

less, but that the proportion which it bears to the whole produce is

necessarily less. The proportion may diminish while the quantity remains

the same, or even increases. If the margin of cultivation descends from

the productive point, which we will call twenty-five, to the productive

point we will call twenty, the rent of all lands that before paid rent

will increase by this difference, and the proportion of the whole

produce which goes to labourers as wages will to the same extent

diminish; but if in the meantime the advance of the arts or economies

that become possible with greater population have so increased the

productive power of labour that at twenty the same exertion will produce

as much wealth as before at twenty-five, labourers will get as wages as

great a quantity as before, and the relative fall of wages will not be

noticeable in any diminution of the necessaries or comforts of the

labourer, but only in the increased value of land and the greater

comforts and more lavish expenditure of the rent-receiving class." It

thus turns out that the alleged impoverishment of the labouring classes

through the increasing wealth of society--the sad and desolating

spectacle that "tormented" Mr. George, "so that he could not rest"--the

cruel mystery that robbed him even of his religious faith, and moved him

to write his powerful but inconclusive book--this was no real

impoverishment at all, but only an apparent one. It is not so much as

"noticeable" in "any diminution of the necessaries or comforts of the

labourer"; it is noticeable only in "the greater comforts and more

lavish expenditure of the rent-receiving class." The poverty of the

labourer consists in the greater wealth of the landlord. The poor are

not poorer; they only seem poorer, because certain of the rich have got

so much richer. The problem is thus, on Mr. George's own showing, just

the mock problem of the apparently receding train.

But let us take up this new issue. Mr. George's assertion now is that

wages are a less proportion of the gross produce of the country than

they were, because rent absorbs a correspondingly larger proportion than

it did. Is that so? Mr. George does not think of showing that it is: he

assumes it, without apparently having the smallest pretence of fact for

his assertion. His assumption is entirely wrong. Rent is a much smaller

proportion of the gross produce of the country than it was, and wages

are not only in their aggregate a larger proportion of the aggregate

produce of the country, but in their average a larger proportion of the

_per capita_ production. There is no need to rest in random assumptions

on the matter. The gross annual produce of the United Kingdom is

reckoned at present at twelve hundred millions sterling, and the rent of

the land at less than seventy millions, or about one seventeenth of the

whole. In the time of King and Davenant, 200 years ago or so, the annual

produce of England and Wales was forty-three millions, and the rent of

land ten millions--little less than one-fourth. (Davenant's Works, iv.,

71.) It is hardly worth while, however, making a formal assertion of so

self-evident a proposition as that rent constitutes a much smaller

fraction of the national income now that wealth is invested so vastly in

trade and manufactures, than it did when agriculture was the one great

business of life: but it is perhaps better worth showing that rent does

not absorb a greater proportion even of the agricultural produce of the

country than it used to do. Rent has risen nearly 200 per cent. in the

course of the last hundred years, but it does not take one whit a larger

share of the gross produce of the land than it took then.

According to the calculations of Davenant and King, the gross produce of

agriculture amounted, at the time of the Revolution, to four rents, or,

allowing for tithes, to three rents; but this was only on the arable.

The produce of other land, natural pasture and forest land and the like,

came to less than two rents; so that while the rent of arable was not

more than a third of the produce (or, to state it exactly, 27 per

cent.), the rent of land generally was more nearly a half. The figures

are--

Gross Produce. Rent.

Arable Land L9,079,000 L2,480,000

Other Land 12,000,000 7,000,000

----------- ----------

Total L21,079,000 L9,480,000

(Davenant's Works, iv., 70.) Arthur Young, a century later, declares

that the doctrine of three rents was already exploded, and that farmers

had begun to expend so much on high cultivation that they would be very

ill content if they produced no more than three rents. In fact, he

declares that even in former times rent could never have amounted to a

third of the produce, except on lands of the very first quality, and

that a fourth was more probably the average proportion. In his

"Political Arithmetic," published in 1779 (Part II., pp. 27, 31), he

estimated the gross agricultural produce of England (exclusive of Wales)

at L72,826,827, and the gross agricultural rental at L19,200,000, or 26

per cent.,--very nearly one-fourth of the produce. To come down nearer

our own time, M'Culloch estimated the gross agricultural produce of

England and Wales in 1842-3 to have been L141,606,857, and the gross

agricultural rental L37,795,906, or 26 per cent. of the produce.

("Statistical Account of the British Empire," 3rd Edition, p. 553.) The

gross, agricultural produce of the United Kingdom is now 270 millions

sterling, and the gross agricultural rental 70 millions. Mr. Mulhall,

indeed, estimates it at only 58 millions; but at 70 millions it would

be, as nearly as possible, 26 per cent.,--curiously enough the same

figure exactly as in 1843 and in 1779, and almost the same as in 1689.

So far of rent; now as to wages. I have already, in a former chapter (p.

301), produced some evidence to show that the average labourer's wages

bears a higher proportion to the average income of the country than it

did in former times, or, in other words, that the labourer enjoys a

higher _per capita_ share of the gross annual produce of the country as

measured in money, and I need not repeat that evidence here. Mr. Mulhall

has made some calculations which confirm the conclusions there drawn.

("Dictionary of Statistics," p. 246.) He compares the income of the

people of the United Kingdom at the three epochs of 1688, 1800, and

1883. He divides the people into classes and numbers them by families,

stating the total income of each class and the total number of families

among whom it was divided. I select the two columns containing the

results for the whole population and the results for the working class.

(1) Number of Families:--

A.D. 1688. A.D. 1800. A.D. 1883.

Whole Nation 1,200,000 1,780,000 6,575,000

Working Class 759,000 1,117,000 4,629,000

(2) Earnings:--

A.D. 1688. A.D. 1880. A.D. 1883.

Whole }

Nation} L45,000,000 L230,000,000 L1,265,000,000

Working}

Class } 11,000,000 78,000,000 447,000,000

A single glance at these tables will show that the aggregate wages of

the country constitutes a slightly better proportion of its aggregate

annual income at present than in 1800, and a decidedly better proportion

than in 1688. But if we look, not to the aggregate income of the class,

but to the average income of the individual families it contains, the

result is in nowise more favourable to Mr. George's assumption. The

following table will show that:--

(3) Average Income of Families:--

A.D. 1688. A.D. 1880. A.D. 1883.

Whole Nation L37 L129 L189

Working Class 14 69 96

The average working-class income was thus 37 per cent. of the average

income of the country in 1688; 53 per cent. of it in 1800; and 51 per

cent. of it in 1883. The difference between the last two epochs is so

indecisive that we may count them practically identical. The real

position of affairs then as to the proportion of wages to national

produce is this, that wages enjoy a considerably larger share of that

produce now than they did at the end of the seventeenth century, and

about the same proportion as they enjoyed at the end of the eighteenth.

If, accordingly, Mr. George resolves to stick by the point of

proportion, he would therefore have no more solid ground to stand on

than on the point of quantity. Rent, as a proportion of the entire

wealth of the country, has enormously declined, and even as a

proportion, of agricultural wealth has not increased. Wages as a

proportion have not declined, but rather risen.

These, among other things, are indications that we have been concluding

too hastily that concentration of wealth is the characteristic tendency

of the time, and ignoring the existence of many minor and less

conspicuous forces which have been working in the contrary direction.

The real prospect at present is towards diffusion. The enormous

accumulations that have marked the last hundred and fifty years have

owed their existence largely to causes that cannot be expected to

endure; in the case of land, to vicious laws directly favouring

aggregations; and in the case of trade, to the unparalleled rapidity of

the transformations and extensions industry has undergone during the

period. Great inequalities are natural to such a time. Huge fortunes are

made by pioneers, and will not be easily made by their successors.

Railway contracting will never produce again a millionaire like Mr.

Brassey, but it will continue to furnish the means of many moderate

fortunes and competencies. So with every other new branch of industry,

or new field of investment. The lucky person who is the first to occupy

it may rise to great riches, but his successors will divide the custom,

and instead of one large fortune, there will be a considerable number of

small ones. Mr. George himself admits that the opportunities of making

large fortunes are growing more limited, but oddly enough he considers

the fact to be a signal evidence of "the march of concentration." In his

"Social Problems" (p. 59) he writes: "An English friend, a wealthy

retired Manchester manufacturer, once told me the story of his life. How

he went to work at eight years of age, helping to make twine, when twine

was made entirely by hand. How, when a young man, he walked to

Manchester, and having got credit for a bale of flax, made it into twine

and sold it. How, building up a little trade, he got others to work for

him. How, when machinery began to be invented, and steam was introduced,

he took advantage of them, until he had a big factory and made a

fortune, when he withdrew to spend the rest of his days at ease, leaving

his business to his son. 'Supposing you were a young man now,' said I,

'could you walk into Manchester and do that again?' 'No,' replied he,

'no one could. I couldn't with fifty thousand pounds in place of my five

shillings.'" The true moral of this little story is of course that it is

more difficult to amass a huge fortune in that particular line now than

when machinery was young, and that a man with L50,000 to start with must

now content himself with a much poorer figure than Mr. George's lucky

friend made out of nothing. Would Mr. George compute what limit could be

set to the sum his friend might have amassed, had he started in those

golden days with L50,000 instead of five shillings? Even as things

stood, his solitary success did not distribute the wealth of Manchester

any the better among his fellow-spinners who were not fortunate enough

to get credit for a bale of flax, or pushing enough to ask for it, and

were not in a position to take advantage of the first introduction of a

new power, and rise with it to great wealth. That the stream of things

is now making for more moderate fortunes, and more of them, is confirmed

by the testamentary statistics of the previous ten years published some

time ago by the _Spectator_ newspaper. These figures show that the

number of fortunes of the first rank left during that period has been

very much less than it was in the preceding ten years, but that the

number of moderate fortunes has been very much larger.

What the future may hide in it I shall not venture to divine. It will no

doubt bring upon industry fresh transformations, but we can hardly

expect them to be so numerous or so rapid as in the brilliant era of

industrial progress and colonial development we have passed through, and

some at least of the changes that are in store for us point, as I have

shown in the introductory chapter of this book, to a greater diffusion

rather than a greater concentration in the future. Mr. George says: "All

the currents of the time run to concentration. To successfully resist it

we must throttle steam and discharge electricity from human service" (p.

232). Now steam has undoubtedly been a great concentrator, but

electricity, which is likely to take its place in the future, will to

all appearance be as great a distributor. Mr. George is equally mistaken

regarding the real effect of the other "currents of the time." "That

concentration is the order of development," says he, "there can be no

mistaking--the concentration of people in large cities, the

concentration of handicrafts in large factories, the concentration of

transportation by railroad and steamship lines, and of agricultural

operations in large fields. The most trivial businesses are being

concentrated in the same way--errands are run and carpet sacks are

carried by corporations" (p. 232). The concentration of people in cities

is not the same thing as the concentration of the wealth of those cities

in the hands of a few individuals. The centralization of labour in

cities has assisted the birth of the trade union and the co-operative

society, which are among the best agencies for diffusing wealth; and

the growth of joint-stock companies is a strange proof of a tendency to

greater concentration of wealth, for the joint-stock company is really

an instrument of the small capital, enabling it by combination to

compete successfully with the larger; and as to agriculture, the real

tendency, in this country at any rate, seems to be to lesser holdings.

When we complain of the inequalities of our time--and I am far from

desiring to underrate their extent or to palliate their

mischievousness--we are apt to forget how largely the real and natural

process of evolution is after all one of distribution, how much the most

conspicuous of the inequalities have been incidental to a transition

period, and due to causes of a temporary nature, and how many

indications we possess that they are not unlikely to be corrected and

moderated in the future course of social development. Some of the

official returns made in connection with the income tax show that the

immense increase of wealth of the last thirty years has been far from

being reaped by any single class, but has been shared pretty evenly by

all the classes included in those returns. We possess detailed accounts

of the number of persons paying income tax in each grade of income under

Schedule D, from the year 1849, and if we compare the figures of that

year with those of 1879, we shall obtain a fair index to the movement of

distribution during those thirty years. Schedule D, it is true, includes

only incomes derived from trades and professions, but these incomes may

fairly enough be taken as sufficiently characteristic to afford a

trustworthy indication of the general movement. While population

increased in the thirty years by 22 per cent., the number of incomes

liable to income-tax increased by 161 per cent., and of these, the

incomes that have increased in much the largest proportion are precisely

those middling or lower middling incomes which I have before shown to

have unfortunately declined since 1688. While the number of incomes over

L1,000 a year has increased by 165 per cent., the number of incomes

between L150 and L400 a year has increased by 256 per cent. Mr. Goschen,

in his inaugural address as President of the Royal Statistical Society

in December, 1887, produced later evidence showing the continuance, and

even growth of the same tendency. He showed from the Income Tax Returns

that, in spite of the increase of population between 1877 and 1886, the

number of incomes over L1,000 a year had decreased by 2.40 per cent.,

and the number of incomes between L500 and L1,000 had remained the same,

while the number of incomes between L150 and L500 had increased 21.4 per

cent. He showed from the statistics of certain selected public

companies, that in the ten years from 1876 to 1886 the number of their

shareholders had increased by 72 per cent., while the average capital

per shareholder had decreased from L443 to L323. He drew similar

conclusions from the probate and inhabited house duty figures, and from

several other sources. (See _Journal of Statistical Society_, December,

1887.) These figures prove that the tendency of things, so far as it

concerns the classes above the labourers, is not to further and

exclusive concentration, but rather towards a wider and beneficial

diffusion; and in regard to the labouring classes, it is admitted by

all--even by the extremest social pessimists--that the upper and middle

strata of them have participated in the progress of wealth equally with

their neighbours. There remains only the lowest class of all, and their

emancipation is the serious task of social reform in the immediate

future; but that class is even now not increasing in the ratio of

population; its misery comes from many causes, most of them moral and

physical rather than economic; and though it presents difficult and

trying problems, there is no reason for renouncing the hope which alone

can sustain social reformers to success.

II. _Mr. George's Explanation._

If there is any force in the foregoing observations, it is plain that

there is no such problem as Mr. George has undertaken to explain, and we

are therefore exempted from all necessity of examining his explanation.

But to Mr. George's own mind his explanation of the appearance that

troubled him really constitutes the demonstration of it; at any rate, he

offers no other. The question of the increase of poverty is of course a

question of fact, that cannot be settled by a _priori_ deduction alone;

but Mr. George seems to think otherwise. He is too bent on proving it

to be _necessary_ to think of asking whether it is _actual_, and even a

man of science like Mr. A. R. Wallace, while regretting that Mr. George

had not chosen to build his proposals on ground of fact, declares that

he adopted an equally legitimate method in deducing his results "from

the admitted principles and data of political economy." ("Land

Nationalization," p. 19.) Moreover, most of the social pessimism of the

present time draws its chief support, exactly like Mr. George's, from

the supposed bearing of certain received economic doctrines; and our

task would therefore be incomplete if we did not follow Mr. George on

this "high _priori_ road" on which he so boldly fares forth, and

performs, as will presently be seen, many a remarkable feat.

Before beginning his explanation, he throws the problem itself into what

he conceives to be a more suitable scientific form. "The cause," says

he, "which produces poverty in the midst of advancing wealth is

evidently the cause which exhibits itself in the tendency everywhere

recognised of wages to a minimum. Let us therefore put our inquiry into

this compact form: Why, in spite of increase in productive power, do

wages tend to a minimum which will give but a bare living?" (p. 10). The

problem, as thus restated, is clearly, be it observed, one of quantity,

not of proportion. A bare living is not a relative share, but a definite

amount, of produce. But the tendency in wages to such a minimum, which

he asserts to be everywhere recognised, is really not recognised at all.

In alleging that it is so, Mr. George evidently alludes to the doctrine

of wages taught by Ricardo and his school; but what they recognised in

wages was a tendency, not to a minimum that would give but a bare

living, but to a minimum that would give a customary living; in other

words, that would sustain the labourers in the standard of comfort

customary among their own class. The economic minimum is not the

absolute minimum of a bare living; it is, as Mr. George himself

elsewhere puts it, "the lowest amount on which labourers will consent to

live and reproduce,"--that is, not the lowest amount on which any

individual labourer will do so, but the lowest amount which labouring

people in general consider it necessary to earn before they will

undertake the responsibility of marriage. If they were to get less than

this, it was contended, they would refrain from marrying to an extent

that would tell sufficiently on the supply of labour to force wages up

again to their old level. This level was the minimum to which wages

constantly tended, but then it was always higher than a bare living; it

was determined by the standard of requirements current among the

labouring class at the time; and it was recognised to be capable of

rising if that standard rose. True, Ricardo and the economists of his

generation entertained very poor hopes of any such rise, because the

working classes of their time, being without the intelligence, the ideas

of comfort, the higher wants that are powerfully operative among the

working classes of our day, were generally seen to "take out" their

better wages when they chanced to get them in nothing but earlier

marriages, which in the end brought their wages down again. We have

happily now to do with a more aspiring and a less uniformly composed

working class. It is perhaps more aspiring in some measure because it is

less uniformly composed. It contains many ranks and inequalities and

standards of social refinement and comfort, and the presence of these

side by side develops a more active tendency upward, which, by supplying

a stronger check than before on improvident marriages, will enable the

labourers, class after class of them, to appropriate securely more and

more of the common domain of advancing civilization. We have had

abundant experience of a rise in the standard of life, and a rise in the

rate of wages, both remaining as permanent possessions of sections of

the labouring class. But if Ricardo and his school had less faith than

they reasonably might have had in the possibility of a permanent upward

tendency in wages, they certainly never dreamt of believing in any

permanent downward tendency. According to their doctrine the rate of

wages moved up and down within certain limits, but always tended to come

back to a particular figure--the amount necessary to give the labourer

the living customary among his class. This figure was really no more a

minimum than it was a maximum; wages were supposed to fall sometimes

below it, as they were supposed to rise sometimes above it; and to speak

of it as a minimum that would give but a bare living is completely to

misrepresent its nature.

The assumption from which Mr. George starts is thus in no wise an

admitted principle of political economy, and would therefore not answer

the test of legitimacy laid down by Mr. Wallace. It has no ground

outside of Mr. George's own imagination. Economists would solve his

problem, "why in spite of increased productive power wages tend to a

minimum that will give but a bare living?" by simply denying his fact,

and having done with it. But Mr. George persuades himself that they

would answer it otherwise, and devotes the next section of his book to

an elaborate confutation of the false answers he supposes they would

return to it. They would either explain it, he thinks, by their theory

of the wages fund, or they would explain it by their theory of

population; and so before confiding to us his own explanation, he

considers it necessary to stop and clear these two venerable theories

out of his way. I am not concerned to defend these theories; their truth

would not make Mr. George's own view any the falser, nor their falsehood

make it any the truer. One of them indeed was dead and buried before Mr.

George attacked it, though I am bound to say it would never have fallen

before the particular line of attack he directs against it. The wages

fund doctrine, which played a considerable _role_ both in its original

form as taught by Senior, and in its subsequent form as modified by

M'Culloch, was refuted by Mr. Thornton in 1869, was almost instantly

abandoned by the candid mind of Mr. Mill, and is now rarely met with as

a living economic doctrine. The wages fund is still regarded of course

as having its limit in capital, and in the conditions which generate

capital, but since these conditions include among other things the

number and efficiency of the labourers, the amount of the wages fund is

no longer represented as at any given moment a fixed and predetermined

quantity susceptible of no possible alteration to meet the exigencies of

the labour market, and when once this characteristic was given up, the

wages fund doctrine was seen to have degenerated into little more than a

stately truism. The Malthusian theory of population is not in the same

way discredited, but it likewise is now generally stated with some

reserve. It has become well understood that the earlier economists

assigned it too absolute and universal a validity, and that it is not,

as they thought, a law for all ages, and especially and happily not a

law for our own. It is true of an era of progressive population and

diminishing return from agriculture, but for our day it has been robbed

of its terrors by free trade and steam navigation, which have connected

our markets with continents of virgin soil, and carried us virtually

into an era of increasing return of indefinite duration. The population

question was one of serious practical import for our fathers, and as

they saw people marrying and giving in marriage, while every fresh

bushel of food was extracted with increasing difficulty from an

exhaustible soil, they looked with a reasonable dread to the future, and

saw no way of hope except in the practice of a heroic continence. But we

live in another time. We find population increasing and yet bread

cheapening, simply because the locomotive which alarmed Mr. George by

taking the tramp to California has brought back plenty to the rest of

the world. It is due to the material progress he preaches against that

we are the first generation who can afford to make light of the

population question, and leave our remote posterity to deal with the

peril when it shall actually arrive.

Mr. George, however, is not content with disputing these doctrines; he

insists on replacing them with others exactly opposite to them in

purport, and for which he claims a like universal validity. He propounds

a new population theory, and a new wages fund theory of his own. The

more population abounds, the more will subsistence superabound, is his

comfortable counter-proposition to Malthusianism. "I assert," says he,

"that in any given state of civilization a greater number of people can

collectively be better provided for than a smaller.... I assert that the

new mouths which an increasing population calls into existence, require

no more food than the old ones, while the hands they bring with them can

in the natural order of things produce more. I assert that, other things

being equal, the greater the population, the greater the comfort which

an equitable distribution of wealth would give to each individual" (p.

99). In a word, his teaching is that "other things being equal"

over-population is a ridiculous impossibility. What may be all concealed

under the reservation, "other things being equal," he does not

enlighten us, but it avowedly contains at least one presupposition of

decisive importance to the question, the presupposition of the unlimited

productiveness of the soil. Mr. George denies the law of diminishing

return. We shall presently find him, in his doctrine about rent, basing

his whole book on the operation of this law. But here in his doctrine

about population it suits him to deny it, and he does so on singularly

fantastical grounds (p. 93). He denies it on the ground that "matter is

eternal, and force must for ever continue to act," as if the

indestructibility of matter was the same thing as its infinite

productiveness. "As the water that we take from the ocean must again

return to the ocean, so the food we take from the reservoirs of nature

is, from the moment we take it, on its way back to those reservoirs.

What we draw from a limited extent of land may temporarily reduce the

productiveness of that land, because the return may be to other land or

may be divided between that land and other land, or perhaps all land;

but this possibility lessens with increasing area, and ceases when the

whole globe is considered. That the earth could maintain a thousand

billions of people as easily as a thousand millions is a necessary

deduction from the manifest truths that at least, as far as our agency

is concerned, matter is eternal and force must for ever continue to

act.... And from this it follows that the limit to the population of the

globe can only be the limit of space. Now this limitation of space--this

danger that the human race may increase beyond the possibility of

finding elbow-room--is so far off as to have for us no more practical

interest than the recurrence of the glacial period or the final

extinguishment of the sun" (p. 94-5). If this passage means anything, it

means that the race may go on multiplying as long as it finds room to

stand on, and that even when that limit is reached it can only be

squeezed to death and not starved. It can in no case apparently be

starved. Subsistence cannot possibly run short, for the inherent powers

of the soil are not permanently destructible. But he might as well argue

that man must be omnipotent because he is immortal. The question is not

one of the durability of the productive powers of the earth--it is one

of their limited or unlimited productive capacity. Up to a certain point

they may yield the same return at the same cost year after year in

_saecula saeculorum_, but will they yield more? Manifestly not. Every

bushel they give after that is got at continuously increasing cost. Now

of course wherever population increases so much, compared with the land

at its disposal, that this increasing cost must be incurred in order to

find them food, the epoch of diminishing return in agriculture has

arrived, and the peril of over-population is already present. Happily,

as we have said, that time is not yet, but it will come long, long

before the human race fails to find elbow-room in this planet.

Mr. George himself admits that in a country of inconsiderable extent, or

in a small island, such as Pitcairn's Island, over-population is quite

possible before elbow-room is near exhausted--(p. 74)--and in making the

admission he virtually surrenders his case. He admits in detail what he

denies in gross. For is not the soil of a small island or an

inconsiderable country as eternal as the soil of a continent? The only

difference is that it is not so extensive, and therefore comes to the

epoch of diminishing return sooner. That is all. The reason why he makes

an exception of such an island is because its inhabitants "are cut off

from communication with the rest of the world, and consequently from the

exchanges which are necessary to the improved modes of production

resorted to as population becomes dense" (p. 74). But if density of

population is such a sure improver of production as Mr. George

represents it to be elsewhere, why should it fail here? And if it fail

anywhere, how can he argue that it must succeed everywhere? Once he

admits, as he does in this passage, that subsistence has a definite

limit in the modes of production that happen to be known in any age and

country, and that population has a definite limit for such age and

country in the amount of subsistence which the known modes of production

are capable of extracting from the soil, he really admits all that

Malthusians generally contend for, and coming to curse, he has really

blessed them altogether. The limit of subsistence which he here

recognises--the limit imposed by the state of the arts--is far within

the limit which he has just been denying, the natural limit to the

inherent fertility of the soil, on which economists base their law of

diminishing return. The former point is far sooner reached than the

latter. Men will starve because they don't know how to make the best use

of nature long before they will starve because nature is used up; and it

is exactly that earlier limit on which Malthusians lay stress.

But except for this inconsistent admission in the case of a petty

isolated island, Mr. George persistently refuses to recognise any kind

of limit to subsistence, either in the productive capacity of the soil

or in the state of the arts. He seems to fancy that land will go on

yielding larger and larger harvests _ad infinitum_ to accommodate an

increasing population, and that even if it failed to do so, new

inventions or improved processes of production would be constantly

discovered when they were needed, and keep the supply of food always

equal to the demand. With these crude assumptions in his head, he

arrives very easily at his own peculiar theory, which is, that

subsistence tends to increase faster than population, because the growth

of population itself affords the means of such economies and

organization of labour as multiply immensely the productive capacity of

each individual labourer. A hundred labourers, he is fond of arguing,

will produce much more than a hundred times the amount that one will,

and it is therefore clear folly to think of population as capable of

encroaching on subsistence. On the contrary, it seems almost fitter to

speak of it as a means of positively economizing subsistence. Mr.

George's mistake arises from ignoring the fact that subsistence depends

on the productive capacity of land as well as on the productive capacity

of labour, and the productive capacity of land is not indefinitely

progressive.

Mr. George's new wages fund theory is based on a precisely analogous

misconception of the real conditions of the case, and is just as much in

the air as his population theory. "Wages," he says, "cannot be

diminished by the increase of labourers, but on the contrary, as the

efficiency of labour manifestly increases with the number of labourers,

the more labourers, other things being equal, the higher wages should

be" (p. 62). Just as he has already argued that food can never run short

before an advancing population, because the new hands can produce much

more than the new mouths can consume, as if the hands span it out of

their own finger nails; so he now argues that wages can never decline

for want of capital to employ labourers, because the capital that

employs them is made by the labourers themselves. They are paid, he

declares, not out of the capital of their employers, but out of the

product of their own labour. Mr. F. A. Walker, the eminent American

economist, had already taught a similar doctrine, but with the

reservation that while wages were really paid out of the produce of the

labour they remunerated, they were usually advanced out of the

employer's capital. But Mr. George throws aside this reservation, and

declares boldly that wages are neither paid nor advanced out of capital,

and that if any advance is made in the transaction at all, it is the

labourer who makes it to the employer, not the employer to the labourer.

"In performing his labour, he (the labourer) is advancing in exchange;

when he gets his wages, the exchange is completed. During the time he is

earning the wages, he is advancing capital to his employer; but at no

time, unless wages are paid before work is done, is the employer

advancing capital to him" (p. 49).

In this contention Mr. George relies much on the analogy of the

"self-employing" labour of primitive society. When men live by gathering

eggs, he tells us, the eggs they gather are their wages. No doubt; but

in our complicated civilization we don't live by gathering eggs from day

to day, but by sowing the seed in spring which is to yield us food only

in harvest--by preparing work for the market which may take weeks,

months, even years before it is marketable. The energetic Sir John

Sinclair is said to have once danced at a ball in the evening dressed in

a suit the wool of which was still growing on the sheep's back in the

morning; but rapidity like that is naturally foreign to ordinary

commerce. The successive operations of clipping, fulling, teasing,

spinning, dying, weaving, cutting, sewing, occupy considerable time. So

with other things. Houses, ships, railways, are not built in a day, or

by a single workman. The product of a single workman's work for a day at

any of these things has no value apart from the product of the other

workmen's work, nor has the work of them all any value unless the work

is, or is to be, completed. The wages paid during the period of

construction, therefore, cannot possibly have come out of the work for

which they were paid, but must have been advanced otherwise. Who

advances them? Clearly not the labourer himself, for he receives them.

And yet that is what Mr. George unhesitatingly asserts, and his argument

is as courageous as it is ingenious. He does not shrink from applying it

to the extremest case you like to suggest--the Great Eastern, the

Gothard Tunnel, the Suez Canal; even in these cases the labourers, who

spent months and years in doing the work, were paid out of the work

itself, out of the Great Eastern, out of the Gothard Tunnel, out of the

Suez Canal. "For," says Mr. George, "a work that is incomplete is not

valueless, it is not unexchangeable; money may be raised on it by

mortgage or otherwise, and as this money is raised on the product of the

labourer's work, the wages it is employed to pay are really paid out of

that product." But this only shifts the question a little: it does not

answer it. Where does this lent money come from? Certainly not from the

work it is lent on. Perhaps not, Mr. George will rejoin, again shifting

his ground, but it comes from the product of the contemporaneous work of

other labourers. "It is not necessary to the production of things that

cannot be used as subsistence or cannot be immediately utilized that

there should have been a previous production of the wealth required for

the maintenance of the labourers while the production is going on. It is

only necessary that there should be, somewhere within the circle of

exchange, a contemporaneous production of subsistence for the labourers,

and a willingness to exchange this subsistence for the thing on which

the labour is being bestowed" (p. 51). But this is only passing round

the dilemma. For this contemporaneous production has itself the same

difficulty to face; it has to sustain its labourers during the time

taken to complete their work; and it can only do so, according to Mr.

George's explanation, by raising the means through a mortgage on the

unfinished work. It borrows to pay its own wages, but is apparently able

to lend to pay other people's. Mr. George has a happy method of carrying

on the affairs of society by mutual accommodation. Peter is a shoemaker

who wants money to buy leather to make shoes and food to maintain him

till the shoes are made. Paul is a carpenter who is in a like case, and

wants money to buy food and timber. Peter borrows the money he needs

from Paul on mortgage, and then Paul in turn borrows what he needs from

Peter, on the same terms. Utopia is a pleasanter world than ours, and an

IOU probably goes a long way in it; but here on this hard earth Peter

would certainly make no shoes nor Paul any chairs, unless he had either

himself saved enough to purchase the materials, or found a neighbour who

had done so and was ready to make him an advance. Except for this

neighbour he could not work at all, and could not therefore "create any

wages," and the amount of work he got and wages he earned would

manifestly depend greatly on the amount of capital this stranger

possessed and was disposed to invest in such an enterprise.

It is true that the wages of labour will be guided in amount by the

quantity of the product, but they are not on that account actually paid

out of the product. And it is true that the labourer gives value for his

wages--certainly he would not otherwise be employed--but that value is

not usually marketable until some time, in many cases years, after the

wages have been enjoyed, and therefore cannot have been the source

whence these wages came. The wages were paid out of the saved results of

previous labour--that is, out of capital--and Mr. George has absolutely

no conception of the amount of capital that is necessary to carry on the

work of industry. He says we live from hand to mouth, and so in a sense

we do. Our capital is being constantly consumed and constantly

reproduced again, and economists are fond of showing, from the speedy

recovery of a civilized state after a devastating war, how short a time

it would really take to replace it entirely. But until it is replaced

every inhabitant undergoes considerable privations, which simply means

that the rate of wages has fallen for want of it. There are some trades,

like the baker's, where the product is actually sold before the wages

are paid; and there are many, like the whaler's mentioned by Mr. George,

where the labourers can afford to wait long terms for part at least of

their remuneration (no great sign, by the way, of the minimum of a bare

living); but even in these much capital must be set aside before a

single hand is engaged. The whalers, for example, must be furnished with

a ship to start with, and be provisioned for the voyage; and if these

requisites are not forthcoming, they must go without work and wages

altogether, or take work at inferior terms in a market glutted by their

own arrival in it. Mr. George speaks lightly of the labourers who

excavated the Suez Canal advancing value to the company who employed

them, and yet before a single pick or spade was stuck into the sand of

the Isthmus the company had laid out, in preliminary expenses and

machinery, as much as six millions sterling--more than a third of the

whole cost of the Canal. They had then to pay other five or six millions

in wages before the work fetched a single fee; and yet Mr. George will

have us believe that those five or six millions actually came out of the

profits, merely because the projectors hoped and believed they might

eventually come out of them. Labourers give an equivalent to the

capitalists for their wages, but their wages are really paid out of the

capital which their employers have saved for the purpose of purchasing

that equivalent. I may have bought a cow in the hope of recouping myself

by selling her milk, but I did not therefore pay her price out of the

milk money--for nobody would have sold her to me if he had to wait for

that; I bought her out of money I had previously saved, and from the

same source exactly, and no other, do capitalists buy labour.

But, objects Mr. George, that cannot be; wages cannot be paid out of

capital, because they are often lowest when, as shown by the low rate of

interest, capital is most abundant. But Mr. George here confounds

existent capital with employed capital. It is only the capital actually

employed that tells on wages; the low rate of interest merely shows that

there has been an increase in unemployed capital, and since that is

generally a correlative of a diminution of employed capital, it is but

natural that low interest should be attended by low wages. Low wages are

a consequence of unemployed labour, unemployed labour a consequence of

unemployed capital, and unemployed capital a consequence of unfavourable

industrial conditions which labour, either with capital or without it,

cannot evade or reverse.

So far then of Mr. George's views on population and the wages fund, for

which much value, as well as originality, has been claimed. The chapters

in which he states them are certainly among the most impressive and

characteristic in his book. Nowhere else does he display more strikingly

his remarkable acuteness, fertility, and literary power, and nowhere

else are these high qualities employed more fruitlessly from sheer want

of grasp of the elements of the problems he discusses. These chapters

are after all, however, something of a digression from the main business

of the book, and they have perhaps detained us too long from Mr.

George's own explanation of the supposed growth of poverty.

His explanation is this: "The reason why, in spite of the increase of

productive power, wages constantly tend to a minimum which will give but

a bare living is that with increase in productive power, rent tends to

even greater increase" (p. 199). "Rent swallows up the whole gain, and

pauperism accompanies progress" (p. 158). "The magic of property," it

seems, has an unsuspected malignancy; but, in the present case, its

spell is really exercised only over Mr. George's own vision. For who,

with his eyes open, would believe for a moment what Mr. George so

gravely asserts, that of the whole gain won by our multiplied productive

power, none whatever has gone to the great bankers, and brewers, and

cotton spinners, and ironmasters, and corn factors, and shipbuilders,

and stockbrokers, and railway contractors; that our Rothschilds, and

Brasseys, and Barings, and Bairds, the great plutocrats of the time, the

possessors of the largest fortunes in the country, the very men and

classes who have been most conspicuously enriched through the material

progress of the nation, have all the while been conducting a hard

struggle against a fatal tendency in their incomes to sink to a bare

living, and had to feed, exactly like the manual labourers, from the

crumbs that fall from the landowners' table. The assertion is too

violent and preposterous to merit serious refutation. Everybody knows

that the greatest part of the wealth of modern society is not

concentrated in the hands of the landlords at all, that it has not

accrued from rent and that it would not be a farthing the less though

private property in land were abolished to-morrow.

But violent and preposterous as Mr. George's conclusion is, it has not

been arrived at without the exercise of much perverse ingenuity. Having

been brought by his examination of the wages fund and population

theories to the conviction that the key to his riddle was not to be

discovered in the conditions that regulated production, he concludes

that it must, therefore, be sought in the conditions that regulate

distribution. His problem is thus one in the distribution of wealth, and

it must be explained, if it is to be explained at all, by the laws of

distribution. To investigate these laws, therefore, becomes now his

object, and the first step he takes is a truly amazing one. At the very

outset he throws the most important class of participators in the

distribution--the class that appropriates the largest share--out of

court altogether, and he proceeds to settle the whole question as if

they never got a penny, and as if the entire spoil were divided among

their neighbours. People who live on profits, it seems, have no _locus

standi_ in a question of distribution, and the case must be considered

as if the parties exclusively concerned were the people who live on

wages, the people who live on interest, and the people who live on rent.

"With profits," he says, "this inquiry has manifestly nothing to do. We

want to find what it is that determines the division of their joint

produce between land, labour, and capital, and profits is not a term

that refers exclusively to any one of these three divisions. Of the

three parts into which profits are divided by political economists,

namely compensation for risk, wages of superintendence, and returns for

the use of capital, the latter falls under the term interest, which

includes all the returns for the use of capital and excludes everything

else; wages of superintendence falls under the term wages, which

includes all returns for human exertions and excludes everything else;

and compensation for risk has no place whatever, as risk is eliminated

when all the transactions of a community are taken together" (pp.

113-4).

Now we have to do here with no mere difference of terminology. Profits

may be employers' wages, if you like to call them so; but it is a fatal

confusion to suppose that, because you have called them employers'

wages, you are therefore entitled to treat them as if they were governed

by the same laws and conditions as labourers' wages. The truth is that

they are governed by opposite conditions, and that the pith of the

labour question is just the conflict between these two kinds of wages

for the better share in the distribution. The battle of labour is not

against the employer receiving fair interest on his capital in

proportion to its quantity, but against the amount of additional profit

which the employer claims as wages of superintendence, and which he also

rates in proportion to capital invested instead of rating it in

proportion to his own trouble or efficiency. One of the chief hopes of

the workman resides in the possibility of breaking down this erroneous

criterion of fair remuneration for superintendence, and so getting the

employers to content themselves with smaller profits than they have been

in the habit of considering indispensable. Profits and wages have thus

opposite and conflicting interests in the distribution, but Mr. George,

having once disguised the one in the garb of the other, is imposed on by

the disguise himself, and treats them in his subsequent speculations as

if they were the same thing, or at any rate--what in the present

connection is equally pernicious in its effects--as if their respective

shares in the distribution were determined by precisely the same

conditions. The result is, as might be expected, a series of singular

_contretemps_ springing from mistaken identity, like those we are

familiar with on the comic stage. The manufacturing millionaire appears

before us as the victim of the same harsh destiny as the penniless

crossing-sweeper, and the banker of Lombard Street is overshadowed by

the same blighting poverty as the lumper of Wapping. Proudhon, in a

powerful passage, describes pauperism as invading modern society at both

extremes; it invaded the poor in the positive form of natural hunger; it

invaded the rich in the unnatural but more devouring form of insatiable

voracity. The burden of Mr. George's prophetic vision contains no such

refinements. He sees a huge wedge driven through the middle of society;

and on the underside of that enchanted wedge he sees the merchant

princes of the world eating the bread of poverty with their lowest

dependents. Mr. George's classification of profits under wages

therefore involves much more than a mere change of nomenclature, for it

has led him to pass off this absurd vision as a literal description of

things as they are. By that classification he has really put out of his

own sight the most important factor in the settlement of the question he

is discussing, and so he begins playing Hamlet by leaving the part of

Hamlet out.

Having simplified matters by throwing profits out of the cast, Mr.

George's next step is to assign the leading _role_ to rent. In the whole

drama of the modern distribution of wealth, no part is more striking or

more often misunderstood than the part played by rent. Wages never cease

to cost much and to be worth little, but rent seems to have the property

of going on growing while the landlords themselves sleep or play. This

fact has impressed Mr. George so profoundly that, losing sight of things

in their true connection and proportions, he declares that the growth of

rent is the key to the whole situation, and that neither wages nor any

other kind of income, not derived from land, can ever draw any advantage

from the increase of prosperity, because rent always steps in before

them and runs off with the spoil. He professes to found this conclusion

on Ricardo's theory of rent, which he accepts, not only as being

absolutely true, but as being too self-evident to need discussion.

Indeed, he seems disposed, like some others, to have his fling at Mill

for calling it the _pons asinorum_ of political economy; but we shall

presently discover various grounds for suspecting that he has not

crossed the bridge successfully himself, and that here, as elsewhere, he

has been led seriously astray by looking at things through the mist of

doctrines he has only imperfectly mastered. Anyhow, he offers his theory

as a deduction from Ricardo's law of rent, and this deduction claims

particular attention because it is the corner-stone of his speculations,

and constitutes what he would consider his most original and important

contribution to economic science. He says that the law of rent itself

"has ever since the time of Ricardo ... been clearly apprehended and

fully recognised. But not so its corollaries. Plain as they are, the

accepted doctrine of wages ... has hitherto prevented their recognition.

Yet, is it not as plain as the simplest geometrical demonstration that

the corollary of the law of rent is the law of wages, when the division

of the produce is simply between rent and wages; or the law of wages and

interest together, when the division is into rent, wages, and interest"

(p. 120). It is really plainer. It is a mere truism. In any simple

division, if you know how much one of the factors gets, you know how

much is left for the others, and if you like to dignify your conclusion

by the name of corollary, you are free to do so. But the real point is

this, whether the share obtained by rent is fixed irrespectively of the

share obtained by wages and interest, or whether, on the contrary, it

does not presuppose the previous determination of the latter. There is

no doubt, at any rate, as to how Ricardo--Mr. George's own

authority--regarded the matter. According to his celebrated theory,

wages and interest are satisfied first, and then rent is just what is

over. Rent is simply surplus profit. In hiring land, the farmer hires a

productive machine, and under the influence of competition gives, for

the use of that productive machine for a year, the whole amount of its

annual produce which remains as a surplus after paying the wages of his

labourers, and allowing interest on his capital, and what he considers a

fair profit for his own work of superintendence. A certain current rate

of wages and a certain current rate of profit are presupposed, and after

these demands are met, then if the land has yielded anything more, that

surplus is what is paid as rent. Ricardo always presumes that land that

cannot produce enough to meet these demands will not be cultivated at

all, and that the poorest land actually under cultivation is land that

meets them and does no more; in other words, that leaves nothing over

for rent. Let us take Ricardo's law as it is stated by Mr. George

himself (p. 118): "The rent of land is determined by the excess of its

produce over that which the same application can secure from the least

productive land in use." The standard by which, according to this law,

the amount of rent is supposed to be determined, is the produce of the

least productive land in use. Now, what is the least productive land in

use? It is land that produces just enough to pay the wages the labourers

upon it are content to work for, and the profits the farmer of it is

content to farm for. How that rate of wages and that rate of profits are

fixed is no matter here; but one thing is clear--and it is enough for

our present purpose--that they cannot be determined, as Mr. George

represents them as being, by a law of rent which presumes and is

conditioned by their operation. Ricardo's law virtually explains rent in

terms of wages and profits, and it would therefore be the height of

absurdity to re-explain wages and profits in terms of rent. And if that

is so, the circumstance which excites Mr. George's surprise, that

economists have always so clearly apprehended the law of rent itself,

and yet failed so completely to recognise the corollaries which he

plumes himself on being the first to deduce from it, admits of a very

simple explanation: the economists understood the law they expounded,

and were better reasoners than to employ it as a demonstration of its

own postulates.

This will become still plainer, if we look more closely at the fact

which has struck Mr. George so much--the constant rise of rent in modern

society. He attributes that rise to many causes; in fact, there are few

things that will not, in his opinion, raise rent. Progress of population

will do so; but if population is stationary, it will be done all the

same by progress in the arts; the spread of education will do it;

retrenchment of public expenditure will do it; extending the margin of

cultivation will do it; and so will artificial contraction of that

margin by speculation. In short, he is so haunted by the idea, that he

seems to believe that so long as rent is suffered to survive at all,

whatever we do will only conduce to its increase. Every step of progress

we take extends its evil reign, and if progress were to reach

perfection, rent would drive wages and interest completely off the field

and appropriate "the whole produce" (p. 179). These fears are not sober,

but they could never have risen had Mr. George first mastered the theory

of rent he founds them on. For rent, being the price paid by producers

for the use of a productive machine, cannot rise unless the price of the

product rises first (or its quantity, if so be that it does not increase

so much as to reduce its price), for unless the price of agricultural

produce rises, the farmer cannot afford to pay a higher rent for the

land than he paid before. No part of Ricardo's theory is more elementary

or more unchallenged than this, that the rent of land constitutes no

part of the price of bread, and that high rent is not the cause of dear

bread, but dear bread the cause of high rent. Rent cannot rise further

or faster than the price of bread (or meat, of course) will allow it,

and the price of bread is beyond the landowner's control. He cannot

raise it, but once it rises, he can easily raise rent in a corresponding

degree. If a rise of rent depends on a rise in the price of bread, what

does a rise in the price of bread depend on? On two things which Mr.

George ignores or misunderstands--the progress of population and the

diminishing return in agricultural production. The growth of population

increases the demand for food so much as to raise its price, and renders

it profitable to resort to more difficult soils or more expensive

methods for additional supplies. The price will then remain at the

figure fixed by the cost of the costliest portion that is brought to

market.

Now Mr. George laughs at the idea of increase of population causing any

difficulty about the supply of food--population, which he is never tired

of telling us, is the very thing most wanted to multiply that supply,

and possesses a power of multiplying it in even a progressive ratio to

its numbers. "The labour of 100 men," he says, "other things being

equal, will produce much more than one hundred times as much as the

labour of one man" (p. 163). And he laughs in the same way at the idea

of a diminishing return in agriculture, as if, says he, matter were not

eternal, and as if an increasing population did not of itself increase

the productive capacity of the land through increasing the productive

capacity of the labour upon it. These two misunderstandings lie at the

bottom of all Mr. George's vagaries about rent, and they are perhaps

natural to a speculator, resident in a rich new colony, which, as he

describes it himself, "with greater natural resources than France, has

not yet a million people." No doubt in a country at that particular

stage of its historical development, increase of population may involve

an increase, and even a more than proportional increase, of food as well

as of other commodities; but that particular stage is a temporary and

fleeting one, and the world in general is very differently situated from

the State of California thirty years ago. Where there is plenty of good

land, the increase of population occasions no increase in the cost of

producing food, because there is no need to resort to poorer land for

the purpose; and while food is got as cheaply as before, other things

are got much more easily and abundantly in consequence of the economies

of labour and the many mutual services which result from the increased

numbers of the community. But that state of matters only continues so

long as there remains no occasion to resort to poorer soils for the

production of food, and that time is long past in most countries of the

world. Mr. George no doubt contends that in all countries it is just the

same as in California, because even though it may have become more

difficult in some places to produce food, it has become everywhere much

easier to produce other commodities, and (so he argues) the production

of any kind of commodity is practically equivalent to the production of

food, for it can always be exchanged for food. So it can, if food is

there to exchange for it; but the very question is whether food is

there, or is there in the same relative quantity. If I say it is more

difficult to get food, it is no answer to tell me that it is much easier

to get other things. And because other things may be multiplied

indefinitely at the same cost, that is no reason for denying that food

can only be multiplied indefinitely at increasing cost. Yet Mr. George

reasons as if it were. This confusion is repeated again and again in the

course of his book, and has evidently had much influence on his whole

speculations. He describes the advantages which the colonist derives

from the arrival of other settlers. "His land yields no more wheat or

potatoes than before, but it does yield far more of all the necessaries

and comforts of life. His labour upon it will bring no heavier crops,

and we will suppose no more valuable crops, but it will bring far more

of all the other things for which men work" (p. 168). That is true, but

it is not to the purpose. The new settler required a market, and

population brought it; but although population up to a certain point is

beneficial, you cannot for that reason declare that beyond that point it

cannot possibly become embarrassing; for on Mr. George's own hypothesis

the ground yields no more wheat and potatoes than before, and the limit

to convenient population is prescribed by the amount of food the ground

yields, and not by the quantity of other commodities which skilled

labour can produce. If population were to exceed what that stock of food

would adequately serve, then new-comers would find little comfort in Mr.

George's rhetorical commonplace that they had two hands and only one

mouth. His simple confidence, that they never can be at a loss, because

they can get food by exchange as well as by direct production, is a mere

dream, because he forgets that the people they are to exchange with are

in the same case as themselves. They can only give food in exchange for

other things so long as they raise more food than serves their own

numbers, and when their numbers increase beyond that point, they will

have no food to sell. The limit to subsistence is not the productive

capacity of labour, but the productive capacity of land.

Mr. George's argument rests on another very curious fallacy. He builds

his whole theory of distribution on the fact of the extension of the

margin of cultivation from better to worse soils, but in the same breath

he denies the existence of the very conditions that alone make that fact

possible. Nobody would resort to worse land unless the better were

unable to furnish indefinite supplies at the old cost, _i.e._, unless

the principle of diminishing return prevailed in agriculture. Nor would

any one resort to worse land until it paid him to do so, _i.e._, until

the produce of this worse land became, through a rise in its price or

through improvements in the art of agriculture, equal in net value to

the produce previously yielded by the worst land then in cultivation.

Mr. George denies the principle of diminishing return. He denies "that

the recourse to lower points of production involves a smaller aggregate

of produce in proportion to the labour expended." He denies this, "even

where there is no advance in the arts and the recourse to lower points

of production is clearly the result of the increased demand of an

increased population. For," says he, "increased population of itself,

and without any advance of the arts, implies an increase in the

productive power of labour" (p. 163). But the question is, does it imply

any increase in the productive power of the soil? Mr. George contends

that it does, but only on the superior soils, not on the inferior.

Increasing population, in his opinion, renders all labour so much more

effective that "the gain in the superior qualities of land will more

than compensate for the diminished production on the land last brought

in" (p. 165). Now to all this there is one simple answer: why then

resort to inferior soils at all? If crowding on the superior soils can

make those soils indefinitely productive, why go farther and fare worse?

There can be no reason for having recourse to worse land, but that the

better has ceased to yield enough at the old cost. Organization and

economy of labour are excellent things, but they cannot press from the

udder more milk than it contains, or rear on the meadow more sheep than

it will carry, or grow on a limited area available for cultivation more

than a definite store of food.

But while Mr. George denies that there is anything to force people to

poorer soils, he supposes at the same time that they go freely in order

to get a less profit. He holds the amount of return obtained from

cultivating the least productive land in use to be the lowest rate of

return for which anybody will invest his capital, and therefore to serve

in some sense as a standard rate of remuneration for all applications of

capital and labour. Nobody, he declares, will work for less than he can

make on land that pays no rent. But will any one work such land for less

than he can make in other industries? That is what Mr. George supposes

to be done every day, although he laughs at the idea of there being any

necessity for doing it. It need not be said that men are not such

lunatics. They are really forced to go to worse soils because the better

cannot increase their yield indefinitely at the same cost, and they

never go till they possess a reasonable expectation of making as much

out of the worse land as they did before out of the better.

From all these remarkable misconceptions of the working of rent, and of

the theory of Ricardo on the subject, which he professes to follow, he

draws his first law of distribution, which is nevertheless, so far as it

goes, undoubtedly correct: "Rent depends on the margin of cultivation,

rising as it falls and falling as it rises" (p. 155).

To find the law of rent, he has told us, is to find at the same time its

correlatives, the laws of wages and interest, and these laws accordingly

he states thus: "Wages depend on the margin of cultivation, falling as

it falls and rising as it rises. Interest (its ratio with wages being

fixed by the net power of increase which attaches to capital) depends on

the margin of cultivation, falling as it falls and rising as it rises"

(p. 156). He is not content, however, with merely inferring these two

laws as corollaries from the law of rent, but thinks it necessary to

construct for wages and interest a certain independent connection with

the movement of the margin of cultivation. To do so, he first reduces

interest, as he had already reduced profits, to a form of wages; he then

erects all the different forms of wages (_i.e._, every form of income

except rent) into a single hierarchical system, in which there are many

different rates of remuneration, occasioned by the necessity of

compensating different risks and exertions, but all moving up and down

concurrently with a certain general rate of wages at the bottom of the

scale; and he finally connects this general or standard rate of wages

with the margin of cultivation, by saying that no one would work at

anything else for less than he can make on land open to him free of

rent, and that therefore the income made by cultivating such land must

be the lowest going.

Mr. George's view of the nature of interest is peculiar. He considers it

to be the natural increase of capital, the fruit of inherent

reproductive powers, like the increase of a calf into a cow, or of a hen

into a hen and chickens; and because interest comes in this way freely

from nature, he believes the private appropriation of it to be

thoroughly just, although he presently gives precisely the same reason

for declaring rent to be theft. It is unnecessary to discuss either the

truth or the consistency of this doctrine here, and I refer to it now

merely to explain that although Mr. George thus justifies interest as

being the price of a natural force, he introduces it into his theory of

the origin of poverty, as the price of human labour. "The primary

division of wealth," he says, "is dual, not tripartite. Capital is but a

form of labour, and its distinction from labour is in reality but a

subdivision, just as the division of labour into skilled and unskilled

would be. In our examination we have reached the same point as would

have been attained had we simply treated capital as a form of labour,

and sought the law which divides the produce between rent and wages;

that is to say between the possessors of the two factors, natural

substance and powers and human exertion--which two factors, by their

union, produce all wealth" (p. 144). The difference between interest and

wages is but as the difference between the wages of skilled labour and

the wages of unskilled; the wages of skilled labour is only the wages of

unskilled, _plus_ some consideration for the skill, or for the time

spent in training, or for drawbacks of various kinds; and the wages of

unskilled labour is fixed by the amount that can be made on land that

pays no rent. Profits, salaries, stipends, fees are, in the same way as

interest, declared to be modes of wages. The L50,000 a year of the

merchant prince, it seems, is just the L50 of the day-labourer, with

L49,950 added to compensate him for the additional perils or drawbacks

or discomforts of his life. All incomes, except the landowner's, row in

the same boat, and the day-labourer's sets the stroke. When the margin

of cultivation descends, he is the first to suffer, and then all the

rest suffer with him. If he loses L10 a year, they successively lose L10

too; the doctor or bank-agent will have L490, instead of L500; the

railway chairman, L4,990, instead of L5,000; the merchant prince,

L49,990, instead of L50,000; and their loss is the landlord's gain. Here

then we see the whole mystery of iniquity as Mr. George professes to

unravel it. "The wealth produced in every community is divided into two

parts by what may be termed the rent line, which is fixed by the margin

of cultivation, or the return which labour and capital could obtain from

such natural opportunities as are free to them without payment of rent.

From the part of produce below this line, wages and interest must be

paid. All that is above goes to the owners of land" (p. 121).

Mr. George here confounds the margin of cultivation with the margin of

appropriation. When economists speak of an extension of the margin of

cultivation, they mean a resort to less productive land, and that is

always accompanied by a rise of rent; but an extension of the margin of

appropriation may be a resort to more productive land, and may occasion

a fall of rent, as has been done in Europe to-day through appropriation

in America. But what in reality he builds his argument on is neither

the movement of the margin of cultivation, nor the movement of the

margin of appropriation, but simply the existence of abundance of

unappropriated land. Where that exists, rent will, of course, be low,

and wages will be high, for nobody will give much for land when he can

get plenty for nothing at a little distance off, and nobody will work at

anything else for less than he can make on land that he may have for

nothing. For such land supplies labourers with an alternative. It is not

the best of alternatives, for it needs capital before one can make use

of it, and it takes time before any return is made from it. A diversity

of national industries, for example, is better, and raises wages more

effectively. Agricultural wages are higher in the manufacturing counties

of England than in the purely agricultural; and they are higher in the

manufacturing Eastern States of Mr. George's own country than in the

purely agricultural States of the West, which possess the largest amount

of unappropriated land. The reason of this is twofold: other industries

increase the competition for labour generally, and create, at the same

time, a better market for farm produce. Unoccupied land would

act--though less effectually--in the same way as an alternative; but few

countries are fortunate enough to possess much of it, and as Mr. George

does not propose to interfere with the occupation of land, but only to

tax the occupiers, he has no scheme for showing how countries that have

it not are to get it. It is easy, of course, to call it from the vasty

deep. "Put to any one capable of thought," says Mr. George, "this

question: 'Suppose there should arise from the English Channel or the

German Ocean a Noman's land on which common labour to an unlimited

amount should be able to make ten shillings a day, and which would

remain unappropriated and of free access like the commons which once

comprised so large a part of English soil. What would be the effect upon

wages in England?' He would at once tell you that common wages

throughout England must soon increase to ten shillings a day" (p. 207).

Perhaps so; but a little more thought would teach him that "a Noman's

land on which common labour to an _unlimited_ amount should be able to

make ten shillings a day" must be itself unlimited in extent, and could

not be accommodated in the English Channel. Apart from preternatural

conditions, it could not afford remunerative employment to more than a

definite number of occupants and cultivators, and when it came to be

entirely occupied, England would stand exactly as it does at present. If

the millennium of the working class is to depend on the discovery of a

Noman's land of infinite expansibility, it must be indefinitely

postponed.

But supposing such an alternative existed and did influence the amount

employers pay their workmen, how is it to influence in the same

direction the amount they reserve to themselves? It is true, as a matter

of fact, that wages and interest generally rise and fall together, for

the simple reason that they are generally subject to the same

influences. When capital is busily employed, so is necessarily labour,

and then both wages and interest are high; when capital is largely

unemployed, so is naturally labour also, and then both wages and

interest are low. But an influence like that which is now adduced by Mr.

George does not act on labourer and employer alike. It supplies the

labourer with an alternative which strengthens his hands in his battle

for wages with employers. Does it then at the same time strengthen the

employer in his battle with the labourer? Does it first raise wages at

the expense of profits, and then raise profits at the expense of wages?

It clearly cannot. To argue as if the existence of alternative work

which benefits the labourer, must benefit the employer in the same

degree, and as if the want of it must injure the employer because it

injures the labourer, is simply to misunderstand the very elements of

the case. One might as well argue that because the heights of Alma were

a decided strategical advantage to the Russians, who were posted on

them, they were therefore an equal advantage to the Allies, who had to

scale them.

Laws of distribution, which are founded on a series of such arbitrary

absurdities as those which I have successively exposed, are manifestly

incapable of throwing any rational light on the causes of poverty, or

giving any practical guidance to its amelioration. But, absurd as they

may be, they are at least propounded with considerable parade, and we

are therefore quite unprepared for the strange turn Mr. George next

chooses to take. It will be remembered that the only reason why he

undertook to search for these laws at all was, that by means of them he

might explain why wages tended to sink to a minimum that would give but

a bare living; but now that he has discovered those laws, he declines to

apply them to the solution of this problem. He will not draw the very

conclusion he has laid down all his apparatus to establish. He will not

solve the problem he has promised us to solve; in fact, he tells us he

never meant to solve it; he never thought or said wages tended to sink

to a minimum that would give a bare living; he never said they tended to

sink at all; all he meant to assert was that if they increased, they did

not increase so fast as the national wealth generally. He used "the word

wages not in the sense of a quantity, but in the sense of a proportion"

(p. 154). He will not therefore, after all, show us why the poor are

getting poorer; but he will read for us, if we like, another riddle, why

they are not growing rich so fast as some of their neighbours. In the

name of the patient reader, I may be permitted to lodge a humble but

firm protest against this eccentric and sudden change of front. Mr.

George ought really to have decided what problem he was to write about

before he began to write at all, and we may therefore for the present

dismiss both his problem and his explanation till he makes up his mind.

III. _Mr. George's Remedy._

After our experience of his problem and his explanation, we cannot

indulge expectations of finding any serious or genuine worth in the

practical remedy Mr. George has to prescribe; and we hear, without a

thought of incongruity, the lofty terms in which, like other medicines

we know of, it is advertised to the world by its inventor as a panacea

for every disease society is heir to. "What I propose," he says, "as the

simple yet sovereign remedy which will raise wages, increase the

earnings of capital, extirpate pauperism, abolish poverty, give

remunerative employment to whoever wishes it, afford free scope to human

powers, lessen crimes, elevate morals and taste and intelligence, purify

government, and carry civilization to yet nobler heights, is--to

appropriate rent by taxation" (p. 288). And the direction for applying

the remedy is equally simple: it is to "abolish all taxation save that

upon land values" (_ibid._). This remedy is currently described as the

nationalization of land; but nationalization of land is a phrase which

stands for several very different and even conflicting ideas. With the

usual fatality of revolutionary parties, the English land nationalizers

are already broken into three separate organizations, and represent at

least three mutually incompatible schemes of opinion. There is first the

socialist idea of abolishing both individual ownership and individual

occupation of land, and cultivating the soil of the country by means of

productive associations or rural communes. Then there is the exactly

opposite principle of Mr. A. R. Wallace and his friends, who are so much

in love with both individual ownership and individual occupation that

their whole aim is to compel us all by law to become occupying owners of

land, whether we have any mind to be so or no. And, finally, we have the

scheme of Mr. George, which must be carefully distinguished from the

others, because he would destroy individual ownership but leave

individual occupation perfectly intact. His non-interference with

individual occupation is remarkable, because, as we have seen, he

declares the cause of poverty to be the exclusion of unemployed labour

from the opportunity of cultivating land, and because that exclusion is

chiefly due to the prior occupation of the land by earlier settlers. Mr.

George, however, thinks he can provide a plentiful supply of unoccupied

land, at a nominal price, for an indefinite number of new-comers without

disturbing any prior occupant. He would do it by merely abolishing the

private owner and asking the occupant to pay his rent to the State

instead of to a landlord, and he explains to us how it is that this

simple expedient is to effect the purpose he desires. "The selling price

of land would fall; land speculation would receive its death-blow; land

monopolization would no longer pay. Millions and millions of acres, from

which settlers are now shut out by high prices, would be abandoned by

their present owners, or sold to settlers upon nominal terms. And this

not merely on the frontiers, but within what are now considered

profitable districts.... And even in densely populated England would

such a policy throw open to cultivation many hundreds of thousands of

acres now held as private parks, deer preserves, and shooting grounds.

For this simple device of placing all taxes on the value of land would

be in effect putting up the land at auction to whoever would pay the

highest rent to the State. The demand for land fixes its value, and

hence if taxes were placed so as to very nearly consume that value, the

man who wished to hold land without using it would have to pay very

nearly what it would be worth to any one who wanted to use it." (p.

309).

Putting up land to auction will not secure cheap or nominally rented

farms to an indefinite number of new-comers, unless there is an

indefinite supply of land to divide into farms, but in the present world

that is not so; and when the existing stock of agricultural land is

exhausted, and every man has his farm, but there is no more for any

new-comer, what is Mr. George's remedy then? Abolition of property in

land will of course abolish all trading in such property; but trading in

landed property does not restrict its occupation. The land speculator,

while he holds the land, of course keeps out another competitor from the

ownership, but he keeps nobody from its occupation and cultivation. He

is surely as ready as anybody else to make money, if money is to be

made, by letting it, even by putting it up to auction, if Mr. George

prefers that mode of letting. The transfer of the power of letting to

the State will not secure a tenant any faster. And as to the private

parks, deer forests and shootings of England, Mr. George forgets that

they are, most of them, at present rented, and not, as he seems to

fancy, owned by their occupants, and that it would not make a straw of

difference to them whether they paid their rents to the Crown factor or

to the landlord's agent. Since Mr. George does not prohibit the making

of fortunes, he cannot prevent commercial kings from America or great

brewers from England hiring forests in the Scotch Highlands. And since,

in spite of his celebrated declaration, that "to the landed estates of

the Duke of Westminster the poorest child that is born in London to-day

has as much right as has his eldest son," he would still leave the Duke

a princely income from the rents of the buildings upon his estates, and

would suffer him to enjoy it without paying a single tax or rate on it

all (p. 320), why should the Duke give up his forest in Assynt, merely

because the Crown is to draw the rent instead of the Duke of Sutherland?

Mr. George accordingly proposes a remedy that would remedy nothing, but

leave things just as they are. Deer forests and the like may not be the

best use of the land, but the particular change Mr. George suggests

would not suppress them or even in the slightest degree check their

spread, and would not throw the ground now occupied by them into the

ordinary market for cultivation. And, besides, even if it did, the land

so provided for new-comers would necessarily soon come to an end, and

with it Mr. George's "simple and sovereign remedy," at least in its

specific operation.

But it is noteworthy that in his lectures in this country in 1884, Mr.

George made little account of the specific operation of his remedy as a

means of furnishing unemployed labourers with a practicable alternative

in agricultural production, to which they might continue indefinitely to

resort, and that he preferred for the most part drawing his cure for

poverty from the public revenue which the confiscation of rent would

place at the disposal of the community. Now as to this aspect of his

remedy, it is surely one of the oddest of his delusions to dream of

curing pauperism by multiplying the recipients of poor relief, and

taking away from it, as he claims credit for doing, through the

countenance of numbers, that reproach which has hitherto been the

strongest preventive against it. Besides, he and his friends greatly

exaggerate the amount of the fund the country would derive from the rent

of its ground. It would really fall far short of paying the whole of our

present taxation, not to speak of leaving anything over for wild schemes

of speculative beneficence. The rural rent of the country is only

seventy millions, and that sum includes the rent of buildings, which Mr.

George does not propose to touch, and which would probably in the

aggregate balance the ground rent of towns, which he includes in his

confiscation project. Now our local taxation alone comes very near that

figure, and certainly the people generally can scarcely be expected to

rise from a condition of alleged poverty to one of substantial wealth,

or even comfort, through merely having their local rates paid for them.

The result would therefore be poor, even if no compensation were to be

made to the present receivers of the rent; but with the compensation

price to pay, it would be really too ridiculously small to throw a whole

nation into labour and disorder for. Much may be done--much must be

done--to make the land of the country more available and more profitable

for the wants of the body of the people, but not one jot of what is

required would be done by mere nationalization of the ownership, or even

done better on such a basis than on that which exists. The things that

are requisite and necessary would remain still to be done, though land

were nationalized to-morrow, and they can be equally well done without

introducing that cumbrous innovation at all. With compensation the

scheme is futile; without it, it is repugnant to a healthy moral sense.

Mr. George indeed regards confiscation as an article of faith. It is of

the essence of the message he keeps on preaching with so much conviction

and courage and fervour. Private property in land, he tells us, is

robbery, and rent is theft, and the reason he offers for these strong

assertions is that nothing can rightly be private property which is not

the fruit of human labour, and that land is not the fruit of human

labour, but the gift of God. As the gift of God, it was, he believes,

intended for all men alike, and therefore its private appropriation

seems to him unjust. Under these circumstances he considers it as

preposterous to compensate landowners for the loss of their land, as it

would be to compensate thieves for the restitution of their spoil. To

confiscate land is only to take one's own, Mr. George has no difficulty

about the sound of the word, nor is he troubled by any subtleties as to

the length it is proper to go in the work. Mr. Mill, whose writings

probably put Mr. George first on this track, proposed to intercept for

national purposes only the future unearned increase of the rent of land,

only that portion of the future increase of rent which should not be due

to the expenditure of labour and capital on the soil. Mr. George would

appropriate the entire rent, the earned increase as well as the

unearned, the past as well as the future; with this exception, that

interest on such improvements as are the fruit of human exertion, and

are clearly distinguishable from the land itself, would be allowed for a

moderate period. He says in one place, "But it will be said: These are

improvements which in time become indistinguishable from the land

itself! Very well; then the title to the improvements becomes blended

with the title to the land; the individual right is lost in the common

right. It is the greater that swallows up the less, not the less that

swallows up the greater. Nature does not proceed from man, but man from

nature, and it is into the bosom of nature that he and all his works

must return again" (p. 242). And in another place, speaking of the

separation of the value of the land from the value of the improvements,

he says: "In the oldest country in the world no difficulty whatever can

attend the separation, if all that be attempted is to separate the value

of the clearly distinguishable improvements made within a moderate

period, from the value of the land, should they be destroyed. This

manifestly is all that justice or policy requires. Absolute accuracy is

impossible in any system, and to attempt to separate all the human race

has done from what nature originally provided would be as absurd as

impracticable. A swamp drained, or a hill terraced by the Romans,

constitutes now as much a part of the natural advantages of the British

Isles as though the work had been done by earthquake or glacier. The

fact that after a certain lapse of time the value of such permanent

improvements would be considered as having lapsed into that of the land,

and would be taxed accordingly, could have no deterrent effect on such

improvements, for such works are frequently undertaken upon leases for

years" (p. 302). The sum of this teaching seems to be that Mr. George

would recognise no separate value in any improvements except buildings,

and would be disposed to appropriate even them after such lapse of time

as would make it not absolutely unprofitable to erect them.

What Mr. George fails to perceive is that agricultural land is in no

sense more a gift of God, and in no sense less an artificial product of

human labour, than other commodities--than gold, for example, or cattle,

or furniture, in which he owns private property to be indisputably just.

Some of the richest land in England lies in the fen country, and that

land is as much the product of engineering skill and prolonged labour

as Portland Harbour or Menai Bridge. Before the days of Sir Cornelius

Vermuyden it was part of the bottom of the sea, and its inhabitants, as

they are described by Camden, trode about on stilts, and lived by

snaring waterfowl. Some of the best land in Belgium was barren

sand-heaps a hundred years ago, and has been made what it is only by the

continuous and untiring labour of its small proprietors. "God made the

sea, man made the dry land," is a proverb among the Dutch, who have

certainly made their own country as much as Mr. George has made his

book. In these cases the labour and the results of the labour are

obvious, but no cultivated land exists anywhere that is not the product

of much labour--certainly much more labour than Mr. George seems to have

any idea of. In the evidence taken before the recent Crofters'

Commission, Mr. Greig, who conducted the Duke of Sutherland's

improvements in the Strath of Kildonan, stated that the cost of

reclaiming 1,300 acres of land there, and furnishing them with the

requisite buildings for nine variously sized farms, was L46,000. Apart

from the buildings, the mere work of reclamation alone is generally

estimated to have cost L20 an acre, and in another part of the same

estates an equally extensive piece of reclamation is said to have cost

L30 an acre. By means of this great expenditure of capital and labour,

land that would hardly fetch a rent of a shilling an acre before was

worth twenty or thirty shillings an acre after. Not the buildings only,

but the land itself has been made what it is by labour. It has been

adapted to a useful office by human skill as really as the clay is by

the potter, or the timber by the wright. Deduct from the rent of these

reclaimed acres the value contributed by human labour, and how much

would remain to represent the gift of God? And would it be greater or

less than would remain after a like process applied, say, to a sovereign

or to a nugget of gold? Mr. George has no scruple about the justice of

private property and inheritance in the nugget, and indeed in all kinds

of movable wealth. "The pen with which I am writing," he says, for

example, "is justly mine. No other human being can rightfully lay claim

to it, for in me is the title of the original producers who made it"

(p. 236). The original producer of the nugget appropriated what was

surely a gift of God as much as the clays or loams of husbandry; and if

he, as Mr. George admits, has "a clear and indefeasible title to the

exclusive possession and enjoyment" of his nugget, and may transmit that

title by bequest or sale unimpaired for an unrestricted period of time,

why is the original producer of agricultural land to be held up as more

than half a thief, and the present possessor as one entirely? And if a

proprietor has spent L20,000 in buildings, and L26,000 in reclamations,

in order to convert the surface of the earth into useful arable soil,

why is he to be allowed rent on the L20,000, and denied it on the

L26,000?