THE SOCIALISTIC ATTACK ON INTEREST AND THE NATURE OF ITS SEVERAL ERRORS
If we reconsider what we have seen in the last chapter, we shall realise
that the moral or theoretical attack on interest, as income which is
unjustifiable because it has not been personally earned, is, when tested
by the logic of those who make it, an attack, not on interest itself,
but on bequest; and that such is the case will become even more evident
when we see what the theory comes to, as translated into a practical
programme.
The majority of those who attack interest to-day, no matter whether in
other respects they are advocates of socialism or opponents of it, agree
in declaring that what a man has personally produced he has a perfect
right to enjoy and spend as he pleases. The only right they deny to him
is the right to any further products which, before the capital has been
spent by him, may result from the productive use of it. Now, the
practical object with which this restriction is advocated is to render
impossible, not accumulations of wealth (for these are recognised as
legitimate when the reward of personal talent), but merely their
perpetuation in the hands of others who are economically idle. So far,
therefore, as this practical object is concerned, it would matter little
whether the man by whom the accumulation was made were allowed to
receive interest on it during his own lifetime or no, provided that this
right to interest were not transmissible to his heir; or even whether he
were allowed or were not allowed to leave anything to an heir at all.
For the heir at best would merely receive a sum which, since it could
not be used by him so as to bring about its own renewal, would be bound
soon to exhaust itself; and the general effect of permitting bequests of
this sterilised kind would differ from the effect of prohibiting
bequests altogether, not because it would tend to render accumulated
fortunes permanent, but only because it would protract for a decade or
two the process of their inevitable dissipation.
We may, therefore, say that, for the purposes of the present discussion,
the modern attack on interest, considered apart from any otherwise
socialistic programme, practically translates itself into this--namely,
the advocacy of a scheme which, as regards the actual producers of
capital, leaves their existing rights both to principal and interest
untouched, and would not even extinguish altogether their existing
powers of bequest, but would limit the exercise of these to the
principal sum only,[23] and prohibit the transmission to any private
person of any right whatever to the usufruct of its productive
employment.
Here, then, at last, we have something definite to discuss--a single
proposed alteration in certain existing arrangements; and by comparing
the situation which actually exists to-day with that which the proposed
alteration, if carried into effect, would produce, we shall see whether
the alteration is workable and practically defensible or no. Let us
begin with the situation which actually exists to-day, confining
ourselves to those features of it which are vital to the present issue.
Let us take two men of practically contrasted types, each of whom has
inherited a capital of fifty thousand pounds. The ultimate object of
each is, in one way or another, to make his capital provide him with the
life that he most desires; but the first man is thoughtful, far-seeing,
and shrewd, while the second cares for nothing but the gaiety and
pleasure of the moment; and they deal with their capitals in accordance
with their respective characters. The first meets, let us say, with the
inventor of an agricultural machine, which will, if successfully
manufactured, double the wheat crop of every acre to the cultivation of
which it is applied. He places his capital, as a loan, in this
inventor's hands. The machine is constructed, and used with the results
desired; and the man who has lent the capital receives each year a
proportion of the new loaves which are due to the machine's efficiency,
and would not have existed otherwise. The second man invests his fortune
in any kind of security which has the advantage of being turned easily
into cash, and draws out month by month so many hundred pounds, without
reference to anything but the pleasures he desires to purchase; and by
the end of a few years both his capital and his income have disappeared.
Now, any one judging these men by the current standards of common-sense
would, while praising the first as a model of moral prudence, condemn
the second as a fool who had brought his ruin upon himself, and curtly
dismiss him, if a bachelor, as being nobody's enemy but his own. But
before we indorse either of these judgments as adequate, let us consider
more minutely what in each case has been really done.
Let us start, then, with noting this. Whether a man invests his capital
in any productive machine and then lives on the interest, or else spends
it as income on his own personal pleasures, he is doing in one respect
precisely the same thing. He is giving something to other men in order
that they in return may make certain efforts for his benefit, of a kind
which he himself prescribes. This is obviously true when, spending his
capital as income, what he pays for is personal service, such as that of
a butler or footman who polishes his silver plate. It is equally true
when he pays for the plate itself. He is paying the silversmith so to
exert his muscles that an ounce or a pound of silver may be wrought into
a specific form. If he pays a toy-maker to make him a dancing-doll, he
is virtually paying him to dance in his own person. He is paying him to
go through a series of prescribed muscular movements. Similarly when he
pays a large number of men to construct a productive machine instead of
a doll or an ornament, he is paying for the muscular movements from
which the machine results. Here we come back to one of the main economic
truths to the elucidation of which our earlier chapters were devoted. It
was there pointed out that the machinery of the modern world owes its
existence to the fact that men of exceptional talent, by possessing the
control of goods which a number of other men require, are able in return
for the goods to make these other men exert themselves in a variety of
minutely prescribed and elaborately co-ordinated ways. In short, all
spending is, on the part of those who spend, a determination of the
efforts of others in such ways as the spender pleases. Further, as was
pointed out in an earlier chapter also, the only goods thus generally
exchangeable for effort are those common necessaries of existence for
which most men must always work, and which may here be represented by
food, the first and the most important of them. Hence, whenever the
question arises of how any given capital shall be treated--of whether it
shall be invested or else spent as income--this capital must be regarded
as existing in the indeterminate form of food, which is equally capable
of being treated in one way or the other. And any man's capital
represents for him, according to its amount, the power of feeding, and
so determining the actions of a definite number of other men for some
definite period. Since, therefore, the two capitalists whose conduct we
have been taking as an illustration have been supposed by us to possess
fifty thousand pounds apiece, we shall give precision to the situation
if we say that each, at starting, has the power of feeding, and so
determining the actions of, two hundred other men for a period of two
years.
So much, then, being settled, let us consider these further facts. Both
the capitalists, as we set out with observing, have in employing their
capital the same ultimate object--namely, that of securing through the
purchased efforts of others a continuous supply of things which will
render their lives agreeable. And now in connection with this fact let
us go back to another, which has also been pointed out before, that all
efforts, the sole object of which is to please from moment to moment the
man who directs and pays for them, are, whether embodied in the form of
commodities or no, really reducible to some kind of personal service,
if a toy-maker, in return for food, makes a dancing-doll for another
man, he might just as well have pirouetted for so many hours himself;
and if the purchaser would be more amused by a man's antics than by a
puppet's, this is precisely what the toy-maker would have been set to
do. In short, if we consider only the economic side of the matter,
without reference to the moral, whenever a man spends anything on his
own personal pleasure, he is virtually paying some other man, or a
number of other men to dance for him.[24] What, therefore, both our
capitalists desire as their ultimate object, is to keep as many men as
they are able to provide with food always dancing for their pleasure, or
in readiness to do so when wanted; but in setting themselves to achieve
this object in their two different ways, what happens is as follows.
Both use their capital by dispensing it in the form of daily rations to
two hundred other men, on condition that these men do something; but the
first feeds the other men, not on condition that they dance for him, or
do anything that ministers to his own immediate pleasure, but on
condition that they construct a machine which will enable, as soon as it
is finished, a given amount of human effort to double the amount of food
which such effort would have produced otherwise. Thus, by the end of two
years--the time which we suppose to be required for the machine's
completion--though the original food-supply of the capitalist will all
have been taken up and disappeared, its place will have been taken by a
machine which will enable forever afterwards one-half of the two hundred
men to produce food for the whole. A hundred men, therefore, are left
for whom food can be permanently provided, without any effort to produce
it being made by these men themselves; and since of this annual surplus
a part--let us call it half--will be taken as interest on the machine by
the man with whose capital it was constructed, he will now have the
means of making fifty men dance for his pleasure in perpetuity; for as
often as they have eaten up one supply of food, this, through the agency
of the machine, will have been replaced by another.
Our second capitalist, meanwhile, who deals with his capital as income,
starts with setting the dancers to dance for his behoof at once; and he
keeps the whole two hundred dancing and doing nothing else, so long as
he has food with which to feed them. This life is charming so long as it
lasts, but in two years' time it abruptly comes to an end. The
capitalist's cupboard is bare. He has no means of refilling it. The
dancers will dance no more for him, for he cannot keep them alive; and
the efforts for two years of two hundred men, as directed by a man who
treats his capital as income, will now have resulted in nothing but the
destruction of that capital itself, and a memory of muscular movements
which, so far as the future is concerned, might just as well have been
those of monkeys before the deluge.
Now, if we take the careers of our two capitalists as standing for the
careers of two individuals only, and estimate them only as related to
these men themselves, we might content ourselves with indorsing the
judgment which conventional critics would pass on them, and say of the
one that he had acted as his own best friend, and dismiss the other as
nobody's enemy but his own. But we are, in our present inquiry, only
concerned with individuals as illustrating kinds of conduct which are,
or which might be, general; and the effects of their conduct, which we
here desire to estimate, are its effects of it, not on themselves, but
on society taken as a whole. If we look at the matter in this
comprehensive way, we shall find that the facile judgments to which we
have just alluded leave the deeper elements of our problem altogether
untouched.
The difference between the ultimate results of the two ways of treating
capital will, to the conventional critic, seem to have been sufficiently
explained, by saying that the energy stored up in a given accumulation
of food reappears when employed in one way, in the efficiency of a
permanent machine; and is, when employed in the other, so far as human
purposes are concerned, as completely lost as it would have been had it
never existed. But if we reconsider a fact which was dwelt upon in our
last chapter, we shall see that the difference is really much greater
than this.
When the potential energy residing in so much food has been converted
into the energy of so much human labour, and when this is so directed
that a productive machine results from it, there is in the machine, as
Dr. Crozier puts it, an indefinitely larger amount of "pure economic
power," than that which has been expended in the work of the labourers'
muscles. While the energy of the labourers has merely resulted in a
bottle, or a cage, we may say, of sufficient strength, the genius of the
man who directed them has captured and imprisoned an elemental slave in
it, who, so long as the cage confines him, will supplement the efforts
of human muscle with his own. But when the energy latent in food is
converted into such efforts as dancing, the result produced is the
equivalent of the human effort only. Thus in the modern world of
scientific enterprise and invention, to invest capital in machinery and
then live on the interest from it, means to press into the service of
mankind an indefinite number of non-human auxiliaries, and year by year
to live on a part of the products which these deathless captives are
never tired of producing.
To spend capital as income on securing immediate pleasures means either
to forgo the chance of adding any new auxiliaries to those that we
possess already, or else to let those who are at our service already,
one after one, escape us--or, in other words, to make the productive
force now at the disposal of any prosperous modern country decline
towards that zero of efficiency from which industrial progress starts,
and which marks off helpless savagery from the first beginnings of
civilisation.
It is no doubt inconceivable, in the case of any modern nation, that a
climax of the kind just indicated could never reach its completion. If
all the capitalists, for example, of Great Britain or America, were
suddenly determined to live on their capital itself, they could do so
only by continuing for a considerable time to employ a great deal of it
precisely as it is employed at present. Indeed, so long as they
continued to demand the luxuries which machines produce, it might seem
that it was hardly possible for them to get rid of their capital at all.
But what would really happen may be briefly explained thus:--
If we take the case of any modern country, the amount of its income at
any given time depends for its sustentation on machines already in
existence; and its increase is dependent on the gradual supersession of
these by new ones yet more efficient. But the efficiency of the former
would soon begin to decrease, and would ultimately disappear altogether,
unless they were constantly repaired and their lost substance was
renewed; while the latter would never exist unless there were men to
make them. Hence, under modern conditions, in any prosperous and
progressive country, a large portion of what is called the manufacturing
class is always engaged, not in producing articles of consumption,
comfort, or luxury, but in repairing and renewing the machines by which
such articles are at present multiplied, or else in constructing new
machines which shall supplement or replace the old. Thus, in Great
Britain, towards the close of the nineteenth century, these makers and
repairers of machinery were, with the exception of coal-miners, the
industrial body whose proportional increase was greatest. In the modern
world the spending of capital as income is a process which, in
proportion as it became general, would accomplish itself by affecting
the position of men like these. It would consist of a withdrawal of men
who are at present occupied in maintaining existing machines, or else in
constructing new ones from their anvils, hammers, files, lathes, and
furnaces, and making them dance instead. This withdrawal would, in
proportion as it became general, render the construction of new machines
impossible, and would leave the efficiency of those now in use to
exhaust itself.
That such is the case is illustrated on a small scale by the conduct of
individuals who live on their capital now. If a farmer, whose capital
consists largely of an agricultural plant, desires to spend more than
his proceeds of his farm are worth, he virtually takes the men who have
been mending his barns and reapers, and sets them to build a buggy which
will take him to the neighbouring races. The varnish on the buggy is
bought with the rust on the reaper's blades; the smart, weather-proof
apron with the barn's unmended roof. If the managing body of a railroad
pays a higher dividend to the shareholders than can be got out of its
net earnings, the results are presently seen in cars that are growing
dirty, in engines that break down, in rotten sleepers, and in trains
that run off the track. The men who were once fed out of a certain
portion of the traffic receipts to keep these things in repair, are now
fed to dance for the shareholders, thus supplying them with spurious
dividends. A farm or a railroad which was managed on these principles
would ultimately cease to produce or to do anything for anybody; and if
all modern capital were managed in a similar way, all the multiplied
luxuries distinctive of modern civilisation would, one by one, disappear
like crops which were left to rot for lack of machines to reap them
with, and train services which had ceased because the engines were all
burned out.
That such a climax should ever, in any modern country, complete itself
cannot, let me say once more, be apprehended as a practical possibility;
but it is practically impossible only because the earlier stages of the
approach to it would lead to a situation that was intolerable long
before it ceased to be irreparable. And here we reach the point to
which the foregoing examination has been leading us. It is precisely
this course of conduct, the end of which would be general ruin, that any
attack on interest, by means of special taxation or otherwise, would, so
long as it lasted, stimulate and render inevitable. Let me point
out--though it ought in a general way to be self-evident--precisely how
this is.
We start with assuming--for, as we have seen already, so much is
conceded by those who attack interest to-day--that the owners of
capital, however their rights may be restricted, still have rights to it
of some kind. But a man's rights to his capital will not be rights at
all unless they empower him to use it in one way or another as a means
of ministering to his own personal desires; and it is possible for him
so to use it in one or other of two ways only--either by keeping it in
the form of some productive machine or plant, and living on a part of
the values which this produces, or by trenching on the substance of the
machine or the plant itself in the manner, and with the results, which
have just been explained and analysed. If, therefore, capitalists are to
be virtually deprived of their interest, either by means of a special
tax on "unearned incomes" or otherwise, but are yet permitted to enjoy
their capital somehow, no course is open to them but to employ for their
private pleasures the men by whom this capital, in such forms as
machines or railroads, is at present maintained, renewed, and kept from
lapsing into a state in which it would be unable to do or to produce
anything. And if any one still thinks that, by such a course of conduct,
if ever it became general, as it would do under these conditions, the
owners of capital would be injuring themselves alone, he need only
reflect a little longer on one of our suggested illustrations, and ask
himself whether the gradual deterioration of railroads would have no
effect on the world beyond that of impoverishing the shareholders. It
would obviously affect the many as much as it affected the few, and the
kind of catastrophe that would result from the deterioration of
railroads is typical of that which would result from the deterioration
of capital generally.
It would, then, be a sufficient answer to those who attack interest, and
propose to transfer it from its present recipients to the state, to
elucidate, as has here been done, the two following points: firstly,
that to interest as a means of enjoying wealth--the right to such
enjoyment itself not being here disputed--the only alternative is a
system which would thus prove fatal to everybody; and, further, that,
conversely, the enjoyment of wealth through interest not only possesses
this negative advantage, but is actively implicated in, and is the
natural corollary of, that progressive accumulation of force in the form
of productive machinery to which all the augmented wealth of the modern
world is due. By the identification of the enjoyment of capital with
the enjoyment of some portion of the products of it, the good of the
individual capitalist is identified with the good of the community; for
it will, in that case, be the object of all capitalists to raise the
productivity of all capital to a maximum; while a system which would
compel the possessor, if he is to enjoy his capital at all, to do so by
diminishing its substance and allowing its powers to dwindle, would
identify the only advantage he could possibly get for himself with the
impoverishment of everybody else, and ultimately of himself also.
But the crucial facts of the case have not been exhausted yet. There are
few phenomena of any complex society which are not traceable to more
causes than one, or at least to one cause which presents itself under
different aspects. Such is the case with interest. Its origin, its
functions, and its justification, in the modern world, must be
considered under an aspect, at which hitherto we have only glanced.
Throughout the present discussion we have been assuming that the
questions at issue turn ultimately on the character of human motive. On
both sides it has been assumed that men of exceptional powers will not
produce exceptional amounts of wealth, unless they are allowed the right
of enjoying some substantial proportion of it. This is a psychological
truth which, together with its social consequences, has been dealt with
elaborately in two of our earlier chapters. It was there shown that the
production of exceptional wealth by those men whose peculiar powers
alone enable them to produce it, involves efforts on their part which,
unlike labour, cannot be exacted of them by any outside compulsion, but
can only be educed by the prospect of a secured reward; and that this
reward consists, as has just been said, of the enjoyment of a part of
the product proportionate to the magnitude of the whole. But what the
proportion should be, and in what manner it should be enjoyed, were
questions which were then passed over. They were passed over in order
that they might be discussed separately. It was pointed out, however,
that the reward, in order to be operative, must be such as will be felt
to be sufficient by these men themselves, and that its precise amount
and quality can be determined by them alone--just as, if what we desire
is to coax an invalid to eat, we can coax him only with food which he
himself finds appetising. Let us now take these questions up again, and
examine them more minutely, and we shall find that interest is justified
from a practical point of view by the fact that the enjoyment of capital
by this particular means is not only the sole manner of enjoying it
which is consistent with the general welfare, but also constitutes the
advantage which, in the eyes of most great producers, gives to capital
the larger part of its value, and renders the desire of producing it
efficient as a social motive.
The reasons why the right to interest forms, in the eyes of the active
producers of capital, the main object of their activity are to be found,
firstly, in the facts of family affection, and, secondarily, in those of
general social intercourse, which together form the medium of by far the
larger part of our satisfactions. In spite of the selfishness which
distinguishes so much of human action, a man's desire to secure for his
family such wealth as he can is one of the strongest motives of human
activity known; and the fact that it operates in the case of many who
are notoriously selfish otherwise, shows how deeply it is ingrained in
the human character. One of the first uses to which a man who has
produced great wealth puts it is in most cases to build a house more or
less proportionate to his means; and it is his pride and pleasure to see
his wife and children acclimatise themselves to their new environment.
But such a house would lose most of its charm and meaning for him if the
fortune which enabled him to live in it were to dwindle with each day's
expenditure, and his family after his death were to be turned into the
street, beggars. If each individual were a unit whose interests ended
with himself; if generations were like stratified rocks, superposed one
on another but not interconnected; if--to quote a pithy phrase, I do not
know from whom--"if all men were born orphans and died bachelors," then
the right to draw income from the products of permanently productive
capital would for most men lose much of what now makes it desirable.
But since individuals and generations are not thus separated actually,
but are, on the contrary, not merely as a scientific fact, but as a fact
which is vivid to every one within the limits of his daily consciousness
dovetailed into one another, and could not exist otherwise, a man's own
fortune, with the kind of life that is dependent on it, is similarly
dovetailed into fortunes of other people, and his present and theirs is
dovetailed into a general future.
We have seen how this is the case with regard to his own family; but the
matter does not end there. Individual households do not live in
isolation; and there are for this fact two closely allied reasons. If
they did there could be no marriage; there could also be nothing like
social intercourse. It is social intercourse of a more or less extended
kind that alone makes possible, not only love and marriage, but most of
the pleasures that give colour to life. We see this in all ranks and in
all stages of civilisation. Savages meet together in numerous groups to
dance, like civilised men and women in New York or in London. The feast,
or the meal eaten by a large gathering, is one of the most universal of
all human enjoyments. But in all such cases the enjoyment involves one
thing--namely, a certain similarity, underlying individual differences,
between those persons who take part in it. Intimate social intercourse
is, as a rule, possible only between those who are similar in their
tastes and ideas with regard to the minute details which for most of us
make up the tesseræ of life's daily mosaic--similar in their manners,
in their standards of beauty and comfort, in their memories, their
prospects, or (to be brief) in what we may call their class
habituations. This is true of all men, be their social position what it
may. It is true, of course, that the quality of a man's life, as a
whole, depends on other things also, of a wider kind than these. It
depends not only on the fact, but also on his consciousness of the fact,
that he is a citizen of a certain state or country, though with most of
its inhabitants he will never exchange a word; or that he is a member of
a certain church; or that, being a man and not a monkey, his destiny is
identified with that of the human species. But, so far as his enjoyment
of private wealth is concerned, each man as a rule, though to this there
are individual exceptions, enjoys it mainly through the life of his own
_de facto_ class--the people whose manners and habits are more or less
similar to his own, because they result from the possession of more or
less similar means. He is, therefore, not interested in the permanence
of his own wealth only. He is equally interested in the permanence of
the wealth of a body of men, the life of which must, like that of all
corporations, be continuous.
There is in this fact much more than at first appears. Let us go back to
a point insisted on in the previous chapter. It was there shown, in
connection with the question of abstract justice, that those who attack
interest on the ground that it is essentially income for which its
recipients give nothing in return, fall into the error of ignoring the
element of time, without reference to which the whole process of life is
unintelligible. It was shown, by various examples, that in a large
number of cases the efforts which ultimately result in the production of
great wealth do not produce it till after, often till long after, the
original effort has come altogether to an end. Let us now take this
point in connection, not with abstract theories, but with the concrete
facts of conduct. Here again those who attack interest fall into the
same error. For example, in answer to arguments used by me when speaking
in America, one socialistic critic eagerly following another called my
attention by name to persons notoriously wealthy, some of whom had never
engaged in active business at all, while others had ceased to do so for
many years; and demanded of me whether I contended that idlers such as
these are doing anything whatever to produce the incomes which they are
now enjoying. If they are, said the critics, let this wonderful fact be
demonstrated. If they are not, then it must stand to reason that the
community will gain, and cannot possibly suffer, by gradually taking the
incomes of these persons away from them, and rendering it impossible
that incomes of a similar kind shall in the future be ever enjoyed by
anybody.
The general nature of the error involved in this class of argument can
be shown by a very simple illustration. In many countries the
government year by year makes a large sum by state lotteries. This may
be a vicious procedure, but let us assume for the moment that it is
legitimate, and that everybody is interested in its perpetuation. The
largest of the prizes drawn in such lotteries is considerable--often
amounting to more than twenty thousand pounds. Now, as soon as the
drawing on any one occasion had been accomplished, it might be argued
with perfect truth, in respect of that occasion only, that, the man who
had won such fortune having done nothing to produce it, the community
would be so much richer if the government, having paid the money to him,
were to take it all back again by a special tax on winnings. This would
be true with respect to that one occasion; but if any government were to
follow such a procedure systematically, no one would ever buy a lottery
ticket again, and the whole lottery system would thenceforth come to an
end.
What is true of wealth won in lotteries is true of wealth in general. If
the desire of possessing wealth is in any way a stimulus to the
production of it, those who are motived to produce it by this desire
to-day are motived by the desire of a something which they see to be
desirable and attainable because they see it around them, embodied in
the position of others, as the final result of the efforts of a
long-past yesterday. If this result were never to be seen realised, no
human being would make any effort to achieve it.
Let us--to go into particulars--suppose that the sole desire which moves
exceptional men to devote their capacities to the augmentation of their
country's wealth is the desire to join a class which, whether idle or
active otherwise--whether devoted to mere pleasure or to philanthropy,
or an enlightened patronage of the arts, or to speculative thought and
study--is itself in an economic sense altogether unproductive. In order
to join such a class, and to work with a view of joining it, society
must be so organised that such a class can exist; and the fact of its
existence constitutes the main moral magnet which, on our present
hypotheses, is permanently essential to the development of the highest
economic activity. Such being the case, then, the following conclusion
reveals itself, which, although it may seem paradoxical, will be found
on reflection to be self-evident--the conclusion namely, that a class
which, if considered by itself, is absolutely non-productive, may, when
taken in connection with the social system as a whole, be an essential
and cardinal factor in the working machinery of production,
constituting, as it would do by the mere fact of its existence, the
charged electric accumulator by which the machinery is kept in motion;
just as the mere existence of men, seen to be secure in their possession
of the prizes of past lotteries, is the magnet which alone can make
other men buy tickets for the lotteries of the future.
I have given this case as an assumption; but it is not an assumption
only. The desire for wealth as a means of living in absolute idleness is
probably confined, as a fact, in all countries to a few. In America
especially it is a matter for surprise to strangers that men who have
made fortune beyond the possibilities of pleasurable expenditure so
rarely retire on them to cultivate the pursuits of leisure. But even in
America, if they do not value leisure for themselves, they value it for
their women, to whom, there as in all countries, four-fifths of the
charm and excitement of private life are due; and the sustained
possibility of leisure, even if not the enjoyment of it--a possibility
which can rest only on a basis of sustained fortunes--is the main
advantage which, in all civilised countries, gives wealth its meaning
for those who already possess it, and its charm for those who are, in
order to possess it, exerting at any given moment their energies and
their intellect in producing it.
The source of such sustained fortunes, in their distinctively modern
form, is, as we have seen already, such and such forces of nature,
which, captured and embodied in machines and other appliances by the
masters of science and men of executive energy, and subsequently
directed by other men of cognate talents, supplement the efficiency of
ordinary human labour, thus yielding the surplus of which modern
fortunes are a part, the remainder forming a fund which diffuses itself
throughout the mass of the community. That part of the surplus which
constitutes such fortunes is interest; and now let us sum up what in
this and the previous chapter our examination of the criticisms directed
against interest has shown us.
In the first place, then, we saw that the theoretical attack on
interest, on the ground that it is income which is not earned by the
recipients, but is virtually taken by the few from the products of the
labour of the many, is chimerical in its moral and false in its economic
implications.
We saw, in the second place, coming down to the practical aspects of the
question, that interest is the only form in which the owners of capital
can enjoy their wealth at all, without drying up the sources from which
most modern wealth springs, thus bringing ruin to the community no less
than to themselves.
We saw, in the third place, that, quite apart from the welfare of the
community, interest constitutes, for the owners of wealth themselves,
the means of enjoying it which mainly makes it desirable, and the object
for the sake of which, at any given moment, the master spirits of
industry are engaged in producing and increasing it.
The reader must observe, however, that this conclusion is here stated in
general terms only. It has not been contended--for this question has not
been touched upon--that interest may not, when received in certain
amounts, be justifiably made the subject of some special taxation. Any
such question must be decided by reference to special circumstances,
and cannot be discussed apart from them. Nor has it been contended that,
within certain limits, the power of bequest is not susceptible of
modification without impairing the energies of the few or the general
prosperity of the many. The sole point insisted on here is this: that
any special tax on interest, or any tampering with the powers of
bequest, begins to be disastrous to all classes alike, if it renders,
and in proportion as it renders to any appreciable degree, the natural
rewards of the great producers of wealth less desirable in their own
eyes than they are and otherwise would be.
FOOTNOTES:
[23] Mr. G. Wilshire, in his detailed criticism of my American speeches,
states twice over the modern socialistic doctrine as to this point. The
maker or inheritor of capital, he says, could, under socialism, "buy all
the automobiles he wanted, all the diamonds, all the champagne; or he
could build a palace. In other words, he could spend his income in
consumable goods, but he could not invest either in productive machinery
or in land."
[24] This is merely saying that all economic effort has, for its
ultimate aim, a desirable state of consciousness, which might be
contemptible if it really depended on looking on at dances, or refined
if it depended on the cultivation of flowers, or listening to great
singers, or witnessing the performance of great plays, or on the
enlargement of the mind by travel.