CHAPTER I

Transcriber’s Note

In the following transcription, italic text is denoted by _underscores_.

Small capitals in the original text have been transcribed as ALL

CAPITALS.

Numbered markers (◆¹, ◆², etc.) have been added to this transcription

to indicate the line in a paragraph at which the text of the

corresponding marginal note (sidenote) started.

The corresponding marginal notes are numbered ◆1, ◆2, etc. They are

enclosed in square brackets and prefixed with the word ‘Sidenote’. They

are placed immediately above the paragraph to which they were attached

in the book.

See end of this document for details of corrections and other changes.

————————————— Start of Book —————————————

LABOUR

AND THE

POPULAR WELFARE

BY

W. H. MALLOCK

AUTHOR OF ‘IS LIFE WORTH LIVING?’ ‘SOCIAL EQUALITY,’ ETC.

SIXTH THOUSAND

LONDON

ADAM AND CHARLES BLACK

1895

PREFACE TO NEW EDITION

In republishing this work at a low price, I wish to reiterate

emphatically what is said of it in the opening chapter,—namely, that

any clearheaded Radical, as distinct from the New Unionist, the

Socialistic dreamer, and the Agitator, will find nothing in it to jar

against his sympathies, or to conflict with his opinions, any more than

the most strenuous Conservative will. If the word “party” is used in

its usual sense, this is a volume absolutely free from any party bias.

It has, however, since its first publication, some nine months ago,

been attacked continually, not by Socialistic writers only (whose

attack was natural), but by Radicals also, who, apparently quite

mistaking the drift of it, have done their best to detect in it flaws,

fallacies, and inaccuracies. As any work like the present, whose aim is

essentially practical, is worse than useless unless the reader is able

to feel confidence in it, let me say a few words as to the degree of

confidence which is claimed, after nine months of criticism, for the

facts and arguments set forth in the following pages.

Let the reader emphasise in his mind the division between facts and

arguments, for they stand on a different footing. In estimating the

truth of any general arguments, the final appeal is to the common

sense of the reader. The reader is himself the judge of them; and the

moment he understands and assents to them, they belong to himself as

much as they ever did to the writer. On the other hand, the historical

facts, or statistics, by which arguments are illustrated, or on which

they are based, claim acceptance on the authority, not of our internal

common sense, but of external evidence. Let me speak separately, then,

of the arguments of this book, and of the facts quoted in it.

Of the arguments, whether taken individually or as a whole, it will be

enough here to say that no hostile critic of these has been able in any

way to meet them. The only writers who have affected to do so have,

either intentionally or unintentionally, entirely failed to understand

them; and when they have seemed to be refuting anything, they have

been refuting only their own misconceptions or misrepresentations. It

is impossible in a short preface to say more than this; but in order

to illustrate the truth of the foregoing statement, a paper published

by me in the _Fortnightly Review_ is (by kind permission of Messrs.

Chapman and Hall) reprinted as an Appendix to the present volume. That

paper consists of an examination of the criticisms made, on behalf

of the Fabian Society, by Mr. Bernard Shaw on two previous papers of

my own published (also in the _Fortnightly Review_) under the title

of “Fabian Economics,” in which the main arguments of this book were

condensed. It is true that many of these arguments are here stated

merely in outline, and in a popular rather than in a philosophical

form, as is explained more fully in the Preface to the First Edition.

But it may be safely asserted that there is hardly a single Socialistic

argument used by the Socialistic party in this country to which this

present book does not contain a reply, or at all events a clear

indication of the grounds on which a reply is to be founded.

With regard to the historical facts, and especially the statistics

here brought forward, it is necessary to speak more particularly. The

broad historical facts—facts connected with the development of wealth

in this country—are incapable of contradiction, and have never been

contradicted. Hostile critics have directed their principal attacks

against the statistics, endeavouring to show that certain of the

figures were inaccurate, and arguing that, this being so, the whole

contents of the book were unreliable.

The most minute attack of this kind which has been brought to my notice

dealt with certain figures which were no doubt erroneous, and indeed

unmeaning; but had the critic examined the volume with more care, he

would have seen that every one of these figures was a misprint, and was

corrected in a list of errata which accompanied the first edition.

Other critics have confined themselves almost entirely to the figures

given by me with regard to two questions—the landed rental of this

country, as distinct from the rent of houses; and the growth of the

national income during the past hundred years.

With regard to both of these questions it should be distinctly

understood that absolute accuracy is impossible; and I have given the

statistics in round numbers only. But, for the purpose for which the

figures are quoted, approximate accuracy is as useful as absolute

accuracy, even were the latter attainable; and every attempt to correct

the figures as given in this volume has only served to show how

substantially accurate these figures are, and how totally unaffected

would be the argument, even were any of the suggested corrections

accepted.

The landed rental of the country is given by me as something under

_a hundred million pounds_. It has been asserted that were the

ground-rents in towns properly estimated, the true rental would be

found to be _a hundred and fifty million pounds_ or _a hundred and

eighty million pounds_. It is no doubt difficult to differentiate in

town properties the total rental from the ground rental; but the most

recent investigations made into this question, so far as it affects

London, will throw light on the question as a whole. The highest

estimate of the present ground-rental of London as related to the total

rental gives the proportion of the former to the latter as _fifteen_

to _forty_. Now house rent in London is higher than in any other town

in the kingdom; therefore, if we assume the same proportion to obtain

in all other towns, we shall be over-estimating the ground-rent of the

country as a whole, instead of underestimating it. If we take this

extreme calculation—which is obviously too great—it will be found to

yield a result as to the total landed rental exceeding only by ten per

cent that given in this volume. It will therefore be easily seen that

the figures given by me are substantially accurate, and sufficiently

accurate for all purposes of political and social argument.

Precisely the same thing is to be said with regard to the figures given

as to the growth of the national income and the capitalised value of

the country. The estimates of various statisticians will be found to

differ from one another by something like ten per cent; but these

differences do not in the least affect the essential character and

meaning of the great facts in question. Let us take, for instance, two

facts stated in this volume—that the capital of the country during the

past century has increased in the proportion of _two_ to _ten_; and

the income per head of the country in the proportion of _fourteen_ to

_thirty-four_ or _thirty-five_. We will suppose some critic to prove

that these proportions should be _three_ to _eleven_, or _twelve_ to

_thirty-three_. Now, large as the error thus detected might be from

some points of view, it would be absolutely immaterial to the large

and general question in connection with which the figures are quoted in

this volume.

The enormous increase in our national income and our national capital

is doubted or denied by no one. Now let us express the increase in

income as a supposed increase in the average height of the rooms

inhabited by the population. According, then, to the figures given by

me, we might say in this case that at the beginning of the century the

average house was _seven feet_ high—only high enough for tall men to

stand up in; and that now houses have been so improved that the average

height of a living-room is _seventeen feet_. If any one, dwelling on

the fact of such a change as this, were inquiring into its causes, and

were basing arguments on its assumed reality, what difference would it

make if some opponent were to prove triumphantly that the height of

the average room now was not _seventeen feet_, but _sixteen feet six

inches_, and that four generations ago it had been _six feet_ instead

of _seven_? The difference in the estimates of our national income

during the past ninety or a hundred years are not more important for

the purpose of any general argument than the difference just supposed

with regard to the height of two living-rooms; and readers may rest

assured that the round numbers given by me with regard to the growth of

the national income and the national capital are so near the admitted

and indisputable truth of things, that no possible correction of them

would substantially alter any one of the arguments which they are here

quoted to illustrate.

_September 1894._

PREFACE TO FIRST EDITION

Nearly all the general truths of Economic Science are, directly or

indirectly, truths about the character or the actions of human beings.

It is, consequently, always well to warn the readers of economic

works, that in Political Economy, more than in any other science,

every general rule is fringed with exceptions and modifications; and

that instances are never far to seek which seem to prove the reverse

of what the general rule states, or to make the statement of it appear

inaccurate. But such general rules need be none the less true for this;

nor for practical purposes any the less safe to reason from. They

resemble, in fact, these general truths with regard to the seasons,

which we do and must reason from, even in so uncertain a climate as our

own. It is, for instance, a truth from which we all reason, that summer

is dryer and warmer than winter; and yet there is a frequent occurrence

of individual days, which, taken by themselves, contradict it. So, too,

those economic definitions, the subjects of which are human actions or

faculties, can be entirely accurate only in the _majority_ of cases to

which they apply; and these cases will be fringed always by a margin

of doubtful ones. But the definitions, for all that, need be none the

less practically true. Day and night are fringed with doubtful hours

of twilight; but our clear knowledge of how midnight differs from noon

is not made less clear by our doubts as to whether a certain hour at

sunrise ought to be called an hour of night or morning.

It is especially desirable to prefix this warning to a work as short

as the present. In larger and more elaborate works, the writer can

particularise the more important exceptions and modifications to which

his rules and definitions are subject. But in a short work this task

must be left to the common sense of the reader. For popular purposes,

however, brevity of statement has one great advantage, namely, that

of clearness; and, as the significance of the exceptions cannot be

understood without the rules, it is almost essential first to state the

rules without obscuring them by the exceptions. There are few readers

probably who will not see that the general propositions and principles

laid down in the following pages, require, in order to fit them to

certain cases, various additions and qualifications. It is necessary

only for the reader to bear in mind that these propositions need be

none the less broadly and vitally true, because any succinct statement

of them is unavoidably incomplete.

CONTENTS

BOOK I

THE DIVISIBLE WEALTH OF THE UNITED KINGDOM

CHAP. PAGE

I. The Welfare of the Home, as the Logical End of

Government—

A Ground of Agreement for all Parties 3

Facts and Principles which are the same for everybody 6

The Income of the Individual as the Aim and Test of

Government 8

Private Income and the Empire 10

Patriotism and the Home 11

Cupidity as a motive in Politics 12

The right Education of Cupidity 13

II. The Conditions involved in the idea of a Legislative

Redistribution of Wealth; and the Necessary

Limitations of the Results—

Cupidity and the Poorer Classes 14

The Limits of Sane Cupidity as fixed by the Total

Production 16

Unforeseen Results of an Equal Division of Wealth 18

Contemporary Agitator on Slavery 20

Workmen as their own Masters 21

Ownership of the Means of Labour impossible for

Modern Workman 22

Equality possible only under a Universal Wage-System 24

Equality and Universal Labour 26

III. The Pecuniary Results to the Individual of an Equal

Division, first of the National Income, and secondly

of certain parts of it—

The Income of Great Britain 27

Division of the National Income 29

How to divide the Income equally 30

Shares of Men, Women, and Children 31

The Maximum Income of a Bachelor 32

Smallness of the result 33

Maximum Income of a Married Couple 34

Practical absurdity of an Equal Division of Income 36

A complete Redivision of Property advocated by nobody 38

The attack on Landed Property 40

Popular ignorance as to the Real Rental of the

Landlords 42

The Landed Aristocracy 44

Multitude of Small Landowners 45

Owners of Railway Shares and Consols 46

Inappreciable cost of the Monarchy 47

Forcible Redistribution impossible 48

IV. The Nature of the National Wealth: first, of the

National Capital; second, of the National Income.

Neither of these is susceptible of Arbitrary

Division—

Difference between Wealth and Money 49

Wealth as a whole not divisible like Money 52

More luxurious forms of Wealth incapable of division 54

The Wealth of Great Britain considered as Capital 56

The elements which compose the National Capital 58

Ludicrous results of an Equal Division of Capital 60

Division of Income, not of Capital, alone worth

considering 62

Elements which compose the National Income 64

Material Goods and Services 66

Home-made Goods and Imports 67

Two-thirds of the Population dependent on Imported

Food 68

Variation of the National Income relatively to the

Population 70

Incomes of other countries compared with that of

our own 72

Productivity of Industry not determined by Time 74

Unperceived increase of the Income of the United

Kingdom 76

Immense Possible Shrinkage in our National Income 78

The Great Problem 80

BOOK II

THE CHIEF FACTOR IN THE PRODUCTION OF THE

NATIONAL INCOME

I. Of the various Factors in Production, and how to

distinguish the Amount produced by each—

The Cause of Production generally 84

The Production of Given Quantities 85

Production a Century Ago 86

Amount of Capital employed in it 87

Land, Capital, and Human Exertion 88

How much produced by each 89

The chief Practical Problem in Contemporary Economics 90

II. How the Product of Land is to be distinguished

from the Product of Human Exertion—

Rent the Product of Land 93

The Accepted Theory of Rent illustrated by an

Example 94

The Product of Agricultural Labour 96

The Product of Land 97

Maximum Produce of Labour 98

Surplus produced by Land 99

Land a Producing Agent as distinct from Labour 100

The Existence of Rent not affected by Socialism 102

Rent necessarily the Property of whoever owns the

Land 104

The Argument of this Volume embodied in the case

of Rent 106

III. Of the Products of Machinery or Fixed Capital,

as distinguished from the Products of Human

Exertion—

Capital of Two Kinds 108

The part of the Product produced by Machinery or

Fixed Capital 110

Example of Product of Machinery as distinct from

that of Labour 112

The Products of a Machine necessarily the Property

of Owner 114

The Cotton Industry in the Last Century 116

Arkwright’s Machinery 118

The Iron Industry of Great Britain 119

Machinery and Production of Iron 120

Machinery and Wage Capital 121

IV. Of the Products of Circulating Capital, or Wage

Capital, as distinguished from the Products of

Human Exertion—

Simplest Function of Wage Capital 122

Distinguishing Function of Modern Wage Capital 124

Wage Capital mainly productive as a means of

directing Labour 126

Slaves and Free Labourers 128

Wage Capital and Progress 129

Wage Capital as related to the production of New

Inventions 130

Capital the Tool of Knowledge 132

Wage Capital and Arkwright 133

Wage Capital as Potential Machinery 134

How to discriminate the amount produced by Wage

Capital 136

V. That the Chief Productive Agent in the modern world

is not Labour, but Ability, or the Faculty which

directs Labour—

The best Labour sometimes useless 138

Labour not the same faculty as the faculty which

directs Labour 140

Extraordinary confusion in current Economic

Language 142

Labour a Lesser Productive Agent 144

Ability a Greater Productive Agent 145

The Vital Distinction between Ability and Labour 146

Ability not a form of Skilled Labour 148

Capital applied successfully the same thing as

Ability 150

Obvious Exceptions 152

Ability the Brain of Capital 153

Ability as the Force behind Capital the Cause of

all Progress 154

VI. Of the Addition made during the last Hundred Years

by Ability to the Product of the National Labour.

This Increment the Product of Ability—

Production in the Last Century 156

Growth of Agricultural Products 158

Growth of Production of Iron 159

Ability and Agriculture in the Last Century 160

The Maximum Product that can be due to Labour

alone 162

Present Annual Product of Ability in the United

Kingdom 164

The Product of Capital virtually Product of the

Ability of the Few 166

BOOK III

AN EXPOSURE OF THE CONFUSIONS IMPLIED IN SOCIALISTIC

THOUGHT AS TO THE MAIN AGENT IN MODERN PRODUCTION.

I. The Confusion of Thought involved in the

Socialistic Conception of Labour—

A confusing Socialistic Formula 171

A Plausible Argument 173

A Plausible Argument analysed 174

Its implied meaning considered 175

The real Taskmaster of Labour not an Employing

Class, but Nature 176

Different position of Ability 178

The Organist and Bellows-blower 179

The Picture and the Canvas 180

The Qualifying Factor 181

Do all men possess Ability 182

Labour itself non-progressive 183

Ancient Labour equal to Modern 184

A Remarkable Illustration 185

Labour as trained by Watt 186

Labour as assisted by Maudslay 187

II. That the Ability which at any given period is a

Producing Agent, is a Faculty residing in and

belonging to living Men—

A Socialistic Criticism 188

Primæval Progress and Labour 190

Rudimentary Ability 191

Primæval and Modern Inventions 192

A more Important Point 193

The necessity for Managing Ability increased by

Inventive Ability 194

The main results of Past Ability inherited by

Living Ability 196

Productive Ability the Ability of Living Men 198

Fresh demonstration of the Productivity of Ability 200

III. That Ability is a natural Monopoly, due to the

congenital Peculiarities of a Minority. The

Fallacies of other Views exposed—

An Error of Mr. Herbert Spencer’s 202

A Philosophic Truth, but an Economic Falsehood 204

Whole body of Successful Inventors a very small

Minority 206

Ability and Opportunity 208

Ability not produced by Opportunity 209

Ability the Maker of its own Opportunities 210

Ability as a matter of Character 212

Function of such Ability 213

Characters not equalised by Education or

Opportunity 214

Progress due solely to the Few 216

Progress in the Iron Industry 217

Early Applications of Ability to British

Iron Production 218

Ability opposed by the Age instead of

representing it 220

Isolated Action of Ability 222

Arkwright and his associates 223

The Value of Watt’s Patent as estimated by

his Contemporaries 224

Industrial Progress the work of the Few

only 226

IV. The Conclusion arrived at in the preceding Book

restated. The Annual Amount produced by

Ability in the United Kingdom—

Grades of Ability 228

Proportion of Able Men to Labourers 230

A Rough Calculation 231

More than half our National Income produced by

a Small Minority 232

BOOK IV

THE REASONABLE HOPES OF LABOUR—THEIR MAGNITUDE,

AND THEIR BASIS

I. How the Future and Hopes of the Labouring

Classes are bound up with the Prosperity of

the Classes who exercise Ability—

Short Summary of the preceding Arguments 237

The preceding Arguments from the Labourer’s Point

of View 240

The Share of Labour in the growing Products of

Ability 242

The amount produced by Labour 244

The amount taken by Labour 245

Continuous Recent Growth of the Receipts of Labour 246

Growth of the Receipts of Labour during Queen

Victoria’s Reign 248

Actual Gains of Labour beyond the Dreams of Socialism 250

Two Points to be considered 252

II. Of the Ownership of Capital, as distinct from its

Employment by Ability—

Land and its Owners 253

Passive Ownership of Capital 255

The Class that Lives on Interest 256

The Hope of Interest as a Motive 257

Capital created and saved mainly for the sake

of Interest 258

Family Feeling 260

The Bequest of Capital 261

Interest a Necessary Incident as the Price of

the Use of Capital 262

A Part of the Interest of Capital constantly

appropriated by Labour 264

Interest not to be confused with Large Profits 266

Interest not to be confused with the Profits of

Sagacity 268

Enormous gains of Labour at the expense of

Ability 270

Labour and the Existing System 272

III. Of the Causes owing to which, and the Means by

which Labour participates in the Growing Products

of Ability—

A Miserable Class co-existing with General

Progress 273

Relative Decrease of Poverty 276

Two Causes of Popular Progress 277

The Riches of a Minority 278

How they are produced 279

The Rich Man’s Progress 280

The Rivalry of the Rich 282

The Gain of Labour 283

Popular Progress and Growth of Population 284

The Gain of Labour limited by the Power of

Ability 286

The Natural Gain of Labour 288

Its relation to Politics 289

Self-Help and State Help 290

IV. Of Socialism and Trade Unionism—the Extent

and Limitation of their Power in increasing the

Income of Labour—

So-called Socialism in England different from

Formal Socialism 291

An Element of Socialism necessary to every State 294

The Socialistic question entirely a question of

degree 296

Socialism not directly operative in increasing the

Income of Labour 298

Trade Unionism 300

How it strengthens Labour 301

How the power of striking grows with the growth of

Wages 302

Natural Limits of the Powers of Trade Unionism 304

Labour and Ability 306

Higgling on Equal Terms 307

The Power represented by Strikes not Labour, but

Labouring Men 308

Leaders of Labouring Men rarely Leaders of Labour 310

The Power of Trade Unionism important, though

limited 312

Certain remaining points 314

V. Of the enormous Encouragement to be derived

by Labour from a true View of the Situation;

and of the Connection between the Interests of

the Labourer and Imperial Politics—

A Recapitulation 315

The Practical Moral 317

The True Functions of Trade Unionism and Socialism 318

The Natural Progress of Labour a Stimulus to Effort 320

The Future of Labour judged from its Past Progress 322

The one thing on which the Hopes of Labour depend 324

The Real Bargain of Labour not with Capital but

Ability 326

Subordination to Ability no Indignity to Labour 328

The Moral Debt of Ability to Labour 330

Labour, Nature, and Ability 332

The Home and Foreign Food 333

Imperial Politics and the National Income 334

The Labourer’s home 336

———————————————————————————————————————————————————————

BOOK I

THE DIVISIBLE WEALTH OF THE

UNITED KINGDOM

———————————————————————————————————————————————————————

CHAPTER I

_The Welfare of the Home, as the Logical End of Government._

[Sidenote ◆1 The subject of this book, but has nothing to do with

party politics.]

◆¹ I wish this book to be something which, when the subject of it is

considered, the reader perhaps will think it cannot possibly be. For

its subject—to describe it in the vague language of the day—is the

labour question, the social question, the social claims of the masses;

and it is these claims and questions as connected with practical

politics. Their connection with politics is close at the present

moment; in the immediate future it is certain to become much closer;

and yet my endeavour will be to treat them in such a way that men of

the most opposite parties—the most progressive Radical and the most

old-fashioned Tory—may find this book equally in harmony with their

sympathies, and equally useful and acceptable from their respective

points of view.

[Sidenote ◆1 An example of the order of facts it deals with.]

[Sidenote ◆2 Such facts as these not generally known; but when

once ascertained, necessarily the same for all parties:]

[Sidenote ◆3 And it is equally to the advantage of all parties to

understand such facts.]

◆¹ But if the reader will consider the matter further, he will see

that my endeavour is not necessarily so impracticable as it seems

to be. A very little reflection must be enough to show anybody that

many of the political problems about which men differ most widely are

concerned with an order of truths which, when once they have been

examined properly, are the same for all of us; and that a preliminary

agreement with regard to them is the only possible basis for any

rational disagreement. I will give one example—the land-question.

About no political problem is there more disagreement than about this;

and yet there are many points in it, about which men may indeed be

ignorant, but about which, except for ignorance, there cannot be any

controversy. Such for instance is the acreage of the United Kingdom,

the number of men by whom the acres are owned, the respective numbers

of large and of small properties, together with their respective

rentals, and the proportion which the national rent bears to the

national income. ◆² The truth about all these points is very easily

ascertained; and yet not one man in a hundred of those by whom the

land-question is discussed, appears to possess the smallest accurate

knowledge of it. A curious instance of this ignorance is to be found

in the popular reception accorded some years ago to the theories of

Mr. Henry George. If Mr. George’s reasonings were correct as applied

to this country, the rental of our titled and untitled aristocracy

would be now about _eight hundred millions_: and few of his admirers

quarrelled with this inference. But if they had only consulted official

records, and made themselves masters of the real facts of the case,

they would have seen at once that this false and ludicrous estimate

was wrong by no less a sum than _seven hundred and seventy millions_;

that the _eight hundred millions_ of Mr. George’s fancy were in reality

not more than _thirty_; and that the rent, which according to him was

two-thirds of the national income, was not in reality more than two

and a quarter per cent of it. Now here is a fact most damaging to the

authority of a certain theorist with whom many Radicals are no doubt

in sympathy; but it none the less is a fact which any honest Radical is

as much concerned to know as is any honest Tory, and which may easily

supply the one with as many arguments as the other. ◆³ The Tory may

use it against the Radical rhetorician who denounces the landlords as

appropriating the whole wealth of the country. The Radical may use

it against the Tory who is defending the House of Peers, and may ask

why a class whose collective wealth is so small, should be specially

privileged to represent the interests of property: whilst those who

oppose protection may use it with equal force as showing how the

diffusion of property has been affected by free trade.

Here is a fair sample, so far as particular facts are concerned, of

the order of truths with which I propose to deal: and if I can deal

with them in the way they ought to be dealt with, they will be as

interesting—and many will be as amusing—as they are practically useful.

It may indeed be said, without the smallest exaggeration, that the

salient facts which underlie our social problems of to-day, would, if

properly presented, be to the general reader as stimulating and fresh

as any novel or book of travels, besides being as little open to any

mere party criticism.

[Sidenote ◆1 Besides such facts, this book deals with general

truths and principles, equally independent of party.]

◆¹ But there are other truths, besides particular facts, which I

propose to urge on the reader’s attention also. There are general

truths, general considerations, and principles: and these too, like

the facts, will be found to have this same characteristic—that though

many of them are not generally realised, though many of them are often

forgotten, and though some of them are supposed to be the possession of

this or that party only, they do but require to be fairly and clearly

stated, to command the assent of every reflecting mind, and to show

themselves as common points from which, like diverging lines, all

rational politicians, whatever may be their differences, must start.

[Sidenote ◆1 The proposition with which the argument starts is an

example of a truth of this kind.]

◆¹ The very first principle to which I must call attention, and which

forms a key to my object throughout this entire book, will at once be

recognised by the reader as being of this kind. The Radical perhaps may

regard it as a mere truism; but the most bigoted Tory, on reflection,

will not deny that it is true. The great truth or principle of which I

speak is as follows.

[Sidenote ◆1 The conditions of private happiness are the end of

all Government.]

[Sidenote ◆2 These conditions are principally a question of

private income.]

[Sidenote ◆3 The end of Government is therefore to secure adequate

incomes for the greatest possible number.]

◆¹ The ultimate end of Government is to secure or provide for

the greatest possible number, not indeed happiness, as is often

inaccurately said, but the external conditions that make happiness

possible. As for happiness, that must come from ourselves, or at all

events from sources beyond the control of Governments. But though no

external conditions are sufficient to make it come, there are many

which are sufficient to drive it or to keep it permanently away; and

it is the end of all Government to minimise conditions such as these.

Now these conditions, though their details vary in various cases, are

essentially alike in all. They are a want of the necessaries, or a want

of the decencies of life, or an excessive difficulty in obtaining them,

or a recurring impossibility of doing so. ◆² They are conditions in

fact which principally, though not entirely, result from an uncertain

or an insufficient income. The ultimate duty of a Government is

therefore towards the incomes of the governed; ◆³ and the three chief

tests of whether a Government is good or bad, are first the number of

families in receipt of sufficient incomes, secondly the security with

which the receipt of such incomes can be counted on, and lastly the

quality of the things which such incomes will command.

[Sidenote ◆1 This view not necessarily materialistic, nor

unpatriotic:]

◆¹ Some people however—perhaps even some Radicals—may be tempted to

say that this is putting the case too strongly, and is caricaturing

the truth rather than fairly stating it. They may say that it excludes

or degrades to subordinate positions all the loftier ends both of

individual and of national life, such as moral and mental culture, and

the power and greatness of the country: but in reality it does nothing

of the kind.

[Sidenote ◆1 For income is necessary for mental as well as

physical welfare,]

[Sidenote ◆2 And the complete welfare of the citizens is what

gives meaning to patriotism.]

◆¹ In the first place, with regard to moral and mental culture, if

these are really desired by the individual citizen, they will be

included amongst the things which his income will help him to obtain:

and an insufficient income certainly tends to deprive him of them.

If he wishes to have books, he must have money to buy books: and if

he wishes his children to be educated, there must be money to pay

for teaching them. In the second place, with regard to the power and

greatness of the country, though for many reasons ◆² we are apt

to forget the fact, it is the material welfare of the home, or the

maintenance of the domestic income, that really gives to them the whole

of their fundamental meaning. Our Empire and our power of defending

it have a positive money value, which affects the prosperity of every

class in the country: and though this may not be the only ground on

which our Empire can be justified, it is the only ground on which,

considering what it costs, its maintenance can be justified in the eyes

of a critical democracy. Supposing, it could be shown to demonstration

that the loss of our Empire and our influence would do no injury to

our trade, or make one British household poorer, it is impossible to

suppose that the democracy of Great Britain would continue for long,

from mere motives of sentiment, to sanction the expense, or submit to

the anxiety and the danger, which the maintenance of an Empire like our

own constantly and necessarily involves.

[Sidenote ◆1 Further, patriotism will only flourish in a country

which secures for its citizens the conditions of a happy

life.]

◆¹ But let us waive this argument, and admit that a sense of our

country’s greatness, quite apart from any thought of our own material

advantage, enlarges and elevates the mind as nothing else can—that

to be proud of our country and proud of ourselves as belonging to it,

to feel ourselves partners in the majesty of the great battle-ship,

in the menace of Gibraltar stored with its sleeping thunders, or the

boastful challenge of the flag that floats in a thousand climates, is

a privilege which it is easier to underrate than exaggerate. Let us

admit all this. But these large and ennobling sentiments are all of

them dependent on the welfare of the home in this way:—they are hardly

possible for those whose home conditions are miserable. Give a man

comfort in even the humblest cottage, and the glow of patriotism may,

and probably will, give an added warmth to that which shines on him

from his fireside. But if his children are crying for food, and he is

shivering by a cold chimney, he will not find much to excite him in the

knowledge that we govern India. Thus, from whatever point of view we

regard the matter, the welfare of the home as secured by a sufficient

income is seen to be at once the test and the end of Government; and it

ceases to be the end of patriotism only when it becomes the foundation

of it.

[Sidenote ◆1 Cupidity, therefore, or the desire for sufficient

income, is a legitimate basis for popular interest in

politics;]

◆¹ Here, then, is the principle which I assume throughout this volume.

And now, I think that, having explained it thus, I may, without offence

to either Tory or Radical, venture to condemn, as strongly as its

stupidity deserves, the way in which politicians are at present so

often attacked for appealing to what is called the cupidity of the

poorer classes. Cupidity is in itself the most general and legitimate

desire to which any politician or political party can appeal. It is

illegitimate only when it is excited by illegitimate methods: and

these methods are of two obvious kinds. One is an exaggeration of the

advantages which are put before the people as obtainable: the other is

the advocacy of a class of measures as means to them, by which not even

a part of them could be, in reality, obtained. Everybody must see that

a cupidity which is excited thus is one of the most dangerous elements

by which the prosperity of a country can be threatened. But a cupidity

which is excited in the right way, which is controlled by a knowledge

of what wealth really exists, and of the fundamental conditions on

which its distribution depends—is merely another name for spirit,

energy, and intelligence.

[Sidenote ◆1 The aim of this book is to educate popular cupidity.]

◆¹ My one aim then, in writing this book, is to educate the cupidity of

voters, no matter what their party, by popularising knowledge of this

non-controversial kind. And such knowledge will be found, as I have

said already, to be composed partly of particular facts, and partly

of general truths. We will begin with the consideration of certain

particular facts, which must, however, be prefaced by a few general

observations.

CHAPTER II

_The Conditions involved in the idea of a Legislative

Redistribution of Wealth; and the Necessary

Limitations of the Results._

[Sidenote ◆1 All men ask of a Government either the increase or

the maintenance of their incomes.]

◆¹ Let me then repeat that we start with assuming cupidity as not only

the general foundation, but also as the inevitable, the natural, and

the right foundation, of the interest which ordinary men of all classes

take in politics. We assume that where the ordinary man, of whatever

class or party, votes for a member of Parliament, or supports any

political measure, he is primarily actuated by one of two hopes, or

both of them—the first being the hope of securing the continuance of

his present income, the second being the hope of increasing it. Now, to

secure what they have already got is the hope of all classes; but to

increase it by legislation is the hope of the poorer only. It is of

course perfectly true that the rich as well as the poor are anxious, as

a rule, to increase their incomes when they can; but they expect to do

so by their own ability and enterprise, and they look to legislation

for merely such negative help as may be given by affording their

abilities fair play.

[Sidenote ◆1 The poor alone look for an increase of income by

direct legislative means. They are right in doing this.]

[Sidenote ◆2 The cupidity which this book chiefly deals with is

the cupidity of the poorer classes.]

◆¹ But with the poorer classes the case is entirely different. They

look to legislation for help of a direct and positive kind, which

may tend to increase their incomes, without any new effort of their

own: and not only do they do this themselves, but the richer classes

sympathise with the desire that makes them do so. It is, for instance,

by no means amongst the poorer classes only that the idea of seizing

on the land, without compensating the owners, has found favour as a

remedy for distress and poverty generally. Owners of every kind of

property, except land, have been found to advocate it; whilst as to

such vaguer and less startling proposals, as the “restoration of the

labourer to the soil,” the limitation of the hours of labour, or the

gradual acquirement by the State of many of our larger industries—the

persistent way in which these are being kept before the public, is due

quite as much to men of means as to poor men. ◆² It is then with the

cupidity of the poorer classes that we are chiefly concerned to deal;

and the great question before us may briefly be put thus: By what sort

of social legislation may the incomes of the poorer classes—or, in

other words, the incomes of the great mass of the community—be, in the

first place, made more constant; and, in the second place, increased?

[Sidenote ◆1 The first question to ask is: What is the maximum

amount which it would be theoretically possible for them

to obtain? For this is much exaggerated.]

◆¹ But before proceeding to this inquiry, there is a preliminary

question to be disposed of. What is the maximum increase which any

conceivable legislation could conceivably secure for them out of the

existing resources of the country? Not only unscrupulous agitators, but

many conscientious reformers, speak of the results to be hoped for from

a better distribution of riches, in terms so exaggerated as to have

no relation to facts; and ideas of the wildest kind are very widely

diffused as to the degree of opulence which it would be possible to

secure for all. The consequence is that at the present moment popular

cupidity has no rational standard. It will therefore be well, before

we go further, to reduce these ideas—I do not say to the limits

which facts will warrant—but to the limits which facts set on what is

theoretically and conceivably possible.

[Sidenote ◆1 An ascertainable limit is placed to this amount by

circumstances.]

[Sidenote ◆2 And this amount would be obtainable only under

certain conditions,]

◆¹ Let me then call attention to the self-evident truth, that the

largest income which could possibly be secured for everybody, could not

be more than an equal share of the actual gross income enjoyed by the

entire nation. Now it happens that we know with substantial accuracy

what the gross amount of the income of the nation now is, and I will

presently show what is the utmost which each individual could hope for

from the most successful attempt at a redistribution of everything. ◆²

But the mere pecuniary results of a revolution of this kind are not the

only results of which we must take account. There are others which it

will be well to glance at before proceeding to our figures.

[Sidenote ◆1 One of which would entirely change the existing

character of wealth.]

◆¹ Though an equal division of wealth would, as we soon shall see,

bring a large addition to the income of a considerable majority of

the nation, the advantages which the recipients would gain from this

addition, would be very different from the advantages which an

individual would gain now, from the same annual sum coming to him from

invested capital. In other words, if wealth were equally distributed,

it would, from the very necessity of the case, lose half the qualities

for which it is at present most coveted.

[Sidenote ◆1 Were wealth equally distributed, nobody would have an

independence.]

◆¹ At present wealth suggests before all things what is commonly called

“an independence”—something on which a man can live independently

of his own exertions. But the moment a whole nation possessed it in

equal quantities this power of giving an independence would go from

it suddenly and for ever. If a workman who at present makes _seventy

pounds_ a year, would receive, by an equal division, an additional

_forty pounds_, it is indeed true that no additional work could be

entailed on him. The work which at present gets him _seventy pounds_,

would in that case get him _a hundred and ten_. But he would never be

able, if he preferred leisure to wealth, to forego the _seventy pounds_

and live in idleness on the _forty pounds_; as he would be able to do

now if the additional _forty pounds_ were the interest of a legacy left

him by his maiden aunt. Unless he continued to work, as he had worked

hitherto, he would lose not only the first sum, but the second.

[Sidenote ◆1 Every one would have to work as hard as he does now;]

This is self-evident, when we consider what is the essence of such a

situation, namely that the position of everybody is identical. For if

everybody preferred to be idle, no wealth could be produced at all.

However great nominally might be the value of our national property,

it is perfectly clear that everybody could not live at leisure in

it: and from the very nature of the case, in a nation where all are

equal, what cannot be done by all, could not be done by anybody. ◆¹

If, therefore, we estimate the income possible for each individual

as an equal fraction of the present income of the nation, it must be

remembered that, to produce the total out of which these fractions are

to come, everybody would have to work as hard as he does now. And more

than that, it would be the concern of all to see that his share of

work was not being shirked by anybody. This is at present the concern

of the employer only: but under the conditions we are now considering,

everybody would be directly interested in becoming his neighbour’s

taskmaster.

[Sidenote ◆1 And be even more under the dominion of the employer

than he is now;]

These last considerations lead us to another aspect of the subject,

with which every intelligent voter should make himself thoroughly

familiar, and which every honest speaker would force on the attention

of his hearers. A large number of agitators, who are either ignorant or

entirely reckless, but who nevertheless possess considerable gifts of

oratory, ◆¹ are constantly endeavouring to associate, in the popular

mind, the legitimate hope of obtaining an increased income, with an

insane hostility to conditions which alone make such an increase

possible. These men[1] are accustomed to declaim against the slavery of

the working classes, quite as much as against their inadequate rate of

payment. By slavery they mean what they call “enslavement to capital.”

Capital means the implements and necessaries of production. These, they

argue, are no longer owned by the workmen as they were in former times:

and thus the workers are no longer their own masters. They must work

under the direction of those who can give them the means of working;

and this, they are urged to believe, reduces them to the condition of

slaves.

[Sidenote ◆1 Nor could any one hope to own the instruments of

production used by him.]

[Sidenote ◆2 Self-contradictions of agitators, who say that

capitalism means slavery, and that socialism would make

the worker free.]

[Sidenote ◆3 The industrial discipline of the State would

necessarily be much harder than that of the private

employer.]

Of course, in these representations there is a certain amount of truth:

but it is difficult to conceive of anything more stupidly and more

wantonly misleading, than the actual meaning which they are employed by

the agitators to convey. For that meaning is nothing else than this—◆¹

that under improved conditions, when wealth is better distributed, the

so-called slavery will disappear, the workers will be their own masters

again, and will each own, as formerly, the implements and the materials

of his work. But, as no one knows better than the extreme socialists,

and as any intelligent man can see easily for himself, such a course of

events is not only not possible, but is the exact reverse of that on

which the progress of the workers must depend. ◆² The wildest agitator

admits, and the most ignorant agitator knows, that the wealth of the

modern world, on the growth of which they insist, and which, for the

very reason that its growth has been so enormous, is declared by them

to offer so rich a prize to the workers, mainly owes its existence

to improved conditions of production. Such persons know also that of

these conditions the chief have been the development of machinery, the

increased subdivision of employments, and the perfected co-operation

of the workers. But the development of machinery necessarily means

this—the transformation of (say) each thousand old-fashioned implements

into a single vast modern one of a hundred times their aggregate

power: and it means that at this single implement a thousand men shall

work. The increased subdivision of labour means that no man shall

make an entire thing, but merely some small part of it; and perfected

co-operation is another name for perfected discipline. It will be thus

seen that the conditions which the agitator calls those of slavery

are essential to the production of the wealth which is to constitute

the workers’ heritage. ◆³ It will be seen that the workers’ hope of

bettering their own position is so far from depending on a recovery

of any former freedom, that it involves yet further elaboration of

industrial discipline; and puts the old ownership of his own tools

by the individual farther and further away into the region of dreams

and impossibilities: and that no redistribution of wealth would even

tend to bring it back again. The weaver of the last century was the

owner of his own loom: and a great cotton-mill may now be owned by one

capitalist. But a co-operative cotton-mill that was owned by all the

workers, in the old sense of the word would not be owned by anybody.

Could any one of these thousand or more men say that any part of the

mill was his own personal property? Could he treat a single bolt, or

a brick, or a wheel, or a door-nail, as he might have treated a loom

left to him in his cottage by his father? Obviously not. No part of

the mill would be his own private property, any more than a train

starting from Euston Station is the property of any shareholder in

the London and North-Western Railway. His ownership would mean merely

that he was entitled to a share of the profits, and that he had one

vote out of a thousand in electing the managers. But however the

managers were elected, he would have to obey their orders; and their

discipline would be probably stricter than that of any private owner.

Much more would this be the case if the dream of the Socialist were

fulfilled, and if instead of each factory or business being owned by

its own workers, all the workers of the country collectively owned all

the businesses—all the machinery, all the raw materials, and all the

capital reserved for and spent in wages. For though the capital of

the country would be owned by the workers nominally, their use of it

would have to be regulated by a controlling body, namely the State. The

managers and the taskmasters would all be State officials, and be armed

with the powers of the State to enforce discipline. The individual

under such an arrangement, might gain in point of income; but if he is

foolish enough to adopt the view of the agitator, and regard himself as

the slave to capital now, he would be no less a slave to it were all

capitals amalgamated, and out of so many million shares he himself were

to own one.

[Sidenote ◆1 For it must always be remembered that the idea of an

equal distribution of wealth necessarily presupposes the

State as sole employer and capitalist.]

◆¹ It is particularly desirable in this particular place to fix

the reader’s attention on this aspect of the question, because

it is inseparably associated with the point we are preparing to

consider—namely, the pecuniary position in which the individual would

be placed by an equal division, were such possible, of the entire

national income. For we must bear in mind that not even in thought or

theory is an equal division of the national income possible, unless

all the products of the labour of every citizen are in the first place

taken by the State as sole employer and capitalist, and are then

distributed as wages in equal portions. Under no other conditions

could equality be more than momentary. If each worker himself sold his

own products to the consumer,—which he could not do, because no one

produces the whole of anything,—the strong and industrious would soon

be richer than the idle; and the man with no children richer than the

man with ten. Inequality would have begun again as soon as one day’s

work was over. Equality demands, as the Socialists are well aware, that

all incomes shall be wages paid by the State; and it implies further,

as we shall presently have occasion to observe—that equal wages shall

be paid to all individuals, not because they are equally productive,

but because they are all equally human. When therefore I speak, as I

shall do presently, of what each individual would receive, if wealth

were divided equally, I must be understood as meaning that he would

receive so much from the State.

[Sidenote ◆1 A redistribution of wealth, if it increased the

incomes of some, would lessen the labour of nobody.]

[Sidenote ◆2 The next chapter contains an examination of the

amount of income which would theoretically result from

an equal distribution in this country.]

◆¹ Let us remember then that a redistribution of wealth would have in

itself no tendency to alter the existing conditions of the workers in

any respect except that of wages only. It would not tend to relieve

any man of a single hour of labour, to give him any more freedom in

choosing the nature of his work or the method of it, or make him less

liable to fines or other punishments for disobedience or unpunctuality.

◆² His only gain, if any, would be a simple gain in money. Let us now

proceed to deal with the pounds, shillings, and pence; and see what is

the utmost that this gain could come to.

CHAPTER III

_The Pecuniary Results to the Individual of an Equal

Division, first of the National Income, and

secondly of certain parts of it._

[Sidenote ◆1 The gross income of the United Kingdom.]

[Sidenote ◆2 The whole amount attributed to the rich would not be

available for distribution.]

[Sidenote ◆3 A certain deduction must therefore be made from the

estimated total.]

◆¹ The gross income of the United Kingdom—the aggregate yearly amount

received by the entire population—is computed to be in round numbers

some _thirteen hundred million pounds_. But though this estimate may

be accepted as true under existing circumstances, we should find it

misleading as an estimate of the amount available for distribution.

So far as it relates to the income of the poorer classes, it would

be indeed still trustworthy; but the income of the richer—which is

the total charged with income-tax—we should find to be seriously

exaggerated, as considerable sums are included in it which are counted

twice over. ◆² For instance, the fee of a great London doctor for

attending a patient in the South of France would be about _twelve

hundred pounds_. Let us suppose this to be paid by a patient whose

income is _twelve thousand pounds_. The doctor pays income-tax on his

fee; the patient pays income-tax on his entire income; and thus the

whole sum charged with income-tax is _thirteen thousand two hundred

pounds_. But if we came to distribute it, we should find that there

was _twelve thousand pounds_ only. And there are many other cases of a

precisely similar nature. According to the calculations of Professor

Leone Levi, the total amount which was counted twice over thus,

amounted ten years ago to more than a _hundred million pounds_.[2] ◆³

In order, therefore, to arrive at the sum which we may assume to be

susceptible of distribution, it will be necessary, therefore, to deduct

at least as much as this from the sum which was just now mentioned of

_thirteen hundred million pounds_.[3] Accordingly the income of the

country, if we estimate it with a view to dividing it, is in round

numbers, _twelve hundred million pounds_.

[Sidenote ◆1 This, divided amongst all, would yield _thirty-two

pounds_ per head:]

[Sidenote ◆2 But different sexes and ages would require different

amounts,]

[Sidenote ◆3 The proportions of which are readily ascertainable.]

◆¹ And now let us glance at our problem in its crudest and most

rudimentary form, and see what would be the share coming to each

individual, if these millions were divided equally amongst the entire

population. The entire population of the United Kingdom numbers a

little over _thirty-eight millions_; so our division sum is simple.

The share of each individual would be about _thirty-two pounds_. But

this sort of equality in distribution would satisfy nobody. It is not

worth talking about. For a quarter of the population are children

under ten years of age,[4] and nearly two-fifths are under fifteen:

and it would be absurd to assign to a baby seeking a pap-bottle, or

even to a boy—voracious as boys’ appetites are—the same sum that

would be assigned to a full-grown man or woman. ◆² In order to give

our distribution even the semblance of rationality, the shares must

be graduated according to the requirements of age and sex. The sort

of proportion to each other which these graduated shares should bear

might possibly be open to some unimportant dispute: but we cannot go

far wrong if we take for our guide the amount of food which scientific

authorities tell us is required respectively by men, women, and

children; together with the average proportion which actually obtains

at present, both between their respective wages and the respective

costs of their maintenance. ◆³ The result which we arrive at from

these sources of information is substantially as follows, and every

fresh inquiry confirms it. For every _pound_ which is required or

received by a man, _fifteen shillings_ does or should go to a woman,

_ten shillings_ to a boy, _nine shillings_ to a girl, and _four and

sixpence_ to an infant.[5]

[Sidenote ◆1 The problem best approached by taking the family as

the unit:]

[Sidenote ◆2 And then we can arrive at the share of each member.]

[Sidenote ◆3 The maximum income that an equal distribution would

give a bachelor.]

◆¹ So much, then, being admitted, we shall make our calculations best

by starting with the family as our unit, and coming to the individual

afterwards. The average family consists of four and a half persons; and

the families in the United Kingdom number _eight and a half millions_.

_Twelve hundred millions_—the sum we have to divide—would give each

family an income of _a hundred and forty pounds_. From this, however,

we should have to deduct taxes; and, since if all classes were equal,

all would have to be taxed equally,—the amount due from each family

would be considerable. Public expenditure, if the State directed

everything, would of necessity be larger than it is at present; but

even if we assume that it would remain at its present figure, each

family would have to contribute at least _sixteen pounds_.[6] Therefore

_sixteen pounds_ must be deducted from the _hundred and forty pounds_.

Accordingly we have for four and a half persons a net income of _a

hundred and twenty-six pounds_. Now these persons would be found to

consist on an average of a man and his wife, a youth, a girl, and a

half of a baby,—for when we deal with averages we must execute many

judgments like Solomon’s,—and if we distribute the income among them

in the proportion I just now indicated, the result we shall arrive at

will, in round numbers, be this. ◆² The man will have _fifty pounds_,

the woman _thirty-six pounds_, the youth _twenty-five pounds_, the girl

_twenty-four pounds_, and the half of the infant _five pounds_. And now

let us scrutinise the result a little further, and see how it looks in

various familiar lights. An equal distribution of the whole wealth of

the country would give every adult male about _nineteen shillings and

sixpence_ a week, and every adult female about _fourteen shillings_.

These sums would, however, be free of taxes; so in order to compare

them with the wages paid at present, we must add to them _two shillings

and sixpence_ and _two shillings_ respectively, which will raise them

respectively to _twenty-two shillings_, and to _sixteen shillings_: ◆³

but a bachelor who is earning the former sum now, or an unmarried woman

who is now earning the latter, would neither of them, under any scheme

of equal distribution conceivable, come in for a penny of the plunder

taken from the rich. They already are receiving all that, on principles

of equality, they could claim.

The smallness of this result is likely to startle anybody; but none the

less is it true: and it is well to consider it carefully, because the

reason why it startles us requires to be particularly noticed. Of the

female population of the country that is above fifteen years old, the

portion that works for wages is not so much as a half;[7] and of the

married women that do so, the portion is much smaller. The remainder

work, no doubt, quite as hard as the rest; but they work as wives and

mothers; and whatever money they have comes to them through their

husbands. Thus when the ordinary man considers the question of income,

he regards income as something which belongs exclusively to the man,

his wife and his children being things which the man maintains as he

pleases. But the moment the principle of equality of distribution is

accepted, all such ideas as these have to be rudely changed: for if

all of us have a claim to an equal share of wealth, just as the common

man’s claim is as good as that of the uncommon man, so the woman’s

claim is as good as the claim of either; and whatever her income might

be under such conditions, it would be hers in her own right, not in

that of anybody else. Accordingly it happens that an equal distribution

of wealth, though it would increase the present income of the ordinary

working man’s family, might actually, so far as the head of the family

was concerned, have the paradoxical result of making him feel that

personally he was poorer than before—not richer.[8]

[Sidenote ◆1 The highest possible standard of living would be

represented by a man and wife without children.]

◆¹ The man’s personal share, then, would be _twenty-two shillings_ a

week, and the woman’s _sixteen shillings_; and they could increase

their income in no way except by marrying. As many of their expenses

would be greatly diminished by being shared, they would by this

arrangement both be substantial gainers: but if the principle of

equality were properly carried out, they would gain very little further

by the appearance of children; for though we must assume that a certain

suitable sum would be paid them by the State for the maintenance of

each child, that would have to be spent for the child’s benefit. We

may, therefore, say that the utmost results which could possibly be

secured to the individual by a general confiscation and a general

redistribution of wealth, would be represented by the condition of a

childless man and wife, with _thirty-eight shillings_ a week, which

they could spend entirely on themselves: for all the wealth of the

nation that was not absorbed in supplying such incomes to men and women

who were childless, would be absorbed in supporting the children of

those who had them; thus merely equalising the conditions of large and

of small families, and enabling the couple with ten or a dozen children

to be personally as well off as the couple with none. Could such a

condition of wellbeing be made universal, many of the darkest evils of

civilisation would no doubt disappear: but it is well for a man who

imagines that the masses of this country are kept by unjust laws out of

the possession of some enormous heritage, to see how limited would be

the result, if the laws were to give them everything; and to reflect

that the largest income that would thus be assigned to any woman, would

be less than the income enjoyed at the present moment by multitudes of

unmarried girls who work in our Midland mills—girls whose wages amount

to _seventeen shillings_ a week, who pay their parents _a shilling_ a

day for board, and who spend the remainder, with a most charming taste,

on dress.

He will have to reflect also that such a result as has been just

described could be produced only by an equality that would be

absolutely grotesque in its completeness—by every male being treated as

equal to every other male of the same age, and by every female being

treated similarly. The prime minister, the commander-in-chief, the most

important State official, would thus, if they were unmarried, be poorer

than many a factory-girl is at present; whilst if they were married,

they and their wives together would have but _four shillings_ a week

more than is at present earned by a mason, and _six shillings_ a week

less than is earned by an overlooker in a cotton-mill.

[Sidenote ◆1 Absolute pecuniary equality, however, is not thought

possible by anybody;]

[Sidenote ◆2 As the salaries asked for Members of Parliament by

the Labour Party show.]

◆¹ But an equality of this kind, from a practical point of view, is

worth considering only as a means of reducing it to an absurdity.

Even were it established to-morrow, it could not be maintained for a

month, owing to the difficulty that would arise in connection with the

question of children: as unless a State official checked the weekly

bills of every parent, parents inevitably would save out of their

children’s allowances; and those with many children would be very soon

founding fortunes. And again it is obvious that different kinds of

occupation require from those engaged in them unequal expenditures; so

that the inevitable inequality of needs would make pecuniary equality

impossible. Indeed every practical man in our own country owns this,

however extreme his views; ◆² as is evidenced by the amounts which have

been suggested by the leaders of the Labour Party as a fit salary for

a paid Member of Parliament. These amounts vary from _three hundred

pounds_ a year to _four hundred pounds_; so that the unmarried Member

of Parliament, in the opinion of our most thoroughgoing democrats,

deserves an income from six to eight times as great as the utmost

income possible for the ordinary unmarried man. And there are many

occupations which will, if this be admitted, deserve to be paid on the

same or on even a higher scale. We may therefore take it for granted

that the most levelling politicians in the country, with whom it is

worth while to reason as practical and influential men, would spare

those incomes not exceeding _four hundred pounds_ a year, and would

probably increase the number of those between that amount and _a

hundred and fifty pounds_. Now the total amount of the incomes between

these limits is not far from _two hundred million pounds_: so if this

be deducted from the _twelve hundred million pounds_ which we just

now took as the sum to be divided equally, the incomes of the people

at large will be less by sixteen per cent than the sums at which they

were just now estimated; and the standard of average comfort will be

represented by a childless man and wife having _thirty-one shillings

and eightpence_ instead of _thirty-eight shillings_ a week.

[Sidenote ◆1 General redistribution, then, is not thought possible

by any English party;]

[Sidenote ◆2 But it is still instructive to consider the

theoretical results of it.]

◆¹ We need not, however, dwell upon such details longer: for there

are few people who conceive even a redistribution like this to be

possible; and there would probably be fewer still who would run the

risk of attempting it, if they realised how limited would be the

utmost results of it to themselves. My only reason for dealing with

these schemes at all is that, ◆² whilst they are felt to be impossible

as soon as they are considered closely, they are yet the schemes

which invariably suggest themselves to the mind when first the idea

of any great social change is presented to it; and a knowledge of

their theoretical results, though it offers no indication of what may

actually be attainable, will sober our thoughts, and at the same time

stimulate them, by putting a distinct and business-like limit to what

is conceivable.

[Sidenote ◆1 But there are certain parts of the national income

the redistribution of which has been actually advocated,

_i.e._: (1) the rent of the land; (2) the interest of

the National Debt; (3) the sums spent on the Monarchy.]

[Sidenote ◆2 We will consider what the nation would gain by

confiscating the above.]

[Sidenote ◆3 Absurd ideas as to the amount of the landed rental of

the country.]

◆¹ And for this reason, before I proceed further, I shall ask the

reader to consider a few more theoretical estimates. The popular

agitator, and those whose opinions are influenced by him, do not

propose to seize upon all property; they content themselves with

proposing to appropriate certain parts of it. The parts generally fixed

upon are as follows:—First and foremost comes the landed rental[9]

of the country—the incomes of the iniquitous landlords. Second comes

the interest on the National Debt; third, the profits of the railway

companies; and last, the sum that goes to support the Monarchy. All

these annual sums have been proposed as subjects of confiscation,

though the process may generally be disguised under other names. ◆²

Let us take each of these separately, and see what the community at

large would gain by the appropriation of each. And we will begin with

the income of the landlords; for not only is this the property which is

most frequently attacked, but it is the one from the division of which

the largest results are expected. ◆³ It is indeed part of the creed of

a certain type of politician that, if the income of the landlords could

be only divided amongst the people, all poverty would be abolished, and

the great problem solved.

[Sidenote ◆1 The popular conception of the wealth of the larger

landlords.]

◆¹ In the minds of most of our extreme reformers, excepting a few

Socialists, the income of the landlords figures as something limitless;

and the landlords themselves as the representatives of all luxury. It

is not difficult to account for this. To any one who studies the aspect

of any of our rural landscapes, with a mind at all occupied with the

problem of the redistribution of wealth, the things that will strike

his eye most and remain uppermost in his mind, are the houses and parks

and woods belonging to the large landlords. Small houses and cottages,

though he might see a hundred of them in a three-miles’ drive, he

would hardly notice; but if in going from York to London he caught

glimpses of twelve large castles, he would think that the whole of

the Great Northern Railway was lined with them. And from impressions

derived thus two beliefs have arisen—first that the word “landlord” is

synonymous with “large landlord”; and secondly that large landlords own

most of the wealth of the kingdom. But ideas like these, when we come

to test them by facts, are found to be ludicrous in their falsehood.

If we take the entire rental derived from land, and compare it with

the profits derived from trade and capital, we shall find that, so far

as mere money is concerned, the land offers the most insignificant,

instead of the most important question[10] that could engage us. Of the

income of the nation, the entire rental of the land does not amount to

more than one-thirteenth; and during the last ten years it has fallen

about thirteen per cent. The community could not possibly get more than

all of it; and if all of it were divided in the proportions we have

already contemplated, it would give each man about twopence a day and

each woman about three half-pence.[11]

[Sidenote ◆1 The landed aristocracy are not the chief

rent-receivers.]

[Sidenote ◆2 A multitude of small proprietors receive twice as

much in rent as the entire landed aristocracy.]

[Sidenote ◆3 The entire rental of the landed aristocracy is so

small that its confiscation would benefit no one.]

◆¹ But the more important part of the matter still remains to be

noticed. The popular idea is, as I just now said, that we should, in

confiscating the rental of the kingdom, be merely robbing a handful

of rich men, who would be probably a deserving, and certainly an easy

prey. The facts of the case are, however, singularly different. It is

true, indeed, if we reckon the land by area, that the large landlords

own a preponderating part of it: but if we reckon the land by value,

the whole case is reversed; ◆² and we find that classes of men who are

supposed by the ordinary agitator to have no fixed interest in the

national soil at all, really draw from it a rental twice as great as

that of the class which is supposed to absorb the whole. I will give

the actual figures,[12] based upon official returns; and in order that

the reader may know my exact meaning, let me define the term that I

have just used—namely “large landlords”—as meaning owners of more than

_a thousand_ acres. No one, according to popular usage, would be called

a large landlord, who was not the owner of at least as much as this;

indeed the large landlord, as denounced by the ordinary agitator, is

generally supposed to be the owner of much more. Out of the aggregate

rental, then—that total sum which would, if divided, give each man

twopence a day—what goes to the large landlords is now considerably

less than _twenty-nine million pounds_. By far the larger part—namely

something like _seventy million pounds_—is divided amongst _nine

hundred and fifty thousand_ owners, of whose stake in the country the

agitator seems totally unaware; and in order to give to each man the

above daily dividend, it would be necessary to rob all this immense

multitude whose rentals are, on an average, _seventy-six pounds_ a

year.[13] Supposing, then, this nation of smaller landlords to be

spared, ◆³ and our robbery confined to peers and to country gentlemen,

the sum to be dealt with would be less than _twenty-nine million

pounds_; and out of the ruin of every park, manor, and castle in the

country, each adult male would receive less than three-farthings daily.

[Sidenote ◆1 Were the National Debt and the Railways confiscated,

the results would likewise be hardly perceptible to the

nation as a whole.]

◆¹ And now let us turn to the National Debt and to the railways. The

entire interest of the one and the entire profits of the other, would,

if divided equally amongst the population, give results a little, but

only a little, larger than the rental of the large landlords. But here

again, if the poorer classes were spared, and the richer investors

alone were singled out for attack, the small dividend of perhaps

one penny for each man daily, would be diminished to a sum yet more

insignificant. How true this is may be seen from the following figures

relating to the National Debt. Out of the _two hundred and thirty-six

thousand_ persons who held consols in 1880, _two hundred and sixteen

thousand_, or more than nine-tenths of the whole, derived from their

investments less than _ninety pounds_ a year; whilst nearly half of the

whole derived less than _fifteen pounds_.

[Sidenote ◆1 The Monarchy costs so small a sum, that no one would

be the richer for its abolition.]

◆¹ And lastly, let us consider the Monarchy, with all its pomp and

circumstance, the maintenance of which is constantly represented as

a burden seriously pressing on the shoulders of the working-class. I

am not arguing that in itself a Monarchy is better than a Republic.

I am considering nothing but its cost in money to the nation. Let

us see then what its maintenance actually costs each of us, and how

much each of us might conceivably gain by its abolition. The total

cost of the Monarchy is about _six hundred thousand pounds_ a year;

but ingenious Radicals have not infrequently argued that virtually,

though indirectly, it costs as much as _a million pounds_. Let us take

then this latter sum, and divide it amongst _thirty-eight million_

people. What does it come to a head? It comes to something less than

_sixpence halfpenny_ a year. It costs each individual less to maintain

the Queen than it would cost him to drink her health in a couple of

pots of porter. The price of these pots is the utmost he could gain

by the abolition of the Monarchy. But does any one think that the

individual would gain so much—or indeed, gain anything? If he does,

he is singularly sanguine. Let him turn to countries that are under a

Republican government; and he will find that elected Presidents are apt

to cost more than Queens.

[Sidenote ◆1 All such schemes of redistribution are illusory, not

only on account of the insignificance of their results,]

[Sidenote ◆2 But also on account of a far deeper reason, on which

the whole problem depends.]

◆¹ All these schemes, then, for attacking property as it exists, for

confiscating and redistributing by some forcible process of legislation

the whole or any part of the existing national income, are either

obviously impracticable, or their result would be insignificant. Their

utmost result indeed would not place any of the workers in so good a

position as is at present occupied by many of them. This is evident

from what has been seen already. ◆² But there is another reason which

renders such schemes illusory—a far more important one than any I have

yet touched upon, and of a far more fundamental kind. We will consider

this in the next chapter; and we shall find, when we have done so, that

it has brought us to the real heart of the question.

CHAPTER IV

_The Nature of the National Wealth: first, of the

National Capital; second, of the National

Income. Neither of these is susceptible of

Arbitrary Division._

[Sidenote ◆1 A legislative division of the national income is not

only disappointing in its theoretical results, but

practically impossible,]

◆¹ We have just seen how disappointing, to those even who would gain

most by it, would be the results of an equal division of the national

income of this country, and how intolerable to all would be the general

conditions involved in it. In doing this, we have of course adopted,

for argument’s sake, an assumption which underlies all popular ideas of

such a process; namely, that if a Government were only strong enough

and possessed the requisite will, it could deal with the national

income in any way that might be desired; or, in other words, that the

national income is something that could be divided and distributed,

as an enormous heap of sovereigns could, according to the will of

any one who had them under his fingers. I am now going to show that

this assumption is entirely false, and that even were it desirable

theoretically that the national income should be redivided, it is not

susceptible of any such arbitrary division.

[Sidenote ◆1 As will be shown in this chapter.]

◆¹ To those who are unaccustomed to reflecting on economic problems,

and who more or less consciously associate the qualities of wealth

with those of the money in whose terms its amount is stated, I cannot

introduce this important subject better than by calling their attention

to the few following facts, which, simple and accessible as they are,

are not generally known.

[Sidenote ◆1 Wealth is utterly unlike money in its divisible

qualities.]

[Sidenote ◆2 The money of the United Kingdom is an imperceptible

fraction of its wealth.]

◆¹ The capital value of the wealth of the United Kingdom is estimated

at something like _ten thousand million pounds_; but the entire amount

of sovereigns and shillings in the country does not exceed _a hundred

and forty-four million pounds_, nor that of the uncoined bullion, _a

hundred and twenty-two million pounds_. That is to say, for every

nominal _ten thousand_ sovereigns there does not exist in reality more

than _two hundred and twenty-six_. Were this sum divided amongst the

population equally, it would give every one a share of exactly _seven

pounds_. Again, this country produces every year wealth which we

express by calling it _thirteen hundred million pounds_. ◆² The amount

of gold and silver produced annually by the whole world is hardly

so much as _thirty-eight million pounds_. If the whole of this were

appropriated by the United Kingdom, it would give annually to each

inhabitant only ten new shillings and a single new half-sovereign.

The United Kingdom, however, gets annually but a tenth of the world’s

money, so its annual share in reality is not so much as _four million

pounds_. Accordingly, that vast volume of wealth which we express by

calling it _thirteen hundred million pounds_, has but _four million

pounds_ of fresh money year by year to correspond to it. That is to

say, there is only one new sovereign for every new nominal sum of

_three hundred and twenty-five_.

[Sidenote ◆1 The nature of wealth, as a whole, is quite

misconceived by most people;]

[Sidenote ◆2 As we see by the metaphors they use to describe it.]

◆¹ Wealth as a whole, therefore, is something so totally distinct from

money that there is no ground for presuming it to be divisible in the

same way. What is wealth, then, in a country like our own? To some

people this will seem a superfluous question. They will say that every

one knows what wealth is by experience—by the experience of possessing

it, or by the experience of wanting it. And in a certain sense this

is true, but not in any sense that concerns us here. In precisely the

same sense every one knows what health is; but that is very different

from knowing on what health depends; and to know the effects of wealth

on our own existence is very different from knowing the nature of the

thing that causes them. Indeed, as a matter of fact, what wealth really

consists of is a thing which very few people are ever at the trouble to

realise; and nothing shows that such is the case more clearly than the

false and misleading images which are commonly used to represent it.

◆² The most familiar of these are: “a treasure,” “a store,” “a hoard,”

or, as the Americans say, “a pile.” Now any one of these images is not

only not literally true, but embodies and expresses a mischievous and

misleading falsehood. It represents wealth as something which could be

carried off and divided—as a kind of plunder which might be seized by

a conquering army. But the truth is, that the amount of existing wealth

which can be accurately described, or could be possibly treated in this

way, is, in a country like ours, a very insignificant portion; and,

were social conditions revolutionised to any serious degree, much of

that portion would lose its value and cease to be wealth at all.

[Sidenote ◆1 Many kinds of wealth that are considered typical

would become almost valueless if divided: for instance,

a great house and its contents.]

◆¹ Let us take, for instance, some palatial house in London, which

catches the public gaze as a monument of wealth and splendour; and we

will suppose that a mob of five hundred people are incited to plunder

it by a leader who informs them that its contents are worth _two

hundred thousand pounds_. Assuming that estimate to be correct, would

it mean that of these five hundred people each would get a portion to

him worth _four hundred pounds_? Let us see what would really happen.

They would find enough wine, perhaps, to keep them all drunk for a

week; enough food to feed thirty of them for a day; and sheets and

blankets for possibly thirty beds. But this would not account for

many thousands out of the _two hundred thousand pounds_. The bulk of

that sum would be made up—how? _A hundred thousand pounds_ would be

probably represented by some hundred and fifty pictures, and the rest

by rare furniture, china, and works of art. Now all these things to

the pillagers would be absolutely devoid of value; for if such pillage

were general there would be nobody left to buy them; and they would

in themselves give the pillagers no pleasure. One can imagine the

feelings of a man who, expecting _four hundred pounds_, found himself

presented with an unsaleable Sèvres broth-basin, or a picture of a

Dutch burgomaster; or of five such men if for their share they were

given a buhl cabinet between them. We may be quite certain that the

broth-basin would be at once broken in anger; the cabinet would be

tossed up for, and probably used as a rabbit-hutch; and the men as a

body would endeavour to make up for their disappointment by ducking or

lynching the leader who had managed to make such fools of them.

[Sidenote ◆1 Wealth, as a whole, even less susceptible of

division.]

◆¹ And now let us consider the wealth of the kingdom as a whole.

Much as the bulk of it differs from the contents of a house of this

kind, it would, if seized on in any forcible way, prove even more

disappointing and elusive.

[Sidenote ◆1 Wealth, as a whole, has two aspects: that of capital,

and that of income.]

[Sidenote ◆2 We will first consider the national capital.]

◆¹ We may consider it under two aspects. We may consider it as so much

annual income, or else as so much capital. In the last chapter we were

considering it as so much income, and presently we shall be doing so

again. But as capital may possibly strike the imagination of many as

something more tangible and easily seized, and likely to yield, if

redistributed, more satisfactory results, ◆² we will see first of what

items the estimated capital of this country is composed. To do so will

not only be instructive: it will also be curious and amusing.

[Sidenote ◆1 This capital consists not of money;]

◆¹ As I said just now, its value, expressed in money, is according to

the latest authorities about _ten thousand million pounds_.[14] As

actual money, however, forms so minute a portion of this,—the reader

will see that it is hardly more than one-fortieth,—we may, for our

present purpose, pass it entirely over; and our concern will be solely

with the things for which our millions are a mere expression.

[Sidenote ◆1 But of three classes of things: the two first

comprising things not susceptible of division;]

◆¹ It will be found that these things divide themselves into three

classes. The first consists of things which, from their very nature,

are not susceptible of any forcible division at all; the second

consists of things which are susceptible of division only by a process

of physically destroying them and pulling them into pieces; and each

of these two classes, in point of value, represents, roughly speaking,

nearly a quarter of the total. The third class alone, which represents

little more than a half, consists of things which, even theoretically,

could be divided without being destroyed.

[Sidenote ◆1 The third class comprising all those things that

could be divided without destroying them; and forming

about half of the total.]

◆¹ We will consider this third class first, which represents in the

estimates of statisticians _five thousand seven hundred million

pounds_. The principal things comprised in it are land, houses,

furniture, works of art, clothing, merchandise, provisions, and

live-stock; and such commodities in general as change hands over the

shopman’s counter, or in the market.[15] Of these items, by far the

largest is houses, which make up a quarter of the capital value of

the country, or _two thousand five hundred million pounds_. But more

than half this sum stands for houses which are much above the average

in size, and which do not form more than an eighth part of the whole;

and were they apportioned to a new class of occupants, they would lose

at least three-fourths of their present estimated value. So too with

regard to furniture and works of art, a large part of their estimated

value would, as we have seen already, disappear in distribution

likewise: and their estimated value is about a tenth of the whole we

are now considering. Land, of course, can, at all events in theory,

be divided with far greater advantage; and counts in the estimates

as _fifteen hundred million pounds_—or something under a sixth of the

whole. Merchandise, provisions, and movable goods in general can be

divided yet more readily; and so one would think could live-stock,

though this is hardly so in reality: but of the whole these three last

items form little more than a twentieth.

[Sidenote ◆1 The results of dividing these would be ridiculous.]

◆¹ And now, supposing all these divisible things to be divided, let us

see what the capital would look like which would be allotted to each

individual. Each individual would find himself possessed of a lodging

of some sort, together with clothes and furniture worth about _eight

pounds_. He would have about _eight pounds_’ worth of provisions and

miscellaneous movables, and a ring, a pin, or a brooch, worth about

_three pounds ten shillings_. He would also be the proprietor of one

acre of land, which would necessarily in many cases be miles away from

his dwelling, whilst as to stocking his acre, he would be met by the

following difficulty. He would find himself entitled to the twentieth

part of a horse, to two-thirds of a sheep, the fourth part of a cow,

and the tenth part of a pig.

[Sidenote ◆1 The second class of things, comprising the national

capital, could not be divided without destroying them.]

[Sidenote ◆2 The remaining class of things could not be divided at

all.]

◆¹ Such then would be the result to the individual of dividing the

whole of our capital that could be divided without destroying it. This

is, as we said, a little more than half of the total; and now let

us turn to the two other quarters; beginning with the things which

could be indeed divided, but which would obviously be destroyed in

the process. Their estimated value is more than _two thousand million

pounds_: half of which sum is represented by the railways and shipping

of the kingdom; _six hundred million pounds_, by gasworks and the

machinery in our factories; and the rest, by roads and streets and

public works and buildings. ◆² These, it is obvious, are not suitable

for division; and still less divisible are the things in the class that

still remains. For of their total value, which amounts to some _two

thousand five hundred million pounds_, more than _a thousand million

pounds_, according to Mr. Giffen, represent the good-will of various

professions of business; and the whole of the remainder—nearly _fifteen

hundred million pounds_—represents nothing that is in the United

Kingdom at all, but merely legal claims on the part of particular

British subjects to a share in the proceeds of enterprise in other

countries.

This last class consists of things which are merely rights and

advantages secured by law, and dependent on existing social conditions;

and it can be easily understood how they would disappear under any

attempt to seize them. But the remaining three quarters of our capital

consists of material things; and what we have seen with regard to them

may strike many people as incredible; for the moment we imagine them

violently seized and distributed, they seem to dwindle and shrivel up;

and the share of each individual suggests to one’s mind nothing but a

series of ludicrous pictures—pictures of men whose heritage in all this

unimaginable wealth is an acre of ground, two wheels of a steam-engine,

a bedroom, a pearl pin, and the tenth part of a pig.

[Sidenote ◆1 Capital has no value at all, except when vivified by

use;]

◆¹ The explanation, however, of this result is to be found in the

recognition of an exceedingly simple fact: that the capital of a

country is of hardly any value at all, and is, as capital, of no value

at all, when regarded merely as an aggregate of material things, and

not as material things made living by their connection with life. The

land, which is worth _fifteen hundred million pounds_, depends for its

value on the application of human labour to it, and the profitable

application of labour depends on skill and intelligence. The value

of the houses depends on our means of living in them—depends not on

themselves, but on the way in which they are inhabited. What are

railways or steamships, regarded as dead matter, or all the machinery

belonging to all the manufacturing companies? Nothing. They are no

more wealth than a decomposing corpse is a man. They become wealth

only when life fills them with movement by a power which, like all

vital processes, is one of infinite complexity: when multitudes are

massed in this or in that spot, or diffused sparsely over this or that

district; when trains move at appropriate seasons, and coal finds its

way from the mine to the engine-furnace. The only parts of the capital

in existence at any given moment, which deserve the name of capital

as mere material things, are the stores of food, fuel, and clothing

existing in granaries, shops, and elsewhere; and not only is the value

of these proportionately small, but, if not renewed constantly, they

would in a few weeks be exhausted.

[Sidenote ◆1 And it obviously cannot be used if it is equally

distributed.]

[Sidenote ◆2 Income is all that could conceivably be thus divided.]

◆¹ It is plain then that, under the complicated system of production

to which the wealth of the modern world is due, an equal division of

the capital of a country like our own is not the way to secure an equal

division of wealth. ◆² The only thing that could conceivably be divided

is income. If, however, it is true that capital is, as we have seen

it is, in its very nature living, and ceases to be itself the moment

that life goes out of it, still more emphatically must the same thing

be said of income, for the sake of producing which capital is alone

accumulated. Agitators talk of the national income as if it were a dead

tree which a statesman like Mr. Gladstone could cut into chips and

distribute. It is not like a dead tree; it is like the living column

of a fountain, of which every particle is in constant movement, and of

which the substance is never for two minutes the same.

[Sidenote ◆1 The national income consists of money no more than

the national capital does.]

[Sidenote ◆2 It consists of other things, or rights to other

things;]

[Sidenote ◆3 Namely, of perishable goods, durable goods, and

services.]

◆¹ Let us examine the details of this income, and the truth of what

has been said will be apparent. The total amount, as we have seen, is

estimated at _thirteen hundred million pounds_; it is not, however,

made up of sovereigns, but of things of which sovereigns are nothing

more than the measure. ◆² The true income of the nation and the true

income of the individual consist alike of things which are actually

consumed or enjoyed; or of legal rights to such things which are

accumulated for future exercise. Of these last, which, in other words,

are savings, and are estimated to amount to _a hundred and thirty

million pounds_ annually, we need not speak here, except to deduct them

from the total spent. The total is thus reduced to _eleven hundred and

seventy million pounds_—or to things actually consumed or enjoyed,

which are valued at that figure. Now what are these things? That is

our present question. ◆³ By far the larger part of them comes under

the following heads: Food, Clothing, Lodging, Fuel and Lighting, the

attendance of Servants, the Defence of the Country and Empire, and the

Maintenance of Law and Order. These together represent about _eight

hundred million pounds_. Of the remaining _three hundred and seventy

million pounds_, about a third is represented by the transport of goods

and travelling; and not much more than a quarter of the total income,

or about _two hundred and seventy million pounds_, by new furniture,

pictures, books, plate, and other miscellaneous articles. The furniture

produced annually counts for something like _forty million pounds_; and

the new plate for not more than _five hundred thousand pounds_.

And now let us examine these things from certain different points of

view, and see how in each case they group themselves into different

classes.

In the first place, they may be classified thus: into things that

are wealth because they are consumed, things that are wealth because

they are owned, and things that are wealth because they are used or

occupied. Under the first heading come food, clothing, lighting, and

fuel; under the second, movable chattels; and under the third, the

occupation of houses,[16] the services of domestics, the carrying of

letters by the Post Office, transport and travelling, and the defences

and administration of the country. In other words, the first class

consists of new perishable goods, the second of new durable goods, and

the third not of goods at all, but of services and uses. The relative

amounts of value of the three will be shown with sufficient accuracy by

the following rough estimates.

Of a total of _eleven hundred and seventy million pounds_, perishable

goods count for _five hundred and twenty million pounds_, durable goods

and chattels for _two hundred and fifty million pounds_, and services

and uses for _four hundred million pounds_. Thus, less than a quarter

of what we call the national income consists of material things which

we can keep and collect about us; little less than half consists of

material things which are only produced to perish, and perish almost

as fast as they are made; and more than a third consists of actions

and services which are not material at all, and pass away and renew

themselves even faster than food and fuel.

[Sidenote ◆1 A large part of the national income consists of

things that are imported.]

[Sidenote ◆2 Most of our food is imported.]

◆¹ This is how the national income appears, as seen from one point

of view. Let us change our ground, and see how it appears to us from

another. We shall see the uses and the services—to the value of

_four hundred million pounds_—still grouped apart as before. But the

remaining elements, representing nearly _eight hundred million pounds_,

and consisting of durable and perishable material things, we shall

see dividing itself in an entirely new way—into material things made

at home, and material things imported. We shall see that the imported

things come to very nearly half;[17] and we shall see further that

amongst these imported things food forms incomparably the largest

item. But the significance of this fact is not fully apparent till we

consider what is the total amount of food consumed by us; and when we

do that, we shall see that, exclusive of alcoholic drinks, actually

more than half come to us from other countries.[18] The reader perhaps

may think that this imported portion consists largely of luxuries,

which, on occasion, we could do without. If he does think so, let him

confine his attention to those articles which are most necessary, and

most universally consumed—namely bread, meat, tea, coffee, and sugar—◆²

and he will see that our imports are to our home produce as _ninety_ to

_seventy-three_. If we strike out the last three, our position is still

more startling;[19] and most startling if we confine ourselves to the

prime necessary—bread. The imported wheat is to the home-grown wheat

as _twenty-six_ to _twelve_: that is to say, of the population of this

kingdom _twenty-six millions_ subsist on wheat that is imported, and

only _twelve millions_ on wheat that is grown at home; or, to put the

matter in a slightly different way, we all subsist on imported wheat

for eight months of the year.

[Sidenote ◆1 Thus the national income is a product of infinite

complexity.]

◆¹ And now let the reader reflect on what all this means. It means that

of the material part of the national income half consists, not of goods

which we ourselves produce, but of foreign goods which are exchanged

for them; and are exchanged for them only because, by means of the most

far-reaching knowledge, and the most delicate adaptation of skill, we

are able to produce goods fitted to the wants and tastes of distant

nations and communities, many of which are to most of us hardly even

known by name. On every workman’s breakfast-table is a meeting of all

the continents and of all the zones; and they are united there by a

thousand processes that never pause for a moment, and thoughts and

energies that never for a moment sleep.

[Sidenote ◆1 Its amount also varies owing to infinitely

complicated causes,]

◆¹ A consideration of these facts will be enough to bring home to

anybody the accuracy of the simile of which I made use just now, when

I compared the income of the nation to the column thrown up by a

fountain. He will see how, like such a column, it is a constant stream

of particles, taking its motion from a variety of complicated forces,

and how it is a phenomenon of force quite as much as a phenomenon of

matter. He will see that it is a living thing, not a dead thing: and

that it can no more be distributed by any mechanical division of it,

than the labour of a man can be distributed by cutting his limbs to

pieces.

This simile of the fountain, though accurate, is, like most similes,

incomplete. It will, however, serve to introduce us to one peculiarity

more by which our national income is distinguished, and which has an

even greater significance than any we have yet dealt with.

In figuring the national income as the water thrown up by a fountain,

we of course suppose its estimated amount or value to be represented

by the volume of the water and the height to which it is thrown. What

I am anxious now to impress on the attention of the reader is that the

height and volume of our national fountain of riches are never quite

the same from one year to another; whilst we need not extend our view

beyond the limits of one generation to see that they have varied in

the most astonishing manner. The height and volume of the fountain are

now very nearly double what they were when Mr. Gladstone was in Lord

Aberdeen’s Ministry.[20]

[Sidenote ◆1 Which are quite independent of the growth of

population;]

◆¹ Some readers will perhaps be tempted to say that in this there is

nothing wonderful, for it is due to the increase of population. But the

increase of population has nothing to do with the matter. It cannot

have anything to do with what I am now stating. For when I say that

within a certain period the income of the nation has doubled itself,

I mean that it has doubled itself in proportion to the population; so

that, no matter how many more millions of people there may be in the

country now than there were at the beginning of the period in question,

there is annually produced for each million of people now nearly

twice the income that was produced for each million of people then.

Or in other words, an equal division now would give each man nearly

double the amount that it would have given him when Mr. Gladstone was

beginning to be middle-aged.

[Sidenote ◆1 As we may see by comparing the income of this country

with the income of others.]

◆¹ But we must not be content with comparing our national income with

itself. Let us compare it also with the incomes of other countries;

and let it in all cases be understood that the comparison is between

the income as related to the respective populations, and not between

the absolute totals. We will begin with France. It is estimated

that, within the last hundred and ten years, the income of France

has, relatively to the population, increased more than fourfold. A

division of the income in 1780 would have given _six pounds_ a head to

everybody: a similar division now would give everybody _twenty-seven

pounds_. And yet the income of France, after all this rapid growth,

is to-day twenty-one per cent less than that of the United Kingdom.

Other comparisons we shall find even more striking. Relatively to the

respective populations, the income of the United Kingdom exceeds that

of Norway in the proportion of _thirty-four_ to _twenty_; that of

Switzerland, in the proportion of _thirty-four_ to _nineteen_; that

of Italy, in the proportion of _thirty-four_ to _twelve_; and that of

Russia, in the proportion of _thirty-four_ to _eleven_. The comparison

with Italy and Russia brings to light a remarkable fact. Were all the

property of the upper classes in those countries confiscated, and the

entire incomes distributed in equal shares, the share of each Russian

would be fifty per cent less, and of each Italian forty per cent less

than what each inhabitant of the United Kingdom would receive from a

division of the income of its wage-earning classes only.

We find, therefore, that if we take equal populations of

men,—populations, let us say, of a million men each,—either belonging

to the same nation at different dates, or to different civilised

nations at the same date, that the incomes produced by no two of them

reach to the same amount; but that, on the contrary, the differences

between the largest income and the others range from twenty to two

hundred per cent.

[Sidenote ◆1 The causes of these differences in income are not

differences of race,]

◆¹ Now what is the reason of this? Perhaps it will be said that

differences of race are the reason. That may explain a little, but

it will not explain much; for these differences between the incomes

produced by equal bodies of men are not observable only when men are of

different races; but the most striking examples,—namely, those afforded

by our own country and France—are differences between the incomes

produced by the same race during different decades—by the same race,

and by many of the same individuals.

[Sidenote ◆1 Nor of soil or climate,]

◆¹ Perhaps then it will be said that they are due to differences of

soil and climate. But again, that will not explain the differences, at

various dates, between the incomes of the same countries; and though

it may explain a little, it will not explain much, of the differences

at the same date between the incomes of different countries. The soil

and climate, for instance, of the United Kingdom, are not in themselves

more suited for agriculture than the soil and climate of France and

Belgium; and yet for each individual actually engaged in agriculture,

this country produces in value twenty-five per cent more than France,

and forty per cent more than Belgium. I may add that it produces

forty-six per cent more than Germany, sixty-six per cent more than

Austria, and sixty per cent more than Italy.[21]

[Sidenote ◆1 Nor of hours of labour,]

◆¹ Perhaps then a third explanation will be suggested. These

differences will be said to be due to differences in the hours of

labour. But a moment’s consideration will show that that has nothing to

do with the problem; for when a million people in this country produced

half what they produce to-day, they had fewer holidays, and they worked

longer hours. Now that they have doubled the annual produce, they take

practically four weeks less in producing it.[22] Again, the hours of

labour for the manufacturing classes are in Switzerland twenty-six

per cent longer at the present time than in this country; and yet

the annual product, in proportion to the number of operatives, is

twenty-eight per cent less.[23]

Agriculture gives us examples of the same discrepancy between the

labour expended and the value of the result obtained. In France, the

agricultural population is three times what it is in this country, but

the value of the agricultural produce is not so much as double.[24]

[Sidenote ◆1 But are causes of some other kind which lie below the

surface,]

Plainly, therefore, the growth of a nation’s income, under modern

conditions, does not depend on an increased expenditure of labour.

There might, indeed, seem some ground for leaping to the contrary

conclusion—that it grows in proportion as the hours of labour

are limited: but whatever incidental truth there may be in that

contention, it does not explain the main facts we are dealing with; for

some of the most rapid changes in the incomes of nations we find have

occurred during periods when the hours of labour remained unaltered;

and we find at the present moment that countries in which the hours of

labour are the same, differ even more, in point of income, from one

another than they differ from countries in which the hours of labour

are different. ◆¹ Whatever, therefore, the causes of such differences

may be, they are not simple and superficial causes like these.

[Sidenote ◆1 And which requires to be carefully searched for.]

I have alluded to the incomes of foreign countries only for the sake

of throwing more light on the income of our own. Let us again turn

to that. Half of that income, as we have seen, consists to-day of an

annual product new since the time when men still in their prime were

children; and this mysterious addition to our wealth has rapidly and

silently developed itself, without one person in a thousand being

aware of its extent, or realising the operation of any new forces that

might account for it. Let people of middle age look back to their own

childhood; and the England of that time, in aspects and modes of life,

will not seem to them very different from what it seems now. Let them

turn over a book of John Leech’s sketches, which appeared in _Punch_

about the time of the first Exhibition; and, putting aside a few

changes in feminine fashion, they will see a faithful representation

of the life that still surrounds them. The street, the drawing-room,

the hunting-field, the railway-station—nothing will be obsolete,

nothing out-of-date. Nothing will suggest that since these sketches

were made any perceptible change has come over the conditions of our

civilisation. And yet, somehow or other, some changes have taken place,

owing to which our income has nearly doubled itself. ◆¹ In other words,

the existence of one-half of our wealth is due to causes, the nature,

the presence, and the operation of which, are hidden so completely

beneath the surface of life as to escape altogether the eye of ordinary

observation, and reveal themselves only to careful and deliberate

search.

[Sidenote ◆1 For, unless we understand the causes which have made

our national income grow, we may, by interfering with

them unknowingly, make our income decrease:]

◆¹ The practical moral of all this is obvious: that just as our income

has doubled itself without our being aware of the causes, and almost

without our being aware of the fact, so unless we learn what the causes

are, and are consequently able to secure for them fair play, or, at all

events, to avoid interfering with their operation, we may lose what we

have gained even more quickly than we have gained it, and annihilate

the larger part of what we are desirous to distribute. We have seen

that the national income is a living thing; and, as is the case with

other living things, the principles of its growth reside in parts of

the body which are themselves not sensitive to pain, but which may for

the moment be deranged and injured with impunity, and will betray their

injury only by results which arise afterwards, and which may not be

perceived till it is too late to remedy them.

[Sidenote ◆1 And this is the danger of reckless social

legislation.]

◆¹ Here lies the danger of reckless social legislation, and even of

the reckless formation of vague public opinion; for public opinion, in

a democratic country like ours, is legislation in its nebular stage:

and hence the only way to avert this danger is, first to do what we

have just now been doing,—to consider the amount and character of the

wealth with which we have to deal,—and secondly, to examine the causes

to which the production of this wealth has been due, and on which the

maintenance of its continued production must depend.

[Sidenote ◆1 We will therefore, in the following Book, examine

what these causes are.]

◆¹ Let the social reformer lay the following reflections to his heart.

Some of the more ardent and hopeful of the leaders of the Labour

Party to-day imagine that considerable changes in the distribution of

the national income may be brought about by the close of the present

century. In other words, they prophesy that the Government will seven

years hence do certain things with that year’s national income. But

the national income of that year is not yet in existence; and what

grounds have those sanguine persons for thinking that when it is

produced it will be as large, or even half as large, as the national

income is to-day? What grounds have they for believing that, if the

working-classes then take everything, they will be as rich as they are

now when they take only a part? The only ground on which such a belief

can be justified is the implied belief that the same conditions and

forces which have swelled the national income to its present vast

amount, will still continue in undisturbed operation.

We will now proceed to consider what these conditions and forces are.

———————————————————————————————————————————————————————

BOOK II

THE CHIEF FACTOR IN THE PRODUCTION

OF THE NATIONAL INCOME

———————————————————————————————————————————————————————

CHAPTER I

_Of the various Factors in Production, and how to

distinguish the Amount produced by each._

The inquiry on which we are entering really comprises two. I will

explain how.

Although, as we have seen, of the yearly income of the nation a part

only consists of material things, yet the remainder depends upon these,

and its amount is necessarily in proportion to them. Accordingly, when

we are dealing with the question of how the income is produced, we may

represent the whole of it as a great heap of commodities, which every

year disappears, and is every year replaced by a new one. Here then we

have a heap of commodities on one side, and on the other the subjects

of our inquiry—namely, the conditions and forces which produce that

heap.

[Sidenote ◆1 Land, Capital, and Human Exertion are the three

factors in production; but at present we may omit

Capital.]

Now, as to what these conditions and forces are, there is a familiar

answer ready for us—◆¹ Land, Labour, and Capital; and, with a certain

reservation, we may take this to be true. But as Capital is itself the

result of Land and Labour, we need not, for the moment, treat Capital

separately; but we may say that the heap is produced by Land and Labour

simply. I use this formula, however, only for the purpose of amending

it. It will be better, for reasons with which I shall deal presently,

instead of the term Labour to use the term Human Exertion. And further,

we must remember this—the heap of commodities we have in view is no

mere abstraction, but represents the income of this country at some

definite date; so that when we are talking of the forces and conditions

that have produced it, we mean not only Human Exertion and Land, but

Human Exertion of a certain definite amount applied to Land of a

definite extent and quality.

[Sidenote ◆1 The first point we notice is that the exertion of the

same number of men applied to the same land does not

always produce the same amount of wealth.]

[Sidenote ◆2 This must be due to some varying element in the Human

Exertion in question.]

[Sidenote ◆3 Let us compare production in this country 100 years

ago with production now.]

◆¹ Now, as I pointed out in the last Book, one of the most remarkable

things about our national production of commodities, is that the yearly

exertion of the same number of men, applied to land of the same extent

and quality, has been far from producing always a heap of the same

size. On the contrary, the heap which it produces to-day is twice as

large as that which it produced in the days of our fathers; and nearly

three times as large as that which it produced in the days of our

grandfathers. Here then is the reason why the inquiry that is before

us is twofold. For we have at first to take some one of such heaps

singly—on several accounts it will be convenient to take the smallest,

namely that produced about a hundred years ago—and to analyse the parts

which Land and Human Exertion played respectively in the production of

_it_. Then, having seen how Land and Human Exertion produced in the

days of our grandfathers a heap of this special size, we must proceed

to inquire why three generations later the same land and the exertions

of a similar number of men produce a heap which is nearly three times

as large. For the difference of result cannot be due to nothing. ◆²

It must be due to some difference in one of the two causes—to the

presence in this cause of some varying element: and it is precisely

here—here in this varying element—that the main interest of our inquiry

centres. For if it is owing to a variation in this element that our

productive powers have nearly trebled themselves in the course of

three generations, nearly two-thirds of the income which the nation

enjoys at present depends on the present condition of this element

being maintained, and not being suffered—as it very easily might be—to

again become what it was three generations back. ◆³ Let us begin then

with taking the amount of commodities produced in this country at the

end of the last century, which is at once the most convenient and the

most natural period to select; for production was then entering on its

present stage of development, and its course from then till now is more

or less familiar to us all.

We will start therefore with the fact that, about a hundred years ago,

our national income, if divided equally amongst the inhabitants of

the kingdom, would have yielded to each inhabitant a share of about

_fourteen pounds_; so that if we confine ourselves to Great Britain,

the population of which was then about _ten millions_, we have a

national income of _a hundred and forty million pounds_, or a heap of

commodities produced every year to an amount that is indicated by that

money value. Let us take then any one of the closing years of the last

century, and consider for a moment the causes at work in this island to

which the production of such a heap of commodities was due.

In general language, these causes have been described already as Human

Exertion of a certain definite amount applied to Land of a certain

definite extent and quality; but it will now be well to restore to

its traditional place the accumulated result of past exertion—namely

Capital, and to think of it as a separate cause, according to the usual

practice. For everybody knows that at the close of the last century,

many sorts of machinery, and stores of all sorts of necessaries, were

made and accumulated to assist and maintain Labour; and it is of such

things that Capital principally consists. The Capital of Great Britain

was at that time about _sixteen hundred million pounds_.[25] We will

accordingly say that about a hundred years ago, the Land of this

island, the Capital of this island, and the Exertions of a population

of _ten million_ people produced together, every twelve months, a heap

of commodities worth _a hundred and forty million pounds_. We need

not, however, dwell, till later, on these details. For the present our

national production at this particular period may be taken to represent

the production of wealth generally.

[Sidenote ◆1 How much in each case did Land, Capital, and Human

Exertion produce respectively?]

◆¹ Now the question, let it be remembered, with which we are concerned

ultimately, is how wealth, as produced in the modern world, may be

distributed. Accordingly, since the distribution of it presupposes its

production, and since we are agreed generally as to what the causes of

its production are,—namely, Land, Capital, and Human Exertion,—our next

great step is to inquire what proportion of the product is to be set

down as due to each of these causes separately; for it is by this means

only that we can see how and to what extent our social arrangements

may be changed, without our production being diminished. And I cannot

introduce the subject in a better way than by quoting the following

passage from John Stuart Mill, in which he declares such an inquiry to

be both meaningless and impossible to answer; for that it _can_ be

answered, and that it is full of meaning, and that to ask and answer it

is a practical and fundamental necessity, will be made all the plainer

by the absurdity of Mill’s denial.

[Sidenote ◆1 Mill declares this question to be meaningless;]

[Sidenote ◆2 But his argument is answered, and is refuted both by

practical life and by his own writings.]

◆¹ “Some writers,” he says, “have raised the question whether Nature

(or, in the language of economics, Land) gives more assistance to

Labour in one kind of industry or another, and have said that in some

occupations Labour does most; in others, Nature most. In this, however,

there seems much confusion of ideas. The part which Nature has in any

work of man is indefinite and immeasurable. It is impossible to decide

that in any one thing Nature does more than in any other. One cannot

even say that Labour does less. Less Labour may be required; but if

that which is required is absolutely indispensable, the result is just

as much the product of Labour as of Nature. When two conditions are

equally necessary for producing the effect at all, it is unmeaning to

say that so much of it is produced by one and so much by the other.

It is like attempting to decide which half of a pair of scissors has

most to do with the act of cutting; or, which of the factors—five or

six—has most to do with the production of thirty.” So writes Mill in

the first chapter of his _Principles of Political Economy_; and if what

he says is true with regard to Land and Labour (or, as we are calling

it, Human Exertion), it is equally true with regard to Human Exertion

and Capital; for without Human Exertion, Capital could produce nothing,

and without Capital modern industry would be impossible: and thus,

according to Mill’s argument, we cannot assign to either of them a

specific portion of the product. ◆² But Mill’s argument is altogether

unsound; and the actual facts of life, and a large part of Mill’s own

book, little as he perceived that it was so, are virtually a complete

refutation of it.

To understand this, the reader need only reflect on those three

principal and familiar parts into which the annual income of every

civilised nation is divided, not only in actual practice, but

theoretically by Mill himself—namely Rent, Interest, and Wages.[26]

For these—what are they? The answer is very simple. They are portions

of the income which correspond, at all events in theory, to the amounts

produced respectively by Land, Capital, and Human Exertion; and which

are on that account distributed amongst three sets of men—those who own

the Land, those who own the Capital, and those who have contributed

the Exertion. There are many causes which in practice may prevent the

correspondence being complete; but that the general way in which the

income is actually distributed is based on the amount produced by these

three things respectively,—Land, Capital, and Human Exertion,—is a fact

which no one can doubt who has once taken the trouble to consider it.

It is thus perfectly clear that, contrary to what Mill says, though two

or more agencies may be equally indispensable to the production of any

wealth at all, it is not only not “unmeaning to say that so much is

produced by one and so much by the other,” but it is possible to make

the calculation with practical certainty and precision; and I will now

proceed to explain the principles on which it is made.