I AC A 
 
 \NWHX 
 
 OW IT ALL FITS 
 TOGETHER
 
 ilNIV, OF CALIF. LIBRARY, LOS ANGELES 
 
 HOW IT ALL FITS TOGETHER
 
 HOW IT ALL FITS 
 TOGETHER A Novice's 
 
 Introduction to the Game of Life 
 By LEONARD ALSTON, Litt.D. 
 
 1920 
 
 LONDON AND TORONTO 
 
 J. M. DENT & SONS, LTD. 
 NEW YORK : E. P. DUTTON & CO.
 
 ALL RIGHTS RESERVED
 
 CONTENTS 
 
 CHAPTER PAGB 
 
 I. AN APOLOGY TO SUNDRY READERS . . 7 
 
 ii. A BIRD'S-EYE VIEW OF THINGS IN GENERAL 14 
 
 III. THE APPARATUS WITH WHICH THE GAME 
 
 IS PLAYED 50 
 
 IV. THE PLAYERS AND THE PRIZES . . 79 
 V. THE BOARD ON WHICH THE GAME IS PLAYED 123 
 
 VI. PATRON, RULE-MAKER, AND REFEREE . 133 
 
 EPILOGUE 155
 
 HOW IT ALL FITS TOGETHER 
 
 CHAPTER I 
 
 AN APOLOGY TO SUNDRY READERS 
 
 IT is with no little trepidation that I venture to 
 launch this frail barque upon the stormy seas of 
 public criticism. 
 
 The cargo comprises nothing new. All that it 
 contains has been handled, not once but many times, 
 by writers of distinction and by scientific thinkers 
 with whom I have no thought of setting myself in 
 rivalry. Usually, however, the products of their 
 workshops have appeared in the shape of ponderous 
 tomes, filled through and through with technicalities 
 of phrasing and illustrated by amazing diagrams 
 which do not seem, to the busy everyday reader, 
 to enliven the subject matter, or indeed to serve 
 any useful end. The professional student realises 
 the great value, for him, of the seemingly pedantic 
 phraseology and all the accompanying technical 
 paraphernalia. He knows that by their aid he, 
 at least, can walk with surer tread through the intri- 
 cate mazes of that enthralling " study of mankind 
 in the ordinary business of life," l which I propose, 
 for the benefit of another type of reader, here to 
 handle afresh. For not many of us have the time, 
 or the courage, to master the technicalities in which 
 economic literature abounds ; and so most of us 
 1 Professor Marshall's definition of Economics.
 
 8 HOW IT ALL FITS TOGETHER 
 
 overlook, or leave unread, the fascinating volumes 
 that pour forth perennially to satisfy the Gargantuan 
 appetites of our ever-thirsty professional students. 
 
 But though I find myself atremble at every fresh 
 period of my voyage, as I tack back and forth from 
 paragraph to paragraph on my path to my goal, 
 never knowing from behind which rocky headland 
 may appear of a sudden the black flag, the skull 
 and cross-bones of General Criticism ; yet of the 
 professional student, sailing under the recognised 
 flag of the regular forces, I have no special fear. 
 I trust that in my book he will find nothing but 
 what he will feel to be but old familiar truisms, 
 stripped indeed of their academic garb, but still 
 merely the old identical ideas, clad, for the nonce, 
 in the sober dress of everyday citizens, in place of 
 the professorial cap and gown. 
 
 " I talk of common things 
 
 Words of the wharf and the market-place 
 And the ware the merchant brings." 
 
 And to the best of my belief (O Economist) I carry 
 no contraband of war. 
 
 The general reader will not, I know, quarrel with 
 me on the score of the absence of difficult techni- 
 calities. But I have fears that I shall irritate him 
 in another way. 
 
 I am attempting to set forth (not as a new dis- 
 covery of mine own) how the parts of the business 
 world, in which we all live and move and have our 
 being, fit in together. But I must set it forth in 
 my own way ; and my own way is to attempt to 
 simplify everything down so that it can be expressed, 
 if not in " words of one syllable," at least in what 
 may be described as " ideas of one syllable." All 
 my readers, however, are necessarily taking part
 
 AN APOLOGY TO SUNDRY READERS g 
 
 " in the ordinary business of life," and each therefore 
 will of necessity know some portion or other of our 
 subject far better than the writer can know it 
 because he, the reader, is living it and this may 
 well bring it about that my clumsy efforts to 
 re-state those facts of life that he knows best 
 should appear to him either as a childish waste of 
 ink and time, or else (what I should dread still 
 more) as a humiliating attempt, on the part of one 
 who imagines himself to be dwelling on lofty 
 mountain-heights of philosophic thought, to talk 
 down to the low levels of the common mind. Lest 
 the succeeding chapters should stir any resentment 
 of this type, I wish to make confession first, that 
 this is the only way in which I can, for my own 
 ends, think things clearly and safely out ; in no 
 other way can I make, for myself, the crooked 
 straight and the rough places plain ; unless I can 
 analyse down my reasoning so that a school-boy 
 should be able to follow it, I cannot feel more than 
 a shaky half -confidence in my own conclusions. 
 And unless we all thus simplify everything down 
 when studying the game of life, as played in the 
 market-place or played with in parliaments, we are 
 always liable to ignore underlying difficulties, and 
 so fail to perceive how such things as capital 
 and labour, buying and selling, spending and saving 
 really do fit in together ; and when politicians or 
 voters, journalists or philanthropists, are led to 
 ignore such difficulties very uncomfortable results 
 sometimes happen. 
 
 We have all heard of that ingenuous young 
 Society lady who, when three grave scientists in 
 her drawing-room were discussing how the new 
 electric lighting system worked, burst into their
 
 to HOW IT ALL FITS TOGETHER 
 
 conversation with the impatient comment that 
 nothing could be simpler : " You just press the 
 button and it lights up at once." The reader who 
 feels that this dainty damsel was as right as she felt, 
 and the disconcerted scientists as foolish as they 
 looked, need come with me no further. I prefer to 
 put him ashore before we leave port. 
 
 But the business of ordinary life supplies material 
 for endless questions that may be " answered." and 
 are habitually " answered," as our young lady dealt 
 with the problem of the electric light. Let us, to 
 take a simple instance, ask ourselves how we send 
 a few pounds sterling to a friend in South Africa 
 (or, if the reader prefers it on a larger scale, how 
 the capitalists of an old country like England, out- 
 raged by iniquities of democratic legislation,propose 
 to punish labour by " sending their capital abroad ") . 
 Our young Society acquaintance will doubtless 
 bubble over with merriment at our unpractical 
 attitude ; " you just call in at the post office round the 
 corner and buy a money order." Perhaps, not satis- 
 fied with this as a complete solution of the problem 
 we had in mind, we proceed (in a lull of office busi- 
 ness) to question the highly efficient clerk who sells 
 us the order. Surely he will be able to solve our 
 difficulties ; for this is the part of the game of life 
 that he is actually playing, the portion of the 
 ordinary business of life that he is living. If he has 
 time, and is obliging, he may tell us a good deal 
 about various book-entries, vouchers, and cross- 
 communications between office and office, and feel 
 that he has supplied us with all that a rational 
 mortal could want. But has he answered our ques- 
 tion ? How does the " money " really get out 
 there ? He has, indeed, supplied us with something
 
 AN APOLOGY TO SUNDRY READERS n 
 
 more than our young lady friend gave us ; but 
 (after all) it amounts to little more than telling us 
 that before we press the electric button the plumbers 
 and plasterers have had to perform a great deal of 
 cunningly concealed work about the walls of our 
 room. " But then," ay she might retort to him, 
 " plumbers' work is not very interesting to watch, 
 and I find it more convenient to go out into the 
 country when that sort of thing is going on in the 
 house." 
 
 And this brings us, by a natural transition, to 
 yet another class of possible readers, who, however, 
 are not likely to become readers of a book of this 
 sort. They are the class of persons who object to 
 questions about the creation and destruction of 
 wealth being raised at all ; who feel that they will 
 be more comfortable if such discussions are never 
 mooted and who are inclined therefore to " vote " 
 all such questions " bad form." Of such are likely 
 to be the man who wishes to live somnolently on 
 inherited wealth how is his income of goods and 
 services maintained ? and the man who wishes to 
 live pestiferously by stirring up sympathetic strikes 
 what groups of workers will be impoverished by 
 the strikes ? All such are in fact first cousins of that 
 interesting boy from the Whitechapel slums who, 
 after his fortnight on the farm, under the auspices 
 of the Children's Country Holiday Fund, found at 
 least one point in which town life is the pleasanter. 
 Here at home he could drink his milk without 
 uneasy dreams to follow it ; " because mother 
 always buys it in a clean shop ; out there they get 
 it from a dirty cow." 
 
 If the reader who has come with me thus far 
 be one who has no sympathy with the poet to whom
 
 12 HOW IT ALL FITS TOGETHER 
 
 dividends and interest were an insoluble enigma 
 
 " Nor could he understand how money breeds ; 
 Thought it a dead thing " 
 
 and is satisfied with learning that it breeds because 
 he takes it to a Savings Bank and leaves it there 
 (or buys stocks and shares with it and waits till 
 the dividends come in), he will have, I am sure, no 
 sympathy or patience with me. My temper and 
 outlook are those of the puzzled botanist who 
 dissects an acorn and spreads its slim sections 
 under the microscope hi hope of catching some 
 glimpses, however tantalising, into the problem of 
 how it can possibly grow into an oak within whose 
 boughs the birds of the air will find commodious 
 shelter ; rather than the temper and outlook of 
 the jobbing gardener (" a practical man, sir ! " ) 
 who brusquely points out that it can be turned 
 into an oak right enough if you give it the proper 
 quantity of water and the proper quality of soil. 
 The business community employer, wage-earner, 
 inventor, and investor forms for us all a commodi- 
 ous shelter from the winds of poverty, more majestic 
 and more marvellous than the forest forms for the 
 blackbird and the thrush. It is at least equally 
 worthy of study, and equally interesting to investi- 
 gate. In the spirit of the botanist considering 
 the acorn, " how it grows," I propose that we 
 should ponder the structure and the workings of 
 the business community of which, in one way or 
 another, we are all shareholders and fellow-members. 
 And if we bring ourselves to study it in this spirit, 
 we may find that our commonplace world street, 
 farm and factory, bank, stock exchange, and mint and 
 market becomes no longer a squalid thing, but
 
 AN APOLOGY TO SUNDRY READERS 13 
 
 an ever-changing scene of shifting light and colour 
 much as the great painter finds in sordid alleys, 
 the smoke of factory chimneys, or the Arabian wealth 
 of pots and pans flung haphazard among the rain- 
 washed nettles and thistles of a roadside rubbish 
 heap, a magic world of ever-growing wonder and 
 delight and mystery. Or (to turn it a better way) 
 our City of Man the world of buying and selling, 
 of banking and investing, of exporting and importing 
 is (to the trained ear) as one vast roll of never- 
 ending orchestral music ; 
 
 ..." seeing the city is built 
 
 To music, therefore never built at all, 
 
 And therefore built for ever." 
 
 There are discords, no doubt ; discords only too 
 imperfectly masked by the masterful conquering 
 concords of trumpet and clarion. There is suffering, 
 perpetual suffering in our City of Man, 
 
 " Wasted lands, 
 Blight and famine, plague and earthquake, roaring deeps 
 
 and fiery sands, 
 Clanging fights, and flaming towns, and sinking ships, and 
 
 praying hands." 
 
 But there is suffering likewise in the forest that thrills 
 us with its glistening dews and endless avenues of 
 light and shade. 
 
 " The mayfly is torn by the swallow, the sparrow speared 
 
 by the shrike, 
 And the whole little wood where I sit is a world of plunder 
 
 and prey." 
 
 Yet we feel the beauty of the woodland. Let us 
 seek, likewise, for the beauty in the Jungle of 
 Mankind.
 
 CHAPTER II 
 
 A BIRD'S-EYE VIEW OF THINGS IN GENERAL 
 
 Now this is the Law of the Jungle as old and as true as 
 
 the sky ; 
 And the Wolf that shall keep it may prosper, but the Wolf 
 
 that shall break it must die. 
 As the creeper that girdles the tree-trunk the Law runneth 
 
 forward and back, 
 For the strength of the Pack is the Wolf, and the strength 
 
 of the Wolf is the Pack. KIPLING. 
 
 WE all desire (though with very varying degrees 
 of eagerness) to attain success in life. We would 
 all fain " gather into barns." Our criteria of 
 economic success will of course differ widely accord- 
 ing as our social environments differ whether 
 the environment be one of Galilean peasants, of 
 English trade-unionists, or of North American 
 millionaires. It is always a relative thing. The 
 professional man of present-day England would 
 feel that he had indeed failed in life if his work 
 brought him in no larger income of commodities 
 and services than fell, let us say, to Queen Eliza- 
 beth's wealthiest subject. The lowest grade English 
 artisan would be horrified if he could gain no more, 
 by following out a prescribed routine of leisurely 
 labour, than the ablest and most industrious 
 coolie of India could hope to achieve by unremitting 
 effort. For the greater part of all we get in life is 
 produced by the action of the community in which 
 
 14
 
 A BIRD'S-EYE VIEW 15 
 
 we live, creating, as an organic whole, wealth for 
 us all. But many of those who pursue wealth unre- 
 mittingly would yet prefer to be able to congratulate 
 themselves on a moderate success won by their 
 own " unaided efforts," than acquire control of 
 far greater material wealth coming to them as a 
 windfall. We should nearly all like to be able to 
 say to ourselves that we are self-made men. 
 
 Now what is it exactly that constitutes this 
 " success," this " getting on in the world," at which 
 we all aim ? And what precisely can we mean by 
 " a self-made man " ? 
 
 Let us, to begin with, convert ourselves in imagi- 
 nation into Robinson Crusoes taking up our lives 
 afresh in the solitude of a gorgeous South Sea island. 
 Our social environment is now a blank. " Getting 
 on " would then seem to mean acquiring greater 
 skill in spearing fish or trapping ground game ; 
 mastering the art of gathering coconuts from the 
 tops of palm-trees ; learning the habits of vegetable 
 and reptile, bird and insect, thunderstorm and 
 hurricane ; discovering how to put together 
 better and better clothing from the fibres of shrubs 
 and trees, to make a safer and more comfortable 
 hut in which to shelter at night, and to construct 
 better boats or tools with which to work. And so, 
 the stronger and more vigorous we were, the quicker 
 with our hands and feet, the more intelligent in 
 our amateur botanising and zoologising, the more 
 we should " get on." We should be growing richer, 
 though we had no money, and nothing to buy with 
 it if we had money. 1 
 
 1 1 omit, as irrelevant for our immediate purpose, some 
 considerations of far deeper significance than most of these : 
 the mastery of the laws of health not merely as a means
 
 16 HOW IT ALL FITS TOGETHER 
 
 But when we talk of " getting on " we usually 
 mean getting on in the world. Now what does this 
 imply that is different from success in the sense 
 in which Robinson Crusoe achieves success ? 
 
 No doubt we nearly all require, as we work our 
 passage through the workaday world of to-day, 
 to achieve (as essential conditions of progress) 
 greater and greater facility in handling the same 
 sort of problems matters of food and clothing 
 and housing, of recreation, and health as those 
 by which Crusoe was confronted. But though such 
 matters still retain their fundamental importance 
 in our lives, we notice that, during the working 
 
 to the most effective acquisition of goods, but as the chief 
 end for which goods would be desired ; the mastery of the 
 laws of the working of one's own mind, as a means to the 
 fuller enjoyment of the senses sight and sound and taste 
 and so forth whose clamant needs our activities are 
 designed to meet ; for the well-trained mind can, of course, 
 gather a harvest of richer satisfactions from the super- 
 ficially trivial and commonplace than the ill-trained mind 
 can extract from the most elaborate apparatus of civilisa- 
 tion. Moreover, individual wealth is a doubly relative 
 thing. It is not merely (as pointed out above) a thing 
 to be measured by comparison with the wealth of a social 
 environment it needs also to be brought into comparison 
 with the individual's own ambitions and desires. And so 
 we frequently meet with the paradox of a man finding 
 himself continually worse off as he grows richer. After 
 jogging along contentedly on two hundred a year, he finds 
 himself pinched with three hundred pounds and an enlarged 
 programme of expenditure. At five hundred it becomes 
 a perpetual strain to make ends meet. And if he has the 
 misfortune to see his income expand into four figures, the 
 struggle to keep up appearances may, and often does, drive 
 him into desperate courses that bring red ruin in their 
 train. (" When we look up we have not enough ; when we 
 look down we have more than enough." Ancient Japanese 
 Proverb.}
 
 A BIRD'S-EYE VIEW 17 
 
 hours we spend in shop or factory or on the farm, 
 it is mostly now with the making of other people's 
 clothing or food or enjoyments that we find ourselves 
 kept busy. " Getting on well " is seldom now 
 conceived as the acquisition of greater facilities 
 and powers in making or doing things for ourselves, 
 even though we may be spending part of our time 
 mending the rents in our own garments or growing 
 vegetables in our own garden. " Getting on well " 
 means, rather, learning to fit in well with other people 
 at tasks that will satisfy the wants of yet other 
 people of whose existence we have only hearsay 
 knowledge. Only in this way whether our daily 
 tasks be manual or mental, skilled or unskilled, 
 whether we wish to succeed as inventors or as 
 speculative investors, whether we serve the com- 
 munity as doctors or circus-riders, professional 
 cricketers or commercial travellers, as judges of 
 the supreme court or as people who make the pips 
 to put into the raspberry jam only in this way 
 can our daily need for daily bread and butter, 
 warmth and shelter, health and fun be reasonably 
 satisfied. 
 
 The boy who leaves school to serve in a shop 
 and gets from the shopkeeper the means wherewith 
 to purchase elsewhere the longed-for products of 
 other men's activities, gets them because he fits 
 in with the shopkeeper in the amusing but difficult 
 task of satisfying the whims and caprices of yet other 
 people the customers who enter the shop, purse 
 in hand, professedly in order to buy. The boy 
 who has his name entered on the pay-sheet of a 
 factory is set to perform some simple task over and 
 over and over again a task that would be quite 
 grotesquely useless if done by itself, and which,
 
 i8 HOW TT ALT. FITS TOGETHER 
 
 therefore (through his ignorance of the Why ? and 
 Whence ? and Whither ? of it all) remains in- 
 humanly devoid of inspiration, as deadening to 
 all his starving faculties and his fingers itching for 
 healthy mischief as the task of Sisyphus among the 
 dead (" Up a high hill he heaves a huge round stone " 
 that forever and forever topples over and rattles 
 down again) the turning of an iron handle, the 
 fastening of labels on empty bottles, the opening 
 up or nailing down of unbeauteous packing-cases. 
 But because he is not a lonely Crusoe in a tropical 
 solitude, but one unit among hundreds of others 
 who are simultaneously engaged on similar but 
 different Sisyphean tasks, what he does fits in with 
 what they do, and so helps to turn out something 
 of value, something that it will please people to 
 have, something perhaps that they feel they cannot 
 do without. And everybody's work in the factory 
 is more valuable, more things and better things are 
 made, because a whole regiment are working 
 together, each making, over and over and over again, 
 nothing but a part of a part of a part of a thing, 
 and so learning to perform his task rapidly, easily, 
 without mistakes or delay. Because of this, the boy 
 who gets twenty shillings a week, for turning a wheel 
 or tending a soulless machine in one factory, is 
 able to buy with his (really princely) l wage a 
 heterogeneous selection of the things that are being 
 turned out by the drilled masses at work in other 
 
 1 Far too princely in many cases ; as we find if we study 
 the problems of boy labour and the future of these lads 
 whose " store of knowledge and discipline acquired at school 
 will be quickly dissipated," and who " will soon become 
 unfit either for employment or for further education." 
 (Report of the Consultative Committee on Continuation 
 Schools, 1909.)
 
 A BIRD'S-EYE VIEW 19 
 
 factories far more curious, fantastic, exhilarating 
 sorts of things than any boy could possibly make, 
 or find for himself, in the pleasantest island where 
 all his work had to be done alone. Nor is it merely 
 the other factory hands working beside him under 
 the same employers, whose labour with him makes 
 his work worth to him this weekly sum (a sum, be 
 it remembered, of food and frolic, books and fire- 
 works, tram-rides and football-matches, and not of 
 uninteresting silver coins concerning which his 
 chief anxiety would seem to be to rid himself of 
 them as speedily as may be selling them here and 
 there and everywhere for what they will fetch in 
 the market) ; but we must also, and equally, take 
 into account the regiments that built the factory, 
 the men who invented and set up the never-to-be- 
 too-much-protested-against machines in it, the 
 men who hewed out from gloomy caverns the 
 coal that keeps the machinery merrily moving, and 
 all the men for thousands of years who have made 
 the things by means of which other things have been 
 made the railways and steamships that bring the 
 materials that other workers in other continents 
 have been preparing (by the aid of other machinery 
 built in yet other factories) for service in our 
 factory the vans that carry the goods away, 
 and the roads over which the departing vans are 
 driven. 
 
 The workings of modern industry resemble, in 
 short, the circulation of the waters about our revolv- 
 ing planet. From the clouds the rain streams down 
 upon the mountains ; the rillets race onwards to 
 join together in foaming rivers ; the rivers sweep 
 down to the ocean ; the sun sucks up the waters 
 from sea to sky again ; and the movement continues
 
 20 HOW IT ALL FITS TOGETHER 
 
 in one unbroken cycle without beginning and with- 
 out end. Each single industry is like the brook, 
 gathering in the tributary rills of raw material 
 that come from haunts of coal and iron-ore, and wool 
 and timber : the stream flows on ; " with here and 
 there a foamy flake," a strike, a lock-out to 
 form " a silvery waterbreak above the golden gravel," 
 while of the materials that pass onwards to the 
 world's markets, becoming, as finished products 
 of the one industry, the " raw material," of further 
 industries, we may say (without gross sacrilege 
 against the poet, in thus giving to his lyric a more 
 widely human application) that out again they 
 " curve and flow to join the brimming river, for 
 men may come and men may go," but this goes 
 on for ever. And it would be impossible for it to 
 continue on its perennial course if the products that 
 it pours into the sea did not return by one route 
 or another, to feed the clouds upon the mountain- 
 peaks that feed in their turn its many sources. 
 
 Even our shipwrecked sailor must be, in similar 
 fashion, the beneficiary of the work of all the ages. 
 If he brought ashore with him any timber or cloth- 
 ing, or an axe or a knife, he has brought with him 
 something in the making of which many myriads of 
 workers have taken a share ; and Robinson Crusoe 
 himself must have been fed and clothed and trained 
 by other people's labours when he was still a child 
 or a youth acquiring the powers with which he seeks 
 to satisfy his own needs now that he is alone on the 
 island. Robinson Crusoe's success, if he succeeds 
 in life, is only partly the result of his own efforts ; 
 and when in the evening of his days he rests beside 
 the blue lagoons and watches his Man Friday per- 
 forming all the tasks that he demands should be
 
 A BIRD'S-EYE VIEW 2i 
 
 carried out to keep him in comfort, Crusoe cannot, 
 any more than you or I, declare himself with truth 
 " a self-made man." 
 
 All mankind are working together, some willingly 
 some in spite of themselves. Even the soldiers 
 or brigands whose function is mainly that of destroy- 
 ing what other men have made, must use the weapons 
 that thousands of men have collaborated in preparing. 
 In other words we cannot play the game of life single- 
 handed. The successes that any of us may score 
 must be won in combination with the efforts of 
 all the other players of the team, even the successes 
 of the most thoroughly selfish type of player. 
 
 Only very gradually has the human race built up 
 a world after this pattern. At first nearly every one 
 must, in adult life, have made and done nearly 
 everything he needed for himself. Each man had 
 to know something of hunting and of cooking, of 
 fighting for his tribe, of making clothes and weapons. 
 But by slow degrees men learned to divide up the 
 work that needed doing, as the work of a cricket or 
 base-ball team is divided up among the different 
 players. One would spend all his time in fashioning 
 the clothes of the rest of the tribe. Another would 
 become the medicine man of the village. Not all 
 would be expected to serve as warriors. And so 
 the world went on, the business of life becoming 
 more and more split up as the centuries slipped by. 
 But not until after the days of Watt and Stephen- 
 son of coal and steam and modern machinery 
 did most men cease to produce whole things for 
 use or sale boots or nails or chairs or saddles ; 
 and learned instead to become like soldiers in an 
 army, carrying out orders the purpose of which it 
 would be impossible for each to understand, though
 
 22 HOW IT ALL FITS TOGETHER 
 
 only through compact regiments blindly obeying 
 such orders can campaigns be won. Few manual 
 workers now do more than make parts of parts of 
 things we all use ; and many remain, like soldiers 
 in a campaign, quite ignorant of the purposes 
 towards the accomplishment of which their work 
 in the factory serves. Yet the combined efforts of 
 all, unconsciously collaborating, though many of 
 them have but the vaguest comprehension of what 
 they are doing or why they are doing it, but merely 
 carry out blindly, and perhaps with much grumbling, 
 the orders they receive enable them to live in 
 greater comfort (and, if so they wish, with more 
 freedom to satisfy deeper human interests, and with 
 a wider horizon to their activities) than could ever 
 be the case when men gave their time to the more 
 interesting work of making whole things and knew 
 why they were making them. 
 
 Nor is it only the manual worker, the street 
 messenger, and the bank-clerk who act thus under 
 orders. Few of those who open a bank account, 
 play about with stocks and shares, and pursue 
 similar " independent " lines of activity, are aware 
 how slightly they differ from the more disciplined 
 and more mechanically obedient units of the business 
 army. They may not take orders from individual 
 superiors ; but, in so far as they succeed in life, 
 they owe their success to the promptitude and 
 intelligence with which they obey orders of another 
 kind. They invest, let us say, in the shares of a 
 copper mine. That means that they are allowing 
 their capital to remain at the disposal of the directors 
 of a mining company, because the electrical engineers 
 of the world are persistently ordering more of the 
 products of the mine, to meet the orders of the masses
 
 A BIRD'S-EYE VIEW 23 
 
 of mankind who are clamouring for services that 
 can be supplied only through the medium of the 
 electrical power that requires the use of ^copper in 
 its production. 
 
 It may, in fact, without gross exaggeration, be 
 laid down as a law of life, that we must obey orders 
 if we would prosper. 
 
 But often we prosper best if we obey orders that 
 the world has not yet dreamt of giving, and supply 
 products that the world henceforth will insistently 
 clamour for, and order, order, order without end, 
 a catching song (may be), a new drug, a novel use 
 for rubber, a romance of a Treasure Island, a new 
 intense thrill from a looping of the loop. Then we 
 grow rich indeed. The world is my oyster (says 
 the humourist) ; let me open it. The world is my 
 harp (says the business adventurer) ; let me play 
 upon it. 
 
 The pioneer in the race for the right to cater 
 for the satisfaction of the world's wants the 
 inventor the advertiser must be 
 
 " Like a poet hidden 
 
 In the light of thought, 
 Singing hymns unbidden, 
 
 Till the world is wrought 
 To sympathy with hopes and fears it heeded not." 
 
 " Getting on " in the world would seem to mean, 
 then, fitting one's self in well with other people 
 doing better and better such things as are needed 
 in order that other people's work may become 
 more useful and more valuable. 
 
 Those who get on unusually well are generally 
 those who supply some one single kind of service 
 better than the majority can succeed in doing it ; 
 and this may be something as intangible as an idea
 
 34 HOW IT ALL FITS TOGETHER 
 
 of a more effective way to combine harmoniously to- 
 gether the faculties of numerous individual workers. 
 
 To illustrate this (and incidentally to clear our 
 notions as to the right of the " employing class " 
 to occupy any place in a properly managed universe) 
 let us, in fancy, picture to ourselves an old-fashioned 
 country, where all boots and shoes are made by 
 hand, and each pair is made entire by a single 
 worker. Into this old-fashioned country walks a 
 new-fashioned man, a man with modern ideas. 
 He watches the individual shoemakers at work, 
 and notices how long each usually takes to begin 
 and finish a pair of boots. He then calls them 
 together, and offers to give regularly to each of them 
 a little more money every week than the profit 
 each has been making (on the average of good times 
 and bad) when working in isolation. But he insists 
 that they must all be willing to do exactly as he 
 gives instructions, and to hand over to him all the 
 boots and shoes to sell when and where he thinks 
 best. Each of the shoemakers has been buying 
 ten-shilling pieces of leather and turning them into 
 thirty-shilling pairs of boots, and living on the 
 difference between the price he paid for the leather 
 and the price he received for the boots. After the 
 agreement is made, their new " captain of industry " 
 (as we may call him) arranges to buy all the leather 
 required. He buys it in larger quantities than 
 they had been able to do, and so can make better 
 bargains with the leather-sellers (through saving 
 them the wasteful trouble of handling many small 
 orders). He gives time and thought so as to buy 
 it at just the right times 1 when there is so much 
 leather in their store-rooms that the leather-sellers 
 
 1 This, by the way, is generally a socially beneficial form
 
 A BIRD'S-EYE VIEW 35 
 
 are eager to get it off their hands at almost any 
 price. He makes arrangements for the sale of all 
 the boots in some convenient shop to which the 
 customers may come without the trouble of finding 
 where the single workers live. He puts up sign- 
 boards to point the way to the shop, and to remind 
 people whose boots are old and worn that it is 
 pleasant to replace old boots by new. Inside the 
 workshop where he brings together the workers, 
 he arranges all the tasks to be done in such a way 
 that each worker's time is used to the best advantage. 
 One is set to do nothing but cut out pieces of leather 
 of just the right size, while another is fitting them 
 together in just the right way. None of the men 
 any longer makes a whole pair of boots ; but all of 
 them together (including the employer who has thus 
 divided up and organised their work, as well as the 
 men who do the cutting and the stitching, the 
 fetching of the leather and the sending of the boots 
 to the customers' houses) supply a much larger 
 number of boots, and give much better service to all 
 the people who use boots, than could be the case if 
 each continued to work alone. And each of them, 
 therefore, is able to get a larger reward in the form 
 of " pay " (or, in other words, obtain more of the 
 goods that other workers are producing elsewhere) 
 than if he had gone on in the older fashion, working 
 by himself single-handed. 
 
 It may well be that the " employer " who has 
 thus brought them together and continues directing 
 their work gains more than any of those who do 
 
 of business thoughtf ulness, and not a mere taking advantage 
 of other people's necessities. (In some cases, of course, 
 it is the latter, and is then quite rightly branded as " pro- 
 fiteering.")
 
 26 
 
 the manual and clerical work ; and this may lead 
 many of the workers to believe that he is growing 
 rich at their expense. In some cases this may be 
 partly true. But in the more typical case that we 
 have taken more typical, in spite of its archaic set- 
 ting it is evident that, though (of course) the 
 employer could not prosper without the co-operation 
 of the paid hands, the paid hands, producing more 
 under the new system, now earn more than they 
 could possibly have earned for themselves, when 
 they tried to do without the employer's help in 
 arranging their work. In other words, the man 
 who has supplied the idea of how best to make 
 boots has supplied something more valuable, more 
 indispensable, than the hard manual work per- 
 formed by the employees. Even if the employer 
 thoroughly enjoys his task (the task of planning, 
 arranging, managing) and the manual workers 
 thoroughly detest their monotonous labour, it may 
 still be true that the employer's work makes more 
 difference to the total output than the prolonged 
 disagreeable efforts of a thousand hand-workers. 
 In such a case, therefore, it is not very surprising 
 we are not talking here of " justice," whatever 
 precisely " justice " may mean if the employer 
 sometimes receives, as his " profit," a larger share 
 of the total gains of the business than the " wages " 
 of several hundreds of the men he employs. 
 
 All the wealth of the world (that is, all the things 
 we are able to use and enjoy) is the result partly of 
 labour, and partly of thought, of ideas, that is to 
 say, of how best the desired goods may be produced. 
 The two must collaborate. 
 
 Who is it, for instance, that constructed the
 
 A BIRD'S-EYE VIEW 27 
 
 railways that make such a spider-web map of this 
 country ? 
 
 The working man is likely to answer " the nav- 
 vies who raised the embankments, the steelworkers 
 who fashioned the rails, and scores of thousands of 
 similar workers." The student of natural sciences 
 is likely to answer " the engineers and inventors 
 who worked out the problems to be solved in the 
 use of coal and steam and steel, so that rails and 
 bridges could be constructed strong enough to carry 
 trains, and locomotives be built capable of outpacing 
 the speed of a galloping horse." The business man 
 is likely to answer " the founders of the companies 
 who persuaded tens of thousands to subscribe from 
 their savings the necessary funds for the payment 
 of the workers ; and the great contractors who 
 hired the swarms of manual labourers, set them 
 their several tasks, bargained with them about 
 their pay, negotiated with Parliaments and land- 
 holders for the right to buy up and use the land 
 through which the lines now run, and watched over 
 the whole process from beginning to end." 
 
 None of these three answers is quite true, or quite 
 untrue. For the inventors' ideas, the capital 
 saved by the investors to pay the labourers, the 
 business man's managing work, and the navvies' 
 labour, were all alike indispensable ; and we cannot 
 mark out how much of the resulting railway system 
 is due to the inventors, the capitalists, the contractors 
 or the labourers. 
 
 Our question in fact is very much like the question 
 who is responsible for the music we enjoy at an 
 organ recital ? The composer of the symphonies, 
 the organist who manipulates the keys, the musical 
 instrument maker, and the boy who blows the bellows
 
 28 HOW IT ALL FITS TOGETHER 
 
 are all alike necessary if we are to enjoy our concert. 
 But whenever a dispute arises (about wages, for 
 instance) we notice that each party to the controv- 
 ersy thinks and talks of the others as being mere 
 bellows-blowers, while he himself, he feels, is the 
 organist and the person really responsible for the 
 music. 
 
 I, too, as I pen these lines, find it hard not to think 
 of myself as the " organist," solely responsible for 
 the music, as I see around me my piles of uncorrected 
 manuscript. Yet I can scarcely forget that I shall 
 need, by and bye, the services of Messrs. Dent & 
 Sons, the publishers, to supply the organ, and of 
 Messrs. Mudie, the booksellers, to supply the concert 
 room ; to say nothing of you, my nimble-fingered 
 friend the compositor, whose hand races up and down 
 from case to case, setting up the dainty type. Will 
 you condescend to set the line if I compare you to 
 the boy in the organ-loft ? (Another paper-weight, 
 please, landlady. Your services, I see, are needed 
 too.) Nor indeed, could even my share of the book 
 be completed, had I not been born an indefatigable 
 kleptomaniac of ideas left lying round in other 
 writers' workshops ; and had I not been fortunate, 
 too, in having many charming pupils who will never 
 be content with my first rough attempts at explaining 
 how each part of it fits in with every other part. 
 Nor ought I to overlook the little group of proof 
 readers, who are galloping with me in the hunt 
 for misprints among the coverts between the two 
 covers of the book. From all sides they raise 
 alarums. Sometimes the game roused is an animal 
 of some zoological interest (an Irish bull with five 
 horns, or some similar monstrosity) ; at other times 
 the creature that has been stirred up from its hiding-
 
 A BIRD'S-EYE VIEW 29 
 
 place is nothing more notable than a bunny with a 
 bobbing tail a comma or semi-colon standing on 
 its head, so ' '. ' 
 
 Fundamentally also the same principles apply in 
 the case of Robinson Crusoej The wealth he acquires 
 (his food and clothes, his boat and tools and hut) 
 must be the result, partly of his manual labour, 
 and partly of his ideas. 
 
 Let us suppose that he is getting for himself a 
 certain quantity of a certain kind of material 
 wood or stone for a fence he is building by working 
 four hours a day. He finds that he needs for his 
 purpose to bring in twice as much per day. He 
 may accomplish this, no doubt, by working eight 
 hours a day instead of four. But suppose, instead, 
 that he sits down for a few hours and thinks out 
 some better scheme for obtaining his material 
 comes to see that he can get the timber to his hut 
 by floating it down a stream, or the stones by throw- 
 ing them down from the top of a cliff, instead of 
 dragging them hundreds of yards across the island. 
 By some such device he may succeed in getting 
 his double quantity of material without doing more 
 than his previous four hours' work. In the one case 
 he is doubling his output by doubling his manual 
 labour ; in the other he is doubling it by improving 
 his methods, like a business man who discovers 
 how to use his " hands " better. In all production 
 of wealth both the hands and the brain are neces- 
 sary both the manual labour and the ideas ; and 
 when one set of men supplies the one and another 
 set the other, each will claim a share in the total 
 wealth produced. The manual labourer is inclined 
 to say that he produces all the wealth, and that the 
 employer is making an unjust profit out of his hands.
 
 30 HOW IT ALL FITS TOGETHER 
 
 The employer is inclined to say that he is the real 
 producer of all the wealth, and that the labourer 
 should be grateful because the employer provides 
 him with the means to work and advances him 
 wages out of the future returns. But is either view 
 more than half right ? 
 
 Let us put it yet another way, and choose a yet 
 simpler illustration from our half-forgotten school- 
 days. Suppose the schoolmaster has set a sum to 
 be done as home-work, and two boys sit down to 
 work it out together. Suppose that one of them 
 sits with his hands in his pockets and does all the 
 reasoning and calculating, while the other uses pen 
 and paper and writes down whatever his companion 
 dictates. Whose work is the sum when the task 
 is finished ? The calculating had to be done and 
 the writing had to be done ; but unless one boy 
 does both, neither boy can be said to have done the 
 home-work or deserves marks for it. In the making 
 of wealth (of goods to be bought and sold) it is nearly 
 always the case that one set of men does the calcu- 
 lating, and another the rougher and more tedious 
 work ; and the two sets divide what we may call 
 the marks the pounds, shillings, and pence with 
 which they buy the prizes of life. 
 
 The prizes most thinking people will probably 
 agree are not distributed in the fairest way possible. 
 But it is obvious that some division of the spoil is 
 necessary, part going to the brain-workers and 
 part to the hand- workers. And some understanding 
 of the way in which this distribution works out 
 it is essential for every thinking citizen to have. 
 For most of the struggles in the political arena have 
 to do, in some way or other, with problems concern- 
 ing the justice of the current modes of division. At
 
 A BIRD'S-EYE VIEW 31 
 
 a parliamentary election men give their votes to 
 one party or another largely as a consequence of 
 their views on such questions as whether trade- 
 unions are trying to win unfair advantages over 
 the employers, or employers to maintain unfair 
 advantages over the men ; whether the Govern- 
 ment should spend the taxpayers' money chiefly 
 for the benefit of one class or another ; and whether, 
 when new taxes are necessary, they should be taken 
 from this class or from that. How we vote often 
 depends largely on our views as to the fairness or 
 unfairness of the way in which is divided up all the 
 wealth that is being produced by the labour and 
 thought of all the workers in the country. 
 
 But while we are talking of those who do the cal- 
 culating and the managing, and those who perform the 
 manual labour, we must not forget the equal import- 
 ance of a third set those who have done the necessary 
 saving. For if we all used and enjoyed at once all 
 that we could get with our weekly pounds, shillings, 
 and pence, and never laid any by for future use, 
 then projects like the building of railways could 
 never be undertaken. Saving is at least as necessary 
 as hand labour or brain work. 
 
 Let us return to the case of Robinson Crusoe. 
 In what ways would a shipwrecked sailor save, 
 and why should he attempt to do so ? 
 
 At first we may picture Crusoe as living from 
 hand to mouth. He gathers enough fruit, and 
 collects enough shell-fish, to keep him alive from 
 day to day. But he wishes, let us say, to build a 
 boat or weave a fishing net ; and the making of 
 these takes time. Accordingly he works overtime 
 for a few days, climbing trees and searching the
 
 32 HOW IT ALL FITS TOGETHER 
 
 pools by the sea-shore, and thus succeeds in gathering 
 together a large pile of coconuts and a store of 
 crayfish and mussels. These form his savings, his 
 " capital," for the moment ; and he is now able to 
 settle down to days of uninterrupted toil at the 
 construction of his net, instead of giving all his 
 efforts to hunting his food. Day by day he con- 
 sumes his saved food (lives on his capital) until 
 there is none left. But in place of the fruit and 
 the fish he has acquired a new species of " capital," 
 a net, with which in future he hopes to catch far 
 more fish than he ever caught before. The fishing 
 net is the result of his saving it is his saving in a 
 transferred form. His stock of wealth is now 
 greater, and his daily income of fish is likewise greater 
 than before. He is using the result of his savings, 
 the fishing net, much as the business man uses the 
 machines in his factory. These similarly must be 
 the offspring of people's savings ; as are also the 
 factories and workshops themselves, the ploughs 
 and harrows of the farmers, the ships, the railways, 
 the roads and the docks, and all the complex appa- 
 ratus by which new wealth is for ever being created. 
 Unless multitudes were continually saving pro- 
 ducing more than they immediately consume (like 
 Robinson Crusoe gathering a store of food), or 
 (what comes to the same thing from the community's 
 point of view) refraining from consuming inherited 
 capital and sternly maintaining it intact nobody 
 could carry out such tasks as the building of railways 
 and the construction of canals that take years to 
 complete. There must be, somewhere, food and 
 clothing in readiness for the navvies to use while 
 they are at work on the railway embankments ; 
 and some one, somewhere, must have saved this
 
 A BIRD'S-EYE VIEW 33 
 
 (refrained from consuming it when he had the legal 
 power to consume it), and expects to receive a share 
 in the products of the enterprise, in the shape of 
 dividends or interest, for having performed the 
 service of saving. 1 
 
 Of course the ordinary man in the ordinary world 
 does not and cannot collect his savings in the form 
 of quantities of food and coal and clothing. How 
 then is the saving done ? 
 
 For the solution of this problem let us transfer 
 our friend Robinson Crusoe from the tranquil South 
 Seas to the complex world of civilisation, and picture 
 him now as a medical man at the beginning of his 
 career, without any capital other than the " personal 
 capital " of his medical knowledge. As our island 
 Crusoe lived from hand to mouth, swarming up 
 coconut palms and chasing after edible crabs 
 to satisfy the cravings of his appetite ; so our 
 civilised Dr. Robinson lives on his narrow daily 
 earnings, racing up and down people's front stairs 
 and chasing after elderly ladies with full purses 
 and dubious nervous systems, in order to gather in 
 likewise his daily harvest of fees. But, if the fees 
 exceed the needs of the hour, he constructs with 
 them what we shall call provisionally (reserving the 
 matter for consideration a few paragraphs later) 
 a pile of entries in a banker's books (Crusoe's pile of 
 fruit and fish), and presently exchanges it for a 
 modern type of fishing net a motor-car, let us 
 say, with which he can thenceforward catch more 
 fees. The motor-car is now his " capital," his 
 first investment. He constructs, more rapidly than 
 before, another pile of bank entries, and exchanges 
 
 1 We are not discussing the meritoriousness of this, but 
 referring merely to its social utility.
 
 34 HOW IT ALL FITS TOGETHER 
 
 this for a part of some larger fishing net a share, 
 let us say, in the Great Northern Railway, which 
 acts like a deep-sea drag net, drawing in fish in the 
 form of freight charges, fines for pulling the com- 
 munication cord without due cause, the prices of 
 excursion tickets, and so forth out of which he 
 receives a supplementary income in the shape of 
 railway dividends. And so his life goes on, until 
 his fishing nets, scattered perhaps over all the seas 
 and continents bonds of a Cuban Telephone 
 Company, Canadian Railway stock, a share in a 
 Japanese War Loan bring him in such an income 
 of goods and services that he finds himself able to 
 " retire," and he now dreams away the leisurely 
 remainder of his days, lying on his back on the 
 peaceful sands of old age, watching his Man Friday 
 mending his nets for him and hacking steps in the 
 bark of the coconut palms to facilitate the task of 
 gathering the fruit. 
 
 But Robinson Crusoe, it should be noted, cannot 
 retire unless his Man Friday keeps still at work. 
 And this is equally true of Dr. Robinson. Dr. 
 Robinson describes himself no doubt as a man of 
 independent means ; but his independence is condi- 
 tioned by the assumption that men in general must 
 continue working ; that capital (supplied by himself 
 out of past labour) and labour (supplied now by 
 others) will through the energies of business managers 
 be somehow fitted together, and wealth thereby be 
 produced sufficient to meet the claims of labourer and 
 employer, as well as of himself, the retired investor. 
 But what really was that mysterious pile of 
 bank entries that we used as a convenient short- 
 hand expression for the first-fruits of Dr. Robinson's 
 saving ?
 
 A BIRD'S-EYE VIEW 35 
 
 Ultimately it must be, just as in the case of the 
 island Crusoe, a store of fruit and fish, or of coal or 
 hides or wheat or iron-ore, stored somewhere ; and 
 this fact it is emphatically necessary to grasp, to 
 grasp firmly, and never let slip. (For my part, 
 when I am reading, say, the more interesting parts 
 of the daily paper those that deal with the current 
 prices of bills of exchange, stocks and shares, and 
 foreign cheques watching that perennial game of 
 chess that the financiers are for ever playing, with 
 the whole round world for their many-squared chess- 
 board, I find it well to close my eyes a moment 
 from time to time, and see it all, as it really is, in 
 terms of coal and machinery. I feel safer, if, like 
 Helen's Babies, I insist on " seeing the wheels go 
 round," before passing on to the next item.) 
 
 When most of us save, we say that we save money. 
 But this is very rarely true, even superficially ; 
 for very few of us are coin-collectors. (It would 
 indeed be rather difficult for many of us to become 
 coin-collectors on a large scale. For if all the coin 
 in the United Kingdom were equally divided up 
 among all the inhabitants, it would work out at 
 rather less than 5 per head of the population.) 
 We are more likely to take our coin to a bank ; and 
 arrange with the banker to be allowed to have an 
 equal amount back whenever we desire it. We 
 cannot ask for the same money back. For if the 
 banker were expected to take care of our own coins 
 for us he would demand to be paid for the service of 
 safeguarding them. But instead he often consents to 
 pay us " interest " for the use of our savings, which 
 he then lends to business men, asking from them a 
 higher rate of interest. What we lend to the banker, 
 and the banker lends to the business man, is the
 
 36 HOW IT ALL FITS TOGETHER 
 
 power to take, when it is wanted, some part of the 
 world's collection of heterogeneous savings the 
 stores of food and material that must be in existence, 
 somewhere, in somebody's hands, before great 
 enterprises like the building of railways can be carried 
 through. Such stores are everywhere in existence ; 
 and that, of course, is the chief reason why we are 
 glad to get hold of money. Few of us desire shillings 
 and pence, as trinkets, to keep. We appreciate 
 them because it is so very easy to get rid of them. 
 Every shopkeeper we find is ready to buy them 
 from us by offering for them any sorts of goods 
 that he has in stock. We appreciate coins because 
 there is never any difficulty, when we take them to 
 shops and other places where the world's stores of 
 good things are kept (saved up for every man's use 
 by the self-restraint of all sorts of workers), in 
 selling them there for such commodities as our 
 fancy selects. 
 
 What the banker himself does is to act as a sort 
 of labour bureau that finds employment for the 
 national stores of coal and wool and wheat and 
 timber. If I say that my income is 500 a year 
 and that I " save " 100 of it, this means, not that 
 I receive or even see or handle five hundred sover- 
 eigns in the year, but that I receive orders (in the 
 shape of my customers' or my employers' cheques) 
 entitling me to draw on the world's stores of goods 
 to the extent measured by the expression " 500." 
 I do so draw to the extent measured by the expres- 
 sion " 400." The remaining stores (say, one 
 hundred tons of coal) that I possessed the legal right 
 to consume, I leave under the control of the banker, 
 and instruct him to find a use for them. He chooses 
 some business man, who has been besieging his doors
 
 A BIRD'S-EYE VIEW 37 
 
 for the power to use one hundred tons of coal in 
 his factory and who agrees to return their equivalent 
 plus 5 at the end of a year. The factory owner 
 can make this offer, because with the help of the 
 coal he expects to produce goods yielding him a 
 profit of more than 5. At the end of the year the 
 banker is repaid ; and out of the 5 contracted for, 
 he hands me 2 as my compensation for not having 
 consumed the coal (or its equivalent) myself by 
 taking, say, a trip round the world (which would 
 involve the consumption of coal on my account in 
 train and steamship and in my lodgings at each 
 wayside inn). The balance is the banker's well- 
 earned commission (part of which is handed over 
 to the door-keeper and the clerks to enable them to 
 pay their little coal-bills), and he is now in a posi- 
 tion to pass on to yet another factory owner the use 
 of another hundred tons of the world's saved stores 
 of coal. 
 
 The banker's function is that of continually trans- 
 ferring the control of " capital " of coal, that is 
 to say, of wheat and machinery, ploughs, harrows, 
 looms, steam-engines, bricks, mortar, and so forth 
 from the hands of those who, like myself, may have 
 the legal power to purchase and utilise them, but 
 not the requisite knowledge to venture on using 
 them, into the hands of those who may be expected 
 to use them to such good purpose as to be able, 
 afterwards, to return their equivalent to the world's 
 store-houses, with something over and above, to 
 reward the banker for his services as intermediary, 
 and myself for my social service in not consuming 
 all that I might have consumed. He transfers out 
 saved wealth by smoothly working devices, 1 built 
 
 1 For the study of these one of the best books is Mr. Hart- 
 ley Withers' The Meaning of Money,
 
 38 HOW IT ALL FITS TOGETHER 
 
 up mostly in the last century from the decaying 
 industries and the declining firms to the rising 
 industries and the advancing firms. And woe 
 betide the unhappy community where the bankers, 
 through over-greed for gain, take needless risks, and 
 by their rash blunders allow its hard-earned savings 
 to be turned into apparatus (such as a wild-cat 
 railway, or a worthless rubber plantation) the pro- 
 ducts of which no one wishes to buy, or to be eaten 
 and drunk away by the wastrel and the spendthrift. 
 Now when we turn from countries like England 
 and America to countries like India and China, we 
 soon notice that the inhabitants of these are beyond 
 all comparison poorer than ourselve's (though we 
 may point out, incidentally, that the stocks of gold 
 and silver in our Indian Empire exceed by several 
 times 1 the amounts held in England). The English 
 working man is almost a king beside the Chinese 
 or Indian coolie. Yet the Chinese are at least as 
 hard-working as the English. They work more 
 hours in the day, and more days in the year. They 
 are perhaps as intelligent in their work as the English 
 
 1 The amounts of gold and silver added during the latter 
 half of the nineteenth century to the stock already in India 
 in 1850 amount to about four times the amount of coins 
 now in circulation in the United Kingdom. (How little the 
 quantity of money in a country has to do with its real 
 wealth should have been brought home vividly in the last 
 few years to the members of nearly all nations. For the 
 actions of governments in changing their monetary systems 
 chiefly by the printing of more paper to take the place 
 of coin have vastly increased the world's stocks of money. 
 Yet the world, as a whole, is unmistakably poorer in 1920 
 than in 1914 ; and those countries, such as Germany and 
 Russia, which have increased their money most lavishly, 
 are perhaps the countries which are now the most im- 
 poverished.)
 
 A BIRD'S-EYE VIEW 39 
 
 working man. They are a thrifty race. Their 
 country is fertile, and rich in minerals. Their 
 opportunities of becoming a prosperous people seem 
 at least as great as ours. 
 
 All this goes to show that mere labour by itself, 
 even when done by persevering and intelligent 
 men, cannot be expected to produce great prosperity. 
 In these Eastern countries nearly all classes of 
 goods are still made in small quantities by single 
 workers. There are not the great employers to 
 bring vast armies of labourers together, and arrange 
 their work for them to the best advantage, by divid- 
 ing up the tasks into little pieces, each to be done 
 by a different " hand." Also and this is perhaps 
 more important still there are not the same 
 convenient arrangements by which the savings 
 of multitudes can be gathered together by bankers 
 and company-promoters, and used by business 
 managers as a means of producing further wealth. 
 And so, though the Chinese have succeeded in giving 
 us many clever and wonderful inventions (like gun- 
 powder and printing), their inventions have not been 
 used to turn out millions of articles from well- 
 managed factories, and thus enable the Chinese 
 worker to get high wages under one employer and 
 buy with them the products turned out by Chinamen 
 working in other factories, and so satisfy easily 
 his daily needs. 
 
 As was said before, a nation's prosperity is based 
 not on labour and on natural advantages of soil 
 and climate alone, but equally upon the ideas of 
 sagacious business leaders and upon the opportunities 
 there may be of using the savings of all who are 
 able and willing to save. 
 
 But is it not true (as perhaps some reader of this
 
 40 HOW IT ALL FITS TOGETHER 
 
 may be inclined to object) that these " ideas " of 
 business men, for producing goods more rapidly 
 and easily, often, when they are first brought into 
 use, result in taking away employment from the 
 working man ? For when a machine is introduced 
 to do the work formerly done by a number of human 
 workers, it certainly looks as if the human machines 
 must, through the competition of these soulless 
 mechanisms, be at once and permanently worse off. 
 
 Yet in the countries where there is much mach- 
 inery, and where mechanical devices are always 
 tending to take the place of manual labour, the 
 working man is immeasurably better off better 
 fed, better clothed, better housed, able to buy more 
 and better goods of all sorts than in the economic- 
 ally backward countries where machinery is little 
 known. How can we explain this paradox, if we 
 accept the dicta of those who declare that all new 
 inventions are bad for the working man ? 
 
 In some few cases, as in domestic service, where 
 modern apparatus relieves the housemaid of much 
 that she used to do laboriously by hand, even the 
 class with which the machinery seems to compete, 
 and which it might, at first sight, be expected to 
 oust, is at once and directly the gainer by the 
 revolutionary changes. But let us take a more 
 ordinary case and examine what more usually 
 happens. 
 
 Suppose that a hundred men have had to be 
 regularly employed in turning out a certain quantity 
 of a certain type of goods just the quantity that is 
 usually bought and sold in a particular commercial 
 area. Now let a machine be invented by means of 
 which eighty men can turn out the same quantity 
 of goods thirty, say, being engaged on making
 
 A BIRD'S-EYE VIEW 41 
 
 and repairing the machinery, and fifty acting as 
 machine minders and tenders. The goods turned 
 out will now be sold cheaper, because there is a 
 smaller total wages bill to be met. So more of 
 the output is bought than before, and more, there- 
 fore, has to be produced ; so it comes about that, 
 though eighty men would suffice to turn out the 
 original output, more than eighty, perhaps more 
 than a hundred, are needed to produce the larger 
 quantity and all the workers in other industries 
 who use these goods get them cheaper, and have thus 
 more to spend in other ways which is much the 
 same as if they were now getting a higher money 
 wage. For a man's real wages, as we have seen, 
 do not consist of shillings and pence, but of the 
 things he can buy with them. (It makes little 
 difference to me whether I come to have twice as 
 much money as before, or whether the things I am 
 habitually buying come to be twice as cheap as 
 they used to be. In either case I am about twice 
 as well off as I was before.) 
 
 Even when the goods that are cheapened by the 
 newly-invented machinery are not goods that 
 working men usually buy, it will still be true that 
 other sets of working men will be the gainers. For 
 the people who do buy these cheapened goods will 
 have more to spend than before, and in spending 
 they must buy goods and services that working men 
 supply. Their increased purchasing power may be 
 expected to increase the amount of work for which 
 wages will be offered. 
 
 This of course is not a complete account of the 
 consequences of the introduction or extension of 
 labour-saving appliances. Nor is it always true
 
 42 HOW IT ALL FITS TOGETHER 
 
 that the working classes are immediately the gainers, 
 especially if the change comes with drastic sudden- 
 ness. In most cases, also, we should expect to find 
 some workers who lose their work, and with it their 
 chances of happiness, through never finding equally 
 satisfactory employment again. But our descrip- 
 tion of what takes place in the generality of cases 
 is not falsified by the occurrence of occasional 
 exceptions. 
 
 We notice that the workers in each industry 
 (employers and employed) gain whenever the pro- 
 ducts of other industries are cheapened. The boot- 
 makers (masters and men) have more to spend on 
 other goods when machinery is introduced to make 
 hats cheaper ; and the hatmakers (masters and 
 men) gain whenever similar changes occur in the 
 boot-factories. And so my selfish, immediate interest 
 in life is always that there should be, not only as 
 few people as possible competing with me in doing 
 the same work as I do, but also as few machines as 
 possible invented to compete with me, and as few 
 changes as possible introduced in the methods of 
 working the apparatus I wish to use. But I want 
 the numbers of other groups of workers, and the 
 application of inventions in other employments, to 
 grow as rapidly as possible. For the smaller the 
 output of goods and services resembling those that 
 I myself bring to market, the greater will be the 
 value of what I myself produce ; and the greater 
 the output of the activities of other groups, the 
 cheaper for me will be the things I wish to buy, and 
 the greater will be the power of yet other groups 
 to purchase what I have to sell. 
 
 Particular groups very frequently suffer, for a 
 short time, if not permanently, when changes of
 
 A BIRD'S-EYE VIEW 43 
 
 method are adopted in any part of the field of 
 industry. But when the changes enable more 
 goods to be offered for sale more cheaply than before, 
 it is practically always the case that there are more 
 gainers than losers. Short-sighted critics overlook 
 this continually, and shrink with repugnance from 
 the mere rumour of the coming of new types of 
 machinery or the adoption of the new methods of 
 training workers that some American employers 
 are beginning to experiment with. They think 
 that the labourer must be ousted by the machine ; 
 that there must be less work to be done, and that the 
 working classes will be worse off, because there 
 will be less wages to be paid than before. Some 
 sets of workers, as we have seen, are certainly likely 
 to be, at least temporarily, in a worse case than 
 before ; but most of the others will have more 
 employment and will find their weekly wages, 
 when they set out to spend, going further than 
 before, which amounts to much the same as saying 
 that their earnings are really higher. 
 
 Any change of this kind may bring suffering in 
 its train ; and for the families that have their 
 happiness wrecked by them the children being 
 despoiled of the prospects of a fuller education, 
 the wives driven to practise humiliating economies 
 the suffering may be very formidable. We need 
 not blink this fact or make light of it. But the 
 number of those who suffer in this way is seldom as 
 large as one might infer from a superficial glance. 
 For novel modes of working can seldom be intro- 
 duced with drastic suddenness ; and during the 
 years when a new jnethod of production is supersed- 
 ing an older method, very few of the rising generation 
 will attach themselves to the firms that cling to
 
 44 HOW IT ALL FITS TOGETHER 
 
 the older system. Even if they were keenly desirous 
 of doing so, they would not easily find openings. 
 For the older-fashioned employers would be seeing 
 their trade passing from them, and their more 
 up-to-date competitors underselling them in the 
 general market. It would be more natural to expect 
 to see them turning away old hands than taking 
 new hands on. And meanwhile the older-fashioned 
 workers would be gradually dying off or dropping 
 out of the trade through old age a process that 
 works itself out more smoothly and more rapidly 
 than a superficial consideration of the problem 
 would suggest. So if we read that there are so 
 many thousand fewer men engaged in a particular 
 occupation than there were ten years ago, this 
 must not be read as meaning that so many thousands 
 have lost their employment. Some may have 
 done so. But the chief change that has been in 
 progress is usually that fewer beginners than previ- 
 ously are being taken on to replace those who are 
 perpetually dropping out. 
 
 Nevertheless each progressive step that is brought 
 before our notice by the daily papers may be the 
 harbinger of suffering for some. Many of us there- 
 fore find ourselves inclined to wish that the clock 
 could be made to stand still, and everybody be 
 induced to remain content with things as they are. 
 If that could be, the world (perhaps) might be a 
 happier world. But when we observe how all sorts 
 and conditions of men are for ever pressing on to 
 become "better off" the working classes with 
 their trade unions, as well as all other classes we 
 see the futility of wishing that the world might 
 halt in its course (even if the wish were really a wise 
 wish, and fifty years of Europe no more admirable
 
 A BIRD'S-EYE VIEW 45 
 
 than a cycle of Cathay). " Things are in the saddle 
 and ride mankind." And recognising this, we seek 
 rather to understand what happens to the rank and 
 file as the moving columns advance ; and so perhaps 
 learn better to make the appropriate hospital pre- 
 parations to meet the claims of those who drop by 
 the side of the long white dusty road whose end, 
 we hope, is at the gates of a more glorious City of 
 Man than this which gave us birth and equipped us 
 for the campaign. 
 
 To summarise then the main points we have 
 reached at this stage in our study. 
 
 In an advanced Western State very few workers 
 now make whole articles for their own use or for 
 sale. Men labour under leadership in great regi- 
 ments massed in factories and workshops, each 
 making only parts of parts of things, the products 
 of one factory being utilised in other factories, or 
 bought by all types of factory workers and others 
 out of the price of their own labours. Our wealth, 
 though measured in money, consists, not of money, 
 but of the goods and services we are able to purchase 
 with it, or to produce without buying from others. 
 All who serve the community by pouring goods or 
 services into the common pool (the world's markets) 
 may expect to draw out from that pool a share of 
 what other workers are adding to it. But besides 
 those who bear the brunt of the struggle, toiling in 
 the sweat of their brows, those also expect to receive 
 a share who contribute, not manual labour, but either 
 ideas (new inventions, or better ways of controlling 
 and arranging the work done in farm and store and 
 factory), or else savings, to be placed at the disposal 
 of the leaders whose function it is to decide how
 
 46 HOW IT ALL FITS TOGETHER 
 
 they are to be utilised in the creation of further 
 wealth. And the greater the quantities of goods 
 produced the greater may be expected to be the 
 shares that fall to those who supply either ideas, 
 or savings, or manual labour. 
 
 " Getting on well " means fitting oneself in well 
 into a world where things are managed after this 
 fashion. Those who can supply anything that is 
 relatively scarce, and much in demand, are likely 
 to " get on " better than those who supply what is 
 already plentifully supplied to meet current demands. 
 They fit in more usefully. Skilled workmen are 
 scarcer than unskilled, and plumbers and engineers 
 therefore draw more from the pool than navvies and 
 street-cleaners. Useful new ideas in business are 
 scarcer than most kinds of trained skill, and those 
 who supply these generally flourish accordingly. 
 Savings also are always scarcer than they might be 
 especially just now when war and war-preparations 
 have been swallowing up what might have gone to 
 swell the apparatus of production, and new worlds 
 and new industries (such as oil-fields and rubber 
 plantations) are crying out for the use of all the 
 capital we can supply. And those, accordingly, who 
 have savings to place at the world's disposal can 
 always get a price for the use of their savings. 
 
 Labour savings ideas these three, working 
 together on the materials that Nature provides 
 (the soil, the vegetation, the animals, the minerals 
 below the surface) produce our wealth in closely 
 knit collaboration like three steeds of very different 
 breeds dragging behind them the lumbering car of 
 economic progress. Nations that harness all three 
 steeds wisely and well together progress steadily, 
 like the Dutch and the Belgians (of pre-war days),
 
 A BIRD'S-EYE VIEW 47 
 
 whose land, when first we read of it, was little more 
 than a barren waste of marshes and sand with but 
 little mineral wealth below its surface ; those 
 nations where one or other of them is ill-attached or 
 missing (industry, or good management, or the 
 habit of saving) fall behind in the race (like the 
 peoples of India and China and of fertile tropical 
 areas whose natural resources remain undeveloped) ; 
 while those nations that waste and destroy wealth 
 in frenzied wars that take both men and savings 
 from the healthier task of creating the things we 
 all desire, in order to use them instead in burning 
 and breaking, may be expected not merely to fall 
 back into misery themselves but to drag back their 
 neighbours with them. 
 
 And this perhaps might have seemed sufficient 
 for a bird's-eye view of our subject. One cardinal 
 fact, however, has been taken for granted. For all 
 forms of activity, the use of land in small quantities 
 or in large, is an indispensable necessity : and land 
 nowadays is mostly in private hands, a fact, 
 that would no doubt appear inexplicable to a Pata- 
 gonian savage or to a highly intellectual being 
 dropped upon the Earth from the planet Mars 
 but a fact that is a natural outgrowth of quite 
 comprehensible historical causes. And thus it 
 comes about that the landlord, who controls the 
 land that all members of the community need, can 
 sell the right to use it for any purposes for which it 
 is needed, in *.-ie same way as the capitalist who 
 supplies capital (the product of saving) can sell the 
 use of it to those who are willing to pay the price. 
 And so the landlord who supplies nothing (nothing 
 in his capacity as landlord however well he may 
 serve the community in other capacities for the
 
 48 HOW IT ALL FITS TOGETHER 
 
 same individual may be capitalist, inventor, business 
 organiser, and landlord in one) takes in the same 
 way as the others from the fund of goods produced 
 by all. If only he could supply land, as the investors 
 supply capital creating more whenever more is 
 urgently required his claim to a share in the 
 national wealth would rest on the same footing as 
 the claim of the capitalist. But unfortunately 
 the supply of land is a fixed stock ; and thus (as 
 one consequence) the land owner is not usually 
 handicapped, to the same extent as others are handi- 
 capped, by the growth of competing agencies drag- 
 ging down the value of his individual share in the 
 common output of wealth. Rather his share tends 
 normally 1 to augment, through the continuous 
 growth in the numbers of men and machines strug- 
 gling in perpetual competition for the use of this 
 limited stock of wealth-producing power, over 
 which he exercises, by law and custom, a little brief 
 authority. 
 
 1 The English agricultural landlord has seen his share of 
 the National Dividend dwindle since the third quarter of 
 the nineteenth century, through the growth of railways 
 opening up competing virgin lands in the New World, and 
 by the growth of agricultural science (enabling a given 
 quantity of produce to be got from smaller areas than 
 before). The English urban landlord may, perhaps, in the 
 future see his share, too, dwindle in similar fashion, through 
 the growth of motor services and conceivably also of avia- 
 tion the latter affecting among other things the rents of 
 residential buildings. (Temporarily, of course, his income 
 is now strictly limited by the post-war legislation with 
 regard to house rents, allowing him to get only about the 
 same money income from his house property as he received 
 before the war, out of which money income he can buy 
 much less than his pre-war share of the goods produced by 
 the rest of us.)
 
 A BIRD'S-EYE VIEW 49 
 
 These then are what Economists call the four 
 "Factors of Production" : Land controlled by Land- 
 lords ; Labour, Organisation, and Capital, supplied by 
 Labourers, Business Managers, and Capitalists. The 
 total annual production of wealth (after allowance 
 is made for the replacement and upkeep of existing 
 apparatus and stocks of material) is the National 
 Dividend ; and the parts of the total product 
 falling to the four several " factors " are known as 
 Rent, Wages, Profits of Business Management, 
 and Interest. The last of these factors, and of 
 these forms of remuneration, we treat in the next 
 chapter. The second and third (the incomes of 
 workers of all sorts) form the subject matter of 
 Chapter IV. ; while Chapter V. deals with questions 
 concerning land and rent.
 
 CHAPTER III 
 
 THE APPARATUS WITH WHICH THE GAME IS PLAYED 
 " They also serve who only stand and wait." MILTON. 
 
 WHAT is saving ? And for what purposes do people 
 in general save ? 
 
 It is possible no doubt to argue that the saving 
 tendency is an inherent instinct of human nature, 
 like the instinct of the busy bee to gather honey in 
 the summer with (presumably) no prophetic pre- 
 vision of the needs of the coming winter. Children 
 make collections of the most heterogeneous kinds 
 with no apparent motive other than the pleasure of 
 collecting ; and even adults are occasionally found 
 emulating the White Knight of Alice Through the 
 Looking Glass, accumulating miscellaneous oddments 
 and justifying their actions, by an after-thought, 
 on the same grounds as the Knight of Looking-Glass 
 Land that one never knows when a rat-trap, or 
 a beehive, or an extra million dollars, will come in 
 handy. Certainly the saving habit often grows 
 into something as imperative as an instinct ; so 
 imperative that legislators have little fear of dis- 
 couraging accumulation by such actions as the im- 
 position of " progressive " death-duties (under which 
 the State takes a larger percentage from the heirs 
 the larger the property left momentarily ownerless 
 by a wealthy man's death). After a certain stage, 
 money-spinners go on spinning money with as
 
 THE APPARATUS 51 
 
 sublimely blind a disregard for rhyme or reason as 
 the magic salt-machine displays in fulfilling its 
 eternal function of grinding out salt at the bottom 
 of the sea. 
 
 In the simplest case, however, where reason 
 plays a conscious part, we save whenever we refrain 
 from enjoying what we might enjoy now, because 
 we feel we shall do more wisely to take our enjoy- 
 ment, or part of it, later. If a small boy is given 
 a pocketful of sweets to-day, and thinks he is not 
 likely to get his pocket replenished in the immediate 
 future, he will probably decide not to devour them 
 all at once. His enjoyment, he realises, will be 
 greater if, instead, he eats a few now, and a few 
 to-morrow, and a few the next day, especially 
 as by so doing he will enjoy to-day the pleasure of 
 thinking about to-morrow's enjoyment, besides 
 enjoying to-morrow the actual eating of the sweets. 
 I: One of the first motives for saving is to make as 
 sure as may be of having the power to spend to- 
 morrow, or next week, or next year. Few of us 
 can ever feel quite confident of having this power 
 in the future ; and our earnings bring us more 
 satisfaction if we spend only part of them now, 
 and feel that we are able to use the remainder at 
 a later date, than if we used all our spending power 
 at once. We lay up for " a rainy day " for a day, 
 that is, when we may not be able to earn, borrow, 
 beg, or steal enough to replace what we are spending 
 now instead of doing all our spending while 
 the sun of prosperity shines. By spreading our 
 expenditure over good and bad times alike, we not 
 only get better value from our spending power, 
 but are able to enjoy in larger measure the pleasure 
 that comes from the prospect of spending, which is
 
 52 HOW IT ALL FITS TOGETHER 
 
 often as pleasant as the spending itself (just as 
 half the enjoyment of a holiday or a honeymoon is 
 often constituted by the pleasure of looking forward 
 to it). 
 
 These are simple and familiar principles on which, 
 even in our pocket-money days, we acted without 
 having to wait for theoretical instruction. But in 
 the great game of life that we all join in playing 
 when we leave behind the shackles of school life, 
 we find there are other, even more important, 
 reasons for saving ; and unless saving on a very 
 large scale were being carried on continuously by 
 all sections of the community, most of the world's 
 business activities (it is almost too evident to require 
 pointing out) would speedily come to a standstill. 
 
 Working men in this country, as one mode of 
 saving, pay weekly subscriptions to a trade union 
 or a friendly society. Then if they temporarily 
 lose their job, this society pays them so much a week 
 until the rainy day has passed. This is one, highly 
 important, way in which savings are gathered 
 together. Nor, when they have thus been gathered 
 together, are they allowed to lie idle, any more 
 than the savings that are entrusted to bankers. 
 Excepting what is required for immediate outgoings, 
 these combined savings are regularly lent out to 
 railway companies and similar business enterprises, 
 thus making it easier for these, in their turn, to 
 give regular employment to the lenders. (And 
 thus we see a double reason why it is wise for the 
 working classes to cultivate the habit of saving. 
 Not only are they, individually, less exposed to 
 suffering in times of unemployment ; they are also 
 less exposed, collectively, to the evil of unemploy- 
 ment itself.)
 
 THE APPARATUS 53 
 
 But perhaps the commonest method of saving 
 consists in taking reserved spending power to a 
 bank, because bankers declare themselves willing 
 to pay 1 for the use of it. Thousands of us pay small 
 sums into banks, and the bankers select borrowers 
 (governments, joint stock companies, private busi- 
 nesses) to which to pass them on. (The reader is 
 warned to bear in mind, steadily, of what these 
 savings fundamentally consist, as indicated on 
 pp. 31-34.) The banker pays us a low rate of interest 
 for what we lend him, and charges the borrower a 
 higher rate. This is the way in which the banker 
 " fits in " to the general scheme of things ; and this 
 is the social service for which he receives a well- 
 merited share in the national dividend. It is a 
 most indispensable service. For most of us are 
 afraid to lend our small sums direct to the business 
 man. We feel we do not know enough about him 
 and his business. He may fail, and we may never 
 see our " money " again. But it is one of the chief 
 functions of the banker to acquire all the information 
 he can as to the safest ways in which our savings 
 may be used, and to act upon his knowledge with 
 the utmost conservatism. 2 
 
 1 In the case of small current accounts against which the 
 depositor has the right of drawing cheques at his caprice, 
 the " pay " usually takes the form of services rendered 
 especially the book-keeping services connected with the 
 collection of funds represented by cheques paid in, or with 
 the paying out of cash for cheques presented. Bankers 
 estimated this service as costing them before the war (in 
 clerks' wages, postage, etc.) somewhere about sixpence per 
 cheque. 
 
 2 We often hear complaints, from such people as the 
 small shopkeeper round the corner, of the uncontrolled 
 " monopoly power " of the great financial agencies that 
 watch over the community's savings, and refuse them the
 
 54 HOW IT ALL FITS TOGETHER 
 
 If there were no trustworthy bankers we should 
 probably try to store our savings at home ; we 
 should be perpetually anxious as to their safety 
 (lest thieves should break through and steal) ; and 
 we should be receiving no interest for the use of 
 them. They would be lying idle, as the savings of 
 the people of India lie idle, in the wasteful form of 
 hoards of precious metals, only to be brought out 
 when a rainy day comes round. But bankers cannot 
 afford to let our savings lie idle. They pass them on 
 as rapidly as possible to people who may be expected 
 to use them in ways that will bring more goods to 
 the world's markets and the world's storehouses of 
 saved wealth. Occasionally, no doubt, they make 
 mistakes, or misuse their powers, by lending in the 
 wrong directions as for instance when they pass 
 our savings on to barbaric governments to play 
 at " going to war " with them. But English bankers 
 have on the whole a more creditable record than 
 bankers of most other countries, and perhaps than 
 any other large class of business men. 
 
 Because, then, of this system of paying interest 
 for loans, we have yet another motive for saving. 
 Not only do we expect to get more satisfaction from 
 our spending power, through not using it all at 
 once ; not only do we enjoy the feeling of security 
 
 " advances " they would like only too well to handle. We 
 may congratulate ourselves that the banking institutions 
 of this country are seldom struggling little competitors 
 such as would have to snatch at risky profits (gained by 
 lending to doubtful borrowers), and who by so doing 
 would imperil the safety of the nation's anxiously got 
 savings precipitating frequent crises in the money market 
 with the consequent miseries of trade depression and wide- 
 spread unemployment.
 
 THE APPARATUS 55 
 
 that comes from the possession of reserved spending 
 power ; but because we are offered payments for 
 the use of our savings we expect to enjoy not merely 
 this reserved spending power but also an increased 
 spending power in the future. And if it were not 
 for this, the temptation to spend now instead of 
 spending in the future would be regrettably strength- 
 ened. For saving may be described as exchanging 
 the certainty of present enjoyment for the chance 
 of future enjoyment. (When we lend 100 for one 
 year at 5 per cent, we may say either that we 
 sell 100 worth of enjoyment now for 105 worth 
 of enjoyment next year, or that we sell the use of 
 100 worth of goods for a twelvemonth for the sum 
 of 5 payable next year.) Future enjoyments are 
 doubtful things, and in consequence are heavily 
 " discounted " in the minds of most of us at least of 
 those of us who dwell South of the Tweed and 
 interest payments have to be thrown into the scales 
 on the same scale-pan as the prospect of future 
 pleasures in order to tip the balance in a socially 
 beneficial direction. We have seen much the same 
 force acting in the case of Robinson Crusoe (to 
 whom, with apologies to the reader, I revert once 
 more) . Crusoe collected, and refrained from immedi- 
 ately consuming, his pile of fruit and fish, because 
 he hoped, by foregoing present enjoyment, to 
 receive in the future more fish (caught by the net 
 which he constructed while living on his savings) 
 and more fruit also (through the increase in the 
 time that he could then devote to fruit-gathering). 
 Now, whenever goods or services of any type are 
 being produced that call for the use of expensive 
 apparatus in their production (such as buildings 
 in which material has to be stored or where men are
 
 56 HOW IT ALT, FITS TOGETHER 
 
 to work ; tools and machinery for the workers to 
 use ; steam-engines to drive the machines ; and 
 coal to feed the steam-engines) then only a part of 
 the price that we pay for the goods or services I 
 mention services, because such things as tram, train, 
 banking, theatrical, insurance, educational, and 
 boarding-house services loom very large in the 
 everyday world can be used to pay workmen's 
 wages. Much has to be set aside by the manufacturer 
 to pay interest to those whose savings were neces- 
 sary in order to provide all this apparatus ; and 
 only part of the price can be divided up between 
 the employer. and his hands, as "profits" and 
 " wages." l 
 
 1 Notice also that when we do not pay for goods at the 
 moment we get them when we buy, not " for cash," but 
 " on credit " the price is nearly always a little higher in 
 consequence, and sometimes a very great deal higher (as, 
 for instance, when furniture is bought " on the hire system " 
 the purchaser paying so much a month, and running the 
 risk of seeing the furniture swept away into the shopkeeper's 
 vans if there is a day's delay in making any of these monthly 
 payments). This difference in price is due to the fact that 
 we are really borrowing from the shopkeeper, and must pay 
 him interest on the loan. It is usually a high rate of 
 interest, especially when we buy in small shops chiefly 
 frequented by customers of the poorest class, because 
 the shopkeeper feels he is running a serious risk of not being 
 paid at all. Not that the poor are the sole, or the chief, 
 offenders. People who consider themselves " gentlemen " 
 and would never dream of borrowing from a tradesman no 
 gentleman, of course, would condescend to borrow from his 
 tailor think nothing of " buying " a suit of clothes for ten 
 guineas and leaving the tailor unpaid for years. It does 
 not occur to them that they have only borrowed the clothes, 
 and not bought them till they have a receipt to show for cash 
 delivered. (Such people would generally pay up promptly 
 their betting losses to other gentlemen these being " debts 
 of honour " debts which naturally, to their minds, take
 
 THE APPARATUS 57 
 
 This seems to many observers an objectionable 
 rule of the game, and one which, they protest, 
 ought emphatically to be revised. For it is a natural 
 question to raise, especially on the part of hard 
 working and conscientious people, why the capitalist 
 should be free to live idly on the interest that he 
 receives for the use of his capital, while the real 
 workers toil continually " Still from one sorrow 
 to another thrown, And make perpetual moan " 
 usually getting a very small share indeed in the 
 rewards of production ? The many work (they 
 say) ; the few enjoy. 
 
 In dealing with this question it seems best to 
 lay aside, at least temporarily, all thought of the 
 capitalist's personal merits, and to examine rather 
 into the social utility of saving and the incentives 
 that are necessary in order that sufficient savings 
 may be forthcoming to enable the world's work to 
 proceed smoothly and steadily. A little considera- 
 tion brings it home to most people that without 
 an immense amount of saving, carried on by all 
 kinds of people, most of the goods we use could not 
 be produced at all ; without much saving there 
 could be no such things as railways and theatres, 
 hotels and roads and factories and ships ; and without 
 such apparatus we could never be supplied, in a 
 country like this, even with our necessary food, to 
 say nothing of the ordinary comforts and enjoyments 
 of life. Many people might still save small amounts 
 against a rainy day, even though no interest were 
 to be got. But it is hardly to be expected that they 
 should lend their savings, and run the risk of never 
 
 precedence of mere debts of honesty.) As a consequence, 
 " buyers " of this type tend to raise slightly the cost of 
 shop goods for all the rest of us.
 
 58 HOW IT ALL FITS TOGETHER 
 
 getting them back, if they were not paid something 
 for doing so. It is easy enough to argue that a 
 rich man does not deserve to live comfortably on the 
 interest he gets from saved wealth, or the rent of 
 houses and land that have been bought with saved 
 wealth. This may be true, but it is often a waste 
 of time to discuss what people deserve. (Do I 
 as an individual deserve to be richer than a person 
 of equal industry and ability who happens to be 
 born, not in the British empire as the heir of all 
 earlier Englishmen's productive energies, but, let 
 us say, in the heart of China ?) It would seem to be 
 more practical to consider whether it would be 
 possible for us to obtain all the kinds of goods and 
 services we need, if people of all sorts were not 
 induced, firstly to save, and secondly to lend (or 
 invest) their savings. 
 
 To the further point which it is natural to raise, 
 that interest (the share of the capitalist and most 
 of us, by the way, are to some tiny extent capitalists) 
 is unnecessarily high, the answer would seem to be 
 that producers are so eager in their competition for 
 the use of capital, workers so eager in their struggle 
 to get into touch with the saved raw material and 
 machinery of the world, that the price paid is as 
 inevitable as the price we pay for food and clothing. 
 The current rate of interest, indeed, had been moving 
 upwards for the twenty years preceding the Great 
 War. For, rapidly as the world's supply of savings 
 had been growing, through the growth of the pro- 
 ductivity of the newer modes of industry (or, in 
 other words, through the world's increased power 
 to save) and through the growth of saving habits 
 among large classes (or, in other words, the growth of 
 the world's willingness to save) a growth which
 
 THE APPARATUS 59 
 
 was seriously offset, however, by the waste of the 
 world's savings in the building up of armies and 
 navies the supply could not keep pace with the 
 growth in the demands for the use of our savings 
 for the opening up of the new countries whence we 
 obtain our raw materials, and for the development 
 of the new industries that are for ever cropping 
 up out of the luxuriant soil of our insatiable 
 desires for new toys and new experiences (cinemato- 
 graphs, motor-cars, super-dreadnoughts, and so 
 forth). 
 
 This upward tendency in interest rates has now 
 been extraordinarily intensified by the destruction of 
 saved wealth in the years 1914-18, while the chaotic 
 changes that have come about in prices and incomes 
 have jolted great numbers out of their normal atti- 
 tude to the questions of saving and spending. A 
 resolute return towards more restrained habits in 
 dealing with personal incomes has become a vital 
 necessity if interest rates are to fall ; and until 
 interest rates do fall as a consequence of substantial 
 increases in the aggregate of savings, the cost of 
 living cannot greatly decline, seeing that interest 
 charges (payments for the use of machinery, etc.) 
 constitute an appreciable part of the costs of all 
 the things we enjoy. 
 
 The price paid for the use of savings (the price 
 paid by the Savings Bank for the use of the small 
 man's shillings, as well as the price paid by one 
 Balkan government for the millions wherewith to 
 kill the subjects of a neighbouring government) 
 ought (says the critic) to be lower ? ... So no 
 doubt ought the prices of bread and gingerbeer to 
 be lower. But those selfish bakers and brewers 
 won't let us have them any the cheaper, for all the
 
 60 HOW IT ALL FITS TOGETHER 
 
 fuss we like to make. (If wishes were guineas, we 
 all should be rich.) * 
 
 This, then, is the real meaning and purpose of 
 the practice of paying interest we want to make it 
 worth while for all kinds of people to save. We 
 may despise, and perhaps rightly despise, the man 
 who lives idly on the yield from his investments. 
 But we cannot in practice distinguish between the 
 different kinds of people who ask interest for the 
 use of their capital. If we could do so, and pay 
 high interest only to active producers of wealth in 
 order to induce them to produce and save more (such 
 people, however, are likely to be borrowing other 
 people's savings to use in addition to their own, 
 rather than be lending surpluses to others), and low 
 interest to idle folk, in order to induce them to buckle 
 to and help increase the world's wealth, it might 
 perhaps be a move in a healthy direction. It bears 
 some resemblance however to the recent attempts 
 on the part of certain groups of working men to 
 boycott " tainted " goods, refusing to assist in their 
 transport during the continuance of some trade 
 dispute with regard to the conditions of their pro- 
 duction. And it is not at all easy to see how such 
 a change in the rules of the game could be made 
 and enforced. 
 
 But though we cannot easily make this distinction 
 between the different sorts of lenders, we can and 
 do always make distinctions between the different 
 sorts of borrowers. If, say, I wish my savings to 
 
 1 Even if the State could be reconstructed on socialistic 
 lines it would seem that the burden of interest charges 
 would still have to be borne, though the form they would 
 take might be superficially different. (See Cassel's The 
 Nature and Necessity of Interest, chapter vi.)
 
 THE APPARATUS 61 
 
 be as safe as I can possibly make them and yet 
 receive some interest from them, I shall place them 
 at the disposal of the British Government ; for 
 it is generally assumed that there is no other borrower 
 that can be counted upon to be more prompt and 
 trustworthy in the matter of interest payments. 
 But for that very reason I must be content with a re- 
 latively low rate of interest (though after the de- 
 struction of wealth in these five years of war, even 
 the British Government has for the moment to 
 pay more than five per cent.). If I am not content 
 with that return and yet wish for reasonable security, 
 I may lend to a well-managed British railway 
 company (" buy railway debentures " ) or to a small 
 but very peaceful and honest government like that 
 of Norway, and get a slightly better income. If 
 instead I lend to a country like Brazil or Japan I 
 can get yet more. If instead of lending to any of 
 these great borrowers I think of placing my savings 
 in the hands of a business man, I shall want to 
 examine closely the chances of my debtor succeed- 
 ing or failing ; and if I feel at all uncertain on this 
 point I am not likely to lend unless I am promised 
 a very high rate of interest. If, further, instead of 
 choosing a prosperous firm that wants to borrow, 
 not because it is in difficulties, but in order to enlarge 
 its operations, I lend to some extravagant young 
 man who promises me (faithfully) that he will 
 repay me with interest because he expects, by and 
 by, to inherit some thousands when his rich 
 great-aunt dies, I shall be able to get a promise of 
 a much higher rate still. In other words I expect 
 a high or a low rate of interest, according as the risk 
 of non-payment of interest and non-repayment of 
 principal is great or small. Or, to put it more
 
 62 HOW IT ALL FITS TOGETHER 
 
 precisely, I want, say, three per cent, for the mere 
 use of my savings ; and one, two, five, ten or twenty 
 per cent, more as compensation for the special risks 
 I may be running. And thus it comes about that 
 the least wealthy people (those who are always 
 borrowing small sums from pawnbrokers and money- 
 lenders, and " buying " goods " on credit " ) must 
 usually pay the highest rates that are paid in the 
 market. 
 
 Now whenever great businesses (such as a railway 
 or a shipping company) are being built up, great 
 supplies of saved capital must be provided. If the 
 enterprise seems a very safe one, the promoters 
 have little difficulty in persuading bankers and 
 others to provide the needed funds ; but if it looks 
 a risky venture, there will be much more difficulty 
 in getting hold of the necessary savings, even though 
 a high rate be offered for the use of them. It is one 
 of the chief functions of bankers to decide into what 
 channels our savings are to flow ; and if they blunder 
 seriously, and allow them to be utilised, say, in 
 building factories that presently have to be shut up 
 (because they produce what people will not buy at 
 prices covering their total cost), then the savings 
 are almost as completely destroyed as if they had 
 been swallowed up by an earthquake or a war ; 
 and bad results follow, not merely for the banker, 
 but also (as in the case of a war) for the working 
 men who wish for steady employment. We cannot 
 do, therefore, without prudent conservative bankers, 
 and especially bankers sufficiently prosperous not 
 to be eager to run foolish risks with our savings in 
 the hope of winning high profits. 
 
 But all this borrowing and lending, the reader 
 should bear in mind, is borrowing and lending of
 
 THE APPARATUS 63 
 
 the power to consume goods ; and though we 
 measure the transactions in terms of gold and other 
 forms of money, the borrowing would not take place 
 unless there existed actual stores of goods which the 
 borrowers wish to utilise. South Africa and 
 Australia have been quite importunate borrowers in 
 the London market. But they are scarcely the 
 countries that one would expect to ask for supplies 
 of gold. Why ! the agents of their mining com- 
 panies are for ever shovelling gold on board ships 
 whose whistles keep screeching " To London ! 
 To London ! " Nor are the shrewd colonials going 
 to be satisfied with bits of paper cheques, bills, 
 I.O.U.'s. They want goods ; and it is goods that 
 travel across the sea when Australia appears as 
 a borrower. Mostly, too, they will be goods made 
 by English workers. And yet, as the street- 
 corner orator points out how dreadfully distressing 
 it is for our poor working man when " Capital " 
 flutters its quivering pinions and floats away, sea- 
 gull fashion, over the salt blue sea ! 
 
 From the study of saving let us now turn to the 
 consideration of its reverse the waste and destruc- 
 tion of wealth, brought about in any manner. The 
 most striking cases of course occur when whole 
 nations in a fit of patriotic anger set about blowing 
 to pieces immense quantities of saved material, 
 and preventing the accumulation of fresh savings 
 by withdrawing hundreds of thousands of workers 
 from their ordinary productive occupations. Wealth 
 that would otherwise have been passed on to business 
 men to help in the making of goods and the growth 
 of our prosperity, is placed in the hands of govern- 
 ments instead, to be utilised by them in the making 
 of apparatus, such as torpedoes, and battleships,
 
 64 HOW IT ALL FITS TOGETHER 
 
 with which to destroy wealth ; and for generations 
 after a war in which our own country engages we 
 must needs go on paying heavier taxes to our govern- 
 ment in order that the government may pay interest 
 on the borrowed millions. (Interest on our present 
 war debt 1919 will for an indefinite period necessi- 
 tate taxation at an average rate of eight or ten pounds 
 per annum on each member of the population men, 
 women, and children ; while pension payments will 
 make an addition of more than two pounds per annum 
 to this figure.) 
 
 But even when our own country is not a party 
 to the war, we are practically certain to be the losers 
 by it. When Japan made war on Russia a few years 
 ago, the Japanese had to ask for many millions of 
 the English people's savings ; for they had (obvi- 
 ously) not nearly enough saved wealth of their own 
 with which to meet the terrible cost of the struggle. 
 Most of these millions would, if there had been no 
 Manchurian war, have gone instead to build up 
 great enterprises, such as railways in Canada and 
 South America, which would make our supplies of 
 raw materials and foodstuffs cheaper and easier to 
 get, or have been used to increase the size and number 
 of the English businesses that employ the working 
 men of England (supplying, let us say, goods to be 
 bought by the taxpayers of the warring countries, 
 who, owing to their increased tax burdens, cannot 
 now afford to buy as much as they otherwise 
 might). We are the poorer not only by the 
 campaigns we undertake ourselves, but by all the 
 useless and expensive wars that are fought throughout 
 the world. 
 
 We need say nothing about the country mouse 
 " wee, sleekit, cow'rin', tim'rous beastie " whose
 
 THE APPARATUS 65 
 
 nest is torn up by the mere passing of the plough- 
 share of War. 
 
 " That wee bit heap o' leaves an' stibble 
 Has cost thee mony a weary nibble ! 
 Now thou's turn'd out, for a' thy trouble, 
 But house or hald, 
 To thole the winter's sleety dribble 
 An' cranreuch cauld ! " 
 
 The stay-at-home worker, in the land which never 
 hears the roar of cannon or sees the smoke of burning 
 homesteads, suffers too. War to him spells, in the 
 long run, less employment, fewer goods made, and 
 heavier taxes. For a short space, no doubt, the 
 outbreak of a war may seem to bring an increase of 
 employment, as work has to be hurried through, in 
 the arsenals and elsewhere, in preparation for the 
 needs of the campaigning armies ; and at the close 
 of a prolonged, exhausting war there may for a few 
 months be intensified industrial activity in those 
 countries whose workers' services are in special 
 demand for the repairing of the wastage of the 
 world's resources. But trade in general suffers ; 
 there is less buying and selling of other things ; and 
 mills and factories must close, breaking up the lives 
 of myriads of innocent families. Even the pro- 
 longed threatening of a war-cloud, and the conse- 
 quent mobilisation of armies, can produce nowadays 
 very similar effects as the peoples of neutral 
 countries have found, to their cost, in recent years. 
 And, it must not be forgotten, the misery due to un- 
 employment at home may be deeper, more widespread, 
 and more lasting, than the misery of beaten armies 
 on the battle-field. Broken bones are serious enough, 
 but broken hopes are graver things by far. And 
 war " Wild War, who breaks the converse of the
 
 66 HOW IT ALL FITS TOGETHER 
 
 wise " breaks also the even tenour of the factory- 
 worker's life, breaks his wife's health, breaks up 
 his home and " bits of sticks," and robs of his 
 schooling and his prospects wise little Peterkin who 
 asked the unanswerable questions. 
 
 " But what good came of it at last ? " 
 
 Quoth little Peterkin : 
 " Why, that I cannot tell," said he, 
 
 " But 'twas a famous victory." 
 
 And as we all suffer through minor European cam- 
 paigns or the civil wars of Central and South America 
 though these latter, being carried on inexpensively, 
 do not touch us so nearly it is one of the great 
 problems of the future for civilised peoples to 
 consider, how governments saturated with old- 
 world ideas, about military honour and so forth, 
 may have taken from them their present power to 
 lay hands on the world's savings and so break the 
 lives of innocent workers in scenes remote from the 
 strife. And if the hotheads among us insist that 
 we must make war when our military " honour " 
 is at stake, then let us answer that the hotheads 
 should not only bear the whole burden of the addi- 
 tional taxes and compensate the rest of us for the 
 narrowing of our opportunities, due to trade de- 
 pression and unemployment, but should also com- 
 pensate us for the loss of our patriotic pride in the 
 patience and common-sense of our country and for 
 the shame that we feel in what we account the tar- 
 nishing of the fair fame of England. 
 
 For we are not filibusters all. 
 
 " But some love England and her honour yet ! 
 
 And these in our Thermopylae shall stand, 
 
 And hold against the world this honour of the land,"
 
 THE APPARATUS 67 
 
 Of course there may be wars fought for good 
 objects that are worth the cost, such as wars to put 
 a stop to slavery. But how many " causes " in 
 the history of mankind have really been furthered 
 by war ? How many wars have we fought without 
 repenting, later, of having " put our money on the 
 wrong horse " (to repeat the phrase of a Tory Foreign 
 Secretary, uttered in all seriousness, in a retrospective 
 reference to our Russo-Turkish policy of the nine- 
 teenth century) ? 
 
 Some few wars too, it may be admitted, have even 
 made the world almost immediately the richer. 
 Thus, if we destroy the freedom and independence 
 of robber tribes in the Sudan who were preventing 
 Egyptian cotton-growers from carrying on their 
 lives peaceably, the whole world may be the richer 
 by the war and not the poorer. But it is seldom 
 nowadays that wars, however successful, can enrich 
 a nation. This was less true a few centuries ago, 
 when many of our great wars were fought in order 
 " to gain " colonial markets, and so to increase 
 trade. But there are more ways than one of 
 " opening up " a market, just as there are more 
 ways than one of opening a banker's strong room. 
 And in those days the " opening up " of markets 
 had fewer of the characteristics of what we now call 
 trade, and more of the features of what we now term 
 piracy. Modern trade can rarely be bettered by 
 war, though some groups, besides the armament 
 firms and their employees especially groups of 
 workers in neutral countries will usually be gainers ; 
 just as when wholesome industrial revolutions in 
 methods of manufacture are being introduced some 
 groups of workers are likely to be losers. Thus the 
 American Civil War probably benefited the cotton-
 
 68 HOW IT ALL FITS TOGETHER 
 
 growers of Egypt and India, while it reduced two 
 millions of Lancashire folk to the borders of destitu- 
 tion ; war-correspondents, war-poets, and postage- 
 stamp collectors in besieged cities may reap good 
 harvests of gold or glory during a campaign, though 
 newspaper proprietors (unless the war is very brief) 
 generally lose, as also do those contributors who 
 supply other forms of tamer literature ; a few lucky 
 " bears " on the Stock Exchange gain ; but the bulk 
 of the world's financiers (and holders of pre-war 
 investments) suffer grievously. And thus in the 
 intricately interwoven network of the modern 
 world's activities we find that it has come about 
 that for all save an exceptional few, war, which in 
 earlier ages was merely a crime, has grown into 
 something immeasurably more serious. War, for 
 economic ends, in the modern world, has become 
 a colossal blunder. 
 
 Let us now consider the effects produced by the 
 destruction of wealth that is lost in other ways than 
 by being lent to governments to make war, by being 
 used to build unprofitable factories, or needless 
 railways by which no one wishes to travel, or (what 
 comes to much the same as these last-mentioned 
 blunders) by being taken by public authorities to 
 construct (let us say) needless roads, when acting 
 from a strong desire to help the deserving unem- 
 ployed. 
 
 What happens when a house or a shop is destroyed 
 by an outbreak of fire ? Bricklayers, carpenters, 
 glaziers, paperhangers, and others cry out at once 
 that it is " good for trade." For another must be 
 built to replace the building that has been destroyed ; 
 and this means more work for the builders ; and 
 unless theirs is an unselfishness as of the early
 
 THE APPARATUS 69 
 
 apostles, they can scarcely refrain from rejoicing 
 at the news of each failure of the fire-brigades to 
 turn up in time even as the armament firms must 
 exult over each threat of an international conflagra- 
 tion. 
 
 Some one, however, is bound to be the poorer. 
 If the shop is not insured, the shopkeeper is obvi- 
 ously the poorer by the loss of his property ; and 
 though he may be willing and able to spend on the 
 erection of a new shop in its place, he must have 
 just so much less power to spend in other ways. 
 He buys less of other goods ; or he withdraws from 
 a bank savings that would otherwise have been used 
 by other business men for buying goods or erecting 
 buildings ; or he sells stocks and shares which are 
 bought by other people's savings, withdrawn from 
 banks for the purpose. In any case, less employ- 
 ment is in consequence given to those sets of men 
 who would have supplied the alternative goods and 
 services. The fire is not good for trade. It does 
 good to builders and their workmen, and harm to 
 the rest of the community, much as an epidemic of 
 small-pox does good to doctors and undertakers, 
 but not to the rest of us. There is a loss of saved 
 wealth, and the community as a whole is the poorer 
 by it. 
 
 If, however, the shop is insured, unthinking people 
 fancy that the loss is, by some magic sleight of 
 hand, conjured into a profit, or at least completely 
 cancelled. Let us examine, then, more precisely, 
 the actual working out of this modern legerdemain. 
 
 Suppose there are a thousand families living in 
 the same locality, each of which owns a house of 
 about the same size, worth (say) 1000 ; and each 
 house runs just as much chance as any other of
 
 70 HOW IT ALL FITS TOGETHER 
 
 destruction by fire. Then these thousand families 
 might agree together that, whenever any one house 
 is destroyed, all will club together and build another 
 in its place. If they come to this agreement, there 
 will be just as great a loss of wealth whenever a fire 
 occurs. But the burden of the loss will be lighter. 
 For instead of one family being ruined (and dragging 
 down miscellaneous creditors in their fall) the bur- 
 den will be distributed among a thousand families, 
 each of which subscribes twenty shillings towards the 
 replacement fund. It is normally better for the 
 community that sudden gains or sudden losses should 
 be evenly distributed, instead of being heaped on 
 single individuals, for this means a better distri- 
 bution of spending power, and therefore steadier 
 conditions of employment. As Mr. J. A. Hobson 
 likes to express it, trade depressions can largely be 
 ascribed to " under-consumption " (or under-con- 
 suming power) on the part of various sections of 
 the community. 
 
 Now suppose it were found, as the result of 
 statistical records, that one house in every thousand 
 in that locality was destroyed by fire each year. 
 Instead of waiting for each outbreak to occur and 
 sending round the hat after the event, it would 
 evidently be simpler and safer to arrange that 
 each family should pay twenty shillings a year into a 
 common fund, and that whenever a fire occurred, 
 the owner of the building destroyed should draw 
 1000 from the common fund to use at his discre- 
 tion. This would be a case of " mutual insurance." 
 
 An ordinary insurance company is a society that 
 agrees to collect subscriptions of this kind, and take 
 charge of the common fund out of which payments 
 are to be made to those who suffer by such misfor-
 
 THE APPARATUS 71 
 
 tunes as fire. Frequently such companies combine 
 with this function that of insuring families against 
 losses caused by the death of one of their members 
 life-insurance (so-called) ; and also that of 
 insuring individuals against the misfortune of a life 
 prolonged beyond the period of earning power 
 endowment insurance. (This latter is perhaps what 
 should more correctly be described as " life-insur- 
 ance," and the former as " death-insurance.") 
 
 In all such matters the insurance company per- 
 forms all the necessary work and charges subscribers 
 rather more than they would need to pay under the 
 system of mutual insurance. Out of these higher 
 charges it expects to reap a profit, which in many 
 cases (though not in all for some batten on the 
 lack of trained imagination or of arithmetical power 
 to be found among large sections of the poor) may be 
 as thoroughly deserved as the reward for any other 
 form of economic service. 
 
 Now, if a shop or a ship that has been insured 
 is burned down or lost at sea, its owner may lose 
 nothing. But there is still the same loss, though it 
 is the insurance company that now bears it. Its 
 shareholders have less profit to divide up among 
 themselves ; they have, therefore, less to spend, or 
 to lend to others to use. And so less employment is 
 given than if there had been no fire or shipwreck. 
 The burning down of an insured house may be good 
 for the builder's trade, but must be bad for most 
 other trades. Insurance, in fact, not merely does 
 not reduce the total of loss ; it tends to increase it, 
 by decreasing householders' carefulness and encour- 
 aging deliberate attempts to rob the shareholders 
 in insurance companies by arson. The law, there- 
 fore, has to frown upon excessive insurance especi-
 
 72 HOW IT ALL FITS TOGETHER 
 
 ally in the case of ships, whose loss (not always 
 undesired by ship-owners) may involve the sacrifice 
 of sailors' lives. 
 
 For all the players in the game of life, but especi- 
 ally for the mass of the nation that lives by weekly 
 wages, it is of the utmost importance that there should 
 be as little waste of wealth and as much saving as 
 possible (the savings to be turned through the 
 medium of the activities of bankers and company- 
 promoters into mills and workshops employing 
 myriads of workers, and producing more and more 
 cheaply the goods that workers want) . This is true 
 whatever the kind of waste, even when the waste 
 consists merely in careless spending. As a general 
 rule, the well-to-do man who spends all that he has 
 power to spend benefits the rest of us less than the 
 careful, saving man whom most of us do not consider 
 an equally attractive personality. The thoughtless 
 spendthrift appears a very fine fellow indeed to the 
 shopkeepers and others with whom he happens to 
 deal. But the benefits for which he is applauded 
 are more short-lived, less substantial, and less wide- 
 spread in their influence, than the benefits due to 
 the man who, spending regularly and steadily on a 
 moderate scale, sets himself to save more. 
 
 This is one great social function of the multi- 
 millionaire. When a man's income passes beyond 
 a certain point, it becomes inevitable that he should 
 save and reinvest it. Even if he magnanimously 
 attempts to give it away, his gifts are almost certain to 
 take the form of wealth-producing apparatus public 
 libraries for instance. No doubt it means greater 
 satisfaction for the community when incomes are 
 fairly evenly divided, the gap between rich and poor
 
 THE APPARATUS 73 
 
 being a relatively narrow one. But when individual 
 incomes exceed a fairly high figure, the reverse state 
 of affairs has its advantages. Less wealth is likely 
 to be squandered when one man " enjoys " a million 
 a year, than when a hundred have ten thousand 
 apiece. We may pity the poor millionaire, as a 
 fellow human being, for all the joys he misses that 
 we can taste the exhilaration of the struggle to 
 make one's way without damaging others, and the 
 homely joys of 
 
 " The little life of bank and briar, 
 The bird that pipes his lone desire 
 And dies unheard within the tree," 
 
 but at the same time we may congratulate ourselves 
 on the benefits we reap at the expense of his over- 
 burdened soul. On the other hand, we cannot 
 forget the dangers involved in leaving excessive 
 power of any sort in single irresponsible hands. Some 
 centuries ago the English had to topple over the 
 political powers of irresponsible kingship ; only 
 yesterday they dealt with an irresponsible House of 
 Lords ; and to-morrow (say some) they must set 
 fetters about the powers of elected Cabinets. So also 
 we may have to say to the multi-millionaire unless 
 he behaves uncommonly well that " golden lads 
 and girls all must," like kings and dukelings, 
 " come to dust." (There seems to be no end to 
 this sort of thing in the building up of our City of 
 Man. One feels tempted to sum it all up in the 
 words of our small friend, Algernon Cholmondeley 
 Montmorency Vere de Vere Jones, who, on his third 
 visit to London Town, finding the streets still under 
 repair, burst out on the top of the 'bus " Won't it 
 be a splendid town, Mother, when it is finished ! " ) 
 It is not true that extravagant expenditure is
 
 74 HOW IT ALL FITS TOGETHER 
 
 good for employment, any more than the burning 
 down of a shop or the sinking of a ship. It is not 
 true, that is, unless we give to the phrase a possible, 
 but rather unusual, interpretation. Extravagant 
 expenditure is " good for " employment in exactly 
 the same sense that sitting with the back of one's 
 neck exposed to a draught from an open window is 
 " good for " a cold in the head. It is very good for 
 the cold and very bad for the patient. Extravagant 
 expenditure is " good for " employment, and bad 
 for the employee. But who in this non-angelic 
 world seeks employment, for its own sake, any more 
 eagerly than he seeks a cold in the head ? What 
 most of us want is wages, and we submit to the 
 employment (as we sometimes submit to the risk 
 of a cold in the head) as a necessary evil as a means 
 to a desired end. On these lines we can agree that 
 extravagant expenditure is good for employment, 
 much as a destructive earthquake is good for employ- 
 ment. After the cataclysm all the thoroughfares 
 are impeded by fallen masonry, necessitating more 
 work for the waggoners and cab-drivers in navigat- 
 ing the streets, more work for the police in guiding 
 the traffic, more work for the surgeons in mending 
 the broken bones of those who stumble among the 
 debris. Extravagant expenditure, in other words, 
 makes it harder for most members of the community 
 to satisfy their everyday desires, and thus necessi- 
 tates more work for all but with no larger income 
 of commodities and services growing out of their 
 treadmill activities. It is very good for employ- 
 ment, and very bad for the community ; very good 
 for the disease, but hardly for the patient. 
 
 What, however, is often more difficult to decide, 
 in practice, is what exactly constitutes extravagant
 
 THE APPARATUS 75 
 
 or wasteful expenditure. Thus if I spend a guinea 
 for the right to occupy fifteen inches of a deal plank 
 on the route to be traversed by a Coronation Pro- 
 cession, I am probably responsible for the consump- 
 tion of only a few pence' worth of wealth. The 
 remainder of the guinea that I part with is merely 
 transferred from my pockets to those of the lucky 
 owner of the site on which the seats are erected. Simi- 
 larly, if I over-stamp my letters, I am merely making 
 a present to the community-at-large ; or if I light 
 a cigar with a five-pound note, I am making a present 
 to the Bank. But if, on the other hand, I partici- 
 pate, as guest or as host, at a banquet that costs a 
 guinea a head, then I am responsible for the con- 
 sumption of a guinea's worth of wealth. The fact 
 that the banquet enables caterers, waiters, and vine- 
 growers to make an income is not an off-set to this 
 waste. It is this that constitutes the waste the waste 
 of energies that might be more beneficially employed 
 in other ways though if any of those who supply 
 the needed services are making an exorbitant (non-. 
 competitive) profit, this part of the " cost " will 
 resemble the gain of the site-owner in the case of 
 the Coronation Procession being merely a transfer 
 of wealth, not a destruction of savings. 
 
 Moreover, it is never wise, especially in our 
 judgments on our neighbour's system of expendi- 
 ture (which, of course, is, in ninety-nine cases out of 
 a hundred, a sublimely idiotic system compared 
 with our own), to overlook the truth that Man is not 
 made for Wealth, but Wealth for Man. Otherwise 
 we are liable to imitate that Scotchman I believe 
 he was a Scotchman who, when found by a visitor 
 wrapped up in rugs in an armchair beside his fire, 
 moaning and groaning with internal agonies, ex-
 
 76 HOW IT ALL FITS TOGETHER 
 
 plained that he had been examining the remains of 
 the various medicines that his doctor had prescribed 
 for the family in the past year, and fearing from their 
 appearance that they were tending to go bad, had 
 drunk them all up, in order to save waste. 1 
 
 Nor is it true that if a well-to-do person does work 
 for pay instead of living idly, he is, by his industry, 
 reducing the amount of work to be done by others 
 who need the pay. For he increases his own spend- 
 ing power by the amount of his salary. In spending 
 this (or, perhaps better, in " saving " it by passing 
 it on through the hands of bankers and directors of 
 joint stock companies to be spent in wealth-producing 
 ways) he gives as much employment to other workers 
 as he seems to have taken away by working himself, 
 and the world is the richer by the amount of useful 
 work he has done. 
 
 Thus if a number of girls belonging to well-to-do 
 families undertake work as manipulators of type- 
 writers at 50 a year, in order to spend 50 a year 
 more on millinery, music, pleasure-trips, and books, 
 they may have taken away the chance of a job from 
 girls who would have been glad of their posts, but 
 they give just as much work to the girls in the mil- 
 linery trade, the stewardesses on the excursion 
 steamers, the girls at the book-binders', and so on. 
 
 If, however, a man who is capable of doing diffi- 
 cult professional work gives this up in order to 
 undertake work of a more routine kind instead, 
 then there will be a waste of human power and a 
 reduction in the amount of wealth that would have 
 been created, and in the opportunities for work 
 
 1 For a good, simple treatment of the problems of expendi- 
 ture, the reader is referred to Mr. H. G. Wood's admirable 
 little book, Personal Economy and Social Reform.
 
 THE APPARATUS 77 
 
 available to manual workers though it is better 
 for wage-earners in general that he should do even 
 ordinary manual work than do nothing at all. If I 
 go blackberrying, in partnership with a man six 
 inches taller than myself, I should prefer that he 
 should leave alone the berries that grow near the 
 ground. For him to gather these is a waste of his 
 six inches. But I prefer, all the same, that he should 
 gather these rather than none at all. 
 
 " But," interjects an eager critic who has been 
 waiting for an opening, " does not what you call 
 ' extravagant ' expenditure put money into circu- 
 lation and so benefit trade? " 
 
 This critic bewilders me ; after a brief encounter 
 with him I find myself, numb and helpless, on the 
 floor. His words leave me in a condition in which 
 I can put forward no defence more luminous than 
 that of the correspondent in Punch who, when his 
 friends urged him not to leave his money lying idle 
 at the bank, pointed out, quite cogently, that it 
 was not lying idle ; whenever he went into the bank 
 he could see the clerks shovelling it around with little 
 brass shovels. Or, is " Free Expenditure " a name 
 for a branch of the Mint that being the only insti- 
 tution known to me that may be expected (by my 
 way of thinking) to " put money into circulation " ? 
 
 " Puts money into circulation ..." Does he 
 mean to imply that it is bad for trade to have many 
 penny-in-the-slot machines scattered about, swallow- 
 ing up our coins, and refusing to disgorge them save 
 at lengthy intervals ? (There is some truth in 
 this, but for the opposite reason to that which our 
 critic approves. It compels the Mint to put more 
 money into circulation an operation which, like 
 gold-mining, involves a relatively wasteful use of
 
 78 HOW IT ALL FITS TOGETHER 
 
 our capital and labour. And some such result 
 actually occurred, I believe, when penny-in-the- 
 slot machines were first extensively introduced.) 
 Does he mean also that it is good for trade when the 
 unemployed are busily playing pitch and toss on 
 every village green and every vacant city lot ? 
 (The coins certainly seem to circulate then.) 
 
 This critic, I am afraid, is " too many " for me. 
 I cannot guess what his well-intentioned intervention 
 is meant to mean. Let me admit it candidly, and 
 abandon the argument, and retire.
 
 CHAPTER IV 
 
 THE PLAYERS AND THE PRIZES 
 
 Shiv, who poured the harvest and made the winds to blow, 
 Sitting at the doorways of a day of long ago, 
 Gave to each his portion, food and toil and fate, 
 From the King upon the guddee to the Beggar at the gate. 
 
 KIPLING. 
 
 How are the prizes of life divided up ? This is 
 our next problem. Incomes, or parts of income, 
 derived from either capital or land-ownership we 
 deal with in Chapters III. and V. What we now 
 have to consider is the highly practical question, 
 why different sets of workers bricklayers, doctors, 
 street-cleaners, policemen, lawyers, sailors, prima 
 donnas, authors, boot-blacks earn such very differ- 
 ent incomes. It is a question of more than merely 
 theoretical interest, not only for everyone who 
 stands at the gateways of adult life, choosing tremu- 
 lously his future occupation, but for all who take 
 any part, however meagre, in the game of politics 
 or the game of life. For it lies at the back of a 
 multitude of the worries that beset the weary citizen, 
 as he turns the pages of his morning paper to read 
 of agitations for minimum wage laws, protests of 
 professional men against insurance acts, and out- 
 cries and outbreaks of municipal and State employees; 
 or lays it aside for a moment to wipe away the tears 
 of his better half over some new phase of the recur- 
 rent servant-question. (" Drat them all ! Why 
 
 79
 
 8o HOW IT ALL FITS TOGETHER 
 
 can't they be satisfied with twelve pounds a year 
 and board, and the reversion of my wife's last season's 
 dresses ? . . . You make the coffee quite as well 
 as the cook used to, my dear. . . . Now when I 
 was a young man " but the reader can supply the 
 rest for himself.) 
 
 Why does a good dentist earn 1000 a year, while 
 a grocer's assistant has to be content with eighty ? 
 Shall we say that it is because the dentist's work is 
 especially disagreeable ? If that were the sole 
 reason, we should expect to see street-scavengers, 
 fishwives, stokers, and the men in the butcher's 
 slaughter-house, paid even better than the dentist. 
 But such folk, we observe, are but seldom prize- 
 winners in the game. Is it, then, because the 
 dentist's work requires more brains ? Partly, per- 
 haps ; but workers whose work requires very great 
 brains indeed are often far from being lavishly 
 remunerated writers of fine poetry, for instance, 
 even those with skill to cut and fashion 
 
 " jewels five words long 
 That on the stretched forefinger of all Time 
 Sparkle for ever." 
 
 (We are getting " warmer," but we are not quite 
 there yet.) 
 
 Let us see if we can reach the desired solution 
 by turning aside to consider an allied problem a 
 sort of first cousin of the original question. (For 
 the long way round is sometimes the easiest to 
 travel.) 
 
 Why do we pay more for some kinds of goods than 
 for others more for grapes than for gooseberries, 
 more for silver spoons than for brass ones, more for 
 a silk dress than for a cotton dress ? Why do we 
 put ourselves to more trouble to recover a small
 
 THE PLAYERS AND THE PRIZES 81 
 
 gold coin than to pick up a large copper one ? 
 (Now don't let us answer that last question after 
 the fashion of the Society lady quoted in Chapter I. 
 It is neither as silly as it looks, nor very easy to 
 answer to answer so as to give full satisfaction, 
 let us say, to an immigrant from the planet Mars. 
 For " we " includes not only the patrician damsel 
 with the jewelled purse, but also the plebeian shop- 
 keeper, and the portly wholesale dealer back of 
 him, and all the rest of mankind, from sensible 
 you and me to the foolish virgins who, when the 
 Last Trump blows, will be discovered with the coins 
 in their hands ; they will feel, methinks, very like 
 that eager mill-hand who, finding an unquenchable 
 thirst upon him, worked three hours overtime, on 
 time-and-a-half rates, and came out, jubilant, 
 to find that closing time was past and that the doors 
 of all the gingerbeer shops were bolted and barred. 
 
 . . Why do we all pretend to be so eager to get 
 hold of money not only here in hypocritical 
 England, but even in truthful France though if 
 we find a stray coin in our waistcoat pocket our 
 first impetuous impulse is to get rid of it as soon as 
 may be ? ... My young Society acquaintance, 
 prithee, tell me why.) 
 
 All these are questions of the open market 
 the open market being, for us, " any set of conditions 
 within which there tends, at any one moment, to 
 be only one price for each grade of each commodity " ; 
 while a perfect market where conditions are so 
 " transparent " that everybody can see what 
 everybody else is doing (or thinking of doing), and 
 where magic carpets are always available to trans- 
 port either buyers or sellers backwards and forwards, 
 without risk of jolting or of collisions in the air, to 
 F
 
 82 HOW IT ALL FITS TOGETHER 
 
 the places where it is best worth their while to be 
 would be a market where this tendency of prices 
 to reach an equality would be actualised into an 
 observable fact. (The Stock Exchange is something 
 like this, but not quite ; so is the money-market, 
 where bankers and bill-brokers buy and sell the 
 short-period use of capital ; so, more or less, are 
 the markets where " future " deliveries of wheat 
 and cotton are dealt in.) 
 
 In all markets, however, most people when they 
 have to buy, try to buy as cheaply as they can. 
 When they are selling, they sell as dear as they can. 
 (Really, everybody attempts both these actions 
 at one and the same moment. The schoolboy is 
 simultaneously buying sweets and selling coppers ; 
 the confectioner is selling sweets and buying 
 coppers ; and each is hoping to make a good bar- 
 gain, without necessarily trying to cheat the other.) 
 Now if cotton dresses were offered at the same price 
 as silk ones, nearly all the buyers would choose silk. 
 The cotton goods could not be sold ; and as silk is 
 more difficult and more costly to prepare than cotton, 
 not enough silk could be placed in the shops to 
 satisfy everybody's needs for dresses ; some would 
 have to be sent empty away. 
 
 Either the price of silk goods has been placed too 
 low, or that of cotton goods too high. Either the 
 former must be raised, to make it worth while for 
 more workers to turn to producing silk, and to make 
 it less worth while for everybody to crowd round the 
 silk-dress counter ; or the price of cotton must be 
 lowered, to produce the reverse effects among the 
 cotton-planters and cotton-spinners and among 
 the customers at large. 
 
 So the prices inevitably alter, until a position of
 
 THE PLAYERS AND THE PRIZES 83 
 
 equilibrium is reached. Both classes of goods 
 come to be sold at a price at which it only just pays 
 some of the producers to sell them, and at which 
 it is only just worth while for some of the customers 
 to buy them. Most of the producers will be getting 
 a better return than this on some part of their 
 output, and most of the customers will feel that 
 they are getting better value than this for most of 
 their expenditure. But if any of the sellers felt 
 that they could with advantage produce and sell 
 more at a lower price, they would be bound to do 
 so, and by their competition drive the price down- 
 wards ; while if many of the customers felt that 
 they could with advantage buy more at a higher 
 price, they would try to buy, and by their competi- 
 tion drive the price upwards. And the players in 
 the " scrum " are so evenly balanced (in normal 
 times, when production and marketing are reason- 
 ably open and free not so much in a period of 
 dearth and confusion and governmental interference, 
 such as we are experiencing at the close of the war) 
 that there seldom occurs a very bad break in their 
 formation, such as would send the ball off with an 
 unexpected rush towards either goal. 
 
 As the price of anything rises we are willing to 
 buy less and less of it ; and as it falls we buy more. 
 If there is a great deal of silk being easily produced, 
 the sellers know that, in order to have it all bought 
 up, they must offer it at lower figures than would 
 be necessary if a smaller quantity only were being 
 produced. If a disease has spread among the silk- 
 worms one year, so that less silk can be offered for 
 sale, the sellers know they can ask a higher price, 
 and sell the whole of the smaller supply to those 
 customers who want silk goods so much that they
 
 84 HOW IT ALL FITS TOGETHER 
 
 will pay more for them than before, while the less 
 eager customers go without. On the other hand, if 
 the fashion changes, so that fewer people are eager 
 to wear silk than wanted it before, the price would 
 need to be lowered if the sellers would see their stocks 
 safely cleared. 
 
 The business man will explain all this in one terse 
 sentence. He declares, with admirable brevity, 
 that " it is all a question of supply and demand." J 
 
 Silk goods sell for more than cotton goods ; and 
 
 1 As I laboriously constructed the foregoing paragraphs 
 as an answer to the questions propounded at the beginning 
 of the chapter, I felt sorely tempted to behave like Katie 
 Willows in Tennyson's The Brook, when she found herself 
 confronted by an embarrassing question. 
 
 " But Katie snatched her eyes at once from mine, 
 And sketching with her slender pointed foot 
 Some figure like a wizard pentagram 
 On garden gravel, let my query pass 
 Unclaimed." 
 
 Had I been a mathematical economist writing for profes- 
 sional students, I should have saved myself much time and 
 trouble, by sketching here just such a wizard's pentagram, 
 sprinkling it over with miscellaneous letters of the alphabet 
 (which I should have explained, airily, as " DD the 
 demand curve ; SS the supply schedule," and so forth) ; 
 and thus dismissed the whole question, even more concisely 
 than our friend the business man, with a " There you are 
 Q.E.D." Unfortunately the publishers of this volume 
 object to being asked to reproduce geometrical designs 
 to save the author time and trouble ; so I have had to work 
 round by a longer route. But (may I point out, for the 
 benefit of the sceptical reader ?) the diagrams that the 
 mathematical professor would here supply would not be an 
 idle flourish on the part of the Superior Person, designed 
 to make the simple things of life seem more learnedly 
 abstruse. " Less of sentiment than sense had Katie ; " 
 and the same, I fancy, holds good of most Professors of 
 Political Economv.
 
 THE PLAYERS AND THE PRIZES 85 
 
 dentists' work sells for more than bricklayers' 
 work. " It is all a question of supply and demand." 
 
 We wish to buy the dentist's services as cheaply 
 as we can ; the dentist sells it as dear as he can. If 
 the dentists were to ask too high a price for their 
 skill, we should try to struggle on without having 
 our teeth seen to as often as we should like ; the 
 dentists would find that they were selling us less of 
 their services than they would like. They would be 
 earning less than they might, and would therefore 
 be likely to lower their charges for the same reason 
 that the silk dealers lowered theirs. If, on the 
 other hand, the dentists' fees were so low that the 
 public were always crowding into the dentists' rooms, 
 the dentists would be able to raise their fees, and 
 yet sell enough of their services to earn high 
 incomes. 
 
 Now if, for any reason, it is evident that dentists 
 are doing better than formerly, more young people 
 who might otherwise have decided to become engi- 
 neers or solicitors or government clerks will think it 
 wiser to have themselves trained as dentists. In 
 other words, because we, the general public, want 
 more dentistry done, and are willing to pay good 
 fees for dental service, the incomes of dentists 
 begin to rise, and more people in consequence 
 become dentists. First we " demand " more dental 
 work, and then more people " supply " themselves 
 as dentists. The same will be the case with all 
 other types of workers bricklayers, butchers, 
 bootmakers, and so on with the result that we 
 find ourselves distributed among all the trades and 
 professions (by no means perfectly, or without 
 much waste of good ability, and the loss of many 
 years of preliminary blundering on the part of many
 
 86 
 
 unhappy beginners) in such a manner as to satisfy, 
 more or less, our needs for one another's services. 
 
 This, however, is a slow, gradual, never-ending 
 process ; and by those whose attention is chiefly 
 occupied with watching the battles between em- 
 ployers and their hands, with trade unions bargain- 
 ing for higher pay, and strikes and lock-outs follow- 
 ing, the fundamentally important facts about 
 " supply and demand " are liable to be overlooked. 
 It is these facts about " demand " (what kinds of 
 goods or services we, the general public, mainly, of 
 course, the working classes want) and " supply " 
 (what numbers of workers in each trade or profes- 
 sion will be ready, able, and willing to do the work 
 for any specified rates of pay) that finally determine 
 what the earnings of bricklayers or dentists will be 
 in the long run, and fix the limits to which trade- 
 unions, or dental congresses, can force pay up, or 
 associated employers and the general public (mainly 
 of course the working classes) can force them down. 
 The struggles between employers and their hands 
 resemble the separate waves breaking on an ocean 
 beach ; while the forces of supply and demand 
 determine how far up the sands the sea will come. 1 
 
 1 The most effective work done by trade unions would 
 seem to be their collective bargaining, not directly about 
 rates of pay, but about conditions of work and methods of 
 pay. If their actions so improve conditions that the mem- 
 bers of the union turn out more work and so become worth 
 more than they were worth before, the " demand " for the 
 labour in question rises and pay rises in consequence. 
 (Rarely can a union permanently affect " supply," by 
 putting obstacles in the path of new-comers into the trade, 
 if these latter are willing to join the union.) The educative 
 effect of their diplomacy is also often important ; and 
 when the unions ave solidly built their moderating influence 
 in preventing such strikes as are really wasteful and which,
 
 THE PLAYERS AND THE PRIZES 87 
 
 If, then, the nation wants (let us say) more bicycles 
 made every year, the earnings of bicycle makers 
 would begin to go up, because there would be more 
 employment to be had. But as this would induce 
 more young people to seek employment in cycle 
 works, the earnings are not likely to rise much ; 
 and in fact, if through excessive optimism too many 
 new hands press in to learn the different parts of 
 this trade, they may even fall. Such mistakes are 
 perpetually occurring, with consequent loss to both 
 capital and labour. Too many of us crowd into one 
 trade for a time (too much capital being drawn in 
 simultaneously) and many of us are presently 
 thrown out of work (the machinery, also, finding 
 itself under-employed), and the wages of those 
 who retain their places (as well as the yield of the 
 capital that continues in operation) fall to a lower 
 level. 
 
 Individual employers can never calculate exactly 
 how many bicycles will be bought by the public 
 at any specified price, or how many bicycles are 
 likely to be produced in a given period by their 
 rivals at home or abroad ; and therefore they cannot 
 calculate exactly how many new hands there will 
 be permanent work for (and how much also of the 
 world's savings they can pay interest on for the right 
 to turn it into cycle-making apparatus) . Even if all 
 the cycle works were merged into a Trust, or brought 
 under State control, though the latter mistake 
 (the under-estimating of what one's rivals are doing) 
 could no longer emerge, the former would appear 
 
 therefore, injure the general public (mainly, of course, the 
 rest of the working classes) is socially most beneficial. We 
 have already referred (p. 52) to the benefits reaped by 
 the whole community (and most especially by the wage- 
 earning portion of it) from their collective savings.
 
 88 HOW IT ALL FITS TOGETHER 
 
 to be at least as likely to occur, with the same dis- 
 astrous effects as under present " anarchic " condi- 
 tions. (The history of American Trusts does not 
 point to any very great steadying of employment 
 when monopoly replaces competition.) 
 
 We have not here (be it observed) dug very deep 
 below the surface of things in our investigation into 
 these queer forces of supply and demand. For 
 whether we appear to ourselves as buyers or sellers 
 (suppliers or demanders) we are equally bent on 
 offering something for something ; and this we 
 should hardly do unless the something we receive 
 seemed to each of us (supplier and demander) of 
 more value than the something we give. And thus 
 no exchanging could take place in any circumstances 
 each of us would rest satisfied with what he pos- 
 sesses unless each of us had a separate and peculiar 
 personal scale of values for all the things that may 
 be bought and sold (including our own time and 
 energies) ; and unless each of us were made after 
 a different pattern from all his neighbours there 
 could be no science of economics. We may be 
 puzzled, and even at times distressed, by the curious 
 valuations that our neighbours set upon the goods 
 in the world's markets one bent on the Simple Life, 
 one on the Strenuous Life, and another on the Life 
 of courts and kings. One, we observe, builds up a 
 fortune in order to exchange it greedily for a member- 
 ship of Parliament ; while another struggles through 
 the turmoil of electioneering and parliamentary 
 business in order to use his opportunities at West- 
 minster to forward his advance towards millionaire- 
 dom. As Omar concisely puts it : 
 
 " I often wonder what the vintners buy 
 One half so precious as the goods they sell."
 
 THE PLAYERS AND THE PRIZES 89 
 
 And even stranger contrasts sometimes greet us. 
 The dwellers in mean streets purchase with showers 
 of coppers the joy-bringing presence of the organ- 
 grinder and his monkey : the income-tax-payers of 
 a daintier quarter purchase with yet more lavish 
 generosity his speedy departure ; while Croesus 
 Minimus from his nurse's arms wails piteously 
 after the retreating figure 
 
 " Just for a handful of silver he left us . . . ! " 
 
 But now let us come back to the question we raised 
 at the beginning of the chapter. Why does one kind 
 of worker earn perhaps ten times as much as 
 another a doctor getting perhaps 1000 a year, a 
 working plumber 200, a clerk in a small shop 100 ? 
 
 If all kinds of work were equally easy to learn, 
 and equally pleasant or unpleasant to do, I think 
 we should soon find that there would not be these 
 big differences in pay. We should all decide to 
 become doctors and refuse to become clerks. But 
 we cannot all become doctors. Before we are 
 allowed to practise as qualified medical men we have 
 to pass a long series of exceedingly difficult examina- 
 tions, to show that we know a great deal about the 
 structure and behaviour of all the parts of the 
 human body, and how different diseases affect each, 
 and how various kinds of drugs are likely to act 
 upon them. Not all of us are clever enough to 
 master all this. Even if we were, there would still 
 be the difficulty of having to pay for this long, expen- 
 sive education. Our parents may be poor, and we 
 may have to begin earning some small wages immedi- 
 ately we leave school ; and if this be so, the chance 
 of becoming doctors is soon lost to us. (Oh, the 
 social waste of this, and the talents buried away in
 
 go HOW IT ALL FITS TOGETHER 
 
 jam-factories and behind the counter of the old- 
 clothes shop " a legion that never was listed, that 
 carries no colours or crest," that has little chance of 
 bringing home medals and decorations, and little 
 hope of joyous adventures in the campaign ! There, 
 but for the whim of the Fates that " poured the 
 harvest and made the winds to blow " march you 
 and I, dear reader.) x But even among those who 
 are clever enough to learn what is necessary, and 
 well enough off to afford the training, there are sure 
 to be some to whom the prospect of a doctor's life 
 
 1 Some present-day writers content themselves with 
 pointing out the obvious truth that those classes whose 
 children have the freest choice of careers must have sprung 
 in the mam from strains which, by Natural Selection, have 
 shown themselves the fittest-to-survive under present and 
 bygone economic conditions ; and are, perhaps, over-ready 
 to assume that these must be the absolutely " fittest " 
 the stocks which it is most desirable should be adequately 
 represented by then: descendants in the future great City 
 of Man. Such a view is, I admit, quite probably correct 
 in the main. But it is well to remember that the fittest to 
 survive in primitive days were the unscrupulous, the 
 cunning, and the physically strong (some of whose descend- 
 ants now hold, in consequence of their ancestors possessing 
 these shining qualities, many of the vantage points in the 
 game of life as it is played to-day), and that just as other 
 qualities than unscrupulous cunning and strength make 
 nowadays for the success both of the individual and of the 
 State, so also yet other talents, little recognised now, 
 may come to be those most desired in the future. An 
 Edison or a Darwin transplanted into Mediaeval Europe 
 would have had little chance of achieving a blazing notoriety, 
 unless, perhaps, at one of those crowded festivals at which 
 witches and heretics were burned to appease the wrath of 
 Heaven. We have only guess-work knowledge of the 
 qualities that the New Republic of the Future will demand. 
 Moreover we have yet little knowledge of the laws of in- 
 heritance in relation to the complex higher faculties 
 among human beings.
 
 THE PLAYERS AND THE PRIZES 91 
 
 is distasteful. They shrink from the thought of 
 dealing with ugly diseases and wailing patients 
 every day and night of the year. They prefer to 
 earn less in what seems to themselves some pleasanter 
 way. For all these reasons the number of persons 
 who " supply " themselves as doctors is never so 
 great as to bring the doctor's earnings down to the 
 level of the earnings of clerks. 
 
 Each of us has his choice of trade or profession, 
 at the time we are leaving school, narrowed down by 
 differences in our strength, our knowledge, our clever- 
 ness, our habits of neatness and regularity, our 
 trustworthiness, as well as by our personal likings 
 for one kind of life rather than another, and also 
 by our parents' ability to pay for the different kinds 
 of training or apprenticeship that may be necessary. 
 One boy may have big enough feet to hope to tramp 
 the streets as a sergeant of police, and " strong 
 and sinewy arms " to fit him to become a village 
 blacksmith, and sufficient education to gain a liveli- 
 hood as an ordinary clerk ; but not be clever enough 
 with his hands to pull watches and clocks to pieces, 
 and then put Humpty Dumpty together again in 
 the jeweller's shop, nor blessed with the gift of 
 patience and the nervous stamina that a school- 
 master must possess to carry himself steadily through 
 his wearing round of ceaseless mental activity, 
 plotting, planning, worrying, from when he leaves 
 his couch in the morning until he lays his weary 
 brain on the pillow at night. (" Mill-hands' work 
 from sun to sun ; teachers' work is never done." ) 
 Another, who is strong enough to work as a miner, 
 is repelled by the idea of spending his working hours 
 underground ; he would rather have a free and 
 jolly time on board ship, even with half the pay
 
 9 2 HOW IT ALL FITS TOGETHER 
 
 playing about with buckets of tar, and dodging 
 behind the ratlines to escape the curses of the 
 bo'sun's mate. (Besides " if love's the best of all, 
 that can a man befall," why " they all love Jack ! "). 
 Each of us likes and dislikes the idea of different 
 kinds of work. Each of us is hindered by lack of 
 some quality strength or taste or skill from offer- 
 ing himself for the majority of trades and professions. 
 And while we realise that what is necessary at the 
 beginning of our earning career is to find the best 
 " opening " into which a fellow can "fit in," we 
 realise also that there is very little use in any one 
 else pointing out to us the most beautifully round 
 openings, if we happen, ourselves, to be equally 
 beautiful square pegs. 1 
 
 Incidentally also we must make a passing refer- 
 ence, very inadequate, to the miserable wastage 
 that occurs in so many lives with wasteful results 
 to the whole community through insufficient 
 comprehension, on the part of beginners, of the 
 special qualities required, and the real inner shocks 
 and strains to be faced, in the different careers that 
 attract them. We never have adequate information 
 as to what are the real conditions how many stripes 
 and disappointments, how many luscious thistles 
 to be cropped in the other donkey's paddock. 
 We are always liable to be swept off our feet, say, 
 
 1 Students of Economics will have met with the above 
 in the usual text- books under such headings as " relative 
 disutility of different types of labour " or " comparative 
 net advantages of different occupations." We thought it 
 advisable to leave out those polysyllabic expressions, and 
 have supplied instead a certain amount of what Pooh-Bah 
 describes with his usual lucidity and simplicity as " merely 
 corroborative detail, intended to give artistic verisimilitude 
 to an otherwise bald and unconvincing narrative."
 
 THE PLAYERS AND THE PRIZES 93 
 
 by the brush of a Kipling, painting for us his glow- 
 ing descriptions of life under tropical suns ; while 
 we realise that, whatever happens, we shall never 
 take up with our father's job, if it makes a fellow 
 come home and behave like a bear as badly as that. 
 American employers, it is worth noting, however, 
 are beginning to save themselves, as well as their 
 young applicants for posts, a certain amount of this 
 waste for example, in some of the telephone 
 companies by sending the would-be beginners to 
 the psychological laboratories of the Universities, 
 to be elaborately tested (even as they are beginning 
 to consult the laboratory psychologists to find out, 
 for instance, what are the best types of colour with 
 which to decorate a factory's walls if the best mus- 
 cular output is to be maintained). 1 Success or 
 
 1 Did you ever guess that it could make a difference to 
 your pushing and pulling power to the extent of 10 or 20 per 
 cent. (I am not sure of my figures) according as your nostrils 
 are surreptitiously invaded by odour A or by odour B 
 even when you are blindfolded, and the odour is introduced 
 so gradually that you assert that you can smell nothing ? 
 (This fact has some importance when one is planning the 
 sanitary arrangements of a factory, and arranging for the 
 disposal of smoke and similar bye-products.) A psycho- 
 logical laboratory is a queer factory for converting absurd 
 little interrogation marks into the most delicious exclama- 
 tion points. How much difference will it make to my 
 lifting power if the wall-paper is coloured crimson instead 
 of grey ? (Thunder ! who'd have thought it ?) " Every 
 pleasurable and every painful experience has a direct reflex 
 effect on the bodily functions and also on the action of the 
 mind. . . . Pleasures actually cause the limbs to increase 
 in size. With pain the limbs shrivel in size, and this is 
 accompanied by a feeling of depression. . . . Pleasure 
 assists the rhythmical action of the lungs and adds to the 
 depth of breathing. Pain interferes with the rhythm of 
 breathing, makes the lung action less deep, and gives a 
 feeling of being stifled, hindered and checked in carrying
 
 94 HOW IT ALL FITS TOGETHER 
 
 failure often depends, it seems, on the most curiously 
 insignificant points in a man's make-up, such as 
 only the expert can indicate to be present or absent. 
 A laboratory of the kind mentioned ought to be 
 endowed by the State, almost as handsomely as 
 if it were a new kind of torpedo factory. (This 
 sort of thing is discussed, with practical illustra- 
 tions, in Professor Miinsterberg's Psychology and 
 Industrial Efficiency.} 
 
 Moreover, when once a man is trained for one line 
 of life, he seldom finds it easy, whatever his abilities, 
 to reverse his decision and begin the game afresh. If I 
 order over-night an egg for breakfast, and find in the 
 morning that the cook has scrambled instead of poach- 
 ing it the egg is all there, just the same there 
 is not much use in my ordering her to unscramble 
 it (while I wait), and to poach it instead. A trained 
 engineer can seldom unscramble himself and re- 
 appear, nicely poached, as an eye and ear specialist 
 or a naval lieutenant. 
 
 out our purposes. Pleasing experiences increase our 
 muscular strength and cause us to feel like men. . . . Pain 
 decreases muscular strength and gives us a feeling of 
 weakness and lack of confidence." (From Dr. W. D. 
 Scott's The Psychology of Advertising.} Novelists, drama- 
 tists, poets generally have inklings of this sort of thing. 
 Of these, one can only do his best work if he is robed in 
 a gorgeous Oriental dressing-gown, with hookah and fez 
 to match. Another needs a solid gold fountain pen, with 
 an inky-dinky ebony writing desk, and a " greenery - 
 yallery " bunch of aesthetic flowers at his side. But apart 
 from these special cases, we all know, without any psycholo- 
 gists to instruct us, that the cultivation of laughter and 
 friendliness, even in the narrowest sphere of economic 
 activities, must help to make the world spin faster on its 
 jubilant course, as it dodges the comets and sweeps round 
 the sun.
 
 THE PLAYERS AND THE PRIZES 95 
 
 But though the choice of a mode of livelihood is 
 thus limited for all of us, the limitations are not 
 nearly as galling as they were in the old-fashioned 
 world, and still are in ill-governed countries. (It is 
 not very safe to propose to open a coal-mine in 
 China, where multitudinous devils live underground, 
 and might escape if an impious miner dug far down. 
 It is not very wise to publish a treatise on Economics 
 in a country governed as Russia has been. In 
 the mediaeval world it was not very wise to seek to 
 leave that station in life where it had pleased 
 Providence to place one except, of course, to 
 become a friar or a monk, and thus, making Humility 
 young Ambition's ladder, mount to the bishop's 
 throne, or a cardinal's seat in the councils of Kings.) 
 Apart from the question of the expenses of early 
 training it is no longer difficult for a capable youth 
 to take up an occupation of a social grade higher 
 than his father's, even as there is no longer any 
 ghost of a shadow of a grain of truth in the dictum 
 of that observant sentry who stood on the Thames 
 embankment (seven or eight centuries ago) and 
 declared that every little boy and girl that's born 
 into this world alive is either a little Liber-al or 
 else a little Conserva-tive. 
 
 As time goes on, it seems the rule that the begin- 
 ner's choice becomes freer and freer. It is easier 
 now to work at a distance from one's home than it 
 used to be, .because travelling backwards and for- 
 wards (by tram or train or bicycle) is becoming 
 cheaper and faster. (We observe the effects of this 
 in the way that London has grown out spaciously 
 in the last half-century. In Stuart times the workers 
 were packed in its narrow twisted alleys like matches 
 in a box. Now many of those who work in the City
 
 96 HOW IT ALL FITS TOGETHER 
 
 come in to their daily round from suburbs perched 
 on the white cliffs of the Sussex coast, or from a 
 garden city at Letchworth.) Also newspaper adver- 
 tisements and labour bureaux bring us news of 
 openings that we should otherwise miss ; while 
 school-training has become more adequate as a 
 means of fitting us to enter, as beginners, a multi- 
 tude of ordinary occupations. It is always (it 
 would seem) becoming easier for the average man 
 to offer himself for such kinds of service as the world 
 demands, and that he can supply. 
 
 But not only does this matter of " supply "the 
 scarcity of people willing and able to serve as doctors, 
 the multitudes willing and able to turn themselves 
 into factory-hands bring it about that doctors' 
 earnings are greater than the earnings of farm- 
 labourers, clerks or mill-hands ; it also has much to 
 do with the question why one doctor earns more 
 than another, and one bootmaker more than another. 
 The supply of the more capable, sober, punctual, 
 industrious, and trustworthy hands in a factory 
 and shall we add, of hands properly obsequious 
 towards the newly-promoted foreman ? is likely 
 to be smaller than the supply of less satisfactory 
 workers. The former therefore are likely to be 
 better paid than the others unless the attempts of 
 trade unions to standardise rates of pay be unusually 
 effective or to be kept on when times are bad and 
 many of the hands must needs be dismissed. (This, 
 by the way, is a matter affecting only the individual 
 worker's chances ; it has little to do with the forces 
 making for much unemployment at one time 
 say, 1908 and 1909 and little unemployment at 
 another say 1913. We cannot dismiss the unem- 
 ployment problem as a mere outgrowth of the evils
 
 THE PLAYERS AND THE PRIZES 97 
 
 of idleness and drunkenness). 1 The supply of 
 stupid, drunken, lazy, unpunctual, careless 
 " wasters " is always more plentiful than employers 
 would like ; while the supply of the best types is 
 invariably scarce. The more good points a man 
 possesses, the scarcer will be the supply of men 
 likely to be chosen in preference to him, or likely to 
 be offered better pay for the same class of work. 
 It is very much the same as the difference between 
 cotton-goods and silk, or between grapes and goose- 
 berries. It is only those who use their opportunities 
 of joining the rarer classes who set themselves to be 
 specially desirable kinds of workers always deter- 
 
 1 Nor is the problem due to any permanent excess of 
 labour-in-general (whatever that might mean), so that it 
 might be permanently cured, as some fancy, by fostering 
 emigration ; though emigration, in certain special cases, 
 may usefully serve as a temporary palliative. Unemploy- 
 ment, an ever-present evil in the industrial State, is due, 
 in the mam, to some maladjustment of capital to labour. 
 One or other has got into the wrong shape. Too much 
 capital has flowed into one industry, and not enough into 
 another ; too many men have trained themselves to do one 
 thing and not enough to do another ; and the evil is further 
 complicated by the fact that we shift our custom capri- 
 ciously from one employer (using one lot of machines and 
 men) to another employer (using identical machines and 
 men), and some of the machinery and some of the men must, 
 therefore, remain idle. The evil consequences of mistakes 
 due to the mal-investment of our capital are more serious 
 than they used to be, owing to the immense amounts of 
 costly apparatus into which our savings are nowadays 
 converted. When our nest-egg of capital has been dished 
 up for public use as an expensive railway, we cannot 
 " unscramble " the railway and poach it afresh into a coal- 
 mine. We have pointed out already how the same holds 
 good of the trained human workers. (For further study of 
 this question, Sir W. H. Beveridge's Unemployment should 
 be read.)
 
 g8 HOW IT ALL FITS TOGETHER 
 
 mined to give the other fellow at least a trifle better 
 value in output than he offers in wages who can 
 reasonably expect to find themselves among the 
 successful players in the game. " It is all a question 
 of supply and demand " ; and we make our chances 
 stronger load the dice in our own favour if we 
 join ourselves to those classes the thorough, 
 honest, skilful classes the supply of which is 
 always below the level of the world's desires ; than 
 if we drift aimlessly into the over-crowded cattle- 
 pen where fret and bellow the second-rate loafers, 
 the oxen that do the most dull and uninteresting, 
 dirty and disagreeable, badly paid, commonplace 
 hauling and pushing jobs. (See them there, jostling, 
 and panting, and heaving and stamping with 
 scarcely a chance to escape for a gallop where the 
 winds blow free through the daisy-strewn meadows of 
 joyous success ! ) 
 
 Most securely placed of all perhaps are those who 
 have been fortunate enough, or far-sighted enough, 
 to acquire a knowledge of several alternative 
 occupations writing for the papers, say, while 
 reading for the bar, or gardening and grooming, as 
 well as waiting in an inn. For these can supply 
 themselves in several different quarters whenever 
 an attractive demand in the form of higher pay is 
 forthcoming. But such all-round players in the 
 game are rare. (In families, however, the members 
 of which stand together in rainy days and sunny 
 days lending each other a macintosh or a sunshade 
 at every change in the readings of the trade baro- 
 meter the same sort of security is gained if, though 
 none of their number is a Jack of All Trades, there 
 are as many different ways of earning as there are 
 brothers and sisters. Similarly the family that
 
 THE PLAYERS AND THE PRIZES 99 
 
 can grow its own vegetables, keep its own poultry, 
 do its own mending, cooking, paperhanging, 
 laundry-work and boot-blacking, really earns more 
 than the family that has to pay outsiders to do these 
 jobs ; and is more secure when the watchman at 
 the Board of Trade declares that times are bad.) 
 
 When a boy leaves school and starts to earn his 
 living, his choice of a career depends partly on the 
 kind of service that he is willing and able to " supply," 
 and partly on the openings there may be near at 
 hand just at the psychological moment or in other 
 words, on the kinds of workers that employers in 
 the neighbourhood " demand." But what kind of 
 workers employers are likely to demand depends 
 on what kinds of things people are willing to buy. 
 (They would not, for instance, demand more learners 
 for the work of making wooden clogs in a district 
 where folk are discarding clogs for leathern boots.) 
 And so, by the ways in which we all use our spending 
 power we help to determine, in this curious world of 
 ours, two very important matters. We bring it 
 about that there is more work for some groups of 
 workers to do, and less for others ; and thus decide 
 that some undeserving people may earn five hundred 
 a year, while others of a much more deserving kind 
 are getting only fifty. But as this leads larger 
 numbers of beginners to enter one trade than 
 another, we are helping to decide how many of the 
 world's workers shall become coal-miners, how many 
 farm-hands, how many clerks, and so on. For if 
 we want more coal than hitherto (because, let us 
 say, we are using more coal to drive our ocean grey- 
 hounds and to keep the wheels whirling in all our 
 busy mills) we must needs offer more for it, and this 
 will induce mine-owners to offer more pay, or more
 
 ioo HOW IT ALL FITS TOGETHER 
 
 regular work, or pleasanter conditions of employ- 
 ment to miners ; and men will become coal-hewers 
 who might otherwise have lived all their lives out 
 on the grassy platforms of the upper world beneath 
 the breezy sky. 
 
 These consequences of the ways in which we 
 direct our expenditure are often very important 
 indeed. 
 
 When we insist on buying things that can only 
 be made by dangerous and disagreeable work being 
 done (as in certain kinds of pottery making, which 
 give rise to diseases among the pottery hands) we 
 are helping unconsciously no doubt, and perhaps 
 in spite of ourselves to spoil workers' lives. It is 
 not often, however, that we can find out the special 
 facts that we might wish to know, without taking 
 more time and trouble than can, perhaps, be reason- 
 ably expected of us. 1 But when we pay to see 
 specially dangerous performances of acrobats, 
 toreadors, animal tamers, aviators, and so on, we 
 are encouraging our neighbours to risk their lives in 
 order that we may enjoy the pleasure of a selfish 
 thrill. 
 
 In the same way when we allow ourselves to be 
 persuaded into buying from certain shop-keepers 
 through swallowing the falsehoods they post on the 
 advertisement hoardings, instead of judging by 
 the real quality of the wares they sell, we are helping 
 good advertisers to succeed, and keeping back the 
 good captains of industry who devote more attention 
 to the real worth of their goods. Have you ever 
 stopped to analyse the reasoning employed in any 
 familiar advertisement ? If you try it, you will 
 
 1 Mr. H. G. Woods, in his Personal Economy and Social 
 Reform, has something to say on this point,
 
 THE PLAYERS AND THE PRIZES 101 
 
 soon find it a most amusing task. Thus the " body 
 building power " of Xerxes' famous food has been 
 " proved to be twenty times the amount taken." 
 Does this mean that if I eat one ounce of the famous 
 food I absorb twenty ounces of body-building power, 
 or that if I eat a cubic inch of it I am getting twenty 
 cubic inches of this desirable commodity ? Any- 
 how, what is an ounce, or a cubic inch, or an acre 
 (if you like) of body-building power ? My own 
 imagination fails to persuade this weird wild-fowl 
 (or chameleon, is it ?) to assume any form more 
 capable of being photographed than the stuff that 
 dreams are made of. (Perhaps, after all, I only 
 dreamt that advertisement.) It is this sort of 
 harmful folly on the part of multitudes of buyers 
 that enables gaol-birds to flourish by the provision 
 of quack " medicines," which create a score of 
 ailments for each ailment that they cure, and go 
 forth, like the Israelite of old, to slay their tens of 
 thousands if not of human lives, at least of healthy 
 moments between the cradle and the grave. (For 
 many amusing illustrations of the wiles of adver- 
 , tisers and of the ways in which the least gullible of 
 us are perpetually, without our guessing it, being 
 gulled by advertisements, the reader should consult 
 Dr. W. D. Scott's The Psychology of Advertising 
 an instructive book.) 
 
 Even in the case of beggars and thieves very much 
 the same general principles (the laws of supply and 
 demand) will be found to hold true. For if we give 
 carelessly and freely to street-loafers, it soon becomes 
 evident to their companions that begging is a 
 remunerative occupation. (There are even, in 
 London, flourishing captains of industry who hire 
 out assistant beggars at a regular weekly salary to
 
 102 HOW IT ALL FITS TOGETHER 
 
 gather in subscriptions, carefully recorded by the 
 generous donors on the collectors' cards, to be given 
 to bogus charities.) Thus by our easy-going slack- 
 ness we tempt those who otherwise might have been 
 self-respecting workers to live on the bread of 
 idleness. When we visit countries like India, where 
 idleness is an absolutely essential ingredient of 
 every one's idea of holiness, and giving to beggars 
 is applauded as a religious duty, and beggars 
 therefore are as much in demand among all seekers 
 after the blessings of Heaven as the " snowy- 
 banded, dilettante, delicate-handed " curate is 
 among the ladies who dwell in the world of fashion- 
 able English piety, we notice that beggars swarm 
 wherever we turn. Similarly, in countries where 
 the police arrangements are notoriously defective, 
 so that it is relatively easy to make a li velihood by 
 simple criminal methods, we find that criminals 
 thrive. The supply of beggars and criminals swells 
 or diminishes much as does the supply of dentists 
 or of cycle-makers. 
 
 We get, in fact, just as many beggars as we show 
 that we want by choosing to pay for them, even as 
 we get as many cycle makers as we want. We 
 purchase a bicycle by giving 20 to a cycle-maker, 
 and so increase for some one the opportunities of 
 getting a living as a cycle-maker. We purchase a 
 glow of self-satisfaction by giving twopence to a 
 beggar, and so increase for some one the oppor- 
 tunities of living as a self-satisfaction-maker. " It 
 is all a question of supply and demand." (" But 
 then," interjects a critic, " am I my brother's keeper ? 
 Why shouldn't I enjoy two-pennyworth of the tonic 
 of self-satisfaction, when I am feeling dull ? That's 
 what the beggar's for." Well, partner in our little
 
 THE PLAYERS AND THE PRIZES 103 
 
 game of life, " I leave it to you " to decide. . . 
 " Hearts or spades ? ") 
 
 Let us consider now an important point with 
 regard to the quality of industriousness. Of its 
 value to the community at large there can be no 
 question ; and also of its value to the industrious 
 individual who through his perseverance is likely 
 to rise above his easier-going fellows. But we 
 notice that the very hard worker in a factory is 
 seldom popular. For the idea is commonly held 
 that the man who does more than he need is not 
 " playing fair " to the rest. If he does more than 
 he need (his fellow-workers feel) there will be less 
 left for them to do ; and some of them, therefore, 
 are the more liable, through his excess of virtue, to be 
 " done out " of a job. Quite unselfish workers 
 feel this, as well as men of baser breed. So the 
 point is worthy of close examination. 
 
 Let us then take a special case, and consider what 
 is likely to happen. On a certain private estate 
 there are (let us say) twenty gardeners employed ; 
 some of these begin to work harder than has been 
 the gardeners' custom ; the owner of the estate 
 finds that nineteen men are all that he now requires 
 to keep the estate going ; and one unfortunate 
 gardener most probably the fellow who " sauced " 
 the head-gardener about grafting pumpkins on a 
 blackberry bush is now dismissed. 
 
 Evidently somebody must be the gainer by the 
 amount of this dismissed gardener's wages, which 
 have no longer to be paid for the same total amount 
 of gardening service is being performed as was per- 
 formed before. If the nineteen remaining gardeners 
 get the same pay as before, it must be the owner of 
 the estate who gains. If on the other hand the men
 
 104 HOW IT ALL FITS TOGETHER 
 
 arejgranted a rise because they are doing better 
 work, it is the gardeners who gain. Now what 
 are the consequences of this gain, whoever it be 
 that enjoys it in the first instance ? Those who 
 have gained, estate-owners or gardeners, must either 
 spend more or save more. The benefits to other 
 workers in the country from the increase in saved 
 wealth (or capital), through its increasing the demand 
 for labour, have been pointed out at length in 
 Chapter III., pp. 72-74. We need not repeat the 
 arguments of that chapter here. Either machinery, 
 in the broadest sense of the term, or raw materials 
 will be bought with the increased wealth placed 
 in the hands of bankers or joint-stock companies 
 by the men who have gained ; the production of 
 such apparatus or raw material and its transporta- 
 tion and so forth will involve employment for 
 certain wage-earners ; and the apparatus and raw 
 material will be used in giving employment in the 
 future to yet other workers. Similarly, though 
 not usually with the same beneficial effects, if the 
 gains be immediately spent (in the more ordinary 
 sense of the word " spent "), goods or services are 
 bought which must be supplied by some groups of 
 workers. In either case at least as much is spent 
 in employing some kind or other of labour (including, 
 of course, shop-keepers' labour, doctors' labour, 
 and any other form of productive activity) as was 
 spent by the estate-owner in employing the super- 
 fluous twentieth gardener. 
 
 Strange as it may seem to those who have not 
 considered the matter carefully, the more work of 
 a useful kind there is done, and the more wealth 
 there is produced, the greater will be the demand 
 on the part of employers for yet other work to be
 
 THE PLAYERS AND THE PRIZES 105 
 
 done. The country as a whole, and the working 
 classes as a whole, must gain whenever more wealth 
 is produced. There is not a fixed stock of jobs 
 raining down from those platforms in the sky where 
 the wealthy employers 
 
 " Lie beside their nectar, and the clouds are lightly curl'd 
 Round their golden houses, girdled with the gleaming 
 world:" 
 
 It is workers (or savers) who make opportunities 
 for workers not the luxurious and idle folk who 
 shrink from bestirring themselves lest the other 
 fellows should have too little to do. What happens, 
 in fact, is very much the same as when new types of 
 machinery are introduced. Some workers may at 
 the moment lose their employment, but more 
 employment is created than there is employment 
 taken away. (See pp. 40-45). 
 
 Loyalty to the special interests of a small group 
 of fellow-gardeners might quite reasonably, we 
 admit, hold back an unselfish gardener from doing 
 more than just enough to protect himself from 
 dismissal. But loyalty to the interests of the whole 
 mass of the nation's workers farm-hands, mill- 
 hands, domestic servants, and so on would stimu- 
 late him rather to make increased exertions. 1 
 
 1 After clambering up that " monkey-puzzler " to pluck 
 the fallacy out of its top economists call it " the Lump of 
 Labour Fallacy," or, when they are in a more dignified 
 mood, " the Fixed Work Fund Theory " we ought, for 
 symmetry's sake, to give a passing reference to its twin- 
 brother, the rich man's fallacy, called " The Wages Fund 
 Theory." We cannot honour it with a more exalted place 
 than a footnote to the page ; for it is a very brown and 
 withered fallacy, only clinging to a precarious existence 
 now in a few of those baronial halls where one still hears 
 " the moan of doves in immemorial elms," and the respectful
 
 This illustration has been carefully selected for 
 the purpose of meeting the most difficult type of 
 case the case where the employees produce nothing 
 that other wage-earners buy. We shall get some- 
 thing much more typical if we pass out of this lordly 
 estate, with its spacious gravelled walks, its lilied 
 ponds, and splashing fountains ; and letting its 
 coronetted gates clang behind us (while the lodge- 
 keeper's supercilious eye takes contemptuous note 
 
 murmuring of innumerable flunkeys. It was a very live 
 sort of mistletoe once, however, when respectable people 
 brought it home at every election time to deck their walls 
 with, or waved it triumphantly in parliamentary debates 
 as a magic charm to keep those wicked trade unions from 
 springing up to blight the land. According to this theory 
 the average wage depends upon the number of workers and 
 upon the amount of capital that the kind capitalist gra- 
 ciously places at their disposal to make things with. 
 
 Now, what workers get certainly does depend largely 
 on what they produce ; and how much they produce does 
 depend largely on the amount of capital available for them 
 to use. But we cannot calculate the average worker's 
 wage by such a simple piece of arithmetic as the jotting 
 down of a thousand million pounds of capital as the Dividend 
 and ten million workers as the Divisor, and giving the 
 answer as a hundred pounds apiece ; and then, to make 
 the conclusion a little more realistic, slipping in a few un- 
 obtrusive words of explanation " ^100 a minute " (if 
 we are in an optimistic mood), or " ^100 a lifetime " (if 
 we are thinking of to-morrow's visit to the dentist). It is 
 a very pretty piece of arithmetic, no doubt, and quite useful 
 when one is talking to a submissive muddle-headed man 
 to persuade him to work hard and pay all the taxes thought- 
 fully laid upon his shoulders (where they don't hurt very 
 much) instead of asking to have them paid by the wealthy 
 folk who would have to draw the money out of the Wages 
 Fund to meet the tax-gatherer's claims and where would 
 the industrious worker be then, poor thing ? . . . No, we 
 can't waste space in exposing the architecture of anti- 
 quated mouse-traps of this description.
 
 THE PLAYERS AND THE PRIZES 107 
 
 of the cut of our country-made clothes) find our way 
 to some grimy coal-mine and clamber down its 
 shaft (while the engineer's back is turned) to see 
 what may happen there. 
 
 If through working less energetically or more 
 wastefully, the coal-miners brought it about that 
 very many more hands would have to be employed 
 to maintain a given output of coal, coal must become 
 more costly to produce and its price must rise. The 
 working classes would in consequence suffer doubly 
 and trebly. For, not only would they have to pay 
 more for the coal they burn in their homes, but the 
 mills and factories that use coal in driving their 
 machinery would see their prosperity relatively 
 declining, and less therefore could be offered in 
 wages to factory hands. Factory-made goods 
 would be liable to become dearer. Gas would rise 
 in price. Steamships would cost more to keep going, 
 and we should have to pay rather more than before 
 for the food supplies and raw materials that these 
 floating factories gather in for us from all quarters 
 of the globe (often after the goods have made long- 
 journeys in America or elsewhere on coal-driven 
 trains). 
 
 All this should help us to an understanding of 
 one of the central facts of modern industrial life, 
 a fact which both employers and the well-to-do 
 classes, on the one hand, and the wage-earners on 
 the other, are very prone to overlook. It has been 
 pointed out that when employers in one industry 
 gain by the introduction of new methods, practically 
 all workers (employers and employees) outside this 
 industry may be expected to gain. But when in any 
 one industry (say, the railway industry) the wage- 
 earners succeed in making the employers give them
 
 better pay, gains and losses are likely to be unevenly 
 distributed among wage-earners and employers in 
 other occupations. For if the guards and porters 
 get higher pay, and their employers (the railway 
 shareholders) get smaller profits in consequence 
 provided the railways do just as much business as 
 before, without charging more for their services to 
 the general public (mainly, of course, the working 
 classes whose factory materials and whose ordinary 
 goods, in various stages of completion, are carried 
 by train) it merely means that the railway hands 
 have more to spend than before and the shareholders 
 have less. This is likely to benefit both employers 
 and employees in the boot-making trade, the breweries 
 and the woollen industries, whose products are 
 mainly bought by the wage-earning classes ; for 
 while the railway hands will spend a little more 
 freely in these directions, the better-off shareholders 
 will spend on these about as much as they spent 
 before. These better-off people are much more 
 likely to curtail their expenditure on such things 
 as silk dresses and motor-cars, with the result that 
 employers and employees in these industries will be 
 worse off, as well as such people as chauffeurs, 
 valets, and butlers. 
 
 There is therefore and this is the important point 
 no real division of the players into two opposing 
 teams, with all the employers on one side and all 
 the wage-earners on the other, the one always gaining 
 whenever the other loses. But, rather, there are 
 always a great many detached struggles perpetually 
 going on in each separate industry, the employers 
 trying to get higher profits out of what they and their 
 hands produce in common, and their hands trying 
 to get higher wages. When the wage-earners win
 
 THE PLAYERS AND THE PRIZES 109 
 
 in one of these many struggles, both employers and 
 employees in some other industries (say, in the 
 boot-making trade) may be better off though hardly 
 so if the wage-earners' success is unwarranted by 
 the conditions of the time, and in consequence 
 some of the more struggling employers have to 
 abandon their efforts to keep men employed and all 
 the employers have to charge more for their goods. 
 But both employers and employees in yet other 
 industries (say, the motor industry) are likely to 
 suffer. Similarly when the employers get the upper 
 hand in one of these separate struggles, boot-makers 
 (employers and employed) are likely to be worse 
 off, and silk dress makers (employers and employed) 
 to be better off. There is, in short, no such thing as 
 Marx's " class war " being waged between employers 
 in general and wage-earners in general or, as the 
 leaders in these struggles usually describe it a war 
 between Capital and Labour. It is largely this 
 delusion the idea that there is a permanent and 
 inevitable conflict of interest between the whole class 
 of employers and the whole class of employees that 
 lies at the basis of the policy of the " sympathetic 
 strike," under which one group of employees attempts 
 by ceasing work to give support to strikers whenever 
 there occurs an industrial dispute with which the 
 former are not directly concerned. 
 
 Nevertheless the " sympathetic strike " in one 
 vital respect does resemble war. For, in the intri- 
 cately interwoven network of the modern world's 
 activities, even though it may not be a crime, the 
 sympathetic strike has become (as a general rule) 
 something much more serious. It is now a colossal 
 blunder. Wage-earners have many interests in 
 common, and trade unions can forward them in
 
 no HOW IT ALL FITS TOGETHER 
 
 many such ways as were indicated in the footnote 
 to p. 86. But a sympathetic strike is rarely, and a 
 universal strike still more rarely, likely to be of 
 more benefit to the wage-earners as a class (apart 
 from political effects in a non-democratic country) 
 than a universal lock-out would be to their associ- 
 ated employers. 
 
 But it is time we touched on the question why 
 do those pampered employers get such preposterous 
 incomes as compared with the pittance of the 
 working men ? 
 
 The average employee is always raising in con- 
 versation with his fellows that eternal question. 
 
 " I was born free as Caesar ; so were you : 
 We both have fed as well ; and we can both 
 Endure the winter's cold as well as he. 
 
 . . . And this man 
 Is now become a god ; and Cassius is 
 A wretched creature, and must bend his body, 
 If Caesar carelessly but nod on him. 
 Why, man, he doth bestride the narrow world 
 Like a Colossus ; and we petty men 
 Walk under his huge legs, and peep about 
 To find ourselves dishonourable graves." 
 
 Well, to begin with, are " profits" on the average 
 so much higher than " wages " on the average ? 
 To strike an average we must take every profit- 
 hunter into account ; just as, if we are asking for 
 the average incomes of people who are called to 
 the Bar, we must add together not merely the 
 incomes of the Lord Chancellor, the Judges of the 
 highest courts, and the people who " swank round " 
 in the silken gown of the K.C. we must remember 
 also the hordes of briefless barristers dwelling like 
 bats in the nooks and crannies of Lincoln's Inn 
 Field and other places where creatures of this species
 
 THE PLAYERS AND THE PRIZES in 
 
 make their nests. Does the average small employer 
 flourish exceedingly anywhere ? In this country 
 in the years before the war there used to occur some 
 six or seven thousand bankruptcies per annum, and 
 a large percentage of these must have been unsuccess- 
 ful employers ; and though, during the war and the 
 post-war period, the number has greatly fallen as a 
 consequence mainly of the rising movement in prices 
 (itself mainly a consequence of the expansion of paper 
 money) this is probably only a very temporary effect 
 of passing conditions. For the time being, the profit- 
 making class could scarcely fail to make unusual 
 gains, and only the most exceptional blunderers 
 would be forced to drop out of the ranks between 
 1915 and 1920. But unless prices continue to rise 
 (as the result of further inflations of currency) the 
 day of easy " profiteering" may be assumed to be 
 practically over. 
 
 The " profits " of the employing class, like the 
 wages of the butcher, the baker, and the candlestick 
 maker, depend ultimately on the law of Supply 
 and Demand. The law here does not work quite so 
 smoothly as in the field of manual labour. This is 
 partly due to the difficulties that often hinder out- 
 siders from entering the class. It is partly due also 
 to the unwavering determination of most employers 
 to conceal their real incomes from the inquisitive, 
 whereas wage rates are usually fairly well-known 
 market figures. When an employer is undergoing 
 rough experiences in his profit-hunting campaign, 
 his natural tendency is to motor round the town in 
 the most jaunty style with an expensive cigar in 
 his mouth. By so doing he may lull the suspicions 
 of his creditors. When he is jubilantly gathering in 
 the shekels, he may think it advisable to go afoot
 
 H2 HOW IT ALL FITS TOGETHER 
 
 in a shabby suit, and talk of " hard times." By so 
 doing he will be less likely to attract the attention 
 of the treasurer of the local hospital and similar 
 annoying people, such as the tax-gathering officials ; 
 he hopes that he is discouraging would-be competitors 
 from entering into the trade to share in his gains ; 
 and he wishes also to plead poverty if he is confronted 
 with demands for higher pay from his employees. 
 And so, though high wages in any one industry 
 may be expected to attract many new learners and 
 so increase the supply of available hands, high profits 
 may be sufficiently well concealed to enable groups 
 of business men to reap semi-monopoly incomes. 
 One never knows. 
 
 But the ability to manage large businesses success- 
 fully does really seem to be rare. We cannot be 
 quite sure on this point, any more than we can guess 
 within a thousand or so how many Tommy Atkinses 
 in our army ought to be carrying field-marshals' 
 batons potential Marlboroughs and Wellingtons. 
 We cannot be sure on the point, because the oppor- 
 tunity of acting as a great captain of industry 
 seldom, in this country, comes now to any one 
 who has not been born into a moderately wealthy 
 circle. A great deal of such talent may be lying 
 latent in the working man's quarter of the town. 
 
 This the working man, in many cases, rightly or 
 wrongly, believes. And either imagining that 
 managing ability is a matter of trivial importance, 
 or fancying that the particular set to which he him- 
 self belongs possesses it in the fullest measure, 
 he has sometimes combined with his fellows to set 
 up a certain type of co-operative workshop. 
 
 The men who set such a workshop going believe 
 that the richer classes have got what may be called
 
 THE PLAYERS AND THE PRIZES 113 
 
 an unfair monopoly of managing positions. One 
 method of carrying out their plan would be for the 
 workmen to put their savings together, borrowing 
 more if necessary (and possible) on their joint 
 credit, and appoint their own manager, or managers, 
 to whom would be paid a definite salary out of the 
 profits of the business, while the manual workers 
 divide what is left. (This reverses the customary 
 arrangement by which the hands get fixed wages, 
 and the business manager takes the uncertain 
 remainder.) But in making this arrangement the 
 manual workers almost invariably underpay their 
 manager. They are perhaps inclined to think too 
 much about what seems on the face of things to be 
 just ; and seeing that the manager's task is lighter 
 and pleasanter than their own, they are unwilling 
 to offer him more than, say, three or four times as 
 much as they expect to earn themselves. But, if 
 the man they choose is a successful type of manager 
 who judges almost unerringly how and when 
 everything should be done the buying and the 
 selling, the scrapping of old machinery and the 
 adoption of new, the advertising, and so forth he 
 is not likely to be content with such a rate of pay, 
 and may be expected to grasp the first opportunity 
 to leave the co-operative group and set up a business 
 of his own. Cooperative workshops of this kind 
 have rarely proved successful ; perhaps because 
 managing ability is, after all, scarcer than most 
 people believe it to be. 1 
 
 1 This type of co-operative workshop springs up, though it 
 seldom flourishes, within the existing social system. An 
 interesting extension of the same principle, which, however, 
 could only be established by revolutionary action (a fact 
 recognised by its advocates, who tend to advocate and adopt 
 measures of violence to promote their aim), would be the 
 H
 
 114 HOW IT ALL FITS TOGETHER 
 
 If it were not for this scarcity of proved managing 
 ability, the co-operative workshop would have many 
 advantages over rival businesses. For, as the men 
 are working to make profits for themselves, they 
 are likely to restrain one another from idling and 
 to aim at avoiding waste of time and material. 
 But, except in the case of co-operative stores for 
 the sale of goods made elsewhere, working men's 
 co-operation has seldom been very successful. 
 Co-operative workshops usually fail, as we should 
 expect a football team to fail, if it had no captain, 
 or if the players believed the captain's orders to 
 amount to nothing more than an ornamental 
 flourish to advertise one not particularly good 
 player's vast self-importance. 
 
 The so-called "co-operative workshops" owned 
 by and producing goods for co-operative stores are 
 
 taking over of all the apparatus and organisation of each 
 individual trade by the different trade-unions whose 
 members are at present the paid employees of private 
 enterprise. If this ideal could be attained all the coal- 
 mines being owned and run by the miners' union, all the 
 railways by the guards and porters, etc. the aim of each 
 group would seem to be (i) to purchase all goods and 
 services from outsiders as cheaply as possible ; (2) to sell 
 its own products or services as dear as possible ; (3) to 
 limit as far as possible the numbers of its own union who 
 would share in the spoils. One can imagine the youthful 
 beginner wandering round from union to union, knocking 
 for admittance at closed doors, during a slack tune when, 
 let us say, the coal-miners were refusing to supply coal 
 to the railway men at ordinary rates unless the railways 
 granted specially low rates on the carriage of coal, while 
 the railway men were refusing to carry coal for the miners 
 unless they got their own coal for locomotive use at half- 
 price. The difficulties of a State where such a scheme 
 (usually known as Syndicalism) should be operative seem 
 insuperable ;
 
 THE PLAYERS AND THE PRIZES 115 
 
 of a different type. They flourish ; and their 
 success is not a matter for surprise. These, however, 
 are not owned and controlled solely by the workers 
 who produce the goods. 
 
 Co-operative activity may be expected, however, 
 to serve very useful ends. It brings ordinary 
 wage-earners to learn more about the interesting 
 problems of management, and perhaps tends to 
 make managing ability less scarce. If it became 
 much less scarce than it now is, individual employers 
 would be less likely to make huge profits, while the 
 nation as a whole would be likely to progress in 
 wealth much faster. 
 
 In contrast with this early type of co-operative 
 workshop, we find that co-operative stores for the 
 sale of goods flourish, and their days promise to be 
 long in the land. Why ? 
 
 When we make our purchases in an ordinary 
 shop, we have to pay a price for our goods such as 
 will enable the shopkeeper to obtain what, according 
 to his own estimate, is a living wage. For we are buy- 
 ing the shopkeeper's services, as well as the services 
 of those who, in the popular sense of the word, 
 are the " producers " l of the goods. But many 
 
 1 Who, by the way, is the " producer " of the coal on the 
 fire near which I am sitting ? The muscular person who 
 hacked it out of an underground seam ? The man (or is 
 it a boy ?) who took it on a truck to the foot of the shaft ? 
 The person up above who turned the windlass ? (We as- 
 sume that it wasn't a very deep mine.) The grimy worker 
 with the shovel who flung it on the cart in the intervals of 
 discussing Lloyd George's latest proposals ? The carter 
 who drove the cart down towards the Newcastle wharves ? 
 The policeman outside the public-house where the carter 
 stopped, who grunted, " Get a move on yer, then ! What 
 are yer blocking the traffic for ? " The stevedores at the 
 boat ? The sailormen ' ' who threshed the Bolivar out acroj s
 
 n6 HOW IT ALL FITS TOGETHER 
 
 of the goods in the shop may never be sold at 
 all. If it is a butcher's, it will occasionally 
 happen that some of the meat goes bad, and 
 unless the butcher is a very great friend of the 
 inspector, that won't be sold. If it is a fancy- 
 goods shop, some of the trinkets in it please none of 
 the customers, and remain on the shelves, until one 
 of the shopkeeper's personal friends gets married. 
 The shopkeeper must take all this into account 
 when he fixes the price of the goods we actually buy. 
 And so, it may be said, we pay not only the prices of 
 what we buy, but also our share of the price of the 
 goods that nobody buys. In most shops, also, 
 not all of the goods are sold " for cash." The shop- 
 keeper allows customers to get into debt with him, 
 and customers are sometimes forgetful. This, too, 
 the shopkeeper must take into account when he 
 fixes in the window the tickets that state, with the 
 finality and unchangeability of the laws of the Medes 
 and Persians, the prices of everything on view. 
 And so it comes about that we pay not only for what 
 we buy, and our share of the price of the goods 
 that nobody buys, but also our share of the price 
 of the goods, which, though " bought," nobody 
 pays for. Besides this, we must also pay our share 
 towards the rent of the shop, towards the cost of 
 
 the bay " ? The employees of the London wholesale coal- 
 dealers ? The railway hands who brought it to the local 
 coal stores ? The man who brought it round to the door ? 
 His assistant who sent it in a rattling avalanche down to 
 the coal-bin in the cellar ? The boot-boy who carried it, 
 wearily, upstairs to the coal-scuttle ? The maid who put 
 it in the grate ? . . . Why, not one of them all did more than 
 pass it along I The real thing that was to be produced was 
 the warmth of the fire. / produced that, with my little 
 match,
 
 THE PLAYERS AND THE PRIZES 117 
 
 the gas that lights it in the evenings, towards the 
 errand boy's wages, and towards the cost of the 
 advertisements that the shopkeeper puts in the 
 papers or on the street hoardings ; and also, if the 
 shopkeeper generously offers free gifts or prizes to 
 the customers who bring in so many hundreds of 
 his " coupons," we must pay for these prizes also 
 for very few shopkeepers are kind enough to give 
 us something for nothing. 
 
 Suppose, however, that a number of us, who are 
 always buying the same sorts of goods, agree to 
 start a shop for our own use. (Tennis and golf 
 clubs often do this and sell such articles as clubs and 
 balls to the members who constitute them. School- 
 boys with a common taste for sweets sometimes do 
 the same, and call it " our tuck-shop.") We can 
 hire an old, dingy barn in a back street, instead of a 
 bright-looking building in a busy thoroughfare. 
 For as we are going to be the customers of our own 
 shop, we know where to find it, and do not mind the 
 trouble of going to it. We shall not have to spend 
 on advertising in order to persuade the customers 
 that our goods really are better than Jones's ; for 
 we ourselves are the customers and we know quite 
 well the goods are much better than Jones's. We 
 shall also, perhaps, keep the shop open in the day- 
 time only, and thus we shall not have many quarrels 
 with the gas company about the falsehoods told by 
 the gas-meter. We shall all pay cash for our pur- 
 chases, and no one will be allowed to tell the man at 
 the paying desk that old story about having left 
 our purse on the mantelshelf in the kitchen. (This 
 also will lighten the expenses of book-keeping.) 
 We shall all agree to carry our own purchases 
 home with us ; and thus we may manage without a
 
 n8 HOW IT ALL FITS TOGETHER 
 
 shop-boy to run out with the various packages and 
 get chased all round the suburb by the youth who 
 didn't like the shape of his grin. And if we keep in 
 our shop only such goods as we all of us buy useful 
 goods, not the absurd things the woman next door 
 buys to show how much more fashionable she is 
 than our wife very few of the goods need remain 
 unsold. 
 
 When we have made arrangements of this kind 
 we have started the right kind of co-operative store ; 
 and it ought to be able to sell us our goods cheaper 
 than Jones's shop does ; or if it sells them at the 
 same price as his, it ought to be able to bring in a 
 much greater profit for its managers for us, that 
 is, who are not only its managers but also its cus- 
 tomers. In fact the co-operative store generally 
 proves so great a success that it grows tired of being 
 merely a co-operative store, and, without changing 
 its name, moves into new premises in the High 
 Street, advertises in the papers, hires a lot of 
 assistants and shop-walkers who must be kept 
 ostentatiously on the move when custom is slack 
 rolling and unrolling and rolling up again great 
 lengths of cloth, and shouting remarks along the 
 speaking tube and stocks all sorts of speculative 
 goods which, before it back-slid, it vowed never, 
 never to have anything to do with. 
 
 The co-operative workshop seems to wither away 
 because the kind of managing ability it requires is 
 relatively rare. The co-operative stores are a success 
 because everybody with a memory and a knowledge 
 for arithmetic can keep them going, well enough. 
 
 The widespread adoption of the principles of 
 co-operative shopping, moreover, would probably 
 lead to a cheapening of such goods as large numbers
 
 THE PLAYERS AND THE PRIZES 119 
 
 of us habitually purchase, and raise the prices of 
 those goods of a more speculative type which are 
 called for only by the occasional customer's caprice. 
 This, moreover, would probably lead to steadier 
 employment in the industries that produce the goods. 
 (In speaking of the co-operative principle we are not 
 referring to the mammoth stores that have grown 
 out of their original purely co-operative shape and 
 have become merely speculative competitive shops 
 catering for all sorts of customers, though these 
 also seem a desirable outgrowth of recent competitive 
 activity ; for few kinds of service involve more 
 waste of human lives, of ability and energy, than 
 does petty shopkeeping to say nothing of its 
 demoralising effects on shopkeepers who find it 
 necessary to cringe and lie to please their 
 customers.) 
 
 We have aimed in this chapter at giving a rough 
 idea of why men's incomes (exclusive of " unearned " 
 incomes) differ so much. But it is by no means true 
 that men are paid, or can expect to be paid, as they 
 deserve. How much, for instance, does a South 
 African miner, trying, during recent disturbances, 
 to raise his pay with dynamite, deserve to get as 
 compared with the Basuto he kicked to death ? 
 I am not suggesting that he doesn't deserve more. 
 But how much more ? Supposing his employer 
 gets ten times his income, does that mean that he 
 ought to get twenty times the Kaffir's income ? It 
 seems rather a difficult problem to solve by " Rule 
 of Three." 
 
 " See how the Fates their gifts allot. 
 For A is happy B is not. 
 Yet B is worthy, I dare say, 
 Of more prosperity than A !
 
 If I were Fortune which I'm not 
 B should enjoy A's happy lot, 
 And A should die in miserie, 
 That is, assuming I am B." 
 
 What is of more importance for the person who 
 wants to " get on " than debating insoluble questions 
 about desert is to snatch opportunities of becoming 
 one of a class of workers the supply of which is 
 always likely to be growing more slowly than the 
 demand for its services grows. The kinds of work 
 that require much training, or natural skill, or artistic 
 taste, or great physical strength, may be out of our 
 reach ; and if so, the higher incomes may be out 
 of our reach also. But within the more ordinary 
 classes of workers where there never seems any 
 scarcity of men capable of doing all that is required, 
 there is always a scarcity of workers whose favourite 
 tune is " Something accomplished, something done, 
 Has earned a night's repose." " There is always 
 room at the top." And though, by climbing to 
 the top in the more ordinary classes of work, a 
 man may not be able to earn much more than his 
 former companions on the slopes a little lower down, 
 still there's a breezier outlook up there, and a man, 
 somehow, feels safer. When times are bad and the 
 foreman has to turn some of the " workers " off the 
 premises, he generally begins with the handiest 
 hands, those down below, and seldom takes the 
 trouble to climb up to those slightly higher levels 
 where the consistently reliable workers have staked 
 out their claims. 
 
 Very few people who have thought carefully 
 about the matter would assert that the system we 
 have described is at all a just system. It is better 
 than a just system, however ; it is a system that
 
 THE PLAYERS AND THE PRIZES 121 
 
 works. And, strong as the professional student's 
 natural bias may be in the direction of welcoming 
 any juster scheme of social arrangements that has 
 been suggested by socialistic reformers, he seldom 
 finds on closer examination any other system that 
 looks, however pretty the designs on the clock face 
 may be made, as if it could possibly work. 
 
 It isn't just. It continually happens that men 
 who are getting first-rate incomes (managers of big 
 businesses, doctors, engineers) thoroughly enjoy 
 much of their work, and would beg to be allowed to 
 go on playing, " for love " (as they say in some 
 other kinds of games), if they weren't allowed a 
 chance of cash winnings, so absorbingly interesting 
 do they find their part in the Game of Life ; while 
 conscientious plodders, tramping through a daily 
 treadmill round of wearisome dullness, may be getting 
 barely enough to buy butter to spread on their bread. 
 In fact it seems almost a law of business life and 
 professional life that one cannot achieve a good 
 income unless one thoroughly enjoys a large part of 
 one's earning work ; and successful people, if com- 
 pelled to retire, are often as miserable as schoolboys 
 whom a hard-hearted schoolmaster has forbidden to 
 join in the games of the school. 
 
 The Game of Life is full of such injustices which 
 one would be glad to see remedied. But if we 
 attempted to revise the rules with regard to earnings, 
 saying that each player must be remunerated in 
 accordance with the hardness or the disagreeableness 
 of his work, or according to the industry and good 
 intentions which he displays, we should run the 
 most serious risks of killing all sorts of incentives to 
 keep the world on the move, and thus of making 
 everyone of us very much worse off than at present.
 
 122 HOW IT ALL FITS TOGETHER 
 
 And so, the best working definition of what consti- 
 tutes a " fair wage " for any group would seem to be 
 such a wage as enables things to work most smoothly 
 for other groups of workers a wage that attracts 
 the appropriate number of the appropriate kind of 
 workers into the group in question, and so enables 
 its output of services to fall into equilibrium with 
 the output of other groups. " Let justice be done, 
 though the skies fall ! " cries the orator on the tub 
 in Hyde Park. For my part, I should prefer the 
 sky to stay where it is, even if we have to put up 
 with many injustices. Let the prosperous rogues 
 keep what they are not justly entitled to ! Verily, 
 verily, we too have our reward.
 
 CHAPTER V 
 
 THE BOARD ON WHICH THE GAME IS PLAYED 
 
 (A Fragment from an Ancient Manuscript x ) 
 
 " Then let him who ventures on the quest for true wis- 
 dom be single-minded, with the concentration of a sitting 
 hen or of a cat watching her prey." Kaibara Ekken (Wis- 
 dom of the East). 
 
 ONCE Upon a Time, in the Benighted City called 
 Good Intentions, in the Kingdom of Nowhere 
 (Situated, I am told, in Latitude 95 N. and in 
 Longitude 183 W., only a Very Large Scale Map 
 will show it), there had been a Custom, handed down 
 from Time Immemorial, that All Shopping should 
 be Carried On by means of Hawkers' Handcarts. 
 For the Wisdom of the Elders had Decreed that 
 Fixed Shops were Unsightly, Undesirable, and 
 Inconvenient for the Customers. There was like- 
 wise a Law the origin of which I know not that 
 
 1 The problem to be dealt with in this chapter being 
 immeasurably more difficult to treat than those dealt with 
 in the rest of the book, the author would have preferred 
 to omit its discussion entirely, especially as it is seldom 
 necessary, for practical purposes, that the novice in the 
 game should trouble his mind by pondering deeply the laws 
 of rent and landlordism. For symmetry's sake, however, 
 he has decided to insert this brief excerpt from an ancient 
 manuscript, together with a preliminary recommendation 
 to the novice to pass it over unread. The reasoning 
 involved is much more difficult than that of the preceding 
 chapters; 
 
 123
 
 124 HOW IT ALL FITS TOGETHER 
 
 no Hawker should be allowed to own his Own Hand- 
 cart, but each must Borrow one, Paying an 
 Annual Charge to the Dealers who Hired Them Out. 
 The Handcarts were Supplied by the Dealers in 
 Open Competition ; but All were Built after One 
 Accepted Pattern. And under the Beneficent 
 Working of the Law of Supply and Demand which 
 holds good even in the Planet Saturn the Annual 
 Rent paid over to the Dealers worked out at 25 
 per annum. For Each Cart cost 100 to build ; 
 15 a year was found sufficient to cover both the 
 Interest on Builders' Capital and the Builders' 
 Profits ; and as Each Handcart had, on the Average, 
 a Life of 10 years before it was thrown aside, as 
 Worthless, on the Dealers' Scrap-heaps, 10 was 
 Written Off the Original 100 each year, as being 
 what the King's Economist called " Annual Depre- 
 ciation." 
 
 Now the Hawkers observed that people especially 
 Congregated at a spot called " Market Square," 
 in the centre of the High Street ; and that when 
 their Carts passed through the High Street and the 
 Square, their Customers were more Numerous, and 
 their Gains accordingly Greater. So they tended 
 to Linger there, blocking the passage of the Modest 
 Pedestrian and of the Wealthy Motorist alike, in 
 spite of All the Efforts of the City Watchmen, who 
 Chivvied Them On. And often the Watchmen 
 brought them before the City Magistrates, who Fined 
 them Perse veringly for Obstructing the Traffic. 
 But the More Sagacious Hawkers saw that it was 
 More Profitable to Incur the Fines than to Forgo the 
 Custom of the More Crowded Thoroughfare ; and 
 so they continued to Break the Bye-Laws, and 
 Humbly Pay the Fines. But One Hawker, Shrewder
 
 THE BOARD 
 
 than the Rest, having made Most Careful Computa- 
 tion of the Difference in his Takings when he 
 Loitered in the Square and when he Toiled Through 
 the Less Frequented Side-Streets, Approached the 
 City Fathers with An Offer. If they would permit 
 him, by Grant of a Special Licence, to Nail his 
 Handcart down in Market Square, at a spot Mid- 
 way between the Common Pump and the Stand from 
 which the Suffragettes addressed the Ratepayers of 
 the City seven evenings in the week, he would Com- 
 pound for the Irregular Fines the Magistrates Levied, 
 and thus Save Trouble for Himself and Them, and 
 likewise for the City Watch, and Pay, instead, an 
 Annual Fine of 50 a year. After " Great Argument 
 About it and About," the City Fathers Experiment- 
 ally Closed with this Offer. And Immediately 
 they were Deluged with Similar Propositions. One 
 Hawker offered 49 a year for the Site on the Other 
 Side of the Suffragettes' Platform ; and one bid 
 48 los. for that which lay Beyond the Common 
 Pump. And after Many Licences had been Granted, 
 the Corporation Commanded that All Handcarts 
 must be nailed Down, the City Surveyors being 
 Instructed to Hold Forthwith a Court, where the 
 Hawkers should attend and bid, one against another, 
 for the Remaining Vacant Spots. And Presently, 
 in place of Processions of Moving Shops Perambulat- 
 ing the Streets, there stretched from the Common 
 Pump along the High Street, and the King's Par- 
 ade, the Lovers' Promenade, and the Open Road 
 that leads to the Schools Four Radiating Lines 
 of Stationary Handcarts ; and for the Right to 
 occupy each Site ah Annual Fine was Levied, varying 
 from 50 at the Centre to Sixpence-Ha'penny at 
 the Circumference.
 
 126 HOW IT ALL FITS TOGETHER 
 
 But One Hawker, who was more Dilatory than 
 the Others in his Attendance at the Surveyors' 
 Court, could find no Empty Corner for the Right 
 to Occupy which he would Consent to Pay even 6d. ; 
 and Him the City Fathers Graciously Permitted to 
 Nail down his Cart without Paying even a Farthing. 
 For if they would not Grant him This Permission, 
 he declared that he would Return his Handcart 
 to the Dealer who Supplied it, and make his living 
 as a Schoolmaster instead ; and as the Mayor was 
 Himself the Dealer who Supplied the Cart, and 
 likewise a Respected Member of the School Board, 
 the Licence was Duly Granted. And the Spot 
 where the Cart was Finally Fastened Down was 
 named by the King's Economist " The Marginal 
 Plot," and thus it is known in the Books of All the 
 Economists ever since. 
 
 Now there were Many Wise Heads in the City 
 of Good Intentions who Protested against All these 
 Proceedings, Raising a Great Outcry, that if the 
 Poor Hawkers had to Pay These Fines " Their 
 Goods Would Cost Them More." But as Time 
 Went On, the Royal Statisticians found that it 
 was Not So ; and the King's Economist Enunciated 
 a Law at which the Public Mocked, Namely, that 
 " Ground Rents Do Not Enter Into The Prices 
 of Goods Sold In Shops." And Thenceforward, 
 Many Likened the King's Economist to the Royal 
 Astrologer, who had Excited their Merriment 
 Aforetime by Affirming that " The Earth Is Round " ; 
 whereas EVERYMAN in the Kingdom of Nowhere 
 can SEE that it is Flat. But the King's Economist 
 Argued that though the Hawkers had to Charge 
 their Customers, as Before, a Price for All their 
 Goods, Sufficient to Cover the 25 Annual Hire of
 
 THE BOARD 127 
 
 the Handcarts, and Sufficient to leave themselves 
 what they called " A Living Wage " this being, 
 in the Mouths of Some of them, 500 a year, and, 
 in the Mouths of Other Some, 50 they Charged 
 No More Now, After these Annual Fines were 
 Levied for the Right to Anchor their Shops Along 
 the Highways. Indeed, it was found that goods 
 were Often Rather Cheaper when Bought from the 
 Shrewd Hawker who Paid 50 a year for the Central 
 Site, than when Bought from the More Dilatory 
 Shopkeepers of the Outer Circle. 
 
 And thus things went on in the City of Good 
 Intentions ; and the Hawkers Prospered, and the 
 Rates and other Taxes were Reduced from year 
 to year, through the growth in the Revenue re- 
 ceived in the form of Annual Fines. But later, in 
 this Kingdom of Nowhere, there followed a period 
 of Anarchy and Confusion, concerning which the 
 Historical Records are Scanty and Incomplete. 
 And when Order came again, the Historians noted, 
 with a Mild Surprise, and with many a Wild Surmise 
 as to the Cause thereof, that no longer were the 
 Fines paid by the Hawkers to the Officials of 
 the Corporation, but, instead, to an Unofficial 
 Class of Wealthy Folk, who called themselves 
 " The Ground Landlords." How this came about 
 there was Much Disputing. Some Historians 
 asserted that the Right to receive the Fines was 
 granted by the City Fathers to the Ground 
 Landlords (many of whom were Themselves 
 Members of the Corporation) in return for Public 
 Service, in Equipping Special Contingents to Ward 
 Off the Attacks of Pirates, or in Watching, like 
 Shepherds, over the Morals of the Common Herd 
 (In the former case, the Registers of the Corporation,
 
 128 HOW IT ALL FITS TOGETHER 
 
 so the Research Students declared, called the Annual 
 Fines by the name of Feudal Dues ; and in the 
 latter, by the name of Tithe.) Others, however, 
 averred that the Ground Landlords Themselves 
 were a Species of Pirates, being Alien Invaders who, 
 in the Period of Confusion, descended as Conquerors 
 upon the Kingdom of Nowhere from the Far Land 
 of Normandie (Lat. 150 N., Long. 440 W.) 
 But All This Disputing, both the " Radds " and 
 the " Taories " x agreed, was about a point of 
 Merely Antiquarian Interest. For Many Good 
 Citizens, who had amassed wealth by Manufacture 
 and by Trade, had Bought from the Original Ground 
 Landlords the Right to receive the Fines ; and so 
 whether the Original Ground Landlords were the 
 State's Best Friends or its Worst Enemies matters 
 little (they said), for we cannot Now get back for 
 the Corporation the Annual Revenue of Fines, save 
 by Purchase from the Landlords : we cannot 
 Confiscate Wealth that in many cases is the Fruit 
 of Social Service, performed in the Workshop, on 
 the Farm, or at the Wharves. But as a Certain 
 Seer (or as the Taories Surnamed him " the Uncer- 
 tain See-er " ) from the Wellch Borders pointed 
 out if the Hawkers should In Future be in a 
 
 1 Also known, according to Dean Swift, the Professor of 
 Antiquities, as the " Big-Endians " and the " Little- 
 Endians " from the Diverse Modes, it is said, in which 
 they dealt with a Political Implement called a " Wedge." 
 The Radds were chiefly Migrants to the Mill Country of the 
 Middle North, Students of Metapheesics in the Highlands, 
 and Minstrels who played symphonies on Instruments 
 called " Consonants " among the Cambrian Hills. The 
 Taories mostly stayed in the South and sold goods to the 
 Samurai, or were dotted about the land in Fortresses called 
 " Kathedral cities, " which they held with Much Pertinacity 
 against the Machinations of the Radds.
 
 THE BOARD 129 
 
 position to pay Heavier Fines than Before and 
 this seemed a Not Unlikely Thing, for the City was 
 Growing Apace and the Crowds that thronged the 
 Thoroughfares to buy became every year denser 
 and More Prosperous the City Fathers might With 
 Reason Confiscate these Additions to the Earlier 
 Annual Fines ; and to these Additional Fines the 
 Bard Poetically gave the name of " Unearned 
 Increments," and the Songs he Composed about 
 them sounded Full Sweetly when played on the 
 Instruments called " Consonants " by the Other 
 Minstrels of the Wellch Borders. And this Advice, 
 in some Small Measure, the City Fathers adopted ; 
 with the Result that the Ground Landlords Gnashed 
 their Teeth, and Wept ; and Ceased Subscribing 
 to the School Fund and the Hospitals. But the 
 Populace Followed after the Bard, and greeted ALL 
 his Songs with Tumultuous Applause. " For " 
 (said they) 
 
 " He sings of what the World will be, 
 When the years have died away." 
 
 Now this name of " Unearned Increments " 
 given to these Additional Fines by the Wellch 
 Seer was declared by the King's Economist to be 
 Not a Scientific Appellation, But a Poetic Licence, 
 to wit, a Terminological Inexactitude. For All 
 Wealth, as all wise Authors are agreed, must be 
 Earned by Some One, either in the Sweat of his 
 Brow, or in the Agony of the Brain, or by his Self- 
 Restraint in Not Consuming what these Other 
 Folk Require. But while Some Few of the Incre- 
 ments are earned by the Landlords Themselves, 
 Some are Created by the Hawkers (or, as Most Writers 
 in the Post-Diluvian Period prefer to call them, 
 " The Tenants " ) through the Sagacious Construe-
 
 130 HOW IT ALL FITS TOGETHER 
 
 tional Changes they make in the Architecture of 
 their Handcarts and through the building-up of 
 Special Fields of Custom (called " Good Will," 
 and possessing a Right Good Market Value 
 sometimes) ; while Yet Others are Due to the 
 Community-At-Large Actively Pursuing its Mani- 
 fold Lines of Activity In and About the Neighbour- 
 hood, and thus building up the Prosperity of 
 all Hawkers of Goods and Services. And thus it 
 was seen to be Incumbent on the Sagacious Fathers 
 of the City, who Twisted their Beards Mightily 
 Over the Problem, to Act Warily, leaving to the 
 Landlord what the Landlord had created, giving 
 to the Tenant what the Tenant had earned, and 
 Confiscating for the Community Only what the 
 Community Itself Produced. But neither Ground 
 Landlord nor Tenant (it was Sagely pointed out) 
 should have a Right to Compensation for " Unearned 
 Decrements " a New Tune this, Invented by the 
 Taories, any more than a Physician could claim 
 it for a Falling Off in His Income through the Com- 
 munity Growing More Healthy in their Manner of 
 Living and Buying Only Medicaments that were 
 Advertised on the Hoardings, or the Schoolmaster, 
 because the Schoolboys of the City became so 
 Eagerly Industrious and likewise So Intelligent 
 (through the Fruitful Application of the New Nos- 
 trum called " Eugenics " ) that they could Learn 
 All Their Lessons Without Teaching At Home. 
 
 This then is what happened in the Kingdom of 
 Nowhere. And by studying the history of that 
 distracted kingdom we can perhaps see more clearly 
 what happens here in Merrie England. 
 
 For the use of shop, mill, and factory, residential
 
 THE BOARD 131 
 
 house or farm, theatre, banker's office, or hotel, the 
 rents charged may be split up into two parts. Of 
 these, one, called Building Rent, enters into and forms 
 a part of the cost of all goods and services that shop- 
 keepers, farmers, manufacturers, bankers, and other 
 caterers supply ; and one, called Site Rent (or " true 
 Economic Rent ") appearing only in certain situa- 
 tions, and not everywhere is a consequence and 
 not a cause of changes in the value of the output 
 of goods and services supplied. So, if the State 
 taxes all site rents, even to 100 per cent., our 
 goods would not cost us a penny the more. Nor, if 
 existing tenants were forbidden to pay site rents, 
 would they be foolish enough to charge us a penny 
 the less, being themselves now their own ground 
 landlords, and receiving two incomes one of rent, 
 paid by themselves to themselves, and one as 
 business managers, which they had already en- 
 deavoured to make as large as possible by charging 
 what they considered the most profitable prices for 
 their goods or services. 1 
 
 In the case of farming land and garden land, 
 no doubt, it is the fertility of the soil that in nearly 
 all cases counts for more than mere situation ; 
 though the most fertile soil in the wilds of Siberia 
 is likely to yield less rent than the most barren 
 acres in Essex or Kent. But situation and fertility 
 are close akin. We may, without outrageous use 
 of metaphor, speak of the wheat sown in fertile 
 
 1 " Not one penny the less " is the phrase used above ; 
 but the words " on the average " should be appended. 
 For such a confiscatory redistribution of spending power 
 would increase the demand for some goods and decrease 
 the demand for others, with irregular and incalculable 
 results, some goods costing us a trifle more than pre- 
 viously, while others would be a little cheapened.
 
 132 HOW IT ALL FITS TOGETHER 
 
 land as being nearer the market than that sown 
 among thorns and thistles (fewer of the grains 
 being lost on their way through being taken as pay- 
 ment for the services of carriers, etc., on their journey 
 from underground to the flour-mills). Or, in talking 
 of shops, we can speak of the greater fertility of 
 shops in the Central Area as compared with the 
 scanty crops of sales that can be grown on shop- 
 counters in the Outer Circle. 
 
 Here endeth our treatment of Rent. The 
 chapter is made shorter than the other chapters 
 because the writer knows, from sore experience, 
 that not many will accept its teaching without 
 demur. The Theorem of Rent is, in fact, almost as 
 difficult for Economists to prove, to the satisfaction 
 of all but the professional student, as the dictum of 
 those foolhardy geometricians who assert that a 
 square drawn on the long side of a square-cornered 
 triangle must be always exactly the same size as 
 the squares on the other two sides added together. 
 (" How can they possibly know ? They haven't 
 measured them all. Besides they couldn't ; for 
 there often isn't room to draw any square there 
 at all.") The author prefers, if so he may, to 
 retain the confidence of his readers by writing little 
 on a subject on which he knows that every busy 
 man on the 'bus knows that he knows far more 
 than all the foolish Academic Economists who sleep 
 their lazy lives away upon the shadowed banks of 
 Cam and Cher.
 
 CHAPTER VI 
 
 PATRON, RULE-MAKER AND REFEREE 
 
 Folk say, a wizard to a northern king 
 At Christmastide such wondrous things did show. 
 That through one window men beheld the spring, 
 And through another saw the summer glow, 
 And through a third the fruited vines arow, 
 While still, unheard, but in its wonted way, 
 Piped the drear wind of that December day. 
 
 So with this Earthly Paradise it is, 
 If ye will read aright, and pardon me, 
 Who strive to build a shadowy isle of bliss 
 Midmost the beating of the steely sea, 
 Where tossed about all hearts of men must be ; 
 Whose ravening monsters mighty men shall slay, 
 Not the poor singer of an empty day. 
 
 WILLIAM MORRIS. 
 
 IN the Game of Life the State is the patron, the 
 rule-maker, the stake-holder, the supervisor of the 
 ambulance department, and the referee. 
 
 The State performs all these functions simul- 
 taneously ; with the consequence that spectators 
 in the grand-stand, even if they keep very wide- 
 awake indeed, find the game at times rather bewilder- 
 ing to follow. 
 
 First of all let us glance at the functions of the 
 State as trainer of the new recruits at the game. 
 
 In those far-off shadowy days, when the world 
 was very much more juvenile and not yet accus- 
 tomed to having everything done for it, grown-up 
 fashion, by machinery, practically every novice at 
 
 133
 
 134 HOW IT ALL FITS TOGETHER 
 
 the game had to pick up the tricks of his trade in 
 one and the same way. He was assigned to an 
 individual trainer, by a procedure called " appren- 
 ticeship " ; and in his new master's house he passed 
 some seven years of hobbledyhoyhood, receiving 
 board and lodging, instruction in his chosen " craft," 
 and such parental control and supervision in the 
 ordinary business of life as his adopted father 
 might think desirable. The custom of India is 
 still very largely the same as this, but with the 
 added restriction that the novice can only choose 
 his father's occupation or that of some allied 
 occupation practised by the members of a more or 
 less extensive religious family called the " Caste " 
 a principle that must lead to disastrous results 
 when there is a falling off in the demand for the 
 kinds of services rendered by the members of the 
 Caste, especially as the Caste is often the only 
 mutual-insurance and poor-relief institution on 
 which the Indian depends in periods of distress. 
 
 The apprentice was expected in the course of 
 his seven years' service to learn the whole of an 
 ordinary craft leather-working, iron-working, or 
 whatever it might be. Towards the end of his 
 seven years he would perhaps receive some small 
 weekly payment for his work, much as boys receive 
 pocket-money from their parents. When his ap- 
 prenticeship was finished he would become a 
 " journeyman " working for wages ; and later 
 perhaps become a " master-craftsman " having 
 journeymen and apprentices working under him. 
 Such was the artisan's career in the old-fashioned 
 world. 
 
 But when the greater part of the world's manu- 
 facturing products ceased to be simple manu-fada
 
 PATRON, RULE-MAKER AND REFEREE 135 
 
 (hand-made goods) but came instead to be turned 
 out with the help of machinery in great mills and 
 factories, much of this earlier custom died away. 
 No longer does the ordinary youth set out, like 
 Alfred the Great, to take " all knowledge as his 
 Province." No longer does he wish to master 
 the whole of his trade. Instead, he goes into a 
 factory where he is at once set to perform some 
 necessary task, so simple that he can master it in 
 a few days or even hours ; and thus he becomes at 
 once a wage-earner. The old-fashioned apprentice 
 was a learner, who did not earn ; the boy in a 
 modern factory is an earner, who is seldom wise 
 enough, even when he has the opportunity, to 
 look about him and learn, while he is earning. 
 Even in the trades such as tailoring and cabinet- 
 making which are still carried on in the more old- 
 fashioned way with relatively little machinery, and 
 where it is still common for the captains of industry 
 to rise by easy stages from the ranks of the appren- 
 ticed learners, it is not very usual, except perhaps 
 in small country towns, for the workers to learn 
 more than one or two parts of the trade. (It is 
 frequently noted in London workshops that the 
 foremen are all from the provinces.) Only in 
 those occupations where rather more skill than the 
 average is required, such as engineering and optical 
 instrument making, do we still find boys commonly 
 beginning as apprentices ; paying a " premium," 
 often, for the instruction they are supposed to 
 receive and to cover the cost of the material they 
 damage in learning ; instead of commencing at 
 once to earn ; and it is no longer the custom in 
 such cases for the apprentice to live like an adopted 
 son in his master's house.
 
 136 HOW IT ALL FITS TOGETHER 
 
 But some kind of training is still necessary before 
 boys can become earners. The game of life is not so 
 simple that one can become a successful player 
 from the very start. Under the older conditions, 
 the laws of the country and the custom of each 
 trade made apprenticeship practically compulsory. 
 But apprenticeship died away or nearly so when 
 there was no longer need for the majority of factory 
 hands to do more than help make a part of a part of 
 a thing. To serve seven years without earning came 
 to seem an absurd and impossible waste of time, 
 except in the most skilled trades, and in such pro- 
 fessions as the doctor's and the architect's, where a 
 long and expensive training is still as necessary as 
 ever. In one case, however, that of schoolmaster- 
 ing (long the refuge of those who failed in every 
 line of life that required common-sense or honesty 
 or energy), the opposite process is taking place ; 
 and a real apprenticeship is coming to be treated 
 as necessary almost as if schoolmastering a 
 mere matter of developing brain and character 
 could not be acquired off-hand, like pick and shovel 
 work. The Chairman of the West Ham Council's 
 Education Committee, Mr. W. R. Hughes, M.A., 
 describing the curriculum of the elementary school- 
 master or mistress in January, 1914, writes : 
 " This rather remarkable fact may be emphasised, 
 that if one of our boys or girls wishes to become a 
 teacher, a decision must be made at eleven years of 
 age, or the door will in all probability be effectually 
 barred for ever." 
 
 In view, however, of the more general phen- 
 omenon of the decay of apprenticeship, the laws 
 had to be recast. Instead of each boy finding an 
 adopted father who would train him both in the
 
 PATRON, RULE-MAKER AND REFEREE 137 
 
 way to earn and the way to live, the State has 
 stepped in, and offers to provide free training 
 (machine-made, and nearly as cheap as machine- 
 made boots) for all. This is the meaning of our 
 system of schools. Few boys are now expected 
 to be trained thoroughly in the use of many different 
 materials, so as to become (say) all-round carpenters 
 or all-round leather- workers. (Farm boys are an 
 exception, because they need to learn, and learn 
 early, how to deal with animals of very different 
 types and tempers. School-attendance laws take 
 this into account and differentiate between the 
 town boy and the country boy.) What now is 
 needed in the world of business, in the shop, the 
 counting-house and the factory, is quickness, neat- 
 ness, regularity, readiness to obey, industry, com- 
 mon sense, and at least a little knowledge of reading, 
 writing, and arithmetic. These are what our ele- 
 mentary schools aim at supplying to millions of 
 children at the expense of the community, instead 
 of separate master-craftsmen supplying a special 
 training to single learners. One result of this 
 change (combined with the general improvement 
 in methods of production) is that boys within a few 
 years of leaving school may now often be found 
 earning more, being able, that is, to buy with 
 their wages more of the products of other workers' 
 labour, than most adult wage-earners of the same 
 class could procure a century ago. 
 
 The process, as now carried on, involves at times, 
 no doubt, in the case of the human boy, the crushing 
 out of many equally attractive and possibly higher 
 qualities such qualities as we desire and admire 
 in a friend, though we prefer in our servants these 
 machine-made virtues of the education factory,
 
 138 HOW IT ALL FITS TOGETHER 
 
 our servants being, of course, the banker and the 
 lawyer, the butcher and the baker, the policeman 
 and the postman, and all mankind (in short) with 
 whom we come into economic relationships. This 
 the less mechanical among our educationists are 
 for ever deploring. And the poet entering the 
 class-room of a school of a type that we hope is 
 now rapidly becoming obsolescent, and noting the 
 dreary, devitalising environment 
 
 " Two and two are four 
 
 Three and three are six " 
 
 turns aside with instinctive shrinking to a memory 
 picture of the country-side 
 
 " Where nothing is added up, 
 Yet, somehow, growth takes place ; 
 Where a yellow buttercup 
 Turns into a fairy's face." 
 
 Boys who think about their future will not, of 
 course, be content with receiving from the com- 
 munity this small (though very pleasant) start. 
 But those whose parents are hard pressed by 
 circumstances and those who have not been 
 warned by teachers and friends to look ahead, take 
 work that brings in a little money directly they 
 leave school, without asking themselves whether 
 they will be learning anything that will enable 
 them to earn something like a man's wage when 
 they are grown men and desirous of marrying. 
 Multitudes of boys drift, without thinking, or 
 watching the set of currents, into Sargasso Seas 
 of hopelessness and incapacity what are more 
 commonly called " blind-alley " occupations. From 
 the age of fourteen to the age of twenty they are 
 growing physically stronger, while working as 
 van-boys or as messengers ; but they are forgetting
 
 PATRON, RULE-MAKER AND REFEREE 139 
 
 all that they learned at school, and not learning 
 how to fit themselves successfully for the business 
 of life in later years. At about the age of twenty 
 they find that they are no longer wanted. They lose 
 their jobs, and for the rest of their lives are badly 
 paid " casual " labourers, getting a little work now 
 and a little then now at the Docks, now outside the 
 railway station, now keeping an eye open for the 
 police to oblige mine host of the Dew Drop Inn 
 but never finding permanent means of earning 
 regularly. And soon, they tend to lose the willing- 
 ness to work. We all do that. It's just that old 
 Original Human Nature, which the factory system 
 had drilled out of us, returning in double measure, 
 and leading us to believe what we believed in the 
 jolly days of childhood, that the only really 
 sensible life is that of the African Negro, basking 
 in the sun and eating watermelons. 
 
 Our schoolboys who have been tempted by high 
 preliminary earnings have walked down a blind 
 alley that ends against a brick wall at the twentieth 
 milestone, instead of finding themselves on any 
 of the breezy open roads that lead to success in 
 life. Then perhaps they light-heartedly marry, 
 as they light-heartedly began their short career 
 as earners, never asking themselves whether they 
 can give their children a fair start in life ; and the 
 children endless children ill-fed, ill-trained, not 
 only do not get a fair chance themselves, but make 
 life a little harder for all around them. And the 
 girls who marry these men are accomplices in it all. 
 
 This takes us by a natural transition to the 
 ambulance department of the State's activity. 
 Much here has been done factory acts, minimum 
 wage laws for " sweated " trades, insurance acts,
 
 140 HOW IT ALL FITS TOGETHER 
 
 miners' eight hour acts, workmen's compensation 
 acts, and so forth. But much still remains to be 
 done, as the study of such books as Miss Gold- 
 mark's Fatigue and Efficiency or of Mr. Bray's 
 Boy Labour and Apprenticeship (to mention only 
 two out of a multitude) will only too clearly show. 
 The State steps in, not merely to make the begin- 
 nings of our earning life easier, but to reduce its 
 hardships at every stage, and finally to ensure, by 
 Old Age Pensions, at least a bare subsistence in its 
 closing years. More and more we have come to 
 recognise that the wealth we all enjoy is produced 
 by all (or nearly all) in common, and that it is 
 largely a series of curious accidents that determines 
 what each man's share is to be. We have outgrown 
 the old-fashioned " individualism " for which men 
 like Bright and Gladstone fought, under which it 
 was considered the only fair and sensible rule for 
 regulating the distribution of the medals and cups 
 for good play, that they must all go to the men who 
 happen to kick the goals. (That rule wasn't 
 invented by the back-line players in the team.) 
 
 The State is perpetually revising the regulations 
 in accordance with which the game has to be played. 
 This is especially true with regard to the ambulance 
 department. 
 
 In laying down new regulations .a wise Govern- 
 ment must keep before it several broad principles, 
 principles which sound sufficiently simple when 
 briefly enunciated, but which are often exceedingly 
 difficult of application ; for a wise application of 
 them must be based on a deep knowledge of the 
 characteristics of the people for whose benefit 
 the new measures are proposed, while it may 
 happen also that the different principles will at
 
 PATRON, RULE-MAKER AND REFEREE 141 
 
 times appear to clash, in which case it is seldom 
 easy to decide which of two conflicting principles 
 should outweigh the other. 
 
 The objects for which the State intervenes in 
 the ordinary business of life are usually if the 
 State is wide awake and not sleep-walking either 
 (i) to set free energies which would otherwise be 
 restrained by the cramping influences of bad social 
 customs or of the individual's straitened circum- 
 stances, and so increase the aggregate wealth-produc- 
 ing power of the nation ; or (2) to restrain the 
 actions of individuals and classes in such ways as 
 to make the division of the aggregate wealth more 
 equitable. On the whole, measures which tend to 
 bring about by gradual stages the latter result 
 may be expected also to further the former aim ; 
 but if the changes in this direction changes aiming 
 at producing a greater equalisation either of wealth 
 itself or of the opportunities of attaining wealth 
 are introduced and enforced with reckless rapidity 
 (the wealth of the wealthiest being over-hastily 
 confiscated by the tax-gatherer in order to promote 
 the welfare of the poor) the aggregate wealth is 
 likely rather to decline than to advance. For if 
 " credit " is in such ways gravely shaken, the 
 stimulus both to saving and to business enterprise 
 on the part of the better-off sections may be expected 
 to be weakened ; and if also the self-respecting 
 qualities of the lower half of the nation are simul- 
 taneously sapped by expectations of having the 
 State do for individuals " paternally " what they 
 might more satisfactorily do for themselves, the 
 loss of wealth-producing power is intensified. Even 
 from the narrower economic point of view no class 
 gets more than a transitory benefit, since equalisation
 
 142 HOW IT ALL FITS TOGETHER 
 
 of each to each on a level of uniform poverty is no 
 more satisfactory than the retention of gross 
 inequalities with a higher general average of pros- 
 perity ; while the broader, moral results are dis- 
 tinctly bad, and political life suffers in quality 
 through the growth of discontent on the one hand 
 and of- a spirit of gambling greed on the other. 
 In such matters we can apply with little hesitation 
 the proverb, " the more the haste, the less the 
 speed." 
 
 As instances of the difficulty of applying such 
 principles we may take the granting of Old Age 
 Pensions and the feeding of necessitous school- 
 children. 
 
 When old age pensions were first advocated, 
 many critics protested that their institution would 
 discourage thrift. On the other hand it may perhaps 
 equally strongly be urged that they are likely in 
 the long run to encourage thrift. For a man who 
 is struggling along on, say, 405. a week, would be 
 foolish indeed if he stinted himself of every six- 
 penny enjoyment, on the " off chance " of his 
 having the misfortune (the word is hardly too 
 strong) to live to be an old man, in order to be able 
 to provide himself in old age with a continuance of 
 the barest necessaries of existence. But if the 
 barest needs of life are rendered secure by the 
 action of the State, then there is a clear incentive 
 to economise a little, in order to make old age re- 
 semble a little more closely a life, and a little less 
 closely a mere existence. 
 
 Similarly with the feeding of school-children. 
 We have decided, for our own sakes, if not for the 
 children's, that all children must have some pre- 
 liminary training. (We may quite reasonably help
 
 PATRON, RULE-MAKER AND REFEREE 143 
 
 in educating our improvident neighbour's children 
 from purely selfish motives, even though we are 
 personally indifferent to our neighbour's individual 
 welfare except in so far as his prosperity has a 
 reflected influence on our own and may positively 
 detest his brood of noisy, stone-throwing brats. 
 For it is always to our interest that our neighbours' 
 children should grow up to be efficient workers and 
 reasonable citizens, even if we prefer to remain 
 inefficient and unreasonable ourselves.) But we 
 find ourselves confronted by a problem arising 
 out of the presence in our schools of insufficiently 
 nourished pupils. Not only do such children 
 gain nothing from their compulsory attendance 
 one's brain cannot digest ideas when one's 
 stomach is clamouring for food to digest instead 
 but their health and future efficiency are directly 
 damaged by our compelling them to disobey the 
 healthy demands of Nature, through their being 
 ordered to sit still and strain their attention wearily 
 upon dull, uninteresting, and tiring subjects. We 
 must, therefore, either bid them stay away, or 
 else supply what the parents should have supplied. 
 We have decided to feed them, and as far as practic- 
 able collect the cost from the parents. Now if this 
 free feeding " pauperises " both children and parents, 
 by accustoming them to dependence on the State 
 rather than on mutual support, it is obviously not a 
 very desirable result. And this would perhaps be 
 the most conspicuous result if the food were, so 
 to speak, thrown at them (as one throws buns at 
 the bears in the Zoo) in the form of clearly marked 
 charitable doles. If, however, as Mr. Sidney Webb 
 epigrammatically puts it, we thoughtfully add 
 another lesson to the school time-table " 12 to i :
 
 144 HOW IT ALL FITS TOGETHER 
 
 table manners: materials provided " and are care- 
 ful to make the whole procedure in this and similar 
 matters as civilising as we can, it is possible that 
 instead of increased pauperisation following on 
 these kinds of State action, a heightened standard of 
 self-respect may even emerge, and these children, 
 on growing in their turn to be the parents of another 
 generation, may prove better parents than their 
 predecessors. 
 
 Even such measures as State Insurance against 
 sickness may similarly be defended on non-philan- 
 thropic grounds. Anything that prevents ailing 
 workmen from permanently having their efficiency 
 lowered, through their neglect of medical advice 
 or dental treatment (owing to fear of incurring 
 expense), and through the spread of ailments from 
 workman to workman in a crowded factory, may 
 quite well tend, it may be argued, to increase in 
 the long run the efficiency of the workers, decrease 
 the number of industrial accidents, and in conse- 
 quence lower for the employer the costs of production 
 in spite of the off-setting waste of time due to 
 malingering. 
 
 But all such schemes call for " money." Where 
 is this money to come from ? Governments seldom 
 own extensive farms or numerous factories which 
 could produce the wealth needed for such purposes. 
 And in spite of the many strong arguments adduced 
 by shrewd, disinterested writers on Socialism, we 
 still hesitate, and hesitate with very good reason, 
 at every proposal that the State or the municipality 
 should take over any new industrial enterprise. 
 We have seen how the co-operative workshop fails. 
 The establishments of municipal baths, tramways, 
 gas-works, etc., may perhaps be described as a
 
 PATRON. RULE-MAKER AND REFEREE 145 
 
 form of compulsory co-operation. The ratepayers 
 are involuntary shareholders in the enterprise ; 
 and if it is decided to sell the product or service 
 " at cost," they have been compelled to invest in 
 an enterprise of the " heads-I-win tails-you-lose " 
 type. They cannot hope for profits to reduce the 
 rates, and the rates may have to be increased to 
 make up unanticipated deficits. And so the Eng- 
 lishman shrinks from advocating State (or municipal) 
 ownership, and anything more than a very limited 
 measure of State control, in the case 'of any enter- 
 prises of a competitive kind, unless there is some 
 overwhelming reason in favour of so doing, owing 
 to the significance of the service in its relation to 
 questions of life and health (e.g., a healthy milk 
 supply or water supply, or a tram service that enables 
 the population to spread out more healthily into 
 the suburbs). On the whole, in spite of the 
 steady growth of State and municipal enterprise 
 in services of a monopoly character, the bulk of 
 Englishmen seem to have made up their minds that 
 the State has enough work on its hands in acting 
 as trainer, adviser, umpire, rule-maker, etc., without 
 taking a turn in the game as a player as well. To 
 some extent their views have been modified by five 
 years of State control over many industries, due 
 to war needs ; but the extent of this modification 
 cannot as yet be easily gauged. 
 
 Yet the State must in some way get hold of the 
 wealth that it arranges to devote to education, 
 old age pensions, workmen's insurance, and so 
 forth. Unless it turns Socialist and produces the 
 wealth itself, it must take it, in accordance with 
 some scheme or other, from all who share in the 
 work of production from those who labour with
 
 146 HOW IT ALT. FITS TOGETHER 
 
 their hands, from those who supply ideas, from 
 those who save. (The mere landholder the land- 
 holder of theory who receives rents and does nothing 
 else takes his share, in more irregular fashion, 
 from the same sources. In taxing him the State 
 takes part of what he has taken from the active 
 members of the community.) All must be made 
 to contribute ; and these contributions, resembling 
 in some ways, but not in all, the voluntary subscrip- 
 tions paid to private clubs by their members, take 
 for the most part the form of rates and taxes, 
 including of course customs duties. (Relatively 
 trivial amounts come from such sources as dividends 
 from Suez Canal shares, returns from Crown lands, 
 treasure trove, intestate estates for which no 
 satisfactory claimants appear, and fines for breaches 
 of the law.) 
 
 So Governments have to decide not merely on 
 what different objects army and navy, police, 
 education, etc. to spend, and how much on each, 
 but also to decide how most equitably to distribute 
 the burden of the contributions and how most 
 economically to collect them. Every country in 
 the world has its own special plan of gathering in 
 the necessary funds. What a far-sighted Govern- 
 ment aims at is to select those forms of taxes that 
 will cost little to collect (e.g. not customs duties in 
 cases where it is easy and profitable to smuggle) 
 and which will interfere as little as possible with 
 the production of further wealth (e.g., not customs 
 duties on imported raw materials like cotton and 
 iron ore) ; taxes which will cause as little grumbling 
 as possible (e.g. not taxes paid at every purchase 
 made at a shop's counter) ; taxes which do not 
 seem specially unfair to any section of the club
 
 PATRON, RULE-MAKER AND REFEREE 147 
 
 members, and therefore do not provoke organised 
 " passive resistance." 
 
 The different members of any club are certain to 
 have very different ideas as to the best ways of 
 utilising the joint funds, though all of them will 
 be agreed that it is advisable to keep the rates of 
 subscription as low as is compatible with the average 
 member's view of the satisfactory working of the 
 club. Those who want the expenditure to run in 
 one direction will always grumble when much is 
 spent on objects that do not interest them. Such 
 conflicts of opinion make up a large part of the 
 Game of Politics in the club that we call the United 
 Kingdom. 
 
 Some of the members are perpetually asking that 
 large amounts should be spent on maintaining a 
 vast army and navy, in order that we may all be 
 able to go on playing our own game without fear 
 of interference from the members of other clubs. 
 These people are aways inclined to grumble when 
 new taxes are being raised to provide education 
 or old-age pensions. Others are always asking for 
 more to be spent on training institutions of all 
 sorts (elementary schools, continuation schools, 
 technical schools, universities for experimental 
 work), and also on the ambulance department 
 (destruction of slums, inspection of food, free 
 dentistry for children, hospitals, sickness and 
 unemployment insurance) in order that the great 
 mass of the players may be enabled to play the 
 game better and more continuously. They believe 
 that this will cause more wealth to be produced, 
 and that if more be earned by every one, much 
 more can be paid in taxes without the nation feeling 
 itself to be growing poorer
 
 148 HOW IT ALL FITS TOGETHER 
 
 We have touched on the relations of the State to 
 Labour. Government also attempts in various 
 ways to encourage saving and business enterprise 
 the two other important " factors of production " 
 
 (P- 49)- 
 To encourage saving, and the use of saved wealth 
 
 in industry, the State, besides taking over small 
 people's savings in the Post Office Savings Bank 
 and finding a use for them, controls by legislation 
 the management of the banks and companies that 
 wish to borrow our savings. One of the most 
 beneficent changes in economic organisation that 
 has helped forward the growth of our prosperity 
 in the last century has been the passing of the laws 
 that govern the formation and activities of joint 
 stock companies. (Wherever you see the term 
 " Limited " or " Ltd." added to the name of a 
 business, that business is a joint stock company.) 
 Such companies may be formed by hundreds or by 
 thousands of persons subscribing small sums and 
 becoming " shareholders " in the enterprise, receiv- 
 ing a share of the joint profits (if any) in the form of 
 dividends, distributed among the members in 
 proportion to the number of shares each holds. If 
 a shareholder changes his mind and wants his 
 money bacl for other purposes, he is generally 
 able to sell his shares to a substitute whose name 
 now replaces his on the company's register of 
 shareholders ; and, unlike a member of an ordinary 
 private partnership, he can do this without 
 consultation with the other members. He does 
 not always, of course, receive as much as he sub- 
 scribed or paid for his shares. (The price of a share, 
 apart from speculative influences due to Stock Ex- 
 change manipulation, should depend on the amount,
 
 PATRON, RULE-MAKER AND REFEREE 149 
 
 the regularity, and the permanence of the antici- 
 pated dividend per share, much as the commercial 
 value of land depends on estimates of future rents, 
 and the " good- will " of a business on estimates of 
 future profits. It has no relation to the " nominal " 
 value of the share whether, that is, the share is 
 called a i share or a 1000 share.) The liability 
 of a shareholder to make good any deficiencies if 
 the company slips into difficulties, unlike the liability 
 of a partner in an ordinary partnership, is limited 
 to a definite amount per share. In the case of a 
 " fully paid share" (which term, by the way, does 
 not imply that anything whatever has actually 
 been subscribed or paid by any one to the company) 
 the liability is nil. In the case of English banking 
 shares the shareholders' liabilities amount usually 
 to several times the market value of the shares. 
 (For further study of this subject the reader should 
 turn to Mr. Hartley Withers' well-informed and 
 most amusing book, " Stocks and Shares." ) 
 
 This limitation of liability enables the ordinary 
 busy man to invest, without risk of ruin, in businesses 
 the inner working of which remains a mystery to 
 him. Incidentally it leads to a good deal of waste 
 of the nation's savings through the investor being 
 cajoled into subscribing to schemes out of which 
 only the company promoter reaps a benefit. But 
 this evil is outweighed by the opportunities that 
 it offers for the promotion of risky new ventures 
 (development of oil-fields, rubber plantations, new 
 patents, etc.), a certain proportion of which succeed 
 and recoup the nation for its losses on the blundering 
 speculations. 1 It is thus that much of our economic 
 progress is made. 
 
 1 Many hasty critics confuse "speculation" (which,
 
 150 HOW IT ALL FITS TOGETHER 
 
 We may notice, also, how the State deals with 
 the players who meet with failure. Its aim is to 
 prevent them losing heart and ceasing to use such 
 skill and energy as they possess. The courts of 
 bankruptcy take over the whole of the unsuccessful 
 player's property excepting such items as may 
 be necessary to enable him to make some sort of 
 fresh beginning and distribute it among the 
 creditors in proportion to the amounts owing to 
 each. The bankrupt is then set free from his past 
 financial obligations. If it were not for this, it 
 would seldom be worth while for a man heavily 
 laden with debts to make the best use of his earning 
 powers. Every trifle accumulated would be liable 
 to be swept away by his importunate creditors. 
 " Why, then," he would ask himself, "go on 
 toiling for others ? " 
 
 On the whole, the bankruptcy principle (though 
 probably requiring many modifications in its 
 detailed application) undoubtedly works advan- 
 tageously ; in spite of the fact that it is misused 
 by rogues to the detriment of the community, 
 
 properly speaking, means " forecasting " future develop- 
 ments) with gambling ; and it is certainly often a very 
 difficult matter to distinguish between them in practice. 
 Gambling is trusting to chance, without careful reasoning 
 about probabilities. This the State generally aims at 
 discouraging. For those who acquire the gambling habit 
 are likely to give less thought to the socially useful aspects 
 of the game of life than they otherwise might. Instead of 
 playing the game carefully and making use of every oppor- 
 tunity of bettering himself in little ways, the gambler is 
 always dreaming of sudden great gains, and is likely, 
 through a natural confusion between the sordid realities 
 of the drab present and the glowing prospects of a golden 
 future, to live wastefully and extravagantly. This, of 
 course, is socially harmful.
 
 PATRON, RULE-MAKER AND REFEREE 151 
 
 even as the facilities for company promoting are 
 misused by buccaneers of a more ambitious type. 
 
 The establishing of a system of patents and 
 copyrights is another method by which progress 
 is encouraged. When a new industrial device is 
 suggested, it is rarely the case that business leaders 
 can feel confident of the commercial value of the 
 suggested improvement, while the preliminary 
 costs of handling a new invention may be consider- 
 able. They naturally hesitate about incurring 
 such preliminary costs (establishing the necessary 
 plant, trying experimental modifications, marketing, 
 advertising) if their rivals are free to copy them 
 immediately the invention in its final form proves 
 a clear success. Without the protection of patent 
 laws each would be likely to wait until one of the 
 others had taken the plunge. Patent and copy- 
 right laws give the patent-holder or the publisher 
 of a book the power to charge monopoly prices for 
 a stated period of years, by forbidding others to 
 produce similar commodities in competition against 
 him. Patented articles are therefore likely to be 
 sold at prices considerably above costs of production. 
 But though we are always combating monopolies 
 when they seem to serve no adequate social good 
 (e.g., many of the American Trusts) we hold that it 
 is as a general rule well worth while to allow the 
 patent-holder to reap a temporary monopolist's 
 profit at our expense with a view to encouraging 
 business men to develop new ideas boldly and 
 promptly ; and at the same time we give some 
 consideration to the inventor's or author's social 
 deserts. (It is, of course, grotesque to argue, . as 
 Mark Twain has often seriously argued, that the 
 author's " right " to monopoly profits is a natural
 
 152 HOW IT ALL FITS TOGETHER 
 
 property right, which it is robbery on the part of 
 the State to limit in any way. A copyright or 
 patent right is a particularly artificial outcome of 
 the State's benevolence towards the author or 
 inventor. It would have disastrous effects on 
 progress, intellectual or economic, to grant such 
 rights in perpetuity.) 
 
 Many more ways of helping the players in the 
 game are always being advocated by those who 
 take part in political life ; suggestions for improve- 
 ments in the rules are perpetually being brought 
 forward, in parliament, in the press, in the pulpit ; 
 and, it is to be hoped, will continue to be brought 
 forward. Industrial organisation is continually 
 altering ; and legislation must move steadily 
 forward in order to keep in touch with its new forms. 
 There is always room for experimenting with new 
 schemes. For there are always great numbers in 
 the community who do not get reasonable oppor- 
 tunities of using their powers to the full ; and : 
 merely as a business proposition, it is worth our 
 while taking trouble in order to create opportuni- 
 ties for them. The whole nation loses when any 
 particular group of players is handicapped by 
 circumstances. What is harmful to one group is 
 generally harmful to the club as a whole, and what 
 is helpful to any one set is helpful to the whole. 
 
 Even as between different nations this is usually 
 true. We often find writers (otherwise very sensible 
 people) talking as if countries like England and 
 Germany were enemies in business, and as if 
 one could not gain without the other losing. But 
 a little thought will show that if the Germans 
 become richer they are likely to purchase larger 
 quantities of English goods and services, and thus
 
 PATRON, RULE-MAKER AND REFEREE 153 
 
 give more opportunities of prosperity to English 
 workers ; or, if they buy more of French goods 
 instead, they foster the prosperity of France, and 
 Frenchmen may be expected to buy more from 
 England. Of course the makers of steel goods in 
 Sheffield or Birmingham are the rivals of the makers 
 of steel goods in Germany, and may be expected to 
 gain if the German steel-workers are injured (by 
 war or in other ways) provided the rest of the 
 German nation remains as prosperous as before. 
 But they do not gain by the German ship-builders 
 or the German machine-makers being injured. 
 If these are rendered poorer (by war or in other 
 ways) there is less chance of prosperity for the English 
 steel-workers, even if these German firms do not 
 themselves buy English steel products ; for if they 
 buy less Belgian steel than before, there is a likeli- 
 hood of more Belgian steel being forced on the 
 English market (" dumped ") at exceptionally low 
 prices. 
 
 Every business man wants his customers to be 
 as prosperous as possible, whatever he may wish 
 about his rivals ; and if we average out the cases 
 of all English business men, they would almost 
 certainly be found to have more customers apiece in 
 Germany than rivals. 
 
 No doubt these considerations require serious 
 modification if there is a grave standing menace of 
 war with the rival nation ; and the absence of this 
 menace in the case of Canada and the United States 
 of America may account for the relative unimport- 
 ance of considerations of hostile rivalry in the 
 Englishman's attitude towards Canadian and 
 American prosperity. In this connection, however, 
 it is worth bearing in mind that if the German is
 
 154 HOW IT ALL FITS TOGETHER 
 
 prospering, if he has many speculative irons in the 
 fire, if he has given many hostages to fortune in the 
 shape of partially developed enterprises in distant 
 parts of the world, he is less likely to risk his pros- 
 perity by plunging again into war. Well-to-do 
 citizens seldom take to burglary and highway 
 robbery. A well-to-do nation, provided the real 
 wishes of the community control its official actions, 
 is less likely than enviously backward nations to 
 turn to war as a remedy for grievances. The 
 sensible thing for Englishmen to wish with regard 
 to Continental powers would seem to be that they 
 should grow steadily in prosperity, should find 
 themselves more and more intricately entangled 
 in the world's net of banking and investment 
 operations, and that their peoples should acquire 
 fuller and fuller control of the machinery of govern- 
 ment. A rich nation is a more dangerous enemy 
 in war than a poor nation ; but a rich nation, if 
 self-governing, enters upon a great war with more 
 reluctance than a poor one. 
 
 So what is true with regard to the best rules 
 for controlling the game of life within the club 
 that we call the United Kingdom is also true, with 
 very few exceptions, in the great loose federation of 
 clubs ever becoming more closely knit by new 
 business ties that is constituted by all the civilised 
 races of the world together.
 
 EPILOGUE 
 
 THIS then constitutes our introduction to the heart- 
 less subject, " the dismal science," which old-fashioned 
 people called Political Economy and new-fangled 
 people call Economics. It is a branch, and by no 
 means the most interesting branch, of the wider 
 subject called Psychology the science of the 
 behaviour of living things " reacting " to changing 
 " stimuli." The earlier Economists were, so to 
 speak, the tutors of statesmen and princes, giving 
 advice on questions of taxes, tariffs, currency 
 regulation, and so forth ; and they coined the term 
 " Political Economy " to describe their volumes of 
 precepts and exhortation. (" Economy," by deriva- 
 tion from the Greek, is " the management of a 
 household " ; " Political Economy " meant the 
 management of the State.) But presently the 
 Economist grew tired of the courtly task of tutoring 
 rulers. He wearied of perpetually making re- 
 pectful remarks to " the King upon the Guddee," 
 and came down for a change to chat with " the 
 beggar at the gate." He found the beggar, and 
 the artisan, and the housewife more interesting 
 company, and often more intelligent reasoners, 
 than the exalted folk whom he had previously 
 been attempting (not very successfully) to convert 
 to his own views of truth. He became more and 
 more conscious, as his knowledge of mankind's 
 little ways expanded, of the great limitations to his 
 effective knowledge. He devoted fewer and fewer
 
 156 HOW IT ALL FITS TOGETHER 
 
 pages to giving advice and more and more pages to 
 pointing out the things that he would like to know 
 before expressing opinions on practical issues. He 
 has become, as a rule, an indefatigable and modest 
 truth-seeker, irritating the busy folk who hurry 
 from job to job on the top of the 'bus by his habit 
 of sitting on the fence and replying to political 
 questions by propounding new and often terribly 
 unanswerable ones. He has recently re-christened 
 his subject " Economics," to make it. rhyme with 
 the established sciences, Physics, Mathematics, 
 Logic ; and has become primarily a scientific 
 enquirer, seizing on facts wherever he can find them. 
 In his work of investigation he is at rather a dis- 
 advantage as compared with most scientists, because 
 he can seldom perform crucial experiments. The 
 experimental psychologist can subject people in 
 the laboratory to various forms of sensory stimuli 
 sights, sounds, pin-pricks, electric shocks and 
 measure and tabulate results. The social psycho- 
 logist (the economist) has usually to wait for states- 
 men, philanthropists, company promoters, to supply 
 the appropriate stimuli ; and then observe, as 
 best he can, how his fellow-mortals behave under, 
 say, the pin-pricks of an insurance act, the electric 
 shock of a tariff, and so forth. 
 
 " Our ship is anchored safe and sound the 
 voyage closed and done." But the reader, it is 
 hoped, if he has taken no such trial trip before it 
 was the novice whom we invited to come with us 
 will scarcely be content with a single excursion 
 round the world and back again. Luckily there are 
 whole fleets for journeys of this kind, built and 
 perpetually a-building. The economists' shipyards 
 are for ever resounding with the clangour of work-
 
 EPILOGUE 157 
 
 men, and boat after boat splashes down each year 
 from the builders' slips. For those who wish to 
 take the round trip the circular tour of the whole 
 economic world with more time to linger for sight- 
 seeing at the various ports than we have been able 
 to arrange Professor Marshall's Economics of In- 
 dustry, Dr. Cannan's Wealth, Professor Hadley's 
 Economics, and Mr. P. H. Wicksteed's The Common 
 Sense of Political Economy may be recommended 
 as seaworthy vessels less likely than others to bring 
 him the discomforts incidental to most novices' 
 first ventures away from dry land. For more 
 special excursions there may be mentioned Mr. 
 W. T. Layton's Capital and Labour, Sir W. H. 
 Beveridge's Unemployment, Mr. Thiselton Mark's 
 Efficiency Ideals, Professor Jenks' The Trust Problem, 
 and Dr. Cassel's The Nature and Necessity of Interest ; 
 while for those who will only consent to sail under 
 a captain who cracks jokes and tells breezy stories 
 all the way, there is Mr. Hartley Withers' flotilla, 
 Stocks and Shares, Money Changing, and The Meaning 
 of Money. Another captain, with whom all his 
 passengers speedily find themselves on the friendli- 
 est terms, but whom most economists hesitate to 
 consider a full member of the regular service (as 
 he has always his own private notions of the relative 
 importance of the different elements that make up 
 the art of economic navigation and of the best way 
 to take one's latitude and longitude when out of 
 sight of land), is Mr. J. A. Hobson, whose flag flies 
 from a multitude of craft of all shapes and sizes. 
 
 These are only a small selection, chosen for the 
 benefit of the untravelled novice. There are 
 multitudes more on which the professional student 
 is for ever embarking, stepping ashore from one,
 
 158 HOW IT ALL FITS TOGETHER 
 
 only to set forth without delay upon another, 
 " once more on his adventure brave and new." 
 For travel of this kind grows in its absorbing 
 interest with each new continent discovered. 
 
 " And come I may but go I must and if men ask you why. 
 You may put the blame on the stars and the sun and the 
 white road and the sky." 
 
 Once having begun we can never contentedly 
 " rust unburnished" among the home-staying folk 
 ashore. Always we must follow the flying vision 
 of Truth regardless alike of the protests and the 
 prejudiced outcries of hide-bound defenders of 
 tyranny-begotten " rights of property " and of 
 tub-thumping advocates of cloud-begotten " inalien- 
 able rights of man." There is no end to the material 
 to be studied, no end to the list of possible excur- 
 sions. But if the novice likes our own method of 
 travelling it is possible that we may organise a 
 second trip on the same lines, and take observations 
 of such things as coins and cheques, bulls and bears, 
 taxes and tariffs. " Round many western islands 
 shall we go, which bards in fealty to Apollo hold." 
 Like most economists, however, the writer prefers 
 not to make any definite prophecies. 
 
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