GIFT OF 
 MICHAEL REESE 
 
LABOUR 
 
 AND THE 
 
 POPULAR WELFARE 
 
LABOUB 
 
 AND THE 
 
 POPULAB WELFABE 
 
 BY 
 
 W. H. MA^LLOCE 
 
 AUTHOR OF 'IS LI^E WORTH LIVUNQ ? ' 'SOCIAL EQUALITY,' ETC. 
 
 SIXTH THOUSAND 
 
 OF THE 
 
 UNIVERSITY 
 
 LONDON 
 ADAM AND CHAELES BLACK 
 
 1895 
 

PKEFAOE TO NEW EDITION 
 
 IN republishing this work at a low price, I 
 wish to reiterate emphatically what is said of it 
 in the opening chapter, namely, that any clear- 
 headed Kadical, as distinct from the New 
 Unionist, the Socialistic dreamer, and the 
 Agitator, will find nothing in it to jar against 
 his sympathies, or to conflict with his opinions, 
 any more than the most strenuous Conserva- 
 tive will. If the word " party " is used in its 
 usual sense, this is a volume absolutely free 
 from any party bias. 
 
 It has, however, since its first publication, 
 some nine months ago, been attacked con- 
 tinually, not by Socialistic writers only (whose 
 attack was natural), but by Kadicals also, 
 
vi LABOUR AND THE POPULAR WELFARE 
 
 who, apparently quite mistaking the drift of 
 it, have done their best to detect in it flaws, 
 fallacies, and inaccuracies. As any work like 
 the present, whose aim is essentially practical, 
 is worse than useless unless the reader is able 
 to x feel confidence in it, let me say a few 
 words as to the degree of confidence which 
 is claimed, after nine months of criticism, 
 for the facts and arguments set forth in the 
 following pages. 
 
 Let the reader emphasise in his mind the 
 division between facts and arguments, for 
 they stand on a different footing. In esti- 
 mating the truth of any general arguments, 
 the final appeal is to the common sense of 
 the reader.' The reader -is himself the judge 
 of them ; and the moment/ he understands 
 and assents to them, they belong to himself 
 as much as they ever olid to the writer. ' On 
 the other hand, the historical facts, or statistics, 
 by which arguments are illustrated, or on 
 
PREFACE TO NEW EDITION vii 
 
 which they are based, claim , acceptance on 
 the authority, not of our internal^ common 
 sense, but of external evidence. Let me 
 speak separately, then, of the arguments of 
 this book, and of the facts quoted in it. 
 
 Of the arguments, whether taken individu- 
 ally or as a whole, it will be enough here to 
 say that no hostile critic of these has been able 
 in any way to meet them. The only writers 
 who have affected to do so have, either in- 
 tentionally or unintentionally, entirely failed 
 to understand them; and when they -have 
 seemed to be refuting anything, they have 
 been refuting only their own misconceptions 
 or misrepresentations. It is impossible in a 
 short preface to say more than this ; but in 
 order to illustrate the truth of the foregoing 
 statement, a< paper published by me in the 
 Fortnightly Review is (by kind permission of 
 Messrs. Chapman and Hall) reprinted as an 
 Appendix to the present volume. That paper 
 
viii LABOUR AND THE POPULAR WELFARE 
 
 consists of an examination of the criticisms 
 made, on behalf of the Fabian Society, by Mr. 
 Bernard Shaw on two previous papers of 
 my own published (also in the Fortnightly 
 Review) under the title of "Fabian Econo- 
 mics," in which the main arguments of this 
 book were condensed. It is true that many of 
 these arguments are here stated merely in 
 outline, and in a popular rather than in a 
 philosophical form, as is explained more fully 
 in the Preface to the First Edition. But it 
 may be safely asserted that there is hardly 
 a single Socialistic argument used by the 
 Socialistic party in this country to which this 
 present book does not contain a reply, or at 
 all events a clear indication of the grounds 
 on which a reply is to be founded. 
 
 With regard to the historical facts, and 
 especially the statistics here brought forward, 
 it is necessary to speak more particularly. 
 The broad historical facts facts connected 
 
PREFACE TO NEW EDITION ix 
 
 with the development of wealth in this 
 country are incapable of contradiction, and 
 have never been contradicted. Hostile critics 
 have directed their principal attacks against 
 the statistics, endeavouring to show that 
 certain of the figures were inaccurate, and 
 arguing that, this being so, the whole contents 
 of the book were unreliable. 
 
 The most minute attack of this kind which 
 has been brought to my notice dealt with 
 certain figures which were no doubt erroneous, 
 and indeed unmeaning ; but had the critic 
 examined the volume with more care, he 
 would have seen that every one of these 
 figures was a misprint, and was corrected in 
 a list of errata which accompanied the first 
 edition. 
 
 Other critics have confined themselves 
 almost entirely to the figures given by me with 
 regard to two questions the landed rental of 
 this country, as distinct from the rent of 
 
x LABOUR AND THE POPULAR WELFARE 
 
 houses ; and the growth of the national in- 
 come during the past hundred years. 
 
 With regard to both of these questions it 
 should be distinctly understood that absolute 
 accuracy is impossible ; and I have given the 
 statistics in round numbers only. But, for 
 the purpose for which the figures are quoted, 
 approximate accuracy is as useful as absolute 
 accuracy, even were the latter attainable ; and 
 every attempt to correct the figures as given 
 in this volume has only served to show how 
 substantially accurate these figures are, and 
 how totally unaffected would be the argument, 
 even were any of the suggested corrections 
 accepted. 
 
 The landed rental of the country is given 
 by me as something under a hundred million 
 pounds. It has been asserted that were the 
 ground-rents in towns properly estimated, the 
 true rental would be found to be a hundred 
 and fifty million pounds or a hundred and 
 
PREFACE TO NEW EDITION xi 
 
 eighty million pounds. It is no doubt diffi- 
 cult to differentiate in town properties the 
 total rental from the ground rental ; but the 
 most recent investigations made into this 
 question, so far as it affects London, will 
 throw light on the question as a whole. 
 The highest estimate of the present ground- 
 rental of London as related to the total rental 
 gives the proportion of the former to the 
 latter as fifteen to forty. Now house rent in 
 London is higher than in any other town in 
 the kingdom ; therefore, if we assume the 
 same proportion to obtain in all other towns, 
 we shall be over-estimating the ground-rent 
 of the country as a whole, instead of under- 
 estimating it. If we take this extreme cal- 
 culation which is obviously too great it will 
 be found to yield a result as to the total landed 
 rental exceeding only by ten per cent that 
 given in this volume. It will therefore be 
 easily seen that the figures given by me are 
 
xii LABOUR AND THE POPULAR WELFARE 
 
 substantially accurate, and sufficiently accurate 
 for all purposes of political and social argument. 
 Precisely the same thing is to be said with 
 regard to the figures given as to the growth 
 of the national income and the capitalised 
 value of the country. The estimates of 
 various statisticians will be found to differ 
 from one another by something like ten per 
 cent ; but these differences do not in the least 
 affect the essential character and meaning of 
 the great facts in question. Let us take, for 
 instance, two facts stated in this volume 
 that the capital of the country during the 
 past century has increased in the proportion 
 of two to ten ; and the income per head of the 
 country in the proportion of fourteen to thirty- 
 four or thirty -Jive. We will suppose some 
 critic to prove that these proportions should 
 be three to eleven, or twelve to thirty-three. 
 Now, large as the error thus detected might 
 be from some points of view, it would be 
 
PREFACE TO NEW EDITION xiii 
 
 absolutely immaterial to the large and general 
 question in connection with, which the figures 
 are quoted in this volume. 
 
 The enormous increase in our national 
 income and our national capital is doubted 
 or denied by no one. Now let us express 
 the increase in income as a supposed in- 
 crease in the average height of the rooms 
 inhabited by the population. According, 
 then, to the figures given by me, we might 
 say in this case that at the beginning of 
 the century the average house was seven 
 feet high only high enough for tall men to 
 stand up in ; and that now houses have been 
 so improved that the average height of a 
 living-room is seventeen feet. If any one, 
 dwelling on the fact of such a change as this, 
 were inquiring into its causes, and were basing 
 arguments on its assumed reality, what differ- 
 ence would it make if some opponent were 
 to prove triumphantly that the height of the 
 
xiv LABOUR AND THE POPULAR WELFARE 
 
 average room now was not seventeen feet, but 
 sixteen feet six inches, and that four genera- 
 tions ago it had been six feet instead of seven ? 
 The difference in the estimates of our national 
 income during the past ninety or a hundred 
 years are not more important for the purpose 
 of any general argument than the difference 
 just supposed with regard to the height of two 
 living-rooms; and readers may rest assured 
 that the round numbers given by me with 
 regard to the growth of the national income 
 and the national capital are so near the ad- 
 mitted and indisputable truth of things, that 
 no possible correction of them would substan- 
 tially alter any one of the arguments which 
 they are here quoted to illustrate. 
 
 September 1894. 
 
PREFACE TO FIRST EDITION 
 
 NEARLY all the general truths of Economic 
 Science are, directly or indirectly, truths about 
 the character or the actions of human beings. 
 It is, consequently, always well to warn the 
 readers of economic works, that in Political 
 Economy, more than in any other science, 
 every general rule is fringed with exceptions 
 and modifications ; and that instances are 
 never far to seek which seem to prove the 
 reverse of what the general rule states, or to 
 make the statement of it appear inaccurate. 
 But such general rules need be none the less 
 true for this ; nor for practical purposes any 
 the less safe to reason from. They resemble, 
 in fact, these general truths with regard to 
 
xvi LABOUR AND THE POPULAR WELFARE 
 
 the seasons, which we do and must reason 
 from, even in so uncertain a climate as our 
 own. It is, for instance, a truth from which 
 we all reason, that summer is dryer and 
 warmer than winter ; and yet there is a 
 frequent occurrence of individual days, which, 
 taken by themselves, contradict it. So, 
 too, those economic definitions, the subjects 
 of which are human actions or faculties, 
 can be entirely accurate only in the majority 
 of cases to which they apply ; and these 
 cases will be fringed always by a margin 
 of doubtful ones. But the definitions, for all 
 that, need be none the less practically true. 
 Day and night are fringed with doubtful 
 hours of twilight ; but our clear knowledge 
 of how midnight differs from noon is not made 
 less clear by our doubts as to whether a certain 
 hour at sunrise ought to be called an hour 
 of night or morning. 
 
 It is especially desirable to prefix this 
 
PREFACE TO FIRST EDITION xvii 
 
 warning to a work as short as the present. 
 In larger and more elaborate works, the writer 
 can particularise the more important excep- 
 tions and modifications to which his rules and 
 definitions are subject. But in a short work 
 this task must be left to the common sense 
 of the reader. For popular purposes, however, 
 brevity of statement has one great advantage, 
 namely, that of clearness ; and, as the signifi- 
 cance of the exceptions cannot be understood 
 without the rules, it is almost essential first 
 to state the rules without obscuring them by 
 the exceptions. There are few readers prob- 
 ably who will not see that the general proposi- 
 tions and principles laid down in the following 
 pages, require, in order to fit them to certain 
 cases, various additions and qualifications. It 
 is necessary only for the reader to bear in mind 
 that these propositions need be none the less 
 broadly and vitally true, because any succinct 
 statement of them is unavoidably incomplete. 
 
CONTENTS 
 
 BOOK I 
 
 THE DIVISIBLE WEALTH OF THE UNITED KINGDOM 
 
 CHAP. PAGE 
 
 I. The Welfare of the Home, as the Logical End of 
 Government 
 
 A Ground of Agreement for all Parties .... 3 
 
 Facts and Principles which are the same for everybody . 6 
 The Income of the Individual as the Aim and Test of 
 Government ........ 8 
 
 Private Income and the Empire . . . . .10 
 
 Patriotism and the Home . . . . . .11 
 
 Cupidity as a motive* in Politics . . . . .12 
 
 The right Education of Cupidity . . . . .13 
 
 II. The Conditions involved in the idea of a Legis- 
 lative Redistribution of Wealth ; and the 
 Necessary Limitations of the Results 
 
 Cupidity and the Poorer Classes . . . - .14 
 The Limits of Sane Cupidity as fixed by the Total Pro- 
 duction 16 
 
 Unforeseen Results of an Equal Division of Wealth . . 18 
 
xx LABOUR AND THE POPULAR WELFARE 
 
 CHAP. PAGE 
 
 Contemporary Agitator on Slavery ..... 20 
 Workmen as their own Masters . . . . .21 
 Ownership of the Means of Labour impossible for Modern 
 
 Workman 22 
 
 Equality possible only under a Universal Wage-System . 24 
 
 Equality and Universal Labour ..... 26 
 
 III. The Pecuniary Results to the Individual of an 
 Equal Division, first of the National Income, 
 and secondly of certain parts of it 
 
 The Income of Great Britain 27 
 
 Division of the National Income ..... 29 
 
 How to divide the Income equally ..... 30 
 
 Shares of Men, Women, and Children . . . .31 
 
 The Maximum Income of a Bachelor .... 32 
 
 Smallness of the result .... . . .33 
 
 Maximum Income of a Married Couple .... 34 
 
 Practical absurdity of an Equal Division of Income . . 36 
 
 A complete Redivision of Property advocated by nobody . 38 
 
 The attack on Landed Property . . . 40 
 
 Popular ignorance as to the Real Rental of the Landlords 42 
 
 The Landed Aristocracy ...... 44 
 
 Multitude of Small Landowners ..... 45 
 
 Owners of Railway Shares and Consols .... 46 
 
 Inappreciable cost of the Monarchy .... 47 
 
 Forcible Redistribution impossible .... 48 
 
 IV. The Nature of the National JVealth : first, of 
 the National Capital ; second, of the National 
 Income. Neither of these is susceptible of 
 Arbitrary Division 
 
 Difference between Wealth and Money . . . .49 
 
 Wealth as a whole not divisible like Money . . .52 
 
 More luxurious forms of W T ealth incapable of division . 54 
 
 The Wealth of Great Britain considered as Capital . . 56 
 
 The elements which compose the National Capital . . 58 
 
CONTENTS 
 
 Ludicrous results of an Equal Division of Capital . . 60 
 
 Division of Income, not of Capital, alone worth considering 62 
 
 Elements which compose the National Income ... 64 
 Material Goods and Services . . . . .66 
 
 Home-made Goods'and Imports ..... 67 
 Two-thirds of the Population dependent on Imported 
 
 Food 68 
 
 Variation of the National Income relatively to the 
 
 Population 70 
 
 Incomes of other countries compared with that of our own 72 
 
 Productivity of Industry not determined by Time . . 74 
 
 Unperceived increase of the Income of the United Kingdom 76 
 
 Immense Possible Shrinkage in our National Income . 78 
 
 , The Great Problem 80 
 
 BOOK II 
 
 THE CHIEF FACTOR IN THE PRODUCTION OF THE 
 NATIONAL INCOME 
 
 I. Of the various Factors in Production, and how 
 to distinguish the Amount produced by each 
 
 The Cause of Production generally . . . .84 
 
 The Production of Given Quantities .... 85 
 
 Production a Century Ago . . . * . . .86 
 
 Amount of Capital employed in it . . . . .87 
 
 Land, Capital, and Human Exertion .... 88 
 
 How much produced by each . . . . .89 
 The chief Practical Problem in Contemporary Economics 90 
 
 II. How the Product of Land is to be distinguished 
 from the Product of Human Exertion 
 
 Rent the Product of Land 93 
 
 The Accepted Theory of Rent illustrated by an Example . 94 
 
 The Product of Agricultural Labour .... 96 
 
 I 
 
xxii LABOUR AND THE POPULAR WELFARE 
 
 CHAP. PAGE 
 
 The Product of Land 97 
 
 Maximum Produce of Labour ..... 98 
 
 Surplus produced by Land 99 
 
 Land a Producing Agent as distinct from Labour . .100 
 The Existence of Rent not affected by Socialism . .102 
 Rent necessarily the Property of whoever owns the Land . 104 
 The Argument of this Volume embodied in the case of 
 Rent 106 
 
 III. Of the Products of Machinery or Fixed Capital, 
 
 as distinguished from the Products of Human 
 Exertion 
 
 Capital of Two Kinds 108 
 
 The part of the Product produced by Machinery or Fixed 
 
 Capital .... 110 
 
 Example of Product of Machinery as distinct from that of 
 
 Labour 112 
 
 The Products of a Machine necessarily the Property of 
 
 Owner 114 
 
 The Cotton Industry in the Last Century . . .116 
 
 Arkwright's Machinery .118 
 
 The Iron Industry of Great Britain . . . .119 
 Machinery and Production of Iron . . . . .120 
 Machinery and Wage Capital . . . . .121 
 
 IV. Of the Products of Circulating Capital, or Wage 
 
 Capital, as distinguished from the Products of 
 Human Exertion 
 
 Simplest Function of Wage Capital . . . .122 
 
 Distinguishing Function of Modern Wage Capital . . 124 
 Wage Capital mainly productive as a means of directing 
 
 Labour 126 
 
 Slaves and Free Labourers ...... 128 
 
 Wage Capital and Progress . . . . . 129 
 
 Wage Capital as related to the production of New Inven- 
 tions 130 
 
 Capital the Tool of Knowledge 132 
 
CONTENTS 
 
 Wage Capital and Arkwright 133 
 
 Wage Capital as Potential Machinery .... 131 
 How to discriminate the amount produced by Wage 
 
 Capital 136 
 
 V. That the Chief Productive Agent in the modern 
 world is not Labour, but Ability, or the 
 Faculty which directs Labour 
 
 The best Labour sometimes useless . . . .138 
 Labour not the same faculty as the faculty which directs 
 
 Labour ......... 140 
 
 Extraordinary confusion in current Economic Language . 142 
 Labour a Lesser Productive Agent . . , . .144 
 Ability a Greater Productive Agent . . . .145 
 
 The Vital Distinction between Ability and Labour . . 146 
 Ability not a form of Skilled Labour . . . .148 
 
 Capital applied successfully the same thing as Ability . 150 
 Obvious Exceptions . . . . . . .152 
 
 Ability the Brain of Capital 153 
 
 Ability as the Force behind Capital the Cause of all 
 
 Progress 154 
 
 VI. Of the Addition made during the last Hundred 
 Years by Ability to the Product of the 
 National Labour. This Increment the Product 
 of Ability 
 
 Production in the Last Century . . . . .156 
 Growth of Agricultural Products . . . . .158 
 Growth of Production of Iron . . . . .159 
 Ability and Agriculture in the Last Century . . .160 
 The Maximum Product that can be due to Labour alone . 162 
 Present Annual Product of Ability in the United Kingdom 164 
 The Product of Capital virtually Product of the Ability 
 of the Few 166 
 
xxiv LABOUR AND THE POPULAR WELFARE 
 
 BOOK III 
 
 AN EXPOSURE OF THE CONFUSIONS IMPLIED IN SOCIALISTIC 
 THOUGHT AS TO THE MAIN AGENT IN MODERN PRO- 
 DUCTION. 
 
 CHAP. PAGE 
 
 I. The Confusion of Thought involved in the Social- 
 istic Conception of Labour 
 
 A confusing Socialistic Formula . . . . .171 
 
 A Plausible Argument . . . . . . .173 
 
 A Plausible Argument analysed . . . . .174 
 
 Its implied meaning considered . . . . .175 
 
 The real Taskmaster of Labour not an Employing Class, 
 
 but Nature 176 
 
 Different position of Ability 178 
 
 The Organist and Bellows-blower . . . . .179 
 
 The Picture and the Canvas 180 
 
 The Qualifying Factor 181 
 
 Do all men possess Ability . . . . . .182 
 
 Labour itself non-progressive ..... 183 
 
 Ancient Labour equal to Modern . . . . .184 
 
 A Remarkable Illustration . . . . . .185 
 
 Labour as trained by Watt 186 
 
 Labour as assisted by Maudsley . . . . .187 
 
 II. That the Ability which at any given period is a 
 Producing Agent, is a Faculty residing in and 
 belonging to living Men 
 
 A Socialistic Criticism . . . . . . .188 
 
 Primaeval Progress and Labour . . . . .190 
 
 Rudimentary Ability ....... 191 
 
 Primaeval and Modern Inventions ..... 192 
 
 A more Important Poiut 193 
 
CONTENTS xxv 
 
 CHAP. PAGE 
 
 The necessity for Managing Ability increased by Inventive 
 
 Ability 194 
 
 The main results of Past Ability inherited by Living 
 
 Ability 196 
 
 Productive Ability the Ability of Living Men . . .198 
 
 Fresh demonstration of the Productivity of Ability . . 200 
 
 III. That Ability is a natural Monopoly, due to the 
 congenital Peculiarities of a Minority. The 
 Fallacies of other Views exposed 
 
 An Error of Mr. Herbert Spencer's .... 202 
 
 A Philosophic Truth, but an Economic Falsehood . . 204 
 
 Whole body of Successful Inventors a very small Minority 206 
 
 Ability and Opportunity 208 
 
 Ability not produced by Opportunity .... 209 
 Ability the Maker of its own Opportunities . . .210 
 Ability as a matter of Character . . . . .212 
 
 Function of such Ability 213 
 
 Characters not equalised by Education or Opportunity . 214 
 Progress due solely to the Few . . . . .216 
 Progress in the Iron Industry . . . . .217 
 
 Early Applications of Ability to British Iron Production . 218 
 
 Ability opposed by the Age instead of representing it . 220 
 
 Isolated Action of Ability 222 
 
 Arkwright and his associates ..... 223 
 
 The Value of Watt's Patent as estimated by his Con- 
 temporaries ........ 224 
 
 Industrial Progress the work of the Few only . . . 226 
 
 IV. The Conclusion arrived at in the preceding Book 
 restated. The Annual Amount produced by 
 Ability in the United Kingdom 
 
 Grades of Ability 228 
 
 Proportion of Able Men to Labourers .... 230 
 
 A Rough Calculation 231 
 
 More than half our National Income produced by a Small 
 
 Minority 232 
 
xxvi LABOUR AND THE POPULAR WELFARE 
 
 BOOK IV 
 
 THE REASONABLE HOPES OF LABOUR THEIR MAGNITUDE, 
 
 AND THEIR BASIS 
 
 CHAP. PA1E 
 
 I. How the Future and Hopes of the Labouring 
 Classes are bound up with the Prosperity of 
 the Classes who exercise Ability 
 
 Short Summary of the preceding Arguments . . .237 
 The preceding Arguments from the Labourer's Point of 
 
 View 240 
 
 The Share of Labour in the growing Products of Ability . 242 
 
 The amount produced by Labour ..... 244 
 
 The amount taken by Labour ..... 245 
 
 Continuous Kecent Growth of the Receipts of Labour . 246 
 Growth of the Receipts of Labour during Queen Victoria's 
 
 Reign 248 
 
 Actual Gains of Labour beyond the Dreams of Socialism . 250 
 
 Two Points to be considered 252 
 
 II. Of the Ownership of Capital, as distinct from its 
 Employment by Ability 
 
 Land and its Owners 253 
 
 Passive Ownership of Capital ..... 255 
 
 The Class that Lives on Interest 256 
 
 The Hope of Interest as a Motive 257 
 
 Capital created and saved mainly for the sake of Interest 258 
 
 Family Feeling 260 
 
 The Bequest of Capital 261 
 
 Interest a Necessary Incident as the Price of the Use of 
 
 Capital 262 
 
 A Part of the Interest of Capital constantly appropriated 
 
 by Labour 264 
 
 Interest not to be confused with Large Profits . . 266 
 
 Interest not to be confused with the Profits of Sagacity . 268 
 
 Enormous gains of Labour at the expense of Ability . 270 
 
 Labour and the Existing System ..... 272 
 
CONTENTS xxvii 
 
 CHAP. , PAGE 
 
 III. Of the Causes owing to which, and the Means by"f\ 
 which Labour participates in the Growing Pro- 
 ducts of Ability 
 
 A Miserable Class co-existing with General Progress . 273 
 Relative Decrease of Poverty ...... 276 
 
 Two Causes of Popular Progress ..... 277 
 
 The Riches of a Minority ...... 278 
 
 How they are produced . . . . . .279 
 
 The Rich Man's Progress ...... 280 
 
 The Rivalry of the Rich ...... 282 
 
 The Gain of Labour ..... . .283 
 
 Popular Progress and Growth of Population . . .284 
 The Gain of Labour limited by the Power of Ability . 286 
 The Natural Gain of Labour ...... 288 
 
 Its relation to Politics ....... 289 
 
 Self-Help and State Help ...... 290 
 
 IV. Of Socialism and Trade Unionism the Extent < 
 and Limitation of their Power in increasing the 
 Income of Labour 
 
 So - called Socialism in England different from Formal 
 
 Socialism ......... 291 
 
 An Element of Socialism necessary to every State . . 294 
 
 The Socialistic question entirely a question of degree . 296 
 Socialism not directly operative in increasing the Income 
 
 of Labour ......... 298 
 
 Trade Unionism ........ 300 
 
 How it strengthens Labour ...... 301 
 
 How the power of striking grows with the growth of Wages 302 
 
 Natural Limits of the Powers of Trade Unionism . . 304 
 
 Labour and Ability ....... 306 
 
 Higgling on Equal Terms ...... 307 
 
 The Power represented by Strikes not Labour, but 
 
 Labouring Men ........ 308 
 
 Leaders of Labouring Men rarely Leaders of Labour . 310 
 
 The Power of Trade Unionism important, though limited . 312 
 
 Certain remaining points ." ..... 314 
 
xxviii LABOUR AND THE POPULAR WELFARE 
 
 CHAP. PAGE 
 
 V. Of the enormous Encouragement to be derived 
 by Labour from a true View of the Situation ; 
 and of the Connection between the Interests of 
 the Labourer and Imperial Politics 
 
 A Recapitulation . . . . . . . .315 
 
 The Practical Moral 317 
 
 The True Functions of Trade Unionism and Socialism . 318 
 
 The Natural Progress of Labour a Stimulus to Effort . 320 
 
 The Future of Labour judged from its Past Progress . 322 
 
 The one thing on which the Hopes of Labour depend . 324 
 
 The Real Bargain of Labour not with Capital but Ability 326 
 
 Subordination to Ability no Indignity to Labour . . 328 
 
 The Moral Debt of Ability to Labour .... 330 
 
 Labour, Nature, and Ability 332 
 
 The Home and Foreign Food 333 
 
 Imperial Politics and the National Income . . . 334 
 
 The Labourer's home . . 336 
 
BOOK I 
 
 THE DIVISIBLE WEALTH OF THE 
 UNITED KINGDOM 
 
*t 
 
 OF THE 
 
 VERSITT 
 
 CHAPTEE I 
 
 The Welfare of the Home, as the Logical End of 
 Government. 
 
 I WISH this book to be something which, when The subject 
 the subject of it is considered, the reader 
 perhaps will think it cannot possibly be. For 
 its subject to describe it in the vague 
 language of the day is the labour question, 
 the social question, the social claims of the 
 masses ; and it is these claims and questions 
 as connected with practical politics. Their 
 connection with politics is close at the present 
 moment ; in the immediate future it is certain 
 to become much closer ; and yet my endeavour 
 will be to treat them in such a way that men 
 of the most opposite parties the most pro- 
 gressive Eadical and the most old-fashioned 
 Tory may find this book equally in harmony 
 
4 A GROUND OF AGREEMENT 
 
 BOOK i. with their sympathies, and equally useful and 
 acceptable from their respective points of 
 view. 
 
 An example But if the reader will consider the matter 
 of facts it further, he will see that my endeavour is not 
 
 deals with. ., . . , , . 
 
 necessarily so impracticable as it seems to be. 
 A very little reflection must be enough to 
 show anybody that many of the political 
 problems about which men differ most widely 
 are concerned with an order of truths which, 
 when once they have been examined properly, 
 are the same for all of us ; and that a pre- 
 liminary agreement with regard to them is 
 the only possible basis for any rational dis- 
 agreement. I will give one example the 
 land-question. About no political problem is 
 there more disagreement than about this ; and 
 yet there are many points in it, about which 
 men may indeed be ignorant, but about which, 
 except for ignorance, there cannot be any 
 controversy. Such for instance is the acreage 
 of the United Kingdom, the number of men 
 by whom the acres are owned, the respective 
 numbers of large and of small properties, 
 together with their respective rentals, and the 
 proportion which the national rent bears to 
 
FOR ALL PARTIES 5 
 
 the national income. The truth about all BOOKI. 
 
 CH I 
 
 these points is very easily ascertained ; and 
 yet not one man in a hundred of those by as these not 
 whom the land-question is discussed, appears known ; y 
 to possess the smallest accurate knowledge 
 
 O nceiscer- 
 
 of it. A curious instance of this ignorance 
 is to be found in the popular reception ac- 
 corded some years ago to the theories of Mr. parties : 
 Henry George. If Mr. George's reasonings 
 were correct as applied to this country, the 
 rental of our titled and untitled aristocracy 
 would be now about eight hundred millions : 
 and few of his admirers quarrelled with this 
 inference. But if they had only consulted 
 official records, and made themselves masters 
 of the real facts of the case, they would have 
 seen at once that this false and ludicrous 
 estimate was wrong by no less a sum than 
 seven hundred and seventy millions ; that the 
 eight hundred millions of Mr. George's fancy 
 were in reality not more than thirty ; and that 
 the rent, which according to him was two-thirds 
 of the national income, was not in reality more 
 than two and a quarter per cent of it. Now 
 here is a fact most damaging to the authority 
 of a certain theorist with whom many Kadicals 
 
6 FACTS AND PRINCIPLES 
 
 BOOK i. are no doubt in sympathy ; but it none the 
 
 CH. I. 
 
 less is a fact which any honest Radical is as 
 much concerned to know as is any honest 
 Tory, and which may easily supply the one 
 with as many arguments as the other. The 
 Tory may use it against the Radical rhetorician 
 who denounces the landlords as appropriating 
 the whole wealth of the country. The Radical 
 And it is may use it against the Tory who is defending 
 theadvan- the House of Peers, and may ask why a class 
 Ses to whose collective wealth is so small, should be 
 specially privileged to represent the interests 
 of property : whilst those who oppose protec- 
 tion may use it with equal force as showing 
 how the diffusion of property has been affected 
 by free trade. 
 
 Here is a fair sample, so far as particular 
 facts are concerned, of the order of truths with 
 which I propose to deal : and if I can deal 
 with them in the way they ought to be dealt 
 with, they will be as interesting and many 
 will be as amusing as they are practically 
 useful. It may indeed be said, without the 
 smallest exaggeration, that the salient facts 
 which underlie our social problems of to-day, 
 would, if properly presented, be to the general 
 
WHICH ARE THE SAME FOR EVERYBODY 7 
 
 reader as stimulating and fresh as any novel BOOK i. 
 or book of travels, besides being as little open 
 to any mere party criticism. 
 
 But there are other truths, besides par- Besides 
 ticular facts, which I propose to urge on the this book ' 
 reader's attention also. There are general generaT 
 truths, general considerations, and principles : principles, 
 and these too, like the facts, will be found to dependent 
 have this same characteristic that though ofparty - 
 many of them are not generally realised, 
 though many of them are often forgotten, and 
 though some of them are supposed to be the 
 possession of this or that party only, they do 
 but require to be fairly and clearly stated, to 
 command the assent of every reflecting mind, 
 and to show themselves as common points 
 from which, like diverging lines, all rational 
 politicians, whatever may be their differences, 
 must start. 
 
 The very first principle to which I must The pro- 
 call attention, and which forms a key to my withwhich 
 object throughout this entire book, will at menfSarts 
 once be recognised by the reader as being of example of 
 this kind. The Radical perhaps may regard 
 it as a mere truism ; but the most bigoted 
 Tory, on reflection, will not deny that it is 
 
8 THE INCOME OF THE INDIVIDUAL 
 
 BOOK i. true. The great truth or principle of which 
 
 I speak is as follows. 
 
 The condi- The ultimate end of Government is to secure 
 private or provide for the greatest possible number, not 
 arTthTend indeed happiness, as is often inaccurately said, 
 emmentT" but the external conditions that make happi- 
 ness possible. As for happiness, that must 
 come from ourselves, or at all events from 
 sources beyond the control of Governments. 
 But though no external conditions are sufficient 
 to make it come, there are many which are 
 sufficient to drive it or to keep it permanently 
 away ; and it is the end of all Government to 
 minimise conditions such as these. Now these 
 conditions, though their details vary in various 
 cases, are essentially alike in all. They are a 
 want of the necessaries, or a want of the 
 decencies of life, or an excessive difficulty in 
 obtaining them, or a recurring impossibility of 
 These con- doing so. They are conditions in fact which 
 
 ditions are . . . 
 
 principally principally, though not entirely, result from 
 
 a question ' . 
 
 of private an uncertain or an insufficient income. The 
 
 ultimate duty of a Government is therefore 
 
 towards the incomes of the governed ; and the 
 
 The end of three chief tests of whether a Government is 
 
 ment is good or bad, are first the number of families 
 
AS THE AIM AND TEST OF GOVERNMENT 9 
 
 in receipt of sufficient incomes, secondly the BOOKI. 
 
 CH. I. 
 
 security with which the receipt of such 
 incomes can be counted on. and lastly the to secure 
 
 quality of the things which such incomes will 
 command. 
 
 Some people however perhaps even some 
 Badicals may be tempted to say that this is 
 putting the case too strongly, and is caricatur- J l e r r ia 1 J 1 n s . tic ' 
 ing ..the truth rather than fairly stating it. P atriotic : 
 They may say that it excludes or degrades to 
 subordinate positions all the loftier ends both 
 of individual and of national life, such as 
 moral and mental culture, and the power and 
 greatness of the country : but in reality it does 
 nothing of the kind. 
 
 In the first place, with regard to moral and For income 
 mental culture, if these are really desired by 
 the individual citizen, they will be included 
 amongst the things which his income will help are> 
 him to obtain : and an insufficient income 
 certainly tends to deprive him of them. If 
 he wishes to have books, he must have money 
 to buy books : and if he wishes his children to 
 be educated, there must be money to pay for 
 teaching them. In the second place, with 
 regard to the power and greatness of the 
 
io PRIVATE INCOME AND THE EMPIRE 
 BOOK i. country, though for many reasons we are apt 
 
 
 to forget the fact, it is the material welfare of 
 complete the home, or the maintenance of the domestic 
 the citizens income, that really gives to them the whole of 
 
 - their fundamental meaning. Our Empire and 
 . our power of defending it have a positive 
 money value, which affects the prosperity of 
 every class in the country : and though this 
 may not be the only ground on which our 
 Empire can be justified, it is the only ground 
 on which, considering what it costs, its main- 
 tenance can be justified in the eyes of a critical 
 democracy. Supposing, it could be shown to 
 demonstration that the loss of our Empire and 
 our influence would do no injury to our trade, 
 or make one British household poorer, it is 
 impossible to suppose that the democracy of 
 Great Britain would continue for long, from 
 mere motives of sentiment, to sanction the ex- 
 pense, or submit to the anxiety and the danger, 
 which the maintenance of an Empire like our 
 own constantly and necessarily involves. 
 Further, But let us waive this argument, and admit 
 that a sense of our country's greatness, quite 
 apart from any thought of our own material 
 advantage, enlarges and elevates the mind as 
 
PA TRIO TISM A ND THE HOME 1 1 
 
 nothing else can that to be proud of our BOOKI. 
 country and proud of ourselves as belonging 
 
 , . secures for 
 
 to it, to reel ourselves partners in the majesty its citizens 
 of the great battle-ship, in the menace of tions of a 
 Gibraltar stored with its sleeping thunders, or 
 the boastful challenge of the flag that floats in 
 a thousand climates, is a privilege which it is 
 easier to underrate than exaggerate. Let us 
 admit all this. But these large and ennobling 
 sentiments are all of them dependent on the 
 welfare of the home in this way : they are 
 hardly possible for those whose home con- 
 ditions are miserable. Give a man comfort 
 in even the humblest cottage, and the glow of 
 patriotism may, and probably will, give an 
 added warmth to that which shines on him 
 from his fireside. But if his children are 
 crying for food, and he is shivering by a cold 
 chimney, he will not find much to excite him 
 in the knowledge that we govern India. 
 Thus, from whatever point of view we regard 
 the matter, the welfare of the home as secured 
 by a sufficient income is seen to be at once 
 the test and the end of Government ; and it 
 ceases to be the end of patriotism only when 
 it becomes the foundation of it. 
 
12 CUPIDITY AS A MOTIVE IN POLITICS 
 
 BOOK i. Here, then, is the principle which I assume 
 _' throughout this volume. And now, I think 
 
 therefore) that, having explained it thus, I may, without 
 for offence to either Tory or Eadical, venture to 
 rs a condemn, as strongly as its stupidity deserves, 
 the way in which politicians are at present so 
 ^ ten attacked for appealing to what is called 
 
 politics ; ^ Q cupidity of the poorer classes. Cupidity is 
 in itself the most general and legitimate desire 
 to which any politician or political party can 
 appeal. It is illegitimate only when it is 
 excited by illegitimate methods : and these 
 methods are of two obvious kinds. One is an 
 exaggeration of the advantages which are put 
 before the people as obtainable : the other is 
 the advocacy of a class of measures as means 
 to them, by which not even a part of them 
 could be, in reality, obtained. Everybody 
 must see that a cupidity which is excited 
 thus is one of the most dangerous elements 
 by which the prosperity of a country can 
 be threatened. But a cupidity which is 
 excited in the right way, which is con- 
 trolled by a knowledge of what wealth 
 really exists, and of the fundamental condi- 
 tions on which its distribution depends is 
 
THE RIGHT EDUCATION OF CUPIDITY 13 
 
 merely another name for spirit, energy, and BOOKI. 
 intelligence. 
 
 The aim of 
 
 My one aim then, in writing this book, is this book 
 
 is to 
 
 to educate the cupidity of voters, no matter educate 
 
 in popular 
 
 what their party, by popularising knowledge cupidity. 
 of this non-controversial kind. And such 
 knowledge will be found, as I have said 
 already, to be composed partly of particular 
 facts, and partly of general truths. We will 
 begin with the consideration of certain par- 
 ticular facts, which must, however, be prefaced 
 by a few general observations. 
 
CHAPTEE II 
 
 The Conditions involved in the idea of a Legislative 
 Redistribution of Wealth; and the Necessary 
 Limitations of the Results. 
 
 AH men LET me then repeat that we start with assum- 
 
 ask of a. 
 
 Govern- mg cupidity as not only the general foundation, 
 either the but also as the inevitable, the natural, and 
 
 right foundation, of the interest which 
 theh- nce ordinary men of all classes take in politics. 
 We assume that where the ordinary man, of 
 whatever class or party, votes for a member of 
 Parliament, or supports any political measure, 
 he is primarily actuated by one of two hopes, 
 or both of them the first being the hope of 
 securing the continuance of his present income, 
 the second being the hope of increasing it. 
 Now, to secure what they have already got is 
 the hope of all classes ; but to increase it by 
 legislation is the hope of the poorer only. It 
 
CUPIDITY AND THE POORER CLASSES 15 
 
 is of course perfectly true that the rich as welF IBOOK i. 
 
 * . . OH. JI. 
 
 as the poor are anxious, as a rule, to increase 
 their incomes when they can ; but they expect 
 to do so by their own ability and enterprise, and 
 they look to legislation for merely such nega- 
 tive help as may be given by affording their 
 abilities fair play. 
 
 But with the poorer classes the case is The poor 
 
 alone look 
 
 entirely different. They look to legislation foranin- 
 for help of a direct and positive kind, which income by 
 
 may tend to increase their incomes, without\ 
 any new effort of their own : and not only do 
 they do this themselves, but the richer classes aSpg this. 
 sympathise with the desire that makes them do 
 so. It is, for instance, by no means amongst 
 the poorer classes only that the idea of 
 seizing on the land, without compensating the 
 owners, has found favour as a remedy for 
 distress and poverty generally. Owners of 
 every kind of property, except land, have been 
 found to advocate it ; whilst as to such vaguer 
 and less startling proposals, as the "restora- 
 tion of the labourer to the soil," the limitation 
 of the hours of labour, or the gradual acquire- 
 ment by the State of many of our larger 
 industries the persistent way in which these 
 
1 6 THE LIMITS OF SANE CUPIDITY 
 
 BOOK i. are being kept before the public, is due quite 
 
 CH. II. 
 
 as much to men 01 means as to poor men. It 
 
 The cupid- is then with the cupidity of the poorer classes 
 
 this book that we are chiefly concerned to deal ; and the 
 
 Lais ^with great question before us may briefly be put 
 
 cupidity of thus : By what sort of social legislation may 
 
 classes? 16 the incomes of the poorer classes or, in other 
 
 words, the incomes of the great mass of the 
 
 community be, in the first place, made more 
 
 constant ; and, in the second place, increased ? 
 
 The first But before proceeding to this inquiry, 
 
 to^askfe : there is a preliminary question to be disposed 
 
 maximum 6 What is the maximum increase which 
 
 wide-hit an 7 conceivable legislation could conceivably 
 
 would be secure f or them out of the existing; resources of 
 
 iHGOrCLic- o 
 
 siWe P for the country? Not only unscrupulous agitators, 
 obtain? kiit many conscientious reformers, speak of the 
 For this is results to be hoped for from a better distribu- 
 
 much ex- 
 aggerated, tion of riches, in terms so exaggerated as to 
 
 have no relation to facts ; and ideas of the 
 wildest kind are very widely diffused as to the 
 degree of opulence which it would be possible 
 to secure for all. The consequence is that at 
 the present moment popular cupidity has no 
 rational standard. It will therefore be well, 
 before we go further, to reduce these ideas I 
 
AS FIXED BY THE TOTAL PRODUCTION 17 
 
 do not say to the limits which facts will BOOKI. 
 
 CH II 
 
 warrant but to the limits which facts set on 
 what is theoretically and conceivably pos- 
 sible. 
 
 Let me then call attention to the self- An ascer- 
 evident truth, that the largest income which limit is 
 could possibly be secured for everybody, could to this 
 not be more than an equal share of the circum- y 
 actual gross income enjoyed by the entire Sl 
 nation. Now it happens that we know with 
 substantial accuracy what the gross amount of 
 the income of the nation now is, and I will 
 presently show what is the utmost which each 
 individual could hope for from the most 
 successful attempt at a redistribution of 
 everything. But the mere pecuniary results And this 
 
 J J , amount 
 
 of a revolution of this kind are not the only would be 
 results of which we must take account. There only under 
 are others which it will be well to glance at conditions, 
 before proceeding to our figures. 
 
 Though an equal division of wealth would, One of 
 
 . , IT- which 
 
 as we soon shall see, bring a large addition would 
 to the income of a considerable majority of change the 
 the nation, the advantages which the re- character 
 cipients would gain from this addition, would 
 be very different from the advantages which 
 
1 8 UNFORESEEN RESULTS OF 
 
 BOOK i. an individual would gain now, from the same 
 
 CH. IL 
 
 annual sum coming to him from invested 
 capital. In other words, if wealth were 
 equally distributed, it would, from the very 
 necessity of the case, lose half the qualities 
 for which it is at present most coveted, 
 were At present wealth suggests before all things 
 
 equally dis- what is commonly called "an independence" 
 nobody' something on which a man can live Me- 
 an inde- a%e pendently of his own exertions. But the 
 moment a whole nation possessed it in equal 
 quantities this power of giving an independence 
 would go from it suddenly and for ever. If 
 a workman who at present makes seventy 
 pounds a year, would receive, by an equal 
 division, an additional forty pounds, it is 
 indeed true that no additional work could be 
 entailed on him. The work which at present 
 gets him seventy pounds, would in that case 
 get him a hundred and ten. But he would 
 never be able, if he preferred leisure to wealth, 
 to forego the seventy, pounds and live in idle- 
 ness on the forty pounds ; as he would be able 
 to do now if the additional forty pounds 
 were the interest of a legacy left him by his 
 maiden aunt. Unless he continued to work, 
 
AN EQUAL DIVISION OF WEALTH 19 
 
 as he had worked hitherto, he would lose not BOOK i. 
 only the first sum, but the second. 
 
 This is self-evident, when we consider what 
 is the essence of such a situation, namely 
 that the position of everybody is identical. 
 For if everybody preferred to be idle, no wealth 
 could be produced at all. However great 
 nominally might be the value of our national 
 property, it is perfectly clear that everybody 
 could not live at leisure in it : and from the 
 very nature of the case, in a nation where all 
 are equal, what cannot be done by all, could 
 not be done by anybody. If, therefore, we Everyone 
 
 .-, . .-, -, /, , would have 
 
 estimate the income possible ior each in- to work as 
 dividual as an equal fraction of the present does now * 
 income of the nation, it must be remembered 
 that, to produce the total out of which these 
 fractions are to come, everybody would have 
 to work as hard as he does now. And more 
 than that, it would be the concern of all to see 
 that his share of work was not being shirked 
 by anybody. This is at present the concern 
 of the employer only : but under the con- 
 ditions we are now considering, everybody 
 would be directly interested in becoming his 
 neighbour's taskmaster. 
 
20 CONTEMPORA RY A GIT A TOR ON SLA VER Y 
 
 BOOK i. These last considerations lead us to another 
 
 CH IT 
 
 aspect of the subject, with which every in- 
 telligent voter should make himself thoroughly 
 familiar, and which every honest speaker would 
 force on the attention of his hearers. A large 
 number of agitators, who are either ignorant 
 or entirely reckless, but who nevertheless 
 possess considerable gifts of oratory, are 
 And be constantly endeavouring to associate, in the 
 popular mind, the legitimate hope of obtaining 
 
 of theem- & n increased income, with an insane hostility 
 to conditions which alone make such an 
 increase possible. These men l are accustomed 
 to declaim against the slavery of the working 
 classes, quite as much as against their in- 
 adequate rate of payment. By slavery they 
 mean what they call " enslavement to capital/' 
 Capital means the implements and necessaries 
 of production. These, they argue, are no 
 longer owned by the workmen as they were in 
 former times : and thus the workers are no 
 longer their own masters. They must work 
 
 i Writers also from whom better things might have been 
 expected make use of the same foolish language. "The 
 proletarian, in accepting the highest bid, sells himself openly 
 into bondage " (Fabian Essays, p. 1 2). 
 
WORKMEN AS THEIR OWN MASTERS 21 
 
 under the direction of those who can give them BOOK i. 
 
 OTT IT 
 
 the means of working ; and this, they are 
 urged to believe, reduces them to the condi- 
 tion of slaves. ' 
 
 Of course, in these representations there is a 
 certain amount of truth : but it is difficult to 
 conceive of anything more stupidly and more 
 wantonly misleading, than the actual meaning 
 which they are employed by the agitators to 
 convey. For that meaning is nothing else 
 than this that under improved conditions, Nor could 
 when wealth is better distributed, the so-called 
 slavery will disappear, the workers will be 
 their own masters again, and will each own, 
 as formerly, the implements and the materials by hun ' 
 of his work. But, as no one knows better than 
 the extreme socialists, and as any intelligent 
 man can see easily for himself, such a course 
 of events is not only not possible, but is the 
 exact reverse of that on which the progress 
 of the workers must depend. The wildest 
 
 T . T , . . tradictions 
 
 agitator admits, and the most ignorant agitator ofagitators, 
 knows, that the wealth of the modern world, that Sa 
 on the growth of which they insist, and means 
 which, for the very reason that its growth anTSt 
 has been so enormous, is declared by them s< 
 
22 OWNERSHIP OF THE MEANS OF LABOUR 
 
 BOOK i. to offer so rich a prize to the workers, 
 CH - n. . 
 
 mainly owes its existence to improved con- 
 
 would 
 
 make the ditions of production. Such persons know 
 
 worker 
 
 free. also that of these conditions the chief have 
 been the development of machinery, the in- 
 creased subdivision of employments, and the 
 perfected co-operation of the workers. But 
 the development of machinery necessarily 
 means this the transformation of (say) each 
 thousand old-fashioned implements into a 
 single vast modern one of a hundred times 
 their aggregate power : and it means that at 
 this single implement a thousand men shall 
 work. The increased subdivision of labour 
 means that no man shall make an entire thing, 
 but merely some small part of it ; and 
 perfected co-operation is another name for 
 perfected discipline. It will be thus seen that 
 \ the conditions which the agitator calls those of 
 slavery are essential to the production of the 
 / wealth which is to constitute the workers' 
 
 The indus- \heritage. It will be seen that the workers' 
 hope of bettering their own position is so far 
 |fr m depending on a recovery of any former 
 freedom, that it involves yet further elabora- 
 
 harderthan ion of i n( j us t r ial discipline ; and puts the old 
 
IMPOSSIBLE FOR MODERN WORKMAN 23 
 ownership of his own tools by the individual BOOK i. 
 
 J . CH. II. 
 
 farther and further away into the region of 
 
 .-.,.. that of toe 
 
 dreams and impossibilities : and that no re- private 
 
 employer. 
 
 distribution 01 wealth would even tend to 
 bring it back again. The weaver of the last 
 century was the owner of his own loom : and 
 a great cotton- mill may now be owned by 
 one capitalist. But a co-operative cotton-mill 
 that was owned by all the workers, in the old 
 sense of the word would not be owned by any- 
 body. Could any one of these thousand or 
 more men say that any part of the mill was 
 his own personal property? Could he treat 
 a single bolt, or a brick, or a wheel, or a door- 
 nail, as he might have treated a loom left to 
 him in his cottage by his father ? Obviously 
 not. No part of the mill would be his own 
 private property, any more than a train start- 
 ing from Euston Station is the property of 
 any shareholder in the London and North- 
 Western Kailway. His ownership would mean 
 merely that he was entitled to a share of the 
 profits, and that he had one vote out of a 
 thousand in electing the managers. But how- 
 ever the managers were elected, he would have 
 to obey their orders ; and their discipline 
 
BOOK I. 
 CH. II. 
 
 24 EQUALITY POSSIBLE ONLY UNDER 
 
 would be probably stricter than that of any 
 private owner. Much more would this be the 
 case if the dreain of the Socialist were fulfilled, 
 and if instead of each factory or business being 
 owned by its own workers, all the workers of 
 the country collectively owned all the busi- 
 nesses all the machinery, all the raw materials, 
 and all the capital reserved for and spent in 
 wages. For though the capital of the country 
 would be owned by the workers nominally, 
 their use of it would have to be regulated by 
 a controlling body, namely the State. The 
 managers and the taskmasters would all be 
 State officials, and be armed with the powers 
 of the State to enforce discipline. The indi- 
 vidual under such an arrangement, might 
 gain in point of income ; but if he is foolish 
 enough to adopt the view of the agitator, and 
 regard himself as the slave to capital now, he 
 would be no less a slave to it were all capitals 
 amalgamated, and out of so many million 
 shares he himself were to own one. 
 
 It is particularly desirable in this particular 
 
 , 
 
 place to nx the readers attention on this 
 the idea of aspect of the question, because it is inseparably 
 associated with the point we are preparing to 
 
 For it must 
 
 always be 
 
A UNIVERSAL WAGE-SYSTEM 25 
 
 consider namely, the pecuniary position in 
 which the individual would be placed by an __ 
 equal division, were such possible, of the wealth 
 entire national income. For we must bear in 
 
 r-~"T 
 
 mind that not even in thought or theory is an |^te as 
 equal division of the national income possible, Sj 1 ,^ 
 unless all the products of the labour of every ca P italist - 
 citizen are in the first place taken by the State 
 as sole employer and capitalist, and are then 
 distributed as wages in equal portions. Under 
 no other conditions could equality be more 
 than momentary. If each worker himself sold 
 his own products to the consumer, which he 
 could not do, because no one produces the 
 whole of anything, the strong and industrious 
 would soon be richer than the idle ; and 
 the man with no children richer than the 
 man with ten. Inequality would have begun 
 again as soon as one day's work was over. 
 Equality demands, as the Socialists are well 
 aware, that all incomes shall be wages paid by 
 the State ; and it implies further, as we shall 
 presently have occasion to observe that equal 
 wages shall be paid to all individuals, not 
 because they are equally productive, but be- 
 cause they are all equally human. When 
 
26 EQUALITY AND UNIVERSAL LABOUR 
 
 BOOK i. therefore I speak, as I shall do presently, of 
 what each individual would receive, if wealth 
 were divided equally, I must be understood 
 as meaning that he would receive so much 
 from the State. 
 
 A redistri- Let us remember then that a redistribution 
 wealth, if of wealth would have in itself no tendency to 
 
 alter the existing conditions of the workers in 
 would 6 ' V ^ an y respect except that of wages only. It 
 labour *of e would not tend to relieve any man of a single 
 nobody. h our O f labour, to give him any more freedom 
 The next in choosing the nature of his work or the 
 contains an method of it, or make him less liable to fines 
 tion of thd or other punishments for disobedience or un- 
 tocome punctuality. His only gain, if any, would be 
 would a simple gain in money. Let us now proceed 
 
 to deal with the pounds, shillings, and pence ; 
 - an d see what is the utmost that this gain 
 could come to. 
 
 country. 
 
CHAPTER III 
 
 The Pecuniary Results to the Individual of an Equal 
 Division, first of the National Income, and secondly 
 of certain parts of it. 
 
 THE gross income of the United Kingdom The gross 
 
 income of 
 
 the aggregate yearly amount received by the the United 
 
 . J . / . Kingdom. 
 
 entire population is computed to be in 
 round numbers some thirteen hundred million 
 pounds. But though this estimate may be 
 accepted as true under existing circumstances, 
 we should find it misleading as an estimate 
 of the amount available for distribution. So 
 far as it relates to the income of the poorer 
 classes, it would be indeed still trustworthy ; 
 but the income of the richer which is the 
 total charged with income-tax we should 
 find to be seriously exaggerated, as consider- 
 able sums are included in it which are 
 counted twice over. For instance, the .fee 
 
28 THE INCOME OF GREAT BRITAIN 
 
 BOOK i. of a great London doctor for attending a 
 patient in the South of France would be 
 
 The whole 
 
 amount about twelve hundred pounds. Let us sup- 
 to the rich pose this to be paid by a patient whose 
 ^available income is twelve thousand pounds. The 
 button. doctor pays income-tax on his fee; the 
 patient pays income-tax on his entire in- 
 come ; and thus the whole sum charged with 
 income-tax is thirteen thousand two hundred 
 pounds. But if we came to distribute it, we 
 should find that there was twelve thousand 
 pounds only. And there are many other 
 cases of a precisely similar nature, According 
 to the calculations of Professor Leone Levi, 
 the total amount which was counted twice 
 over thus, amounted ten years ago to more 
 than a hundred million pounds. 1 In order, 
 therefore, to arrive at the sum which we may 
 assume to be susceptible of distribution, it will 
 be necessary, therefore, to deduct at least as 
 
 1 According to Professor Leone Levi, the actual sum 
 would be one hundred and thirteen million pounds : but in 
 dealing with estimates such as these, in which absolute 
 accuracy is impossible, it is better, as well as more con- 
 venient, to use round numbers. More than nine-tenths of 
 this sum belongs to the income of the classes that pay income- 
 tax. Of the working-class income, not more than two per 
 cent is counted twice over, according to Professor Leone Levi 
 
DIVISION OF THE NATIONAL INCOME 29 
 
 BOOK I. 
 
 much as this from the sum which was just now CH. m. 
 mentioned of thirteen hundred million pounds. 1 A certain 
 Accordingly the income of the country, if we must 
 estimate it with a view to dividing it, is in round be made 6 
 numbers, twelve hundred million pounds. estimated 
 
 And now let us glance at our problem in 
 its crudest and most rudimentary form, and This, 
 see what would be the share coming to each amongst 
 individual, if these millions were divided ' 1 
 
 equally amongst the entire population. The 
 entire population of the United Kingdom 
 numbers a little over thirty -eight millions ; 
 so our division sum is simple. The share 
 of each individual would be about thirty- 
 two pounds. But this sort of equality in 
 distribution would satisfy nobody. It is not 
 worth talking about. For a quarter of the 
 population are children under ten years of 
 age, 2 and nearly two -fifths are under fifteen : 
 and it would be absurd to assign to a baby 
 seeking a pap-bottle, or even to a boy vora- 
 
 1 There is a general agreement amongst statisticians with 
 regard to these figures. Cf. Messrs Giffen, Mulhall, and 
 Leone Levi passim. 
 
 2 Out of any thousand inhabitants, two hundred and fifty- 
 eight are under ten years of age ; and three hundred and sixty- 
 six out of every thousand are under fifteen. 
 
30 HOW TO DIVIDE THE INCOME EQUALLY 
 
 cn?m.' c i us as boys' appetites are the same sum 
 
 But~differ- ^at would be assigned to a full-grown man 
 
 and S a X <* or woman - I n order to give our distribution 
 
 would even k e semblance of rationality, the shares 
 
 rccjuirc *^ 
 
 mus * be graduated according to the require- 
 ments of age and sex. The sort of proportion 
 to each other which these graduated shares 
 should bear might possibly be open to some 
 unimportant dispute : but we cannot go far 
 wrong- if we take for our guide the amount 
 of food which scientific authorities tell us is 
 required respectively by men, women, and 
 children ; together with the average proportion 
 which actually obtains at present, both between 
 their respective wages and the respective 
 The pro- costs of their maintenance. The result which 
 wl^ciTare* we arr i ye a ^ from these sources of information 
 ascertain- * s substantially as follows, and every fresh 
 able. inquiry confirms it. For every pound which 
 is required or received by a man, fifteen 
 shillings does or should go to a woman, ten 
 shillings to a boy, nine shillings to a girl, and 
 four and sixpence to an infant. 1 
 
 1 Statistics in support of the above result might be 
 indefinitely multiplied, both from European countries and 
 America. So far as food is concerned, scientific authorities 
 
SHARES OF MEN, WOMEN, AND CHILDREN 31 
 
 So much, then, being admitted, we shall BOOKI. 
 make our calculations best by starting with 
 the family as our unit, and coming to the 
 individual afterwards. The average family 
 consists of four and a half persons ; and the 
 families in the United Kingdom number eight umt : 
 and a half millions. Twelve hundred millions 
 the sum we have to divide would give each 
 family an income of a hundred and forty 
 pounds. From this, however, we should have 
 to deduct taxes ; and, since if all classes were 
 equal, all would have to be taxed equally, 
 the amount due from each family would be 
 considerable. Public expenditure, if the State 
 directed everything, would of necessity be 
 larger than it is at present ; but even if we 
 assume that it would remain at its present 
 figure, each family would have to contribute 
 at least sixteen pounds. 1 Therefore sixteen 
 
 tell us that if twenty represents the amount required by a man, 
 a woman will require fifteen, and a child eleven ; but the total 
 expenditures necessary are somewhat different in proportion. 
 1 The total imperial taxation in the United Kingdom is 
 about two pounds eight shillings per head ; and the total local 
 taxation is about one pound four shillings. Thus the two 
 together come to three pounds twelve shillings per head, which 
 for every family of four and a half persons gives a total of 
 sixteen pounds four shillings. 
 
32 THE MAXIMUM INCOME OF A BACHELOR 
 
 BOOK i. pounds must be deducted from the hundred 
 and forty pounds. Accordingly we have for 
 four and a half persons a net income of a 
 hundred and twenty -six pounds. Now these 
 persons would be found to consist on an 
 average of a man and his wife, a youth, a girl, 
 and a half of a baby, for when we deal with 
 averages we must execute many judgments 
 like Solomon's, and if we distribute the 
 income among them in the proportion I just 
 now indicated, the result we shall arrive at 
 And then will, in round numbers, be this. The man 
 
 we can 
 
 arrive at will have fifty pounds, the woman thirty-six 
 of each pounds, the youth twenty-Jive pounds, the girl 
 twenty-four pounds, and the half of the infant 
 five pounds. And now let us scrutinise the 
 result a little further, and see how it looks in 
 various familiar lights. An equal distribution 
 of the whole wealth of the country would give 
 every adult male about nineteen shillings 
 and sixpence a week, and every adult female 
 about fourteen shillings. These sums would, 
 however, be free of taxes; so in order to 
 compare them with the wages paid at present, 
 we must add to them two shillings and six- 
 pence and two shillings respectively, which will 
 
SMALLNESS OF THE RESULT 33 
 
 raise them respectively to twenty-two shillings, BOOK i. 
 and to sixteen shillings : but a bachelor who is 
 
 . The maxi- 
 
 earning the former sum now, or an unmarried mum 
 
 , , income that 
 
 woman who is now earning the latter, would a n equal 
 neither of them, under any scheme of equal tion would 
 distribution conceivable, come in for a penny bachelor. 
 of the plunder taken from the rich. They 
 already are receiving all that, on principles of 
 equality, they could claim. 
 
 The smallness of this result is likely to 
 startle anybody ; but none the less is it true : 
 and it is well to consider it carefully, because 
 the reason why it startles us requires to be 
 particularly noticed. Of the female population 
 of the country that is above fifteen years old, 
 the portion that works for wages is not so much 
 as a half ; * and of the married women that do 
 so, the portion is much smaller. The remainder 
 work, no doubt, quite as hard as the rest ; but 
 they work as wives and mothers ; and what- 
 ever money they have comes to them through 
 their husbands. Thus when the ordinary man 
 considers the question of income, he regards 
 
 1 The number of females over fifteen years of age is 
 about twelve millions. Those who work for wages number 
 less than five millions. 
 
 3 
 
CH. III. 
 
 34 MAXIMUM INCOME OF 
 
 BOOK i. income as something which belongs exclusively 
 to the man, his wife and his children being 
 things which the man maintains as he pleases. 
 But the moment the principle of equality of 
 distribution is accepted, all such ideas as these 
 have to be rudely changed : for if all of us 
 have a claim to an equal share of wealth, just 
 as the common man's claim is as good as that 
 of the uncommon man, so the woman's claim 
 is as good as the claim of either ; and what- 
 ever her income might be under such con- 
 ditions, it would be hers in her own right, 
 not in that of anybody else. Accordingly it 
 happens that an equal distribution of wealth, 
 though it would increase the present income 
 of the ordinary working man's family, might 
 actually, so far as the head of the family was 
 concerned, have the paradoxical result of 
 making him feel that personally he was poorer 
 than before not richer. 1 
 
 1 Mr. Giffen's latest estimates show that not more than 
 twenty-three per cent of the wage-earners in this country earn 
 less than twenty shillings a week ; whilst seventy-seven per 
 cent earn this sum and upwards. Thirty-five per cent earn 
 from twenty shillings to twenty -five shillings; and forty-one 
 per cent earn more than twenty-five shillings. See evidence 
 given by Mr. Giffen before the Labour Commission, 7th 
 December 1892 
 
A MARRIED COUPLE 35 
 
 The man's personal share, then, would be BOOKI. 
 twenty-two shillings a week, and the woman's 
 sixteen shillings; and they could increase est possible 
 
 standard of 
 
 their income in no way except by marrying, living 
 As many of their expenses would be greatly re pre- 
 diminished by being shared, they would by ^man y 
 this arrangement both be substantial gainers : ^hlut 6 
 but if the principle of equality were properly c 
 carried out, they would gain very little further 
 by the appearance of children ; for though 
 we must assume that a certain suitable sum 
 would be paid them by the State for the 
 maintenance of each child, that would have 
 to be spent for the child's benefit. We may, 
 therefore, say that the utmost results which 
 could possibly be secured to the individual 
 by a general confiscation and a general re- 
 distribution of wealth, would be represented 
 by the condition of a childless man and wife, 
 with thirty - eight shillings a week, which 
 they could spend entirely on themselves : 
 for all the wealth of the nation that was 
 not absorbed in supplying such incomes to 
 men and women who were childless, would 
 be absorbed in supporting the children of 
 those who had them ; thus merely equalising 
 
36 PRACTICAL ABSURDITY OF AN 
 
 BOOK i. the conditions of large and of small families, 
 
 CH. m. i i 
 
 and enabling the couple with ten or a dozen 
 children to be personally as well off as the 
 couple with none. Could such a condition of 
 wellbeing be made universal, many of the 
 darkest evils of civilisation would no doubt 
 disappear : but it is well for a man who 
 imagines that the masses of this country are 
 kept by unjust laws out of the possession of 
 some enormous heritage, to see how limited 
 would be the result, if the laws were to give 
 them everything ; and to reflect that the 
 largest income that would thus be assigned to 
 any woman, would be less than the income 
 enjoyed at the present moment by multitudes 
 of unmarried girls who work in our Midland 
 mills girls whose wages amount to seventeen 
 shillings a week, who pay their parents a 
 shilling a day for board, and who spend 
 the remainder, with a most charming taste, 
 on dress. 
 
 He will have to reflect also that such a 
 result as has been just described could be 
 produced only by an equality that would be 
 absolutely grotesque in its completeness by 
 every male being treated as equal to every 
 
EQUAL DIVISION OF INCOME 37 
 
 other male of the same age, and by every BOOKI. 
 female being treated similarly. The prime 
 minister, the commander -in -chief, the most 
 important State official, would thus, if they 
 were unmarried, be poorer than many a factory- 
 girl is at present ; whilst if they were married, 
 they and their wives together would have but 
 four shillings a week more than is at present 
 earned by a mason, and six shillings a week 
 less than is earned by an overlooker in a 
 cotton-mill. 
 
 But an equality of this kind, from a practi- Absolute 
 cal point of view, is worth considering only as equafity7 
 a means of reducing it to an absurdity. Even nouhought 
 were it established to-morrow, it could not be anybody ^ 
 maintained for a month, owing to the diffi- 
 culty that would arise in connection with the 
 question of children : as unless a State official 
 checked the weekly bills of every parent, 
 parents inevitably would save out of their 
 children's allowances ; and those with many 
 children would be very soon founding fortunes. 
 And again it is obvious that different kinds of 
 occupation require from those engaged in them 
 unequal expenditures ; so that the inevitable 
 inequality of needs would make pecuniary 
 
38 A COMPLETE RE DIVISION OF PROPERTY 
 BOOK i. equality impossible. Indeed every practical 
 
 CH. III. . il 1 
 
 man in our own country owns this, however 
 AS the extreme his views ; as is evidenced by the 
 asked for amounts which have been suggested by the 
 Parliament leaders of the Labour Party as a fit salary for 
 Labour a paid Member of Parliament. These amounts 
 show. vary from three hundred pounds a year to 
 four hundred pounds ; so that the unmarried 
 Member of Parliament, in the opinion of 
 our most thoroughgoing democrats, deserves 
 an income from six to eight times as great 
 as the utmost income possible for the ordin- 
 ary unmarried man. And there are many 
 occupations which will, if this be admitted, 
 deserve to be paid on the same or on even a 
 higher scale. We may therefore take it for 
 granted that the most levelling politicians in 
 the country, with whom it is worth while to 
 reason as practical and influential men, would 
 spare those incomes not exceeding four hundred 
 pounds a year, and would probably increase the 
 number of those between that amount and a 
 hundred and fifty pounds. Now the total 
 amount of the incomes between these limits 
 is not far from two hundred million pounds : 
 so if this be deducted from the twelve hundred 
 
ADVOCA TED B Y NO BOD Y 39 
 
 million pounds which we just now took as the BOOK i. 
 sum to be divided equally, the incomes of the 
 people at large will be less by sixteen per cent 
 than the sums at which they were just now 
 estimated ; and the standard of average com- 
 fort will be represented by a childless man and 
 wife having thirty-one shillings and eightpence 
 instead of thirty-eight shillings a week. 
 
 We need not, however, dwell upon such General 
 
 redistribu- 
 
 details longer : for there are few people who tkm, then, 
 
 -.is not 
 
 conceive even a redistribution like this to be thought 
 possible ; and there would probably be fewer any S Eng- 
 still who would run the risk of attempting it, 
 if they realised how limited would be the 
 utmost results of it to themselves. My only 
 reason for dealing with these schemes at all 
 is that, whilst they are felt to be impossible as But it is 
 soon as they are considered closely, they are strucUveto 
 yet the schemes which invariably suggest the tieo- 
 themselves to the mind when first the idea of 
 any great social change is presented to it ; and 
 a knowledge of their theoretical results, though 
 it offers no indication of what may actually be 
 attainable, will sober our thoughts, and at the 
 same time stimulate them, by putting a distinct 
 and business-like limit to what is conceivable. 
 
40 THE A TTA CK ON 
 
 BOOK i. And for this reason, before I proceed 
 
 further, I shall ask the reader to consider a 
 
 are certain few more theoretical estimates. The popular 
 
 national e agitator, and those whose opinions are influ- 
 
 income the i i i i 
 
 enced by him, do not propose to seize upon 
 
 all property ; they content themselves with 
 proposing to appropriate certain parts of it. 
 advocated, rpj^ pg^s generally fixed upon are as follows : 
 
 S thellnd* First an( ^ foremost comes the landed rental l 
 terestofth'e ^ *ke coun ^ r } 7 the incomes of the iniquitous 
 National landlords. Second comes the interest on the 
 
 Debt | 
 
 (3) the National Debt: third, the profits of the railway 
 
 sums spent * 
 
 on the companies : and last, the sum that goes to 
 
 Monarchy. 
 
 support the Monarchy. All these annual sums 
 have been proposed as subjects of confiscation, 
 though the process may generally be disguised 
 
 1 The reader must observe that I speak of the rent of the 
 land, not of the land itself, as the subject of the above 
 calculation. I forbear to touch the question of any mere 
 change in the occupancy or administration of the land, or 
 even of any scheme of nationalising the land by purchasing 
 it at its market price from the owners ; for by none of these 
 would the present owners be robbed pecuniarily, nor would 
 the nation pecuniarily gain, except in so far as new condi- 
 tions of tenure made agriculture more productive. All such 
 schemes are subjects of legitimate controversy, or, in other 
 words, are party questions ; and I therefore abstain from 
 touching them. I deal in the text with facts about which 
 there can be no controversy. 
 
LANDED PROPERTY 41 
 
 under other names. Let us take each of these BOOK i 
 
 CH - IIL 
 separately, and see what the community at - 
 
 large would gain by the appropriation of each, consider 
 And we will begin with the income of the land- nation 
 
 lords ; for not only is this the property which 
 
 is most frequently attacked, but it is the one abovf. 
 
 from the division of which the largest results 
 
 Absurd 
 
 are expected. It is indeed part of the creed ideas as to 
 
 -, . . . i c ^ 
 
 of a certain type of politician that, if the of the 
 income of the landlords could be only divided rental 
 amongst the people, all poverty would be country. 
 abolished, and the great problem solved. 
 
 In the minds of most of our extreme The 
 reformers, excepting a few Socialists, the 
 income of the landlords figures as something the* larger 
 limitless ; and the landlords themselves as the 
 representatives of all luxury. It is not difficult 
 to account for this. To any one who studies 
 the aspect of any of our rural landscapes, with 
 a mind at all occupied with the problem of the 
 redistribution of wealth, the things that will 
 strike his eye most and remain uppermost in 
 his mind, are the houses and parks and woods 
 belonging to the large landlords. Small 
 houses and cottages, though he might see a 
 hundred of them in a three-miles' drive, he 
 
CH. III. 
 
 42 POPULAR IGNORANCE AS TO 
 
 BOOK i. would hardly notice ; but if in going from 
 York to London he caught glimpses of twelve 
 large castles, he would think that the whole of 
 the Great Northern Railway was lined with 
 them. And from impressions derived thus 
 two beliefs have arisen first -that the word 
 "landlord" is synonymous with "large land- 
 lord " ; and secondly that large landlords own 
 most of the wealth of the kingdom. But ideas 
 like these, when we come to test them by 
 facts, are found to be ludicrous in their false- 
 hood. If we take the entire rental derived 
 from land, and compare it with the profits 
 derived from trade and capital, we shall find 
 that, so far as mere money is concerned, the 
 land offers the most insignificant, instead of 
 the most important question 1 that could 
 engage us. Of the income of the nation, the 
 entire rental of the land does not amount to 
 more than one-thirteenth ; and during the last 
 
 1 It is also every year becoming more unimportant, in 
 diametrical contradiction of the theories of Mr. H. George. 
 This was pointed out some twelve years ago by Professor 
 Leone Levi, who showed that whereas in 1814 the incomes 
 of the landlord and farmer were fifty-six per cent of the total 
 assessed to income-tax, in 1851 they were thirty-seven per 
 cent, and in 1880 only twenty-four per cent. They are now 
 only sixteen per cent. 
 
THE REAL RENTAL OF THE LANDLORDS 43 
 
 ten years it has fallen about thirteen per BOOKI. 
 cent. The community could not possibly get 
 more than all of it ; and if all of it were 
 divided in the proportions we have already 
 contemplated, it would give each man about 
 twopence a day and each woman about three 
 half-pence. 1 
 
 But the more important part of the matter The landed 
 
 mi i i aristocracy 
 
 still remains to be noticed. Ine popular idea are not the 
 is, as I just now said, that we should, in con- receivers. 
 fiscating the rental of the kingdom, be merely 
 robbing a handful of rich men, who would be 
 probably a deserving, and certainly an easy 
 prey. The facts of the case are, however, 
 singularly different. It is true, indeed, if we 
 reckon the land by area, that the large land- 
 lords own a preponderating part of it : but if 
 we reckon the land by value, the whole case 
 is reversed ; and we find that classes of men A muiti- 
 
 , . tude of 
 
 who are supposed by the ordinary agitator to small pro- 
 have no fixed interest in the national soil at 
 
 all, really draw from it a rental twice as great renTas the 
 
 as that of the class which is supposed to absorb 
 
 the whole. I will give the actual figures, 2 aristocrac >'- 
 
 1 See Local Government Board valuation of 1878. 
 
 2 Recent falls in rent make it impossible to give the 
 
CH. 
 
 44 THE LANDED ARISTOCRACY 
 
 BOOK i. based upon official returns ; and in order that 
 the reader may know my exact meaning, let me 
 define the term that I have just used namely 
 " large landlords " as meaning owners of more 
 than a thousand acres. No one, according to 
 popular usage, would be called a large landlord, 
 who was not the owner of at least as much as 
 this ; indeed the large landlord, as denounced 
 by the ordinary agitator, is generally supposed 
 to be the owner of much more. Out of the 
 aggregate rental, then that total sum which 
 would, if divided, give each man twopence a 
 day what goes to the large landlords is now 
 considerably less than twenty -nine million 
 pounds. By far the larger part namely 
 something like seventy million pounds is 
 divided amongst nine hundred and fifty thou- 
 sand owners, of whose stake in the country 
 
 figures with actual precision ; but the returns in the New 
 Doomsday Book, taken together with subsequent official in- 
 formation, enable us to arrive at the substantial facts of the 
 case. In 1878 the rental of the owners of more than a 
 thousand acres was twenty-nine million pounds. The rental 
 of the rural owners of smaller estates was thirty-two million 
 pounds ; and the rental of small urban and suburban owners 
 was thirty -six million pounds. The suburban properties 
 averaged three and a half acres, the average rent being thirteen 
 pounds per acre. 
 
I. 
 
 CH. III. 
 
 MULTITUDE OF SMALL LANDOWNERS 45 
 
 the agitator seems totally unaware; and in BOOK 
 order to give to each man the above daily 
 dividend, it would be necessary to rob all this 
 immense multitude whose rentals are, on an 
 average, seventy -six pounds a year. 1 Suppos- 
 ing, then, this nation of smaller landlords to 
 
 1 According to the Local Government Eeport of 1878, 
 the rental of all the properties over five hundred acres averaged 
 thirty-six shillings an acre ; that of properties between fifty 
 and a hundred acres, forty-eight shillings an acre ; and that of 
 properties between ten and fifty acres, a hundred and sixteen 
 shillings an acre. In Scotland, the rental of properties over 
 five hundred acres averaged nine shillings an acre : that of 
 properties between ten and fifty acres, four hundred and thirteen 
 shillings. With regard to the value of properties under ten 
 acres, the following Scotch statistics are interesting. Four- 
 fifths of the ground rental of Edinburgh is taken by owners 
 of less than one acre, the rental of such owners being on an 
 average ninety -nine pounds. Three-fourths of the ground 
 rental of Glasgow is taken by owners of similar plots of 
 ground ; only there the rental of such owners is a hundred 
 and seventy-one pounds. In the municipal borough of Kil- 
 marnock, land owned in plots of less than an acre lets per 
 acre at thirty-two pounds. The land of the few men who own 
 larger plots lets for not more than twenty pounds. Each one 
 of the eleven thousand men who own collectively four-fifths 
 of Edinburgh, has in point of money as much stake in the 
 soil as though he were the owner in Sutherland of two 
 thousand acres : and each one of the ten thousand men who 
 own collectively three-fourths of Glasgow, has as much stake 
 in the soil as though he were the owner in Sutherland of 
 three thousand four hundred acres. 
 
 OF THE 
 
 UNIVERSITY 
 
46 OWNERS OF RAILWA Y SHARES & CONSOLS 
 
 BOOK i. be spared, and our robbery confined to peers 
 and to country gentlemen, the sum to be dealt 
 
 The entire 1111 
 
 rental of with would be less than twenty-nine million 
 aristocracy pounds ; and out of the ruin of every park, 
 that its"* manor, and castle in the country, each adult 
 lion would male would receive less than three -farthings 
 
 benefit no i ! 
 
 one> daily. 
 
 were the And now let us turn to the National Debt 
 
 Debtand and to the railways. The entire interest of 
 the one and the entire profits of the other, 
 would, if divided equally amongst the popula- 
 tion > g ive results a little, but only a little, 
 
 ce a pubie p t e o" lar g er tnan tne rental of tne lar g e landlords. 
 -^ U ^ ^ ere a g a i n > if the poorer classes were spared, 
 and the richer investors alone were singled out 
 for attack, the small dividend of perhaps one 
 penny for each man daily, would be diminished 
 to a sum yet more insignificant. How true 
 this is may be seen from the following figures 
 relating to the National Debt. Out of the 
 two hundred and thirty-six thousand persons 
 who held consols in 1880, two hundred and 
 sixteen thousand, or more than nine-tenths of 
 the whole, derived from their investments less 
 than ninety pounds a year ; whilst nearly half 
 of the whole derived less than fifteen pounds. 
 
INAPPRECIABLE COST OF THE MONARCHY 47 
 
 And lastly, let us consider the Monarchy, BOOKI. 
 with all its pomp and circumstance, the 
 
 r . The Mon- 
 
 maintenance of which is constantly represented archy costs 
 
 . . so small a 
 
 as a burden seriously pressing on the shoulders sum, that 
 
 . T no one 
 
 oi the working-class. I am not arguing that would be 
 in itself a Monarchy is better than a Eepublic. f 0r its 
 I am considering nothing but its cost in a 
 money to the nation. Let us see then what 
 its maintenance actually costs each of us, and 
 hoV much each of us might conceivably gain 
 by its abolition. The total cost of the Mon- 
 archy is about six hundred thousand pounds 
 a year ; but ingenious Kadicals have not 
 infrequently argued that virtually, though in- 
 directly, it costs as much as a million pounds. 
 Let us take then this latter sum, and divide 
 it amongst thirty-eight million people. What 
 does it come to a head ? It comes to some- 
 thing less than sixpence halfpenny a year. 
 It costs each individual less to maintain the 
 Queen "than it would cost him to drink her 
 health in a couple of pots of porter. The 
 price of these pots is the utmost he could 
 gain by the abolition of the Monarchy. 
 But does any one think that the individual 
 would gain so much or indeed, gain any- 
 
48 FORCIBLE REDISTRIBUTION IMPOSSIBLE 
 
 BOOK i. thing ? If he does, he is singularly sanguine. 
 
 CH. III. . . 
 
 Let him turn to countries that are under a 
 Eepublican government ; and he will find that 
 elected Presidents are apt to cost more than 
 Queens. 
 
 AH such All these schemes, then, for attacking 
 
 - property as it exists, for confiscating and re- 
 distributing by some forcible process of legis- 
 lation the whole or any part of the existing 
 na ti na l income, are either obviously impracti- 
 ca kle, or their result would be insignificant. 
 Their utmost result indeed would not place 
 any of the workers in so good a position as is 
 at present occupied by many of them. This 
 is evident from what has been seen already. 
 
 But also on But there is another reason which renders such 
 
 accouut of , .,, ,, 
 
 a far deeper schemes illusory a lar more important one 
 which the than any I have yet touched upon, and of a 
 problem far more fundamental kind. We will consider 
 
 epen s. ^. g -^ ^ e next chapter ; and we shall find, 
 when we have done so, that it has brought us 
 to the real heart of the question. 
 
CHAPTER IV 
 
 The Nature of the National Wealth: first, of the 
 National Capital ; second, of the National Income. 
 Neither of these is susceptible of Arbitrary 
 Division. 
 
 WE have iust seen how disappointing, to those Aiegisia- 
 
 J , tive divi- 
 
 even who would gain most by it, would be the sion of the 
 results of an equal division of the national come is not 
 income of this country, and how intolerable to appointing 
 all would be the general conditions involved in ietlcli re- 
 
 it. In doing this, we have of course adopted, 
 for argument's sake, an assumption which lmpos 
 underlies all popular ideas of such a process ; 
 namely, that if a Government were only strong 
 enough and possessed the requisite will, it could 
 deal with the national income in any way that 
 might be desired ; or, in other words, that the 
 national income is something that could be 
 divided and distributed, as an enormous heap 
 
 4 
 
So DIFFERENCE BETWEEN 
 
 BOOK i. of sovereigns could, according to the will of 
 any one who had them under his fingers. I am 
 now going to show that this assumption is 
 entirely false, and that even were it desirable 
 theoretically that the national income should 
 be redivided, it is not susceptible of any such 
 arbitrary division. 
 AS win To those who are unaccustomed to reflecting 
 
 be shown . , , 
 
 in this on economic problems, and who more or less 
 consciously associate the qualities of wealth 
 with those of the money in whose terms its 
 amount is stated, I cannot introduce this 
 important subject better than by calling their 
 attention to the few following facts, which, 
 simple and accessible as they are, are not 
 generally known. 
 
 Wealth is The capital value of the wealth of the 
 
 utterly un- * 
 
 like money United Kingdom is estimated at something 
 divisible like ten thousand million pounds; but the 
 
 qualities. . . 
 
 entire amount 01 sovereigns and shillings in 
 the country does not exceed a hundred and 
 forty -four million pounds, nor that of the 
 uncoined bullion, a hundred and twenty -two 
 'million pounds. That is to say, for every 
 nominal ten thousand sovereigns there does 
 not exist in reality more than two hundred 
 
WEAL TH AND MONE Y 5 1 
 
 and twenty -six. Were this sum divided BOOKI. 
 
 , . n in- CH - IV - 
 
 amongst the population equally, it would give 
 every one a share of exactly seven pounds. 
 Again, this country produces every year 
 wealth which we express by calling it thirteen 
 hundred million pounds. The amount of The money 
 gold and silver produced annually by the united 
 whole world is hardly so much as thirty-eight is 
 million pounds. If the whole of this were 
 appropriated by the United Kingdom, it its wealth< 
 would give annually to each inhabitant only 
 ten new shillings and a single new half- 
 
 o o 
 
 sovereign. The United Kingdom, however, 
 gets annually but a tenth of the world's 
 money, so its annual share in reality is not 
 so much as four million pounds. Accordingly, 
 that vast volume of wealth which we express 
 by calling it thirteen hundred million pounds, 
 has but four million pounds of fresh money 
 year by year to correspond to it. That is 
 to say, there is only one new sovereign for 
 every new nominal sum of three hundred 
 and twenty-jive. 
 
 Wealth as a whole, therefore, is something The nature 
 
 3 of wealth, 
 
 so totally distinct from money that there is no as a whole, 
 ground for presuming it to be divisible in the miscon- 
 
52 WEALTH AS A WHOLE 
 
 BOOK i. same way. What is wealth, then, in a country 
 
 PIT TV 
 
 like our own ? To some people this will seem 
 most a superfluous question. They will say that 
 every one knows what wealth is by experience 
 by the experience of possessing it, or by the 
 experience of wanting it. And in a certain 
 sense this is true, but not in any sense that 
 concerns us here. In precisely the same sense 
 every one knows what health is ; but that is 
 very different from knowing on what health 
 depends ; and to know the effects of wealth on 
 our own existence is very different from know- 
 ing the nature of the thing that causes them. 
 Indeed, as a matter of fact, what wealth really 
 consists of is a thing which very few people are 
 ever at the trouble to realise ; and nothing 
 shows that such is the case more clearly than 
 the false and misleading images which are 
 AS we see commonly used to represent it. The most 
 metaphors familiar of these are : " a treasure," " a store," 
 describe it? " a hoard," or, as the Americans say, "a pile." 
 Now any one of these images is not only not 
 literally true, but embodies and expresses a 
 mischievous and misleading falsehood. It 
 represents wealth as something which could be 
 carried off and divided as a kind of plunder 
 
CH. IV. 
 
 NOT DIVISIBLE LIKE MONEY 53 
 
 which might be seized by a conquering army. BOOK 
 But the truth is, that the amount of existing 
 wealth which can be accurately described, or 
 could be possibly treated in this way, is, in a 
 country like ours, a very insignificant portion ; 
 and, were social conditions revolutionised to 
 any serious degree, much of that portion 
 would lose its value and cease to be wealth 
 at all. 
 
 Let us take, for instance, some palatial house 
 in London, which catches the public gaze as a 
 monument of wealth and splendour ; and we 
 will suppose that a mob of five hundred people 
 are incited to plunder it by a leader who 
 informs them that its contents are worth 
 two hundred thousand pounds. Assuming 
 
 that estimate to be correct, would it mean an( V ts . 
 
 contents. 
 
 that of these five hundred people each would 
 get a portion to him worth four hundred 
 pounds? Let us see what would really 
 happen. They would find enough wine, 
 perhaps, to keep them all drunk for a 
 week ; enough food to feed thirty of them 
 for a day; and sheets and blankets for 
 possibly thirty beds. But this would not 
 account for many thousands out of the 
 
54 MORE LUXURIOUS FORMS OF WEALTH 
 
 BOOK i. two hundred thousand pounds. The bulk of 
 
 CH. IV. 
 
 that sum would be made up how? A 
 hundred thousand pounds would be probably 
 represented by some hundred and fifty pictures, 
 and the rest by rare furniture, china, and 
 works of art. Now all these things to the 
 pillagers would be absolutely devoid of value ; 
 for if such pillage were general there would 
 be nobody left to buy them ; and they would 
 in themselves give the pillagers no pleasure. 
 One can imagine the feelings of a man who, 
 expecting four hundred pounds, found himself 
 presented with an unsaleable Sevres broth- 
 basin, or a picture of a Dutch burgomaster ; or 
 of five such men if for their share they were 
 given a buhl cabinet between them. We may 
 be quite certain that the broth-basin would be 
 at once broken in anger; the cabinet would 
 be tossed up for, and probably used as a 
 rabbit-hutch ; and the men as a body would 
 endeavour to make up for their disappoint- 
 ment by ducking or lynching the leader 
 who had managed to make such fools of 
 them. 
 
 wealth, as And now let us consider the wealth of the 
 evenness kingdom as a whole. Much as the bulk of it 
 
INCAPABLE OF DIVISION 55 
 
 differs from the contents of a house of this BOOKI. 
 
 CTT TV 
 
 kind, it would, if seized on in any forcible 
 
 susceptible 
 
 way, prove even more disappointing and of division. 
 elusive. 
 
 We may consider it under two aspects. Wealth, as 
 
 . . a whole, 
 
 We may consider it as so much annual income, has two 
 
 aspects : 
 
 or else as so much capital. In the last chapter that of 
 
 .,.-.. , capital, and 
 
 we were considering it as so much income, that of 
 and presently we shall be doing so again. 
 But as capital may possibly strike the imagin- 
 ation of many as something more tangible 
 and easily seized, and likely to yield, if re- 
 distributed, more satisfactory results, we will wewiii 
 see first of what items the estimated capital of aider the 
 this country is composed. To do so will not capital! 
 only be instructive : it will also be curious 
 and amusing. 
 
 As I said just now, its value, expressed in This capital 
 money, is according to the latest authorities not of 
 about ten thousand million pounds. 1 As a 
 actual money, however, forms so minute a 
 portion of this, the reader will see that it is 
 hardly more than one -fortieth, we may, for 
 
 1 This is Mr. Giffen's estimate. Mr. Mulhall, who has 
 made independent calculations, does not differ from Mr. 
 Giffen by more than five per cent. 
 
56 THE WEALTH OF GREAT BRITAIN 
 
 BOOK i. our present purpose, pass it entirely over; 
 
 and our concern will be solely with the things 
 
 for which our millions are a mere expression. 
 
 But of three It will be found that these things divide 
 
 things: the themselves into three classes. The first 
 
 comprising consists of things which, from their very 
 
 susceptible na ^ure, are not susceptible of any forcible 
 
 011 ; division at all ; the second consists of things 
 
 which are susceptible of division only by a 
 
 process of physically destroying them and 
 
 pulling them into pieces ; and each of these 
 
 two classes, in point of value, represents, 
 
 roughly speaking, nearly a quarter of the total. 
 
 The third class alone, which represents little 
 
 more than a half, consists of things which, 
 
 even theoretically, could be divided without 
 
 being destroyed. 
 
 The third We will consider this third class first, which 
 
 class com- . . ... 
 
 prising aii represents in the estimates ol statisticians 
 things that five thousand seven hundred million pounds. 
 divided 6 The principal things comprised in it are land, 
 destroying houses, furniture, works of art, clothing, 
 forming* merchandise, provisions, and live-stock ; and 
 of the total. suc ^ commodities in general as change hands 
 over the shopman's counter, or in the market. 1 
 
 1 General merchandise is estimated by Mr. Mulhall at 
 
CH. IV. 
 
 CONSIDERED AS CAPITAL 57 
 
 Of these items, by far the largest is houses, BOOK 
 which make up a quarter of the capital value 
 of the country, or two thousand five hundred 
 million pounds. But more than half this 
 sum stands for houses which are much 
 above the average in size, and which do 
 not form more than an eighth part of the 
 whole ; and were they apportioned to a new 
 class of occupants, they would lose at least 
 three-fourths of their present estimated value. 
 So too with regard to furniture and works of 
 art, a large part of their estimated value 
 would, as we have seen already, disappear in 
 distribution likewise : and their estimated 
 value is about a tenth of the whole we are 
 now considering. Land, of course, can, at all 
 events in theory, be divided with far greater 
 
 three hundred and forty -three million pounds. For every 
 hundred inhabitants in the year 1877 there were fox horses, 
 twenty-eight cows, seventy-six sheep, and ten pigs. In 1881 
 there were in Great Britain five million four hundred and 
 seventy-five thousand houses. The rent of eighty -seven per 
 cent of these was under thirty pounds a year, and the rental 
 of more than a half averaged only ten pounds. The total 
 house -rental of Great Britain in that year was one hundred 
 and fourteen million pounds; and the aggregate total of 
 houses over thirty pounds annual value was sixty million 
 pounds ; though in point of number these houses were only 
 thirteen per cent of the whole. 
 
58 THE ELEMENTS WHICH COMPOSE 
 
 BOOK i. advantage ; and counts in the estimates as 
 fifteen hundred million pounds or some- 
 thing under a sixth of the whole. Merchan- 
 dise, provisions, and movable goods in general 
 can be divided yet more readily ; and so one 
 would think could live-stock, though this is 
 hardly so in reality : but of the whole these 
 three last items form little more than a 
 twentieth. 
 
 The results And now, supposing all these divisible 
 these 3 things to be divided, let us see what the 
 ridiculous, capital would look like which would be allotted 
 to each individual. Each individual would 
 find himself possessed of a lodging of some 
 sort, together with clothes and furniture worth 
 about eight pounds. He would have about 
 eight pounds' worth of provisions and miscel- 
 laneous movables, and a ring, a pin, or a 
 brooch, worth about three pounds ten shillings. 
 He would also be the proprietor of one acre 
 of land, which would necessarily in many 
 cases be miles away from his dwelling, 
 w T hilst as to stocking his acre, he would be 
 met by the following difficulty. He would 
 find himself entitled to the twentieth part 
 of a horse, to two -thirds of a sheep, the 
 
THE NATIONAL CAPITAL 59 
 
 fourth part of a cow. and the tenth part of BOOK i. 
 
 CH. IV. 
 
 a pig. 
 
 Such then would be the result to the in- 
 dividual of dividing the whole of our capital 
 that could be divided without destroying it. 
 This is, as we said, a little more than half The second 
 
 class of 
 
 oi the total ; and now let us turn to the things, 
 two other quarters ; beginning with the tiT P 
 things which could be indeed divided, but capital* 
 
 which would obviously be destroyed in the 
 process. Their estimated value is more than 
 two thousand million pounds: half of which them< 
 sum is represented by the railways and ship- 
 ping of the kingdom ; six hundred million 
 pounds, by gasworks and the machinery in 
 our factories ; and the rest, by roads and 
 streets and public works and buildings. These, The 
 it is obvious, are not suitable for division ; 
 and still less divisible are the things in the 
 
 class that still remains. For of their total at aii! ld 
 value, which amounts to some two thousand 
 Jive hundred million pounds, more than a 
 thousand million pounds, according to Mr. 
 Giffen, represent the good -will of various 
 professions of business ; and the whole of the 
 remainder nearly fifteen hundred million 
 
60 L UDICRO US RES UL TS 
 
 BOOK i. pounds represents nothing that is in the 
 United Kingdom at all, but merely legal 
 claims on the part of particular British 
 subjects to a share in the proceeds of enter- 
 prise in other countries. 
 
 This last class consists of things which are 
 merely rights and advantages secured by law, 
 and dependent on existing social conditions ; 
 and it can be easily understood how they 
 would disappear under any attempt to seize 
 them. But the remaining three quarters of 
 our capital consists of material things; and 
 what we have seen with regard to them may 
 strike many people as incredible ; for the 
 moment we imagine them violently seized 
 and distributed, they seem to dwindle and 
 shrivel up ; and the share of each individual 
 suggests to one's mind nothing but a series of 
 ludicrous pictures pictures of men whose 
 heritage in all this unimaginable wealth is an 
 acre of ground, two wheels of a steam-engine, 
 a bedroom, a pearl pin, and the tenth part of 
 a pig. 
 
 capital has The explanation, however, of this result is 
 aii, V except to be found in the recognition of an exceed- 
 fiedbye; m gty simple fact i that the capital of a country 
 
OF AN EQUAL DIVISION OF CAPITAL 61 
 
 is of hardly' any value at all, and is, as capital, BOOK 
 of no value at all, when regarded merely as 
 an aggregate of material things, and not as 
 material things made living by their connec- 
 tion with life. The land, which is worth 
 fifteen hundred million pounds, depends for 
 its value on the application of human labour 
 to it, and the profitable application of labour 
 depends on skill and intelligence. The value 
 of the houses depends on our means of living 
 in them depends not on themselves, but on 
 the way in which they are inhabited. What 
 are railways or steamships, regarded as dead 
 matter, or all the machinery belonging to 
 all the manufacturing companies ? Nothing. 
 They are no more wealth than a decomposing 
 corpse is a man. They become wealth only 
 when life fills them with movement by a 
 power which, like all vital processes, is one of in- 
 finite complexity : when multitudes are massed 
 in this or in that spot, or diffused sparsely 
 over this or that district ; when trains move at 
 appropriate seasons, and coal finds its way from 
 the mine to the engine-furnace. The only parts 
 of the capital in existence at any given moment, 
 which deserve the name of capital as mere 
 
62 DIVISION OF INCOME, NOT OF CAPITAL 
 
 BOOK i. material things, are the stores of food, fuel, 
 
 CH. IV. -i -I i ... 
 
 and clothing existing in granaries, shops, and 
 elsewhere ; and not only is the value of these 
 proportionately small, but, if not renewed 
 constantly, they would in a few weeks be 
 exhausted. 
 
 And it It is plain then that, under the complicated 
 
 system of production to which the wealth of 
 is- the modern world is due, an equal division of 
 
 tributed. ^e ca pital of a country like our own is not 
 the way to secure an equal division of wealth. 
 The only thing that could conceivably be 
 
 income is divided is income. If, however, it is true that 
 - capital is, as we have seen it is, in its very 
 nature living, and ceases to be itself the 
 
 divided. m0 ment that life goes out of it, still more 
 emphatically must the same thing be said of 
 income, for the sake of producing which 
 capital is alone accumulated. Agitators talk 
 of the national income as if it were a dead 
 tree which a statesman like Mr. Gladstone 
 could cut into chips and distribute. It is not 
 like a dead tree ; it is like the living column of 
 a fountain, of which every particle is in con- 
 stant movement, and of which the substance is 
 never for two minutes the same. 
 
ALONE WORTH CONSIDERING 63 
 
 Let us examine the details of this income, BOOK i. 
 
 CH. IV. 
 
 and the truth of what has been said will be 
 
 The 
 
 apparent. The total amount, as we have national 
 
 7 7 -77 income 
 
 seen, is estimated at thirteen hundred 'million consists of 
 pounds ; it is not, however, made up of sove- more than 
 
 r , . , . thenational 
 
 reigns, but of things of which sovereigns are capital 
 nothing more than the measure. The true It e c S ' nsists 
 income of the nation and the true income of of other 
 
 things, or 
 
 the individual consist alike of things which J^f to 
 are actually consumed or enjoyed; or of legal things: 
 rights to such things which are accumulated 
 for future exercise. Of these last, which, in 
 other words, are savings, and are estimated 
 to amount to a hundred and thirty million 
 pounds annually, we need not speak here, except 
 to deduct them from the total spent. The total 
 is thus reduced to eleven hundred and seventy 
 million pounds or to things actually con- 
 sumed or enjoyed, which are valued at that 
 figure. Now what are these things ? That is Namely, of 
 our present question. By far the larger part goods, 
 of them comes under the following heads : goods, Ind 
 Food, Clothing, Lodging, Fuel and Lighting, s< 
 the attendance of Servants, the Defence of the 
 Country and Empire, and the Maintenance of 
 Law and Order. These together represent 
 
CH. IV. 
 
 64 ELEMENTS WHICH COMPOSE 
 
 BOOK i. about eight hundred million pounds. Of the 
 remaining three hundred and seventy million 
 pounds, about a third is represented by the 
 transport of goods and travelling; and not 
 much more than a quarter of the total income, 
 or about two hundred and seventy million 
 pounds, by new furniture, pictures, books, 
 plate, and other miscellaneous articles. The 
 furniture produced annually counts for some- 
 thing like forty million pounds; and the 
 new plate for not more than Jive hundred 
 thousand pounds. 
 
 And now let us examine these things from 
 certain different points of view, and see how in 
 each case they group themselves into different 
 classes. 
 
 In the first place, they may be classified 
 thus : into things that are wealth because 
 they are consumed, things that are wealth 
 because they are owned, and things that are 
 wealth because they are used or occupied. 
 Under the first heading come food, clothing, 
 lighting, and fuel ; under the second, movable 
 chattels ; and under the third, the occupation 
 of houses, 1 the services of domestics, the 
 
 1 This classification of houses may perhaps be objected to ; 
 
THE NATIONAL INCOME 65 
 
 carrying of letters by the Post Office, transport BOOK i. 
 and travelling, and the defences and adminis- !L_' 
 tration of the country. In other words, 
 the first class consists of new perishable 
 goods, the second of new durable goods, 
 and the third not of goods at all, but of 
 services and uses. The relative amounts 
 of value of the three will be shown with 
 sufficient accuracy by the following rough 
 estimates. 
 
 Of a total of eleven hundred and seventy 
 million pounds, perishable goods count for 
 jive hundred and twenty million pounds, 
 durable goods and chattels for two hundred 
 
 but from the above point of view it is correct. Houses 
 represent an annual income of one hundred and thirty-Jive 
 million pounds. Not more than thirty-Jive million pounds are 
 spent annually in building new houses ; whilst the whole 
 are counted as representing a new one hundred million 
 pounds every year. It is plain, therefore, that if we 
 estimate the entire annual value as above, the sum in question 
 stands not for the houses, but for the use of them. Even more 
 clearly does the same reasoning apply to railways and 
 shipping. Whether we send goods by these or are conveyed 
 by them ourselves, all that we get from them is the mere 
 service of transport. On transport and travelling by railway 
 about seventy million pounds are spent annually : by ship 
 about thirty million pounds; by trams about two million 
 pounds. 
 
 5 
 
66 MATERIAL GOODS AND SERVICES 
 
 BOOK i. anc l fifty million pounds, and services and 
 uses for four hundred 'million pounds. Thus, 
 less than a quarter of what we call the national 
 income consists of material things which we 
 can keep and collect about us ; little less than 
 half consists of material things which are only 
 produced to perish, and perish almost as fast 
 as they are made ; and more than a third 
 consists of actions and services which are 
 not material at all, and pass away and renew 
 themselves even faster than food and fuel. 
 A large This is how the national income appears, 
 
 part of the . . 
 
 national as seen from one point of view. Let us change 
 
 income 
 
 consists our ground, and see how it appears to us from 
 thatarf another. We shall see the uses and the 
 services to the value of four hundred million 
 pounds still grouped apart as before. But 
 the remaining elements, representing nearly 
 eight hundred million pounds, and consisting 
 of durable and perishable material things, 
 we shall see dividing itself in an entirely 
 new way into material things made at 
 home, and material things imported. We 
 shall see that the imported things come to 
 very nearly half; l and we shall see further that 
 
 1 The total annual imports are about four hundred and 
 
HOME-MADE GOODS AND IMPORTS 67 
 
 amongst these imported things food forms BOOK 
 incomparably the largest item. But the sig- 
 nificance of this fact is not fully apparent till 
 we consider what is the total amount of food 
 consumed by us ; and when we do that, we 
 shall see that, exclusive of alcoholic drinks, 
 actually more than half come to us from other 
 countries. 1 The reader perhaps may think 
 that this imported portion consists largely of 
 luxuries, which, on occasion, we could do 
 without. If he does think so, let him con- 
 fine his attention to those articles which 
 are most necessary, and most universally 
 consumed namely bread, meat, tea, coffee, and 
 sugar and he will see that our imports are to Most of 
 our home produce as ninety to seventy -three, 
 If we strike out the last three, our position 
 is still more startling ; 2 and most startling if 
 
 twenty million pounds. The amount retained for home 
 consumption is about three hundred and sixty-jive million 
 pounds. 
 
 1 The approximate value of the food consumed annually 
 in the United Kingdom (exclusive of alcoholic drinks) is 
 two hundred and ninety million pounds. The total value of 
 food imported is over one hundred and fifty million pounds. 
 
 2 The number of persons fed on home-grown meat was 
 twenty-three millions one hundred thousand. The number fed 
 on imported meat was fourteen millions seven hundred thousand. 
 
come is a 
 
 68 TWO-THIRDS OF THE POPULATION 
 
 BOOK i. we confine ourselves to the prime necessary 
 ' bread. The imported wheat is to the home- 
 grown wheat as twenty-six to twelve : that is 
 to say, of the population of this kingdom 
 twenty-six millions subsist on wheat that is 
 imported, and only twelve millions on wheat 
 that is grown at home ; or, to put the matter 
 in a slightly different way, we all subsist on 
 imported wheat for eight months of the year. 
 Thus the And now let the reader reflect on what 
 *~ all this means. It means that of the 
 f material part of the national income half 
 consists, not of goods which we ourselves 
 produce, but of foreign goods which are 
 exchanged for them ; and are exchanged for 
 them only because, by means of the most 
 far-reaching knowledge, and the most delicate 
 adaptation of skill, we are able to produce 
 goods fitted to the wants and tastes of distant 
 nations and communities, many of which are 
 to most of us hardly even known by name. 
 On every workman's breakfast-table is a meet- 
 ing of all the continents and of all the zones ; 
 
 In other words, the number of persons who subsist on im- 
 ported meat now is about equal to the entire population of 
 the United Kingdom in 1801. 
 
DEPENDENT ON IMPORTED FOOD 69 
 
 and they are united there by a thousand BOOKL 
 
 CH. IV. 
 
 processes that never pause lor a moment, 
 and thoughts and energies that never for a 
 moment sleep. 
 
 A consideration of these facts will be its amount 
 
 also varies 
 
 enough to bring home to anybody the accuracy owing to 
 of the simile of which I made use just now, com- 
 when I compared the income of the nation to causes, 
 the column thrown up by a fountain. He 
 will see how, like such a column, it is a 
 constant stream of particles, taking its motion 
 from a variety of complicated forces, and how 
 it is a phenomenon of force quite as much as a 
 phenomenon of matter. He will see that it is 
 a living thing, not a dead thing : and that it 
 can no more be distributed by any mechanical 
 division of it, than the labour of a man can be 
 distributed by cutting his limbs to pieces. 
 
 This simile of the fountain, though accurate, 
 is, like most similes, incomplete. It will, how- 
 ever, serve to introduce us to one peculiarity 
 more by which our national income is dis- 
 tinguished, and which has an even greater 
 significance than any we have yet dealt with. 
 
 In figuring the national income as the water 
 thrown up by a fountain, we of course suppose 
 
70 VARIATION OF THE NATIONAL INCOME 
 BOOK i. its estimated amount or value to be represented 
 
 CH. IV. 
 
 by the volume of the water and the height to 
 which it is thrown. What I am anxious now 
 to impress on the attention of the reader is 
 that the height and volume of our national 
 fountain of riches are never quite the same 
 from one year to another ; whilst we need not 
 extend our view beyond the limits of one 
 generation to see that they have varied in the 
 most astonishing manner. The height and 
 volume of the fountain are now very nearly 
 double what they were when Mr. Gladstone 
 was in Lord Aberdeen's Ministry. 1 
 which are Some readers will perhaps be tempted to 
 pendent of say that in this there is nothing wonderful, for 
 
 it is due to the increase of population. But 
 the increase of population has nothing to do 
 with the matter. It cannot have anything to 
 do with what I am now stating. For when I 
 say that within a certain period the income of 
 the nation has doubled itself, I mean that it 
 has doubled itself in proportion to the popula- 
 tion ; so that, no matter how many more 
 
 1 From the year 1843 to 1851, the annual income of the 
 nation averaged jive hundred and fifteen million pounds, 
 according to the calculations of Messrs. Leone Levi, Dudley 
 Baxter, Mulhall, and Giffen. 
 
RELA TIVEL Y TO THE POP ULA TION 7 1 
 
 millions of people there may be in the country BOOK i. 
 now than there were at the beginning of the 
 period in question, there is annually produced 
 for each million of people now nearly twice 
 the income that was produced for each million 
 of people then. Or in other words, an equal 
 division now would give each man nearly 
 double the amount that it would have given 
 him when Mr. Gladstone was beginning to be 
 middle-aged. 
 
 But we must not be content with comparing AS we may 
 our national income with itself. Let us com- pTringTbT 
 pare it also with the incomes of other countries ; thfcconn- 
 and let it in all cases be understood that the ^ e ^come 
 comparison is between the income as related to 01 
 the respective populations, and not between 
 the absolute totals. We will begin with 
 France. It is estimated that, within the last 
 hundred and ten years, the income of France 
 has, relatively to the population, increased more 
 than fourfold. A division of the income in 
 1780 would have given six pounds a head to 
 everybody : a similar division now would give 
 everybody twenty -seven pounds. And yet the 
 income of France, after all this rapid growth, 
 is to-day twenty-one per cent less than that 
 
CH. IV. 
 
 72 INCOMES OF OTHER COUNTRIES 
 
 BOOK i. of the United Kingdom. Other comparisons 
 we shall find even more striking. Kelatively 
 to the respective populations, the income of 
 the United Kingdom exceeds that of Norway 
 in the proportion of thirty -four to twenty; 
 that of Switzerland, in the proportion of thirty- 
 four to nineteen; that of Italy, in the pro- 
 portion of thirty-four to twelve; and that of 
 Kussia, in the proportion of thirty-four to 
 eleven. The comparison with Italy and Russia 
 brings to light a remarkable fact. Were all 
 the property of the upper classes in those 
 countries confiscated, and the entire incomes 
 distributed in equal shares, the share of each 
 Russian would be fifty per cent less, and of 
 each Italian forty per cent less than what each 
 inhabitant of the United Kingdom would 
 receive from a division of the income of its 
 wage-earning classes only. 
 
 We find, therefore, that if we take equal 
 populations of men, populations, let us say, 
 of a million men each, either belonging to the 
 same nation at different dates, or to different 
 civilised nations at the same date, that the in- 
 comes produced by no two of them reach to 
 the same amount ; but that, on the contrary, 
 
COMPARED WITH THAT OF OUR OWN 73 
 
 the differences between the largest income and BOOK i. 
 the others range from twenty to two hundred 
 per cent. 
 
 Now what is the reason of this ? Perhaps The causes 
 it will be said that differences of race are the differences 
 
 reason. That may explain a little, but it will are* noT* 6 
 not explain much ; for these differences between of^ r c e e * ce 
 the incomes produced by equal bodies of men 
 are- not observable only when men are of 
 different races ; but the most striking examples, 
 namely, those afforded by our own country 
 and France are differences between the in- 
 comes produced by the same race during 
 different decades by the same race, and by 
 many of the same individuals. 
 
 Perhaps then it will be said that they are Nor of sou 
 due to differences of soil and climate. But 
 again, that will not explain the differences, at 
 various dates, between the incomes of the same 
 countries ; and though it may explain a little, 
 it will not explain much, of the differences at 
 the same date between the incomes of different 
 countries. The soil and climate, for instance, 
 of the United Kingdom, are not in themselves 
 more suited for agriculture than the soil and 
 climate of France and Belgium ; and yet for 
 
74 PRODUCTIVITY OF INDUSTR Y 
 
 BOOK i. each individual actually engaged in agriculture, 
 
 CH. IV. . 
 
 this country produces in value twenty-five per 
 cent more than France, and forty per cent 
 more than Belgium. I may add that it pro- 
 duces forty-six per cent more than Germany, 
 sixty-six per cent more than Austria, and 
 sixty per cent more than Italy. 1 
 
 Nor of Perhaps then a third explanation will be 
 
 labour, suggested. These differences will be said to 
 be due to differences in the hours of labour. 
 But a moment's consideration will show that 
 that has nothing to do with the problem ; for 
 when a million people in this country produced 
 half what they produce to-day, they had fewer 
 holidays, and they worked longer hours. Now 
 that they have doubled the annual produce, 
 they take practically four weeks less in 
 producing it. 2 Again, the hours of labour for 
 the manufacturing classes are in Switzerland 
 
 1 The actual figures are as follows : In 1887 the estimates 
 of the value of agricultural products per each individual actually 
 engaged in agriculture were : United Kingdom, ninety-eight 
 pounds ; France, seventy - one pounds ; Belgium, fifty - six 
 pounds ; Germany, fifty - two pounds ; Austria, thirty - one 
 pounds; Italy, thirty-seven pounds. 
 
 2 It is understating the case to say that the British 
 operative to-day works one hundred and eighty-nine hours 
 less annually than his predecessor of forty or fifty years ago, 
 
CH. IV. 
 
 NO T DE TERM I NED B Y TIME 7 5 
 
 twenty-six per cent longer at the present time BOOKI. 
 than in this country ; and yet the annual pro- 
 duct, in proportion to the number of operatives, 
 is twenty-eight per cent less. 1 
 
 Agriculture gives us examples of the same 
 discrepancy between the labour expended and 
 the value of the result obtained. In France, 
 the agricultural population is three times 
 what it is in this country, but the value of 
 the agricultural produce is not so much as 
 double. 2 
 
 Plainly, therefore, the growth of a nation's 
 income, under modern conditions, does not 
 depend on an increased expenditure of labour. 
 There might, indeed, seem some ground for 
 leaping to the contrary conclusion that it 
 grows in proportion as the hours of labour are 
 limited : but whatever incidental truth there 
 
 and one hundred and eighty -nine hours = three weeks of 
 nine hours a day. To this must be added at least a week 
 of additional holidays. 
 
 1 The hours of labour in Switzerland are, on an average, 
 sixty-six a week. 
 
 2 The agricultural population in France is about 
 eighteen millions j in this country, about six millions. The 
 produce of France is worth about four hundred and fourteen 
 million pounds ; of this country, two hundred and twenty-six 
 
7.6 UNPERCEIVED INCREASE OF THE 
 BOOK i. may be in that contention, it does not explain 
 
 CH IV 
 
 the main facts we are dealing with ; for some 
 of the most rapid changes in the incomes of 
 nations we find have occurred during periods 
 when the hours of labour remained unaltered ; 
 and we find at the present moment that 
 countries in which the hours of labour are 
 the same, differ even more, in point of income, 
 from one another than they differ from countries 
 in which the hours of labour are different. 
 But are Whatever, therefore, the causes of such dif- 
 some other ferences may be, they are not simple and 
 
 kind which ~ . , ,., . 
 
 lie below superficial causes like these. 
 
 I have alluded to the incomes of foreign 
 countries only for the sake of throwing 
 more light on the income of our own. Let 
 us again turn to that. Half of that in- 
 come, as we have seen, consists to-day of 
 an annual product new since the time when 
 men still in their prime were children; 
 and this mysterious addition to our wealth 
 has rapidly and silently developed itself, 
 without one person in a thousand being 
 aware of its extent, or realising the operation 
 of any new forces that might account for 
 it. Let people of middle age look back to 
 
INCOME OF THE UNITED KINGDOM 77 
 
 their own childhood ; and the England of BOOK i. 
 that time, in aspects and modes of life, will 
 not seem to them very different from what it 
 seems now. Let them turn over a book of 
 John Leech's sketches, which appeared in 
 Punch about the time of the first Exhibition ; 
 and, putting aside a few changes in feminine 
 fashion, they will see a faithful representation 
 of the life that still surrounds them. The 
 street, the drawing-room, the hunting-field, 
 the railway-station nothing will be obsolete, 
 nothing out-of-date. Nothing will suggest 
 that since these sketches were made any per- 
 ceptible change has come over the conditions 
 of our civilisation. And yet, somehow or 
 other, some changes have taken place, owing 
 to which our income has nearly doubled itself. 
 In other words, the existence of one-half of And which 
 our wealth is due to causes, the nature, the 
 
 presence, and the operation of which, are for 
 hidden so completely beneath the surface of 
 life as to escape altogether the eye of ordinary 
 observation, and reveal themselves only to 
 careful and deliberate search. 
 
 The practical moral of all this is obvious : For, unless 
 that just as our income has doubled itself stand the 
 
78 IMMENSE POSSIBLE SHRINKAGE 
 
 BOOK i. without our being aware of the causes, and 
 
 CH. IV. 
 
 almost without our being aware of the fact, 
 
 causes 
 
 which have so unless we learn what the causes are, and 
 national in are consequently able to secure for them fair 
 
 come grow, , ,, . ~ . . 
 
 wemay, by play, or, at ail events, to avoid interfering 
 with their operation, we may lose what we 
 
 have gained even more quickly than we have 
 decrease? 6 gained it, and annihilate the larger part of 
 what we are desirous to distribute. We have 
 seen that the national income is a living thing ; 
 and, as is the case with other living things, 
 the principles of its growth reside in parts 
 of the body which are themselves not sensitive 
 to pain, but which may for the moment be 
 deranged and injured with impunity, and will 
 betray their injury only by results which arise 
 afterwards, and which may not be perceived 
 till it is too late to remedy them. 
 And this is Here lies the danger of reckless social legis- 
 of redden lation, and even of the reckless formation of 
 vague public opinion ; for public opinion, in a 
 democratic country like ours; is legislation in 
 its nebular stage : and hence the only way to 
 avert this danger is, first to do what we have 
 just now been doing, to consider the amount 
 and character of the wealth with which we 
 
IN OUR NATIONAL INCOME 79 
 
 have to deal, and secondly, to examine BOOK i. 
 
 CH. IV. 
 
 the causes to which the production of this 
 wealth has been due, and on which the 
 maintenance of its continued production must 
 depend. 
 
 Let the social reformer lay the following Wewm 
 reflections to his heart. Some of the more in the re 
 ardent and hopeful of the leaders of the 
 labour-party to-day imagine that considerable 
 changes in the distribution of the national 
 income may be brought about by the close of 
 the present century. In other words, they 
 prophesy that the Government will seven 
 years hence do certain things with that year's 
 national income. But the national income of 
 that year is not yet in existence; and what 
 grounds have those sanguine persons for 
 thinking that when it is produced it will be 
 as large, or even half as large, as the national 
 income is to-day ? What grounds have they 
 for believing that, if the working-classes then 
 take everything, they will be as rich as they 
 are now when they take only a part ? The 
 only ground on which such a belief can be 
 justified is the implied belief that the same 
 conditions and forces which have swelled the 
 
8o THE GREA T PROBLEM 
 
 BOOK i. national income to its present vast amount, 
 _ ' will still continue in undisturbed opera- 
 tion. 
 
 We will now proceed to consider what 
 these conditions and forces are. 
 
BOOK II 
 
 THE CHIEF FACTOE IN THE PKODUCTION 
 OF THE NATIONAL INCOME 
 
CHAPTEK I 
 
 Of ike various Factors in Production, and how to 
 distinguish the Amount produced ly each. 
 
 THE inquiry on which we are entering really 
 comprises two. I will explain how. 
 
 Although, as we have seen, of the yearly 
 income of the nation a part only consists of 
 material things, yet the remainder depends 
 upon these, and its amount is necessarily in 
 proportion to them. Accordingly, when we are 
 dealing with the question of how the income 
 is produced, we may represent the whole of it 
 as a great heap of commodities, which every 
 year disappears, and is every year replaced by 
 a new one. Here then we have a heap of 
 commodities on one side, and on the other the 
 subjects of our inquiry namely, the conditions 
 and forces which produce that heap. 
 
 Now, as to what these conditions and forces 
 
84 THE CAUSE OF PRODUCTION GENERALLY 
 
 BOOK n. are, there is a familiar answer ready for us 
 Land, Labour, and Capital ; and, with a certain 
 capital, reservation, we may take this to be true. But 
 Human as Capital is itself the result of Land and 
 nthe Labour, we need not, for the moment, treat 
 factors in Capital separately ; but we may say that the 
 tio^but heap is produced by Land and Labour simply. 
 we P may nt I use this formula, however, only for the 
 capital, purpose of amending it. It will be better, for 
 reasons with which I shall deal presently, in- 
 stead of the term Labour to use the term 
 Human Exertion. And further, we must 
 remember this the heap of commodities we 
 have in view is no mere abstraction, but repre- 
 sents the income of this country at some definite 
 date ; so that when we are talking of the 
 forces and conditions that have produced it, we 
 mean not only Human Exertion and Land, but 
 Human Exertion of a certain definite amount 
 applied to Land of a definite extent and quality. 
 The first Now, as I pointed out in the last Book, one 
 of the most remarkable things about our 
 
 exertion national production of commodities, is that the 
 - yearly exertion of the same number of men, 
 1 applied to land of the same extent and quality, 
 has been far from producing always a heap of 
 
THE PRODUCTION OF GIVEN QUANTITIES 85 
 
 the same size. On the contrary, the heap BOOKII. 
 which it produces to-day is twice as large as 
 
 the same 
 
 that which it produced in the days 01 our land does 
 
 . , not always 
 
 lathers ; and nearly three times as large as produce 
 that which it produced in the days of our amount of 
 grandfathers. Here then is the reason why * 
 the inquiry that is before us is twofold. For 
 we Jiave at first to take some one of such 
 heaps singly on several accounts it will be 
 convenient to take the smallest, namely that 
 produced about a hundred years ago and to 
 analyse the parts which Land and Human 
 Exertion played respectively in the production 
 of it. Then, having seen how Land and Human 
 Exertion produced in the days of our grand- 
 fathers a heap of this special size, we must 
 proceed to inquire why three generations 
 later the same land and the exertions of a 
 similar number of men produce a heap which 
 is nearly three times as large. For the differ- 
 ence of result cannot be due to nothing. It- 
 must be due to some difference in one of the TM S must 
 
 . be due to 
 
 two causes to the presence in this cause of some vary- 
 
 , -i ., . ing element 
 
 some varying element : and it is precisely here m the 
 here in this varying element that the main Exertion in 
 interest of our inquiry centres. For if it is q 
 
86 PRODUCTION A CENTURY AGO 
 
 BOOK ii. owing to a variation in this element that our 
 productive powers have nearly trebled them- 
 selves in the course of three generations, nearly 
 two-thirds of the income which the nation 
 enjoys at present depends on the present 
 condition of this element being maintained, 
 and not being suffered as it very easily might 
 be to again become what it was three 
 Let us generations back. Let us begin then with 
 prodiiction taking the amount of commodities produced in 
 country this country at the end of the last century, 
 ago witT which is at once the most convenient and the 
 now." C J most natural period to select ; for production 
 was then entering on its present stage of 
 development, and its course from then till 
 now is more or less familiar to us all. 
 
 We will start therefore with the fact that, 
 about a hundred years ago, our national income, 
 if divided equally amongst the inhabitants of 
 the kingdom, would have yielded to each 
 inhabitant a share of about fourteen pounds ; 
 so that if we confine ourselves to Great Britain, 
 the population of which was then about ten 
 'millions, we have a national income of a 
 hundred and forty million pounds, or a heap of 
 commodities produced every year to an amount 
 
AMOUNT OF CAPITAL EMPLOYED IN IT 87 
 
 that is indicated by that money value. Let us BOOK n. 
 
 CH. I. 
 
 take then any one of the closing years of the 
 last century, and consider for a moment the 
 causes at work in this island to which the pro- 
 duction of such a heap of commodities was due. 
 In general language, these causes have been 
 described already as Human Exertion of a 
 certain definite amount applied to Land of a 
 certain definite extent and quality ; but it will 
 now be well to restore to its traditional place 
 the accumulated result of past exertion 
 namely Capital, and to think of it as a separate 
 cause, according to the usual practice. For 
 everybody knows that at the close of the last 
 century, many sorts of machinery, and stores 
 of all sorts of necessaries, were made and 
 accumulated to assist and maintain Labour ; 
 and it is of such things that Capital principally 
 consists. The Capital of Great Britain was 
 at that time about sixteen hundred million 
 pounds. 1 We will accordingly say that about 
 a hundred years ago, the Land of this island, 
 the Capital of this island, and the Exertions of 
 
 1 According to Eden it was about seventeen hundred million 
 pounds at the beginning of the present century. Twenty- 
 five years previously it was, according to Young's estimate, 
 eleven hundred million 
 
88 LAND, CAPITAL, AND HUMAN EXERTION 
 
 BOOK n. a population of ten million people produced 
 
 CH. I. 
 
 together, every twelve months, a heap of com- 
 modities worth a hundred and forty million 
 pounds. We need not, however, dwell, till 
 later, on these details. For the present our 
 national production at this particular period 
 may be taken to represent the production of 
 wealth generally. 
 HOW much Now the question, let it be remembered, 
 
 in each 
 
 case did w ith which we are concerned ultimately, is 
 
 Land, 
 
 Capital, now wealth, as produced in the modern world, 
 
 and Human 
 
 Exertion ma y be distributed. Accordingly, since the 
 
 produce re- J &J ' 
 
 spectiveiy? distribution of it presupposes its production, 
 and since we are agreed generally as to what 
 the causes of its production are, namely, Land, 
 Capital, and Human Exertion, our next great 
 step is to inquire what proportion of the pro- 
 duct is to be set down as due to each of these 
 causes separately ; for it is by this means only 
 that we can see how and to what extent our 
 social arrangements may be changed, without 
 our production being diminished. And I 
 cannot introduce the subject in a better way 
 than by quoting the following passage from 
 John Stuart Mill, in which he declares such 
 an inquiry to be both meaningless and 
 
HO W MUCH PRODUCED BY EACH 89 
 
 impossible to answer ; for that it can be BOOK n. 
 
 CH T 
 
 answered, and that it is full of meaning, and 
 that to ask and answer it is a practical and 
 fundamental necessity, will be made all the 
 plainer by the absurdity of Mill's denial. 
 
 " Some writers," he says, " have raised the Mm de- 
 
 _ T / i i dares this 
 
 question whether JNature (or, in the language question to 
 of economics, Land) gives more assistance to i ng iess; 
 Labour in one kind of industry or another, and 
 have said that in some occupations Labour 
 does most ; in others, Nature most. In this, 
 however, there seems much confusion of ideas. 
 The part which Nature has in any work of 
 man is indefinite and immeasurable. It is 
 impossible to decide that in any one thing 
 Nature does more than in any other. One 
 cannot even say that Labour does less. Less 
 Labour may be required ; but if that which is 
 required is absolutely indispensable, the result 
 is just as much the product of Labour as of 
 Nature. When two conditions are equally 
 necessary for producing the effect at all, it is 
 unmeaning to say that so much of it is pro- 
 duced by one and so much by the other. It 
 is like attempting to decide which half of a 
 pair of scissors has most to do with the act of 
 
90 THE CHIEF PRACTICAL PROBLEM 
 
 BOOK u. cutting ; or, which of the factors five or six 
 
 CH I. 
 
 ' ' has most to do with the production of 
 thirty." So writes Mill in the first chapter 
 of his Principles of Political Economy; 
 and if what he says is true with regard to 
 Land and Labour (or, as we are calling it, 
 Human Exertion), it is equally true with re- 
 gard to Human Exertion and Capital ; for with- 
 out Human Exertion, Capital could produce 
 nothing, and without Capital modern industry 
 would be impossible : and thus, according to 
 Mill's argument, we cannot assign to either of 
 them a specific portion of the product. But 
 But his Mill's argument is altogether unsound ; and 
 mentis the actual facts of life, and a large part of 
 and is re- Mill's own book, little as he perceived that it 
 
 futedboth ' . 
 
 by practi- was so, are virtually a complete refutation of it. 
 
 by bis own To understand this, the reader need only 
 reflect on those three principal and familiar 
 parts into which the annual income of every 
 civilised nation is divided, not only in actual 
 practice, but theoretically by Mill himself 
 namely Rent, Interest, and Wages. 1 For 
 
 1 I have not mentioned Profits. They consist, says Mill, 
 of Interest on Capital and "Wages of Superintendence ; to 
 which he adds compensation for risk a most important 
 item, but not requiring to be included here. 
 
CH. 1. 
 
 IN CONTEMPORAR Y ECONOMICS 9 r 
 
 these what are they? The answer is very B0 - 
 simple. They are portions of the income 
 which correspond, at all events in theory, to 
 the amounts produced respectively by Land, 
 Capital, and Human Exertion ; and which are 
 on that account distributed amongst three 
 sets of men those who own the Land, those 
 who own the Capital, and those who have 
 contributed the Exertion. There are many 
 causes which in practice may prevent the 
 correspondence being complete ; but that the 
 general way in which the income is actually 
 distributed is based on the amount produced 
 by these three things respectively, Land, 
 Capital, and Human Exertion, is a fact which 
 no one can doubt who has once taken the 
 trouble to consider it. It is thus perfectly 
 clear that, contrary to what Mill says, though 
 two or more agencies may be equally indis- 
 pensable to the production of any wealth at 
 all, it is not only not " unmeaning to say 
 that so much is produced by one and so 
 much by the other," but it is possible to make 
 the calculation with practical certainty and 
 precision ; and I will now proceed to explain 
 the principles on which it is made. 
 
CHAPTEE II 
 
 How the Prodrtt of Land is to be distinguished from 
 the Product of Human Exertion. 
 
 THE question before us will be most easily 
 understood if we begin with once again 
 waiving any consideration of Capital, and if 
 we deal only with what Mill, in the passage 
 just quoted, calls " Nature and Labour " or, in 
 other words, with Land and Human Exertion. 
 We will also, for simplicity's sake, confine 
 ourselves to one use of land its primary and 
 most important use, namely its use in agri- 
 culture or food-production. 
 
 Rent is the Now a British tenant-farmer who lives 
 Ke^ 011 solely by hi s farming obviously derives his 
 Produced w ^l e income from the produce of the soil he 
 Human occupies ; but the whole of this produce does 
 
 but^the no ^ & ^ hi mse lf- P ar k i s P a ^ away in the 
 Landitseif; form of rent to his landlord, and part in the 
 
RENT THE PRODUCT OF LAND 93 
 
 form of wages to his labourers. We may BOOK n. 
 however suppose, without altering the situa- 
 tion, that he has no labourers under him 
 that he is his own labourer as well as his own 
 manager, and that the whole of the produce 
 that is not set aside as rent goes to himself 
 as the wages of his own exertion. The point 
 onjwhich I am going to insist is this that 
 whilst the exertion has produced the product 
 that is taken as wages, the soil or to speak 
 more accurately a certain quality in the soil 
 has just as truly produced the produce that 
 goes in rent in fact that " Nature and Labour, 
 though equally necessary for producing the 
 effect at all," each produce respectively a 
 certain definite part of it. 
 
 In order to prove this it will be enough to AS win be 
 make really clear to the reader the explana- this chap- 
 tion of rent which is given by all economists reference 
 an explanation in which men of the most universally 
 
 opposite schools agree men like Eicardo, and 
 men like Mr. Henry George ; and of which E 
 Mill himself is one of the most illustrious 
 exponents. I shall myself attempt to add 
 nothing new to it, except a greater simplicity 
 of statement and illustration, and a special 
 
94 THE ACCEPTED THEORY OF RENT 
 
 BOOK ii. stress on a certain part of its meaning, the 
 importance of which has been hitherto disre- 
 garded. 
 
 Now, as we are going to take the industry 
 of agriculture for our example, we shall mean 
 by rent a portion of the agricultural products 
 derived from Human Exertion applied to a 
 given tract of soil. Of such products let us 
 take corn, and use it, for simplicity's sake, 
 as representing all the rest ; and that being 
 settled, let us go yet a step further; and, 
 for simplicity's sake also, let us represent corn 
 by bread ; and imagine that loaves develop 
 themselves in the soil like potatoes, and, when 
 the ground is properly tilled, are dug up 
 ready for consumption. We shall figure rent 
 therefore as a certain number of loaves that 
 are dug up from a given tract of soil. Now 
 everybody knows that all soils are not equally 
 good. That there is good land and that there 
 is poor land is a fact quite familiar even to 
 people who have never spent a single day in 
 the country. And this means, if we continue 
 the above supposition, that different fields of 
 precisely the same size, cultivated by similar 
 men and with the same expenditure of exer- 
 
ILL USTRA TED B Y AN EXAMPLE 95 
 
 tion, will yield to their respective cultivators BOOKH. 
 different numbers of loaves. 
 
 Let us take an example. Tom, Dick, and we win 
 Harry, we will say, are three brothers, who this by the 
 have each inherited a field of twelve acres, three men 
 They are all equally strong, and equally p wer a tm- 
 
 industrious : we may suppose, in fact, that l 
 they all came into the world together, and are futility. 
 as like one another as three Enfield rifles. 
 Each works in his field for the same time every 
 day, digs up as many loaves as he can, and 
 every evening brings them home in a basket. 
 But when they come to compare the number 
 that has been dug up by each, Tom always 
 finds that he has fifteen loaves, Dick that he 
 has twelve, and Harry that he has only nine ; 
 the reason being that in the field owned by 
 Harry fewer loaves develop themselves than 
 in the fields owned by Tom and Dick. Harry 
 digs up fewer, because there are fewer to dig up. 
 Let us consider Harry's case first. 
 
 Each of the loaves is, we will say, worth Labour 
 
 9 J I must be 
 
 fourpence ; therefore Harry, with his nine held to 
 
 produce so 
 
 loaves, makes three shillings a day, or eighteen much as is 
 
 . absolutely 
 
 shillings a week. This is just enough to necessary 
 
 -, . for its own 
 
 support him, according to the ideas and habits support. 
 
CH. II. 
 
 96 THE PRODUCT OF AGRICULTURAL LABOUR 
 
 BOOK IT. of his class. If his field were such that it 
 yielded him fewer loaves, or if he had to give 
 even one of the loaves away, the field would be 
 useless ; it would not be cultivated at all, 
 either by him, or by anybody, nor could it be ; 
 for the entire produce, which would then go to 
 the cultivator, would not be enough to induce, 
 or perhaps even to make him able, to cultivate 
 it. But, as matters stand, so long as the entire 
 produce does go to him, and to no one else, we 
 must take it for granted that his exertion and 
 his field between them yield him a livelihood 
 which, according to his habits, is sufficient ; for 
 otherwise, as I have said, this field neither would 
 nor could be cultivated. And it will be well 
 here to make the general observation that 
 whenever we find a class of men cultivating 
 the utmost area of land which their strength 
 permits, and taking for themselves the entire 
 produce, their condition offers the highest 
 standard of living that can possibly be 
 general amongst peasant cultivators : from 
 which it follows that, unless no land is 
 cultivated except the best, the general 
 standard of living must necessarily require 
 less than the entire produce which the 
 
CH. II. 
 
 THE PRODUCT OF LAND 97 
 
 best land will yield. We assume then that BOOKH. 
 Harry, with his nine loaves a day, represents 
 the highest standard of living that is, or that 
 can be, general amongst his class. 
 
 And now let us turn from Harry's case to 
 the case of Tom and Dick. They have been 
 accustomed to precisely the same standard of 
 living as he has been ; and they require for 
 their support precisely the same amount of 
 produce. But each day, after they have all 
 of them fared alike, each taking the same 
 quantity from his own particular basket, the 
 baskets of Tom and Dick present a different 
 appearance to that of Harry. There is in each 
 of the two first a something which is not to be 
 found in his. There is a surplus. In Dick's 
 basket there are three extra loaves remaining ; 
 and in Tom's basket there are six. To what 
 then is the production of these extra loaves 
 due ? Is it due to land, or is it due to the 
 exertions of Tom and Dick ? Mill, as we have 
 seen, would tell us that this was an unmeaning 
 question ; but we shall soon see that it is not so. 
 
 It is perfectly true that it would be an 
 unmeaning question if we had to do with one 
 of the brothers only say with Harry, and 
 
 7 
 
98 MAXIMUM PRODUCE OF LABOUR 
 
 BOOKII. only with Harry's field. Then, no doubt, it 
 
 CH. II. 
 
 would be impossible to say which produced 
 most Harry or the furrows tilled by him, 
 whether Harry produced two loaves and the 
 furrows seven, or Harry seven and the furrows 
 two. And as to Harry's case more must be said 
 than this. Such a calculation with regard to 
 it would be not only impossible, but useless ; 
 for even if we convinced ourselves that the 
 land produced seven loaves, and Harry's 
 exertion only two, all the loaves would still of 
 necessity go to Harry. In a case like this, 
 therefore, it is quite sufficient to take account 
 of Human Exertion only. Agricultural labour, 
 in fact, must be held to produce whatever 
 product is necessary for the customary 
 But what- maintenance of the labourer. But if this is 
 this the entire product obtained from the worst soil 
 
 T cultivated, it cannot be the entire product 
 but L of ur> obtained from the best soil ; and the moment 
 we have to deal with a second field, a field 
 which is of a different quality, and which, 
 although it is of exactly the same size, and is 
 cultivated every day with precisely similar 
 labour, yields to that labour a larger number 
 of loaves, twelve loaves, or fifteen loaves, 
 
' 
 
 SURPLUS PRODUCED BY LAND 99 
 
 instead of nine, then our position altogether BOOK n. 
 changes. We are not only able, but obliged 
 to consider Land as well as Labour, and to dis- 
 criminate between their respective products. 
 A calculation which was before as unmeaning 
 as Mill declares it to be, not only becomes 
 intelligible, but is forced on us. 
 
 For if we start with the generalisation 
 derived from Harry's case, or any other case 
 in which the land is of a similar quality that man tnmTg 
 one man's labour produces nine loaves daily, ^J^th 
 and then find that Tom and Dick, for the same m ^ ^ 
 amount of labour, are rewarded respectively by the worst - 
 fifteen loaves or by twelve, we have six extra 
 loaves in one case, and three in the other, 
 which cannot have been produced by Labour, 
 and which yet must have been produced by 
 something. They cannot have been produced 
 by Labour ; for the very assumption with which 
 we start is that the Labour is the same in the 
 last two cases as in the first ; and according 
 to all common-sense and all logical reasoning, 
 the same cause cannot produce two different 
 results. When results differ, the cause of the 
 difference must be sought in some cause that 
 varies, not a cause that remains the same ; 
 
ioo LAND A PRODUCING AGENT 
 
 BOOK n. and the only cause that here varies is the Land. 
 Accordingly, just as in Harry's case we are 
 neither able nor concerned to credit the Land 
 with any special part, or indeed any part, of 
 the product, but say that all the nine loaves 
 are produced by Harry's Labour, so too in the 
 case of Tom and Dick we credit Labour with a 
 precisely similar number ; but all loaves 
 beyond that number we credit not to their 
 Labour, but to their Land or, to speak more 
 accurately, to certain qualities which their 
 Land possesses, and which are not possessed 
 by Harry's. In Dick's case these superior 
 qualities produce three loaves ; in Harry's case, 
 they produce six. 
 
 If any one doubts that such is the case, let 
 him imagine our three brothers beginning to 
 quarrel amongst themselves, and Tom and 
 Dick boasting that they were better men than 
 Harry, on the ground that they always brought 
 home more loaves than he. Every one can see 
 what Harry's retort would be, and see also that 
 The men it is unanswerable. Of course he would say, 
 
 themselves ... , . , n 
 
 would be 1 am as good a man as either 01 you, and my 
 
 understand labour produces quite as much as yours. Let 
 
 us only change fields, and you will see that 
 
CH. II. 
 
 AS DISTINCT FROM LABOUR 101 
 
 soon enough. Let Tom take mine, and let me BOOK 
 take his, and I then will bring home fifteen 
 loaves ; and he, work as he may, will only 
 
 bring home nine. It is your b y land that 
 
 produces more than mine, not you that produce 
 more than I ; and if you deny it, stand out 
 
 you s and I'll fight you." We may 
 
 also appeal to one of the commonest of our 
 common phrases, in which Harry's supposed 
 contention is every day reiterated. If a 
 farmer is transferred from a bad farm to a good 
 one, and the product of his farming is thereby 
 increased, as it will be, everybody will say, 
 " The good farm makes all the difference." 
 This is merely another way of saying, the 
 superior qualities in the soil produce all the 
 increase, or to continue our illustration the 
 increased number of loaves. 
 
 And all the world is not only asserting this 
 truth every day, but is also acting on it ; for 
 these extra loaves, produced by the qualities 
 peculiar to superior soils, are neither more 
 nor less than Kent. Kent is the amount of 
 produce which a given amount of exertion 
 obtains from rich land, beyond what it obtains 
 from poor land. Such is the account of rent 
 
102 THE EXISTENCE OF RENT 
 
 BOOK H. in which all economists agree ; indeed, when 
 c ^l! L once it is understood, the truth of it is self- 
 evident. Mr. Henry George's entire doctrines 
 are built on it ; whilst Mill calls it the 
 pons asinorum of economics. I have added 
 nothing in the above statement of it to what 
 is stated by all economists, except weight and 
 emphasis to a truth which they do not so much 
 state as imply, and whose importance they 
 seem to have overlooked. This truth is like 
 a note on a piano, which they have all of them 
 sounded lightly amongst other notes. I have 
 sounded it by itself, and have emphasised it 
 with the loud pedal the truth that rent is for 
 all practical purposes not the product of Land 
 and Human Exertion combined, but the pro- 
 duct of Land solely, as separate from Human 
 Exertion and distinct from it. 
 
 The above And here let me pause for a moment to 
 
 Bent fa not point out a fact which, though it illustrates 
 
 doctrine. S the above truth further, I should not mention 
 
 hold true here if it were not for the following reason. 
 
 Sstic state" Kent forms the subject of so much social and 
 
 of any 1 a P ar ty prejudice that what I have just been 
 
 urging may be received by certain readers 
 
 with suspicion, and regarded as some special 
 
NOT AFFECTED BY SOCIALISM 103 
 
 pleading on behalf of landlords. I wish there- BOOK 11, 
 fore to point out clearly that the existence 
 of rent and the payment of rent is not 
 peculiar to our existing system of landlordism. 
 Rent must arise, under any social arrange- 
 ment, from all soils which are better than the 
 poorest soil cultivated : it must be necessarily 
 paid to somebody ; and that somebody must 
 necessarily be the owner. If a peer or a 
 squire is the owner, it is paid to the peer or 
 squire ; if the cultivator is the owner, the 
 cultivator pays it to himself ; if the land were 
 nationalised and the State were to become the 
 owner, the cultivator would have to pay it 
 away to the State. 
 
 In order that the reader may fully realise it is easy 
 
 to see how 
 
 this, let us go back to our three brothers, 01 Rent arises, 
 whom the only two who paid rent at all, paid conditions, 
 it, according to our supposition, to themselves ; 
 and let us imagine that Harry the brother sc 
 who pays no rent to anybody, because his 
 field produces none, ha,s a sweetheart who 
 lives close to Tom's field, or who sits and 
 sucks blackberries all day in its hedge ; and 
 that Harry is thus anxious to exchange fields 
 with Tom, in order that he may be cheered at 
 
104 RENT NECESSARILY THE PROPERTY 
 
 BOOK ii. his work by the smiles of the beloved object. 
 
 CH. II. 
 
 Now if Tom were to assent to Harry's wishes 
 without making any conditions, he would be 
 not only humouring the desire of Harry's 
 heart, but he would be making him a present 
 of six loaves daily ; and this, we may assume, 
 he certainly would not do ; nor would Harry, 
 if he knew anything of human nature, expect 
 or even ask him to do so. If Tom, however, 
 were on good terms with his brother, he 
 might quite conceivably be willing to meet 
 his wishes, could it be but arranged that he 
 should be no loser by doing so ; and this 
 could be accomplished in one way only 
 namely, by arranging that, since Harry would 
 gain six loaves each day by the exchange, and 
 Tom would lose them, Harry should send 
 these six loaves every day to Tom ; and thus, 
 whilst Harry was a gainer from a sentimental 
 point of view, the material circumstances of 
 both of them would remain what they were 
 before. Or we may put the arrangement in 
 more familiar terms. The loaves in question 
 we have supposed to be worth fourpence each ; 
 so we may assume that instead of actually 
 sending the loaves, Harry sends his brother 
 
CH. II. 
 
 OF WHOEVER OWNS THE LAND 105 
 
 two shillings a day, or twelve shillings a week, BOOK n. 
 or thirty pounds a year. Tom's field, as we 
 have said, is twelve acres ; therefore, Harry 
 pays him a rent of fifty shillings an acre. 
 And Tom's case is the case of every landlord, 
 no matter whether the landlord is a private 
 person or the State a peer who lets his land, 
 a peasant like Tom who cultivates it, or a 
 State which allows the individual to occupy 
 but not to own it. Eent represents an advan- 
 tage which is naturally inherent in certain 
 soils; and whoever owns this advantage 
 either the State or the private person must 
 of necessity either take the rent, or else make 
 a present of it to certain favoured individuals. 
 It should further be pointed out that this 
 doctrine of Eent, though putting so strict a 
 limit on the product that can be assigned to 
 Labour, interferes with no view that the most 
 ardent Socialist or Kadical may entertain with 
 regard to the moral rights of the labourer. 
 If any one contends that the men who labour 
 on the land, and who pay away part of the 
 produce as rent to other persons, ought by 
 rights to retain the whole produce for them- 
 selves, he is perfectly at liberty to do so, for 
 
106 THE ARGUMENT OF THIS VOLUME 
 
 BOOK ii. anything that has been urged here. For the 
 real meaning of such a contention is, not that 
 the labourers do not already keep everything 
 that is produced by their labour, but that 
 they ought to own their land instead of hiring 
 it, and so keep everything that is produced by 
 the land as well. 
 
 This doctrine of Kent, then, which I have 
 tried to make absolutely clear, involves no 
 special pleading on behalf either of landlord 
 or tenant, of rich or poor. It can be used 
 with equal effect by Tory, Radical, or Socialist, 
 and it would be as true of a Socialistic State 
 as it is of any other. I have insisted on it 
 The doc- here for one reason only. It illustrates, and 
 Rent is the is the fundamental example of, the following 
 tai example great principle that in all cases where Human 
 reasoning Exertion is applied to Land which yields only 
 agent enough wealth to maintain the man exerting 
 ' 1 himself, practical logic compels us to attribute 
 
 the entire product to his exertion, and to 
 take the assumption that his exertion produces 
 attributed. this muc j 1 ^ QUJ . starting -point. But in all 
 
 other cases that is to say in all cases where 
 the same exertion results in an increased pro- 
 duct, we attribute the increase we attribute 
 
EMBODIED IN THE CASE OF RENT 107 
 the added product not to Human Exertion, BOOKH. 
 
 CH. II. 
 
 which is present equally in both cases, but to 
 some cause which is present in the second 
 case, and was not present in the first : that is 
 to say, to some superior quality in the soil. 
 
 And now let us put this in a more general 
 form. When two or more causes produce a 
 given amount of wealth, and when the same 
 causes with some other cause added to them 
 produce a greater amount, the excess of the 
 last amount over the first is produced by the 
 added cause ; or conversely, the added cause 
 produces precisely that proportion of the total 
 by which the total would be diminished if the 
 added cause were withdrawn. 
 
 It is on this principle that the whole 
 reasoning in the present book is based ; and 
 having seen how it enables us to discriminate 
 between the amounts of wealth produced re- 
 spectively by Human Exertion and Land, let 
 us go on to see how it will enable us likewise 
 to discriminate what is produced by Capital. 
 
CHAPTER III 
 
 Of the Products of Machinery or Fixed Capital, as dis- 
 tinguished from the Products of Human Exertion. 
 
 TO under- LAND, which in economics means everything 
 much of that the earth produces and the areas it offers 
 
 for habitation, is of course in a sense at the 
 bottom of every industry. But if we wish 
 well to to understand the case of Capital, it will be 
 agriculture we ^ *o turn from agriculture to industry of 
 faeces ; another kind ; the reason being that the part 
 which Capital plays in agriculture is not only, 
 comparatively speaking, small, but is also a 
 part which, when we are first approaching the 
 subject, is comparatively ill fitted for purposes 
 AS Capital O f illustration. What is best fitted for the 
 
 plays in 
 
 manufac- purpose of illustration is Capital applied to 
 
 more manufactures ; and it is best at first not to 
 
 part consider all such Capital, but to confine our 
 
 attention to one particular part of it. I must 
 
 explain to the reader exactly what I mean. 
 
CAPITAL OF TWO KINDS 109 
 
 People constantly speak of Capital as being BOOK n. 
 a sensitive thing a movable thing a thing 
 
 u Capital, 
 
 that is easily driven away that can be when 
 
 actually 
 
 transferred from one place to another by a employed, 
 mere stroke of the pen. We all of us know kinds : 
 the phrases. But though they express a truth, 
 it is partial truth only. Capital before it is 
 employed, when it is lying, let us say, in a 
 bank, to the credit of a Company that has not 
 yet begun operations Capital, under such 
 circumstances, is no doubt altogether mov- 
 able; for before it is employed it exists as 
 credit only. But the moment it is employed Fixed 
 
 ' Capital, 
 
 in manufacture, a very considerable part of it such as 
 
 . i /> plant and 
 
 is converted into things that are very far from machinery; 
 movable into such things as buildings and 
 heavy machinery; and only a part remains 
 movable namely that reserved for wages. 
 For example, M'Culloch estimates that the 
 average cost of a factory is about one hundred 
 pounds for every operative to be employed in 
 it ; whilst the yearly wages of each adult male 
 would now on the average, be about sixty 
 pounds. Thus, if a factory is started which 
 will employ one thousand men, and if the 
 wages of all of them have to be paid out of 
 
i io THE PART OF THE PRODUCT PRODUCED 
 
 BOOK ii. Capital for a year, the amount reserved for 
 wages will be sixty thousand pounds, whilst 
 a hundred thousand pounds will have been 
 converted into plant and buildings. Most 
 people are familiar with the names given 
 by economists to distinguish the two forms 
 into which employed capital divides itself. 
 The part which is reserved for, and paid in 
 wages, is called " Circulating Capital " ; that 
 which is embodied in buildings and machinery 
 is called " Fixed Capital." Of Circulating 
 Capital or, as we may call it, Wage Capital 
 we will speak presently. We will speak at 
 first of Fixed Capital only ; and of this we will 
 
 embodied ... 
 
 in machin- take the most essential part, namely machinery ; 
 for our ' and for convenience sake we will omit the 
 purpose, we accidental part, namely buildings, which 
 render merely the passive service of shelter. 
 
 Now in any operation of manufacturing 
 raw material, or what means the same thing 
 conveying raw material, say water or coal 
 or fish, to the places where they are to be 
 consumed, certain machines or appliances are 
 necessary to enable the operation to take 
 place well. Thus fish or coal could hardly be 
 carried without a basket, whilst water could 
 
BY MA CHINE R Y OR FIXED CAPITAL 1 1 1 
 
 certainly not be carried without some vessel, BOOKH. 
 
 . . CH - m - 
 
 nor m many places raised from its source 
 
 without a rope and pail. For all purposes 
 therefore of practical argument and calcula- 
 tion, appliances of these most simple and in- 
 dispensable kinds are merged in Human Exer- 
 tion, just as is the case with the poorest kind 
 of Land, and are not credited separately with 
 any portion of the result. We do not say 
 the man raised so much water, and the rope 
 and the pail so much. We say the man 
 raised the whole. But the moment we have we shall 
 to deal with appliances of an improved kind, machinery 
 by which the result is increased, whilst the product of* 
 labour remains the same, the case of the ap- t he same 11 
 pliances becomes analogous to that of superior ^p^of a 
 soils ; and a portion of the result can be assigned l l \^ di 
 to them, distinct from the result of Labour. 
 
 Let us suppose, for instance, that a village AS a cer- 
 gets all its water from a cistern, to keep iustance pe 
 which replenished takes the labour of ten w 
 men constantly raising the water by means 
 of pails and ropes, and then carrying it to 
 the cistern, up a steep wearisome hill. These 
 men, we will say, receive each one pound a 
 week, the village thus paying for its water Jive 
 
ii2 EXAMPLE OF PRODUCT OF MACHINERY 
 
 BOOK n. hundred pounds a year, the whole of which sum 
 ' goes in the remuneration of labour. We will 
 suppose, further, that the amount of water 
 thus obtained is a thousand gallons daily, 
 each man raising and carrying a hundred 
 gallons ; and that this supply, though suffi- 
 cient for the necessities of the villagers, is 
 not sufficient for their comfort. They would 
 gladly have twice that amount ; but they 
 are not able to pay for it. Such is the situa- 
 tion with which we start. We have a 
 thousand gallons of water supplied daily by 
 the exertion of ten men, or a hundred gallons 
 by the exertion of each of them. 
 
 And now let us suppose that the village is 
 suddenly presented with a pumping-engine, 
 having a handle or handles at which five of 
 these men can work simultaneously, and by 
 means of which they, working no harder than 
 formerly, can raise twice the amount of 
 water that was formerly raised by ten men 
 namely two thousand gallons daily, instead 
 of one thousand. The villagers, therefore, 
 have now a thousand gallons daily which 
 they did not have before ; and to what is the 
 supply of this extra quantity due ? It is not 
 
AS DISTINCT FROM THAT OF LABOUR 113 
 
 due to Labour. The Labour involved can BOOKH. 
 produce no more than formerly ; indeed it - ' 
 must produce less ; for its quality is unchanged, 
 and it is halved in quantity. Obviously, then, 
 the extra thousand gallons are due to the pump- 
 ing-engine, and this not in a mere theoretical 
 sense, but in the most practical sense possible ; 
 for this extra supply appears in the cistern as 
 soon as the engine is present, and would cease 
 to appear if the engine were taken away. 
 
 And here let me pause for a moment, as I it may be 
 
 1 . i -i T !''. 11 a ^ SO k~ 
 
 did when 1 was discussing land, to point out served that 
 a fact which at the present stage of argument product 
 has no logical place, but which should be the <^vner 
 realised by the reader, in order to avoid mis- machine, 
 conception: name]y, the fact that the extra ^ to the 
 water-supply which is due to the pumping- 
 engine, will necessarily be the property of 
 whoever owns the engine, just as rent will be 
 the property of whoever owns the land that 
 yields it. We supposed just now that the 
 owner of the engine was the village. We 
 supposed that the engine was presented to it. 
 Consequently the village owned the whole 
 extra thousand gallons. It had not to pay for 
 them. But let us suppose instead that the 
 
 8 
 
CH. m. 
 
 114 THE PRODUCTS OF A MACHINE 
 
 BOOK ii. engine was the property of some stranger. 
 Just as necessarily in that case the gallons 
 would belong to him ; and he could command 
 payment for them, just as if he had carried 
 them to the cistern himself. We supposed 
 that the village was able to pay jive, hundred 
 pounds for its water ; and that it really wanted, 
 for its convenience, twice as much as it could 
 obtain for that sum expended on human labour. 
 The owner of the pumping-engine, by allow- 
 ing the village to use it, doubles the water- 
 supply, and halves the labour bill. The ex- 
 penditure on labour sinks from five hundred 
 pounds to two hundred and fifty pounds ; and 
 the owner of the pumping-engine can, it is 
 needless to say, command the two hundred and 
 fifty pounds which is saved to the village by its 
 use. In actual life, no doubt, the bargain would 
 be less simple ; because in actual life there 
 would be a number of rival pumping- engines, 
 whose owners would reduce, by competition, 
 the price of the extra water ; but whatever 
 the price might be, the principle would remain 
 the same. The price or the value of the 
 water would go to the owner of the engine ; 
 and it would fail to do so only if one thing 
 
NECESSARILY THE PROPERTY OF OWNER 115 
 
 happened if the owner refused to receive it, BOOK n. 
 and, for some reason or other, made the 
 village a free gift of what the village would 
 be perfectly willing to buy. In this truth 
 there is nothing that makes for or against 
 Socialism. The real contention of the 
 Socialist is simply this not that labour 
 makes what is actually made by machinery ; 
 but that labourers ought to own the machinery, 
 and for that reason appropriate what is made 
 by it. A machine or engine, in fact, which 
 is used to assist labour is, in its quality of 
 a producing agent, just as separate from the 
 labour with which it co-operates, as a donkey, 
 in its quality of a carrying agent, is distinct 
 from its master, if the master is walking along 
 "carrying one sack of corn, and guiding the 
 donkey who walks carrying seven. 
 
 And this brings us back into the line of A machine, 
 
 , -. . then, as a 
 
 our main argument; the comparison just productive 
 made being a very apt and helpful illustration 
 of it. Every machine may be looked on as 
 a kind of domestic animal, and each new J 
 machine as an animal of some new species ; ammal - 
 which animals co-operate with men in the 
 production of certain products : and the point 
 
CH. III. 
 
 116 THE COTTON INDUSTRY 
 
 BOOK n. I am urging on the reader may accordingly 
 be put thus. When a man, or a number of 
 men, without one of these animals to assist 
 them, produce a certain amount of some parti- 
 cular product, and with the assistance of one of 
 these animals produce a much larger amount, 
 the added quantity is produced not by the men, 
 but by the animal or, to drop back again into 
 the language of fact, by the machine. 
 The history I have taken an imaginary case of drawing 
 cotton m- and pumping water, because the operation is of 
 remarkabfe an exceedingly simple kind. We will now turn 
 of IMS. from the imaginary world to the real, and clench 
 what has been said by an illustration from the 
 history of our own country and from that 
 period which at present we specially have in 
 view namely the close of the last century. 
 
 From the year 1795 to the year 1800, 
 the amount of cotton manufactured in this 
 country was on the average about thirty-seven 
 million pounds weight annually : ten years 
 before it was only ten million pounds; ten 
 years before that, only four million pounds ; 
 and during the previous fifty years it had been 
 less than two and a half million pounds. 
 The amount manufactured, up to the end of 
 
IN THE LAST CENTURY 117 
 
 this last-named period, was limited by the BOOKH. 
 
 CH. III. 
 
 fact that spinning was a much slower process 
 than weaving. It was performed by means 
 of an apparatus known as "the one-thread 
 wheel." No other spinning-machine existed ; 
 and it was the opinion of experts, about the 
 year 1770, that it would hardly be possible in 
 the-course of the next thirty years, by collect- 
 ing and training to the spinning trade every 
 hand that could be secured for such a purpose, 
 to raise the annual total to so much as five 
 million pounds. As a matter of fact, however, 
 five million pounds were spun in the year 1776. 
 In six years' time, the original product had 
 been doubled. In ten years, it had been more 
 than quadrupled ; in twenty years, it had 
 increased nearly elevenfold ; and in five and 
 twenty years, it had increased fifteenfold. 1 
 
 To what, then, was this extraordinary For every 
 
 * pound of 
 
 increase due ? It was due to the invention cotton spun 
 
 by labour, 
 
 and introduction of new spinning machinery Ark- 
 
 1 From 1716 to 1770 the cotton manufactured in this 
 
 spun tour- 
 country annually averaged under two and a half million pounds teen 
 
 weight. From 1771 to 1775 it was four million seven hundred pounds. 
 thousand pounds. From 1781 to 1785 it was eleven million 
 pounds. From 1791 to 1795 it was twenty-six million pounds ; 
 and from 1795 to 1800 it was thirty -seven million pounds. 
 

 1 1 8 ARK WRIGHTS MA CHINE R Y 
 
 especially to the machines invented by 
 Hargraves and Arkwright, and the successive 
 application of horse -power, water-power, 
 and lastly of steam-power, to driving them. 
 Previous to the year 1770, such a thing as a 
 cotton -mill was unknown. During the ten 
 following years, about forty were erected in 
 Great Britain ; in the six years following 
 there were erected a hundred more ; and from 
 that time forward their number increased 
 rapidly, till they first absorbed, and then 
 more than absorbed, the whole population 
 that had previously conducted the industry 
 in their own homes. As we follow the 
 history of the manufacture into the present 
 century, a large part of the increasing gross 
 produce is to be set down to the increase in 
 the employed population ; but during the 
 twenty -five years with which we have just 
 been dealing, the number of hands employed 
 in spinning had not more than doubled, 1 
 whilst the amount of cotton manufactured 
 had increased by fifteen hundred per cent. 
 
 1 Pitt estimated that the hands employed in spinning 
 increased from forty thousand to eighty thousand between 
 the years 1760 and 1790. 
 
THE IRON INDUSTRY OF GREAT BRITAIN 119 
 
 It is therefore evident that the increase BOOKH. 
 during this period is due almost entirely, not 
 to human exertion, but to machinery. 1 
 
 And next, with more brevity, let us The 
 consider the manufacture of iron. By and iron offers 
 by we shall come back to the subject ; so it example. 
 will be enough here to mention a single fact 
 connected with it. From about the year 
 1740, when a careful and comprehensive 
 inquiry into the matter was made, up to the 
 year 1780, the average produce of each 
 smelting furnace in the country was two hun- 
 dred and ninety -four tons of iron annually. 
 Towards the close of this period machinery 
 had been invented by which a blast was 
 produced of a strength that had been un- 
 known previously; and in the year 1788, the 
 average product of each of these same furnaces 
 
 1 Were any confirmation of this conclusion needed, it is 
 afforded us by the fact that in 1786 a spinner received ten 
 shillings a pound for spinning cotton of a certain quality : in 
 1795 he had received only eightpence, or a fifteenth part of 
 ten shillings ; and yet in the course of a similar day's labour, 
 he made more money than he had been able to do under the 
 former scale of payment. The price of spinning No. 100 
 was ten shillings per pound in 1786 ; in 1793, two shillings 
 and sixpence. The subsequent drop to eightpence coincided 
 with the application of machinery to the working of the mule. 
 
120 MACHINERY AND PRODUCTION OF IRON 
 
 BOOK ii. w&sjive hundred and ninety-Jive tons, or very 
 nearly double what it had been previously. 
 An extra two hundred and fifty tons was 
 produced from each furnace annually : and if 
 we attribute the whole of the former product 
 to human exertion, two hundred and fifty 
 tons at all events was the product of the new 
 machinery ; since if that had been destroyed, 
 the product, in proportion to the expenditure 
 of exertion, would at once have sunk back to 
 what it had been forty-eight years earlier. 
 The pro- Here, then, we have before us the two 
 of Capital 1 ' principal manufactures of this country, as 
 - they were during the closing years of the last 
 cen tury ; and we have seen that in each a 
 Definite portion of the product was due to a 
 the pro- certain kind of capital, as distinct from human 
 
 ducts of 
 
 Labour. exertion distinct from human exertion in pre- 
 cisely the same way, as we have already seen 
 land to be, when we find it producing rent; 
 and we have seen further that the products 
 both of this kind of Capital and of Land, 
 are to be distinguished from those of Human 
 Exertion on precisely similar principles. 1 
 
 1 Were this work a treatise on political economy, rather 
 than a work on practical politics, in which only the simplest 
 
MACHINERY AND WAGE CAPITAL 121 
 
 Machinery, however, or fixed capital, of BOOKH. 
 
 CH III 
 
 which we have taken machinery as the type, 
 
 r\ i 
 
 is only a part of Capital considered as a whole, chapter we 
 We have still to deal with the part that is siderthe 
 reserved for and spent in wages ; and this ofwag e s 
 will introduce us to an entirely new subject apl ' 
 a subject which as yet I have not so much 
 as hinted at namely human exertion con- 
 sidered in an entirely new light. 
 
 and most fundamental economic principles are insisted on, 
 I should have here introduced a chapter on the special and 
 peculiar part which fixed capital, other than machinery, 
 plays in agriculture. I have not done so, however, for fear 
 of interrupting the thread of the main argument ; but it 
 will be useful to call the reader's attention to the subject in 
 a note. 
 
 It was explained in the last chapter that rent (to speak 
 with strict accuracy) is not to be described as the product of 
 superior soils, but rather as the product of the qualities 
 which make such soils superior qualities which are present 
 in them and which in poorer soils are absent. Now in 
 speaking of rent, we assumed these superior qualities to be 
 natural. As a matter of fact, however, in highly cultivated 
 countries, many of them are artificial. They have been 
 added to the soil by human exertion for instance by the 
 process of draining ; or they have been actually placed in 
 the soil, as by the process of manuring. In this way land 
 and capital merge and melt into one another, and illustrate 
 each other's functions as productive agents. It is im- 
 possible to imagine a more complete and beautiful example 
 of the relation between the two. At this point the rent of 
 Capital and the rent of Land become indistinguishable. 
 
CHAPTER IV 
 
 Of the Products of Circulating Capital, or Wage 
 Capital, as distinguished from the Products of 
 Human Exertion. 
 
 Wage CIRCULATING Capital, or, as it is better to call 
 en it, Wage Capital, is practically a store of those 
 
 things which wages are used to buy that is 
 to say the common necessaries of subsistence. 
 And tne primary function the simplest and 
 most obvious function which such Capital 
 performs is this : it enables men, by supplying 
 them with the means of living, to undertake 
 long operations, which when completed will 
 produce much or be of much use, but which 
 until they are completed will produce nothing 
 and be of no use, and will consequently 
 supply nothing themselves to the men whilst 
 actually engaged in them. 
 
 Let us imagine, for instance, a tunnel which 
 
s a 
 
 SIMPLEST FUNCTION OF WAGE CAPITAL 123 
 
 pierces a range of mountains, and facilitates BOOKH. 
 communication between two populous cities. 
 Five hundred navvies, we will say, have to 
 work five years to make it. Now if two yards 
 of tunnel were made every day, and if each 
 yard could be used as soon as made, the tolls 
 of passengers would at once yield a daily 
 revenue which would provide the navvies with 
 subsistence, as their work proceeded. But as 
 a matter of fact until the last day's work is 
 done, and the end of the fifth year sees the 
 piercing of the mountain completed, the tunnel 
 is as useless as it was when it was only just 
 begun, and when it was nothing more than a 
 shallow cavity in a rock. Five years must 
 elapse before a single toll is paid, and before 
 the tunnel itself supplies a single human being 
 with the means of providing bread for even a 
 single day. The possibility then of the tunnel 
 being made at all, depends on the existence of 
 a five-years' supply of necessaries, for which 
 indirectly the tunnel will pay hereafter, but in 
 producing or providing which, it has had no 
 share whatever. 
 
 Wage Capital, in fact, imparts to industry 
 the power of waiting for its own results. This 
 
124 DISTINGUISHING FUNCTION 
 
 BOOK IT. is its simplest, its most obvious, and its 
 
 CH. IV. 
 
 primeval function. It has been the function 
 
 But the 
 
 above- of such capital from the days of the earliest 
 
 mentioned ..-,. . -, i - i * i 
 
 function of civilisations ; and it is, indeed, its fundamental 
 
 Capital is function still : but in the modern world it is 
 
 principal far from being its principal function. I call 
 
 themodern its principal functions in the modern world 
 
 the functions by which during the past 
 
 century and a quarter it has produced results 
 
 so incomparably, and so increasingly greater, 
 
 than were ever produced by it in the whole 
 
 course of preceding ages. 
 
 itsprinci- What this function is must be explained 
 tkn/now is very clearly and carefully. It is not to enable 
 labourers to wait for the results of their 
 labours. It is to enable the exceptional know- 
 ledge, ingenuity, enterprise, and productive 
 exertions 16 genius OI> a ^ ew m en so to animate, to organise, 
 rdiaar an( ^ direct the average physical exertions of 
 the many, as to improve, to multiply, or to 
 hasten the results of that exertion without 
 increasing its quantity. All civilisations, 
 ancient as well as modern, have involved, in a 
 certain sense, the direction by the few of the 
 many. The temples and palaces of early 
 Egypt and Assyria, which excite the wonder 
 
 labourers. 
 
OF MODERN WAGE CAPITAL 125 
 
 of modern engineers and architects by the BOOK n. 
 size of the blocks of stone used in their 
 astounding structure, are monuments of a 
 control, absolute and unlimited and masterly, 
 exercised by a few human minds over millions 
 of human bodies. But in that control, as 
 exercised in the ancient world, one element 
 was wanting which is the essence of modern 
 industry. When the masters of ancient labour 
 wished to multiply commodities, or to secure an 
 increase of power for accomplishing some single 
 work, the sole means known to them was to in- 
 crease the number of labourers ; and when one 
 thousand slaves were insufficient, to reinforce 
 them with (let us say) four thousand more. 
 The masters of modern labour pursue a new 
 and essentially opposite course. Instead of 
 seeking in such a case to secure four thousand 
 new labourers, they seek to endow one 
 thousand with the industrial power of five. 
 If Nebuchadnezzar had set himself to tunnel The 
 
 modern 
 
 a mountain, he could have hastened the work empioyei 
 
 i i n i mi i n this 
 
 only by flogging more slaves to it. The respect 
 modern contractor, in co-operation with the fromfhe 
 modern inventor, instead of flogging labour, a 
 would assist it with tram-lines, trucks, and 
 
126 WAGE CAPITAL MAINLY PRODUCTIVE 
 
 BOOKII. boring engines. In other words, whereas in 
 
 CH IV. 
 
 former ages the aim of the employing class 
 was simply to secure the service of an in- 
 creasing quantity of labour, the aim of the 
 employing class in the present age is to 
 increase the productive power of the same 
 quantity. The employing class in former ages 
 merely forced the employed to exert their own 
 industrial faculties, and appropriated what 
 those faculties produced. The employing class 
 of the present age not only commands the 
 employed, but it co-operates with them by 
 lending them faculties which they do not 
 wage themselves possess. It applies to the guidance 
 
 Capital in r 
 
 the modern of the muscles of the most ordinary worker 
 means by the profoundest knowledge of science, all the 
 ceptionai strength of will, all the spirit of enterprise, 
 !entto C S and the exceptional aptitude for affairs, that 
 distinguish the most gifted and the vigorous 
 characters of the day. And it is the peculiar 
 modern function of Capital, as spent in Wages, 
 to enable this result to take place. 
 wage capi- Let us consider how it does so. Socialists tell 
 this in a us that Capitalism in the modern world means 
 merely the appropriation by the few of all the 
 
 of 6 X1 ~ materials of production, so that the many 
 
 
AS A MEANS OF DIRECTING LABOUR 127 
 must either work as the few bid them, or must BOOK n 
 
 CH. IV. 
 
 starve. But this is a very small part of what 
 
 ~ . ,. . Capital 
 
 modern Capitalism means, and it is not the altogether 
 essential part, nor does it even suggest the 1 
 essential part. The majority of men must 
 always work or starve. Nature, not modern 
 Capitalism , is responsible for that necessity. The 
 essential difference which modern Capitalism 
 has introduced into the situation is this and 
 it is an enormous difference that whereas in 
 former ages the livelihood of a man was con- 
 tingent on his working in the best way that 
 the average man knew, modern Capitalism has 
 made his livelihood contingent on his working 
 in the best way that exceptional men know. 
 Now this best way, as we shall see more 
 clearly presently, does not involve the forcing 
 of each man to work harder, or the exacting 
 from him any more difficult effort. It involves 
 merely the supplying him with a constant 
 'external guide for even his minutest actions 
 a guide for every movement of arm and hand, 
 or a pattern of each of the objects which are 
 the direct result of these movements; and 
 consequently the one thing which before all 
 others it requires is constant obedience or 
 
128 SLA VES AND FREE LABOURERS 
 
 BOOK ii. conformity to such guides and patterns. The 
 entire industrial progress of the modern world 
 has depended, and depends altogether on this 
 constant obedience being secured ; and the 
 possession of Wage Capital by the employing 
 class is the sole means which is possible in 
 the modern world of securing it. In the 
 ancient world the case would no doubt have 
 been different. The lash of the taskmaster, 
 the fear of prison, of death, of torture, were 
 then available for the stimulation and organ- 
 isation of Labour. But they are available no 
 longer. The masses of civilised humanity 
 have taken this great step they have risen 
 from the level on which they could be driven 
 to industrial obedience, to the level on which 
 they must be induced to it. Obedience of 
 some sort is a social necessity now as ever, and 
 always must be : but social necessity spoke 
 merely to the fear of the slave ; it speaks to 
 the will and the reason of the free labourer. 
 The free labourer may be, and must be, in one 
 or other of two positions. He may work for 
 himself, consuming or selling his own produce ; 
 or he may work for an employer, who pays 
 him wages, and exacts in return for them not 
 
WAGE CAPITAL AND PROGRESS 129 
 work only, but work performed in a certain BOOK n. 
 
 CH IV 
 
 prescribed way. The first position is that of 
 the peasant proprietor or the hand - loom 
 weaver. The second is that of the employee 
 in a mill or factory. In both cases, the voice 
 of social necessity, or of society, speaks to the 
 man's reason, informing him of the homely 
 fact that he cannot live unless he labours : 
 but in the first case, the voice of society cries 
 to him out of the ground, " You will get no 
 food unless you labour in some way " ; and in 
 the second case it cries to him from the mouths 
 of the wisest and strongest men, " You will 
 get no food unless you consent to labour in the 
 best way." 1 
 
 In other words, Wage Capital in the modern 
 world promotes that growth of wealth by which 
 the modern world is distinguished, simply 
 because Wage Capital is the vehicle by which, 
 
 the exceptional qualities of the few corn- 
 Labour ; 
 
 municate themselves to the whole industrial 
 community. The. real principle of progress ^ 
 and production is not in the Capital, but in the 
 
 1 In a state where the employing class were physically 
 the masters of the employed, Wage Capital would be un- 
 necessary for the employer. A system of forced labour 
 might take its place. 
 
130 WAGE CAPITAL AS RELATED TO 
 
 BOOK n. qualities of the men who control it ; just as 
 the vital force which goes to make a great 
 picture is not in the brush, but in the great 
 painter's hand ; or as the skill which pilots a 
 coach and four through London is not in the 
 reins, but in the hand of the expert coachman. 
 AS we can This can easily be seen by turning our 
 
 see by . J . * 
 
 following attention once again to machinery, and 
 
 the steps . 
 
 by which a supposing that a company is floated for the 
 
 improved manufacture of something by means 
 one new of some new invention. The directors must 
 of course begin with securing a site for the 
 factory; but with this exception their entire 
 initial expenditure will directly or indirectly 
 consist in the payment of wages in purchas- 
 ing the services of a certain number of men 
 by whose exertions certain masses of raw 
 material are to be produced and fashioned 
 into certain definite forms that is to say, into 
 the new machinery and a suitable building to 
 protect it. 
 
 The whole Now, the powers of these men resemble 
 a mass of fluid metal which is capable of 
 being run into any variety of mould. If 
 the directors were bound by no articles of 
 used in the assoc i at i n, and if, at their first board 
 
THE PRODUCTION OF NEW INVENTIONS 131 
 
 meeting, before they had entered into any BOOKH. 
 
 CH. IV. 
 
 contract for the machinery, some other - 
 
 / expendi- 
 
 invention for the manufacture of some other tm-e of the 
 commodity were suddenly brought to their capital. 
 notice, and happened to take their fancy, the 
 men they were on the point of employing to 
 produce one kind of machinery might, with 
 equal ease, be employed to produce another. 
 We will assume that the machinery which 
 the men are set to produce actually is a 
 great improvement on anything of the kind 
 used hitherto, and ends in adding greatly to 
 the productive powers of the nation; but, so 
 far as the men are concerned whose exertions 
 are paid for out of the capital of the company, 
 the machinery might just as well have been 
 absolutely valueless a mere aggregation of 
 wheels and axles, as meaningless as a mad- 
 man's dream. What makes their exertions 
 not only useful instead of useless, but more 
 useful than any exertion similarly applied 
 had ever been hitherto, is, firstly, the in- 
 genuity of the inventor of the new machine ; 
 secondly, the judgment of the promoters and 
 directors of the company ; and lastly, the 
 confidence in their judgment felt by the 
 
I 3 2 CAPITAL THE TOOL OF KNOWLEDGE 
 
 BOOKH. subscribing public. Or, we may suppose the 
 - ' inventor to have himself supplied the Capital, 
 and to unite in himself the parts of the direc- 
 tors and the shareholders. In that case the 
 exertions of the men employed derive their 
 value entirely from the talent of this one man. 
 The men employed by him, we will say, num- 
 ber a thousand, and the Wage Capital he owns 
 and administers aids and increases production 
 only because it is the means by which the one 
 man induces the thousand to accept him as 
 the steersman of their exertions, and to allow 
 him to direct their course towards new and 
 remote results which for them lie hidden 'be- 
 hind the horizon of contemporary habit or 
 ignorance. 
 
 The case of Let us take an actual case the case of 
 Wright's Arkwright's spinning-frame. This invention, 
 
 which was destined to influence the prosperity 
 hls ' of so many millions, was in great danger of 
 being altogether lost, simply on account of the 
 difficulty experienced by the inventor in secur- 
 ing sufficient capital to construct and perfect 
 his machine, and, what was equally necessary, 
 to exhibit it in actual use. After many rebuffs 
 and disappointments, a sum was at last 
 
WAGE CAPITAL AND ARKWRIGHT 133 
 
 advanced him by a certain firm of bankers BOOK n. 
 the Messrs. Wright of Nottingham ; but before 
 the preliminary experiments had advanced far 
 their courage failed them, they repented of 
 what they had done, and they passed the 
 inventor on to two other capitalists whose 
 insight was fortunately keener, and whose 
 characters were more courageous. These 
 gentlemen, Mr. Need and Mr. Strutt of Derby, 
 took Arkwright into partnership, and by means 
 of the Capital which they placed at his disposal, 
 his machine, which till now had existed only in 
 his own brain and in a few unfinished models, 
 was before long in operation, and a new indus- 
 trial era was inaugurated. Now, to the accom- 
 plishment of this result Wage Capital was 
 essential; but it was essential only as the 
 means of giving effect to the genius and strong 
 character of certain specially gifted persons 
 Arkwright with his marvellous inventive 
 genius, Messrs. Need and Strutt with their 
 sagacity and spirit and enterprise. If it had 
 not been for the qualities of these three men, 
 the wages paid to the labourers who made the 
 machine of Arkwright would have probably 
 been paid indeed to the very same labourers, 
 
134 WAGE CAPITAL AS 
 
 BOOK ii. but their exertions would have been directed 
 
 CH. IV. . 
 
 to producing some different product some 
 product which added nothing to the existing 
 powers of the community. 
 NOW ma- Machinery, therefore, or Fixed Capital, 
 
 chinery is ^ m J - 
 
 necessariiy though it differs as soon as it is made from 
 
 Wage 
 
 Capital ^ Capital employed in wages, is the result of the 
 use of such Capital, and is indeed but another 
 form of it. And now comes the point on which 
 I am concerned to insist here : that conversely 
 Wage Capital, when employed so as to increase 
 the productivity of labour, in other words 
 when employed by men with the requisite 
 capacity, is in its essence but another form 
 of machinery. Machinery may be called con- 
 gealed Wage Capital. Wage Capital may be 
 called fluid machinery. For the function of 
 both namely, to increase wealth is the 
 same, and they fulfil this function by means of 
 the same virtue residing in them. It is easy 
 to see the truth of this. The increase of wealth 
 means the improvement and multiplication of 
 commodities which reward the exertions of the 
 same number of men. The number and quality 
 of these commodities are increased by applica- 
 tion of Capital, because Capital enables persons 
 
BOOR. . 
 CH. IV. 
 
 POTENTIAL MACHINERY 135 
 
 who are exceptionally gifted to control and 
 direct the exertions of the majority; and Capital, 
 as embodied in machinery, differs from Capital 
 continuously employed in wages, only because 
 the former gives us machinery which is in- 
 animate, and the latter, machinery which is 
 living. For a thousand men so organised as 
 to produce some given product or result, and 
 to produce it with the greatest precision or in 
 the least possible time, are to all intents and 
 purposes as much an invention and a machine 
 as a thousand wheels or rollers adjusted for a 
 similar purpose. 
 
 All Capital, therefore, in all its distinctively And there- 
 modern applications all those applications capital, 
 which have caused what is called industrial 
 progress is virtually this, and this only : it 
 is the exceptional capacities of one set of men 
 applied to the average capacities of another Labour 
 set. We may accordingly include all Capital ^ 
 fixed and circulating under one head, and Exertion 
 
 over 
 
 say of it as a whole what in the last chapter another, 
 was said of machinery : that when by its 
 application to the exertions of a given number 
 of men a larger product results than resulted 
 from them before it was applied, Capital is to 
 
CH. IV. 
 
 136 HOW TO DISCRIMINATE THE AMOUNT 
 
 BOOK ii. k e credited with producing the amount of 
 the increase ; or to put the same thing in 
 another way with the amount of the de- 
 crease which would result if its application 
 were withdrawn. 
 
 How this is the case with machinery I 
 have already illustrated by examples. It is 
 less easy to illustrate by examples, but equally 
 easy to see how it is the case with Capital 
 continuously employed as wages. It is less 
 easy to select illustrations, because the whole 
 of modern progress is itself one great, though 
 infinitely complex example of it ; and it will 
 be enough here as we shall recur to the subject 
 presently, to consider one obvious and very 
 familiar fact. Many new commodities, and 
 many new methods of production, depend on 
 the invention not of new machines, but of 
 new processes. The Capital employed in 
 working a new process is mainly employed as 
 wages, by the administration of which the 
 actions of the workmen are guided, controlled, 
 and organised. Thus if fifty men, working 
 independently and selling their own produce, 
 produce a hundred articles of a certain sort 
 weekly, and another fifty men, working for a 
 
PRODUCED BY WAGE CAPITAL 137 
 
 wage-paying employer, produce, owing to the BOOK n. 
 way in which their labour is guided and 
 organised, just double the number of such This aspect 
 
 of the 
 
 articles in the same time, we shall say that'l question 
 
 will be 
 
 the hundred extra articles are the product of considered 
 
 
 Wage Capital, just as we should say, if the the 
 increased production had been due to the chapter> 
 introduction of a machine, that these extra 
 hundred articles were the product of Fixed 
 Capital. And in both cases we should mean, 
 as I am now going to insist more particularly, 
 that they were really the product of the 
 capacities which each kind of Capital repre- 
 sents. This brings us to the heart of the 
 whole problem 
 
CHAPTER V 
 
 That the Chief Productive Agent in the modern world 
 is not Labour, but Ability, or the Faculty which 
 directs Labour. 
 
 what was I SAID in the last chapter that machinery or 
 last chap- Fixed Capital was congealed Wage Capital. But 
 that 8 pro-" as Wage Capital is metamorphosed into machin- 
 Human ^J only owing to the fact that it is at once 
 of X two n a the instrument and the guide of Human Exer- 
 
 machinery may be called congealed exertion 
 of whlt^ y also - Tnis description of it is but half original ; 
 ^ or Socialistic writers have for a long time called 
 it " congealed Labour." But between the two 
 phrases there is a great and fundamental differ- 
 ence, and I now bring them thus together to 
 show what the difference is. The first includes 
 the whole meaning of the second, whereas the 
 second includes only a part of the meaning of 
 the first. Let us take the finest bronze statue 
 that was ever made, and also the worst, the 
 
us. 
 
 THE BEST LABOUR SOMETIMES USELESS 139 
 
 feeblest, the most ridiculous. Both can with BOOK u. 
 
 CFT V 
 
 equal accuracy be called congealed Labour ; but 
 to call them this is just as useless a truism as instances 
 to call them congealed bronze. It describes w 
 the point in which the two statues resemble 
 each other ; it tells us nothing of what is far 
 more important the points in which the two 
 statues differ. They differ because, whilst both 
 are congealed Labour, the one is also congealed 
 imagination of the highest order, the other is 
 also congealed imagination of the lowest. The 
 excellence of the metal and of the casting may 
 be the same in both cases. Or again, let us 
 take a vessel like the City of Paris, and let 
 us take also the vessel that was known as the 
 Bessemer Steamer. The Bessemer Steamer 
 was fitted with a sort of rocking saloon, which, 
 when the vessel rolled, was expected to remain 
 level. The contrivance was a complete failure. 
 The hundreds of thousands of pounds spent on 
 it were practically thrown away, and the struc- 
 ture ended by being sold as old iron. Now 
 these two vessels were equally congealed Labour, 
 and congealed Labour of precisely the same 
 quality ; for the workmen employed on the 
 Bessemer Steamer were as skilful as those 
 
CH. V. 
 
 140 LABOUR NOT THE SAME FACULTY AS 
 
 BOOK n. employed on the City of Paris. And yet the 
 Labour in the one case was congealed into a 
 piece of lumber, and in the other case it was 
 congealed into one of the most perfect of those 
 living links by which the lives of two worlds 
 are united. To call both the vessels, then, 
 congealed Labour, only tells us how success 
 resembles failure, not how it differs from it. 
 The City of Paris differs from the Bessemer 
 Steamer because the City of Paris was con- 
 gealed judgment, and the Bessemer Steamer 
 was congealed misjudgment. 
 
 It is therefore evident that in using 
 Capital so as to make Labour more efficacious, 
 as distinct from wasting Capital so as to make 
 Labour nugatory, some other human faculties 
 are involved distinct from the faculty of 
 Labour ; and I have employed, except when it 
 would have been mere pedantry to do so, the 
 term " Human Exertion " instead of the term 
 " Labour," because the former includes those 
 other faculties, and the latter does not ; or, if 
 it includes them, it entirely fails to distinguish 
 them, and merely confounds them with faculties 
 from which they fundamentally differ. Thus, 
 when I pointed out in the last chapter that 
 
THE FACULTY WHICH DIRECTS LABOUR 141 
 
 BOOK II. 
 CH. V. 
 
 Capital, in so far as it increased the productivity 
 of Labour, was mental and moral energy as ap- 
 plied to muscular energy, I might have said with 
 equal propriety, had my argument advanced 
 far enough, that it was one kind of Human 
 Exertion guiding and controlling another 
 kind. Here we come to the great central fact 
 which forms the key to the whole economic 
 problem : the fact that in the production of 
 wealth two kinds of Human Exertion are in- 
 volved, and not, as economists have hitherto 
 told us, one two kinds of exertion absolutely 
 distinct, and, as we shall see presently, follow- 
 ing different laws. 
 
 Economic writers, like the world in general, Economic 
 do indeed recognise, in an unscientific way, vaguely 
 that productive exertion exhibits itself under this fact? 
 many various forms ; but their admissions and 
 
 statements with regard to this point are entirely expressed 
 confused and stultified by the almost ludicrous It 
 persistence with which they classify all these 
 forms under the single heading of Labour. 
 Mill, for instance, says that a large part of 
 profits are really wages of the labour of super- 
 intendence. He speaks of " the labour of the 
 invention of industrial processes," " the labour 
 
142 EXTRA ORD1NAR Y CONFUSION IN 
 
 BOOK n. of Watt in contriving the steam-engine," and 
 
 even of "the labour of the savant and the 
 
 They con- speculative thinker." He employs the same 
 
 productive word to describe the effort that invented Ark- 
 
 together wright's spinning-frame, and the commonest 
 
 muscular movement of any one of the mechanics 
 Labour. w j lo ass i s ^ e( j ^[^ hammer or screwdriver to 
 construct it under Arkwright's direction. He 
 employs the same word to describe the power 
 that perfected the electric telegraph, and the 
 power that hangs the wires from pole to pole, 
 like clothes-lines. He confuses under one 
 heading the functions of the employer and the 
 employed of the men who lead in industry, 
 and of the men who follow. He calls them all 
 labourers, and he calls their work Labour. 
 
 Now were the question merely one of liter- 
 ary or philosophical propriety, this inclusive 
 use of the word Labour might be defensible ; 
 but we have nothing to do here with the 
 niceties of such trivial criticism. We are con- 
 cerned not with what a word might be made 
 to mean, but what it practically does mean ; 
 and if we appeal to the ordinary use of language, 
 not only its use by the mass of ordinary 
 men, but its most frequent use by economic 
 
CH. V. 
 
 CURRENT ECONOMIC LANGUAGE 143 
 
 writers also, we shall find that the word Labour BOOK n. 
 has a meaning which is practically settled ; 
 and we shall find that this meaning is not an 
 inclusive one, but exclusive. We shall find Butprac- 
 that Labour practically means muscular Labour, Labour 
 or at all events some form of exertion of which muscular 
 men common men are as universally capable, 
 and that it not only never naturally includes 
 any other idea, but distinctly and emphatically 
 excludes it. For instance, when Mill in his 
 Principles of Political Economy devotes one 
 of his chapters to the future of the " Labouring 
 Classes," he instinctively uses the phrase as 
 meaning manual labourers. When, as not 
 unfrequently happens, some opulent politician 
 says to a popular audience, " I, too, am a 
 labouring man/' he is either understood to be 
 saying something which is only true meta- 
 phorically, or is jeered at as saying something 
 which is not true at all. Probably no two 
 men in the United Kingdom have worked 
 harder or for longer hours than Mr. Gladstone 
 and Lord Salisbury ; yet no one could call Mr. 
 Gladstone a labour member, or say that Lord 
 Salisbury was an instance of a labouring man 
 being a peer. The Watts, the Stevensons, the 
 
144 LABOUR A LESSER PRODUCTIVE AGENT 
 
 BOOK ii. Whitworths, the Bessemers, the Armstrongs, 
 
 CH. V. 
 
 the Brasseys, are, according to the formal 
 definition of the economists, one and all of 
 them labourers. But what man is there who, 
 if, in speaking of a strike, he were to say that 
 he supported or opposed the claims of Labour, 
 would be understood as meaning the claims of 
 employers and millionaires like these ? It is 
 evident that no one would understand him in 
 such a sense ; and if he used the word Labour 
 thus, he would be merely trifling with language. 
 The word, for all practical purposes, has its 
 meaning unequivocally fixed. It does not 
 mean all Human Exertion ; it emphatically 
 means a part of it only. It means muscular 
 and manual exertion, or exertion of which the 
 ordinary man is capable, as distinct from in- 
 dustrial exertion of any other kind ; and not 
 only as distinct from it, but as actively opposed 
 to and struggling with it. Since, then, we 
 have to deal with distinct and opposing things, 
 it is idle to attempt to discuss them under one 
 Mental and and the same name. To do so would be like 
 tion, as describing the Franco-Prussian War with only 
 production, one name for both armies the soldiers ; or 
 
 must there- . , . , . . 
 
 fore be like attempting to explain the composition 01 
 
ABILITY A GREATER PRODUCTIVE AGENT 145 
 
 water, with only one name for oxygen and BOOK n. 
 
 hydrogen the gas. Accordingly, for the in- 
 given 
 dustrial exertion exertion moral and mental another 
 
 name : 
 
 which is distinct from Labour and opposed 
 to it, we must find some separate and some 
 distinctive name; and the name which I propose 
 to use for this purpose is Ability. 
 
 IJuman Exertion then, as applied to the in tins 
 production of wealth, is of two distinct kinds : be called 
 Ability and Labour the former being essentially A 
 moral or mental exertion, and only incidentally 
 muscular; the latter being mainly muscular, 
 and only moral or mental in a comparatively 
 unimportant sense. This difference between 
 them, however, though accidentally it is always 
 present, and is what at firsT; strikes the observa- There is> 
 tion, is not the fundamental difference. The a e e v r er ' a 
 fundamental difference is of quite another kind. 
 It lies in the following fact : That Labour is a 
 kind of exertion on the part of the individual, ^ f one 
 which begins and ends with each separate J e e n ^ e a r nd 
 task it is employed upon, whilst Ability is a muscular. 
 kind of exertion on the part of the individual 
 which is capable of affecting simultaneously 
 the labour of an indefinite number of indi- 
 viduals, and thus hastening or perfecting the 
 
 10 
 
146 THE VITAL DISTINCTION 
 
 BOOKIL accomplishment of an indefinite number of 
 
 CH. V. 
 
 tasks. 
 
 The vital This vital distinction, hitherto so entirely 
 Jftat^he^ neglected, should be written in letters of fire 
 onemui/ on ^ ne mind of everybody who wishes to 
 t5fonyf; understand, to improve, or even to discuss 
 intelligibly, the economic conditions of a 
 * country such as ours. Unless it is recognised, 
 ite number. an( j terms are found to express it, it is impos- 
 sible to think clearly about the question ; 
 much more is it impossible to argue clearly 
 about it : for men's thoughts, even if for 
 moments they are correct and clear, will be 
 presently tripped up and entangled in the 
 language they are obliged to use. Thus, we 
 constantly find that when men have declared 
 all wealth to be due to Labour, more or less 
 consciously including Ability in the term, 
 they go on to speak of Labour and the labour- 
 ing classes, more or less consciously excluding 
 it ; and we can hardly open a review or a 
 newspaper, or listen to a speech on any 
 economic problem, without finding the labour- 
 ing classes spoken of as " the producers," to the 
 obvious and intentional exclusion of the classes 
 who exercise Ability ; whereas it can be de- 
 
BETWEEN ABILITY AND LABOUR 147 
 
 monstrated. as we shall see in another chapter, BOOK u. 
 
 CH. V. 
 
 that of the wealth enjoyed by this country 
 'to -day, Labour produces little more than a 
 
 Let us go back then to the definitions I 
 have just now given, and insist on them and 
 enlarge them and explain them, so as to 
 make them absolutely clear. 
 
 Labour, I said, is a kind of exertion on 
 the part of the individual, which begins and 
 ends with each separate task it is employed 
 upon ; whilst Ability is a kind of exertion on 
 the part of the individual which is capable of 
 affecting simultaneously the labour of an in- 
 definite number of individuals. Here are Familiar 
 
 , A -n T i i examples 
 
 some examples. An English navvy, it is said, w m show 
 will do more work in a day than a French 
 navvy ; he will dig or wheel away more barrow- 
 loads of earth ; but the greater power of the 
 one, if the two work together, has no tendency 
 to communicate itself to the other. The one, 
 let us say, will wheel twelve barrow -loads, 
 whilst the other will wheel ten. We will 
 imagine, then, a gang of ten French navvies, 
 who in a given time wheel a hundred barrow- 
 loads. One of them dies, and his place is 
 
148 ABILITY NOT A FORM 
 
 BOOKH. taken by an Englishman. The Englishman 
 !!ll' wheels twelve loads instead of ten ; but the 
 rest of the gang continue to wheel ten only. 
 Let us suppose, however, that the Englishman, 
 instead of being a navvy, is a little cripple who 
 has this kind of ability that he can show 
 the navvies how to attack with their picks 
 each separate ton of earth in the most effica- 
 cious way, and how to run their barrows 
 along the easiest tracks or gradients. He 
 might quite conceivably enable the nine 
 Frenchmen to wheel fifteen barrow-loads in 
 the time that they formerly consumed in 
 wheeling ten ; and thus, though the gang 
 contained one labourer less than formerly, 
 yet owing to the presence of one man ' of 
 ability, the efficacy of its exertions would be 
 increased by fifty per cent. Or again, let 
 us take the case of some machine, whose 
 efficiency is in proportion to the niceness with 
 which certain of its parts are finished. The 
 skilled workman whose labour finishes such 
 parts contributes by doing so to the efficiency 
 of that one machine only ; he does nothing 
 to influence the labour of any other workman, 
 or facilitate the production of any other 
 
CH. V. 
 
 OF SKILLED LABOUR 149 
 
 machine similar to it. But the man who, BOOK n. 
 by his inventive ability, makes the machine 
 simpler, or introduces into it some new 
 principle, so that, without requiring so much 
 or such skilled labour to construct it, it will, 
 when constructed, be twice as efficient as 
 before, may, by his ability, affect individual 
 machines without number, and increase the 
 efficiency of the labour of many millions of 
 workmen. Such a case as this is specially 
 worth considering, because it exposes an error 
 to which I shall again refer hereafter the 
 error often made by economic writers, of 
 treating Ability as a species of Skilled Labour. 
 For Skilled Labour is itself so far from being 
 the same thing as Ability, that it is in some 
 respects more distinct from it than Labour of 
 more common kinds ; for the secret of it is 
 less capable of being communicated to other 
 labourers. For instance, one of the most 
 perfect chronometers ever made namely, that 
 invented by Mudge in the last century 
 required for its construction Labour of such 
 unusual nicety, that though two specimens, 
 made under the direct supervision of the 
 inventor, went with an accuracy that has 
 
CH. V. 
 
 pj 
 
 150 CAPITAL APPLIED SUCCESSFULLY 
 
 BOOKII. not since been surpassed, the difficulty of 
 reproducing them rendered the invention 
 valueless. But the great example of this 
 particular truth is to be found in a certain 
 fact connected with the history of the steam- 
 engine a fact which is little known, whose 
 significance has never been realised, and which 
 I shall mention a little later on. It may thus 
 be said with regard to the production of 
 wealth generally, that it will be limited in 
 proportion to the exceptionally skilled labour 
 it requires, whilst it will be increased in pro- 
 
 - 
 
 portion to the exceptional ability that is 
 applied to it. 
 
 We shall The difference, then, between Ability and 
 to describ^ Labour must be now abundantly clear. As 
 accurately a g enera ^ ru l e > there is the broad difference on 
 contrdiin' ^ nG sur ^ ace > * na ^ * ne one ^ s mainly mental 
 Za * <mr - and the other mainly muscular; but to this 
 rule there are many exceptions, and the differ- 
 ence in question is accidental and superficial. 
 The essential, the fundamental difference from 
 a practical point of view is, that whilst 
 Labour is the exertion of a single man applied 
 to a single task, Ability is the exertion of a 
 single man applied to an indefinite number 
 
THE SAME THING AS ABILITY 151 
 
 of tasks, and an indefinite number of in- BOOKH. 
 
 CH. V. 
 
 dividuals. 
 
 And now let us go back to the subject of it is, of 
 Capital. I have said that Capital is one kind understood 
 of Human Exertion guiding and controlling definition 
 another kind. We can at last express this 
 with more brevity, and say that Capital is 
 Ability guiding and controlling Labour. This 
 is no mere rhetorical or metaphorical state- 
 ment. It is the accurate expression of what 
 is at once a theoretical truth and an historical 
 fact ; and to show the reader that it is so, 
 let me remove certain objections which may 
 very possibly suggest themselves. In the 
 first place, it may be said that Capital belongs 
 constantly to idle and foolish persons, or 
 even indeed to idiots, to all of whom it yields 
 a revenue. This is true ; but such an objec- 
 tion altogether ignores the fact that though 
 such persons own the Capital, they do not 
 administer it. An idiot inherits shares in a 
 great commercial house ; but the men who 
 manage the business are not idiots. They 
 only pay the idiot a certain sum for allowing 
 his Capital to be made use of by their Ability. 
 It may, however, be said further that many 
 
CH. V. 
 
 
 152 OBVIOUS EXCEPTIONS 
 
 BOOK n. men, neither idle nor idiotic, had administered 
 Capital themselves, and had succeeded merely 
 in wasting it. This again is true ; but where 
 Capital is wasted the productive powers of 
 the nation are not increased by it. It is, 
 however, a broad historical fact that, by the 
 application of Capital the productive powers 
 of the nation have been increasing continually 
 for more than a hundred years, and are in- 
 creasing still ; and this is the fact, or the 
 phenomenon, which we are engaged in study- 
 ing. Capital for us, then, means Capital 
 applied successfully ; and when I say that 
 Capital is Ability guiding and controlling 
 Labour, it is of Capital applied successfully, 
 and not of Capital wasted, that I must in 
 every case be understood to be speaking ; just 
 as if it were said that a battle was won by 
 British bayonets, the bayonets meant would 
 be those that the combatants used, not those 
 , that deserters happened to throw away. The 
 / fact, indeed, that in certain hands so much 
 Capital is thrown away and wasted, is nothing 
 but a proof of what I say, that as a produc- 
 tive agent Capital represents, and practically 
 is, Ability. 
 
ABILITY THE BRAIN OF CAPITAL 153 
 
 It may, however, be said and the objec- BOOKH. 
 
 CH. V. 
 
 tion is worth noticing that Capital is a 
 material thing, and Ability a mental thing ; 
 and it may be asked how, except metaphor- 
 ically, the one can be said to be the other?, 
 An answer may be given by the analogy of capital 
 the mind and brain. So long as the mind something 
 inhabits and directs a human body, mind 
 and matter are two sides of the same thing. l ^ d ] 
 It is only through the brain that mind has 
 power over the muscles; and the brain is 
 powerful only because it is the organ of the 
 mind. Now Ability is to Capital what mind 
 is to the brain ; and, like mind and brain, 
 the two terms may be used interchangeably. 
 Capital is that through which the Ability of 
 one set of men acts on the muscles that is 
 to say, the Labour of another set, whether by 
 setting Labour to produce machinery, or by so 
 organising various multitudes of labourers 
 that each multitude becomes a single machine 
 in itself, or by settling or devising the uses to 
 which these machines shall be put. 
 
 And it will be well, in case any Socialist 
 should happen to read these pages, to point 
 out that my insisting on this fact is no 
 
154 ABILITY AS THE FORCE BEHIND CAPITAL 
 
 BOOK IT. piece of special pleading on behalf of the 
 private capitalist. The whole of the above 
 would be argument would apply to Capital, no matter 
 capital hi a who owned it : individuals, or the community 
 state as Tn as a whole. For no matter who owned it, 
 or who divided the proceeds of it, the entire 
 control of it would have to be in the hands of 
 Ability. In what, or how many, individuals 
 Ability may be held to reside ; how such indi- 
 viduals are best found, tested, and brought 
 forward ; and how their power over Capital 
 may be best attained by them whether as 
 owners, or as borrowers, or as State officials, 
 is a totally different question, and is in this 
 place beside the point. 
 
 At present, it will be enough to sum up 
 what we have seen thus far. The causes of 
 wealth are not, as is commonly said, three : 
 Land, Labour, and Capital. This analysis 
 omits the most important cause altogether, 
 and makes it impossible to explain, or even 
 reason about, the phenomenon of industrial 
 progress. The causes of wealth are four Land, 
 Labour, Capital, and Ability : the two first 
 being the indispensable elements in the pro- 
 duction of any wealth whatsoever ; the fourth 
 
 
THE CAUSE OF ALL PROGRESS 155 
 
 being the cause of all progress in production ; BOOK n. 
 
 . . . , CH. V. 
 
 and the third, as it now exists, being the 
 creation of the fourth, and the means through 
 which it operates. These two last, as we shall 
 see presently, may, except for special purposes, 
 be treated as only one, and will be best included 
 under the one term Ability. 
 
 And now let us turn back to the condition 
 of this country at the close of the last century, 
 and the reader will see why, at the outset of 
 the above inquiry, I fixed his attention on 
 that particular period. 
 
CHAPTER VI 
 
 Of tlu Addition made during the last Hundred Tears 
 "by Ability to the Product of the National Labour. 
 This Increment the Product of Ability. 
 
 Let us now I HAVE already said something but in very 
 
 turn to the J & J 
 
 history of general terms of what, at the close of the 
 
 production . 
 
 in this last century, the wealth 01 this country was. 
 
 country i i -i 
 
 during the Let us now consider the subject a little more 
 dred years; in detail, though we need not trouble ourselves 
 with a great many facts and figures. The 
 comparatively backward state of Ireland makes 
 it easier to deal with Great Britain only ; and 
 the income of Great Britain was then, as I have 
 said already, about a hundred and forty million 
 pounds annually. This amount was, as has been 
 said already, also produced by Land, Capital, 
 and Human Exertion, or, as we are now able to 
 put it, by Land, Labour, Capital, and Ability ; 
 
PRODUCTION IN THE LAST CENTURY 157 
 
 and according to the principles which I have BOOK n. 
 already carefully explained, had the statistics 
 of industry been recorded as fully as they are 
 now, we should be able to assign to each cause 
 a definite proportion of the product. Of what 
 the Land produced, as distinct from the three 
 other causes, we are indeed able to speak with 
 sufficient accuracy as it is. It was practically 
 the amount taken in rent; and the amount taken 
 in rent was about twenty -jive million pounds, or 
 something between a fifth and sixth of the 
 total. But the proportion produced respect- 
 ively by Labour, Capital, and Ability cannot be 
 determined with the same ease or exactness. 
 There are, however, connected with this 
 question, a number of well-known and highly 
 significant facts, to a few of which I will call 
 the reader's attention. 
 
 Between the years 1750 and 1800, the And con- 
 population of Great Britain increased by barely 
 
 so much as twenty-five per cent. It rose from 
 about eight millions to about ten. Now during 
 that period the number of hands employed d L0n ' 
 in manufactures increased proportionally far 
 faster than the total population. The cotton- 
 spinners, for instance, increased from forty to 
 
CH. VI, 
 
 158 GROWTH OF AGRICULTURAL PRODUCTS 
 
 eighty thousand. 1 Such being the case, it 
 is of course evident that the increase of 
 agricultural labourers cannot have been very 
 great. It can hardly have been, at the utmost, 
 so much as eighteen per cent. 2 And now let 
 us glance at the history of agricultural pro- 
 ducts, as indicated by a few typical facts. In 
 the year 1688, the number of sheep in Great 
 Britain was estimated at twelve millions. In 
 the year 1774, the number was estimated at 
 almost the same figure ; but between the years 
 1774 and 1800, this twelve millions had risen 
 to twenty millions. During the same twenty- 
 six years, the number of cattle had increased 
 in almost the same proportion. That is to say, 
 live-stock had increased by seventy-five per 
 cent. Between the years 1750 and 1780 there 
 was an average annual increase in agricultural 
 capital of seven million three hundred thousand 
 pounds. But from the years 1780 and 1800 
 there was an average annual increase of twenty- 
 six million pounds ; whilst between the years 
 
 1 This was Pitt's computation. See Lecky, History of 
 England during the Eighteenth Century, voL vi. chap, xxiii. 
 
 2 The amount of land, formerly waste, that was added to 
 the cultivable area during the last century, was in England 
 and Wales not more than sixteen per cent of the total. 
 
GROWTH OF PRODUCTION OF IRON 159 
 
 1750 and 1800 the farmer's income had very BOOKH. 
 nearly doubled, 1 and the total products of 
 agriculture had increased sixty per cent. 
 
 And now let us turn to manufactures. And m 
 These, as a whole, had advanced more slowly ; tores, 
 but the advance of certain of them had been 
 yet more rapid and striking. It will be 
 enough to mention two : the manufacture of 
 cotton, to which I have called attention 
 already ; and an industry yet more important 
 the manufacture of iron. The amount of pig- 
 iron produced annually in Great Britain during That had 
 the earlier part of the last century was not more taken place 
 than twenty thousand tons ; 2 at the close of the of the ksT 
 century it was more than a hundred and eighty c< 
 thousand. What may have been the increase 
 in the amount of labour employed, cannot be 
 said with certainty ; but it cannot have been 
 comparable to the increase of the product, which 
 was, as we have j ust seen, eight hundred per cent ; 
 
 1 The rental of Great Britain in 1750 was about 
 thirteen million five hundred thousand pounds, and in 1800 about 
 twenty-nine million six hundred thousand pounds. According 
 to the estimates of Arthur Young, the farmer's income some- 
 what more. The wages of Agricultural Labour had not risen 
 proportionately. 
 
 2 See Encyclopaedia Britannica, first and earlier editions. 
 
160 ABILITY AND AGRICULTURE 
 
 BOOK ii. anc l it may a^ain be mentioned that one single 
 
 CH. VI. J 
 
 set of inventions, in the course of eight years, 
 nearly doubled the product of each individual 
 smelting furnace. 1 As to the cotton industry, 
 our information is more complete. The amount 
 of labour was doubled in forty years. The pro- 
 duct was increased fifteen-fold in twenty-five. 
 We shall My present aim, however, is to make no 
 obviously exact calculation respecting the extent to 
 wn i cn production, taken as a whole, had during 
 
 musthave ^ e P er i 0( i m question outstripped the increase 
 AMmy and of Labour \ but merely to show the reader that 
 capital. fa e extent was very large ; and that, according 
 the principles explained already, it was due 
 altogether to the operation of Capital and 
 Ability or, to speak more exactly, of Ability 
 operating through Capital. The truth of this 
 statement with regard to the increase of 
 manufactures has been show T n and illustrated 
 by the instance of Arkwright and the cotton 
 industry. It will be well to mention at this 
 point several analogous instances taken from 
 
 1 See Encyclopaedia Britannica, first and earlier editions. 
 The product of each smelting furnace in use in 1780 was two 
 hundred and ninety-four tons annually. In 1788, these same 
 furnaces were producing, by the aid of new inventions, five 
 hundred and ninety-four tons. 
 
IN THE LAST CENTURY 161 
 
 the history of agriculture. Elkington, who BOOK n. 
 
 . .,, CH. VI. 
 
 inaugurated a new system 01 drainage, will 
 supply us with one. One still more remarkable Labour 
 
 is supplied by Bakewell, who may be said to rey have 
 have played in practical life a part resembling 
 that which Darwin has played in speculation. 
 He discovered the method of improving the 
 breeds of sheep and cattle by a system of 
 selection and crossing that was not before 
 known; and it was owing to the ability of 
 this one man that "the breed of animals in 
 England," as Mr. Lecky points out, " was 
 probably more improved in the course of a 
 single fifty years than in all the recorded 
 centuries that preceded it." The close con- 
 nection of such improvements with Capital is 
 the constant theme of Arthur Young, though 
 he was not consciously anything of a political 
 economist, nor did he attempt to express his 
 opinion in scientific language. But a still 
 more effective witness is a distinguished 
 modern Eadical, Professor Thorold Kogers, who, 
 though always ready, and, as many people 
 would say, eager to espouse the side of Labour 
 as against Capital and Ability, especially 
 when the two last belonged to the landed class 
 
 11 
 
162 THE MAXIMUM PRODUCT 
 
 BOOK ii is yet compelled to assert as emphatically 
 as Young himself, that the Ability and the 
 Capital of this very class were in the last cen- 
 tury " the pioneers of agricultural progress " 
 a progress which he illustrates by these 
 picturesque examples : that it raised the 
 average weight of the fatted ox from 400 Ibs. 
 to 1200 Ibs., and increased the weight of the 
 average fleece fourfold. 
 
 Therefore It will therefore be apparent to every 
 tlat La- U reader, that of the income of Great Britain at 
 
 the close of the last century, Ability and 
 the whole Capital, as distinct from Labour, created a 
 uatSnai considerable part, though we need not de- 
 Sired 1 termine what part. Accordingly, since the 
 BuTfo? ' i ncome f Great Britain, with a population of 
 argument's ten m illions, was at that time about a hundred 
 
 sake we 
 
 cede that it an ^ f or ty million pounds, of fourteen pounds 
 produced p er head, 1 it is evident that the Labour of a 
 
 the whole. r 
 
 1 According to Arthur Young's estimates, the earnings 
 of an agricultural family, consisting of seven persons all 
 capable of work, would be about fifty-one pounds annually. 
 This gives a little over seven pounds a head ; but when the 
 children and others not capable of work are taken into 
 account the average is considerably lower. The wages, 
 however, of the artisan class being higher, the average amount 
 per head taken by the whole working population would be 
 about seven pounds. 
 
THAT CAN BE DUE TO LABOUR ALONE 163 
 
 population of ten millions was quite incapable, BOOK H. 
 a hundred years ago, of producing by itself as 
 much as fourteen pounds per head. 1 I will, 
 however, merely for the sake of argument, and 
 of keeping a calculation I am about to make 
 far within the limits which strict truth would 
 warrant, make a preposterous concession to any 
 possible objector. I will concede that Labour 
 by itself produced the entire value in question, 
 and that Ability, as distinct from Labour, had 
 nothing at all to do with it. I will concede 
 that the faculties which produced the machines 
 of Arkwright, which had already turned steam 
 into an infant Hercules of industry, and was 
 pouring into this island the wealth of the 
 farthest Indies, were faculties of the same order 
 as those which were possessed by any waggoner 
 who had driven the same waggon along the 
 same ruts for a lifetime. And I will now 
 proceed to the calculation I spoke of. I shall 
 state it first, and establish its truth afterwards. 
 
 It will be seen, from what has just been The whole 
 
 income of 
 
 1 About l : 12s. per head would have to be set down to 
 land, were the land question being dealt with. But for the 
 purpose of the above discussion, land may be ignored, as it 
 does not affect the problem. 
 
1 64 PRESENT ANNUAL PRODUCT OF 
 BOOK ii. said, that a hundred years ago the utmost 
 
 P FT V I 
 
 that Labour could produce in the most 
 tam at that advanced country of Europe was a hundred 
 
 and forty million pounds annually for a 
 population of ten millions, or let me repeat 
 fourteen pounds per head. The production 
 per head is now thirty -five pounds ; or, for each 
 * en m illio n s of population, three hundred and 
 fifty m itti ns ' The point on which presently I 
 
 Book 6 we sna H insist at length is this : that if Labour is 
 ? e * an .. to be credited with producing the whole of the 
 
 indication 
 
 oftheut- smaller sum, the entire difference between the 
 
 most that 
 
 Labour smaller sum and the larger is to be credited 
 
 alone can 
 
 produce, to Ability operating on industry through 
 population Capital. That is to say, for every three 
 millions hundred and fifty millions of our present 
 
 at present . 
 
 produces national income, Labour produces only a 
 
 hundred hundred and forty millions whilst Ability 
 
 millions and Capital produce two hundred and ten. 
 
 But the fact may be put yet more clearly 
 
 than this. Of our present national income 
 
 of thirteen hundred millions, Labour pro- 
 
 duces about five hundred, whilst Ability and 
 
 Capital produce about eight hundred. It 
 
 could indeed be shown, as I just now 
 
 indicated, that Labour in reality produces 
 
BOOK II. 
 CH. VI. 
 
 ABILITY IN THE UNITED KINGDOM 165 
 
 less than this, and Ability and Capital more ; 
 but for argument's sake we will let the 
 calculation stand thus, in order that Labour 
 shall be at all events credited with not less 
 than its due. 
 
 And now as to Capital arid Ability, and the And it win 
 eight hundred millions produced by them, what be shown 
 
 . -, , , in the next 
 
 has., just been said can be put in a simpler way. Book that 
 Capital is not only the material means through 6 
 which Ability acts on and assists Labour, but 
 
 
 not 
 
 it is a material means which Ability has a j d 
 itself created. So long as Labour alone was L 
 the principal productive agent, those vast 
 accumulations which are distinctive of the 
 modern world were unknown and impossible. 
 Professor Thorold Eogers has pointed out how 
 small was the Capital of this country at so late 
 a date as the close of the seventeenth century. 
 Labour alone was unable to supply a surplus 
 from which any such accumulation as we now 
 call Capital could be taken. These became 
 possible only by the increasing action of Ability. 
 They were taken from the products which 
 Ability added to the products of Labour, 
 Capital therefore is Ability in a double sense 
 not only in the sense that as a productive 
 
1 66 THE PRODUCT OF CAPITAL VIRTUALLY 
 
 BOOK n. agent it represents Ability, but in the sense 
 that Ability has created it. We may therefore 
 for the present leave Capital entirely out of 
 our discussion, regarding it as comprehended 
 under the term and the idea of Ability ; 
 although when we come to consider the 
 question of distribution, we shall have to 
 take account of the distinction between the 
 two. But for the present we are concerned 
 with the problem of production only ; and 
 in dealing with that part of it which alone 
 is now before us, we have to do only with 
 two, and not three forces not with Labour, 
 Ability, and Capital, but with Labour and 
 Ability only. 
 
 The calculation, therefore, which was put 
 forward just now may be expressed in yet 
 simpler terms. Of our present national in- 
 come of thirteen hundred millions, Labour pro- 
 duces Jive hundred millions and Ability eight 
 hundred. And now comes another point which 
 yet remains to be mentioned. When we speak 
 of Labour, we mean not an abstract quality : 
 what we mean is labouring men. Similarly, 
 when we talk of Ability, we do not mean an 
 abstract quality either : we mean men who 
 
PRODUCT OF THE ABILITY OF THE FEW 167 
 
 possess and exercise it. But whereas when we BOOK " 
 
 CH. VI. 
 
 talk of Labour we mean an immense number 
 of men, when we talk of Ability as I shall 
 show presently we mean a number that by 
 comparison is extremely small. The real 
 fact then on which I am here insisting, and 
 which I shall now proceed to substantiate 
 and explain further, is that, whilst the 
 immense majority of the population of this 
 country produce little more than one-third of 
 the income, a body of men who are compara- 
 tively a mere handful actually produce little 
 less than two-thirds of it. 
 
BOOK III 
 
 AN EXPOSUEE OF THE CONFUSIONS IM- 
 PLIED IN SOCIALISTIC THOUGHT AS 
 TO THE MAIN AGENT IN MODEEN 
 PEODUCTION. 
 
CHAPTEK I 
 
 The Confusion of Thought involved in the Socialistic 
 Conception of Labour. 
 
 THERE is one point which now must be quite After what 
 
 . , n I'll- h aS n W 
 
 plain to every reader, and on which there is been said, 
 no need to insist further ; namely, that Ability wfli admit 
 is as truly a productive agent as Labour, and Ability, as 
 that if Labour produces any part of contem- 
 porary wealth, Ability just as truly produces as 
 another part. This proposition, when put in agent a^ 6 
 a general way, will, after what has been said, Lab( 
 not be disputed by anybody ; but there are 
 various arguments which readers of socialistic 
 sympathies will probably invoke as disproving 
 it in the particular form just given to it. 
 Certain of these arguments require to be 
 discussed at length ; but the rest can be 
 disposed off quickly, and we will get them 
 out of the way first. They are, indeed, not 
 
172 A CONFUSING SOCIALISTIC FORMULA 
 
 BOOK in. so much arguments as confusions of thought, 
 due largely to an inaccurate use of language. 
 
 But Social- . & 
 
 ists, even These contusions are practically all compre- 
 
 admit tins hended in the common socialistic formula which 
 
 their in- declares all production, under modern condi- 
 
 thought 6 tions, to be what Socialists call " socialised." 
 
 knguage By this is meant that the whole wealth of the 
 
 thTmean- community is produced by the joint action of 
 
 factf the a ^ tne classes of men and of all the faculties 
 
 employed in its production ; and the formula 
 
 thus includes, as Socialists will be careful to 
 
 tell us, all those faculties which are here 
 
 described as Ability. Now such a doctrine, if 
 
 we consider its superficial sense merely, is so 
 
 far from being untrue that it is a truism. But 
 
 if we consider what it implies, if we consider 
 
 the only meaning which gives it force as a 
 
 socialistic argument, or indeed invests it with 
 
 the character of any argument at all, we shall 
 
 find it to be a collection of fallacies for which 
 
 the truism is only a cloak. For the implied 
 
 meaning is not the mere barren statement that 
 
 the exertions of all contribute to the joint result, 
 
 but that the exertions of all contribute to it in 
 
 an equal degree ; the further implication being 
 
 that all therefore should share alike in it. 
 
A PLAUSIBLE ARGUMENT 173 
 
 This is really Mill's argument with respect BOOK m. 
 to Land and Labour, put into different language 
 
 _ _. _ _ ' _ . . ... _ . Making use 
 
 and applied to Labour and Ability. It says in of the same 
 
 cv ' i ' -i -n/i'iii fallacy as 
 
 enect precisely what was said by Mill, that that of 
 
 l. t xl. J Mill, which 
 
 when two causes are both necessary to produc- has been 
 ing a given result, it is absurd to say that the 
 one produces more or less of it than the other : 
 only here the argument can be used with 
 greater apparent force. For the Socialists may 
 say that if the principle which has been ex- 
 plained in this book is admitted, and if Ability 
 is held to produce all that part of the product 
 w^hich is over and above what Labour could 
 produce by itself, Labour, by the same reasoning, 
 could be proved to produce the whole of the 
 product, since, without the assistance of Labour, 
 Ability could produce nothing. Accordingly, 
 they will go on to say, this conclusion being 
 absurd, the reasoning which leads to it must 
 be false, and we must fall back again on the 
 principle set forth by Mill. Labour and 
 Ability are both necessary to the result, and 
 being equally necessary must be held to con- 
 tribute equally to producing it. 
 
 This argument, as I have said, has great 
 apparent force ; but again we have a plausi- 
 
1 74 A PLA USIBLE A RG UMENT ANAL YSED 
 BOOK in. bility which is altogether upon the surface. If 
 
 CH T 
 
 Labour and Ability were here conceived of as 
 faculties, without regard to the number of men 
 possessing them, the argument would, what- 
 ever its logical value, coincide broadly with 
 one great practical fact, to which by and by I 
 shall call the reader's attention ; namely, that 
 Labour and Ability do in this country divide 
 between them the joint product in nearly 
 equal portions. But those who make use of 
 the socialistic formula use it with a meaning 
 
 o 
 
 very different from the above. When they 
 say that Ability and Labour contribute equally 
 to producing a given amount of wealth, they 
 mean not that the men who exercise one 
 faculty produce collectively as much as the men 
 who exercise the other ; for that might mean 
 that Jive hundred men of Ability produced as 
 much as five hundred thousand labourers ; and 
 that is the very position which the Socialists de- 
 sire to combat. They mean something which is 
 the exact reverse of this : not that one faculty 
 produces as much as the other faculty, but that 
 one man produces as much as, and no more than 
 another man, no matter which faculty he exer- 
 cises in the producing process. They mean not 
 
' 
 
 ITS IMPLIED MEANING CONSIDERED 175 
 
 that the faculty of Labour which an ordinary BOOKIU. 
 ploughman represents, produces as much as the 
 faculty represented by an Arkwright or by a 
 Stevenson, but that the individual ploughman, 
 by the single task which he himself performs, 
 adds as much to his country's wealth as the crea- 
 tors of the spinning-frame and the locomotive. 
 
 As soon as we realise that this is what the Their 
 argument means, its apparent plausibility turns 
 into a sort of absurdity which common sense re- 
 jects, even before seeing why it does so. We t^Tshow its 
 will not, however, be content with dismissing absurdlt y- 
 the argument as absurd : there is an idea at 
 the back of it which requires and deserves to 
 be examined. It is an idea which rests upon 
 the fact already alluded to, that though Ability 
 can make nothing without Labour, Labour can 
 make something without Ability ; and that 
 thus the labourers who work under the direc- 
 tion of an able man each contribute a kind of 
 exertion more essential to the result than he 
 does. Each can say to him, " I am something 
 without you. You, on the contrary, are nothing 
 without me." Thus there arises a more or less 
 conscious idea of Labour as a force which, if only 
 properly organised, will be able at any moment, 
 
1 76 THE REAL TASKMASTER OF LABOUR 
 
 BOOK in. by refusing to exert itself, to render Ability 
 
 helpless, and so bring it to terms and become 
 
 its master, instead of being, as now, its servant. 
 
 But in it But this idea, which is suggested, and seems 
 
 indeed, a to be supported, by the modern development of 
 
 labour-organisation and strikes, really ignores 
 whichmust the most fundamental facts of the case. In 
 not only ' the first place, it may be observed that though 
 According Ability, regarded as a faculty, is no doubt help- 
 L^bouTcan ^ ess unless there is Labour for it to act upon, 
 bring* Ability, if we take it to mean the men possess- 
 termsby ^o ^ e ^ acu lty, is, whatever happens, in as 
 wertitseif g 00 ^ a position as Labour ; for the average man 
 of ability can always become a labourer. But 
 the principal point to realise is far more 
 important than this. We are perfectly right 
 in saying, as was said just now, that if Labour 
 should refuse to exert itself, Ability could pro- 
 duce nothing ; but it seems completely to 
 escape the notice of those who use this argu- 
 ment that to refuse to exert itself is what 
 Labour can never do, except for very short 
 times, and to a quite unimportant extent ; and 
 it can only do thus much when Ability indirectly 
 helps it. The ideas of the power of Labour 
 which are suggested by the phenomenon of the 
 
NOT AN EMPLOYING CLASS, BUT NATURE 177 
 
 strike are. as I shall by and by show more / BOOK m. 
 
 PIT T 
 
 fully, curiously fallacious. Men can strike 
 
 . . i But Labour 
 
 that is to say, cease to labour only when /cannot 
 they have some store on which to live when' exert itself 
 they are idle ; and such a store is nothing but and 
 
 so much Capital. A strike, therefore, 
 sents the power not of Labour, but of Capital. 1 capital. 
 The Capital which is available in the present' 
 day for supporting strikes would never have 
 been in existence but for the past action of 
 Ability ; and what is still more important, a 
 widespread strike would very quickly exhaust 
 it. Further, a strike, no matter what Capital 
 were at the back of it, could never be more 
 than partial for even a single day ; for there 
 are many kinds of Labour, such as transport 
 and distribution of food, the constant per- 
 formance of which is required by even the 
 humblest lives. But it is not necessary to 
 dwell on such small matters as these. It is 
 enough to point to the fact, which does not 
 require proving the broad fact that men, taken 
 as a whole, can no more refuse to labour than 
 they can refuse to breathe. What compels them 
 
 1 This fact has been commented on with much force by Mr. 
 Gourlay in a paper contributed by him to the<A^tijor 
 
 12 /^ 
 
 (UNIVERSITT 
 
BOOK III. 
 CH. I. 
 
 Nature, not 
 the men of 
 
 1 78 DIFFERENT POSITION OF ABILITY 
 
 to labour is not the employing class, but Nature. 
 The employing class the men of ability 
 merely compel them to labour in a special way. 
 forces the But Ability itself stands on an entirely 
 meito y ' different footing. Whereas Labour, as a 
 whole, cannot cease to exert itself, Ability can. 
 Indeed, for long periods of history it has hardly 
 exerted itself at all ; whilst its full industrial 
 power, as we know it now, only began to be 
 felt a century and a half ago. Labour, in 
 other words, represents a necessary kind of 
 exertion, which can always be counted on as 
 we count on some force of Nature : Ability 
 represents a voluntary kind of exertion, which 
 can only be induced to manifest itself under 
 certain special circumstances. Accordingly, 
 But Nature whilst Labour can make no terms with Nature, 
 ouetoexert Ability in the long run can always make terms 
 therefore with Labour. It will thus be seen that the set 
 in the 7 L ' of arguments founded on the conception of 
 i n n f n Labour as stronger than Ability, because more 
 
 necessary, are arguments founded on a complete 
 Labour, misconception of facts. I speak of them as 
 arguments ; but they hardly deserve the name. 
 Rather they are vague ideas that float in the 
 minds of many people, and suggest beliefs or 
 
ITT. 
 CH. I. 
 
 THE ORGANIST AND BELLOWS-BLOWER 179 
 
 opinions to which they can give no logical BOOK 
 basis. At all events, after what has been said, 
 we may dismiss them from our thoughts, and 
 turn to another fallacy that lurks in the social- 
 istic formula. 
 
 I said of that formula that, the moment its Let us now 
 meaning was realised, it struck the mind as an socialistic 
 absurdity, even before the mind knew why. liTmpL: 
 Let us now apply it to two simple cases, which 
 will show its absurdity in a yet more striking 
 manner. There is an old story commonly told By the case 
 of Handel. The great composer had been organist 
 
 i r* n and the 
 
 playing some magnificent piece 01 music on man who 
 the organ ; and as soon as the last vibration of 
 inspired sound had subsided, he was greeted 
 by the voice of the man who blew the bellows, 
 saying, " I think that we two played that beau- 
 tifully." " We !" exclaimed Handel. "What 
 had you to do with it ? " He turned again to 
 the keys, and struck them, but not a note came. 
 " Ha ! " said the bellows-blower, " what have I 
 to do with it ? Admit that I have as much to 
 do with it as you have, or I will not give you 
 the power to sound a single chord." The 
 whole point of this story lies in the fact that 
 the argument of the bellows-blower, though 
 
i8o THE PICTURE AND THE CANVAS 
 
 BOOKHL possessed of a certain plausibility, is at the 
 same time obviously absurd. But according 
 to the principles of the Socialists, it is absolutely 
 and entirely true. It exhibits those principles 
 
 Or of a applied in the most perfect way. With just 
 the same force, it may be said about a great 
 picture by the man who has woven the canvas, 
 or tacked it to its wooden frame. This man 
 may, according to the socialistic theory of pro- 
 duction, call the picture the socialised product 
 of the great painter and himself, and, though 
 no more able to draw than a child of four years 
 old, may put himself on a level with a Millais 
 or an Alma Tadema. To the production of the 
 result the canvas is as necessary as the painter. 
 The nature of the fallacy which leads us 
 to such conclusions as these is revealed 
 almost instantly by the light such conclusions 
 throw on it. It consists in ignoring the fact 
 that whilst anybody, not a cripple or idiot, 
 can blow the bellows of an organ, or stretch 
 the canvas for a picture, only one man in a 
 million can make music like Handel, or cover 
 the canvas with pictures like Millais or Alma 
 Tadema. The nature of the situation will be 
 understood most accurately if we imagine the 
 
 
THE QUALIFYING FACTOR 181 
 
 bellows-blower at the key-board of the organ, BOOK in. 
 and the canvas-stretcher with the painter's 
 brushes. The one, no doubt, could elicit a 
 large volume of sound ; the other could cover 
 the canvas with daubs of unmeaning colour. 
 These men, then, when they work for the 
 artists of whom we speak, may very properly 
 be credited with a share in as much of the 
 result as would have been produced if they had 
 been in the artists' places. That is to say, to 
 the production of mere sound the bellows- 
 blower may be held to contribute as much as 
 the great musician ; and the canvas-stretcher 
 as much as the painter to the mere laying on 
 of colour. But all the difference between an 
 unmeaning discord and music, all the difference 
 between an unmeaning daub and a picture, is 
 due to qualities that are possessed by no one 
 except the musician and the painter. 1 The 
 
 1 The matter may also be put in this way. There are 
 ninety-nine labourers engaged on a certain work at which 
 there is room for a hundred. The ninety-nine men produce 
 every week value to the amount of ninety - nine pounds. 
 There are two candidates for the hundredth place : one 
 a labourer, John ; and one, a man of ability, James. If 
 John takes the vacant place, we have a hundred men pro- 
 ducing a hundred pounds. If James takes the vacant place, 
 the productivity of labour by his action is (we will say) 
 
182 DO ALL MEN POSSESS ABILITY 
 
 BOOK m. socialistic theory of production would be true 
 
 CH. I. 
 
 only on the supposition that the faculties 
 
 The social- i -i 
 
 istic view employed in production were all equally com- 
 tionwonu mon, and that everybody is equally capable of 
 
 be true 1 . , . 
 
 only were exertion oi every grade. JSIow is this supposi- 
 fact r f Hfe tion true, or is it not true ? A moment ago I 
 different to spoke of it. assuming it to be obviously false ; 
 what it is. and man y p eo pi e w in think it is hardly worth 
 
 discussion. That, however, is far from being 
 
 the case. It is a supposition which, as we 
 
 have seen, lies at the very root of Socialism : 
 
 the question it involves is a broad question of 
 
 fact ; and it is necessary, by an appeal to fact, to 
 
 show that it is as false as I have assumed it to be. 
 
 The great f Let me once again, then, state the great 
 
 modem" 1 proposition which I am anxious to put beyond 
 
 the reach of all denial or misconception. A 
 given number of people, a hundred years ago, 
 produced yearly in this country a hundred 
 
 ber of men. 
 
 doubled, and we have a hundred men producing a hundred 
 
 and ninety-eight pounds. No amount of theory based on the fact 
 that James could do nothing without the ninety-nine labourers 
 can obscure or do away with the practical truth and import- 
 ance of the fact that the exertion of James will produce ninety- 
 eight pounds more than the exertion of John ; and any 
 person with whom the decision rested, which of these two men 
 should take the hundredth place, would base their decision 
 on this fact. 
 
CH. I. 
 
 LABOUR ITSELF NON-PROGRESSIVE 183 
 
 and forty million pounds. The same number BOOK m. 
 of people to-day produce two and a half times 
 as much. Labour, a hundred years ago, could 
 not have produced more than the total product 
 of the community that is to say, a hundred 
 and forty million pounds ; and, if it produced 
 that then, it produces no more now. The 
 whole added product is produced by the action 
 of Ability. The proposition is a double one. 
 Let us take the two parts in order. 
 
 I have already here and there pointed out History 
 
 . shows us 
 
 in passing how certain special advances in that 
 the productive powers of the community were not pro- 
 due demonstrably to Ability, not to Labour ; 
 but I have waited till our argument had 
 arrived at its present stage to insist on the that were 
 
 general truth that, except within very narrow 
 limits, Labour is, in its very nature, not pro- 
 gressive at all. If we cast our eyes backwards *jj ^ of 
 as far into the remote past as any records or centui r- 
 relics of human existence will carry us, we 
 can indeed discern three steps in industrial 
 progress, which we may, if we please, attribute 
 to the self-development of Labour the use of 
 stone, the use of bronze, and the use of iron. 
 But these steps followed each other slowly, 
 
1 84 ANCIENT LABOUR EQUAL TO MODERN 
 BOOK ni. and at immeasurable intervals; and though 
 
 PTT T 
 
 ' the last was taken in the early morning of 
 history, yet Labour even then had, in certain 
 respects, reached for thousands of years an 
 efficiency which it has never since surpassed. 
 In the lake- dwellings of Switzerland, which 
 belong to the age of stone, objects have been 
 found which bear witness to a manual skill 
 equal to that of the most dexterous workmen 
 of to-day. No labour, again, is more delicate 
 than that of engraving gems ; and yet the 
 work of the finest modern gem-engravers is 
 outdone by that of the ancient Greeks and 
 Romans. It was even found, when the 
 unburied ship of a Viking was being repro- 
 duced for the International Exhibition at 
 Chicago, that in point of mere workmanship, 
 with all our modern appliances, it was impos- 
 sible to make the copy any better than the 
 original; whilst, if we institute a comparison 
 with times nearer our own especially if we 
 come to the close of the last century it is 
 hardly necessary to say that in every opera- 
 tion which depended on training of eye and 
 hand, the great-grandfathers of the present gen- 
 eration were the equals of their great-grandsons. 
 
A REMARKABLE ILLUSTRATION 185 
 
 We will therefore content ourselves with BOOKHI. 
 comparing the labourers of to-day with the 
 
 J . Let us then 
 
 labourers of the days of Pitt ; and with regard compare 
 
 ' the work- 
 
 tO those two sets of men, we may safely say ers of that 
 
 . _ period with 
 
 this, that in whatever respect the latter seem their great- 
 able to do more than the former, their seem- O f to-day. 
 ingly increased power can be definitely and 
 distinctly traced to some source outside them- 
 selves, from which it has been taken and 
 lent to them in other words, to the ability 
 of some one able man, or else to the joint 
 action of a body of able men. A single 
 illustration is sufficient to prove this. It 
 consists of a fact to which I have alluded in 
 general terms already. It is as follows : 
 
 When Watt had perfected his steam-engine 
 in structure, design, and principle, and was 
 able to make a model which was triumphantly 
 successful in its working, he encountered an 
 obstacle of which few people are aware, and 
 which, had it not been overcome, would have 
 made the development of steam-power, as 
 we know it now, an utter impossibility. It 
 was indeed, in the opinion of the engineer 
 Smeaton, fatal to the success of Watt's steam- 
 engine altogether. This obstacle was the 
 
1 86 LABOUR AS TRAINED BY WATT 
 
 BOOK ra. difficulty of making cylinders, of any useful 
 size, sufficiently true to keep the pistons 
 steam-tight. Watt, with indomitable per- 
 severance, endeavoured to train men to the 
 degree of accuracy required, by setting them 
 to work at cylinders, and at nothing else ; and 
 by inducing fathers to bring up their sons 
 with them in the workshop, and thus from 
 their earliest youth habituate them to this 
 single task. By this means, in time, a band 
 of labourers was secured in whom skill was 
 raised to the highest point of which it is 
 
 We shall capable. But not even all the skill of those 
 
 see that in . 111 
 
 Labour caretully- trained men men trained by the 
 has been greatest mechanical genius of the modern 
 whatso- reSS world was equal to making cylinders ap- 
 Abmtyhas proaching the standard of accuracy which was 
 necessary to render the steam-engine, as we now 
 know it, a possibility. But what the Labour 
 of the cleverest labourer could never be 
 brought to accomplish, was instantly and with 
 ease accomplished by the action of Ability. 
 Henry Maudsley, by introducing the slide-rest, 
 did at a single stroke for all the mechanics in 
 the country what Watt, after years of effort, 
 was unable to do for any of them. The 
 
LABOUR AS ASSISTED BY MAUDS LEY 187 
 
 Ability of Maudsley, congealed in this beauti- BOOK m. 
 ful instrument, took the tool out of the hands 
 of Labour at the turning-lathe, and held it to 
 the surface of the cylinder, whilst Labour 
 looked on and watched. With this iron " mate " 
 lent to him, this child of an alien brain, the 
 average mechanic was enabled to accomplish 
 wonders which no mechanic in the world by 
 his own skill could approach. The power of 
 one man descended at once on a thousand 
 workshops, and sat on each of the labourers 
 like the fire of an industrial Pentecost ; and 
 their own personal efficiency, which was the 
 slowly-matured product of centuries, was, by 
 a power acting outside themselves, increased a 
 hundredfold in the course of a few years. 
 
 Illustrations of this kind might be multi- There is, 
 
 i . 1 . i i i IT in however, a 
 
 plied without limit ; but nothing could add plausible 
 to the force of the one just given, or show totidsTte 
 more clearly how the productivity of Labour] must con- 
 is fixed, and the power of Ability, and oi sl 
 Ability alone, is progressive. There is, how-' 
 ever, a very important argument which ob- 
 jectors may use here with so much apparent 
 force that, although it is entirely fallacious, it 
 requires to be considered carefully. 
 
CHAPTEE II 
 
 That the Ability which at any given period is a 
 Producing Agent, is a Faculty residing in and 
 belonging to living Men. 
 
 IT may amuse the reader to hear this argu- 
 ment stated forcibly, if not very fully by 
 an American Socialist, in an anonymous letter 
 to myself. I had published an article in 
 The North American Review, giving a short 
 summary of what I have said in the preceding 
 chapters with regard to the part played by 
 Ability in production ; and the letter which 
 I will now give was sent me as a criticism 
 on this : 
 
 Theobjec- Sir Your article in the current number of 
 8 The North American Review on " Who are the 
 
 Chief Wealth Producers ? " in my judgment is the 
 crowning absurdity of the various effusions that 
 say that parade under the self- assumed title of political 
 
A SOCIALISTIC CRITICISM 189 
 
 economy. In the vulgar parlance of some news- BOOK m. 
 
 CH IT 
 
 papers, it is hog-wash. It is utterly senseless, and ' 
 wholly, absurd and worthless. You propose to 
 
 publish a book in which you will elaborate your such as the 
 
 inventor of 
 
 theory. Well, if the book has a large sale, it will the plough, 
 not be because the author has any ability as a writer producing 
 on economical subjects, but rather that the buyers by 
 
 are either dupes or fools. All the increase in wealth ability ; 
 
 and if 
 
 that has resulted by reason of men using ploughs absurd in 
 was produced by the man who invented the plough 
 eh ? The total amount of the wealth produced by 
 men by reason of their using certain appliances in 
 the form of tools or machines is produced by the 
 man who invented the tool or machine eh ? perhaps 
 some one in Egypt thousands of years ago ? Such 
 stuff is not only worthless hog-wash : it is nauseating, 
 is worthy of the inmate of Bedlam. 
 
 Now the argument implied in this charming 
 letter, so far as it goes, is sound ; and I will 
 put it presently in a more comprehensive form. 
 Its fault is that it goes a very little way, 
 and does not even approach the position it 
 is adduced to combat. To say that if one 
 man who lived thousands of years ago could 
 be shown to be the sole and only inventor of 
 the plough, then all the increase of wealth 
 that has since been produced by ploughing 
 
190 PRIMEVAL PROGRESS AND LABOUR 
 
 BOOK in. ought to be credited to the Ability of this one 
 
 CTT IT 
 
 man, is practically no doubt as absurd l as the 
 
 writer of the letter thinks it ; and were such 
 
 the result of the reasoning in this volume, it 
 
 would reduce that reasoning to an absurdity. 
 
 TO this That reasoning, however, leads to no result 
 
 two ' of the kind ; and it is necessary to explain 
 
 The first is to the reader exactly why it fails to do so. 
 
 that the 
 
 simpler 
 inventions 
 are prob- 
 
 It fails to do so because ploughs, and other 
 implements equally simple, instead of repre- 
 not y to Ue> ! senting those conditions of production to 
 which alone the reasoning in this volume 
 
 nxm C eT-~ applies, represent conditions which are alto- 
 gether opposed to them. The plough, or at 
 least such a plough as was in use in ancient 
 Egypt, is the very type and embodiment 
 of the non- progressive nature of Labour, as 
 opposed to, and contrasted with, the progres- 
 sive nature of Ability. The plough, indeed, 
 in its simplest form, was probably not the 
 result of Ability at all, but rather of the 
 experience of multitudes of common men, 
 acting on the intelligence which common 
 
 1 I say practically as absurd, meaning absurd and 
 practically meaningless in an economic argument. There 
 are many points of view from which it would be philoso- 
 phically true. 
 
CH. II. 
 
 7? UDIMENTAR V ABILITY 1 9 1 
 
 men possess; just as, even more obviously, BOOKHI. 
 was the use of a stick to walk with, or of 
 a flail for thrashing corn. It will perhaps, 
 however, be said that in that case, according 
 to the definition given by me, the plough 
 would be the result of Ability all the same, 
 only that it would prove Ability to be a 
 faculty almost as universal as Labour. And 
 no doubt it would prove this of Ability of 
 a low kind ; indeed, we may admit that it 
 does prove it. Everybody has a little Ability 
 in him, just as everybody has a little poetry ; 
 but in cases of this kind everything is a 
 question of degree ; and for practical purposes 
 we are compelled to classify men not accord- 
 ing to faculties which, strictly speaking, they 
 possess, but according to the degree in which 
 they possess them. Cold, strictly speaking, 
 is merely a low degree of heat ; but for all 
 practical purposes winter is opposed to summer. 
 Similarly, a man who has just enough poetry 
 in him to be able as most men can to 
 scribble a verse of doggerel, is for all practical 
 purposes opposed to a Shakespeare or a Dante ; 
 and similarly also the man who has just 
 enough Ability in him to discover the use of 
 
192 PRIMAEVAL AND MODERN INVENTIONS 
 
 BOOK m. a stick, a flail, or a plough, is for all practical 
 
 CH. II. _ _ . _ _ 
 
 purposes opposed to the men who are capable 
 
 of inventing implements of a higher and 
 
 more complicated order. Nor is the line 
 
 which we thus draw drawn arbitrarily. It 
 
 is a line drawn for us by the whole industrial 
 
 And, like history of mankind ; and never was there 
 
 sSf ,they~ a division more striking and more persistent. 
 
 remained For the simpler implements in question, from 
 
 unchanged ^ g^ ^^ ^^ fa^y were i nve nted,- 
 
 " thousands of years ago," as my American 
 correspondent says, remained what they then 
 were up to the beginning of the modern 
 epoch ; and in many countries, such as India, 
 tfrey remain the same to-day. The simpler 
 industrial arts, then, and the simpler imple- 
 ments of industry are sharply marked off 
 from the higher and more complicated by 
 Ithe fact that, whilst the latter are demon- 
 strably due to individuals, have flourished 
 only within the area of their influence, and 
 have constituted a sudden and distinct 
 advance on the former, the former have 
 apparently been due to the average faculties 
 of mankind, and have remained practically 
 unchanged from the days of their first dis- 
 
A MORE IMPORTANT POINT 193 
 
 covery. Accordingly, the distinction between BOOK m. 
 the two being so marked and enormous, the 
 faculties to which they are respectively 
 due, even if differing only in degree, yet 
 differ in degree so much that they are for 
 practical purposes different faculties, and 
 must be called by different names. The 
 simple inventions, then, to which my corre- But even if 
 
 . invented 
 
 spondent reiers, together with the wealth by Ability, 
 produced by them, are to be credited to still attri- 
 Labour, the non-progressive character of which wealth now 
 
 they embody and represent, and have nothing 
 to do with that Ability which is the cause ofV Lab< 
 industrial progress. 
 
 My correspondent's letter, however, whether 
 he saw it himself or not, really raises a point 
 far more important than this. For even if the 
 invention of the plough had been the work of 
 one man only, if it had involved as much 
 knowledge and genius as the invention of the 
 steam-engine, and if, but for this one man, 
 ploughs would never have existed, yet to at- 
 tribute to the Ability of this one man all the 
 wealth that has been subsequently produced 
 by ploughing would still be practically as ab- 
 surd as my correspondent implies it would be. 
 
 13 
 
194 THE NECESSITY FOR MANA GING ABILITY 
 BOOK in. Now why is this ? The reason why is 
 
 CFT TT 
 
 as follows. Although, according to such an 
 the com- hypothesis, if a plough had not been made 
 
 monest i i i IT 
 
 labourer, by this one able man, no ploughs would ever 
 he hasseen have been made by anybody, yet when such 
 make a^d a simple implement has once been made and 
 
 E"~ed, anybody who has seen it can make 
 d use others like it ; so that the Ability of 
 e inventor of the plough increases the pro- 
 ductivity of every labourer who uses it, not by 
 co-operating with him, but by actually passing 
 into him. Thus, so far as this particular 
 operation is concerned, the simplest labourer 
 becomes endowed with all the powers of the 
 inventor ; and the inventor thenceforward is, 
 in no practical sense, the producer of the 
 increased product of what he has enabled the 
 labourer to produce, any more than a father is 
 the producer of what is produced by his son. 
 
 And if the productivity of Labour were 
 increased by inventions alone, and if all 
 inventions were as simple as the primaeval 
 plough if, when once seen, anybody were 
 able to make them, and, having once made 
 them, to use them to the utmost advantage- 
 then, though Ability might still be the sole 
 
INCREASED BY INVENTIVE ABILITY 195 
 
 cause of every fresh addition to the productive BOOK in. 
 
 CH. II. 
 
 powers of exertion, these added powers would | 
 be all made over to Labour, and be absorbed 
 and appropriated by it, just as Lear's kingdom 
 was made over to his daughters ; and what- 
 ever increased wealth might be produced 
 thenceforward through their agency would 
 be the true product of Labour, which had in 
 itself become more effective. But, as a matter But the 
 
 f, * y1 . . ,, -i , inventions 
 
 oi tact, this is not the case ; and it is not so by which 
 
 for two reasons. In the first place, such 
 implements as the primaeval plough differ increased* 
 from the implements on which modern in- aretheverj 
 dustry depends, in the complexity alike of 
 their structure, and of the principles involved 
 in it ; so that without the guidance of Ability 
 of many kinds, Labour alone would be power- 
 less to reproduce them ; and, in the second Al iity to 
 
 use them 
 
 place, as these implements multiply, not only to tlie best 
 
 is Ability more and more necessary for their as the y re- 
 
 quired to 
 
 manufacture, but is more and more necessary make them. 
 also for the use of them when manufactured. 
 One of the principal results of the modern 
 development of machinery, or of the use, by 
 new processes, of newly discovered powers 
 of Nature, is the increasing division and sub- 
 
CH. II. 
 
 196 THE MAIN RESULTS OF PAST ABILITY 
 
 BOOK in. division of Labour ; so that the labourers, as 
 I have said before, by the introduction of this 
 mass of machinery, become themselves the 
 most complicated machine of all, each labourer 
 being a single minute wheel, and Ability 
 being the framework which alone keeps them 
 in their places. It may be said, therefore, 
 that each modern invention or discovery by 
 which the productivity of human exertion is 
 increased has upon Labour an effect exactly 
 opposite to that which was produced on it 
 by such inventions as the primaeval plough. 
 Instead of making Labour more efficacious 
 in itself, they make it less and less efficacious, 
 \ unless it is assisted by Ability. 
 
 They do And here we have the answer to the 
 
 come, u is real argument which lies at the bottom of my 
 said, com- American correspondent's letter an argument 
 perty pr which, in some such words as the following, 
 
 is to be found repeated in every Socialistic 
 treatise: "When once an invention is made, 
 it becomes common property." So it does 
 in a certain theoretical sense ; but only in 
 the sense in which a knowledge of Chinese 
 becomes common property in England on 
 the publication of a Chinese grammar. For 
 
INHERITED BY LIVING ABILITY 197 
 
 juired to 
 maintain 
 ,nd use the 
 cowers left 
 ;o it by 
 ,he Ability 
 f the past. 
 
 all practical purposes, such a statement is BOOKUL 
 about as true as to say that because anybody 
 can buy a book on military tactics, everybody 
 is possessed of the genius of the Duke of 
 Wellington. The real truth is, that to utilise 
 modern inventions, and to maintain the con- 
 ditions of industry which these inventions 
 subserve, as much Ability is required as was 
 required to invent them ; though, as I shall 
 have occasion to point out later on, the 
 Ability is of a different kind. 
 
 These considerations bring us to another 
 important point, which must indeed from 
 the beginning have been more or less obvious, 
 but which must now be stated explicitly. 
 That point is, that when we speak of Ability we must, 
 
 -i , T -, then, here 
 
 as producing at any given time such and no tethat 
 such a portion of the national income, as Ability ia 
 distinguished from the portion which is 
 produced by Labour, we are speaking of ^ 
 Ability possessed by living men, who pos- 
 sess it either in the form of their own 
 superior faculties, assimilating, utilising, and 
 
 adding to the inventions and discoveries alive at the 
 
 time, 
 
 of their predecessors ; or in the form of 
 inherited Capital, which those predecessors 
 
198 PRODUCTIVE ABILITY 
 
 have produced and left to them. Thus, 
 though dead men like Arkwright, or Watt, 
 or Stevenson may, in a certain theoretical 
 sense, be considered as continuing to pro- 
 duce wealth still, they cannot be considered 
 to do so in any sense that is practical ; be- 
 cause they cannot as individuals put forward 
 any practical claims, or influence the situation 
 any further by their actions. For all practical 
 purposes, then, their Ability as a productive 
 force exists only in those living men who 
 inherit or give effect to its results. Now, 
 of the externalised or congealed Ability which 
 is inherited in the form of Capital, as dis- 
 tinguished from the personal Ability by which 
 Capital is utilised, we need not speak here, 
 though we shall have to do so presently. For 
 this inherited Capital would not only be useless 
 in production, but would actually disappear 
 and evaporate like a lump of camphor, if it 
 were not constantly used, and, in being used, 
 renewed, by that personal Ability which in- 
 herits it, and is inseparable from the living 
 individual ; and, though it will be necessary 
 to consider Capital apart from this when we 
 come to deal with the problem of distribution, 
 
CH. II. 
 
 THE ABILITY OF LIVING MEN 199 
 
 all that we need consider when we are B K 
 
 CH. 
 
 dealing with the problem of production is 
 this personal Ability, which alone makes 
 Capital live. 
 
 So far, then, as modern production is con- who are 
 
 practically 
 
 cerned, all the results of past Ability, instead the mono- 
 
 polists not 
 
 of becoming the common property oi Labour, only of 
 
 *V _f ; their own 
 
 become on the whole, with allowance lor special 
 
 -, 11 powers, 
 
 many exceptions, more and more strictly the but of the 
 monopoly of living Ability ; because these cated 
 results becoming more and more complicated, 
 Ability becomes more and more essential to 
 the power of mastering and of using them. 
 As, however, I shall point out by and by, 
 in more than one connection, the Ability that 
 masters and uses them differs much in kind 
 from the Ability that originally produced 
 them : one difference being that, whereas to 
 invent and perfect some new machine requires 
 Ability of the highest class in, let us say> 
 one man, and Ability of the second class in 
 a few other men, his partners ; to use this 
 machine to the best advantage, and control 
 and maintain the industry which its use has 
 inaugurated or developed, may require perhaps 
 Ability of only the second class in one man, 
 
200 FRESH DEMONSTRATION OF 
 
 . but will require Ability of the third and 
 
 CH II 
 
 fourth class in a large number of men. 
 And the Ability therefore the Ability of living 
 
 mouoply 
 
 of Ability men constantly tends, as the income of the 
 
 grows 
 
 stricter at nation grows, to play a larger part in its 
 stage of production, or to produce a larger part of it ; 
 whilst Labour, though without it no income 
 could be produced at all, tends to produce a 
 part which is both relatively and absolutely 
 smaller. We assume, for instance, that the 
 Labour of this country a hundred years ago 
 was capable of producing the whole of what 
 was the national income then. If it could 
 by itself, without any Ability to guide it, 
 have succeeded then, when production was 
 so much simpler, in just producing the yearly 
 amount in question, which, as a matter of 
 fact, it could not have done even then, the 
 same amount of Labour, without any Ability 
 to guide it, could certainly not succeed in 
 producing so much now, when all the condi- 
 tions of production have become so much 
 more complicated, and when elaborate organis- 
 
 Thus the 
 
 argument ation is necessary to make almost any effort 
 
 above , . 
 
 quoted effective. 
 
 claims of Thus the argument, which was fermenting 
 
THE PRODUCTIVITY OF ABILITY 201 
 
 in my American correspondent's mind, and BOOKIH. 
 which he regarded as reducing the claims of 
 Ability to "hog-wash," really affords the means, whenei- 
 if examined carefully and minutely, of estab- ec 
 lishing yet more firmly the position it was additional 
 invoked to shatter, and of making the claims t n 
 of Ability not only clearer but more extensive. strength - 
 
CHAPTER III 
 
 That Ability is a natural Monopoly, due to the con- 
 genital Peculiarities of a Minority. The Fallacies 
 of other Views exposed. 
 
 But the BUT the socialistic theorist will not even vet 
 
 Socialists ,...__ J 
 
 have yet nave been silenced. Even if he is constrained 
 
 fallacy to admit the truth of all that has just been 
 
 they will said, we shall find that he still possesses in his 
 
 neutralise arsenal of error another set of arguments by 
 
 wiLuias which he will endeavour to do away with its 
 
 said. be< force. These are generally presented to us 
 
 in mere loose rhetorical forms ; but however 
 
 loosely they may be expressed, they contain a 
 
 distinct meaning, which I will endeavour to 
 
 state as completely and as clearly as is possible. 
 
 They will Put shortly, it is as follows. Though Ability and 
 
 Ability is Labour may both be productive faculties, and 
 
 uon^r though it may be allowed that the one is more 
 
 opp C ortun- productive than the other, it is on the whole 
 
 ity, and & mere ma tter of social accident a matter 
 
AN ERROR OF MR. HERBERT SPENCER'S 203 
 
 depending on station, fortune, and education BOOK m. 
 
 CTT TTT 
 
 which faculty is exercised by this or that in- 
 
 dividual. Thus, though it may be allowed that 
 a great painter and the man who stretches potentially 
 his canvas, or an inventor like Watt and the man. e 
 average mechanic who works for him, do, by 
 the time that both are mature men, differ 
 enormously in the comparative efficacy of 
 their faculties, yet the difference is mainly due 
 to circumstances posterior to their birth ; that 
 the circumstances which developed the higher 
 faculties in one man might equally well have 
 developed them in the other; and that the 
 circumstances in question, even if only a few 
 can profit by them, are really created by the 
 joint action of the many. 
 
 The above contention contains several dif- 
 ferent propositions, which we will presently 
 examine one by one. We will, however, take 
 its general meaning first. One of the chief 
 exponents of this, strange as the fact may seem, 
 is that vehement anti- Socialist, Mr. Herbert 
 Spencer. Mr. Spencer disposes of the claims 
 of the man of ability as a force distinct from 
 the generation at large to which he belongs, 
 by saying that " Before the great man can 
 
204 A PHILOSOPHIC TRUTH 
 
 BOOKHI. remake his society, his society must make 
 
 CH. III. 
 
 him." Thus, to take an example from art, the 
 
 This is . > ' 
 
 sometimes genius of a man like Shakespeare is explained 
 
 expressed . ... 
 
 in saying by reference to the condition of the civilised 
 
 great man world, and of England more especially, during 
 
 hfe age," y the reign of Queen Elizabeth. The temper 
 
 opportune of the human mind caused by centuries of 
 
 have ' Catholicism, the stir of the human mind 
 
 secured r gj^^^ ' n ^ Q Reformation or the Renaissance, 
 
 and the sense of the new world then being 
 
 conquered in America, are all dwelt on as 
 
 general or social causes which produced in an 
 
 individual poet a greatness which has been 
 
 But this, since unequalled. Now this reasoning, if used 
 
 psycL- rue to combat a certain psychological error, no 
 
 is?bso- 7 ' doubt expresses a very important truth ; but 
 
 iifthe fa ?e if ^ i g transferred to the sphere of economics 
 
 sphere^ it s whole meaning vanishes. It was originally 
 
 economics. u&e ^ j n opposition to the now obsolete theory 
 
 according to which a genius was a kind of 
 
 spiritual aerolite, fallen from heaven, and 
 
 related in no calculable way to its environment. 
 
 It was used, for instance, to prove with regard 
 
 to Shakespeare that had he lived in another age 
 
 he would have thought and written differently, 
 
 and that he might have been a worse poet 
 
CH. III. 
 
 BUT AN ECONOMIC FALSEHOOD 205 
 
 under circumstances less exciting to the imag- BOOK m. 
 ination. But when we leave the psychological 
 side of the case, and look at its practical side, 
 a set of facts is forced on us which are of 
 quite a different order. We are forced to 
 reflect that though Shakespeare's mind may 
 have been what it was because the age acted 
 041 it, the age was acting on all Shakespeare's 
 contemporaries, and yet it produced one 
 Shakespeare only. If Queen Elizabeth had 
 been told that it was the age which pro- 
 duced Shakespeare, and in consequence had 
 ordered that three or four more Shakespeares 
 should be brought to her, her courtiers, do 
 what they would, would have been unable to 
 find them ; and the reason is plain. The age 
 acts on, or sets its stamp on, the character of 
 every single mind that belongs to it ; but the 
 effect in each case depends on the mind acted 
 on ; and it is only one mind amongst ordinary 
 minds innumerable, that this universal action 
 can fashion into a great poet. And what is 
 true of poetic genius is true of industrial 
 Ability. The great director of Labour is 
 as rare as a great poet is ; and though 
 Ability of lower degrees is far commoner than 
 
206 WHOLE BODY OF S UCCESSFUL IN VENTORS 
 BOOK m. Ability of the highest, yet the fact that it is 
 
 CH. in. 
 
 the age which elicits and conditions its activi- 
 ties does nothing to make it commoner than 
 it would be otherwise, nor affects the fact that 
 its possessors are relatively a small minority. 
 For the psychologist, the action of the age is an 
 all-important consideration ;' for the economist, 
 it is a consideration of no importance at anX 
 
 But it is by no means my intention to dis- 
 miss the Socialistic argument with this simple 
 demonstration of the irrelevance of its general 
 meaning. I am going to call the attention of 
 the reader to the particular meanings that are 
 attached to it, and show how absolutely false 
 these are, by comparing them with historical 
 facts. 
 
 Again, In the first place, then, the claims of the 
 
 urge that age, or of society as a whole, to be the author 
 fectecTin- of industrial progress, in opposition to the 
 claims of a minority, are supported by many 
 
 man.Tut 6 writers on the ground that no invention or 
 
 men hlmf discovery is in reality the work of any single 
 
 opentedto man - Such writers delight to multiply and 
 
 produce it. fa Q y can jo so without difficulty instances of 
 
 how the most important machines or processes 
 
 have been perfected only after a long lapse of 
 
A VERY SMALL MINORITY 207 
 
 time, by the efforts of many men following or BOOK m. 
 co-operating with one another. Thus the elec- 
 tric telegraph, and the use of gas for lighting, 
 were not the discoveries of those who first 
 introduced them to the public ; and Stevenson 
 described the locomotive as the ." invention of 
 no one man, but of a race of mechanical 
 engineers." Further, it is frequently urged 
 that the same discoveries and inventions are 
 arrived at in different places, by different minds, 
 simultaneously; and this fact is put forward 
 as a conclusive proof and illustration of how 
 society, not the individual, is the true discoverer 
 and inventor. But these arguments leave out This is 
 of sight entirely the fact that, in the first place, thTciass 11 
 the whole body of individuals spoken of such referred to 
 as the race of engineers who produced the 
 locomotive, or the astronomers in different 
 countries who are discovering the same new 
 star form a body which is infinitesimally 
 small itself; and secondly, that even the body ^m4itj 
 of persons they represent, namely, all of those in s eneral - 
 who are engaged in the same pursuits, and have 
 even so much as attempted any step in indus- 
 trial progress, though numerous in comparison 
 with those who have actually succeeded in 
 
 \ \\>" > 
 
 \ 
 

 2o8 ABILITY AND OPPORTUNITY 
 
 BOOK in. taking one, are merely a handful when com- 
 pared with society as a whole, and instead of 
 representing society, offer the strongest contrast 
 to it. The nature of the assistance which 
 Ability gives to Ability is an interesting ques- 
 tion, but it is nothing to the point here. To 
 prove that progress is the joint product of 
 Ability and Ability, does not form a proof, 
 but on the contrary a disproof of the proposi- 
 tion, that it is the joint product of Ability and 
 Labour or, in other words, that it is the pro- 
 duct of the age, or the entire community. 
 
 Further socialistic theorist, however, even if he 
 
 8 a( ^ m ^ s ^ ne a ^ove answer, will by no means 
 
 that Abii- admit that it is fatal to his own position. He 
 
 ity is the 
 
 product of w jn s till take refuge in the proposition already 
 
 education, . . . . 
 
 and that an alluded to, that the Ability of individuals is 
 
 equal 
 
 education the child of opportunity, and that Ability is 
 
 would -iii 
 
 equalise rarer than Labour, and able men are a minority, 
 
 faculties. . . 
 
 only because, under existing social circum- 
 stances, the opportunities which enable it to 
 develop itself are comparatively few. And if 
 he is pressed to say what these opportunities 
 are, he will say that they may be described gener- 
 ally by the one word education. This argu- 
 ment can be answered in one way only, namely, 
 
CH. III. 
 
 ABILITY NOT PRODUCED B Y OPPORTUNITY 209 
 
 an appeal to facts ; and it is hard to conceive BOOK m. 
 
 mr TTT 
 
 of anything which facts more conclusively dis- 
 prove. Indeed, of much industrial Ability, it 
 can not only be shown to be false, but it is 
 also, on the very surface of it, absurd. It is 
 plausible as applied to Ability of one kind 
 only, namely, that of the inventor or the dis- 
 cpverer ; but this, as we shall see presently, 
 is so far from being Ability as a whole, that it 
 is not even the most important part of it. 
 Let us, however, suppose it to be the whole 
 for a moment, and ask how far the actual facts 
 of life warrant us in regarding it as the child 
 of opportunity and education. Let us first 
 refer to that general kind of experience which 
 is recorded in the memory of everybody who 
 has ever been at a school or college, and 
 which, in the lives of tutors and masters, is 
 repeated every day. Let a hundred individuals ; 
 from childhood be brought up in the same 
 school, let them all be devoted to the study of 
 the same branch of knowledge, let them enjoy 
 to the fullest what is called " equality of oppor- 
 tunity," and it will be found that not only is 
 there no equality in the amount of knowledge 
 they acquire, but that there is hardly any 
 
 14 
 
210 ABILITY THE MAKER 
 
 BOOK m. resemblance in the uses to which they will be 
 
 - '/ able to put it. Two youths may have worked 
 
 together in one laboratory. One will never do 
 
 more than understand the discoveries of others. 
 
 The other will discover, like Columbus, some 
 
 But this new wor ld of mysteries. Indeed, equality of 
 
 wild theory I pp 0r tunity, as all experience shows, instead 
 
 Position !f tending to make the power of all men equal, 
 
 to the ^Qgg k u serve to exhibit the extent to which 
 
 most 
 
 notorious \h&f differ. 
 
 facts ; J 
 
 AS may be But particular facts are more forcible than 
 giance^t general facts. Let us consider the men who, 
 Bomeofthe as a matter of history, have achieved by their 
 languished Ability the greatest discoveries and inventions, 
 Sfte" 1 an d let us see if it can be said of these men, 
 on the whole, that their Ability has been due 
 to any exceptional education or opportunity. 
 Speaking generally, the very reverse is the case. 
 If education means education in the branch 
 of work or knowledge in which the Ability of 
 the able man is manifested, the greatest in- 
 ventors of the present century have had no 
 advantages of educational opportunity at all. 
 D. Smiles observes that our greatest mechanical 
 inventors did not even have the advantage of 
 being brought up as engineers. "Watt," he 
 
OF ITS OWN OPPORTUNITIES 211 
 
 writes, " was a mathematical instrument-maker ; BOOK m. 
 Arkwright was a barber ; Cartwright, the in- 
 ventor of the power-loom, was a clergyman ; 
 Bell, who afterwards invented the reaping- 
 machine, was a Scotch minister ; Armstrong, 
 the inventor of the hydraulic engine, was a 
 solicitor ; and Wheatstone, inventor of the 
 electric telegraph, was a maker of musical 
 instruments." That knowledge is necessary 
 to mechanical invention is of course a self- 
 evident truth; and the acquisition of knowledge, 
 however acquired, is education : education, 
 therefore, was necessary to the exercise of the 
 Ability of all these men. But the point to 
 observe is, that they had none of them any 
 special educational opportunity ; they were - 
 placed at no advantage as compared with any 
 of their fellows ; many of them, indeed, were 
 at a very marked disadvantage ; and though, 
 when opportunity is present, Ability will no 
 doubt profit by it, the above examples show, 
 and the whole course of industrial history \ 
 
 shows, 1 that Ability is so far from being the 
 
 i 
 
 1 The examples given above might be multiplied indefin- 
 itely. Maudsley was brought up as a " powder-boy " at 
 Woolwich. The inventors of the planing machine, Clements 
 
212 ABILITY AS A MATTER OF CHARACTER 
 
 BOOK m. } creature of opportunity, that it is, on the 
 
 CH. m. ft 
 
 - 1\ contrary, m most cases the creator of it. 
 The theory The mental power, however, which is exer- 
 further cised by the inventor and discoverer, as I 
 the U fact by nave sa id, i Q but one kind of industrial Ability 
 out of ma^-^bility or the faculty by 
 , w hicii""0ne man assists the Labour of an 
 perament ^definite number of men consists in what 
 hi y ^e ca ^ e( ^- exceptional gifts of character, 
 
 intellect. u ite as much as in exceptional gifts of intel- 
 A sagacity, an instinctive quickness in 
 gnising the intellect of others, a strength 
 of will that sometimes is almost brutal, and 
 will force a way for a new idea, like a pugilist 
 forcing himself through a crowd, these are 
 faculties quite as necessary as intellect for 
 giving effect to what intellect discovers or 
 creates ; and they do not always, or even 
 generally, reside in the same individuals. 
 The genius which is capable of grappling with 
 ideas and principles, and in the domain of 
 thought will display the sublimest daring, 
 
 and Fox, were brought up, the one as a slater, the other as a 
 domestic servant. Neilson, the inventor of the hot-blast, was 
 a millwright. Roberts, the inventor of the self-acting mule 
 and the slotting-machine, was a quarryman. The illustrious 
 Bramah began life as a common farm-boy. 
 
FUNCTION OF SUCH ABILITY 213 
 
 often goes with a temperament of such social BOOK m. 
 timidity as to unfit its possessor for facing 
 and dealing with the world. It is one thing 
 to perfect some new machine or process, it 
 is another to secure Capital which may put 
 it into practical operation ; and again, if we 
 put the difficulty of securing Capital out of 
 the question by supposing the inventor to be 
 a large capitalist himself, there is another 
 difficulty to be considered, more important 
 far than this the difficulty dealt with in the 
 last chapter namely, the conduct of the 
 business when once started. Here we come 
 to a number of complicated tasks, in which 
 the faculty of invention or discovery offers 
 no assistance whatsoever. We come to tasks 
 which have to do, not with natural principles, 
 but with men the thousand tasks of daily 
 and of hourly management. A machine or 
 process is invented by intellect there is one 
 step. It is put into practical operation with 
 the aid of Capital there is another. When 
 these two steps are taken, they do not require 
 to be repeated, but the tasks of management 
 are tasks which never cease ; on the contrary, 
 as has been said already, they tend rather 
 
214 CHARACTERS NOT EQUALISED 
 
 to become ever more numerous and compli- 
 ' cated. Nor do they consist only of the mere 
 rteTb^ ^management of labourers, the selection of 
 intellects foremen and inspectors, and the minutiae of 
 y Ability 1 industrial discipline. They consist also of 
 what may be called the policy of the whole 
 business the quick comprehension of the 
 fluctuating wants of the consumer, the extent 
 to which these may be led, the extent to 
 which they must be followed, the constant 
 power of adjusting the supply of a commodity 
 to the demand. On the importance of these 
 faculties there is a great deal to be said ; 
 but I will only observe here that it is 
 embodied and exemplified in the fact that 
 successful inventors and discoverers are nearly 
 always to be found in partnership with men 
 who are not inventors, but who are critics 
 of inventions, who understand how to manage 
 and use them, and who supplement the Ability 
 that consists of gifts of intellect by that 
 other kind of Ability that consists of gifts 
 of character. 
 
 Now if, as we have seen, it is entirely 
 contrary to experience to suppose that inven- 
 tive Ability is produced by educational oppor- 
 
BY EDUCATION OR OPPORTUNITY 215 
 
 tunity, much more is it contrary to experience BOOK m. 
 
 CU. Ill* 
 
 it is contrary even to common sense to 
 
 J Equality of 
 
 suppose that Ability of character can be education 
 
 1-1 TI i r nd PP r ' 
 
 produced in the same way. JLducation, as Amity, in- 
 
 -. , r> soead of 
 
 applied to the rousing and the training 01 equalising 
 
 the intellect, is like a polishing process applied 
 to various stones, which may give to all of 
 them a certain kind of smoothness, but brings 
 to light their differences far more than their 
 similarity. Education may make all of us 
 write equally good grammar, but it will not 
 make all of us write equally good poetry, 
 any more than cutting and polishing will 
 turn a pebble into an emerald. And if this 
 is true of education applied to intellect, of 
 education applied to character it is truer 
 still. Character consists of such qualities as 
 temperament, strength of will, imagination, per- 
 severance, courage ; and it is as absurd to expect Ability, 
 that the same course of education will make a natural 
 hundred boys equally brave or imaginative, because 7 
 as it is to expect that it will make them arlborn e 
 equally tall or heavy, or decorate all of them w 
 with hair of the same colour. 
 
 Ability, then, is rare as compared with 
 Labour, not because the opportunities are 
 
216 PROGRESS DUE SOLELY TO THE FEW 
 
 BOOK m. rare which are favourable or necessary to its 
 development, but because the minds and 
 
 And now . 
 
 let us again characters are rare which can turn opportunity 
 
 compare its , , 
 
 action with i to account. And now let us turn again to 
 massof / the more general form of the Socialistic 
 rounding-, fallacy the general proposition that the Age, 
 or Society, or the Human Eace is the true 
 inventor, and let us test this by a new order 
 of facts. 
 
 I have already alluded to the stress laid 
 by Socialists on the fact that different indi- 
 viduals in different parts of the world often 
 make the same discoveries at almost the 
 same time ; and I pointed out that whatever 
 this might teach us, applied only to a small 
 minority of persons, and had no reference 
 whatever to the great mass of the race. But 
 Socialists very frequently put their view in 
 a form even more exaggerated than that 
 which I thus criticised. They use language 
 which implies that the whole mass of society 
 moves forward together at the same intel- 
 lectual pace ; and that discoverers and in- 
 ventors merely occupy the position of persons 
 who chance to be walking a few paces in 
 advance of the crowd, and who thus light 
 
PROGRESS IN THE IRON INDUSTRY 217 
 
 upon new processes or machines like so many BOOK m. 
 
 . CH. in. 
 
 nuggets lying and glittering on the ground, 
 which those who follow would have presently men in any 
 discovered for themselves ; or, again, they present the 
 
 i -, -, tendencies 
 
 are represented as persons who are merely and intei- 
 
 the first to utter some word or exclamation 
 which is already on the lips of everybody, tempor- 
 Let us, then, take the three great elements J^ e 
 which go to make up the industrial prosperity to 
 of this country the manufacture of iron, the 
 manufacture of cotton, and the development 
 
 of the steam-engine, and see how far the oftl \ is 
 
 country : 
 
 history of each of these lends any support to (i) the mm 
 
 * J manufac- 
 
 the theory just mentioned. ture > W 
 
 the cotton 
 
 We will begin with the manufacture of manufac- 
 
 ture, (3) 
 iron. Ever since man was acquainted with the steam- 
 
 engine. 
 
 the use of this metal till a time removed from 
 our own by a few generations only, its pro- 
 duction from the ore was dependent entirely 
 upon wood, which alone of all fuels so far The 
 as knowledge then went had the chemical 
 qualities necessary for the process of smelting, 
 The iron industry in this country was there- 
 fore, till very recently, confined to wooded pi a c c e a of in 
 districts, such as parts of Sussex and Shrop- wood - 
 shire ; and so large, during the seventeenth 
 
2i8 EARLY APPLICATIONS OF ABILITY 
 
 BOOK m. century, was the consumption of trees and 
 brushwood, that the smelting furnace came 
 to be considered by many statesmen as the 
 destroyer of wood, rather than as the pro- 
 The dis- ducer of metal. This view, indeed, can hardly 
 howto use be called exaggerated ; for by the beginning 
 this pur- f the century following the wood available 
 f r the furnaces was becoming so fast ex- 
 hausted that the industry had begun to 
 l a e b e U either dwindle \ and but for one great discovery it 
 bitterly 01 " wou -ld. have soon been altogether extinguished. 
 affwht by Tllis was tlie metnod f smelting iron with 
 them f coa ^' Now to wna t cause was this discovery 
 Chief due? The answer can be given with the 
 
 amongst 
 
 these were utmost completeness and precision. It was 
 due to the Ability of a few isolated individuals, 
 whose relation to their contemporaries and to 
 their age we will now briefly glance at. 
 
 Dud The first of these was a certain Dud 
 
 Dudley, who procured a patent in the year 
 1620 for smelting iron ore " with coal, in 
 furnaces with bellows " ; and his process was 
 so far successful, that at length from a single 
 furnace he produced for a time seven tons of 
 iron weekly. For reasons, however, which wilL 
 be mentioned presently Dudley's invention 
 
TO BRITISH IRON PRODUCTION 219 
 
 died with himself; and for fifty years after BOOKHI. 
 his death the application of coal to smelting 
 was as much a lost art as it would have been 
 had he never lived. Between the years 1718 
 and 1735 it was again discovered by a father 
 and son the Darby s of Coalbrookdale. A The two 
 further step, and one of almost equal import- 
 arice, was achieved by two of their foremen 
 brothers of the name of Cranege assisted Reynolds 
 by Reynolds, who had married the younger Gr*neges, 
 Darby's daughter, and this was the application ai 
 of coal to the process which succeeds smelting, 
 namely, the conversion of crude iron into 
 bar-iron, or iron that is malleable. Other 
 inventors might be mentioned by whom these 
 men were assisted, but it will be quite enough 
 to consider the case of these. As related to 
 the age, as related to the society round him, 
 the one thing most striking in the life of 
 each of them is not that he represented that 
 society, but that he was in opposition to it, 
 and had to fight a way for his inventions 
 through neglect, ridicule, and persecution. The 
 nation at large was absolutely ignorant of the 
 very nature of the objects which these men 
 had in view ; whilst the ironmasters of the 
 
220 ABILITY OPPOSED BY THE AGE 
 
 BOOK m. day, as a body, though not equally ignorant, 
 
 J ' disbelieved that the objects were practicable 
 
 until they were actually accomplished. It is 
 true that these great inventors were not alone 
 in their efforts ; for where they succeeded, 
 others attempted and failed : but these failures 
 do but show in a stronger light how rare and 
 how great were the faculties which success 
 demanded. 
 The details Let us take each case separately. Dudley's 
 
 of whose i-f. T 
 
 several me as an ironmaster was one long succession 
 sig^amius- of persecution at the hands of his brothers in 
 what fas the trade. They petitioned the king to put a 
 said. stop to his manufacture ; they incited mobs to 
 destroy Jiis bellows and his furnaces; they 
 harassed him with law-suits, ruined him with 
 legal expenses ; they succeeded at last in having 
 him imprisoned for debt ; and by thus crippling 
 the inventor, they at last killed his invention. 
 It is true that meanwhile a few men a very 
 few believed in his ideas, and attempted to 
 work them out independently ; and amongst 
 these was Oliver Cromwell himself. He and 
 certain partners protected themselves with a 
 patent for the purpose, and actually bought up 
 the works of the ruined Dudley ; but all their 
 
INSTEAD OF REPRESENTING IT 221 
 
 attempts ended in utter failure. Two more BOOKIH. 
 
 CH. III. 
 
 adventurers, named Copley and Proger, were 
 successively granted patents during the reign 
 of Charles II. for this same purpose, and like- 
 wise failed ignominiously. One man alone in 
 the whole nation had proved himself capable 
 of accomplishing this new conquest for in- 
 dustry ; whilst the nation as a whole, and the 
 masters of the iron trade in particular, remained 
 as they were stationary in their old invincible 
 ignorance. The two Darbys, the two Craneges, 
 and Reynolds, though not encountering, as 
 Dudley did, the hostility of their contempor- 
 aries, yet achieved their work without the 
 slightest encouragement or assistance from 
 them. The younger Darby, solitary as Colum- 
 bus on his quarter-deck, watched all night by 
 his furnace as he was bringing his process to 
 perfection. His workmen, like the sailors of 
 Columbus, obeyed their orders blindly ; and in 
 hardly a brain but his own did there exist 
 the smallest consciousness that one man was 
 laying, in secret, the foundation of his country's 
 greatness. With regard to Reynolds and the 
 Craneges, who imitated, though they did not 
 perfect, the further use of coal for the produc- 
 
222 ISOLATED ACTION OF ABILITY 
 
 BOOK m. tion of iron that is malleable, we have similar 
 
 CH. m. .. 
 
 evidence that is yet more circumstantial. Key- 
 nolds distinctly declares in a letter written to a 
 friend that the conception of this process was so 
 entirely original with the Craneges that it had 
 never for a moment occurred to himself as being 
 possible, and that they had had to convince 
 him that it was so, against his own judgment. 
 But when once his conversion was completed, 
 he united his Ability with theirs ; and within a 
 very short time the second great step in our 
 iron industry had been taken triumphantly by 
 these three unaided men. 
 
 Were it necessary, and would space permit 
 of it, we might extend this history further. 
 We might cite the inventions of Huntsman, of 
 Onions, of Cort, and Neilson, and show how 
 each of these was conceived, was perfected, 
 \ and was brought into practical use, whilst the 
 nation as a whole remained inert, passive, 
 and ignorant, and the experts of the trade 
 were hostile, and sometimes equally ignorant. 
 Huntsman perfected his process in a secrecy 
 as carefully guarded as that of a mediaeval 
 necromancer hiding himself from the vigilance 
 of the Church ; whilst James Neilson, the 
 
ARKWRIGHT AND HIS ASSOCIATES 223 
 
 inventor of the hot -blast, had at first to BOOKHI. 
 encounter the united ridicule and hostility of 
 all the shrewdest and most experienced iron- 
 masters in the kingdom. 
 
 The history of the cotton manufacture offers Thehistory 
 precisely similar evidence. Almost every one cotton 
 
 1 i manufac- 
 
 of those great improvements made in it, by turedoes 
 which Ability has multiplied the power of equli force; 
 Labour, had to be forced by the able men on 
 the acceptance of adverse contemporaries. Hay 
 was driven from the country ; Hargreaves from 
 his native town ; Arkwright's mill, near Chorley, 
 was burnt down by a mob ; Peel, who used 
 Arkwright's machinery, was at one time in 
 danger of his life. Nor was it only the hostility 
 of the ignorant that the inventors had to 
 encounter. They had to conquer Capital before 
 they could conquer Labour ; for the Capitalists 
 at the beginning were hardly more friendly to 
 them than the labourers. The first Capitalists 
 who assisted Arkwright, and had Ability 
 enough to discover some promise in his inven- 
 tion, had not enough Ability to see their way 
 through certain difficulties, and withdrew their 
 help from him at the most critical moment. 
 The enterprising men who at last became his 
 
224 THE VALUE OF WATTS PATENT 
 
 BOOK m. partners, and with the aid of whose Capital his 
 invention became successful, represented their 
 age just as little as Arkwright did. He and 
 they, indeed, had the same opportunities as 
 the society round them ; but they stand con- 
 trasted to the society by the different use they 
 made of them. 
 
 Also the And now, lastly, let us come to the history 
 
 history of . TTT 
 
 the steam- oi the steam-engine. W e need not go over 
 avery & ground we have already trodden, and prove 
 anecdote once more that in this case, as in the others, the 
 age, in the sense of the majority of the com- 
 munity, had as little to do with the work of 
 the great inventors as Hannibal had to do with 
 the beheading of Charles I. It will be enough 
 to insist on the fact that the scientific minority 
 amongst whom the inventors lived, and who 
 were busied with the same pursuits, were, as a 
 body, concerned in it just as little. The whole 
 forward movement, the step after step of dis- 
 covery by which the power of steam has become 
 what it now is, was due to individuals to a 
 minority of a minority ; and this smaller 
 minority was so far from representing the 
 larger, or from merely marching a few steps 
 ahead of it, that the large minority always 
 
AS ESTIMA TED B Y HIS CONTEMPORARIES 225 
 
 hung back incredulous, till, in spite of itself, it BOOK m. 
 
 . CH. III. 
 
 was converted by the accomplished miracle. 
 One example is enough to illustrate this. 
 Watt, when he was perfecting his steam-engine, 
 was in partnership with Dr. Roebuck, who 
 advanced the money required to patent the 
 invention, and whose energy and encouragement 
 helped him over many practical difficulties. 
 When the engine was almost brought to 
 completion, Roebuck found himself so much 
 embarrassed for money, on account of expense 
 incurred by him in an entirely different enter- 
 prise, that he was forced to sell a large part of 
 his property ; and amongst other things with 
 which he parted was his interest in Watt's 
 patent. This he transferred to the celebrated 
 engineer Boulton ; and the patent for that 
 invention which has since revolutionised the 
 world was valued by Roebuck's creditors at 
 only one farthing. 
 
 These facts speak plainly enough for them- The aver- 
 selves; and the conscience of most men will add it ? cross-' 
 
 , , , -, , . , . examined 
 
 its own witness to what they teach us which is a t the Day 
 this. So far as industrial progress is concerned, \ment, dg 
 the majority of mankind are passive. They forced to 
 labour as the conditions into which they are 
 
 15 
 
226 INDUSTRIAL PROGRESS 
 
 BOOK m. born compel them to labour: but they do 
 
 CH. ni. 
 
 nothing, from their cradle to their grave, so to 
 effect. alter these conditions that their own labour, 
 or Labour generally, shall produce larger or 
 improved results. The most progressive race 
 in the world or in other words the English 
 race has progressed as it has done only be- 
 cause it has produced the largest minority of 
 men fitted to lead, and has been quickest in 
 obeying their orders ; but apart from these 
 men it has had no appreciable tendency to 
 move. Let the average Englishman ask him- 
 self if this is not absolutely true. Let him 
 imagine himself arraigned before the Deity at 
 the Day of Judgment, and the Deity saying 
 this to him : " You found when you entered 
 the world that a man's labour on the average 
 produced each year such and such an amount 
 of wealth. Have you done anything to make 
 the product of the same labour greater ? Have 
 you discovered or applied any new principle 
 to any branch of industry ? Have you guided 
 industry into any new direction ? Have the 
 exertions of any other human being been made 
 more efficacious owing to your powers of inven- 
 tion, of enterprise, or of management ? " There 
 
CH. III. 
 
 THE WORK OF THE FEW ONLY 227 
 
 is not one man in a hundred who, if thus ques- BOOK m. 
 tioned at the Judgment-seat, would be able, 
 on examining every thought and deed of his 
 life, to give the Judge any answer but, "No. 
 So far as I am concerned, the powers of Labour 
 are as I found them." 
 
CHAPTEE IV 
 
 The Conclusion . arrived at in the preceding Book 
 restated. The Annual Amount produced ly Ability 
 in the United Kingdom. 
 
 The more, IN spite, then, of the arguments which Socialists 
 we examine have borrowed from psychology, and with 
 tioivtiie which, by transferring them to the sphere of 
 SeSiy do economics, and so depriving them of all prac- 
 tical meaning, they have contrived to confuse 
 
 tne problem of industrial progress, the facts of 
 of the few" ^ ne case wnen examined from a practical point 
 of view, stand out hard and clear and unam- 
 1 biguous. Industrial progress is the work not 
 of society as a whole but of a small part of it, 
 to the entire exclusion of the larger part ; the 
 reason of this being that the faculties to which 
 
 o 
 
 this progress is due the faculties which I 
 have included under the name of Industrial 
 Ability are found to exist only in a small 
 
III. 
 
 CH. IV. 
 
 GRADES OF ABILITY 229 
 
 percentage of individuals, and are practi- 
 cally absent from the minds, characters, and 
 temperaments of the majority of the human 
 race. Ability is, in fact, a narrow natural 
 monopoly. 
 
 Ability, however, is of different kinds and But it must 
 grades, some kinds being far commoner than posed*S 
 .others ; and before summing up what has been rarer than 
 said in this chapter, it will be well to give the l 
 reader some more or less definite idea of the 
 numerical proportion which, judging by general 
 evidence, the men of Ability bear to the mass 
 of labourers. Such evidence, not indeed very 
 exact, but still corresponding broadly to the 
 underlying facts of the case, is to be found in 
 the number of men paying income-tax on busi- 
 ness incomes, as compared with the number of 
 wage -earners whose incomes escape that tax ; 
 in the number of men, that is, who earn more 
 than one hundred and fifty pounds a year, as 
 compared with the number of men who do 
 not earn so much. It may seem at first sight 
 that this division is purely arbitrary ; but we 
 shall see, on consideration, that it is not so. 
 We shall find that, allowing for very numerous 
 exceptions, men in this country do as a rule 
 
230 PROPORTION OF ABLE MEN TO LA BO URERS 
 
 receive less than one hundred and fifty pounds 
 a year for Labour, and that when they receive 
 indicatioli for their exertions a larger income than this 
 ber of able they receive it for the direction of Labour, or 
 
 men in this /> .-, . / A1 .,., ,. T 
 
 country is for the exercise of some sort of Ability. Now 
 theincomes if we take the males who are over sixteen years 
 
 of age, and who are actually engaged in some 
 wages of age industrial occupation, we shall find that those 
 Labour. wno earn more ^han one hundred and fifty 
 pounds a year, form of the entire number 
 something like six per cent. - We may there- 
 fore say that out of every thousand men 
 there are, on an average, sixty who are dis- 
 tinctly superior to their fellows, who each 
 add more to the gross amount of the pro- 
 duct by directing Labour, than any one man 
 does by labouring, and who possesses Ability 
 Thehighest to a greater or less extent. The commoner 
 very rare kinds of Ability, however, depend as a rule 
 grades of ! on the higher kinds, and are efficacious only 
 below the as working under their direction ; and if we 
 thereis ! continue our estimate on the basis we have 
 plentiful just adopted, and accept the amount that a 
 man makes in industry as being on the whole 
 an evidence of the amount of his Ability, we 
 consider that, all allowance being made for 
 
CH. IV. 
 
 A ROUGH CALCULATION 231 
 
 mere luck or speculation, a business income of .BOOK m. 
 ffty thousand pounds means, as a rule, Ability 
 of the first class, of fifteen thousand pounds 
 Ability of the second, and five thousand 
 pounds Ability of the third, we shall find that 
 men possessing these higher degrees of the 
 faculty are, in comparison to the mass of 
 employed males, very few indeed. We shall 
 find that Ability of the third class is possessed 
 by but one man out of two thousand ; of the 
 second class by but one man out of four thou- 
 sand ; and of the first class by but one man 
 out of a hundred thousand. This is, as I have 
 said, a very rough method of calculation, but 
 it is not a random one ; and there is reason to 
 believe that it affords us an approximation to 
 truth. At all events, taking it as a whole, it 
 does not err by making Ability too rare ; and 
 we shall be certainly within the mark if, taking 
 Ability as a whole, and waiving the question of 
 its various classes and their rarity, we say 
 that of the men in this country actively engaged 
 in production, the men of Ability constitute 
 one-sixteenth. 
 
 And now we are in a position to repeat 
 with more precision and confidence the conclu- 
 
232 MORE THAN HALF OUR NA TIONAL INCOME 
 
 BOOK in. sion which we reached at the end of the last 
 chapter. It was there pointed out that of 
 
 We may . 
 
 now repeat our present national income, consisting as 
 elusions it does of about thirteen hundred million 
 
 pounds, Labour demonstrably produced not 
 Ability a more than five hundred 'million pounds, whilst 
 - eight hundred million pounds at least was 
 demonstrably the product of Ability. In the 
 present chapter, I have substantiated that pro- 
 position : I have exposed the confusions and 
 Labour, at fallacies which have been used to obscure its 
 
 the utmost, 
 
 teenths'" tiuih > I have shown that Ability and Labour 
 are two distinct forces, in the sense that whilst 
 the latter represents a faculty common to all 
 men, the possession of the former is the natural 
 monopoly of the few ; that the labourer and 
 the man of Ability play such different parts in 
 production that a given amount of wealth is no 
 more their joint product than a picture is the 
 joint product of a great painter and a canvas- 
 stretcher ; and I have now pointed to some 
 rough indication of the respective numbers of 
 the men of Ability and of the labourers. In- 
 stead, therefore, of contenting ourselves with 
 the general statement that Ability makes so 
 much of the national income, and Labour so 
 
cir. iv. 
 
 PRODUCED BY A SMALL MINORITY 233 
 
 much, we may say that ninety-six per cent of BOOK m. 
 the producing classes produce little more than a 
 third of our present national income, and that 
 a minority, consisting of one-sixteenth of these 
 classes, produces little less than two-thirds 
 of it. 
 
BOOK IV 
 
 THE REASONABLE HOPES OF LABOUR 
 THEIR MAGNITUDE, AND THEIR 
 BASIS 
 
CHAPTEK I 
 
 HQW the Future and Hopes of the Labouring Classes 
 are bound up with the Prosperity of the Classes 
 who exercise Ability. 
 
 THE conclusion just arrived at is not yet com- Thefore- 
 pletely stated ; for there are certain further foncfusions 
 facts to be considered in connection with it complete; 
 which have indeed already come under our 
 view, but which, in order to simplify the course 
 of our argument, have been put out of sight 
 in the two preceding chapters. I shall return stands * 
 to these facts presently ; but it will be well, 
 before doing so, to take the conclusion as it 
 stands in this simple and broad form, and see, 
 by reference to those principles which were ex- 
 plained at starting, and in which all classes and 
 parties agree, what is the broad lesson which 
 it forces on us, underlying all party differences. 
 I started with pointing out that, so far 
 
 teaches us 
 as it 
 
238 SHORT SUM MAR Y 
 
 BOOK iv. as politics are concerned, the aim of all classes 
 
 CH. I. . 
 
 is to maintain their existing incomes ; and 
 up ail that that the aim of the most numerous class is 
 
 has been . . 
 
 said thus not only to maintain, but to increase them. 
 
 I pointed out further that the income of the 
 that it g individual is necessarily limited by the amount 
 nottiing f the income of the nation ; and that there- 
 negative f re tne increase, or at all events the mainten- 
 ance > f tne existing income of the nation is 
 i m pli e( l i n all hopes of social and economic 
 unchecked P ro g ress > an( l forms the foundation on which 
 all such hopes are based. I then examined 
 the causes to which the existing income of 
 the nation is due ; and I showed that very 
 f nearly two-thirds of it is due to the exertions 
 of a small body of men who contribute thus 
 to the productive powers of the community, 
 not primarily because they possess Capital, 
 because they possess Ability, of which 
 apital is merely the instrument ; that it is 
 owing to the exercise of Ability only that 
 this larger part of the income has gradually 
 made its appearance during the past hundred 
 years ; and that were the exercise of Ability 
 interfered with, the increment would at once 
 dwindle, and before ]ong disappear. 
 
OF THE PRECEDING ARGUMENTS 239 
 
 Thus the two chief factors in the production BOOK i 
 
 CH. I. 
 
 of the national income in the production 
 of that wealth which must be produced before 
 it can be distributed are not Labour and 
 Capital, which terms, as commonly used, mean 
 living labourers on the one hand, and dead 
 material on the other ; but they are two 
 distinct bodies of living men labourers on 
 the one hand, and on the other men of 
 Ability. The great practical truth, then, 
 which is to be drawn from the foregoing 
 arguments is this and it is to be drawn from 
 them in the interest of all classes alike that 
 the action of Ability should never be checked 
 or hampered in such a way as to diminish its 
 productive efficacy, either by so interfering 
 with its control of Capital, or by so diminish- 
 ing its rewards, as to diminish the vigour 
 with which it exerts itself; but that, on the 
 contrary, all these social conditions should be 
 jealously maintained and guarded which tend 
 to stimulate it most, by the nature of the 
 rewards they offer it, and which secure for 
 it also the most favourable conditions for its 
 exercise. By such means, and by such means 
 only, is there any possibility of the national 
 
THE PRECEDING ARGUMENTS 
 
 BOOK iv. wealth being increased, or even preserved 
 
 from disastrous and rapid diminution. 
 But this is This, however, is but one half of the case : 
 S being and, taken by itself, it may seem to have no 
 lesson \ connection with the problem which forms the 
 indLd'thl main subject of this volume, namely, the 
 chief pr| soc i a i nO p es anc [ interests, not of Ability, but 
 \^of_JLabour. For, taken by itself, the con- 
 clusion which has just been stated may strike 
 the reader at first sight as amounting merely 
 to this : that the sum total of the national 
 income will be largest when the most numer- 
 ous minority of able men produce the largest 
 possible incomes, incomes which they them- 
 selves consume ; and that, unless they are 
 allowed to consume them, they will soon 
 cease to produce them. From the labourer's 
 point of view, such a conclusion would indeed 
 be a barren one. It might show him that 
 he could not better himself by attacking the 
 fortunes of the minority ; but it would, on 
 the other hand, fail to show him that he 
 was much interested in their maintenance, 
 since, if Ability consumes the whole of the 
 annual wealth which it adds to the wealth 
 annually produced by Labour, the total might 
 
FROM THE LABOURER'S POINT OF VIEW 241 
 
 be diminished by the whole of the added BOOKIV. 
 portion, and Labour itself be no worse off 
 than formerly. But when I said just now 
 that it was to the interest of all classes alike 
 not to diminish the rewards which Ability 
 may hope for by exerting itself, this was 
 said with a special qualification. I did not 
 say that it was to the interest of the labourers 
 to allow Ability to retain the whole of what 
 it produced, or to abstain themselves from 
 appropriating a certain portion of it; but 
 what I did say was that any portion appro- 
 priated thus should not be so large, nor 
 appropriated in such a way, as to make what 
 remains an object of less desire, or the hope 
 of possessing it less powerful as a stimulus 
 to producing it. This qualification, as the 
 reader will see presently, gives to the con- 
 clusion in question a very different meaning 
 from that which at first he may very naturally 
 have attributed to it. 
 
 For the precise point to which I have The chief 
 been leading up, from the opening page of be leant 
 the present volume to this, is that a con- whilst' 
 siderable portion of the wealth produced by 
 Ability may be taken from it and handed 
 
 16 
 
242 THE SHARE OF LABOUR 
 
 BOOK iv. over to Labour, without the vigour of Ability 
 being in the least diminished by the loss ; 
 may appro- that such being the case, the one great aim 
 large shahi of Labour is to constantly take from Ability 
 ducts. pr a certain part of its product ; and that this 
 is the sole process by which, so far as money 
 is concerned, Labour has improved its position 
 during the past hundred years, or by which 
 it can ever hope to improve it further in the 
 future. 
 Theques- The practical question, therefore, for the 
 
 tionis,How i 
 
 much may great mass 01 the population resolves itself 
 
 priSe into this : What is the extent to which 
 
 paralysing Ability can be rqjikted of its products, with- 
 
 which pn/ out diminishing its efficacy as a productive 
 
 agent ? An able man's hopes of securing 
 
 nine hundred thousand pounds for himself 
 
 would probably stimulate his Ability as much 
 
 as his hopes of securing a million. Indeed 
 
 the fact that, before he could secure a million 
 
 pounds for himself, he had to produce a 
 
 hundred thousand for other people, might 
 
 tend to increase his efforts rather than to relax 
 
 them. But, on the other hand, if, before he 
 
 could secure a hundred thousand pounds for 
 
 himself, he had to produce a million for other 
 
CH. I. 
 
 IN THE GROWING PRODUCTS OF ABILITY 243 
 
 people, it is doubtful whether either sum BOOKIV. 
 would ever be produced at all. There must 
 therefore be, under any given set of circum- 
 stances, some point somewhere between 
 these two extremes up to which Labour can 
 appropriate the products of Ability with per- 
 manent advantage to itself, but beyond which 
 it cannot carry the process, without checking 
 the production of what it desires to appro- 
 priate. But how are we to ascertain where 
 that precise point is ? 
 
 To this question it is altogether impossible This is a 
 
 ... question 
 
 to give any answer based upon a priori which 
 reasoning. The very idea of such a thing answered 
 is ridiculous ; and to attempt it could, at the experience; 
 
 best, result in nothing better than some piece 
 of academic ingenuity, having no practical of a 6 
 meaning for man, woman, or child. But 
 what reasoning will not do, industrial history 
 will. Industrial history will provide us with"^ 
 an answer of the most striking kind general, 
 indeed, in its character ; but not, for that 
 reason, any the less decided, or less full of 
 instruction. For industrial history, in a\ 
 way which few people realise, will show us ] 
 how, during the past hundred years, Labour 
 
244 THE AMOUNT PRODUCED BY LABOUR 
 BOOK iv. / has actually succeeded in accomplishing the 
 
 OH T / 
 
 - feat we are considering ; how, without checking 
 / the development and the power of Ability, 
 it has been able to appropriate year by year 
 a certain share of what Ability produces. 
 When the reader comes to consider this, 
 which is the great industrial object lesson 
 of modern times, when he sees what the 
 share is which Labour has appropriated so 
 triumphantly, he will see how the conclusions 
 we have here arrived at, with regard to the 
 causes of production, afford a foundation for 
 the hopes and claims of Labour, as broad and 
 solid as that by which they support the rights 
 of Ability. 
 
 Let us turn, then, once more to the fact 
 which I have already so often dwelt upon, 
 that during the closing years of the last 
 century the population of Great Britain was 
 about ten millions, and the national income 
 about a hundred and forty million pounds. 
 It has been shown that to reach and maintain 
 that rate of production required the exertion 
 of an immense amount of Ability, and the 
 use of an immense Capital which Ability had 
 recently created. But let me repeat what I 
 
THE AMOUNT TAKEN BY LABOUR 245 
 
 have said already : that we will, for the BOOK i 
 
 CH. I. 
 
 purpose of the present argument, attribute 
 the production of the whole to average human 
 Labour. It is obvious that Labour did not 
 produce more, for no more was produced ; 
 and it is also obvious that if, since that time, 
 it had never been assisted and never controlled 
 by Ability, the same amount of Labour would 
 produce no more now. We are therefore, 
 let me repeat, plainly understating the case 
 if we say that British Labour by itself in 
 other words, Labour shut out from, and un- 
 assisted by the industrial Ability of the past 
 ninety years can, at the utmost, produce 
 annually a hundred and forty million pounds 
 for every ten millions of the population. 
 
 And now let us turn from what Labour 
 produces to what the labouring classes 1 have 
 
 1 By labouring classes is meant all those families having 
 incomes of less than a hundred and fifty pounds a year. The 
 substantial accuracy of this rough classification has already 
 been pointed out. No doubt they include many persons 
 who are not manual labourers ; but against this must be set 
 the fact that, according to the latest evidence, there are at 
 least a hundred and eighty thousand skilled manual labourers 
 who earn more than a hundred and fifty pounds. And, at all 
 events, whether the classes in question are manual labourers 
 or not, they are, with very manifest exceptions, wage-earners 
 
246 CONTINUOUS RECENT GROWTH 
 
 BOOK iv. received at different dates within the ninety 
 
 CH. I. * 
 
 or hundred years in question. At the time 
 
 Iii I860 . 
 
 Labour of which we have just been speaking, they 
 least received about half of what we assume Labour 
 plr cent to have produced. A labouring population of ten 
 it produced million people received annually about seventy 
 ofthe million pounds. 1 Two generations later, the 
 ofAbmty ; same number of people received in return for 
 their labour about a hundred and sixty million 
 pounds. 2 They were twenty -five per cent 
 
 that is to say, for whatever money they receive they give 
 work which is estimated at at least the same money value. 
 A schoolmaster, for instance, who receives a hundred and 
 forty pounds a year gives in return teaching which is valued 
 at the same sum. School teaching is wealth just as much 
 as a schoolhouse ; it figures in all estimates as part of the 
 national income ; and therefore the schoolmaster is a pro- 
 ducer just as much as the school builder. 
 
 1 This corresponds with Arthur Young's estimate of 
 wages for about the same period. 
 
 2 Statisticians estimate that in 1860 the working classes 
 of the United Kingdom received in wages four hundred million 
 pounds ; the population then being about twice what it was 
 at the close of the last century. In order to arrive at the 
 receipts of British Labour, the receipts of Irish Labour must 
 be deducted from this total. The latter are proportionately 
 much lower than the former, and could not have reached the 
 sum of eighty million pounds. But assuming them to have 
 reached that, and deducting eighty million pounds from four 
 hundred million pounds, there is left for British Labonr 
 three hundred and twenty million pounds, to be divided, 
 
OF THE RECEIPTS OF LABOUR 247 
 
 richer than they possibly could have been if, BOOK iv. 
 
 CH I. 
 
 in 1795, they had seized on all the property 
 in the kingdom and divided it amongst them- 
 selves. In other words, Labour in 1860, 
 instead of receiving, as it did two generations 
 previously, half of what we assume it to have 
 produced, received twenty-five per cent more 
 than it produced. If we turn from the year 
 1860 to the present time, we find that the 
 gains of Labour have gone on increasing ; 
 and that each ten millions of the labouring 
 classes to-day receives in return for its labour 
 two hundred million pounds, or over forty 
 per cent more than it produces. And all 
 these calculations are based, the reader must 
 remember, on the ridiculously exaggerated 
 assumption which was made for the sake 
 of argument, that in the days of Watt and 
 Arkwright, Capital, Genius, and Ability had 
 no share in production ; and that all the 
 wealth of the country, till the beginning of 
 the present century, was due to the spontane- 
 ous efforts of common Labour alone. 
 
 And now let us look at the matter from a 
 
 roughly speaking, amongst twenty million people ; which for 
 each ten millions yields a hundred and sixty million pounds. 
 
248 GROWTH OF THE RECEIPTS OF LABOUR 
 
 BOOK iv. point of view slightly different, and compare 
 
 the receipts of Labour not with what we 
 
 of Labour assume it to have itself produced, but with 
 
 a yet more the total product of the community at a 
 
 lightly certain very recent date. 
 
 thpres^t In 1843, when Queen Victoria had been 
 Labour Of g i x or seven years on the throne, the gross 
 Total the income of the nation was in round numbers 
 oTthT fi ve hundred and fifteen million pounds. Of 
 Sly* 17 this, two hundred and thirty -five million 
 ago - pounds went to the labouring classes, and the 
 remainder, two hundred and eighty million 
 pounds, to the classes that paid income-tax. 
 Only fifty years have elapsed since that time, 
 and, according- to the best authorities, the 
 income of the labouring classes now is cer- 
 tainly not less than six hundred and sixty 
 million pounds. 1 That is to say, it exceeds, 
 by a hundred and forty-five million pounds, 
 the entire income of the nation fifty years ago. 
 An allowance, however, must be made for 
 the increase in the number of the labourers. 
 That is of course obvious, and we will at once 
 proceed to make it. But when it is made, 
 
 1 According to the latest estimates, it exceeds seven 
 hundred million pounds. 
 
CH. I. 
 
 DURING QUEEN VICTORIA'S REIGN 249 
 
 the case is hardly less wonderful. The labour- BOOK iv. 
 ing classes in 1843 numbered twenty -six 
 millions; at the present time they number 
 thirty -three millions} That is to say, they 
 have increased by seven million persons. 
 Now assuming, as we have done, that Labour 
 by itself produces as much as fourteen pounds 
 per head of the population, this addition of 
 seven million persons will account for an 
 addition of ninety -eight million pounds to 
 the five hundred and fifteen million pounds 
 which was the amount of the national income 
 fifty years ago. We must therefore, to make 
 our comparisons accurate, deduct ninety-eight 
 million pounds from the hundred and forty- 
 five million pounds just mentioned, which 
 will leave us an addition of forty-seven million 
 pounds. We may now say, without any 
 reservation, that the labouring classes of this 
 country, in proportion to their number, receive 
 to- day forty-seven? million pounds a year more 
 
 1 The entire population has risen from about twenty-seven 
 million five hundred thousand to thirty-eight millions. But a 
 large part of this increase has taken place amongst the 
 classes who pay income-tax, and are expressly excluded from 
 the above calculations. These classes have risen from one 
 million five hundred thousand to five millions. 
 
25o ACTUAL GAINS OF LABOUR 
 
 BOOK iv. than the entire income of the country at the 
 
 CFT I / 
 
 beginning of the reign of Queen Victoria, 
 labourer To any labourer anxious for his own welfare, 
 
 anxious for , -, . . . . P i i 
 
 his own to any voter or politician 01 any kind, who 
 should* realises that the welfare of the labourers is 
 the foundation of national stability, and who 
 seeks to discover by what conditions that 
 welfare can be best secured and promoted, 
 this fact which I have just stated is one that 
 cannot be considered too closely, too seriously, 
 or too constantly. 
 
 Let the reader reflect on what it means. 
 Dreams of some possible social revolution, 
 dreams of some division of property by which 
 most of the riches of the rich should be 
 abstracted from them and divided amongst 
 
 o 
 
 the poor these were not wanting fifty years 
 a o- But even the most sanguine of the 
 dreamers hardly ventured to hope that the 
 has done" 1 ^en riches of the rich could be taken away 
 dofn^for ^ rom them completely; that a sum equal to 
 him far the rent of the whole landed aristocracy, all 
 
 more than 
 
 jjy SoeiaH the interest on Capital, all the profits of our 
 
 promised, commerce and manufactures, could be added 
 
 to what was then the income of the labouring 
 
 classes. No forces of revolution were thought 
 
 They show 
 
BEYOND THE DREAMS OF SOCIALISM 251 
 
 equal to such a change as that. But what \ BOOK iv. 
 have the facts been ? What has happened \ 
 really ? Within fifty years the miracle has 
 taken place, or, indeed, one greater than that. 
 The same number of labourers and their 
 families as then formed the whole labouring 
 population of the country now possess among 
 them every penny of the amount that then 
 formed the income of the entire nation. They 
 have gained every penny that they possibly 
 could have gained if every rich man of that 
 period if duke, and cotton lord, and railway 
 king, followed by all the host of minor pluto- 
 crats, had been forced to cast all they had 
 into the treasury of Labour, and give their 
 very last farthing to swell the labourer's 
 wages. The labourers have gained this ; but 
 that is not all. They have gained an annual 
 sum of forty '-seven million pounds more. And 
 they have done all this, not only without 
 revolution, but without any attack on the 
 fundamental principles of property. On the 
 contrary, the circumstances which have enabled 
 Labour to gain most from the proceeds of 
 Ability, have been the circumstances which 
 have enabled Ability to produce most itself. 
 
252 TWO POINTS TO BE CONSIDERED 
 
 BOOK iv. Before, however, we pursue these considera- 
 tions further, it is necessary that we should 
 proceeding deal with two important points which have 
 argument, perhaps already suggested themselves to the 
 two side reader as essential to the problem before us. 
 They are not new points. They have been 
 discussed in previous chapters; but the time 
 has now arrived to turn to them once again. 
 
CHAPTEK II 
 
 v Of the, Ownership of Capital, as distinct from its 
 Employment ly Ability. 
 
 THE first of the points I have alluded to can 
 be disposed of very quickly. It relates to 
 Land. In analysing the causes to which our 
 national income is due, I began with showing 
 that Land produced a certain definite part 
 of it. For the sake, however, of simplicity, in the 
 in the calculation which I went on to make, I 
 
 ignored Land, and the fact of its being a pro- of Land ! 
 ductive agent ; and treated the whole income 
 as if produced by Labour, Capital, and Ability. 
 I wish, therefore, now to point out to the 
 reader that this procedure has had little 
 practical effect on the calculation in question, 
 and that any error introduced by it can be 
 easily rectified in a moment. The entire 
 landed rental of this country is, as I have 
 
ance. 
 
 254 LAND AND ITS OWNERS 
 
 BOOK iv. already shown, not so much as one thirteenth 
 
 ce. n. 
 
 of the income ; whilst that of the larger landed 
 
 But rent, . . 
 
 especially proprietors is not so much as one thirty-ninth. 
 
 the rent of AT . .. . . n 
 
 the large JNow my sole object in dealing with the 
 so small a national income at all is to show how far it 
 national * is susceptible of redistribution ; and it is per- 
 thaHhe fectly certain that no existing political party 
 would attempt, or even desire, to redistribute 
 the rents of any class except the large pro- 
 prietors only. The smaller proprietors, nine 
 hundred and fifty thousand in number, who 
 take between them two-thirds of the rental, 
 are in little immediate danger of having their 
 rights attacked. The only rental therefore 
 namely, that of the larger proprietors which 
 can be looked on, even in theory, as the 
 subject of redistribution, is too insignificant, 
 being less than thirty million pounds, to 
 appreciably affect our calculations when we 
 are dealing with thirteen hundred millions. 
 The theory of Land as an independent pro- 
 ductive agent, and of rent as representing 
 its independent product, is essential to an 
 understanding of the theory of production 
 generally ; but in this country the actual 
 product of the Land is so small, as compared 
 
BOOK IV. 
 CH. II. 
 
 PASSIVE OWNERSHIP OF CAPITAL 255 
 
 with the products of Labour, Capital, and 
 Ability, that for purposes like the present 
 it is hardly worth considering. Its being 
 redistributed, or not redistributed, would, 
 as we have seen already, make to each in- 
 dividual but a difference of three farthings 
 a day. 
 
 The second point I alluded to must be capital, 
 considered at greater length. In dealing with 
 Capital and Ability, I first treated them 
 separately. I then showed that, regarded as omitted 1 
 a productive agent, Capital is Ability, and also ' 
 must be treated as identical with it. But it 
 is necessary, now that we are dealing with 
 distribution, to disunite them for a moment, 
 and treat them separately once more. For w e must 
 even though it be admitted that Ability, 
 working by means of Capital, produces, as 
 it has been shown to do, nearly two-thirds l\ e ic c h asses 
 of the national income, and though it be themselves 
 admitted further that a large portion of this 
 product should go to those able men who 
 are actively engaged in producing it, the of it;i 
 men whose Ability animates and vivifies 
 Capital, it may yet be urged that a portion 
 of it which is very large indeed goes, as a 
 
CH. n. 
 
 256 THE CLASS THAT LIVES ON INTEREST 
 
 BOOK iv. fact, to men who do not exert themselves at 
 all, or who, at any rate, do not exert them- 
 selves in the production of wealth. These 
 men, it will be said, live not on the products 
 of Ability, but on the interest of Capital 
 which they have come accidentally to possess ; 
 and it will be asked on what grounds Labour 
 ciasses S hoid is interested in forbearing to touch the posses- 
 productive sions of those who produce nothing? If it 
 has added to its income, as it has done, during 
 the past hundred years, why should it not 
 now add to it much more rapidly, by appro- 
 priating what goes to this wholly non-produc- 
 tive class ? 
 
 To this question there are several answers. 
 One is that a leisured class a class whose 
 exertions have no commercial value, or no 
 value commensurate with the cost of its 
 maintenance is essential to the development 
 of culture, of knowledge, of art, and of mental 
 civilisation generally. But this is an answer 
 which we need not dwell on here ; for, what- 
 ever its force, it is foreign to our present 
 purpose. We will confine ourselves solely to 
 the material interests that are involved, and 
 consider solely how the plunder of a class 
 
THE HOPE OF INTEREST AS A MOTIVE 257 
 
 living on the interest of Capital would 
 tend to affect the actual production of 
 wealth. 
 
 It would affect the production of wealth 
 in just the same way as would a similar 
 treatment of that class on whose active 
 Ability production is directly dependent ; 
 and it would do this for the following 
 reasons. 
 
 The greater part of the Capital that has They are 
 been accumulated in the modern world is the O f Ability, 
 
 .,.,., T -, . . -, and repre- 
 
 creation of active Ability, as I have pointed sen t, by 
 
 out already. It has been saved not from the 
 product of Labour, but from the product which 
 Ability has added to this. It is Ability con- 
 gealed, or Ability stored up. And the main 
 motive that has prompted the men of Ability created - 
 to create it has not consisted only of the desire 
 of enjoying the income which they are enabled 
 to produce by its means, when actually em- 
 ploying it themselves, but the desire also of 
 enjoying some portion of the income which 
 will be produced by its means if it is employed 
 by the Ability of others. In a word, the men 
 who create and add to our Capital are motived 
 to do so by expectation that the Capital shall | 
 
 17 
 
258 CAPITAL CREATED AND SAVED 
 
 BOOK iv. be their own property ; that it shall, when they 
 wish it, yield them a certain income independent 
 
 iscreated a of any further exertions of their own. Were 
 this expectation rendered impossible, were 
 Capital by any means prevented from yielding 
 
 t?th<Tmai interest either to the persons who made and 
 saved it, or those to whom the makers might 
 
 and saved ] :)e q uea ^] 1 ft, the principal motive for making 
 or saving it would be gone. If a man, for 
 instance, makes one thousand pounds he can, 
 as matters stand, do three things with it, any 
 one of which will gratify him. He can spend 
 it as income, and enjoy the whole of it in that 
 way ; he can use it himself as Capital, and so 
 enjoy the profits ; or he can let others use it 
 as Capital, and so enjoy the interest. But if 
 he were by any means precluded from receiving 
 interest for it, and desired for any reason to 
 retire from active business, he could do with 
 his thousand pounds one of two things only 
 he could spend it as income, in which case it 
 would be destroyed ; or let others use it as 
 Capital, in which case he himself could derive 
 no benefit whatever from it, and would, in 
 effect, be giving it or throwing it away. Were 
 the first course pursued, no Capital would be 
 
MAINLY FOR THE SAKE OF INTEREST 259 
 
 saved ; were the second course obligatory, no BOOK iv 
 
 OTT TT 
 
 Capital would be created. 1 
 
 1 These considerations are so obvious, and have been so 
 constantly dwelt upon by all economic writers, other than 
 avowed Socialists, that it is quite unnecessary here to insist 
 on these further. Even the Socialists themselves have recog- 
 nised how much force there is in them, and have consequently 
 been at pains to meet them by the following curious doctrine. 
 They maintain that a man who makes or inherits a certain 
 sum has a perfect right to possess it, to hoard it, or squander 
 it on himself ; but no right to any payment for the use 
 made of it by others. They argue that if he puts it into a 
 business he is simply having it preserved for him ; for the 
 larger part of the Capital at any time existing would dwindle 
 and disappear if it were not renewed by being used. Let 
 him put it into a business, say the Socialists, and draw it 
 out as he wants it. Few things can show more clearly than 
 this suggested arrangement the visionary character of the 
 Socialistic mind for it needs but little thought to show that 
 such an arrangement would defeat its own objects and be 
 altogether impracticable. The sole ground on which the 
 Socialists recommend it, in preference to the arrangement 
 which prevails at present, is that the interest which the 
 owners of the Capital are forbidden to receive themselves 
 would by some means or other be taken by the State instead 
 and distributed amongst the labourers as an addition to their 
 wages, and would thus be the means of supplying them with 
 extra comforts. Now the interest if so applied would, it is 
 needless to say, be not saved but consumed. But the owners 
 of the Capital, who are thus deprived of their interest, are 
 to have the privilege, according to the arrangement we are 
 considering, of consuming their Capital in lieu of the interest 
 that has been taken from them. Accordingly, whereas the 
 interest is all that is consumed now, under this arrangement 
 
260 FAMIL Y FEELING 
 
 BOOK iv. I have spoken thus far as though in creating 
 
 Capital a man's motive were the hope of en- 
 
 secomiiy, ! joying the interest of it himself. But there is 
 
 family another motive almost equally powerful in 
 
 immediate | some . cases more powerful and that is the 
 
 hope of transferring or transmitting it to his 
 
 The bulk family or to his children. Now four-fifths of 
 
 capital the Capital of the United Kingdom has been 
 
 created within the last eighty years. The 
 employ if total Capital in 1812 amounted to about 
 
 two thousand millions; now it amounts to 
 from e their almost ten thousand millions. Therefore eight 
 
 thousand millions of the Capital of this 
 created!?? country has been created by the Ability of the 
 parents and of the grandparents of those who 
 now possess it, supplemented by the Ability 
 of many who now possess it themselves. The 
 most rapid increase in it took place between 
 1840 and 1875. If we regard men of fifty as 
 
 the Capital would be consumed as well. The tendency, in 
 fact, of the arrangement would be neither more nor less than 
 this : to increase the consumption of the nation at the expense 
 of its savings, until at last all the savings had disappeared. 
 It would be impracticable also for many other reasons, to 
 discuss which here would simply be waste of time. It is 
 enough to observe that the fact of its having been suggested 
 is only a tribute to the insuperable nature of the difficulty it 
 was designed to meet 
 
THE BEQUEST OF CAPITAL 261 
 
 representing the present generation of those BOOKIV. 
 
 . CH. II. 
 
 actively engaged in business, we may say that 
 their grandfathers made two thousand millions history of 
 
 . . ~, . , , . >. the growth 
 
 of our existing Capital, their parents jour O f capital 
 thousand millions, and themselves two thou- 
 
 sand millions. It will thus be easily realised shows 7 
 how those persons who own Capital which they 
 Cleave others to employ, and which personally 
 they have had no hand in making, are for the 
 most part relatives or representatives of the 
 very persons who made it, and who made 
 it actuated by the hope that their relations 
 or representatives should succeed to it. All A man's 
 history shows us that one of the most import- leave 6 
 ant and unalterable factors in human action is his n faLii y 
 a certain solidarity of interest between men by history 
 even selfish men and those nearly connected Strong*! 
 with them ; and just as parents are, by an 
 almost universal instinct, prompted to rear ^ 
 their children, so are they prompted to be- 
 queath to them or, at all events, to one of 
 them the greater part of their possessions. 
 We might as well try to legislate against the 
 instincts of maternity, as against the instinct 
 of bequest. Therefore, that the ownership of 
 much of the Capital of the country should be 
 
BOOK I\ 
 
 CH. n. 
 
 262 INTEREST A NECESSARY INCIDENT 
 
 separated from the actual employment of it, is 
 a necessary result of the forces by which it 
 was called into existence ; and in proportion 
 as such a result was made impossible in the 
 future, the continued operation of these forces 
 1 would be checked. 
 
 Further, it But interest depends also on a reason that is 
 
 sibie to* yet stronger and more simple than these. The 
 
 Interest owner of Capital receives interest for the use of 
 
 offered and it, because it is, in the very nature of things, 
 
 tne e useof impossible to prevent its being offered him, and 
 
 capital. impossible to prevent his taking it. If a man 
 
 who possesses one, hundred thousand pounds, 
 
 by using it as Capital makes ten thousand 
 
 pounds a year, and could, if he had the use of 
 
 another one hundred thousand pounds, add 
 
 another ten thousand pounds to his income, 
 
 no Government could prevent his making a 
 
 bargain with a man who happened to possess 
 
 the sum required, by which the latter, in 
 
 return for lending him that sum, would obtain 
 
 a part of the income which the use of it would 
 
 enable him to produce. 
 
 The most practical aspect of the matter, 
 however, yet remains to be considered. I 
 have spoken of interest as of a thing with 
 
AS THE PRICE OF THE USE OF CAPITAL 263 
 
 whose nature we are all familiar. But let us BOOK iv. 
 
 CH TI 
 
 pause and ask, What is it? It is merely a 
 part of the product which active Ability is 
 enabled to produce by means of its tool, Capital. 
 It is the part given by the man who uses the 
 tool to the man who owns it. But the tool, 
 or Capital, is, as we have seen already, itself 
 the product of the Ability of some man in the 
 past ; so that the payment of interest, whether 
 theoretically just or no, is a question which 
 concerns theoretically two parties only : the 
 possessor of living Ability, and the possessor 
 of the results of past Ability. Thus, whatever 
 view we may happen to take about it, Labour, 
 in so far as theoretical justice goes, has no 
 concern in the matter, one way or the other. 
 For if interest is robbery, it is Ability that is 
 robbed, not Labour. 
 
 It is important to take notice of this truth ; And 
 fora knowledge of what is theoretically just, interest be 
 though it can never control classes so far as to ItltTii 10 ' 
 prevent their seizing on whatever they can present? 
 obtain and keep, exercises none the less a very Labour. 6 * 
 strong influence on their views as to how much 
 of the wealth of other classes is obtainable, 
 and also on the temper in which, and the 
 
264 A PART OF THE INTEREST OF CAPITAL 
 
 BOOK iv. entire procedure by which, they will endeavour 
 
 CH IT 
 
 to obtain it. For this reason it is impossible 
 modify, to insist too strongly on the fact that, as a 
 extinguish, matter of theoretical justice, Labour, as such, 
 to^ppro"* 6 has no claim whatever on any of the interest 
 parfof 1 P a id for the use of Capital ; and that if it 
 paS? as succeeds in obtaining any part of this interest, 
 iterest. ^ w ^ j^ obtaining what has been made by 
 others, not what has been made by itself. It 
 is not that such arguments as these will extin- 
 guish the desire of Labour to increase its own 
 wages at the expense of interest, if possible ; 
 for might the might that can sustain itself, 
 not the brute force of the moment will always 
 form in the long run the practical rule of right ; 
 but they will disseminate a dispassionate view 
 of what the limits of possibility are, and on 
 what these limits depend. 
 
 History And now let us turn to the facts of in- 
 
 thatthey dustrial history, and see what light they 
 
 doing this throw on what has just been said. I have 
 
 5ady> pointed out that if Capital is to be made or 
 
 used at all, it must necessarily, for many 
 
 reasons, be allowed to yield interest to its 
 
 owners ; but the amount of interest it yields 
 
 has varied at various times ; and, although to 
 
CONSTANTLY APPROPRIATED BY LABOUR 265 
 
 abolish it altogether would be impossible, or, BOOKIV. 
 if possible, fatal to production, it is capable, 
 under certain circumstances, of being reduced 
 to a minimum, without production being in 
 any degree checked ; and every pound which 
 the man who employs Capital is thus relieved 
 from paying to the man who owns it con- 
 stitutes, other things being equal, a fund 
 which may be appropriated by Labour. To 
 say this is to make no barren theoretical 
 statement. The fund in question not only 
 may, under certain circumstances, be appro- 
 priated by Labour; but these circumstances 
 are the natural result of our existing industrial 
 system ; and the fund, as I will now show, 
 has been appropriated by Labour already, and 
 forms a considerable part of that additional 
 income which Labour, as we have seen, has 
 secured from the income created by Ability. 
 
 In days preceding the rise of the modern to an. 
 industrial system, the average rate of interest extent. 
 was as high as ten per cent. As the modern \$ 
 system developed itself, as Ability more and 
 more was diverted from war, and concentrated 
 on commerce and industry, and produced by 
 the use of Capital a larger and more certain 
 
266 INTEREST NOT TO BE CONFUSED 
 
 BOOK iv. product, the price it paid for the use of 
 Capital fell, till by the middle of this century 
 
 Interest 
 
 now forms it was not more than five per cent. During 
 part of the the past forty years it has continued to sink 
 the nation, still further, and can hardly be said now to 
 
 average much more than three, 
 in spite of This fact is sufficiently well known to 
 
 appear- 
 ances to the investors ; but there are other tacts known 
 
 equally well which tend to confuse popular 
 thought on the subject, and which accordingly, 
 in a practical work like this, it is very neces- 
 sary to place in their true light. For, in 
 spite of what has been said of the fall in the 
 rate of interest from ten to six, and to five, 
 and from five to three per cent, it is notorious 
 that companies, when successful, often pay 
 to-day dividends of from ten to twenty per 
 cent, or even more ; and founders' shares in 
 companies are constantly much sought after, 
 which are merely shares in such profits as 
 result over and above a return of at least ten 
 per cent on the capital. 
 
 But the explanation of this apparent con- 
 As much I tradiction is simple. Large profits must not 
 vulgarly be confounded with high interest. Large 
 profits are a mixture of three things, as was 
 
WITH LARGE PROFITS 267 
 
 BOOK IV. 
 CH. II. 
 
 pointed out by Mill, though he did not name 
 
 two of them happily. He said that profits ^-^ 
 
 . , , f f. . . -, something 
 
 consisted of wages 01 superintendence, com- quite 
 
 . , , . , n - t i different. 
 
 nsation for risk, and interest on Capital, 
 instead of wages of superintendence, we 
 the product of Ability, and instead of 
 compensation for risk, we say the reward of 
 sagacity, which is itself a form of Ability, we 
 shall have an accurate statement of the case. 
 A large amount of the Capital in the kingdom 
 is managed by the men who own it ; and 
 when they manage it successfully, the returns 
 are large. Sometimes a man with a Capital 
 of a hundred thousand pounds will make as 
 much as fifteen thousand pounds a year ; 
 but that does not mean that his Capital yields 
 fifteen per cent of interest. Let such a man 
 be left another hundred thousand pounds, 
 which he determines not to put into his own 
 business, but invests in some security held 
 to be absolutely safe, and he will find that 
 interest on Capital means not more than three 
 and a half per cent. If he is determined 
 to get a large return on his Capital, and if he 
 does this by investing it in some new and 
 speculative enterprise, this result, unless it be 
 
268 INTEREST NOT TO BE CONFUSED 
 
 BOOK iv. the mere good luck of a gambler, is mainly the 
 result of his own knowledge and judgment, 
 as the following facts clearly enough show. 
 
 Between the years 1862 and 1885 there 
 were registered in the United Kingdom about 
 twenty -jive thousand joint stock companies, 
 with an aggregate Capital of about two thou- 
 sand nine hundred million pounds. Of these 
 companies, by the year 1885, more than 
 fifteen thousand had failed, and less than ten 
 thousand were still existing. During the 
 following four years the proportion of failures 
 was smaller; but a return published in 1889 
 shows that of all the companies formed during 
 the past twenty - seven years, considerably 
 more than half had been wound up judicially. 
 Therefore a man who secures a large return on 
 money invested in a business not under his own 
 control, does so by an exercise of sagacity not 
 only beneficial to himself, but in a still higher 
 degree beneficial to the country generally ; for 
 he has helped to direct human exertion into a 
 profitable and useful channel, whereas those who 
 are less sagacious do but help it to waste itself. 1 
 
 1 The part played in national progress by the mere 
 business sagacity of investors, amounts practically to a con- 
 
WITH THE PROFITS OF SAGACITY 269 
 
 Of large returns on Capital, then, only a BOOKIV. 
 part is interest ; the larger part being merely _!_' 
 another name for what we have shown to 
 be the actual creation of Ability either the 
 Ability with which the Capital has been 
 employed in directing Labour, or the Ability 
 with which some new method of directing 
 Labour has been selected. There is accord- 
 ingly no contradiction in the two statements 
 that Capital may often bring more than 
 fifteen per cent to the original investors ; and 
 yet that interest on Capital in the present 
 day is not more than three or three and a 
 half per cent. Here is the explanation of 
 shares rising in value. A man who at the 
 starting of a business takes a hundred one 
 pound shares in it, and, when it is well estab- 
 lished, gets twenty pounds a year as a dividend, 
 will be able to sell his shares for something like 
 six hundred pounds ; which means that little 
 more than three per cent is the interest which 
 will be received by the purchaser. 
 
 Interest, then, or the sum which those who 
 
 stant criticism of inventions, discoveries, schemes, and enter- 
 prises of all kinds, and the selection of those that are valuable 
 from amongst a mass of what is valueless and chimerical. 
 
270 ENORMOUS GAINS OF LABOUR 
 
 BOOK iv. use Capital pay to those who own it, having 
 
 CH. II. . 
 
 decreased, as we have seen it has done, with 
 then, has the development of our industrial system, it 
 and the ' remains to show the reader where the sum 
 tLu saved* thus saved has gone. It must have gone 
 to the"* to one or other of two classes of people : 
 classes!^ to the men f Ability, or to the labourers. 
 If it had gone to the former, that is, to the 
 employers of Labour, their gains now would 
 be greater, in proportion to the Capital em- 
 ployed by them, than they were fifty years 
 ago ; but if their gains have not become 
 greater, then the sum in question must 
 obviously have found its way to the labourers. 
 And that such is the case will be made 
 sufficiently evident by the fact that Mr. 
 Giffen has demonstrated in the most con- 
 clusive way that, if rent and the interest 
 taken by the classes that pay income-tax 
 had increased as fast as the sum actually 
 taken by Labour, the sum assessed to income- 
 tax would be four hundred million pounds 
 greater than it is, and the sum taken by 
 Labour four hundred million pounds less. 1 
 
 1 See Mr. Giffen's Inaugural Address of the Fiftieth Ses- 
 sion of the Statistical Society. 
 
AT THE EXPENSE OF ABILITY 271 
 
 In this case the wealthier classes would be BOOKIV. 
 now taking one thousand and sixty million 
 pounds, instead of the six hundred million 
 pounds which they actually do take ; * and 
 the labouring classes, instead of taking, as 
 they do, six hundred and sixty million 
 pounds, or, as Mr. Giifen maintains, more, 
 would be taking only two hundred and sixty 
 million pounds? In fact, as Mr. Giffen de- 
 clares, " It would not be far short of the mark 
 to say that the whole of the great improve- 
 ment of the last fifty years has gone to the 
 masses." And the accuracy of this statement 
 is demonstrated in a very striking way by 
 the fact that had the whole improvement, 
 according to the contrary hypothesis, gone 
 
 1 The gross amount assessed to income-tax in 1891 was 
 nearly seven hundred million pounds; now more than a 
 hundred million pounds was exempt, as belonging to persons 
 with incomes of less than a hundred and fifty pounds a year. . 
 Mr. Giffen maintains (see his evidence given before the Eoyal 
 Commission on Labour, 7th December 1892) that there is 
 an immense middle-class income not included amongst the 
 wages of the labouring class. This, according to the classifica- 
 tion adopted above, which divides the population into those 
 with incomes above, and those with incomes below a hundred 
 and fifty pounds, would raise the collective incomes of the 
 latter to over seven hundred million pounds. 
 
 2 See Mr. Giffen's Address, as above. 
 
272 LABOUR AND THE EXISTING SYSTEM 
 
 BOOK iv. not to the labourers, but to the classes that 
 
 CH. II. 
 
 pay income-tax, the remainder, namely, two 
 hundred and sixty million pounds, would 
 correspond, almost exactly, allowing for the 
 increase of their numbers, with what the 
 labouring classes received at the close of the 
 last century. 
 
 what the What, then, the social reformer, what the 
 reformer labourer, and the friend of Labour, ought to 
 study is study with a view to improving the condition 
 dreams of of the labouring classes, is not the theories 
 and dreams of those who imagine that the 
 improvement is to be made only by some 
 through reorganisation of society, but the progress, 
 an( ^ *^ e causes OI> the progress, that these 
 classes have actually been making, not only 
 un der existing institutions, but through them, 
 because of them, by means of them. 
 
CHAPTER III 
 
 &f the Causes owing to which, and the Means by 
 which Labour participates in the growing Pro- 
 ducts of Ability. 
 
 LET me repeat in other words what I have 
 just said. The labouring classes, under the 
 existing condition of things, have acquired 
 more wealth in a given time than the most 
 sanguine Socialist of fifty years ago could 
 have promised them ; and this increased 
 wealth has found its way into their pockets 
 owing to causes that are in actual operation 
 round us. These causes, therefore, should be 
 studied for two reasons : firstly, in order that 
 we may avoid hindering their operation ; 
 secondly, in order that we may, if possible, 
 accelerate it ; and I shall presently point out, 
 as briefly, but as clearly as I can, what the 
 general character of these causes is. 
 
 18 
 
274 A MISERABLE CLASS 
 
 BOOK iv. But before doing this, before considering 
 
 the cause of this progress, I must for a 
 
 that there moment longer dwell and insist upon the 
 
 ous facts reality of it; because unhappily there are 
 
 certain notorious facts which constantly obtrude 
 orextitabie themselves on the observation of everybody, 
 and which tend to make many people deny, or 
 at least doubt it. These facts are as follows. 
 
 Speaking in round numbers, there exists in 
 this country to-day a population consisting of 
 about seven hundred thousand families, or 
 three million persons, whose means of subsist- 
 ence are either insufficient, or barely sufficient, 
 or precarious, and the conditions of whose life 
 generally are either hard or degrading, or both. 
 A considerable portion of them may, without 
 any sentimental exaggeration, be called miser- 
 able ; and all of them may be called more or 
 less unfortunate. There is, further, this obser- 
 vation to be made. People who are in want of 
 the bare necessaries of life can hardly be worse 
 off absolutely at one period than another ; but 
 if, whilst their own poverty remains the same, 
 the riches of other classes increase, they do, in 
 a certain sense, become worse off relatively. 
 The common statement, therefore, that the 
 
CO-EXISTING WITH GENERAL PROGRESS 275 
 
 poor are getting constantly poorer is, in this _ BOOK iv. 
 relative sense, true of a certain part of the J _ ' 
 population ; and that part is now nearly equal \ 
 in numbers to the entire population of the 
 country at the time of the Norman Conquest. 
 Such being the case, it is of course obvious 
 that persons who, for purposes of either bene- 
 volence or agitation, are concerned to discover 
 want, misfortune, and misery, find it easier 
 to do so now than at any former period. 
 London alone possesses an unfortunate class 
 which is probably as large as the whole 
 population of Glasgow ; and an endless pro- 
 cession of rags and tatters might be marched 
 into Hyde Park to demonstrate every Sunday. 
 But if the unfortunate class in London is as 
 large as the whole population of Glasgow, we 
 must not forget that the population of London 
 is greater by nearly a million than the popula- 
 tion of all Scotland ; and the truth is that, \ But when 
 although the unfortunate class has, with the L V iz. facts 
 increase of population, increased in numbers the T ery 
 
 absolutely, yet relatively, for at least two 
 centuries, it has continued steadily to decrease, 
 In illustration of this fact, it may be mentioned t] 
 that, whereas in 1850 there were nine paupers 
 
276 RELATIVE DECREASE OF POVERTY 
 
 BOOK iv. to every two hundred inhabitants, in 1882 
 J _ ' there were only Jive; whilst, to turn for a 
 moment to a remoter period, so as to compare 
 the new industrial system with the old, in 
 the year 1615, a survey of Sheffield, already 
 a manufacturing centre, showed that the 
 " begging poor," who " could not live without 
 the charity of their neighbours," actually 
 amounted to one -third of the population, or 
 seven hundred and twenty -five households 
 out of two thousand two hundred and seven. 
 Further, although, as I observed just now, 
 it is in a certain sense true to say that, 
 relatively to other classes, the unfortunate 
 class has been getting poorer, the real tend- 
 ency of events is expressed in a much truer 
 way by saying that all other classes have been 
 getting more and more removed from poverty. 
 we shall What the presence, then, and the persist- 
 they have ence of this class really shows us is not that 
 the progress of the labouring classes as a whole 
 nas been less rapid and less remarkable than 
 
 the extra- ^ naS J US ^ l> een Sa ^ * ^6, ^Ut ^hat a 
 
 progrenaf faction of the population, for some reason or 
 the vast O ther, has always remained hitherto outside 
 
 majority. J 
 
 this general progress ; and the one practical 
 
TWO CAUSES OF POPULAR PROGRESS 277 
 
 lesson which its existence ought to force on us BOOK iv, 
 is not to doubt the main movement, still less 
 to interfere with it, but to find some means of 
 drawing these outsiders into it. This great what then 
 and grave problem, however, requires to be 
 
 treated by itself, and does not come within the progress ? 
 scope of the present volume. Our business is 
 not with the causes which have shut out one- 
 tenth of the poorer classes from the growing 
 national wealth, but with those which have so 
 signally operated in making nine-tenths of 
 them sharers in it. 
 
 We will accordingly return to these, and 
 consider what they are. We shall find them They are of 
 
 i-i ^ wo kinds : 
 
 to be of two kinds : firstly, those which consist 
 
 -, i . taneous 
 
 of the natural actions ol men, each pursuing tendencies, 
 his own individual interest; and secondly, deliberate 
 their concerted actions, which represent some concerted 
 general principle, and are deliberately under- J^ M 
 taken for the advantage not of an individual 
 but of a class. We will begin with consider- 
 ing the former ; as not only are they the 
 most important, but they also altogether 
 determine and condition the latter, and the 
 latter, indeed, can do little more than assist 
 them. 
 
2;8 THE RICHES OF A MINORITY 
 
 BOOK iv. The natural causes that tend to distribute 
 
 - amongst Labour a large portion of the wealth 
 
 We will _ C ' _ ..... 
 
 begin with produced by Ability will be best understood 
 
 taneous if we first consider for a moment the two 
 
 tendencies 1,1 i > -i 
 
 i.e. the ways and the two only ways in which a 
 
 minority can become wealthy. _ What these 
 are can be easily realised thus. I Let us imagine 
 a community of eight labouring men, who 
 ^ make each of them fifty pounds a year, and 
 who represent Labour ; and let us imagine a 
 ninth man, a man of Ability, who represents 
 There are the minority. The ninth man might, if he 
 
 two ways 
 
 of getting were strong enough, rob each of the eight men 
 
 abstracting of twenty-five pounds, compelling them each 
 
 existing to live on twenty-five pounds instead of on 
 
 or (2) by fifty pounds, and appropriate to himself an 
 
 ?t. "-The annual two hundred pounds. Or he might 
 
 of the reach the same result in a totally different w T ay. 
 
 woridhave, He might so direct and assist the Labour of 
 
 LU'e 016 ' tne ei g nt men > that without any extra effort 
 
 second tbe ^ themselves they each, instead of fifty pounds 
 
 produced seventy -five pounds, and if, under 
 
 these circumstances, he took twenty-five pounds 
 
 from each, he would gain the same sum as 
 
 before, namely two hundred pounds, but, as 
 
 I said, in a totally different way. It would 
 

 HOW THEY ARE PRODUCED 279 
 
 represent what he had added to the original BOOK 
 product of the labourers, instead of representing 
 anything he had taken from it. Now whatever 
 may have been true of rich classes in former 
 times and under other social conditions, the 
 riches now enjoyed by the rich class in this 
 country have, with exceptions which are utterly 
 ^unimportant, been acquired by the latter of 
 these two methods, not by the former. They 
 represent an addition to the product of Labour, 
 not an abstraction from it.\ This is, of course, 
 clear from what has been said already ; but it 
 is necessary here to specially bear it in mind. 
 
 Let us then take a community of eight Let us 
 labourers, each producing commodities worth the nature 
 fifty pounds a year, and each consuming as he process, 
 easily might the whole of them. These men 
 represent the productive power of Labour ; 
 and now let us suppose the advent of Ability By first 
 in the person of the ninth man, by whose 
 assistance this productive power is multiplied, 
 and consider more particularly what the ninth 
 man does. There is one thing which it is 
 quite plain he does not do. He does not 
 multiply the power of Labour for the sake of ^ as r s e '. being 
 merely increasing the output of those actual seuted 
 
 * o JT onp. mn 
 
 as 
 one man. 
 
280 THE RICH MAN'S PROGRESS 
 
 BOOK iv. products which he finds the labourers orio p in- 
 
 CH. III. . 
 
 ally producing and consuming, and of appro- 
 priating the added quantity ; for the things he 
 would thus acquire would be of no possible 
 good to him. He would have more boots and 
 trousers than he could wear, more bread and 
 cheese than he could eat, and spades and imple- 
 ments which he did not want to use. He would 
 not want them himself, and the labourers are 
 already supplied with them. They would be 
 no good to anybody. He does not therefore 
 employ his Ability thus, so as to increase the 
 output of the products that have been produced 
 hitherto ; but he enables first, we will say, 
 four men, then three, then two, and lastly one, 
 to produce the same products that were origin- 
 ally produced by eight ; and he thus liberates 
 a continually increasing number, whom he sets 
 to produce products of new and quite different 
 kinds. 
 
 Let us see how he does this. The eight 
 labourers, when he finds them, make each fifty 
 pounds a year, orfour hundred pounds in the 
 aggregate ; and this represents the normal 
 necessaries of their existence. He, by the 
 assistance which his Ability renders Labour, 
 
CH. IIT. 
 
 THE RICH MAN'S PROGRESS 281 
 
 enables at last, after many stages of progress, BOOK iv. 
 these same necessaries to be produced by one 
 single man, who, instead of producing, as for- 
 merly, goods woiih fifty pounds, finds himself, 
 with the assistance of Ability, producing goods 
 worth four hundred pounds. There is thus 
 an increase of three hundred and fifty pounds, 
 and this increment the man of Ability takes. 
 
 Meanwhile, seven men are left idle, and with 
 them the man of Ability makes the following 
 bargain. Out of the three hundred and fifty 
 pounds worth of necessaries which he possesses, 
 he offers each of them fifty pounds worth 
 the amount which originally they each made 
 for themselves, on condition that they will 
 make other things for him, or put their time at 
 his disposal. They accordingly make luxuries 
 for him, or become his personal servants. For 
 the three hundred and fifty pounds he pays 
 them in the shape of necessaries, they return 
 him another three hundred and fifty pounds in 
 the shape of commodities or of service ; and this 
 new wealth constitutes the able man's income. 
 
 Such, reduced to its simplest elements, is 
 the process on which the riches of the rich in 
 the modern world depend. It will be seen, 
 
282 THE RIVALRY OF THE RICH 
 
 BOOK iv. however, that in the case we have just supposed, 
 
 CH. m. 
 
 the labourers, by the process in question, gain 
 case, there absolutely nothing. Each of them originally 
 compete made fifty pounds a year. He now receives 
 employers, the same sum in wages. But the total product 
 t^ere^o d ^ as increased by three hundred and fifty 
 pounds, and of this the labourers acquire no 
 snare whatever. Nor, supposing them to be 
 inexperienced in the art of combination, is there 
 the labour- anv means by w hich they could ever do so. 
 And if our imaginary community were a com- 
 plete representation of reality, the same would 
 be the case with the labourers in real life. 
 But let us But it must now be pointed out that in 
 
 introduce a . 
 
 second man one important respect, as a representation 01 
 
 competing reality, our community is incomplete. It re- 
 first, and presents the main process by which the riches 
 of distribu- of the rich are produced ; but it offers no 
 
 parallel to one factor in the real situation, 
 amongst owing to which the labourers inevitably acquire 
 
 a snare ^ n them. In that community the rich 
 at once, classes are represented by a single person, who 
 has no conflicting interests analogous to his 
 own to contend against. But in actual life, 
 so far as this point is concerned, the condition 
 of the rich is different altogether. As looked 
 
CH. III. 
 
 THE GAIN OF LABOUR 283 
 
 at from without, they are, indeed, a single BOOKIV. 
 body, which may with accuracy be represented 
 as one man ; but as looked at from within, they 
 are a multitude of different bodies, whose 
 interests, within certain limits, are diametric- 
 ally opposed to each other. In order, there- 
 fore, to make our illustration complete, instead 
 of one man of Ability we must imagine two. 
 The first, whose fortunes we have just followed, 
 and whom, for the sake of distinctness, we will 
 christen John, has already brought production 
 to the state that has been just described. He 
 has managed to get seven men out of eight to 
 produce luxuries for himself, luxuries, we will 
 say, such as wine, cigars, and butter, paying 
 these seven men with the surplus necessaries 
 which, with his assistance, are produced by 
 the eighth man. But of these luxuries the 
 seven men keep none ; nor can they give any 
 of them to the eighth man, their fellow. John 
 takes alL But now let us suppose that a 
 second man of Ability, whom we will christen 
 James, appears upon the scene, just as anxious 
 as John to direct Labour by his Ability, and 
 just as capable of making Labour productive. 
 But all the labourers are at presejiLinJhe pay 
 
 OF THE 
 
 UNIVERSITY 
 
284 POPULAR PROGRESS 
 
 BOOK iv. of John. James therefore must set himself to 
 detach them from John's service; and he accord- 
 ingly engages that if they will work for him 
 they shall not only each receive the necessaries 
 that John gives them, but a share of the other 
 things that they produce of the butter, of the 
 cigars, and of the wine as well. The moment 
 this occurs, John has to make a similar offer ; 
 and thus the wages of Labour at once begin to 
 rise. When they have been forced up to a 
 certain point, James and John cease to bid 
 against one another, and each employs a 
 certain number of labourers, till one or other 
 of them makes some new discovery which 
 enables the same amount of some commodity 
 we will say cigars as has hitherto been 
 produced by two men, to be produced by one ; 
 and thus a new labourer is set free, and is 
 available for some new employment. We 
 must assume that James and John could both 
 employ this man profitably that is, that they 
 could set him to produce some new object of 
 desire let us say strawberries ; and, this being 
 so, there is again a competition for his labour. 
 He is offered by both employers as much as 
 he has received hitherto, and as the other 
 
AND GROWTH OF POPULATION 285 
 
 labourers receive ; and he is offered besides a BOOK iv. 
 certain number of strawberries. Whichever 
 employer ultimately secures his services, the 
 man has secured some further addition to his 
 income. He has some share in the increasing 
 wealth of the community ; and, as John and 
 James continue to compete in increasing the 
 production of all other commodities, some 
 share of each increase will in time go to all 
 the labourers. 
 
 One thing only could interfere with this And 
 
 & J nothing 
 
 process ; and that has been excluded from our can stop 
 
 this process 
 
 supposed community : namely, an increase in except an 
 
 . . , . , increase of 
 
 its numbers. And a mere increase in the population 
 
 numbers would in itself not be enough. It 
 must be an increase which outstrips the dis- productive 
 covery of new ways in which labour may be Abliity. f 
 employed profitably. Let us suppose that to 
 our original eight labourers, eight new labourers 
 are added, who if left to themselves could do 
 just what the first eight could do, namely, 
 produce annual subsistence for themselves to 
 the value of fifty pounds each. If, under the 
 management of James or John, the productivity 
 of these men could be multiplied eight-fold, as 
 was the case with the first eight, James and 
 
286 THE GAIN OF LABOUR 
 
 BOOK iv. John would be soon competing for their services, 
 _ ' and the second eight, like the first eight, would 
 share in the increased product. But if, owing 
 to all the best land being occupied, and few 
 improvements having been discovered in the 
 methods of any new industries, the productivity 
 of the new -men could be increased not eight- 
 fold, but only by one-eighth that is to say, if 
 what each man produces by his unaided Labour 
 could be raised by Ability from fifty pounds, 
 not to four hundred pounds, but to no more 
 than fifty-six pounds ten shillings, fifty -six 
 pounds ten shillings would be the utmost these 
 men would get, even if the Ability of James 
 or John got no remuneration whatever. 
 Meanwhile, however, the first set of workmen 
 are, as we have seen, receiving much more than 
 this. They are receiving each, we will say, 
 one hundred pounds. The second set, there- 
 fore, naturally envy them their situations, and 
 endeavour to secure these for themselves by 
 offering their Labour at a considerably lower 
 price. They offer it at ninety pounds, at 
 seventy pounds, or even at sixty pounds ; for 
 they would be bettering their present situation 
 by accepting even this last sum. This being 
 
LIMITED BY THE POWER OF ABILITY 287 
 
 the case, the original eight labourers have BOOKIV, 
 necessarily to offer their Labour at reduced 
 terms also ; and thus the wages of Labour are 
 diminished all round. 
 
 Such is the inevitable result under such 
 circumstances, if each man employer and 
 employed alike follows his own interest 
 at the bidding of common sense. One man 
 is not more selfish than another ; indeed, in 
 a bad sense, nobody is selfish at all ; and for 
 the result nobody is to blame. The average 
 wages of Labour are diminished for this simple 
 reason, and for no other that the average 
 product is diminished which each labourer 
 assists in producing. The community is richer 
 absolutely; but it is poorer in proportion to 
 its numbers. 1 Let us see how this works out. 
 The original product of the first eight labourers 
 was fifty pounds a head, or four hundred 
 pounds in the aggregate. This was raised by 
 the co-operation of Ability to four hundred 
 pounds a head, or three thousand two hundred 
 
 1 If the number of employers does not increase, it is true 
 that they, unlike the employed, will be richer in proportion 
 to their numbers ; but they will be poorer in proportion to 
 the number of men employed by them. 
 
288 THE NATURAL GAIN OF LABOUR 
 
 BOOK iv. pounds in the aggregate. But the second set 
 - ' of labourers, whatever Ability may do for them, 
 cannot be made to produce more ih&n fifty -six 
 pounds ten shillings a head, or an aggregate 
 of four hundred and fifty -two pounds; 
 and thus, whereas eight labourers produced 
 three thousand two hundred pounds, sixteen 
 labourers produce only three thousand six 
 hundred and fifty -two pounds, and the aver- 
 age product is lowered from four hundred 
 pounds to two hundred and twenty -eight 
 pounds. 1 
 
 1 Thus the old theory of the wage-fund, which has so 
 often been attacked of late, has after all this great residuary 
 truth, namely, that the amount of wealth that is spent and 
 taken in wages is limited by the total amount of wealth pro- 
 duced in proportion to the number of labourers who assist in 
 its production. That theory, however, as commonly under- 
 stood, is no doubt erroneous, though not for the reasons com- 
 monly advanced by its critics. The theory of a wage-fund 
 as commonly understood means this that if there were eight 
 labourers and a capital of four hundred pounds, which would 
 be spent in wages and replaced within a year, and if this 
 were distributed in equal shares of fifty pounds, it would be 
 impossible to increase the share of one labourer without 
 diminishing that of the others ; or to employ more labourers 
 without doing the same thing. But the truth is that if 
 means were discovered by which the productivity of any one 
 labourer could be doubled during the first six months, the 
 whole fifty pounds destined for his whole year's subsistence 
 
ITS RELATION TO POLITICS 289 
 
 Was;es naturally decline then, owing to an BOOK iv. 
 
 CH. III. 
 
 increase of population, when relatively to the 
 population wealth declines also ; but only then, natural 
 On the other hand, and this is the important however, 
 point to consider, so long as a country, under regulated 
 
 ,, -i . . , by deliber- 
 
 the existing system of production, continues, a te action, 
 like our own, to grow richer in proportion to and 1 other, 
 the number of labourers, of every fresh increase 
 in riches the labourers will obtain a share, 
 without any political action or corporate 
 struggle on their part, merely by means of a 
 natural and spontaneous process. And we 
 have now seen in a broad and general way 
 what the character of this process is. It may 
 seem, however, to many people that a study of 
 it and of its results can teach no lesson but the 
 lesson of laisser faire, which practically means 
 that the labourers have no interest in politics 
 
 might be paid to him during the first six months, and the 
 fund would meanwhile have been created with which to pay 
 him a similar sum for the next six months the employer 
 gaining in the same proportion as the labourer. So, too, 
 with regard to an additional number of labourers if ability 
 could employ their labour to sufficient advantage, part of the 
 sum destined to support the original labourer for the second 
 six months of the year might be advanced to them, and 
 before the second six months' wages became due there might 
 be enough to pay an increased wage to all 
 
 19 
 
290 SELF-HELP AND STATE HELP 
 
 BOOK iv. at all, and that all social legislation and cor- 
 porate action of their own is no better than a 
 waste of trouble, and is very possibly worse. 
 But to think this is to completely misconceive 
 the matter. Even a study of this process of 
 natural distribution by itself would be fruitful 
 of suggestions of a highly practical kind ; but 
 if we would understand the actual forces to 
 which distribution is due, it must, as I have 
 said already, not be studied by itself, but taken 
 in connection with others by which its opera- 
 tion has been accelerated. I spoke of these as 
 consisting of deliberate and concerted actions 
 in contradistinction to individual and spon- 
 which taneous actions ; and these, speaking broadly, 
 takes two have been of two kinds the one represented 
 iegisia ms by the organisation of Labour in Trade Unions, 
 
 the other by certain legislative measures, which, 
 amongst a vague and misleading way, are popularly 
 described as " Socialistic." Let us proceed to 
 
 will discuss 
 
 both in the 
 
 next 
 chapter 
 
CHAPTER IV 
 
 Of Socialism and Trade Unionism the Extent and 
 Limitation of their Power in increasing the Income 
 of Labour. 
 
 I WILL speak first of the kind of legislation, Legislation 
 
 . . . . of the kind 
 
 popularly called Socialistic, which certain just ai- 
 
 ' 
 
 l J -4.1. U 1. J 
 
 people now regard with so much hope, and commonly 
 others with corresponding dread ; and I shall socialistic : 
 show that both of these extreme views rest 
 on a complete misconception of what this so- 
 called Socialism is. For what is popularly 
 called Socialism in this country, so far as it 
 has ever been advocated by any political 
 party, or has been embodied in any measure 
 passed or even proposed in Parliament, does 
 not embody what is really the distinctive 
 principle of Socialism. Socialism, regarded But this 
 as a reasoned body of doctrine, rests altogether describing 
 on a peculiar theory of production, to which inaccurate- 
 
CH. IV. 
 
 292 SO-CALLED SOCIALISM IN ENGLAND 
 
 BOOK iv. already I have made frequent reference a 
 theory according to which the faculties of men 
 are so equal that one man produces as much 
 wealth as another; or, if any man produces 
 more, he is so entirely indifferent as to 
 whether he enjoys what he produces or no, 
 that he would go on producing it just the 
 same, if he knew that the larger part would 
 at once be taken away from him. Hence 
 Socialists argue that the existing rewards of 
 Ability are altogether superfluous, and that 
 the existing system of production, which rests 
 on their supposed necessity, can be completely 
 revolutionised and made equally efficacious 
 without them. 
 
 But whatever may be the opinions of a 
 few dreamers or theorists, or however in the 
 future these opinions may spread, the funda- 
 mental principle of Socialism, up to . the 
 present time, has never been embodied in 
 any measure or proposal which has been 
 advocated in this country by any practical 
 party. On the contrary, the proposals and 
 measures which are most frequently denounced 
 as Socialistic even one so extreme as that 
 of free meals for children at Board Schools 
 
DIFFERENT FROM FORMAL SOCIALISM 293 
 
 all presuppose the system of production BOOK iv. 
 
 CH. IV. 
 
 which is existing, and thus rest on the very 
 foundation which professed Socialists would so-caiied 
 
 _- , Socialistic 
 
 destroy. 1 They merely represent so many legislation 
 ways wise or unwise of distributing a public country 
 
 rests on 
 the very 
 1 This is true even of productive or distributive industries system of 
 
 carried out by the State. The real Socialistic principle of P r h ^ ction 
 production has never been applied by the State, or by any professed 
 municipal authority ; nor has any practical party so much s . ocialists 
 as suggested that it should be. The manager of a State destroying. 
 factory has just the same motive to save that an ordinary 
 employer has : he can invest his money, and get interest on 
 it. A State or a municipal business differs only from a 
 private Capitalist's business either in making no profits, as 
 is the case in the building of ships of war ; or of securing the 
 services of Ability at a somewhat cheaper rate, and, in con- 
 sequence, generally diminishing its efficacy. Of State business 
 carried on at a profit, the Post Office offers the best example ; 
 and it is the example universally fixed on by contemporary 
 English Socialists. It is an example, however, which dis- 
 proves everything that they think it proves ; and shows the 
 necessary limitations of the principle involved, instead of the 
 possibility of its extension. For, in the first place, the 
 object aimed at i.e. the delivery of letters is one of excep- 
 tional simplicity. In the second place, all practical men 
 agree that, could the postal service be carried out by private 
 and competing firms, it would (at all events in towns) be 
 carried out much better ; only the advantages gained in this 
 special and exceptional case from the entire service being 
 under a single management, outweigh the disadvantages. 
 And lastly, the business, as it stands, is a State business in 
 the most superficial sense only. The railways and the 
 
294 AN ELEMENT OF SOCIALISM 
 
 BOOK iv. revenue, which consists almost entirely of 
 taxes on an income produced by the forces 
 of Individualism. 
 
 Now, so far as the matter is a mere ques- 
 tion of words, we may call such proposals or 
 measures Socialistic if we like. On grounds 
 of etymology we should be perfectly right in 
 doing so ; but we shall see that in that case, 
 with exactly the same propriety, we may 
 apply the word to the institution of Govern- 
 ment itself. The Army, the Navy, and more 
 obviously still the Police Force, are all Social- 
 istic in this sense of the word ; nor can any- 
 thing be more completely Socialistic than a 
 public road or a street. In each case a certain 
 something is supported by a common fund 
 for the use of all ; and every one is entitled 
 to an equal advantage from it, irrespective of 
 
 steamers that carry the letters are all the creations of private 
 enterprise, in which the principle of competition, and the 
 motive force of the natural rewards of Ability, have had 
 free play. Indeed the Post Office, as we now know it, if 
 we can call it Socialistic at all, represents only a superficial 
 layer of State Socialism resting on individualism, and only 
 made possible by its developments. Real State Socialism 
 would be merely the Capitalistic system minus the rewards 
 of that Ability by which alone Capital is made productive. 
 
NECESSARY TO EVERY STATE 295 
 
 his own deserts, or the amount he has con- 
 
 CH. IV. 
 
 tributed to its support. 
 
 If, then, we agree to call those measures what is 
 Socialistic to which the word is popularly socialism 
 applied at present, Socialism, instead of being 
 
 opposed to Individualism, is its necessary 
 complement, as we may see at once by con- g^te; 
 sidering the necessity of public roads and a 
 police force ; for the first of these shows us 
 that private property would be inaccessible 
 without the existence of social property ; and 
 the second that it would be insecure without 
 the existence of social servants. The good 
 or evil, then, that will result from Socialism, 
 as understood thus, depends altogether on 
 questions of degree and detail. There is no 
 question as to whether we shall be Socialistic 
 or no. We must be Socialistic ; and we And the 
 always have been, though perhaps without majTpro 
 knowing it, as M. Jourdain talked prose. The extended 
 only question is as to the precise limits to 
 which the Socialistic principle can be pushed 
 with advantage to the greatest number. 
 
 What these limits may be it is impossible 
 to discuss here. Any general discussion of 
 such a point would be meaningless. Each 
 
296 THE SOCIALISTIC QUESTION 
 
 BOOK iv. case or measure must be discussed on its own 
 
 CH IV 
 
 merits. But, though it is impossible to state 
 what the limits are, it is exceedingly easy to 
 show on what they depend. They depend on 
 two analogous and all-important facts, one of 
 which I have already explained and dwelt upon, 
 and which forms, indeed, one of the principal 
 themes of this volume. This is the fact, that 
 the most powerful of our productive agents, 
 namely Ability, cannot be robbed, without 
 diminishing its productivity, of more than a 
 certain proportion of the annual wealth pro- 
 duced by it; and, as it is from this wealth 
 that most of the Socialistic fund must be 
 appropriated, Socialistic distribution is limited 
 by the limits of possible appropriation. The 
 other fact the counterpart of this is as 
 follows. Just as Ability is paralysed by 
 robbing it of more than a certain portion of 
 its products, Labour may equally be paralysed 
 by an unwise distribution of them ; and thus 
 their continued production be at last rendered 
 That it can impossible. For instance, quite apart from 
 pushed too any initial difficulty in raising the requisite 
 obvious. fund from the wealthier class of tax-payers, 
 the providing of free meals for children in 
 
ENTIREL Y 'A QUESTION OF DEGREE 297 
 
 Board Schools is open to criticism, on account BOOK iv. 
 of the effect which it might conceivably have 
 upon parents, of diminishing their industry 
 by diminishing the necessity for its exercise. 
 Whether such would be the effect really in 
 this particular case, it is beside my purpose 
 to consider; but few people will doubt that 
 if such a provision were extended, and if, 
 even for so short a time as a single six 
 months, free meals were provided for the 
 parents also, half the Labour of the country 
 would be for the time annihilated. Labour, 
 however, is as necessary to production as is 
 Ability, even though, under modern conditions, 
 it does not produce so much ; and it is there- 
 fore perfectly evident that there is a limit 
 somewhere, beyond which to relieve the in- 
 dividual labourer of his responsibilities by 
 paying his expenses out of a public fund will 
 be, until human nature is entirely changed, 
 to dry up the sources from which that fund 
 is derived. 
 
 As I have said already, it is impossible, in 
 any general way, to give any indication of 
 what this limit is ; but the industrial history 
 of this country supplies a most instructive 
 
298 SOCIALISM NOT DIRECTL Y OPERA TIVE 
 
 BOOK iv. instance in which it was notoriously over- 
 passed, and what was meant as a benefit to 
 Labour, under circumstances of exceptional 
 difficulty, ended by endangering the prosperity 
 of the whole community. I refer to our Poor 
 Law at the beginning of this century, the 
 effects of which form one of the most remark- 
 able object-lessons by which experience has 
 ever illustrated a special point in economics. 
 
 The sort of That Poor Law, as Professor Marshall well 
 
 natural 
 
 limit that observes, arranged that part of the wages 
 its bene- [of the labourers] should be given in the form 
 of poor relief ; and that this should be distri- 
 of buted amongst them in the inverse proportion 
 to their industry, thrift, and forethought. 
 The traditions and instincts," he adds, " which 
 were fostered by that evil experience are even 
 now a great hindrance to the progress of the 
 working classes." Now that particular evil 
 on which Professor Marshall comments, 
 namely, that the part of the wages coming 
 through this Socialistic channel were in the 
 
 O 
 
 inverse proportion to what had really been 
 produced by the labourer is inherent in all 
 
 1 Principles of Economics, by Alfred Marshall, book iv. 
 chap. vii. 
 

 IN INCREASING THE INCOME OF LABOUR 299 
 
 Socialistic measures, the principal object of 
 which is to raise or supplement wages ; as is 
 clearly enough confessed by the Socialistic 
 motto, " To every man according to his needs." 
 It may accordingly be said that, absolutely such 
 necessary as the Socialistic principle is, and 
 much as may be hoped from its extension in 
 many directions, it neither has been in the 
 past, nor can possibly be in the future, 
 efficacious to any great extent in increasing 
 the actual income of the labourer. l 
 
 1 Though I have aimed at excluding from this volume 
 all controversial matter, I may here hazard the opinion that 
 the Socialistic principle is most properly applied to providing 
 the labourers, not with things that they would buy if they 
 were able to do so, but things that naturally they would not 
 buy. Things procurable by money may be divided into 
 three classes things that are necessary, things that are 
 superfluous, and things that are beneficial. Clothing is an 
 example of the first class, finery of the second, and education 
 of the third. If a man receives food from the State, other- 
 wise than as a reward for a given amount of labour, his 
 motive to labour will be lessened. If a factory girl, irre- 
 spective of her industry, was supplied by the State with 
 fashionable hats and jackets, her motive to labour would be 
 lessened also ; for clothing and finery are amongst the special 
 objects to procure which labour is undertaken. But desire 
 to be able to pay for education does not constitute, for most 
 men and women, a strong motive to labour ; and therefore 
 education may be supplied by the State, without the efficacy 
 of their labour being interfered with. 
 
300 TRADE UNIONISM 
 
 BOOK iv. Such being the case, then, let us now 
 
 - turn our attention to another principle of an 
 
 unionism entirely different kind, which, so far as regards 
 
 can do 7ar 7 this object, is incalculably more important, 
 
 we"wai an d which has constantly operated in the past, 
 
 ma 7 operate in the future, to increase 
 in e whaf h the labourer's income, without any correspond- 
 ing disadvantages. I mean that principle of 
 organisation amongst the labourers themselves 
 which is commonly called Trade Unionism ; 
 and which directly or indirectly represents 
 the principal means by which Labour is 
 attempting, throughout the civilised world, 
 to accelerate and regulate the natural distri- 
 bution of wealth. I will first, in the light of 
 the conclusions we have already arrived at, 
 point out to the reader what, speaking gener- 
 ally, is the way in which Trade Unionism 
 strengthens the hands of Labour; and then 
 consider what is the utmost extent to which 
 the strength which Labour now derives from 
 it may be developed. 
 
 The opera- ^ the reader has not already forgotten our 
 imaginary community, our eight labourers 
 wittl Jolm an(i James directing them, our 
 
 Trade* 
 
 wages can eas i es ^ course will be to turn again to that. 
 
HOW IT STRENGTHENS LABOUR 301 
 
 We saw that when the labourers were employed BOOK iv. 
 by John only, John who found them each 
 
 / / 7 n 1111 ^6 easily 
 
 making fifty pounds a year, and enabled them seen at a 
 
 by his Ability each to make four hundred reference to 
 pounds we saw that the whole of this 
 increase, in the natural course of things, would 
 
 be kept by John himself, by whose Ability * 
 
 it was practically created ; for it would not be 
 to John's advantage to part with any of it, 
 and the labourers, so long as they all acted 
 separately, would have no means of extracting 
 any of it from him. It would be useless for 
 one of them at a time to strike for higher 
 wages. The striker and the employer would 
 meet on wholly unequal terms ; because 
 the striker, whilst the strike lasted, would 
 be sacrificing the whole of his income, whilst 
 depriving the employer of only an eighth 
 part of his. But let us alter the supposition. 
 Let us suppose that the labourers combine 
 together, and that the whole eight strike for 
 higher wages simultaneously. The situation 
 is now completely changed ; and the loss that 
 the struggle will entail on both parties is 
 equal. The employer, like the labourer, will 
 for a time lose all his income. It is true 
 
302 HO W THE POWER OF STRIKING 
 BOOK iv. that if the employer has a reserve fund on which 
 
 PTT TV 
 
 he can support himself whilst production is 
 suspended, and if the labourer has no such fund, 
 the employer may still be sure of an immediate 
 victory, should he be resolved at all costs to 
 resist the labourers' demand. But, in any 
 case, the cost of resisting it will be appreciable : 
 it is a loss which the labourers will be able to 
 inflict on him repeatedly ; and he may see 
 that they would be able, by their strikes, to 
 make him ultimately lose more than he would 
 by assenting to their demands, or, at all events, 
 making some concessions to them. It is there- 
 fore obvious that the labourers, in such a case, 
 will be able to extract extra wages in the 
 inverse proportion to the loss which the em- 
 ployer will sustain if he concedes them, and 
 in direct proportion to the loss which would 
 threaten him should he refuse to do so. 1 
 
 1 In our imaginary community we have at first eight 
 labourers, who produce fifty pounds a year a-piece=/owr 
 hundred pounds. Then we have eight labourers + one able 
 man, who produce four hundred pounds a year for each 
 labourer = three thousand two hundred pounds. Of this the 
 able man takes two thousand eight hundred pounds. Now, 
 suppose the labourers strike for double wages, and succeed 
 in getting them, their total wages are eight hundred pounds a 
 year instead of four hundred pounds ; and the employer's income 
 
GROWS WITH THE GROWTH OF WAGES 303 
 
 There is, however, much more to be said. BOOKIV. 
 With each increase of their wages which the 
 labourers succeed in gaining, they will be 
 better equipping themselves for any fresh 
 struggle in the future ; for they will be able 
 to set aside a larger and larger fund on which 
 to support themselves without working, and 
 thus be in a position to make the struggle 
 longer, or, in other words, to inflict still greater 
 injury on the employer. And if such will be 
 
 is two thousand four hundred pounds instead of two thousand 
 eight hundred pounds. The labourers gain a hundred per cent; 
 the employer loses little more than fourteen per cent. The 
 labourers therefore have a stronger motive in demanding than 
 the employer has in resisting. But let us suppose that, the 
 total income of the community remaining unchanged, the 
 labourers have succeeded in obtaining one thousand eight 
 himdred pounds, thus leaving the employer one thousand four 
 hundred pounds. The situation will now be changed. The 
 labourers could not possibly now gain an increase of a hundred 
 per cent, for the entire income available would not supply 
 this ; but let us suppose they strike for an increase of two 
 hundred pounds. If they gained that, their income would be 
 two thousand pounds, and that of the employer one thousand 
 two hundred pounds; but the former situation would be 
 reversed. The employer now would lose more than the 
 labourer would gain. The labourers would gain, in round 
 numbers, only eleven per cent ; and the employer would 
 lose fourteen per cent. Therefore the employer would 
 have a stronger motive in resisting than the labourers in 
 demanding. 
 
304 NATURAL LIMITS OF THE POWERS 
 
 BOOK iv. the case when there is one employer only, 
 much more will it be the case when there are 
 
 Combina- 
 
 tiou two when John and James, as we have seen, 
 
 amongst . . ^ . . 
 
 labourers are lorced by the necessities of competition to 
 B?and- grant part of the labourers' demands, even 
 again?t ea before they are formulated. It might thus 
 .employers, seem that there is hardly any limit to the 
 Pwer which a perfected system of Trade 
 Unionism may one day confer upon the 
 labourers. There are, however, two which we 
 tocombine w ^ consider now, in addition to others at 
 which we will glance presently. One is the 
 limit with which we are already familiar, and 
 of which in this connection I shall again speak, 
 namely, the limit of the minimum reward 
 requisite as a stimulus to Ability. The other 
 is a limit closely connected with this, which 
 is constituted by the fact that if the demands 
 of Labour are pushed beyond a certain point 
 against disunited employers, the employers 
 will combine against Labour, as Labour has 
 combined against them, and all further conces- 
 sions will be, at all costs, unanimously refused. 
 The Now a situation like this is the ultimate 
 
 ultimate 
 
 tendency situation which all Trade Unionism tends to 
 Unionism bring about. It tends, by turning the labourers 
 
OF TRADE UNIONISM 305 
 
 into a single body on the one hand, and the BOOK 
 employers into a single body on the other, to 
 
 OFT TV 
 
 , , . , is to make 
 
 make the dispute like one between two indi- any 
 viduals ; and though for many reasons this between 
 result can never be entirely realised, 1 the limits pioyerand 
 
 employed 
 like a 
 1 The possibility of such a result would depend upon two conflict 
 
 assumptions, which are not in accordance with reality, and , e w . ee ?. 
 for^which allowance must be made. The first is the assump- viduals. 
 tion that the labouring population is stationary ; the second 
 is that Ability can increase the productivity of Labour equally 
 in all industries. In reality, however, as was noticed in the 
 last chapter, the number of labourers increases constantly, 
 and the improvements in different industries are very un- 
 equal ; and, owing to these two causes, it often happens 
 that the total value produced in some industries by Labour 
 and Ability together is not so great as is the share that is 
 taken by Labour in others. Thus the labourers employed 
 in the inferior industries could by no possibility raise their 
 wages to the amount received by the labourers employed 
 in the superior ones. Their effort accordingly would be to 
 obtain employment in the latter, and to do so by accepting 
 wages higher indeed than what they receive at present, but 
 lower than those received by the men whose positions they 
 wish to take. Thus, under such circumstances, a union of 
 industrial interests ceases to be any longer possible. By an 
 irresistible and automatic process, there is produced an 
 antagonism between them ; and the labourers who enjoy the 
 higher wages will do what is actually done by our Trade 
 Unions : they will form a separate combination to protect 
 their own interests, not only against the employers, but 
 even more directly against other labourers. At a certain 
 stage of their demands, the labourers may be able to combine 
 
 20 
 
306 LABOUR AND ABILITY 
 
 BOOK iv. of the power of Trade Unionism can be best seen 
 
 CH TV 
 
 by imagining it. What, then, is the picture we 
 have before us ? We have Labour and Ability 
 in the character of two men confronting each 
 other, each determined to secure for himself 
 the largest possible portion of a certain aggre- 
 gate amount of wealth which they produce 
 together. Now we will assume, though this is 
 far from being the case, that neither of them 
 would shrink, for the sake of gaining their 
 object, from inflicting on the other the utmost 
 injury possible ; and we shall see also, if we 
 make our picture accurate, that Labour is 
 physically the bigger man of the two. It 
 happens, however, that the very existence of 
 the wealth for the possession of which they 
 are prepared to fight is entirely dependent on 
 their peacefully co-operating to produce it ; so 
 / that if in the struggle either disabled the other, 
 A he would be destroying the prize which it is 
 object of his struggle to secure. Thus the 
 dispute between them, however hostile may be 
 
 more readily and more closely than the employers ; but when 
 a certain stage has been passed, the case will be the reverse. 
 The employers will be forced more and more into unanimous 
 action, whilst the labourers, by their diverging interests,, are 
 divided into groups whose action is mutually hostile. 
 
HIGGLING ON EQUAL TERMS 307 
 
 their temper, must necessarily be of the nature BOOK iv. 
 
 CH IV 
 
 not of a fight, but of a bargain ; and will be 
 
 IITI 11 i i p ^"ke limit 
 
 settled, like other bargains, by the process 01 to which it 
 compromise which Adam Smith calls "the wages is 
 
 higgling of the market." "When such a bargain^ 
 is struck, there will be a limit on both sides 
 a maximum limit to what Ability will consent Ability 
 to, give, and a minimum limit to what Labour \ oper 
 will consent to receive. There will be a certain 
 minimum which Ability must concede in the 
 long run ; because if it did not give so much, 
 it would indirectly lose more : and conversely 
 there is a certain maximum more than which 
 Labour will never permanently obtain ; because 
 if it did so the stimulus to Ability would be 
 weakened, and the total product would in conse- 
 quence be diminished, out of which alone the in- 
 creased share which Labour demands can come. 
 
 Thus the extent to which Trade Unionism Thus the 
 
 . . possible 
 
 can assist in raising wages, no matter how power of 
 wide and how complete its development, is far unionism 
 more limited than appearances lead many wages*^ 
 people to suppose. For the labourers, not limited 
 only in this country, but all over the world, seems * 
 are growing yearly more expert in the art of 
 effective combination, and are increasing their 
 
308 THE POWER REPRESENTED BY STRIKES 
 
 BOOK rv. strength by a vast network of alliances ; and 
 from time to time the whole civilised world 
 hastily by is startled at the powers of resistance and 
 tude of destruction which they show themselves to have 
 Labour acquired, and which they have called into 
 operation with a view to enforcing their 
 demands. The gas-strikes and the dock-strikes 
 m London, and the great railway- strikes, and 
 ^ ne s^ke a ^ Homestead in America, are cases 
 in point, and are enough to illustrate my 
 meaning. They impress the imagination with 
 a sense that Labour is becoming omnipotent. 
 But in all these Labour movements there is 
 one unchanging feature, which seems never to 
 be realised either by those who take part in 
 them or by observers, but on which really 
 their entire character depends, and which 
 makes their actual character entirely different 
 from what it seems to be. That this feature 
 should have so completely escaped popular 
 notice is one of the most singular facts in the 
 history of political blindness> and can be 
 accounted for only by the crude and imperfect 
 state in which the analysis of the causes of 
 production has been left hitherto by economists. 
 The feature I allude to is as follows. 
 
NOT LABOUR, BUT LABOURING MEN 309 
 
 These great developments of Trade Union- BOOK iv. 
 ism which are commonly called Labour move- 
 
 The imper- 
 
 ments do not really, in any accurate sense, feet state of 
 
 .. , economic 
 
 represent Labour at all. All that they repre- science has 
 sent in themselves is a power to abstain from a totaTiy 
 labourin. In other words, the increased to be 
 
 command of the labourers over the machinery 
 of combination, and even their increased com- 
 mand of the tactics of industrial warfare, 
 represents no increased command over the The force 
 smallest of industrial processes, nor puts them represents 
 in a better position, without the aid of Ability, Labour at 
 to maintain still less to increase by the 
 smallest fraction the production of that 
 wealth in which they are anxious to share 
 farther. A strike therefore, however great or labour * 
 however admirably organised, no more repre- 
 sents any part of the power of Labour than 
 the mutiny organised amongst the crew of 
 Columbus, with a view to making him give up 
 his enterprise, represented the power which 
 achieved the discovery of America. And this 
 is not true of the average labourers only ; it is 
 yet more strikingly true of the superior men 
 who lead them. From the ranks of the 
 labourers, men are constantly rising whose 
 
CH. IV. 
 
 310 LEADERS OF LABOURING MEN 
 
 BOOK iv. abilities for organising resistance are remark- 
 able, and indeed admirable ; but it is probably 
 not too much to say that no leader who has 
 devoted himself to organising the labourers for 
 resistance has ever been a man capable, to any 
 appreciable degree, of giving them help by 
 rendering their labour more productive. Those 
 who have been most successful in urging their 
 fellows to ask for more, have been quite incom- 
 petent to help them to make more. Thus 
 these so-called Labour leaders, no matter how 
 considerable may be many of their intellectual 
 and moral qualities, are indeed leaders of 
 labourers ; but they are no more leaders of 
 Labour than a sergeant who drilled a volunteer 
 corps of art students could be called the leader 
 of a rising school of painting ; and a strike is 
 no more the expression of the power of Labour 
 than Byron's swimming across the Hellespont 
 was an expression of the power of poetry, or 
 than Burns's poetry was an expression of the 
 power of ploughing. A strike is merely an 
 expression of the fact that the labourers, for 
 good or ill, can acquire, under certain circum- 
 stances, the power to cease from labouring, and 
 can use this as a weapon not of production, but of 
 
RA REL Y LEADERS OF LABOUR 311 
 
 warfare. The utmost that -the power embodied BOOK iv. 
 
 CH IV 
 
 in Trade Unionism could accomplish would be 
 
 " . .. .. And even 
 
 to bring about a strike that was universal ; and this power 
 although no doubt it might do this theoretically, never be 
 it could never do so much as this practically, nor last ' 
 for the simple reason that, as I have already ^hfis't it* 
 pointed out, Labour could not be entirely sus- Depends on 
 pended for even a single day. Further, the CapltaL 
 more general the suspension was, the shorter 
 would be the time for which it could be main- 
 tained ; and to mention yet another point to 
 which I have referred already, it could be 
 maintained only, for no matter how short a 
 time, by the assistance of the very thing 
 against which strikes are ostensibly directed, 
 namely Capital ; and not even Capital could 
 make that time long. Nature, who is the arch- 
 taskmaster, and who knows no mercy, would 
 soon smash like matchwood a Trade Union of 
 all the world, and force the labourers to go 
 back to their work, even if no such body as an 
 employing class existed. 
 
 All the ideas, then, derived from the recent 
 developments of Trade Unionism, that Labour, 
 through its means, will acquire any greatly 
 increasing power of commanding an increasing 
 
312 THE POWER OF TRADE UNIONISM 
 BOOK iv. share of the total income of the community, 
 
 CH. IV. 
 
 rests on a total misconception of the power 
 that Trade Unionism represents, and a total 
 failure to see the conditions and things that 
 limit it. It is limited firstly by Nature, who 
 makes a general strike impossible ; secondly 
 by Capital, without which any strike is 
 impossible; and lastly by the fact that the 
 labourers of the present day already draw part 
 of their wages from the wealth produced by 
 Ability ; that any further increase they must 
 draw from this source entirely ; and that, being 
 thus dependent on the assistance of Ability 
 now, Trade Unionism, as we have seen, has 
 not the slightest tendency to make them any 
 the less dependent on it in the future. 
 
 When the reader takes into account all that 
 has just been said, he will be hardly disposed 
 to quarrel with the following conclusions of 
 Professor Marshall, who derives them from 
 history quite as much as from theory, and who 
 expresses himself with regard to Trade Unions 
 thus : " Their importance," he says, " is cer- 
 tainly great, and grows rapidly ; but it is apt to 
 be exaggerated : for indeed many of them are 
 little more than eddies such as have always 
 
IMPORTANT THOUGH LIMITED 313 
 
 fluttered over the surface of progress. And BOOK 
 
 CH IV 
 
 though they are now on a larger and more 
 imposing scale in this age than before, yet 
 much as ever the main body of the movement 
 depends on the deep, silent, strong stream of 
 the tendencies of Normal Distribution and 
 Exchange." 
 
 But in the case of Trade Unionism, just as Trade 
 in that of Socialism, because the extent is 
 limited to which it can raise the labourers' 
 income, it does not follow that within these 
 limits its action may not be of great and in- 
 creasing benefit. Thus Mill, whose general 
 view of the subject coincides broadly with that Jj 
 of Professor Marshall, points out that though a 
 Union will never be able permanently to raise But none 
 wages above the point to which in time they may be of 
 would rise naturally, nor permanently to keep fj e to the e 
 them above a point to which they would In^move 
 naturally fall, it can hasten the rise, which S e a vils 
 might otherwise be long delayed, and retard ^seln 
 the fall, which might otherwise be premature ; J^ t ges has 
 and the gain to Labour may thus in the long removed 
 
 * & and could 
 
 run be enormous. Unions have done this for ? ot remove 
 
 by itself. 
 
 Labour in the past ; and with improved and 
 extended organisation, they may be able to do 
 
 OF THE 
 
314 CERTAIN REMAINING POINTS 
 
 BOOK iv. it yet more effectively in the future ; and they 
 have done, and may continue to do many other 
 things besides to do them, and to add to their 
 number. It is beyond my purpose to speak of 
 these things in detail. In the next chapter, I 
 shall briefly indicate some of them ; but the 
 main points on which I am concerned to insist 
 are simpler ; and the next chapter the last 
 will be devoted principally to these. 
 
CHAPTEE V 
 
 Of the enormous Encouragement to le derived ly 
 Labour from a true View of the Situation ; and 
 of the Connection between the Interests of the 
 Labourer and Imperial Politics. 
 
 THE object of this work, as I explained in the Let me 
 opening chapter, is to point out to the great remind the 
 body of the people that is to say, to the the object 
 multitude of average men and women, whose book. 
 incomes consist of the wages of ordinary 
 Labour the conditions which determine the 
 possibility of these incomes being increased, 
 and so to enable them to distinguish the true 
 means from the false, which they may them- 
 selves adopt with a view to obtaining this 
 result. And in order to show them how their it is to 
 present incomes may be increased, I have that the 
 devoted myself to showing the reader how 
 their present incomes have been obtained. I 
 
3i6 A RECAPITULATION 
 
 BOOK iv. have done this by fixing his attention on the 
 ' fact that their present incomes obviously 
 production depend upon two sets of causes : first, the 
 11 forces that produce the aggregate income of the 
 country ; and secondly, the forces that distribute 
 a certain portion of this amongst the labourers. 
 And these last I have examined from two points 
 of view; first exhibiting their results, and then 
 indicating their nature. Let me briefly re- 
 capitulate what I have said about both subjects, 
 i Lave just I have shown that, contrary to the opinion 
 the normal which is too commonly held, and which is 
 dirtribu- sedulously fostered by the ignorance alike of 
 infavour a the agitator and the sentimentalist, the forces 
 of distribution which are actually at work 
 around us, which have been at work for the 
 P as ^ hundred years, and which are part and 
 parcel of our modern industrial system, have 
 been and are constantly securing for Labour 
 a share of every fresh addition to the total 
 income of the nation ; and have, for at all 
 events the past fifty years, made the average 
 income of the labouring man grow faster than 
 the incomes of any other members of the 
 community. They have, in fact, been doing 
 the very thing which the agitator declared 
 
THE PRACTICAL MORAL 317 
 
 could be done only by resisting them ; and BOOK iv. 
 they have not only given Labour all that 
 the agitator has promised it, but they have 
 actually given it more than the wildest agitator 
 ever suggested to it. I have shown the 
 reader this ; and I have shown him also that 
 the forces in question are primarily the spon- 
 taneous forces " deep, strong, and silent," as 
 Professor Marshall calls them "of normal 
 distribution and exchange"; how that these 
 have been, and are seconded by the deliberate 
 action of men : by extended application of what 
 is called the Socialistic principle, and to a far 
 greater extent by combinations of the labourers 
 amongst themselves. 
 
 The practical moral of all this is obvious. 
 As to the normal and spontaneous forces of 
 distribution, what a study of them inculcates 
 on the labourer is not any principle of political 
 action, but a general temper of mind towards 
 the whole existing system. It inculcates 
 general acquiescence, instead of general revolt. 
 Now temper of mind, being that from which 
 policies spring, is quite as important as the 
 details of any of the policies themselves. Still 
 it must be admitted that were the normal 
 
3i8 THE TRUE FUNCTIONS 
 
 BOOK iv. forces of distribution the only forces that had 
 
 PTT V 
 
 ' been at work for the labourer's benefit, the 
 principal lesson they would teach him would 
 be the lesson of laisser aller. But though 
 these forces have been the primary, they have 
 not been the only forces ; and the deliberate 
 policies by which men have controlled their 
 operation, and have applied them, have been 
 equally necessary in producing the desired 
 results. The normal forces of distribution 
 may be compared to the waters of the Nile, 
 which would indeed, as the river rises, natur- 
 ally fertilise the whole of the adjacent country, 
 but which would do as much harm as good, and 
 do but half the good they might do, if it were 
 not for the irrigation works devised by human 
 ingenuity. And what these works are to the 
 Nile, deliberate measures have been to the 
 normal forces of distribution. The growing 
 volume of wealth, which is spreading itself 
 over the fields of Labour, even yet has failed 
 to reach an unhappy fraction of the com- 
 munity ; the tides and currents flow with 
 intermittent force, which is often destructive, 
 still more often wasted, rarely husbanded and 
 applied to the best advantage. Had it not 
 
OF TRADE UNIONISM AND SOCIALISM 319 
 
 been for the deliberate action of men, for BOOKIV. 
 
 \ CH. V. 
 
 legislation in favour of the labourers, and 
 their own combinations amongst themselves, 
 these evils which have accompanied their 
 general progress would have been greater. 
 Wise action in the future will undoubtedly This should 
 
 1 - . . encourage, 
 
 make them less ; and may, though it is and not 
 
 r-r -\ 11 discourage, 
 
 idle to hope for Utopias in this world, cause political 
 the larger and darker part of them to dis- behalf 
 
 of the 
 appear. labourers. 
 
 The lesson, then, to be drawn from what 
 I have urged in the preceding chapter is, 
 taken as a whole, no lesson of laisser faire. 
 Though neither Socialism nor Trade Unionism 
 may have much, or perhaps any, efficacy in 
 raising the maximum of the labourer's actual 
 income, though this must depend on forces 
 which are wholly different, yet Trade Union- 
 ism, and the principle which is called Socialism, 
 may be of incalculable service in bringing 
 about conditions under which that income 
 may be earned with greater certainty, and 
 under improved circumstances, and, above all, 
 be able to command more comforts, conven- 
 iences, and enjoyments/' Thus many of these 
 measures which I have called Socialistic under 
 
320 THE NATURAL PROGRESS OF LABOUR 
 
 BOOK iv. protest, may be regarded as an interception 
 
 of a portion of the labourer's income, and an 
 
 expenditure of it on his account by the State 
 
 in a way from which he derives far more 
 
 benefit than he would, or could have secured 
 
 if he had had the spending of it himself; 
 
 whilst Trade Unionism, though it cannot per- 
 
 manently raise his wages beyond a maximum 
 
 determined by other causes, may, as has been 
 
 said before, raise them to this earlier than 
 
 they would have risen otherwise, and prevent 
 
 what might otherwise occur a fall in them 
 
 Much is to before it was imperative. Trade Unionism, 
 
 beyond the however, has many other functions besides 
 
 raising the raising of wages. It aims and aims 
 
 labourers' successfully at diminishing the pain and 
 
 friction caused amongst the labourers by the 
 unionism vicissitudes alike O f industry and of life. It 
 
 socialism nas done much in this direction already ; and 
 
 vary much. ^ ^ f uture ft ma y fo more. 
 
 The fact then that the normal forces of 
 distribution must, if things continue their 
 present course, increase the income of the 
 labourer, even without any action on their 
 own part, though it is calculated to change 
 the temper in which the labourers approach 
 
A STIMULUS TO EFFORT 321 
 
 politics, is, instead of being calculated to damp BOOK iv. 
 their political activity, calculated to animate 
 it with far more hope and interest than the 
 wild denunciations and theories of the con- 
 temporary agitator, which those who applaud 
 them do but half believe. It will to the 
 labourer be far more encouraging to feel that 
 the problem before him is not how to under- 
 mine a vast system which is hostile to him, 
 and which, though often attacked, has never 
 yet been subverted, but merely to accom- 
 modate more completely to his needs a system 
 which has been, and is, constantly working in 
 his favour. 
 
 Let him consider the situation well. Let whilst as 
 him realise what that system has already wages, if 
 done for him. In spite of the sufferings labourers 
 which, owing to various causes, were inflicted 
 on the labouring classes during the earlier 
 years of the century, many of them of a kind 
 whose recurrence improved policy may obviate, 
 the income of Labour has, on the aggregate, 
 continued to rise steadily. Let him consider 
 how much. I have stated this once, let me ildest 
 
 dreams 
 
 state it now again. During the first sixty hitherto. 
 years of this century the income of the 
 
 21 
 
322 THE FUTURE OF LABOUR 
 
 BOOK iv. labouring classes rose to such an extent that 
 in the year 1860 it was equal (all deductions 
 for the increase of population being made) to 
 the income of all classes in the year 1800. 
 But there is another fact, far more extra- 
 ordinary, to follow ; and that is, that a result 
 precisely similar has been accomplished since 
 in one-half of the time. In 1880 the income 
 of the labouring classes was (all deductions 
 for the increase of population being made) 
 more than equal to the income of all classes 
 in the year 1850. Thus the labouring classes 
 in 1860 were in precisely the same pecuniary 
 position as the working classes in 1800 would 
 have been had the entire wealth of the king- 
 dom been in their hands ; and the working 
 classes of to-day are in a better pecuniary 
 position than their fathers would have been 
 could they have plundered and divided be- 
 tween them the wealth of every rich and 
 middle-class man at the time of the building 
 of the first Great Exhibition. I repeat what 
 I have said before that this represents a 
 progress, which the wildest Socialist would 
 never have dreamed of promising. 
 
 And now comes what is practically the 
 
CH. V. 
 
 JUDGED FROM ITS PAST PROGRESS 323 
 
 important deduction from these facts. What BOOK 
 has happened in the near past, will, other 
 things being equal, happen in the near future. 
 If the same forces that have been at work 
 since the year 1850 continue to be at work, 
 and if, although regulated, they are not 
 checked, the labourers of this country will in 
 another thirty years have nearly doubled the 
 income which they enjoy at present. Their 
 income will have risen from something under 
 seven hundred millions to something over 
 thirteen hundred millions. The labourers, in 
 fact, will, so far as money goes, be in precisely 
 the same position as they would be to-day if, 
 by some unheard-of miracle, the entire present 
 income of the country were suddenly made 
 over to them in the form of wages, and the 
 whole of the richer classes were left starving 
 and penniless. This is no fanciful calculation. 
 It is simply a plain statement of what must 
 happen, and will happen, if only the forces of 
 production continue to operate for another 
 thirty years as they have been operating 
 steadily for the past hundred. Is not this 
 enough to stimulate the labourer's hopes, and 
 convince him that for him the true industrial 
 

 324 THE ONE THING ON WHICH 
 
 BOOK IT. policy is one that will adjust his own relations 
 with the existing system better, and regulate 
 better the flow of the wealth which it promises 
 to bring him, rather than a policy whose aim 
 is to subvert that system altogether, and in 
 especial to paralyse the force from which it 
 derives its efficacy ? 
 
 But the And this brings me back to that main, 
 
 that fundamental truth which it is the special 
 object of this volume to elucidate. The force 
 which has been at the bottom of all the 
 
 continued labourers' progress during the past, and on 
 e continued action of which depends all 
 i- these hopes for their future that force is not 
 Labour but Ability ; it is a force possessed 
 
 for its anc [ exercised not by the many but by the 
 
 operation, * J 
 
 few. The income which Labour receives 
 already is largely in excess of what Labour 
 itself produces. Were Ability crippled, or 
 discouraged from exerting itself, the entire 
 income of the nation would dwindle down to 
 an amount which would not yield Labour so 
 much as it takes now ; whilst any advance, 
 no matter how small, on what Labour takes 
 now must come from an increasing product, 
 which Ability only can produce. 
 
THE HOPES OF LABOUR DEPEND 325 
 
 Hitherto this truth, though more or less BOOKIV. 
 
 CH. V. 
 
 apparent to economic writers and thoughtful 
 
 Labour 
 
 persons generally, has been apparent to them must 
 
 1 remember 
 
 only by fits and starts, and has never been that 
 assigned any definite or logical place in their aiiTfog 
 theories of production, or has ever been ex- " 
 
 pressed clearly ; and, owing to this cause, not 
 only has it been entirely absent from the theories m^t be ; 
 of the public generally, but its place has been 
 usurped by a meaningless and absurd false- 
 hood. In place of the living force Ability, P ltiated - 
 residing in living men, popular thought, misled ' \ 
 by a singular oversight of the economists, has 
 substituted Capital a thing which, apart from j 
 Ability, assists production as little as a dead } 
 or unborn donkey ; and hence has arisen that 
 dangerous and ridiculous illusion sometimes 
 plainly expressed, often only half-conscious 
 to the effect that if the labourers could only 
 seize upon Capital they would be masters of 
 the entire productive power of the country. 
 The defenders of the existing system have 
 been as guilty of this error as its antagonists ; 
 and the attack and defence have been con- 
 ducted on equally false grounds. Thus in a 
 recent strike, the final threat of the employers 
 
326 THE REAL BARGAIN OF LABOUR 
 BOOK iv. men who had created almost the whole of 
 
 CH V 
 
 their enormous business was that, if the 
 strikers insisted upon certain demands, the 
 Capital involved in the business would be 
 removed to another country ; and a well- 
 known journal, professing to be devoted to 
 the interest of Labour, conceived that it had 
 disposed of this threat triumphantly by saying 
 that, of the Capital a large part was not 
 portable, and that the employers might go if 
 they chose, and leave this behind. A great 
 musician, who conceived himself to have been 
 ill-treated in London, might just as well have 
 threatened that he would remove his concert- 
 room to St. Petersburg, when the principal 
 meaning of his threat would be that he would 
 remove himself; and the journal referred to 
 might just as well have said, had the business 
 in question been the production of a great 
 picture, "The painter may go if he likes 
 what matter? We can keep his brushes." 
 
 The real parties, then, to the industrial 
 disputes of the modern world are not active 
 labourers on one side, and idle, perhaps idiotic 
 owners of so much dead material on the 
 other side : but they are, on the one side, 
 
NOT WITH CAPITAL BUT ABILITY 327 
 
 the vast majority of men, possessed of average BOOKIV. 
 powers of production, and able to produce by 
 them a comparatively small amount ; and, on 
 the other, a minority whose powers of pro- 
 duction are exceptional, who, if we take the 
 product of the average labourer as a unit, are 
 able to multiply this to an almost indefinite 
 extent, and who thus create an increasing 
 store of Capital to be used by themselves, or 
 transmitted to their representatives, and an 
 increasing income to be divided between these 
 and the labourers. In other words, the dis- 
 pute is between the many who desire to 
 increase their incomes, and the few by whose 
 exceptional powers it is alone possible to 
 increase them. Such has been the situation 
 hitherto ; it is such at the present moment ; 
 and the whole tendency of industrial progress, 
 is not to change, but to accentuate it. As the \ 
 productivity of Human Exertion increases, 
 the part played by Ability becomes more 
 and more important. More and more do the 
 average men become dependent on the excep- 
 tional men. So long as the nation at large 
 remembers this, no reforms need be dreaded. 
 If the nation forgets this, it will be in danger 
 
328 SUBORDINATION TO ABILITY 
 
 BOOK iv. every day of increasing, by its reforms, the 
 
 CH. V. .-,.., , -. . 
 
 very evils it wishes to obviate, and postponing 
 or making impossible the advantages it wishes 
 to secure, 
 in this And now let me pause to point out to the 
 
 view there 
 
 is nothing reader that to insist thus on the subordinate 
 
 derogatory 
 
 to Labour, position oi Labour as a productive agent is to 
 insist on nothing that need wound the self-love 
 of the labourers. In asserting that a man who 
 can produce wealth only by Labour is inferior 
 to a man who can produce ten times the 
 amount by Ability, we assert his inferiority in 
 the business of production only. In other 
 respects he may be the better, even the greater 
 man of the two. Shakespeare or Turner or 
 Beethoven, if employed as producers of com- 
 modities, would probably have been no better 
 than the ordinary hands in a factory, and far 
 inferior to many a vulgar manufacturer. Again, 
 and it is still more important to notice this, 
 if we confine our attention to single commodi- 
 ties, many commodities produced by Labour 1 
 
 1 The reader must always bear in mind the definition 
 given of Labour, as that kind of industrial exertion which is 
 applied to one task at a time only, and while so applied 
 begins and ends with that task ; as distinguished from Ability, 
 which influences simultaneously an indefinite number of tasks. 
 
NO INDIGNITY TO LABOUR 329 
 
 alone are better and more beautiful than any BOOK iv. 
 similar ones produced by Labour under the 
 direction of Ability. Of some the reverse is does not 
 true notably those whose utility depends on products of 
 their mechanical precision ; but of others, in but muiti- 
 which beauty or even durability is of import- p 
 ance, such as fine stuffs or carpets, fine paper 
 and printing, carved furniture, and many kinds 
 of metal work, it is universally admitted that 
 the handicraftsman, working under his own 
 direction, was long ago able to produce results 
 which Labour, directed by Ability, has never 
 been able to improve upon, and is rarely able 
 to equal. What Ability does is not to improve 
 such commodities, but to multiply them, and 
 thus convert them from rare luxuries into 
 generally accessible comforts. A paraffin lamp, 
 for instance, cast or stamped in metal, and 
 manufactured by the thousand, might not be 
 able to compare for beauty with a lamp of 
 wrought iron, made by the skill and taste of 
 some single unaided craftsman ; but whereas 
 the latter would probably cost several guineas, 
 and be in reach only of the more opulent 
 classes, the former would probably cost about 
 half a crown, and, giving precisely as much 
 
330 THE MORAL DEBT 
 
 BOOK rv. light as the other, would find its way into every 
 
 CH. V. 
 
 cottage home, and take the place of a tallow 
 dip or of darkness. Now since what the 
 labouring classes demand in order to improve 
 their position is not better commodities than 
 can be produced by hand, but more commodi- 
 ties than can be produced by hand, Ability 
 is a more important factor in the case than 
 Labour; but none the less, from an artistic 
 and moral point of view, the highest kind of 
 Labour may stand higher than many of the 
 most productive kinds of Ability. 
 Ability, in Nor, again, do we ascribe to Labour any 
 part of its undignified position in insisting that much of 
 
 proceeds to . . . -, . , , . 
 
 Labour, is its present income, and any possible increase 
 
 of it, is and must be taken from the wealth 
 produced by Ability. For even were there 
 nothing more to be said than this, Labour is 
 in a position, or we assume it will be, to com- 
 mand from Ability whatever sum may be in 
 question, and can be neither despised nor 
 blamed for making the best bargain for itself 
 that is possible. But its position can be justi- 
 fied on far higher grounds than these. In the 
 first place, Labour, by submitting itself to the 
 guidance of Ability, no matter whether the 
 
OF ABILITY TO LABOUR 33* 
 
 submission was voluntary, which it was not, BOOKIV. 
 
 CH V 
 
 or gradual, unconscious, and involuntary, which 
 it was, surrendered many conditions of life 
 which were in themselves desirable, and has a 
 moral claim on Ability to be compensated for 
 having done so ; whilst Ability, for its part, 
 owes a moral debt to Labour, not upon this 
 ground only, but on another also one which 
 thus far has never been recognised nor insisted 
 on, but out of which arises a yet deeper and 
 stronger obligation. I have shown that of the 
 present annual wealth of the nation Ability 
 creates very nearly two-thirds. But it may 
 truly be said to have created far more than 
 this. It may be said to have created not only 
 two-thirds of the income, but also to have 
 created two-thirds of the inhabitants. If the 
 minority of this country, in pursuit of their own 
 advantage, had not exercised their Ability and 
 increased production as they have done, it is 
 not too much to say that of our country's pre- 
 sent inhabitants twenty -four millions would 
 never have been in existence. Those, then, who 
 either contributed to this result themselves, 
 or inherit the Capital produced by those who 
 did so, are burdened by the responsibility of 
 
332 LABOUR, NATURE, AND ABILITY 
 
 BOOK iv. having called these multitudes into life ; and 
 thus when the wages of Labour are augmented 
 out of the proceeds of Ability, Ability is not 
 robbed, nor does Labour accept a largess, but 
 a duty is discharged which, if recognised for 
 what it is, and performed in the spirit proper 
 to it, will have the effect of really uniting 
 classes, instead of that which is now so often 
 aimed at of confusing them. 
 
 But Labour The labourers, on the other hand, must 
 remember this : that having been called into 
 
 debTto a existence, no matter by what means, and pre- 
 
 Abihty ; suma bly wishing to live rather than be starved 
 
 to death, they do not labour because the men 
 
 of Ability make them, but as I have before 
 
 pointed out because imperious Nature makes 
 
 them ; and that the tendency of Ability is in 
 
 And that the long run to stand as a mediator between 
 
 will grow them and Nature, and whilst increasing the 
 
 products of their Labour, to diminish its 
 duration and severity. 
 increases. There are two further points which yet 
 remain to be noticed. 
 
 I have hitherto spoken of the increase of 
 wealth and wages, as if that were the main 
 object on which the labourers should concen- 
 
CH. V. 
 
 THE HOME AND FOREIGN FOOD 333 
 
 trate their attention, and which bound up BOOKIV. 
 their interests so indissolubly with those of 
 Ability. But it must also be pointed out that 
 were Ability unduly hampered, and its efficacy 
 enfeebled either by a diminution of its rewards, 
 or by interference with its action, the question 
 would soon arise, not of how to increase wages, 
 but of how to prevent their falling. This 
 point I have indeed alluded to already ; but I 
 wish now to exhibit it in a new light. As I 
 mentioned in an earlier chapter, of the inhabit- 
 ants of this country, who are something like 
 thirty -eight millions in number, twenty -six 
 millions live on imported corn, and about 
 thirteen millions live on imported meat ; or, 
 to put it in another way, we all of us the 
 whole population live on imported meat for 
 nearly Jive months of the year, and on imported 
 corn for eight months ; and were these foreign 
 food supplies interfered with, there are possi- 
 bilities in this country of suffering, of famine, 
 and of horror for all classes of society, to which 
 the entire history of mankind offers us no 
 parallel. This country, more than any country 
 in the world, is an artificial fabric that has 
 been built up by Ability, half of its present 
 
CH. V. 
 
 334 IMPERIAL POLITICS 
 
 BOOK iv. wealth being, let me repeat once more. the 
 marvellous product of the past fifty years ; 
 and the constant action of Ability is just as 
 necessary to prevent this from dwindling as it 
 is to achieve its increase. But in order that 
 Ability may exert itself, something more is 
 needed than mere freedom from industrial 
 interference, or security for its natural rewards ; 
 and that is the maintenance of the national or 
 international position which this country has 
 secured for itself amongst the other countries 
 of the world. 
 
 And this And this brings us to that class of questions 
 which, in ordinary language, are called ques- 
 tions of policy, and amongst which foreign 
 policy holds a chief place. Successful foreign 
 policy means the maintenance or the achieve- 
 
 wm show, men t of those conditions that are most favour- 
 
 closer a ^^ e ^ t ne industries of our own nation ; and 
 ^is means the conditions that are most 
 favourable to the homes of our own people. 
 ^ * s ^ common ly supposed that the greatness 
 and the ascendancy of our Empire minister to 
 nothing but a certain natural pride ; and 
 natural pride, in its turn, is supposed by some 
 to be an immoral and inhuman sentiment 
 
AND THE NATIONAL INCOME 335 
 
 peculiar to the upper classes. No one will be BOOK iv 
 quicker to resent this last ludicrous supposition 
 than the great masses of the British people ; 
 but, all the same, they are apt to think the 
 former supposition correct, to regard the mere 
 glory of the country as the principal result of 
 our Empire ; and such being the case, they 
 ar^e, on occasion, apt to be persuaded that glory 
 can be bought at too dear a price, in money, 
 struggle, or merely international friction. At 
 all events, they are constantly tempted to 
 regard foreign politics as something entirely 
 unconnected with their own immediate, their 
 domestic, their personal, their daily interests. 
 
 I am going to enter here on no debatable 
 matter, nor discuss the value of this or that 
 special possession, or this or that policy. It is 
 enough to point out that, to a very great 
 extent, on the political future of this country 
 depends the magnitude of its income, and on 
 the magnitude of its income depends the income 
 of the working classes the warmth of the 
 hearth, the supply of food on the breakfast- 
 table, of every labourer's home, and that when 
 popular support is asked for some foreign war, 
 the sole immediate aim of which seems the 
 
CH. V. 
 
 336 THE LABOURERS HOME 
 
 BOOK iv. defence of some remote frontier, or the main- 
 tenance of British prestige, it may well be that 
 our soldiers will be really fighting for the safety 
 and welfare of their children and wives at 
 home fighting to keep away from British and 
 Irish doors not the foreign plunderer and the 
 ravisher, but enemies still more pitiless the 
 want, the hunger, and the cold that spare 
 neither age nor sex, and against which all 
 prayers are unavailing. 
 
APPENDIX 
 
 EARLY in this year [1894] I published in the Fort- 
 nightly Eeview two articles under the title of "Fabian 
 Economics" These articles were not written or pub- 
 lished until some months after the first publication of the 
 present volume. I wrote them then, because then, for 
 the first time, I happened to see a volume from which 
 previously I had seen some extracts only a volume 
 entitled Fabian Essays, in which the doctrines of 
 contemporary English Socialism are set forth ; and my 
 aim was to apply the general arguments embodied in 
 Labour and the Popular Welfare to the position of 
 the Socialists, as definitely stated by themselves. One 
 of the Fabian Essayists Mr. Bernard Shaw came 
 forward in the Fortnightly Eeview to attack my 
 arguments, with what success will be shown by the 
 subjoined reply to him, which was originally published 
 in the same Review, under the title of " A Socialist in 
 a Corner!' A few paragraphs which would be here 
 superfluous are omitted. 
 
 A SOCIALIST IN A COKNEB 
 
 Fortnightly Eeview, May 1894 
 
 MAGAZINE controversy on complicated and serious 
 subjects, though it can never be exhaustive, may 
 
 22 
 
338 LABOUR AND THE POPULAR WELFARE 
 
 yet be of great use, if it calls the attention of the 
 public to the main points at issue, if it helps men 
 to judge for themselves of the character and weight 
 of the arguments which are capable of being 
 employed on one side and the other ; and, above 
 all, if by elucidating the points on which opponents 
 agree, the area of actual dispute be narrowed down 
 and defined. For this reason it seems to me not 
 useless to examine briefly the answer which, on 
 behalf of a body of Socialists, Mr. Shaw has made 
 to the criticisms which, in this Eeview and else- 
 where, I have recently directed against the entire 
 Socialistic position and particularly against that 
 position as expounded by himself and his colleagues. 
 Not only Mr. Shaw, but the other Fabian writers, 
 are persons, at all events, of sufficient intelligence, 
 sufficient knowledge, and sufficient literary skill, to 
 render the way in which they put the case for 
 Socialism a valuable indication of what the strength 
 of that case is. It was for this reason that I 
 thought Fabian Essays worth criticising; and for 
 this reason I think Mr. Shaw's answer worth 
 criticising also. It is an indication not only of 
 how Mr. Shaw can argue as an individual, but of 
 what arguments are available in defence of the 
 position which he occupies ; and Mr. Shaw, has 
 taken trouble himself to make this view still more 
 plausible, by the hints he gives that in the com- 
 position of his answer he has sought the advice 
 and counsel of his faithful colleagues ; so that his 
 pages represent the wisdom of many, though pre- 
 sumably the wit of one. 
 
APPENDIX 339 
 
 I propose, then, to show, in as few words as 
 possible, that Mr. Shaw has not only proved himself 
 incapable of shaking a single one of the various 
 arguments advanced by me, but that whilst nattering 
 himself that, in his own phrase, he has been taking 
 his opponent's scalp, the scalp which he holds, and 
 has really taken, is his own. His criticism divides 
 itself into two main parts. One is an admission of 
 the truth of one of the fundamental propositions 
 oa which I insisted. The second is a complete 
 evasion of another, and the substitution for it of an 
 ineptitude which is entirely of Mr. Shaw's invention, 
 and which he finds it so easy and so exciting to 
 demolish, that he sets it up as often as he knocks 
 it down, for the pleasure of displaying his prowess 
 over again. 
 
 Here, then, are three propositions to be dealt 
 with : First, the primary proposition on which I 
 insisted, and the truth of which Mr. Shaw admits ; 
 secondly, a proposition on which Mr. Shaw declares 
 that I insisted, but which is really an invention of 
 his own ; and thirdly, a proposition on which I 
 did insist actually, but which Mr. Shaw never even 
 states, much less attempts to meet. This third 
 proposition I shall briefly state once again when I 
 have dealt with the two others, and show how 
 Fabian philosophy indeed the philosophy of all 
 Socialism completely fails to meet it. 
 
 To begin, then, with the first. My primary 
 object has been to exhibit the absolute falsehood of 
 the Socialistic doctrine that all wealth is due to 
 labour, and to replace this by a demonstration that 
 
340 LABOUR AND THE POPULAR WELFARE 
 
 under modern conditions of production, labour is 
 not only not the sole producer of wealth, but does 
 not even produce the principal part of it. The 
 principal producing agent, I have pointed out, is 
 what I have called Industrial Ability or the 
 faculty which, whilst exercised by a few, directs 
 the labour of the many ; and if this truth is once 
 accepted, it completely cuts away from Socialism 
 the whole of its existing foundations, and renders 
 absolutely meaningless the whole of its popular 
 rhetoric. For the most powerful argumentative 
 appeal which Socialism can make to the majority 
 is merely some amplification of the statement, 
 which is no doubt plausible, and is advanced by 
 Socialists as an axiom, that the exertions of the 
 majority or, in other words, Labour has produced 
 all wealth, and that therefore the majority not only 
 ought to possess it, but will be able to possess it 
 by the simple process of retaining it. But the 
 moment the productive functions of industrial 
 ability are made clear, the doctrine which seemed 
 an axiom is reduced to an absurdity ; and what 
 might before have seemed a paradox becomes a 
 simple and intelligible truth the doctrine, namely, 
 that a comparatively few persons, with certain 
 exceptional gifts, are capable of producing more 
 wealth than all the rest of the community; and 
 that whoever may produce the wealth which the 
 rich classes possess, it is at all events not produced 
 by the multitude, and might, under changed condi- 
 tions, be no longer produced at all. 
 
 Now this doctrine of Ability Mr. Shaw accepts, 
 
APPENDIX 341 
 
 and completely surrenders and throws overboard the 
 Socialistic doctrine of Labour. He does indeed 
 endeavour to make the surrender seem less complete 
 than it is, partly by irrelevant comments on some 
 minor points/ and partly by insisting on certain 
 qualifications which are perfectly true, and to which 
 I have myself often elsewhere alluded, but which, 
 as I shall show presently, are, on his own admission, 
 of small practical importance, and do not appreciably 
 affect the main position. For instance Mr. Shaw 
 argues that it is not always the most able man who, 
 in any given business, is to be found directing it. 
 This also is no doubt true. It merely means, 
 however, that of industrial ability the same thing 
 may be said, which has so truly been said of Govern- 
 ment that it is always in, or passing into, the 
 hands of the most powerful section of the community. 
 
 1 Mr. Shaw, for instance, is at much, pains to point out that 
 Ability is not one definite thing, as the power of jumping is, and 
 makes himself merry by asking if "Wellington's Ability could be 
 compared with Cobden's, or Napoleon's with. Beethoven's. This is 
 all beside the mark. I have been careful to define the sense in 
 which I used the word Ability to define it with the utmost 
 exactness. I have said that I use it as meaning productive Ability 
 industrial Ability. That is to say, those faculties by which men> 
 not labouring themselves, are capable of directing to the best 
 advantage the labour of others, with a view to the production of 
 economic commodities. In the Middle Ages I said that another 
 kind of Ability was more important i.e. Military Ability, instead 
 of Economic ; and the historical importance of this fact, which Mr. 
 Shaw says I discovered only after I had written my first article on 
 Fabian Economics, I insisted on, at much greater length, years 
 ago, when criticising Karl Marx's "Theory of Value," in this [the 
 Fortnightly] Review. Again, let Mr. Shaw turn to Labour and 
 the Popular Welfare, p. 328, and he will find what he says put 
 more clearly by myself than by him. 
 
342 LABOUR AND THE POPULAR WELFARE 
 
 'Businesses conducted by men of inferior Ability 
 are gradually superseded by businesses conducted by 
 men of superior Ability. Men's actual positions 
 may be a few years behind or before their capacities, 
 but for all practical purposes they coincide with 
 them/f and the utmost that Mr. Shaw's contention 
 could prove would be that some members of a 
 minority are in places which should be occupied by 
 other members of a minority ; not that the majority 
 could take the places of either. 
 
 But I merely mention these points in passing, 
 and waste no pains in insisting on them or pressing 
 them home, because their practical insignificance is 
 admitted by Mr. Shaw himself. The great body of 
 men of men selected at random, even if they 
 should enjoy the advantages of superior position and 
 education " could not," he says, " invent a wheel- 
 barrow, much less a locomotive." He amplifies this 
 admission by quoting the case of an acquaintance 
 of his, whose exceptional Ability secured him four 
 thousand pounds a year, because without the assist- 
 ance of that Ability his employer would have lost 
 more than this sum. " Other men," he proceeds, 
 " have an eye for contracts, or what not, or are born 
 captains of industry, in which case they go into 
 business on their own account, and make ten, 
 twenty, or two hundred per cent, where you or I 
 should lose five. . . . All these people are rentiers 
 of Ability." Again he quotes with emphatic 
 approval a passage from an American writer, whom 
 he praises as a skilled economist ; and using this 
 passage as a text, endorses its meaning in these 
 
APPENDIX 343 
 
 words of his own. " The able man, the actual 
 organiser and employer, alone is able to find a use 
 for mere manual deftness, or for that brute strength, 
 and heavy bank balance, which any fool may 
 possess." " The capitalist and the labourer run 
 helplessly to the able man." " He is the only 
 party in the transction capable of the slightest 
 initiative in production." 
 
 I need not add anything to these admissions. 
 T.Jiey constitute, as I say, a complete surrender of 
 the Socialistic doctrine of Labour, and an emphatic 
 admission of the primary proposition I advanced as 
 to the productive function of Ability. It is enough 
 then to say, that so far as the question of Labour 
 is concerned, Mr. Shaw throws over completely all 
 the doctrines of the Gotha programme, the Erfurt 
 programme, of Karl Marx and his disciples, of Mr. 
 Hyndman and his Social Democrats in fact the 
 cardinal doctrine of Socialism as hitherto preached 
 everywhere. 
 
 Having disposed then of the point as to which 
 Mr. Shaw agrees with me, I will pass on to the 
 point on which he supposes me to disagree with 
 him ; and this is the point to which he devotes 
 the larger part of his article. Everything else is 
 thrown in as a sort of by-play. This point is as 
 follows. Speaking roughly, and adopting the 
 following figures, not because I consider them 
 accurate, but merely because they agree with Mr. 
 Shaw's, and are for the present purpose as good as 
 any others, above seven hundred million pounds of 
 the national income go to the non-labouring classes. 
 
344 LABOUR AND THE POPULAR WELFARE 
 
 Mr. Shaw, as I gather, would set down about two 
 hundred million pounds of this as the earnings or 
 profits of Ability; whilst he contends that the 
 remainder is the product neither of Ability nor 
 Labour, but of capital or land. It represents the 
 assistance which land and capital give to the two 
 other productive agents ; and it goes to those who 
 possess this land and capital, simply on account of 
 the rights which they possess as passive owners. 
 This sum, which Mr. Shaw estimates at about 
 Jive hundred million pounds} ought, he contends, 
 still to go to the owners in fact, it must always go 
 to its owners ; but the owners should be changed. 
 They should be the whole nation instead of a 
 small class. 
 
 Now Mr. Shaw says that my great mistake has 
 relation to these five hundred million pounds. He 
 says that, having argued rightly enough that two 
 
 1 It is interesting to see the analysis which Mr. Shaw gives of 
 the elements which make up the five hundred million pounds (see 
 page 482 of his article). It shows a curious want of sense of pro- 
 portion, and reads much like a statement that a young man's 
 bankruptcy was due to the one hundred thousand pounds he has spent 
 on the turf, the fifty thousand pounds he had spent on building a 
 house, the fifty pounds he has spent on a fur coat, and the sixpence 
 he gave last Saturday to the porter at Paddington Station. But 
 there is in it a more serious error than this. Mr. Shaw says, and 
 rightly, that a large part of the millions to which he alludes con- 
 sists of payments to artists and other professional men (e.g. doctors), 
 by very rich commonplace people competing for their services. 
 But he entirely mistakes the meaning of this fact. I have pointed 
 it out carefully in Labour and the Popular Welfare (Book I. 
 chap, iii.) and have illustrated it by one of the exact cases Mr. 
 Shaw has in view, viz. that of a doctor who gets a fee of one thousand 
 two hundred pounds from "a very rich commonplace person." I 
 
APPENDIX 345 
 
 hundred million pounds or so are the genuine pro- 
 duct or rent of actual and indispensable Ability, I 
 have committed the absurd mistake of confusing 
 with this rent of ability, the rent of land, of houses, 
 and above all, the interest on capital. " Mr. 
 Mallock," he says, "is an inconsiderate amateur, 
 who does not know the difference between profits 
 and earnings on the one hand, and rent and interest 
 on the other." And he summarises my views on 
 the subject by saying, that I " see in every railway 
 shareholder the inventor of the locomotive or the 
 steam-engine," and that I gravely maintain that 
 the three hundred thousand pounds a year which 
 may form the income of one or two great urban 
 landlords is produced by the exercise of some 
 abnormal ability on their parts. This supposed 
 doctrine of mine forms the main subject of Mr. 
 Shaw's attack. He is exuberantly witty on the 
 
 pointed out that in the estimates, from which Mr. Shaw gets his 
 figures of five hundred million pounds, all such payments are counted 
 twice over. The "very rich commonplace person" and the doctor 
 both pay income-tax on and are regarded as possessing the same 
 one thousand two hundred pounds. As matters stand this is right 
 enough, for the patient receives either in good or fancied good an 
 equivalent for his fee in the doctor's services ; but if the sum in 
 question were to be divided up and distributed, there would for 
 distribution be one one thousand two hundred pounds only. By 
 reference to calculations of Professor Leoni Levi, with whom I 
 corresponded on these matters, I drew the conclusion that the sum 
 thus counted twice over was about one hundred million pounds 
 annually ten years ago. This would knock off twenty per cent at 
 once from Mr. Shaw's Jive hundred million pounds ; and I may 
 again mention Mr. Giffen's emphatic warning that, if we are think- 
 ing of any general redistribution, another two hundred million pounds 
 would have to be deducted from the sums which persons like Mr. 
 Shaw imagine await their seizure. 
 
346 LABOUR AND THE POPULAR WELFARE 
 
 subject. He turns the doctrine this way and that, 
 distorting its features into all sorts of expressions, 
 laughing afresh each time he does so. He calls me 
 his " brother " and his " son " ; he quotes nursery 
 rhymes at me. He alludes to my own income and 
 the income of the Duke of Westminster, and 
 intimates a desire to know whether the Duke being, 
 so he says, many hundred times as rich as myself, 
 I am many hundred times as big a fool as the 
 Duke. In fact, he has recourse to every argument- 
 ative device which his private sense of humour and 
 his excellent taste suggest. 
 
 The immediate answer to all this is very simple 
 namely, that I never gave utterance to any such 
 absurdity as Mr. Shaw attributes to me, but that, 
 on the contrary, I have insisted with the utmost 
 emphasis on this very distinction between profits 
 and earnings, and rent and interest, which he 
 assures his readers I do not even perceive. Mr. 
 Shaw, therefore, has devoted most of his time to 
 trampling only on a misconception of his own. 
 This is the immediate answer to him ; but there is 
 a further answer to come, relating to the conclu- 
 sions I drew from nature of rent and interest, after 
 I had pointed out their contrast to the direct 
 receipts of Ability. Let me show the truth of the 
 immediate answer first. 
 
 I do not think that in my two recent articles in 
 this Keview there is a single sentence that to any 
 clear-headed man could form an excuse for such a 
 misconception as Mr. Shaw's, whereas there are 
 pages which ought to have made it impossible. 
 
APPENDIX 347 
 
 Indeed, a notice in the Spectator disposes of Mr. 
 Shaw by saying that he evades the real point raised 
 by me, not meeting what I did say, and combating 
 what I did not say. But, as I started with observ- 
 ing, magazine articles can rarely be exhaustive, and 
 I will assume that some incompleteness or careless- 
 ness of expression on my part might have afforded, 
 had these articles stood alone, some excuse for their 
 critic. Mr. Shaw, however, is at pains to impress 
 us that he has read other writings of mine on the 
 same subject. He even remembers, after an interval 
 of more than ten years, some letters I wrote to the 
 St. James's Gazette. It might, therefore, have been 
 not unreasonable to expect that he would have 
 referred to my recent volume, Labour and the 
 Popular Welfare, which I expressly referred to in 
 my two articles, and in which I said I had stated 
 my position more fully. As an answer to Mr. Shaw 
 I will quote from that volume now. 
 
 The first Book deals with certain statistics as to 
 production in this country, and the growth of the 
 national income as related to the population. In 
 the second Book I deal with the cause of this 
 growth. I point out that the causes of production 
 are not three, as generally stated viz. Land, 
 Labour, and Capital ; but four viz. Land, Labour, 
 Capital, and Ability ; and that the fourth is the 
 sole source of that increase in production which is 
 the distinguishing feature of modern industrial 
 progress. In thus treating Capital as distinct from 
 Ability, I point out taking a pumping-engine as 
 an example that capital creates a product which 
 
348 LABOUR AND THE POPULAR WELFARE 
 
 necessarily goes to its owner, qud owner, whether 
 the owner is an individual or the State. I then 
 proceed to show that fixed capital e.g. an engine 
 is the result of circulating capital fossilised ; and 
 that circulating capital is productive only in pro- 
 portion as it is under the control of Ability. For 
 this reason I said that whilst it is in process of 
 being utilised, Capital is connected with Ability as 
 the brain is connected with the mind, it being the 
 material means through which Ability controls 
 Labour ; and that thus from a certain point of view 
 the two are inseparable. I need not insist on this 
 truth, because Mr. Shaw admits it. But Mr. Shaw 
 will find a subsequent chapter (Book IV. chap, ii.) 
 bearing the title, Of the Ownership of Capital as 
 distinct from its Employment by Ability. From that 
 chapter I quote the following passage : 
 
 " In dealing with Capital and Ability, I first treated them 
 separately, I then showed that, regarded as a productive 
 agent, Capital is Ability, and must be treated as identical 
 with it. But it is necessary, now we are dealing with dis- 
 tribution, to dissociate them for a moment and treat them 
 separately once more. For even though it be admitted that 
 Ability, working by means of Capital, produces, as it has 
 been shown to do, nearly two-thirds of the national income, l 
 
 1 The case may also be put in another way. Interest is the 
 product of capital qud capital, as opposed to the product of ability 
 as distinct from capital. But the bulk of modern capital is 
 historically the creation of ability, which has miraculously multi- 
 plied the few loaves and fishes existing at the close of the last 
 century. Interest may therefore be called the secondary or indirect 
 product of ability, whilst earnings and profits may be called the 
 direct product of ability. Any one who is living on interest at tho 
 present moment is almost sure to be living, not on his own ability, 
 
APPENDIX 349 
 
 and though it may be admitted further that a large portion 
 of this product should go to the able men who are actively 
 engaged in producing it the men whose Ability animates 
 and vivifies Capital it may be argued that a portion of it, 
 which is very large indeed, goes as a fact to men who do not 
 exert themselves at all, or who, at any rate, do not exert 
 themselves in the production of wealth. These - men, it will 
 be said, live not on the products of Ability, but on the 
 interest of Capital, which they have come accidentally to 
 possess ; and it will be asked on what ground Labour is 
 interested in forbearing to touch the possessions of those 
 who produce nothing ? . . . Why should it not appropriate 
 what goes to this wholly non-productive class." 
 
 If Mr. Shaw or his readers are still in doubt as 
 to the extent to which his criticism of myself is 
 wide of the mark if he still thinks that he is 
 fighting any mistake but his own, when he attacks 
 me as though I confused interest with the direct 
 
 but on the products of the ability of some member of his own 
 family who has added to the national wealth within the past two 
 generations. Suppose a man who died in 1830 left a fortune of 
 two hundred thousand pounds, which he made, as Salt did, by the 
 invention and production of some new textile fabric ; and suppose 
 that this fortune is now in the hands of a foolish and feeble grand- 
 son, who enjoys eight thousand pounds a year. This is evidently 
 not the product of the grandson's ability ; but it is the product of 
 the ability of the grandfather. The truth of this may be easily 
 seen by altering the supposition thus by supposing that the 
 original maker of the fortune, instead of dying in 1830, is alive 
 now, but as imbecile as we supposed his grandson to be. He has, 
 we will say, long retired from business, and lives on the interest 
 of the capital he made when his faculties were in their vigour. 
 Would any one say that he is not living on his own ability ? The 
 only difference is and it is a difference which, from many points 
 of view, is of the greatest importance that formerly he was living 
 on the direct product of his ability, and he is now living on its 
 indirect product. 
 
350 LABOUR AND THE POPULAR WELFARE 
 
 earnings of Ability, let me add one passage more 
 out of the same chapter : 
 
 " Large profits must not be confounded with high interest. 
 Large profits are a mixture of three things, as was pointed 
 out by Mill, though he did not name two of them happily. 
 He said that profits consisted of wages of superintendence, 
 compensation for risk, and interest on Capital. Jf, instead 
 of wages of superintendence we say the product of Ability, 
 and instead of compensation for risk we say the reward of 
 sagacity, which is itself a form of Ability, we shall have an 
 accurate statement of the case." 
 
 Again, two pages earlier Mr. Shaw will find 
 this : 
 
 " Interest is capable, under certain circumstances, of being 
 reduced to a minimum without production being in any 
 degree checked ; and every pound which the man who 
 employs Capital is thus relieved from paying to the man 
 who owns it constitutes, other things being equal, a fund which 
 may be appropriated by Labour." 
 
 These quotations will be enough to show how 
 the bulk of Mr. Shaw's criticisms, which he thinks 
 are directed against myself, are criticisms of an 
 absurd error and confusion of thought, which I 
 have myself done my utmost to expose, in order 
 that I might put the real facts of the case more 
 clearly. 
 
 Let me now briefly restate what I have actually 
 said about these facts. Let me restate the points 
 which Mr. Shaw hardly ventures even to glance at. 
 I have said that Capital and Ability, as actually 
 engaged in production, are united like mind and 
 brain. There is, however, as I observed also, this 
 difference. So far as this life is concerned, at all 
 
APPENDIX 35i 
 
 events, brain and mind 'are inseparable. The organ 
 and the function cannot be divided. But in the 
 case of Ability and Capital they can be. The mind 
 of one man has often to borrow from another man 
 the matter through which alone it is able to operate 
 in production. Thus though Ability and Capital, 
 when viewed from the standpoint of Labour, are 
 one thing, when viewed from the standpoint of 
 their different processes they are two ; and Capital 
 i& seen to produce a part of the product, as dis- 
 tinguished from the Ability whose tool and organ 
 it is. Mr. Shaw says that the capital of the 
 country at the present time produces five hundred 
 million pounds annually, and, for argument's sake, 
 I accept this figure. Thus far, then, Mr. Shaw 
 and I agree. But what I have urged Mr. Shaw to 
 consider, and what he does not venture even to 
 think of, is the following question : How did the 
 capital of this country come into existence ? 
 
 Even the soil of this country, as we know it 
 now, is an artificial product. It did not exist in 
 its present state two hundred years ago. Still it 
 was there. But of the capital of the country, as it 
 exists to-day, by far the larger part did not exist 
 at all. Let us merely go back two generations to 
 the times of our own grandfathers ; and we shall 
 find that of the ten thousand million pounds at 
 which our present capital is estimated, eight thousand 
 million pounds have been produced during the last 
 eighty years. That is to say, four -fifths of our 
 capital was non-existent at a time when the grand- 
 fathers of many of us were already grown men. 
 
352 LABOUR AND THE POPULAR WELFARE 
 
 How, then, was this capital produced ? The 
 ordinary Socialist will say that it was produced by 
 Labour that it is, as (I think) Lassalle called it, 
 " fossil Labour." Mr. Shaw, however, judging by 
 what we have seen of his opinions, will agree with 
 me that though a small part of it may be fossil 
 Labour, by far the larger part is fossil Ability. It 
 is, in fact, savings from the growing annual wealth 
 which has been produced during the period in 
 question by the activity of able men. But these 
 able men did not produce it by accident. They 
 produced it under the stimulus of some very strong 
 motive. What was this motive ? Mr. Shaw's 
 Socialistic friends and predecessors have been 
 spouting and shouting an answer to this question 
 for the past sixty years. They have been telling 
 us that the main 'motive of the employing class 
 was "greed." Unlike most of their statements, 
 this is entirely true. Nor, although the sound of 
 it is offensive, is there anything offensive in its 
 meaning. It means that in saving capital and in 
 producing the surplus out of which they were able 
 to save it, the motive of the producers was the 
 desire to live on the interest of it when it was 
 saved ; and that if it had not been for the desire, 
 the hope, the expectation of getting this interest, 
 the capital most certainly would never have been 
 produced at all, or, at all events, only a very 
 minute fraction of it. 
 
 I asked in one of my articles in this Eeview 
 whether Mr. Shaw thought that a man who received 
 ten thousand a year as the product of his excep- 
 
APPENDIX 353 
 
 tional ability would value this sum as much if he 
 were forbidden by the State to invest a penny of it 
 if the State, in fact, were an organised conspiracy 
 to prevent his investing it so as to make an inde- 
 pendent provision for his family, or for himself at 
 any moment when he might wish to stop working 
 as he values it now when the State is organised 
 so as to make his investments secure ? And the 
 sole indication in the whole of Mr. Shaw's paper 
 that he has ever realised the existence of the question 
 here indicated is to be found in a casual sentence, 
 in which he says that to think that the complete 
 confiscation of all the capital created by the two 
 past generations, and the avowed intention on the 
 part of the State to confiscate all the capital that is 
 now. being created by the present to think, in 
 other words, that the annihilation of the strongest 
 and fiercest hope that has ever nerved exceptional 
 men to make exceptional industrial exertion, would 
 in the smallest degree damp the energies of any able 
 man "is an extremely unhistoric apprehension," 
 and one as to which he " doubts whether the public 
 will take the alarm." And having said this, he en- 
 deavours to justify himself by an appeal to history. 
 He asks if the men who built the Pyramids did 
 not work just as hard "though they knew that 
 Pharaoh was at the head of an organised conspiracy 
 to take away the Pyramids from them as soon as 
 they were made ? " 
 
 This remarkable historical reference is the sole 
 answer Mr. Shaw attempts to make to the real 
 point raised by me. If it is necessary seriously to 
 
 23 
 
354 LABOUR AND THE POPULAR WELFARE 
 
 answer it, let me refer Mr. Shaw to Labour and the 
 Popular Welfare, pp. 124, 125, where his childish 
 piece of reasoning actually illustrated there by 
 the example of Ancient Egypt is anticipated and 
 disposed of. As I there pointed out, these great 
 buildings of the ancient world were the products 
 not of Ability as it exists in the modern world, 
 but of Labour ; the difference between the two (so 
 far as this point is concerned) being this : that 
 the labour an average man can perform is a known 
 quantity, and wherever a dominant race enslaves 
 an inferior one, the taskmasters of the former can 
 coerce the latter into performing a required amount 
 of service. But the existence of exceptional ability 
 cannot be known or even suspected by others till 
 the able individual voluntarily shows and exerts 
 it. He cannot be driven ; he must be induced and 
 tempted. And not only is there no means of 
 making him exert his talents, except by allowing 
 these talents to secure for himself an exceptional 
 reward; but in the absence of any such reward to 
 fire his imagination and his passion, he will prob- 
 ably not be conscious of his own Ability himself. 
 Pharaoh could flog the stupidest Israelite into 
 laying so many bricks, but he could not have 
 flogged Moses himself into a Brassey, a Bessemer, 
 or an Edison. 
 
 This, however, is a point with which it is 
 impossible to deal in a few sentences or a few pages. 
 The great question of human motive, closely allied 
 as it is with the question of family affection, the 
 pleasures of social intercourse, the excitements and 
 
APPENDIX 355 
 
 prizes of social rivalry, of love, of ambition, and 
 all the philosophy of taste and manners this 
 great question of motive can be only touched upon 
 here. But a few more words may be said to show 
 the naive ignorance of human nature and of the 
 world betrayed by the Fabian champion. 
 
 Mr. Shaw, in order to prove how fully he under- 
 stands the question of Ability, quotes the case of a 
 friend of his, who, by his Ability, makes four 
 thousand pounds a year. This, says Mr. Shaw, is 
 just as it should be : but if a man, like his friend, 
 should save one hundred thousand pounds, and 
 desire to leave this to his son, invested for him at 3^ 
 per cent, so that the son may receive an income 
 whether he has any of his father's ability or no - 
 this, says Mr. Shaw, is what Socialism will not 
 permit. The son must earn all he gets ; and if he 
 happens to have no exceptional ability, which may 
 probably be the case, he will have to put up with 
 the mere wages of manual labour. He will have to 
 live on some eighty pounds a year instead of four 
 thousand pounds. And Mr. Shaw says, that to 
 introduce this arrangement into our social system 
 will have no appreciable effect on the men who are 
 now making, by their ability, their four thousand 
 pounds a year. Let us suggest to him the following 
 reflections. What good, in that case, would the 
 four thousand pounds a year be to the father, unless 
 he were to eat and drink nearly the whole of it 
 himself ? For it would be absurd and cruel in him 
 to bring up his children in luxury if the moment 
 he died they would have to become scavengers. 
 
356 LABOUR AND THE POPULAR WELFARE 
 
 Wealth is mainly valuable, and sought for, not for 
 the sake of the pleasures of sense which it secures 
 for a man's individual nervous system, but for the 
 sake of the entourage of the world which it creates 
 around him, which it peoples with companions for 
 him brought up and refined in a certain way, and 
 in which alone his mere personal pleasures can be 
 fully enjoyed. Capitalism, as Mr. Shaw truly 
 observes, produces many personal inequalities, which 
 without it could not exist. He fails to understand 
 that it is precisely the prospect of producing such 
 inequalities that constitutes the main motive that 
 urges able men to create Capital. 
 
 More than ten years ago I published a book 
 called Social Equality, devoted to the exposition of 
 these truths. I cannot dwell upon them now. In 
 that book history is appealed to, and biography is 
 appealed to; and the special case of literary and 
 artistic production, of which Mr. Shaw makes so 
 much, is considered in a chapter devoted to the 
 subject, and Mr. Shaw's precise arguments are dis- 
 posed of in anticipation. But to a great extent the 
 true doctrine of motive is one which cannot be 
 established by mere formal argument. It must to 
 a great extent be left to the verdict of the jury of 
 general common sense, the judgment of men of 
 experience and knowledge of the world that know- 
 ledge which, of all others, Mr. Shaw and his friends 
 appear to be most lacking in. 
 
 It will be enough, then, to turn from Mr. Shaw 
 himself to ordinary sensible men, especially to the 
 men of exceptional energy, capacity, shrewdness, 
 
APPENDIX 357 
 
 strong will, and productive genius the men who 
 are making fortunes, or who have just made them, 
 and without whose efforts all modern industry would 
 be paralysed, and to tell such men that the sole 
 answer of Fabianism to my attack on the Socialistic 
 position is summed up in the following astounding 
 statement: That the complete confiscation of all 
 the invested money in this country, and all the 
 incomes derived from it from the many thousands 
 a year going to the great organiser of industry 
 to the hundred a year belonging to the small 
 retired tradesman would have no effect whatever 
 on the hopes and efforts of those who are now 
 devoting their Ability to making money to invest 
 (see Mr. Shaw's article). Well Bos locutus est : 
 there is the quintessence of Mr. Shaw's knowledge 
 of human nature and of the world, and though it 
 would be interesting and instructive to analyse the 
 error of his view, no analysis could make its 
 absurdity seem more complete than it will seem 
 without analysis, to every practical man. 
 
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