>
 
 WORK AND WEALTH
 
 THE MACMILLAN COMPANY 
 
 NEW YORK BOSTON CHICAGO DALLAS 
 ATLANTA SAN FRANCISCO 
 
 MACMILLAN & CO., LIMITED 
 
 LONDON BOMBAY CALCUTTA 
 MELBOURNE 
 
 THE MACMILLAN CO. OF CANADA, LID. 
 
 TORONTO
 
 WORK AND WEALTH 
 
 A HUMAN VALUATION 
 
 BY 
 
 J. A. HOBSON 
 
 AUTHOR OF " THE INDUSTRIAL SYSTEM," " THE EVOLUTION OF 
 MODERN CAPITALISM," ETC. 
 
 Nrm fork 
 THE MACMILLAN COMPANY 
 
 1921 
 
 All rights reserved
 
 COPYRIGHT, 1914, 
 BY J. A. HOBSON. 
 
 Set up and electrotyped. Published May, 191,4. 
 
 WortoooB 
 Berwick & Smith Co., Norwood, Mass., U.S.A.
 
 LI" 
 
 TATE is. . KO6 
 
 SANTA BARBARA, c i . 
 
 PREFACE 
 
 The goods and services that constitute our national income 
 are valued severally and collectively with a fair amount of 
 accuracy in terms of money. For a gold standard, though by no 
 means perfect for the work of monetary measurement, is stable 
 and has a single definite meaning to all men. By means of it we 
 can estimate the rates of growth or decline in our industry, as 
 an aggregate or in its several departments, and the quantities of 
 output and consumption of the various products. We can com- 
 pare the growth of our national wealth with that of other nations. 
 
 But how far can these measurements of concrete wealth fur- 
 nish reliable information regarding the vital values, the human 
 welfare, which all economic processes are designed to yield? 
 Though it will be generally admitted that every increase of 
 economic wealth is in some measure conducive to welfare, every 
 decrease to illfare, nobody will pretend even approximately to 
 declare what that measure is, or to lay down any explicit rules 
 relating wealth to welfare, either for an individual or a nation. 
 Indeed, even the general assumption that every growth of wealth 
 enhances welfare cannot be admitted without qualification. An 
 injurious excess of income is possible for an individual, perhaps 
 for a nation, and the national welfare which an increased volume 
 of wealth seems capable of yielding might be more than cancelled 
 by a distribution which bestowed upon a few an increased share 
 of the larger wealth, or by an aggravation of the toil of the pro- 
 ducers. 
 
 Such obvious considerations drive us to seek some intelligible 
 and consistent method of human valuation for economic goods 
 and processes. To find a standard of human welfare as stable 
 and as generally acceptable as the monetary standard is mani- 
 festly impossible. Indeed, the difficulties attending any sort 
 of calculus of vital values might appear insuperable, were it not 
 for one reflection. Every statesman, social reformer, philan- 
 
 v
 
 vi PREFACE 
 
 thropist, every public-spirited citizen, does possess and apply 
 to the conduct of affairs some such standard or criterion as we are 
 seeking. Some notion or idea, more or less clear and explicit, of 
 the general welfare, crossed and blurred no doubt by other in- 
 terests and passions, is an operative and directive influence in his 
 policy. Moreover, though idiosyncrasies will everywhere affect 
 this operative ideal, there will be found among persons of widely 
 different minds and dispositions a substantial body of agreement 
 in their meaning of human welfare. The common social environ- 
 ment partly evokes, partly imposes, this agreement. In fact, all 
 cooperative work for social progress implies the existence of some 
 such standard as we are seeking. The complex image of human 
 values which it contains is always slowly changing, and varies 
 somewhat among different sorts and conditions of men. But for 
 the interpretation of economic goods and processes it has, at any 
 time, a real validity. For it is anchored to certain solid founda- 
 tions of human nature, the needs and functions to which, alike 
 in the individual and in the society, we give the term 'organic.' 
 
 Only by considering the organic nature of man and of human 
 society can we trace an intelligible order in the evolution of 
 industry. The wants of man, and therefore the economic opera- 
 tions serving them must be treated as organic processes. This 
 term, borrowed from biology, must be extended so as to cover 
 the entire physical and spiritual structure of human society, for 
 no other term is so well fitted to describe the nature of the federal 
 unity which society presents. The standard of values thus set 
 up is the current estimate of 'organic welfare.' 
 
 The justification of these terms and of this mode of human 
 valuation is to be found in their application to the task before 
 us. These tools will be found to do the work better than any 
 others that are available. 
 
 In seeking to translate economic values into human by refer- 
 ence to such a standard of organic welfare, I take as the aptest 
 material for experiment the aggregate of goods and services that 
 constitute the real income of the British nation. In order to re- 
 duce that income to terms of human welfare, I first examine 
 separately the economic costs of production and the economic 
 utilities of consumption which meet in this concrete wealth,
 
 PREFACE vii 
 
 analysing them into human cost and human utility, the debit 
 and credit sides of the account of welfare. Analysis of the pro- 
 ductive processes will, of course, disclose the fact that not all 
 'economic' costs have human costs attached to them, but that 
 human utilities of varying value inhere in many sorts of pro- 
 ductive work. Surveying the different orders of productive 
 energy, from the finest arts to the lowest modes of routine toil, 
 we discover that any two bodies of economic wealth, possessing 
 the same pecuniary value, may differ enormously in the quantity 
 of human cost they carry. For that cost will depend upon the 
 nature of the work, the nature of the workers, and the distribu- 
 tion of the work among the workers. This line of enquiry opens 
 out, in form at any rate, a complete criticism of current English 
 industry, from the humanist standpoint. A similar analysis 
 applied on the consumption side resolves the economic utility 
 of the goods and services into human utility. Here again out 
 of economic utilities much human cost emerges, just as out of 
 economic costs much human utility. Equal quantities of income 
 yield In their consumption widely diverse quantities of human 
 utility or welfare. 
 
 Piecing together the two sides of our enquiry into the produc- 
 tion and consumption of the income, we perceive, as might be 
 expected, that a sound human economy conforms to the organic 
 law of distribution, 'from each according to his power, to each ac- 
 cording to his needs/ and that, precisely so far as the current 
 processes of economic distribution of work and of its product con- 
 travene this organic law, waste accrues and illfare displaces wel- 
 fare. The economic distinction between costs and unearned sur- 
 plus 1 furnishes in effect a faithful measure of the extent and forms 
 of divergence between the economic and the human 'law' of 
 distribution. For when this surplus income is traced, backward 
 to the human costs involved in its production, forward to the 
 human injuries inflicted by the excessive and bad consumption 
 it sustains, it is seen to be the direct efficient cause of all the 
 human defects in our economic system. Growing in magnitude 
 with the development of the modern arts of industry and com- 
 merce, it is the concrete embodiment of the social-economic 
 
 1 This distinction is elaborated in my work, The Industrial System (Longmans).
 
 viii PREFACE 
 
 problem. The absorption and utilisation of the surplus for the 
 betterment of the working-classes and the enrichment of public 
 life are essential conditions for the humanisation of industry. 
 
 The first half of the book is occupied with the general exposi- 
 tion and illustration of this method of human valuation. The 
 second part applies the humanist principles thus established, to 
 the discussion of some of the great practical issues of social- 
 economic reconstruction in the fields of business and politics. 
 The medley of overlapping conflicts between capital and labour, 
 producer and consumer, competition and combination, the in- 
 dividual and society, is sifted so as to discover lines of industrial 
 reformation based upon a conception of organic harmony. The 
 reconstruction of the business, so as adequately to represent in 
 its operation the respective interests of capital, ability, labour 
 and the consumer, is seen to be the first desideratum of reform. 
 Here, as in the wider oppositions between business and business, 
 trade and trade, nation and nation (misconceived as economic 
 units), the more rational standpoint of a humanist valuation 
 suggests modes of reconcilement following an evolution of 
 economic structure in which the corporate or cooperative spirit 
 finds clearer and stronger expression. The most debated ques- 
 tion, how far ordinary human nature can yield economic motives 
 to social service strong and reliable enough to enable society 
 to dispense with some of the incentives of competitive greed, 
 hitherto deemed indispensable supports to industry, is discussed 
 in several of the later chapters. The practicable limits of in- 
 dustrial reformation are found to depend upon the reality and 
 importance assigned to 'the social will' as a power operative for 
 industrial purposes, in other words upon the strength of the 
 spiritual unity of society. A final chapter is given to a discussion 
 of the limitations of the scientific and quantitative methods in the 
 interpretation and direction of social-economic life. It is con- 
 tended that the art of social as of individual conduct must 
 always defy exact scientific guidance, the methods of science 
 being incompetent closely to predict or direct the creative ele- 
 ment in organic processes. 
 
 The processes of human valuation and judgment, therefore, 
 whether applied to industry or to other activities and achieve-
 
 PREFACE ix 
 
 ments, must ultimately belong to the art rather than to the 
 science of society, the statesman and the citizen absorbing and 
 assimilating the history of the past which science presents in its 
 facts and laws, but using his free constructive faculty to make 
 the history of the future. The failures of the individual states- 
 man or citizen in the performance of this artistic work are due 
 to the fact that a larger artist, whose performance the most en- 
 lightened individual can but slightly apprehend, viz. society it- 
 self, takes an over-ruling part in the process. 
 
 This brief presentation of the argument, dwelling unavoidably 
 upon intellectual method, may possibly have failed to convey the 
 intensely practical purpose which I have kept in mind throughout 
 the preparation of the book. That purpose is to present a full and 
 formal exposure of the inhumanity and vital waste of modern 
 industry by the close application of the best-approved formulas 
 of individual and social welfare, and to indicate the most hopeful 
 measures of remedy for a society sufficiently intelligent, coura- 
 geous and self-governing to apply them. 
 
 Such a work evidently presents a large frontfor hostile criticism. 
 Its scope has often compelled a rigorous compression in the dis- 
 cussion of important controversial topics, and has precluded all 
 entrance upon the more detailed issues in the policy of reconstruc- 
 tion. But I venture to hope that many readers, who may disagree 
 with the particular valuations and interpretations offered in these 
 chapters, will be led to accept the broader outlines of the method 
 of human valuation here proposed, and will recognise the im- 
 portance of a better application of this method in the solutions 
 of the practical problems of economic reform. 
 
 J. A. HOBSON. 
 HAMPSTEAD, 
 
 January, 1914.
 
 TABLE OF CONTENTS 
 
 CHAPTER I pAGE 
 
 THE HUMAN STANDARD OF VALUE i 
 
 i. The need for a human survey. 2. The attitude of eco- 
 nomic science towards the industrial system. 3. The monetary 
 standard of values. 4. Some inherent defects of Political Econ- 
 omy for human valuation. 5. The humanist standpoint of 
 Ruskin. 6. Ruskin's strength and weakness. 7. Organic wel- 
 fare as a standard. 8. Society as an organism or an organisa- 
 tion? 9. Defence of the organic concept. 
 
 CHAPTER II 
 
 THE HUMAN ORIGINS or INDUSTRY 19 
 
 i. Industry emerging from organic processes. 2. The begin- 
 nings of a rational economy. 3. Utility and self-expression in 
 work. 4. The severance of economic from other human motives. 
 
 CHAPTER III 
 
 REAL INCOME: COST AND UTILITY 28 
 
 i. The humanist attitude towards income. 2. The meaning 
 of national income. 3. Failure of pecuniary measurement. 
 4. Standard of the humanly desirable. 5. Human problems of 
 production and consumption. 6. The analysis of cost and util- 
 ity. 7. Economic versus human costs. 8. The Business as a 
 human structure. 9. Creation and imitation. 10. Merits and 
 defects of the distinction. 1 1. Its provisional acceptance. 
 
 CHAPTER IV 
 
 THE CREATIVE FACTOR IN PRODUCTION 44 
 
 i. Creation in the fine arts. 2. Commercialism in art. 
 3. Interpretative and executive art. 4. Discovery and inven- 
 tion in the ' useful ' arts. 5. The economy of the creative faculty. 
 6. Professional ability. 7. Human costs of professional and 
 
 xi
 
 xii TABLE OF CONTENTS 
 
 PAGE 
 
 official work. 8. Psychology of the financier and the 'business 
 man '. 9. Risk-taking as a personal cost. 
 
 CHAPTER V 
 
 HUMAN COSTS or INDUSTRY 60 
 
 i. Repetition and routine the essential qualities of labour. 2. 
 The physiology of fatigue. 3. Nervous fatigue. 4. Accidents 
 and disorders from fatigue. 5. Ennui and painful efforts. 6. 
 Human costs of conforming to routine. 
 
 CHAPTER VI 
 
 THE REIGN OF THE MACHINE 72 
 
 i. Cooperation of Labour and Machinery. 2. Limits to the 
 reign of machinery. 3. Direct and indirect influences of the ma- 
 chine. 4. Has machinery lightened or aggravated net human 
 costs? 
 
 CHAPTER VII 
 
 THE DISTRIBUTION OF HUMAN COSTS 79 
 
 i. Apportionment of labour according to age, sex, personal ca- 
 pacity. 2. Human waste from labour of the old, the young, the 
 weak. 3. Natural and artificial restrictions on woman's work. 
 4. Costs do not always vary with routine. 5. Summary of 
 physical costs. 6. Moral costs of labour. 
 
 CHAPTER VIII 
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 89 
 
 i. Risk-taking as a physical and psychical cost. 2. Risks in- 
 volved in all productive work. 3. Costly and costless saving. 
 4. Efforts of abstinence and postponement. 5. Distribution of 
 expenditure over time. 6. The possibility of costless capital. 
 7. Automatic saving of the rich. 8. Motives in the saving of 
 the thrifty. 9. Human costs and utilities of thrift. 10. The 
 heavy costs of working-class saving. 
 
 CHAPTER DC 
 
 HUMAN UTILITY OF CONSUMPTION 106 
 
 i. The human valuation of economic utilities, Wealth and 
 'Illth'. 2. How far the arts of production and consumption
 
 TABLE OF CONTENTS xiii 
 
 PAGE 
 
 correspond. 3. Slow evolution of consumptive arts. 4. Pro- 
 duction for profit endangers consumption. 5. Instinct and rea- 
 son in the evolution of wants. 6. Organic safeguards against 
 waste. 7. Growing waste with rising standards of consumption. 
 
 CHAPTER X 
 
 CLASS STANDARDS OF CONSUMPTION 121 
 
 i. Physical environment as a factor in class standards. 2. 
 Industrial conditions affecting standards. 3. Conventional ele- 
 ments in consumption. 4. Risks in ' Novelties ' under individual 
 choice. 5. Imitation as a maker of 'conventions'. 6 . How 
 commercial interests damage conventional consumption. 7. Hu- 
 man values in conventional and routine elements. 8. The play 
 of imitative forces. 9. The modus operandi of prestige. 10. 
 Theory of a leisure class. 1 1. Futile expenditure. 
 
 CHAPTER XI 
 
 SPORT, CULTURE AND CHARITY 146 
 
 i. Sport -activities and survival value. 2. The exploitation 
 of biological utility. 3. Degradation of the sporting life. 
 Its prestige. 4. Intellectual recreations. Decorative culture. 
 5. Ethics of the sporting life. 6. Parody of the lower leisure- 
 class. 7. Race exploitation displacing class exploitation. 
 
 CHAPTER XII 
 
 THE HUMAN LAW OF DISTRIBUTION 159 
 
 i. Human costs and utilities in Production and Consumption. 
 2. The same laws of valuation applicable on each side. 3. 
 Statement of the human law. 4. Income according to needs. 
 5. Identity and diversity of needs. 6. Laissez-faire as a law 
 of human distribution. 7. The new doctrine of Marginalism. 
 8. Its logical and practical defects. 9. Fundamental diver- 
 gence of the economic and human laws. The surplus. 10. Or- 
 igins and nature of the surplus. n. Rent element in surplus. 
 12. Other contributory sources. 13. Claims of 'Ability' to 
 the surplus. 14. Theory of prizes and blanks. 15. Summary 
 of injuries and wastes from the surplus.
 
 xiv TABLE OF CONTENTS 
 
 CHAPTER XIII 
 
 THE HUMAN CLAIMS OF LABOUR 190 
 
 i. The Labour Movement's basis of remuneration. 
 2. Ethics and economics of the piece-wage system. 3. Growth 
 of the salary system. 4. The minimum wage policy. 
 5. Limitation of output. 6. Public supplements to wages. 
 
 CHAPTER XIV 
 
 SCIENTIFIC MANAGEMENT 202 
 
 i. Science applied to business organization. 2. Experi- 
 mental study of tools, work and workers. 3. The intensifica- 
 tion of labour. 4. Relation of economic to human costs. 5. 
 Applied psychology. Miinsterberg's experiments. 6. Selection 
 and adjustment of men to jobs. 7. Will workers gain in wages? 
 8. The mechanisation of labour. 9. Reactions on the progress 
 of the industrial arts and standards of life. 10. Science applied 
 to consumption. n. Dietaries in relation to work. 12. Eu- 
 genics and education, for work or life? 13. The science of human 
 industry. 
 
 CHAPTER XV 
 
 THE DISTRIBUTION OF LEISURE 228 
 
 i. The upper and lower leisured classes. 2. Under and over- 
 employment. 3. The demand for an Eight Hours Day. 4. 
 Shorter hours in relation to spare energy. 4. Double injury of 
 long work-day, to producer and consumer. 6. Leisure as the 
 opportunity of opportunities. 7. Leisure as condition of educa- 
 tion. 8. Leisure and invention. 9. Non-economic values of 
 leisure. 10. The place of leisure in class standards of life. n. 
 Leisure as a social requisite. 
 
 CHAPTER XVI 
 
 THE RECONSTRUCTION OF INDUSTRY 250 
 
 i. Realisation of the social meaning of labour. 2. Com- 
 petition in trades, businesses and workers. Its dehumanising ef- 
 fects. 3. Harmony and discord between capital and labour. 
 4. Experiments in new business structure. 5. Cooperation 
 of Capital and Labour. 6. The opposition of producer and con- 
 sumer. 7. The cooperative movement as a mode of settlement. 
 8. The workers' claim for a share in business control. 9. The
 
 TABLE OF CONTENTS rv 
 
 PAGE 
 
 balance of interests in business structure. 10. The syndicalist 
 idea. n. Dangers of bureaucracy. 
 
 CHAPTER XVII 
 
 THE NATION AND THE WORLD 272 
 
 i. Nations misconceived as economic units. 2. The idea 
 of an economic world-state. 3. Need for a conscious recogni- 
 tion of world industry. 
 
 CHAPTER XVIII 
 
 SOCIAL HARMONY IN ECONOMIC LIFE 276 
 
 i. Growing harmony within the Business. 2. Organisation 
 versus competition in the Trade. 3. States in relation to monopo- 
 lies and combines. 4. The need for international regulation of 
 Industry. 
 
 CHAPTER XLX 
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 283 
 
 i. The spiritual assumptions of humanist reforms. 2. 
 Stimulation of Industrial motives. 3. Less 'costly' production 
 required. 4. Limitations of the claims of industry on life. 5. 
 The scope of individualism and private enterprise. 6. Moral and 
 social significance of 'the Surplus.' 7. Theory of Property as a 
 social trust. The test of Charity. 8. Property set upon a 
 'proper' basis. 9. Beneficial reactions of sound property upon 
 other functions. 
 
 CHAPTER XX 
 
 THE SOCIAL WILL AS AN ECONOMIC FORCE 301 
 
 i. Early stages of reconstruction may involve some economic 
 loss. 2. Esprit de Corps or common consciousness as an economic 
 incentive. 3. Wholesome interaction of better social conscious- 
 ness and better social environment. 4. Ultimate reason for so- 
 cialisation of routine industries. 5. Social life justifies the rou- 
 tine work of individuals. 6. The cells' imperfect realisation of 
 the organism. 
 
 CHAPTER XXI 
 
 PERSONAL AND SOCIAL EFFICIENCY 310 
 
 i. The organic law as basis of personal efficiency for pro- 
 duction. 2. Personal efficiency for consumption. 3. Organic
 
 xvi TABLE OF CONTENTS 
 
 PAGE 
 
 union of production and consumption. 4. Will society enslave 
 the individual? 5. Quantity and quality of work. 6. The 
 relations between material and non-material wealth. 7. Quan- 
 tity and quality of life. 
 
 CHAPTER XXII 
 
 SOCIAL SCIENCE AND SOCIAL ART 320 
 
 i. 'Enlightened common sense' as a human standard. 2. 
 Limitation of a quantitative calculus. 3. Quantitative and quali- 
 tative facts. 4. The reduction of qualitative to quantitative 
 differences. 5. Scientific politics. 6. The case of art-values. 
 7. Analysis of utility of income. 8. How mutations and nov- 
 elty limit science. 9. Use and abuse of averages. 10. Sum- 
 mary of uses of a scientific calculus. 1 1. The services of science 
 to human arts. 12. Final futility of 'marginalism.' The in- 
 calculable. 13. Scientific calculus as guide to conduct. 14. 
 Organic unity imposes values. 15. Two meanings of social will 
 and social value. 16. Collective instincts in Democracy. 17. 
 General will in instinct and reason. 18. Creative power in 
 collective man. 19. The evolution of a rational social will.
 
 WORK AND WEALTH
 
 WORK AND WEALTH 
 
 CHAPTER I 
 
 THE HUMAN STANDARD OF VALUE 
 
 i. In an age when human problems of a distinctively eco- 
 nomic character, relating to wages, hours of labour, housing, 
 employment, taxation, insurance and kindred subjects, are press- 
 ing for separate consideration and solution, it is particularly 
 important to enforce the need of a general survey of our economic 
 system from the standpoint of human values. Social students, of 
 course, are justified by considerations of intellectual economy in 
 isolating these several problems for certain purposes of detailed 
 enquiry. But the broader human setting, demanded for the 
 judgment or the policy of a statesman or reformer, can never be 
 obtained by this separatist treatment. For the interactions which 
 relate these issues to one another are numerous and intimate. 
 Taking as the most familiar example the groups of questions re- 
 lating to the working-classes, we recognise at once how the 
 wages, hours, regularity of employment and other considerations 
 of labour, overlap and intertwine, while, again, the questions 
 relating to conditions of living, such as housing, food, drink, 
 education, recreation, facilities of transit, have similar inter- 
 relations as factors in a standard of comfort. Nor is it less evi- 
 dent that conditions of labour and conditions of living, taken 
 severally and in the aggregate, interact in ways that affect the 
 efficiency and well-being of the people. 
 
 The special and separate studies of these various problems 
 must then, in order to be socially serviceable, be subject to the 
 guidance and direction of some general conception which shall 
 have regard to all sorts of economic factors and operations, assess- 
 ing them by reference to some single standard of the humanly de- 
 sirable. This general survey and the application of this single
 
 2 WORK AND WEALTH 
 
 standard of valuation are necessary alike to a scientific inter- 
 pretation of the economic or industrial world and to a conscious 
 art of social-economic progress. They must exert a control over 
 the division of intellectual labour on the one hand, and over the 
 utilisation of such labour for social policy upon the other. The 
 notion that, by setting groups of students to work at gathering, 
 testing, measuring and tabulating crude facts, relating, say, to 
 infant mortality, expenditure on drink, or wages in women's 
 industries, valuable truths of wide application will somehow be 
 spontaneously generated, and that by a purely inductive process 
 there will come to light general laws authoritative for social 
 policy, is entirely destitute of foundation. The humblest grubber 
 among 'facts' must approach them with some equipment of 
 questions, hypotheses, and methods of classification, all of which 
 imply the acceptance of principles derived from a wider field of 
 thought. The same holds again of the next higher grade of stu- 
 dents, the intellectual middlemen who utilise the 'facts' got by the 
 detailed workers 'at the face.' They too must bring wider prin- 
 ciples to correlate and to interpret the results got by the humbler 
 workers. So at each stage of the inductive process, laws and stan- 
 dards derived from a higher intellectual stage are brought to bear. 
 Even if such studies were prompted entirely by a disinterested 
 desire for knowledge, it is evident that their success implies the 
 inspiration and application of some general ideas, which in rela- 
 tion to these studies are a priori. But regarding these studies as 
 designed primarily to assist the art of social policy, we must 
 recognise that the inner prompting motive of every question that 
 is put at each stage of such enquiries, the inner regulative prin- 
 ciple of the division of labour and of the correlation of the results, 
 is the desire to realise some more or less clear conception of gen- 
 eral human well-being. It must, of course, be admitted that this 
 procedure rests upon a sort of paradox. The general conception 
 of human well-being is itself vague and unsubstantial, until it 
 has acquired and assimilated the very sorts of knowledge the 
 collection of which it is here assumed to be able to direct. This 
 paradox, however, is familiar to all who reflect upon the progress 
 of knowledge in any department and for any purpose. I only 
 name it here in order to anticipate the objection of those dis-
 
 THE HUMAN STANDARD OF VALUE 3 
 
 posed to question the validity of assuming any sort of standard 
 of human welfare, and to insist upon testing each economic 
 issue upon what they call 'its own merits.' The application of a 
 general survey and a general standard of values is none the less 
 a logically valid and a practically useful procedure, because 
 the new facts which its application discloses afford more fulness 
 and exactitude to the survey, while the standard is itself made 
 clearer and more effective thereby. 
 
 Assuming it to be admitted, then, that a human valuation of 
 economic processes is possible and desirable, both for the en- 
 largement of knowledge and for purposes of social policy, the 
 questions next arjse, 'How shall we conceive and describe the 
 standard of human valuation, and how shall we apply it to the 
 interpretation of the present economic system?' 
 
 2. Before facing these questions, however, it will be well to 
 have before our minds a clear outline picture of this economic 
 system which we seek to value. It consists of two complex 
 operations, constantly interacting, known as Production and 
 Consumption of wealth. By wealth is understood all sorts of 
 vendible goods and services. So far as material wealth is con- 
 cerned, it is ' produced ' by a series of processes which convert 
 raw materials into finished goods of various sorts and sizes and 
 dispose them in such quantities as are required, for the satisfac- 
 tion of consumers or as instruments in some further process of 
 production. Similarly, in the case of professional, official, domes- 
 tic, industrial, commercial, and other personal services, which 
 also rank as wealth, 1 a variety of productive processes go to pre- 
 pare them and to place them at the disposal of consumers. The 
 processes of production may thus be classified as extractive, 
 manufacturing, artistic, transport, commercial, professional, 
 domestic. Thus it is seen that the work of 'distribution' and 
 'exchange,' z sometimes distinguished from the work of pro- 
 duction, is here included in that category. 
 
 1 Labour employed in productive work of industry is usually excluded from the 
 category of national 'wealth', though it is sometimes regarded as 'personal wealth'. 
 But there is no sufficient reason for this exclusion. Any increase of the efficiency of 
 the labour of a nation is evidently as much an increase of its total vendible resources 
 as an increase in its instrumental capital would be. 
 
 2 Exchange is simply an ordinary branch of production, mainly consisting of
 
 4 WORK AND WEALTH 
 
 Now, the first difficulty confronting us in our search for a 
 human valuation of this economic system consists in the ob- 
 scurity in which half this system lies. For though there is every- 
 where a formal recognition that consumption is the end or goal 
 of industry, there is no admission that the arts of consumption 
 are equally important with the arts of production and are de- 
 serving of as much attention by students or reformers of our 
 * economic system.' On the contrary, so absorbing are the pro- 
 ductive processes in their claims upon the physical and mental 
 energies of mankind, that the economic system, alike for prac- 
 titioners and theorists, has almost come to be identified with 
 these processes. This depreciation and neglect of Consumption 
 no doubt has been natural enough. So much more conscious 
 energy of thought and feeling, and so much more expenditure of 
 time and effort have gone into the discovery, development and 
 practice of the productive arts. Their practice has involved so 
 much more publicity, so much wider and more varied intercourse, 
 and therefore so much more organisation. Consumption, on the 
 other hand, has been so much more passive in its character, so 
 private and individual in the acts which comprise it, so Little 
 associated with sequences of thought or purpose, that it has 
 hardly come to be regarded as an art. Hence, even in the 
 more elaborate civilisations where much detailed skill and at- 
 tention are devoted to the use and enjoyment of goods and 
 services, the neglect of consumptive processes by economic 
 science remains almost unimpaired. The arts of production 
 remain so much more exacting in their demands upon our 
 attention. 
 
 The early influence of this dominance of the productive stand- 
 point in economic science has had effects upon the terminology 
 and structure of that science which are serious obstacles to the 
 human interpretation of industry. Unconsciously, but consis- 
 tently, the early structure of the science was built with exclusive 
 regard to the industrial or productive processes. The art out of 
 which the science grew was concerned with the progress of agricul- 
 
 wholesale and retail trade. Distribution has, of course, another and an important 
 economic signification, being applied to the laws determining the apportionment 
 of the product.
 
 ture, manufacture, and commerce, or with problems of money, 
 taxation, and population, regarded mainly or wholly from the 
 productive standpoint. The underlying assumption everywhere 
 was the question, 'How will this or that policy affect the quan- 
 tity of wealth produced in the country? ' always with an impor- 
 tant corollary to the effect, 'How will it affect the quantity of 
 wealth, passing as rents, profits, interest, or wages to the several 
 classes of the nation?' But nowhere was there any direct con- 
 sideration of the arts of consumption, with one particularly 
 instructive exception. The only bit of attention paid by our 
 early classical economists to processes of consumption was to 
 distinguish 'productive' from 'unproductive' consumption, 
 that is, to suggest a valuation of consumption based entirely 
 upon its subordination to future purposes of production. Their 
 condemnation of luxurious expenditure and waste, alike in the 
 wealthy and the working-classes, was not primarily directed 
 against the loss of real enjoyment, or human well-being, or the 
 moral degradation involved in such abuse of spending power, 
 but against the damage to the further processes of making wealth 
 by reducing the rate of saving or by impairing the working 
 efficiency of labour. Though occasional considerations of a more 
 distinctively humane or moral character entered into the tirades 
 against luxury, or the dietetic advice offered by these economic 
 teachers, the main trend of their reflections on the use of wealth 
 was quite evidently dominated by considerations of increased 
 production. This tendency further impressed itself upon the 
 central concept of economic science, that of value, which was 
 treated by these early makers of Political Economy exclusively 
 from the productive standpoint of 'costs.' When, however, later 
 theorists, beginning with Jevons in this country, sought to con- 
 vert the formal goal of consumption into the real goal, by sub- 
 stituting ' utility ' for ' cost ' as the determinant of value, it might 
 have been supposed that they would have been impelled, passing 
 through the gateway of utility into consumption, to open up 
 that hitherto neglected country. But no such thing has happened. 
 While an elaborate division of intellectual labour has been 
 applied, both to the study of the objective structure of industry, 
 and to the psychology of the various agents of production, no
 
 6 WORK AND WEALTH 
 
 corresponding studies of consumption have been made. When 
 the products of industry pass over the retail counter, economic 
 science almost entirely loses count of them. They pass from sight 
 into the mysterious maw of 'the Consumer.' It has never 
 occurred to the economist that it is just as important to have a 
 clear and close knowledge of what happens to products when 
 they have become consumer's goods, as it is to trace their history 
 in the productive stages. It would, of course, be untrue to say 
 that modern economists completely ignore methods and motives 
 of consumption. Their studies of value and of markets compel 
 them to direct equal attention to forces regulating Supply and 
 Demand, and many of them assign a formal superiority to the 
 demand for final commodities which issues from Consumers, as 
 the regulator of the whole industrial system. But while this has 
 evoked some interesting enquiries into quantities and modes of 
 consumption, the main interest of these enquiries has lain, not 
 in the light they shed upon the use and enjoyment got from con- 
 sumption, but in the effects of that consumption upon demand 
 as a factor in problems of price and of production. In a word, 
 the economic arts of consumption still run in subordination to 
 the arts of production, and the very nature of the interest taken 
 in them attests their secondary place. Half of the field of ec- 
 onomic survey important from the standpoint of human welfare 
 thus stands unexplored or ill-explored. 
 
 3. A necessary result of this identification of economic 
 subject-matter with the productive apparatus, has been to im- 
 pose upon the study of economics a distinctively mechanical 
 character. The network of businesses and trades and processes, 
 which constitutes industry, may indeed, by an interpretative 
 effort of imagination, be resolved into the myriads of thoughts, 
 desires and relations which are its spiritual texture. Every 
 business, with its varied machinery and plant, its buildings, 
 materials, etc., is the embodiment of conscious human effort, 
 and the personnel of management and operatives represent a 
 live current of volition and intelligence, directing and cooperating 
 with it. A business, thus regarded, is a distinctively spiritual 
 fabric. Nor is this true only of those industries employed in 
 fashioning material goods. The complicated arrangements of
 
 THE HUMAN STANDARD OF VALUE 7 
 
 communications and of commerce with their ganglia of markets, 
 by which goods pass from one process to another and are gathered, 
 sorted and distributed in regulated channels throughout the 
 world of workers and consumers, represent an even more delicate 
 adjustment of psychical activities. Economic science tends, un- 
 doubtedly, to become less material in its outlook and treatment, 
 and to give more attention to the psychological supports of the 
 industrial system. Not only have we many special studies of 
 such economic questions as saving and investment, business 
 administration and other critical operations of will and judgment, 
 but in such works as those of M. Tarde in France, and Mr. 
 Wicksteed in this country, we find attempts at a systematic 
 psychological interpretation of industry. Economics, indeed, 
 according to the latter writer, is a branch of the science of 'pref- 
 erences,' the application of intelligent human volition to the 
 satisfaction of economic wants. 
 
 And yet the science remains distinctively mechanical and 
 unfitted for the performance of any human interpretation of in- 
 dustry. This is due to the failure of our psychological econ- 
 omists to tear themselves free from the traditions of a Political 
 Economy which in its very structure has made man subservient 
 to marketable wealth. The accepted conception of the Art of 
 Political Economy is that it is directed to the production of 
 wealth whose value is attested by the purely quantitative cal- 
 culus of money, and the Science of Political Economy is virtually 
 confined to discovering and formulating the laws for the produc- 
 tion of such wealth. The basic concepts of Value, Cost, and 
 Utility, are subjected to this governing presupposition. Their 
 primary significance is a monetary one. The value of any stock 
 of wealth is signified in money, the cost of its production, the 
 utility of its consumption, are registered in monetary terms. 
 The psychological researches which take place into processes of 
 thought and desire are not regarded as having significance on 
 their own account, but merely as means or instruments in the 
 working of industrial processes. The study of motives, interests, 
 and ideas in the process of invention, or in the organisation and 
 operation of some productive work, treats these thoughts and 
 feelings not in their full bearing upon human life, its progress or
 
 8 WORK AND WEALTH 
 
 happiness, but in exclusive relation to the monetary end to which 
 they are directed. 
 
 4. It is no concern of ours to criticise this attitude in the 
 sense of condemnation. But it is important to realise that no 
 progress of psychological analysis will enable economic science to 
 supply a human valuation of industry so long as all the human 
 functions involved in economic processes are measured, assessed, 
 and valued, according to their bearing upon the production of a 
 'wealth' which has no directly assignable relation to human 
 welfare, but is estimated by a purely monetary measure. The 
 net effect of this conception of the economic system as an elab- 
 orate arrangement of material and spiritual factors, contributing 
 to the production and distribution of a stream of various goods 
 valued by a monetary standard, is to leave upon the mind the 
 impress of a distinctively mechanical apparatus. No one, for 
 example, can read the masterly work of Mr. Wicksteed l without 
 recognising that his delicate, elaborate measurements and bal- 
 ances of motives and preferences, while involving and implying 
 actions that no one but man can perform, treat not only industry, 
 but humanity itself as a psychological mechanism. 
 
 This distinctively mechanical character is inherent in the struc- 
 ture of an economic science based upon the subserviency of all 
 human activities to a purely quantitative conception of wealth, 
 and a purely monetary standard of value. This character of 
 economic science is, of course, by no means disabling for all pur- 
 poses. On the contrary, it furnishes valid instruments for the 
 interpretation of many important groups of phenomena in the 
 business world, and for the solution of certain problems where 
 purely quantitative standards and methods are applicable. 
 Indeed, the increasing devotion of economists to problems of 
 money, price, and other definitely monetary questions, may be 
 taken as a half-instinctive recognition of the real inadequacy 
 of current economics for any very useful solution of those more 
 vital problems into which closely human considerations enter as 
 governing factors. As we proceed, we shall realise in more detail 
 the nature of the incapacity of current economics to furnish any 
 rules for settling issues that relate to wages, hours of labour, 
 1 The Common-sense of Political Economy.
 
 THE HUMAN STANDARD OF VALUE 9 
 
 State interference with private industry, private property, and 
 other human problems which are in first appearance 'economic.* 
 
 Three defects appear, then, to disqualify current economic 
 science for the work of human valuation. First, an exaggerated 
 stress upon production, reflected in the terminology and method 
 of the science, with a corresponding neglect of consumption. 
 Secondly, a standard of values which has no consistent relation 
 to human welfare. Thirdly, a mechanical conception of the 
 economic system, due to the treatment of every human action as 
 a means to the production of non-humanly valued wealth. 
 
 5. These warning-posts may help us to discover and to formu- 
 late an intellectual procedure more suited to our needs. A human 
 valuation of industry will give equal attention to Production and 
 Consumption, will express Cost and Utility in terms of human 
 effort and satisfaction, and will substitute for the monetary 
 standard of wealth a standard of human well-being. This asser- 
 tion of vital value as the standard and criterion is, of course, no 
 novelty. It has underlain all the more comprehensive criticisms 
 of orthodox political economy by moralists and social reformers. 
 By far the most brilliant and effective of these criticisms, that 
 of John Ruskin, was expressly formulated in terms of vital value. 
 The defects which he found in the current economic science were 
 substantially the same as those which we have noted. His famous 
 declaration that 'There is no wealth but life/ and his insistence 
 that all concrete wealth or money income must be estimated in 
 relation to the vital cost of its production and the vital utility of 
 its consumption, is the evidently accurate standpoint for a human 
 valuation of industry. This vital criterion he brought to bear 
 with great skill, alike upon the processes of production and con- 
 sumption, disclosing the immense discrepancies between mone- 
 tary costs and human costs, monetary wealth and vital wealth. 
 No one ever had a more vivid and comprehensive view of the 
 essentially organic nature of the harmony of various productive 
 activities needed for a wholesome life, and of the related harmony 
 of uses and satisfactions on the consumptive side. His mind 
 seized with incomparable force of vision the cardinal truth of 
 human economics, viz. that every piece of concrete wealth must 
 be valued in terms of the vital costs of its production and the
 
 io WORK AND WEALTH 
 
 vital uses of its consumption, and his most effective assault upon 
 current economic theory was based upon its complete inadequacy 
 to afford such information. But, though most of his later writings 
 were suffused with this conception of wealth and with the double 
 process of analysis which it involved, nowhere was that analysis 
 systematically applied. There were brilliant excursions into the 
 domain of labour, distinguishing the nobler and the baser sorts, 
 those which are truly 'recreative' and those which degrade and 
 impoverish life. There was the famous distinction between 
 'wealth' and 'illth,' according to the essential qualities of the 
 goods and the sorts of persons into whose hands they pass for 
 consumption. In the most systematic of his works, Munera 
 Puheris, he, indeed, appears at the outset to have his mind 
 closely set upon the exact performance of the required analysis. 
 For, defining the scope of his work, he says, ' The essential work 
 of the political economist is to determine what are in reality use- 
 ful or life-giving things, and by what degrees and kind of labour 
 they are attainable and distributable.' * Then follows a clear 
 and logical distinction between value and cost. 'Value is the 
 life-giving power of anything; cost the quantity of labour re- 
 quired to produce it.' Had he proceeded to estimate 'Wealth' 
 with equal regard to its value and its labour-cost, the latter ex- 
 pressed in vital terms, the scientific character of his analysis 
 would have been preserved. But unfortunately he allowed him- 
 self to be overweighted by a sense of value which stresses ' human 
 utility' of consumption, so that, while the 'utility' side of the 
 equation is worked out with admirable skill, the 'cost' or labour 
 side is slighted, and the organic relation between the two is lost 
 sight of. The confusion wrought in the minds of readers by the 
 failure to find in any of his works a full application of his prin- 
 ciple has been responsible for an unjust disparagement of the 
 truly scientific service rendered by Ruskin towards the founda- 
 tion of social-economics. From a Pisgah height his mind's eye 
 swept in quick penetrative glances over the promised land, but 
 he did not occupy it, or furnish any clear survey. 
 
 6. Our purpose here is in part to perform the task indicated 
 by Ruskin, viz. to apply to industry the vital standard of valua- 
 1 Munera Puheris, XL.
 
 THE HUMAN STANDARD OF VALUE n 
 
 tion, or at any rate to improve the instruments of vital survey. 
 But only, in part. For our task is in scope less comprehensive 
 than that to which Ruskin applied himself. Though his teaching 
 sprang originally from two related roots of emotional valuation 
 distinctively economic in their bearings, the love of the finer sorts 
 of human work called Art, and the reprobation of the degrading 
 conditions of the work most of his countrymen were called upon 
 to do, it expanded into a wider meaning of 'economy' which 
 included not merely economic activities and economic goods, but 
 all sorts of vital activities and goods. A criticism of current 
 Political Economy, on the ground that it did not treat its ac- 
 cepted subject-matter in a vital manner, thus developed into a 
 constructive Political Economy which not merely humanised the 
 method but expanded the area of the science and art, so as to 
 make it in effect a comprehensive science and art of human wel- 
 fare. 
 
 Now it has always been an open question whether the makers 
 of Political Economy were intellectually justified in severing 
 marketable from non-marketable goods and services, and framing 
 a separate science upon studies of the former. That marketable 
 goods are not always separable from non-marketable, and that 
 the economic activities of man are always inter-related with 
 non-economic activities, are accepted truths. Ruskin's percep- 
 tion of the intimacy of these relations between commercial and 
 non-commercial functions and products led him to break down 
 the barriers set up by Economic Science, in the furtherance of 
 an art which should set up as its goal 'the multiplication of 
 human life at its highest standard.' 
 
 Now this enlargement may be quite legitimate. But it was 
 evidently responsible in large measure for the failure of Ruskin 
 to drive home the criticism directed against the current economic 
 teaching. It was one thing to attack Political Economists for 
 failing to take due account of human values in their treatment of 
 processes relating to marketable wealth. It was, however, quite 
 another to insist that the barrier between Political Economy and 
 other social sciences and arts should be torn down, and that all 
 phenomena of vital import should become the objects of its study. 
 Had Ruskin been able to keep to the narrower scope, doubtless
 
 12 WORK AND WEALTH 
 
 he would not have been Ruskin, but his attack on current ec- 
 onomic theory and practice would have been vastly more effect- 
 ive. 
 
 This brief excursion into Ruskin's work has been necessary, 
 first in order to make proper acknowledgement of the sound 
 scientific instinct of this great pioneer of social thought, and, 
 secondly, to make it clear that, while accepting his standard of 
 valuation, we do not propose applying it outside the range of 
 economic phenomena in the ordinary acceptation of that term. 
 While admitting the overlapping and interaction of economic and 
 other human functions, we shall accept the ordinary definition of 
 the boundaries of economic studies, and shall seek to make our 
 human survey and apply our human valuation within these 
 limits. The extra-economic implications which the unity of life 
 will disclose cannot, indeed, be ignored, but they will be treated 
 as supplementary to the main purpose, that of valuing the proc- 
 esses directly connected with the getting and spending of money 
 incomes. 
 
 7. In setting up a vital standard of valuation, we are likely 
 to be met with the objections that life is too vague, too changing, 
 too incomprehensible for any standard, and that life is not 
 valuable in itself but because of certain qualities which it may 
 possess. Our standard must be conceived in terms of a life that 
 is good or desirable. This consideration might evidently lead 
 us far afield. If we are to undertake a valuation of life as a pre- 
 liminary to valuing industry, it is likely that we may never 
 approach the second undertaking. The best escape from this 
 predicament is to start from some generally accepted concept 
 which indicates, even if it does not express fully, the desirable in 
 life. Such a term I take to be 'organic welfare.' Though in form 
 a mere synonym for good life, it is by usage both more restricted 
 and more precise. It perhaps appears to thrust into the forefront 
 of consideration the physical basis of life. But the organic con- 
 cept, when liberally interpreted and applied, carries no such 
 restrictive implication, and its distinctively biological association 
 should not rule it out from the work of wider valuation here 
 required. As a provisional statement of our standard of valua- 
 tion, 'organic welfare' has two advantages. In the first place,
 
 THE HUMAN STANDARD OF VALUE 13 
 
 it supplies an admittedly sound method of estimating those 
 physical costs and utilities with which the major part of industry 
 and of its product is associated. Even in the most advanced 
 civilisation of to-day, economic processes are primarily physical 
 in the efforts they evoke and in the needs they satisfy; the ex- 
 penditure and recoupment of physical energy constitute the first 
 and most prominent aspect of industry. In tracing the origins 
 of human industry, we shall find this rooted in what appear as 
 half -instinctive animal functions for the satisfaction of 'organic' 
 needs, individual or racial. The primitive direction of produc- 
 tive effort is evidently 'organic.' 
 
 Again, the 'organic' point of view avoids two grave errors 
 common to the more mechanical treatment of an economic 
 science which has subordinated man to commercial wealth. It 
 insists upon regarding the productive effort which goes into any 
 work of production and the satisfaction which proceeds from the 
 consumption of any product, not as a separate cost and a separate 
 utility, but in their total bearing upon the life of the producer or 
 consumer. The mechanical separatism of the ordinary economic 
 view follows from a treatment in which the labour bestowed on a 
 product is only a 'cost' in the same sense as the raw materials 
 and tools employed in making it, all alike purchased as separate 
 commodities at a market in which they figure as fractions of a 
 Supply. Similarly with the ordinary economic treatment of con- 
 sumption. Each consumable is regarded as yielding a quality of 
 utility or satisfaction valued on its own account, whereas in real- 
 ity its consumable value depends upon the ways hi which it affects 
 the entire organic process of consumption. Every speeding-up 
 of a machine-process, or every reduction of the hours of labour, 
 affects for good or evil both the economic and the human effi- 
 ciency of the whole man: every rise or fall of remuneration for 
 , his labour similarly reacts upon the standard of life. Nor is this 
 all. Current economic science has not only treated each cost and 
 each utility as a separate item or unit of economic power, it has 
 treated each man as two men, producer and consumer. The 
 acquiescence in the economic tendency towards a constantly in- 
 creasing specialisation of man as producer, a constantly increasing 
 generalisation of man as consumer, is only intelligible upon the
 
 14 WORK AND WEALTH 
 
 supposition that the arts of production and consumption have 
 no relation to one another. 1 The standpoint of organic welfare 
 reduces to its natural limits this useful distinction of producer 
 and consumer, and enables us to trace the true interactions of the 
 two processes. In a word, it obliges us to value every act of pro- 
 duction or consumption with regard to its aggregate effect upon 
 the life and character of the agent. 
 
 8. Finally, a 'social' interpretation of industry is not pos- 
 sible except by treating society as an organic structure. Whether 
 society be regarded as an 'organism' with a life conceived as 
 comprising and regulating the life of its individuals, in the same 
 manner as a biological organism that of its cells, or as an 'organi- 
 sation' contrived by individuals entirely for the furtherance of 
 their private ends, it must be treated as a vital structure capable 
 of working well or working ill. I say vital structure, not spiritual 
 structure, for I hold the tendency to interpret social organisation 
 exclusively in terms of ethical ends, and as existing simply for 
 'the realisation of an ethical order,' to be unwarranted. The 
 men who form or constitute a Society, or who enter any sort of 
 social organisation, enter body and soul, they carry into it the 
 inseparable character of the organic life, with all the physical and 
 spiritual activities and purposes it contains. Particular modes 
 of social organisation, as, for example, a Church, may be treated 
 as directed primarily to spiritual ends, though even there the 
 separation is not finally valid. But society in the broader sense, 
 even though conceived not as an 'organism' but merely as an 
 organisation, must be regarded as existing for various sorts of 
 human purposes. For the impulses to form societies are rooted 
 in broad instincts of gregariousness and of sexual and racial 
 feeling, which are best described as organic, and, though these 
 instincts become spiritualised and rationalised with the progress 
 of the human mind, they never cease to carry a biological import. 
 
 Even though one takes, therefore, the extremely individualistic 
 view of Society, regarding it as nothing more than a set of arrange- 
 ments for furthering the life of individual men and women, 
 
 1 How potent a source of intellectual confusion this separation of producer and 
 consumer is, may be best illustrated from the commonly accepted treatment of the 
 theory of taxation, which regards 'consumers' as a different class of beings from 
 'producers ' for purposes of incidence of taxes.
 
 THE HUMAN STANDARD OF VALUE 15 
 
 entirely a means or instrument for achieving the ends of 'per- 
 sonality,' our human valuation of industry will require considera- 
 tion of its reactions upon the structure and working of these 
 social arrangements. 
 
 But this organic treatment of Society is, of course, still more 
 essential, if we consider society not merely as a number of men 
 and women with social instincts and social aspects of their in- 
 dividual lives, but as a group-life with a collective body, a 
 collective consciousness and will, and capable of realising a 
 collective vital end. The disposition to convert sociology into 
 a study, on the one hand, of social feelings in the individual man, 
 on the other of social institutions that are only forms through 
 which these feelings express themselves, is to my mind a wholly 
 inadequate conception of the science of Society. The study of 
 the social value of individual men no more constitutes sociology 
 than the study of cell life constitutes human physiology. A 
 recognition of the independent value of the good life of a society 
 is essential to any science or art of Society. 
 
 To a Greek or a Roman, the idea that the city existed merely 
 for the production of good citizens, and without an end or self 
 of its own, would never have seemed plausible. Nor to any 
 Christian, familiar with the idea and the sentiment of the Church 
 as a society of religious men and women, would it occur that such 
 Society had no life or purpose other than that contained in its 
 individual members. Society must then be conceived, not as a 
 set of social relations, but as a collective organism, with life, will, 
 purpose, meaning of its own, as distinguished from the life, will, 
 purpose, meaning, of the individual members of it. To those who 
 boggle at the extension of the biological term 'organism' to 
 society, asking awkward questions as to the whereabouts of the 
 social sensorium, and the integument of a society, or whether a 
 political, a religious, an industrial Society do not conflict and 
 overlap, I would reply that these difficulties are such as arise 
 whenever an extension of boundaries occurs in the intellectual 
 world. The concept 'organism' as applied to the life of animals 
 and vegetables, is not wholly appropriate to describe the life of a 
 society, but it is more appropriate than any other concept, and 
 some concept must be applied. If some qualification is desired,
 
 16 WORK AND WEALTH 
 
 no objection can be raised against the term super-organism ex- 
 cept its length. What is necessary is that some term should be 
 used to assist the mind in realising clearly that all life proceeds 
 by the cooperation of units working, not each for its separate 
 self, but for a whole, and attaining their separate well-being in 
 the proper functioning of that whole. As the structure of the 
 organic cell, the organ, and the organism illustrate this coopera- 
 tive and composite life, so with the larger groupings which we 
 call societies. An animal organism is a society of cells. 
 
 9. So far as the difficulty arising from the narrowly biological 
 use of the term organism is concerned, that is rapidly disappear- 
 ing before the advance of psychology. For modern biology is 
 coming more and more to realise its early error in seeking to con- 
 fine itself to the study of life as a merely physical phenomenon. 
 Biology and psychology are constantly drawing into closer rela- 
 tions, with the result that a new science of psycho-biology is 
 already coming into being. In building, thus far, upon a founda- 
 tion of organic concepts, one is no longer properly exposed to the 
 suspicion of ignoring or disparaging the psychical phenomena 
 which constitute man's spiritual nature. 
 
 As biology, thus treating the entire organic nature of man, 
 becomes an individual psycho-physics, so must sociology, treating 
 the wider organic nature of man, become a collective psycho- 
 physics. While then the respective importance of the welfare 
 of the individual and of society may still be difficult to define, 
 the admission of society as a psycho-physical structure, with 
 human ends of its own, will involve its proper recognition in the 
 appraisement of every sort of human value. Our task, that of 
 devising a method of valuation of industry, will evidently demand 
 that economic processes shall be considered, not only in their 
 bearing upon individual lives, but in their bearing upon the wel- 
 fare of society. Indeed, it is difficult to see how any reasonable 
 person can confront the grave practical problems presented by the 
 industrial societies of to-day, such as those contained in individ- 
 ual, class, sex, national differentiation of economic functions, 
 without realising that the hypothesis of humanity as itself a 
 collective organism can alone furnish any hope of their rational 
 solution.
 
 THE HUMAN STANDARD OF VALUE 17 
 
 The significance of the organic conception 'in any human 
 valuation of industrial acts or products is evident. It requires 
 us to value each act or product both from the standpoint of the 
 individual and of the society to which he belongs, and it fur- 
 nishes a harmony of the two areas of interest. The baffling 
 problems everywhere presented to thought by the apparent 
 contradiction of the unity and the diversity of nature, the whole 
 and the parts, the general and the particular, find their clearest 
 practical solution in the fact and consciousness of man's social na- 
 ture, his recognition that in feeling and in action he is both an 
 individual and a member of a number of social groups, expanding 
 in a series of concentric circles from family and city to humanity, 
 and in dimmer outline to some larger cosmic organism. 
 
 For our economic valuation, the harmony of this narrower 
 and wider treatment of human nature is of profound and obvious 
 importance. It will require us, in considering the vital costs and 
 satisfactions involved in the production and consumption of 
 goods, to have regard to their effects, not only upon the individ- 
 uals who produce and consume the goods, but upon the city, 
 nation, or other society to which they belong. Human welfare 
 will be not merely the welfare of human beings taken as an ag- 
 gregate, but of society regarded as an organic unity. The most 
 delicate economic and spiritual issues of adjustment will be found 
 to relate to the provisions for harmonising the order and the 
 growth of the narrower and the wider organisms. While, then, 
 biology has in the past been too arrogant in pressing distinctively 
 physical implications of the term 'organism' into the dawning 
 science of sociology, and in distorting the true conception of social 
 evolution by enforcing narrow interpretations of selection and 
 survival, this is no ground for refusing to utilise the terminology 
 which, better than any other, expresses the relations of parts to 
 wholes in every sort of living substance. 
 
 The contradictions of Production and Consumption, Cost and 
 Utility, Physical and Spiritual Welfare, Individual and Social 
 Welfare, all find their likeliest mode of reconcilement and of 
 harmony in the treatment of society as an organism. 
 
 NOTE. There are doubtless those who will remain dissatisfied with this insistence 
 upon the extension of organism and the conception of the humanly desirable in
 
 i8 WORK AND WEALTH 
 
 terms of 'organic' welfare. They would insist that the conscious personality of an 
 individual or of a society transcends organism, as the latter does mechanism, and 
 that our standard and measure of welfare should be expressed in psychical terms of 
 personality. This point of view has recently been concisely and powerfully restated 
 by Dr. Haldane (Mechanism, Life and Personality). But though there is much 
 to say for treating personality as the intrinsic quality of our humanist standard, 
 I decided against the course on a balance of intellectual expediency, preferring to 
 retain the clearness and force of the organic concept while spiritualising it to 
 meet the requirements of ascending life.
 
 CHAPTER H 
 
 THE HUMAN ORIGINS OF INDUSTRY 
 
 i. Although it is no part of my purpose to endeavour to set 
 forth the facts and laws of the historical evolution of modern 
 industry, it will be useful to make some brief allusion to the ori- 
 gins of industry and property, so as to give concrete meaning 
 to the stress laid upon organic processes in our interpretation. 
 For just in proportion as. it is realised that industry has all its 
 earliest roots in the primary organic needs of man, will assent 
 more easily be given to the proposal to adhere to the organic 
 conception of welfare in valuing modern economic processes. 
 
 It is not easy to ascertain where the activities which we term 
 industrial first emerge in the evolution of organic life. Every 
 organism selects, appropriates, and assimilates matter from its 
 environment, in order to provide for growth or waste of tissue 
 and energy given out in the general course of its vital processes, 
 including the activities of procuring food, protection against 
 organic or inorganic dangers, and the generation, rearing, and 
 protection of offspring. Nutrition and function are the terms 
 usually applied to describe the primary balance of the vital 
 processes of intaking and outputting energy. The organism 
 feeds itself in order to work. It seems at first as if we had here 
 laid down in the origins of organic life a natural economy of 
 production and consumption. But do the organic processes of 
 feeding, choosing, appropriating, and assimilating food, constitute 
 consumption, and do the other activities for which food is utilised 
 constitute production? Reflection will show that there is very 
 little intellectual service in pressing sharply this distinction. 
 The active life of an organism consists in a round of nutritive, 
 protective, generative processes, each of which, from the stand- 
 point of individual and species, may be regarded alike as produc- 
 tive and consumptive. A plant drives its suckers into the soil in 
 search of the foods it needs, disposes its leaves to utilise the light 
 
 19
 
 20 WORK AND WEALTH 
 
 and air or for protection against the wind, assimilates its organic 
 food by the use of its stock of chlorophyl, distributes it through- 
 out its system for maintenance and growth, and directs that 
 growth so as to safeguard its own existence and to provide itself 
 with favourable opportunities of fertilisation by insect or other 
 agencies. If due account be taken both of the cellular life within 
 the individual and of the specific life of this plant organism, the 
 whole of the processes or activities appears to be nutritive, each 
 act of nutrition being associated with some other function in the 
 evolution of the cell, the organism, the species. It would be as 
 plausible to assert that every other function, protective, genera- 
 tive, or other, was undertaken for the nutrition of the individual 
 or the species, as to assert the opposite. But, without entering 
 into the delicate metaphysics of this question, we may confidently 
 affirm that in this elementary organic life nutrition and function 
 cannot be regarded as mutually exclusive processes, while the eco- 
 nomic contrasts of production and consumption, work and enjoy- 
 ment, cost and utility, have no clear application. If we approach 
 a stage nearer to human life, we begin to find, in the life of either 
 the lower or higher animals, some organic activities to which the 
 term industry appears applicable. The long, arduous, complex 
 and painful output of energy, consciously put forth by many ani- 
 mals in the search for food, sometimes in the storage of food, in 
 the provision of shelter, in some instances in the use of tools or 
 weapons, in processes of cooperation and division of labour for 
 migration, protection, or combat, certainly approaches what we 
 recognise as industry. It involves a painstaking interference 
 with the material environment for the purposive attainment of 
 some distinct object consciously regarded as desirable, which is 
 of the essence of industry. It may, however, be objected that 
 such processes, though resembling human industry in the in- 
 tricacy and technical skill involved, are not really purposive in 
 the rational sense, but are merely instinctive, and that, as such, 
 they ought to be distinguished from the rational conduct of 
 human industry. Thus, it is contended that, though the efforts 
 given out by many animals in procuring food, protection against 
 enemies, or provision of shelter, formally correspond with familiar 
 processes of human industry, the direction of instinct makes
 
 THE HUMAN ORIGINS OF INDUSTRY 21 
 
 the application of this term improper. But, as we proceed further 
 into our psychological analysis of human work, we shall find so 
 large an element of admitted instinct in many forms of it as to 
 preclude us from admitting that 'rational' direction is essential 
 to industry. It is, therefore, permissible for us to give a provi- 
 sional recognition to such animal activities as containing some, 
 at any rate, of the essential characteristics of 'work' or 'industry.' 
 Indeed, the evident resemblance of these regular activities of 
 animals in seeking food, shelter and protection, to the activities 
 of primitive man applied to the same definitely organic satisfac- 
 tions, would preclude us from denying to the lower animals what 
 we must admit in the case of men. For, even in primitive men, 
 possessing a certain use of tools and weapons, and a higher degree 
 of cunning in dealing with their environment, the drive and 
 direction of organic instincts and impulses, as distinguished 
 from reflection and reason, appear to be hardly less dominant 
 than in their animal kindred. Unless we arbitrarily reserve the 
 concepts work and industry for a higher stage of social evolution, 
 in which some measure of settled life with tribal and personal 
 property and calculated provision for future wants have emerged, 
 it will be well to seek the roots of the elaborated industrial system 
 which we wish to interpret in these rudimentary and mainly 
 instinctive activities of animals and savage men. 
 
 2. In examining these organic activities lying at the basis 
 of human industry, we shall light at the outset upon one fact 
 of extreme significance, viz. that to each of these organically 
 useful efforts Nature has attached some definite physical, or 
 psycho-physical, enjoyment. Hunting, fighting, mating, the care 
 and protection of the young, indeed all actions which possess 
 what is called 'survival value' or biological utility, are endowed 
 with a pleasure bonus as a bribe for their performance. Nature 
 endows most organically useful efforts with concurrent enjoy- 
 ment. 
 
 But, though in these 'organic functions* many animals give 
 out a great deal of 'laborious' effort, commingled with elements 
 of play or of incipient art, as in the dancing, singing and decora- 
 tive operations of birds, to none of them is the word 'industry' 
 fully applicable. We do not seem to enter the definitely economic
 
 22 WORK AND WEALTH 
 
 sphere until we find animals sufficiently reasonable to interfere 
 in a conscious way with their environment, for tolerably distant 
 ends. For, though much industrial production and consumption 
 will continue to be either instinctive or automatic in their 
 operation, a growing element of conscious purpose will become 
 essential to the ordered conduct of all industrial processes. The 
 conscious conception of more distant ends and the growing 
 willingness to make present sacrifices for their attainment are 
 the plainest badges of this industrial progress. When a being is 
 aware of these purposes he has entered a rational economy. 
 
 As this more rational economy proceeds, the marks which 
 distinguish it from a purely instinctive organic economy become 
 evident. The instinctive economy allows little scope for in- 
 dividuality of life, the dominant drive of its 'implicit' purpose 
 is specific, i. e. subserving the maintenance and evolution of the 
 species. The spirit of the hive in bee-life is the fullest expression 
 of this subservience of the individual life to the corporate life 
 and of the present generation to the series of generations consti- 
 tuting the specific life. But everywhere the dominion of instinct 
 implies the absorption of the individual life in promoting the ends 
 of the species: successful parenthood is the primary work of the 
 individual. 
 
 It might almost be said that the dawn of reason is the dawn 
 of selfishness. For rational economy involves a conscious realisa- 
 tion of the individual self, with ends of its own to be secured and 
 with opportunities for securing them. The earliest conception 
 of this separate self and its ends will naturally tend to be in 
 terms of merely or mainly physical satisfaction. Thus the dis- 
 placement of the instinctive by the rational economy is evidently 
 a critical era, attended with grave risks due to the tendency 
 towards an over-assertion of the individual self and a consequent 
 weakening of the forces making for specific life. Man, the newly 
 conscious individual, may perversely choose to squander organic 
 resources ' intended ' by nature for the race upon his own personal 
 pleasures and needs. He may refuse to make as a matter of 
 rational choice those personal efforts and sacrifices for family and 
 race which no animal, subject to the drive of instinct, is able to 
 'think' of refusing. Such may be an effect of the release from
 
 THE HUMAN ORIGINS OF INDUSTRY 23 
 
 the life of organic instincts. The increasing supply of foods and 
 other sources of physical satisfaction he may apply to build up 
 for himself a life of super-brutal hedonism. 1 For, when reason 
 first begins to assert supremacy, it is apt to become thrall to the 
 purely animal self. Only as this animal self becomes spiritualised 
 and socialised, does the social race-life reassert its sway upon the 
 higher plane of human consciousness. 
 
 3. But it is of importance to realise that a first effect of 
 reason, operating to direct the purposive activities, is to liberate 
 the 'self from the dominion of the specific life, and to enable it 
 to seek and obtain separate personal satisfactions. For with 
 this power comes the fact and the sense of 'personal property' 
 which play so large a part in industry. 
 
 Early industry and early property are largely directed by the 
 requirements of this dawning sense of personality. Though the 
 origins of industry are doubtless found in the promptings of 
 organic utility, they are not of a narrowly 'utilitarian' character. 
 We do not find the earliest industries of man closely confined to 
 the satisfaction of what might seem the most urgent of his organic 
 needs, food, shelter, protection against enemies. The elements 
 of play and ornament are so prevalent in early industries as to 
 suggest the theory, which some anthropologists press far, that 
 adornment for personal glory is the dominant origin of industry 
 and property. So, for example, Biicher 2 contends that the 
 earliest really industrial activities were a painting and tatooing 
 of the body, and a manufacture of clothing and of other personal 
 apparatus for purely ornamental purposes. 
 
 Even the taming of domestic animals was, he held, first under- 
 taken for amusement or for the worship of the gods. The strong 
 attraction of most savage or backward peoples in our day towards 
 articles of ornament and play which afford expression to naive 
 personal pride, appears to support this view. Primitive man cer- 
 tainly does not evolve towards industrial civilisation by a logi- 
 
 1 'Em wenig besser wtird er leben 
 
 Hattst du ihm nicht den Schein des Himmels Licht gegeben 
 Er nennt's Vernunft und braucht's allein 
 Nur thierischer als jedes Thier zu sein.' 
 
 * Industrial Evolution (Bell & Co.).
 
 24 WORK AND WEALTH 
 
 cally sane economy of satisfying first his most vitally important 
 material needs, and then building on this foundation a superstruc- 
 ture of conveniences, comforts and luxuries, with the various in- 
 dustries appertaining thereto. This economic man is nowhere 
 found. Actual man, as many anthropologists depict him, appears 
 to begin with the luxuries and dispenses with the conveniences. 
 This non-utilitarian view of the origins of industry has, how- 
 ever, been driven to excess. There remains a large element of 
 truth in the proverb 'Necessity is the mother of invention.' 
 The earliest weapons and tools, adapted from sticks and stones 
 and other raw material, were probably forced on the dawning 
 intelligence of man by the hard facts of his struggle with hostile 
 nature and his search for food. Fighting, hunting, mating, were 
 presumably his first pursuits and the early arts or industries, at 
 any rate on the male side, would be subsidiary to these pursuits. 
 Any organised process or handling of matter which would make 
 him a better fighter, hunter, suitor, would be likely to emerge as 
 a craft or industry. This explains the apparent blend of utili- 
 tarian and non-utilitarian origins. In point of fact, most of the 
 so-called ornamental activities and products have their evident 
 biological uses. They are not mere playthings. The adornment 
 of the human body, the use of tatoos and masks, drums and gongs 
 and other play-products, are partly, no doubt, for mere glory of 
 self-assertion, itself an instinctive craving, but also for courtship, 
 for recognition and for frightening enemies. While, then, it re- 
 mains true that the sportive and artistic impulses are conspicuous 
 in the early crafts, it is a mistake to disparage the organic utility 
 of these processes. After man has made provision for the present 
 necessities of the body, his superfluous energy naturally tends, 
 either to preparatory play, the practice or imitation of biologically 
 useful actions, or else to explorative, constructive, and decorative 
 work in handling such materials as present themselves. This 
 curiosity about his surroundings, and the instinctive desire to 
 construct and arrange them for his convenience, or for the dawn- 
 ing aesthetic satisfaction of his senses, or to impress the female 
 of his race, these instincts undeniably coalesce with the drive of 
 physical necessity to force man to apply his mind to the discovery 
 and practice of the early arts and crafts.
 
 THE HUMAN ORIGINS OF INDUSTRY 25 
 
 But, though these distinctively male modes of manipulating 
 the environment thus possess a utilitarian aspect, they do not 
 furnish the beginnings of the chief industries which figure in 
 civilised life. The beginnings of manufacture and of agriculture, 
 as regular occupations, are commonly ascribed to women and to 
 slaves. Those who conceive of the earliest human societies as 
 matriarchal or gyricecocentric, the women forming fixed centres 
 of order in the home and village, owning the children and the 
 property attached to the home, regard women both as the inven- 
 tors and the practitioners of the early handicrafts, including the 
 cultivation of the soil. The beginnings of the arts of pottery, 
 basket-making, building, clothes-making, as well as digging, plant- 
 ing, milling and other processes of preparing food, were doubt- 
 less women's work in the first instance, though they were proba- 
 bly raised to the position of regular industries when slavery be- 
 came common. It is, however, noteworthy that, even in those 
 early handicrafts devoted to the most practical needs of life, the 
 decorative instinct generally finds expression. Not only the 
 weapons of the men, but the pots and pans and other domestic 
 utensils of the women, carry carvings or mouldings, which testify 
 to the play or art impulses. Leisure and pleasure thus appear as 
 ingredients in the earliest industries. 
 
 To whatever source, then, we trace the origins of industry, to 
 the use of weapons, snares and other male apparatus for the fight 
 and hunt, to the instincts of play, imitation and adornment as 
 modes of self-expression and of pride, or to the more distinctively 
 utilitarian work of women and of slaves around the home, we 
 find play or pleasure mingled with the work. 
 
 This profoundly interesting truth is attested by the long sur- 
 viving presence of the song and other rhythmic activities in 
 many forms of associated labour, as well as in the dancing which 
 in primitive societies was an almost invariable accompaniment 
 of all important enterprises, war, hunting and harvesting, and 
 which still survives among us in the Harvest Home. Though 
 in slave industries this lighter element doubtless dwindled 
 very low, it seldom died out entirely, as the song of the 
 galley-rowers, or of the Southern negroes in the cotton-fields, 
 testifies. Where the handicrafts throve among free men in
 
 26 WORK AND WEALTH 
 
 Europe, everywhere the motives of play, personal pride and prow- 
 ess, find liberal expression in industry. 
 
 4. This slight and necessarily speculative sketch of the origin 
 of industry is designed to enforce two facts. In the first place, 
 we can trace in every rudimentary industry the promptings of 
 vital utility, laying the foundations of an economy of efforts and 
 satisfactions which furthers the organic development of the in- 
 dividual and the race. In the second place, we everywhere find 
 what we call distinctively economic motives and activities almost 
 inextricably intertwined, or even fused, with other motives and 
 activities, sportive, artistic, religious, social and political. 
 
 To trace the history of the process by which in modern civilisa- 
 tion economic or industrial activities have separated themselves 
 from other activities, assuming more and more dominance, until 
 the Industrial System and the Business Man have become the 
 most potent facts of life, would lie beyond our scope. Nor is it 
 at all necessary. What is important for us to realise, however, 
 is that this process of industrialisation, through which the civil- 
 ised peoples have been passing, is beyond all question the most 
 powerful instrument of education. It appears to have done more 
 to rationalise and to socialise men than all the higher and more 
 spiritual institutions of man, so far as such comparisons are possi- 
 ble. It has rationalised man chiefly by compelling him to ex- 
 ercise foresight and forethought, to subdue his will and train his 
 active faculties to the performance of long and intrinsically dis- 
 agreeable tasks, in order to realise some more and more distant 
 object of desire, and by obliging him to recognise the rigorous 
 laws of causation in his calculations. It has socialised him by 
 weaving an ever more elaborate tissue of common interests be- 
 tween him and a growing number of his fellow men, and by 
 compelling him to engage in closer cooperation with them for the 
 attainment of his ends. Though this socialisation is far more ad- 
 vanced in objective fact than in thought and feeling, it remains 
 true that the direct and indirect association of larger and more 
 various bodies or men in modern industry and commerce is the 
 first condition and the strongest stimulus to the expansion and 
 intensification of the social will. 
 
 It is this orderly rational system of industry, employing, as it
 
 THE HUMAN ORIGINS OF INDUSTRY 27 
 
 j 
 
 does, the organic powers of man for the satisfaction of his organic 
 needs, that we seek to submit to valuation. 
 
 The immense variety and complexity of the arts and crafts of 
 which such a system of human industry consists, the long inter- 
 val of time which often intervenes between acts of production and 
 of consumption, the differences of personality between those who 
 perform the efforts of production and those who utilise or enjoy 
 the fruits of those efforts in consumption, immensely remote as 
 they appear from the simple organic economy of primitive man, 
 do not escape an ultimate dependence upon organic laws and con- 
 ditions. A human valuation, therefore, must insist upon express- 
 ing them in terms of organic welfare, individual and social. As 
 human activities and enjoyments ascend in the process we term 
 civilisation, we shall expect to find this organic life becoming 
 more psychical, in the sense that their modes are more 'reason- 
 able' and the emotions that attach to them are more spiritual, 
 i. e. less directly driven by animal instincts. So too we shall ex- 
 pect industrial progress to contribute to a growing adjustment 
 between the individual and the social economy, restoring under 
 the form of reasonable social service to the more highly individ- 
 ualised members of a modern society an increasing measure of 
 that subservience to the organic welfare of mankind which in- 
 stinct was able to secure upon a lower plane of conscious lif e.
 
 CHAPTER in 
 
 REAL INCOME: COST AND UTILITY 
 
 i. Approaching on its concrete side the economic system the 
 human values of which we seek to ascertain, we find it to consist 
 in a series of productive processes bringing various goods and 
 services into marketable shape, accompanied by a series of con- 
 sumptive processes in which these goods and services are used, 
 wasted, or otherwise disposed of by those who buy them for per- 
 sonal uses. The former set of processes, as we have recognised, 
 occupy a place of so much greater prominence and publicity as 
 virtually to absorb the science of industry or 'economies', leaving 
 to the processes of consumption an obscure and entirely subor- 
 dinate position. Our organic or human valuation starts with a 
 protest against this assumption of inequality in the arts of pro- 
 duction and consumption. Its interpretation of economic pro- 
 cesses will be disposed to lay as much stress upon the history of 
 the various commodities after they leave the shop-counter and 
 pass into the possession of consumers as before. The human 
 good and evil associated with economic 'wealth' must, viewed 
 from the organic standpoint, depend as much upon the nature 
 of its consumption as upon the nature of its production. 
 
 This consideration will determine our method of applying the 
 human standard of values. Accepting at the outset the conven- 
 ient distinction between the processes of production and con- 
 sumption, we shall approach the economic system at the point 
 where the two processes meet, that is to say where wealth emerges 
 from the productive processes as Income, in order to pass as such 
 into the possession of persons entitled to consume it. 
 
 To make the enquiry simpler and more easily intelligible, we 
 will ignore for the present all the extra-national or cosmopolitan 
 conditions of modern industry, and assume that we are dealing 
 with a closed national system producing, distributing, and con- 
 suming the two thousand million pounds' worth of goods and 
 
 28
 
 REAL INCOME: COST AND UTILITY 29 
 
 services roughly estimated to constitute the current annual in- 
 come of the British nation. 
 
 2. Now the habit of regarding wealth and income in terms of 
 money is so deep-seated and persistent as to make it difficult for 
 ordinary 'business' men to realise these words in any other than 
 a monetary sense. The ordinary mind has to break through a 
 certain barrier of thought and feeling in order even to present 
 to itself the significance of 'real' wages or 'real' income, as dis- 
 tinguished from money wages and money income. This do- 
 minion of the monetary standard is illustrated by the almost in- 
 stinctive thrill of elation that is felt when we are informed that 
 the income of the nation has risen from about 1,200,000,000 in 
 1870 to 2,000,000,000 in 1912. l So accustomed are we to regard 
 money as the measure of the desirable, that we feel that this rise 
 of money income must imply a corresponding rise in national 
 welfare. It requires some effort of mind to realise even the two 
 obviously important factors of the increase of population and the 
 shift of prices, which, when once realised, so evidently affect the 
 bearing of the money income upon the national welfare. Year 
 after year trade reports and other official documents, in com- 
 paring the relative economic position of the various nations or the 
 fluctuations of trade within a single nation, habitually encourage 
 this misleading influence of the financial standard by publishing 
 crude, uncorrected monetary values as if they were indicative 
 of industrial facts, and statesmen take such figures as valid evi- 
 dence on which to base a policy. 
 
 As regards the particular object of our enquiry, this obsession 
 of the general mind by the monetary standard makes it impossible 
 for us even to assume that all our readers attach a clear and con- 
 sistent meaning to the term 'real' income. It is not quite easy 
 at first to grasp the central and essential fact that every receipt 
 
 1 1 have taken the estimate of the total income of the nation made by Mr. Flux 
 in his Reports of the First Census of Production for the United Kingdom (1907) 
 as the basis for the round figures adopted here for aggregate income and for savings. 
 As a matter of fact Mr. Flux assigns to savings a slightly higher figure and propor- 
 tion of income than that taken here. But since for our purpose nothing depends 
 upon the exactitude of the figures (and indeed Mr. Flux claims no such exactitude 
 for his) it is more convenient for us to take the round figures of our text, though 
 probably in both instances, i. e. aggregate income and savings, they are somewhat 
 below the true figures for 1912.
 
 30 WORK AND WEALTH 
 
 of any sort of income, whether as wages, rent, salary, interest, 
 profit, fees or otherwise, involves the coming into being of a bit 
 of 'real' income in the shape of some material goods or some 
 saleable service. 1 This fact once grasped, however, it becomes 
 evident that the 2,000,000,000, said to be the nation's income, 
 is merely the monetary representative of goods and services which 
 are the net product of the economic activity of the year, the 
 quantity of wealth produced over and above that which has gone 
 to maintain the existing material fabric of industry. The aggre- 
 gate amount of 'wealth produced' is, of course, considerably 
 greater, for a large quantity of the productive power must con- 
 tinua^y be employed in repairing the wear and tear sustained 
 by tho material instruments of production, the land, buildings, 
 machinery and tools and other forms of 'fixed' capital, and in 
 replacing the raw materials and other forms of 'circulating' 
 capital which have passed out of the productive processes into 
 consumable goods. The net 'real' income consists of the goods 
 and services produced over and above this provision for the 
 maintenance of the material structure of the system. 
 
 There is, however, an important qualification to this mode of 
 reckoning the net real income of the nation which needs mention. 
 While the portion of the current product which goes to replace 
 this wear and tear of land and capital is not included in the goods 
 and services represented by the 2,000,000,000 and classed as 
 real net income, the wear and tear or maintenance fund of labour 
 is included in it. When consideration is taken of the distribution 
 of what is often termed the national dividend between the re- 
 spective owners of the factors of production, this anomaly is 
 seldom borne in mind. In estimating the income of labour the 
 replacement fund is counted; in estimating the income of land 
 and capital it is not counted. But, illogical as this discrimina- 
 
 1 There is no commoner stumbling-block to the beginner in the study of Political 
 Economy than the fact that the income of a rich man, amounting to say 10,000, 
 when paid away to persons who sell him goods or personal services, seems to count 
 'over again' as incomes of these persons. Why, they are disposed to ask, should 
 the private secretary who receives 400 out of this 10,000 be required to pay an 
 income-tax upon a sum which (as they say) has already paid its share as part of 
 the 10.000? Nothing but a grasp of the fact that the secretary produces a 'real' 
 income of 'services' corresponding to this 400 which he receives clears up the mis- 
 understanding.
 
 REAL INCOME: COST AND UTILITY 31 
 
 tion is, usage has so universally accepted it that it will be best 
 for us in a work not chiefly concerned with the problems of objec- 
 tive distribution to give a provisional acceptance to it. 
 
 The real net income, or national dividend, corresponding to the 
 2,000,000,000, consists of the goods and services at the disposal 
 of the recipients of this money income. By applying each sov- 
 ereign as they received it in rent, wages, interest, profit, fees, 
 etc., to purchase consumable goods or services, they might con- 
 sume the whole of it during the current year. In that event, 
 though provision would have been made for the bare upkeep of 
 capital, no provision would have been made for its enlargement 
 or improvement with a view to the future increase of production. 
 In point of fact, that provision is made by applying a considera- 
 ble portion of the net money income, say 300,000,000, to de- 
 mand, not consumable goods or services, but more instruments 
 and materials of production. As this process goes on continu- 
 ously, it implies that some 3 / 20 of the total industrial activity 
 of the nation is engaged in making not consumable but new capi- 
 tal goods. 1 This saving process has an important psychology of 
 its own to which we shall give some attention later on. At pres- 
 ent it need only be considered as a reduction in the net income of 
 consumable goods and services at the disposal of a progressive 
 community for current use and enjoyment. This wealth, actually 
 available for current use, the food, clothing, shelter and other 
 domestic necessaries and conveniences, the travel, information, 
 education, recreation, professional, official and domestic services, 
 the various sorts of material and non-material comforts and lux- 
 uries, constituting the current net real income of consumer's 
 goods, is the primary object of our valuation. The new machines, 
 tools, buildings, materials and other forms of capital, expressing 
 the 300,000,000 of savings, though entering our analysis upon 
 the costs side equally with goods used for immediate consump- 
 tion, do not figure directly on the consumption side, but only in- 
 directly in the future consumables which they assist to produce. 
 
 3. But as regards the application of our analysis, it makes no 
 
 1 About half of this passes under the head of over-seas investments into the in- 
 dustrial systems of other nations, though the interest upon this foreign capital is 
 available for consumption in this country.
 
 32 WORK AND WEALTH 
 
 real difference whether we take the narrower connotation of the 
 national dividend which includes only consumable goods, or the 
 broader one which includes savings. It will no doubt easily be 
 admitted that a merely pecuniary statement of the 'value' of 
 this dividend conveys no reliable information as to the human or 
 vital welfare it involves. Making due allowance for all tem- 
 poral or local variations of price, the statement that the national 
 income has doubled in the last century, or even that the income 
 per head of the population has doubled, affords no positive proof 
 that any increase has been made in the national welfare, much less 
 how much increase. Unless, however, we adopt an attitude of 
 general scepticism towards the economic structure of 'civilisa- 
 tion/ we may admit, with Professor Pigou, 1 a presumption that 
 a growth of the national dividend faster than the growth of pop- 
 ulation implies some increase of welfare. But even that presump- 
 tion must be qualified by the reflection that it really rests upon a 
 view of marketable wealth which has exclusive regard to its sup- 
 posed utility in consumption without any corresponding consid- 
 eration of the cost of its production. A pecuniary statement of 
 the national dividend which contained no information as to the 
 nature of the goods and services comprising it, may be repudiated 
 out of hand as useless for our purpose. For upon such a state- 
 ment i 'worth' of 'trade gin' has precisely the same value as i 
 'worth' of 'best books' or of wholesome bread, i worth of hand- 
 made lace sweated out of peasant women at the cost of their 
 eyesight has precisely the same weight in the money income of 
 the nation as i worth of carpentry or of medical attendance. 
 
 4. If we are to estimate the human value of a given national 
 income, it is evident that we must secure answers to three ques- 
 tions. We must first learn what the concrete goods and services 
 are which constitute the 'real' income, and then we must trace 
 these concrete goods and services backwards through the proc- 
 esses of their production and forward through the processes of 
 their consumption, in order to learn the human costs and utilities 
 which attach to each. The amount of human wealth or 'illth' 
 which each of these concrete 'goods' contains has, strictly speak- 
 ing, no assignable relation to the money ticket put upon it when 
 1 Wealth and Welfare, Chap. I.
 
 REAL INCOME: COST AND UTILITY 33 
 
 it is sold. That sum of human value can only be worked out in 
 terms of the actual processes of production and consumption 
 through which the 'goods' pass. Some students of current polit- 
 ical economy may perhaps be disposed to cavil at this criticism, 
 insisting that on the average things must be sold in proportion to 
 the painful or otherwise distasteful efforts of producing them, or 
 in proportion to the pleasant or otherwise serviceable modes of 
 their consumption. On the average, they will contend, a rational 
 calculus of pleasure and pain underlies the operations of the eco- , 
 nomic system. This position, however, I claim to undermine by 
 showing, first that this 'rational' calculus rests upon assumptions 
 of free choice and competition which are unwarrantable, and sec- 
 ondly, that this rational calculus of current pleasures and pains, 
 so far as it is operative, is not a valid criterion of human welfare) 
 as conceived in the terms of organic welfare. Our task, it must 
 be realised, is not that of reducing monetary values, or the con- 
 crete goods to which they refer, to terms of average current de- 
 sirability, but to terms of that desirability corrected so as to con- 
 form to the best-approved standard of the desirable. In a word, 
 the defects of average current estimates and desires, in part 
 causes, in part effects of a defective industrial economy, must 
 themselves be valued and discounted in terms of our human ideals 
 of individual and social life. 
 
 5. With this organic standard, the nature and validity of 
 which will become clearer with use, let us set about our task of 
 finding methods for assessing in terms of human value the stocks 
 of concrete goods and services which are the real net income of 
 the nation. The human, as distinguished from the money and 
 the 'real' dividend, will consist of the amount of vital or organic 
 welfare conveyed in the producing and consuming processes for 
 which this concrete income stands. What we require then is to 
 apply some sort of calculus of human cost and human utility to 
 these processes. Now we are confronted at the outset by the po- 
 sition of an economic science which conceives production entirely 
 in terms of 'cost', consumption entirely in terms of 'utility'. 
 Indeed, the economic doctrine of value hinges almost entirely 
 upon this antithesis. For it is mainly owing to its 'costs' that 
 a limit of scarcity is set on each 'supply', while it is the 'utility'
 
 34 WORK AND WEALTH 
 
 accorded by consumers that gives economic force and meaning 
 to 'demand'. Hence production is conceived as a process which 
 rolls up costs into commodities, consumption as a process that 
 unrolls them into utilities. 
 
 Now an organic interpretation of industry cannot accept this 
 mode of conceiving the productive and consumptive functions. 
 Considerations of the organic origins of industry lend no support 
 to the assumption that production is all 'cost' and no 'utility', 
 consumption all 'utility' and no 'cost'. On the contrary, in our 
 human analysis of economic processes we shall rather expect to 
 find costs and utilities, alike in their sense of pains and pleasures 
 and of organic losses and organic gains, commingled in various 
 degrees in all productive and consumptive processes. 
 
 Our aim will be to set out, as well as we can, reliable rules for 
 examining the productive and consumptive history of the various 
 sorts of concrete marketable goods so as to discover the human 
 elements of cost and utility contained in each, and by a computa- 
 tion of these positives and negatives to reach some estimate of 
 the aggregate human value contained in the several sorts of 
 commodities which form the concrete income of the nation and 
 in this income as a whole. Only by some such process is it possi- 
 ble to reach a knowledge of the real wealth of nations. 
 
 We may state the problem provisionally in three questions: 
 
 1. What are the concrete goods and services which constitute 
 
 the real national income? 
 
 2. How are these goods produced? 
 
 3. How are they consumed? 
 
 But in truth the consideration of the so-called 'concrete' na- 
 ture of these goods is as irrelevant to our analysis as that of the 
 money ticket placed on them. For from the standpoint of wel- 
 fare these goods are nothing but the activities of those who pro- 
 duce and consume them, or, if it be preferred, the human processes 
 of production and consumption. The human meaning of any 
 given stock of wheat in our national supply will consist of the 
 efforts of body and mind, the thought and desire and directed 
 skill, put into the several processes of preparing the soil, sowing, 
 tending, reaping and marketing the wheat, undergone by the 
 farmer in Manitoba or in Norfolk, the merchant, shipper, miller,
 
 REAL INCOME: COST AND UTILITY 35 
 
 baker who convey it from the farm and convert it into bread, and 
 finally the activities of mastication, digestion and assimilation 
 with the accompanying satisfaction as it passes into the physical 
 system of the consumer. And so with every other sort of con- 
 crete marketable goods or services. From the standpoint of 
 human value, they are wholly resolvable into the physical and 
 mental activities and feelings of the human beings who produce 
 and consume them. It is the balance of the desirable over the 
 undesirable in these several activities and feelings that consti- 
 tutes the human value of any stock of marketable goods. The 
 standard of desirability will be the conception of the organic well- 
 being of the society to which the individuals whose activities and 
 feelings are concerned belong. 
 
 Or the several stages of interpretation may be expressed as 
 follows. A given money income must first be resolved into the 
 concrete goods which it expresses: those goods must then be re- 
 solved into the various efforts of production and satisfactions of 
 consumption, estimated according to the current ideas and de- 
 sires of the individuals who experience them: these current in- 
 dividual estimates of the desirable must be adjusted by reference 
 to an ideal standard of the socially desirable. The extent of this 
 latter process of adjustment will, of course, depend upon how 
 far the actual current ideas and feelings of individuals are kept 
 in essential harmony with the true standard of social well-being 
 by the natural evolution of an organic society. 
 
 6. Our task in seeking to devise a method for the human in- 
 terpretation or valuation of Industry consists then hi confront- 
 ing the goods which form the net consumable income of the com- 
 munity, and in finding answers to the two related questions: 
 
 What are the net human costs involved in their production? 
 
 What are the net human utilities involved in their consump- 
 tion? 
 
 A simple sum in subtraction should then give us the result we 
 seek so far as any such quantitative calculus is valid and feasi- 
 ble. 1 
 
 Now though economists, of course, are well aware that many 
 
 t The exceedingly important question of the limits to the validity of such a 
 quantitative calculus is discussed in the concluding chapter.
 
 36 WORK AND WEALTH 
 
 of the processes of production contain elements of pleasure and 
 utility to the producers, while some of the processes of consump- 
 tion contain elements of pain and cost to the consumers, they 
 have, rightly from their standpoint, ignored these qualifications 
 in their general formulae, and have represented 'goods' from the 
 producer's side as consisting entirely of accumulated costs, while 
 from the consumer's side they constitute pure utility. Though 
 our brief preliminary survey of the origins of industry indicates 
 that no such sharp distinction between production and consump- 
 tion can ultimately be maintained, and that throughout the whole 
 continuous career of goods from cradle to grave the activities 
 bestowed on them are composites of pleasure and pain, cost and 
 utility, organic gain and organic loss, socially desirable and so- 
 cially undesirable, it will be expedient to take our start from the 
 commonly-accepted economic position, and to give separate con- 
 sideration to the human values underlying processes of production 
 on the one hand, processes of consumption on the other. 
 
 The general lines along which such an investigation must pro- 
 ceed are unmistakable. 
 
 In order to express business 'costs' in terms of human cost, 
 we require to know three things: 
 
 1. The quality and kind of the various human efforts involved 
 
 in the business 'cost'. 
 
 2. The capacities of the human beings who give out these 
 
 efforts. 
 
 3. The distribution of the effort among those who give it out. 
 Corresponding strictly to this analysis of 'costs' of Production 
 
 will be the analysis of 'utility' of Consumption. There we shall 
 want to know: 
 
 1. The quality and kind of the satisfaction or utility yielded 
 
 by the 'economic utility' that is sold to consumers. 
 
 2. The capacities of the consumers who get this 'economic 
 
 utility'. 
 
 3. The distribution of the economic utility among the con- 
 
 suming public. 
 
 The humanist criticism of Industry is condensed into this 
 analysis. The humanist requires that the effort expended on 
 any sort of production shall be such as to contain a minimum of
 
 REAL INCOME: COST AND UTILITY 37 
 
 painful or injurious or otherwise undesirable activity. His com- 
 plaint is that Industry, as actually organised and operated under 
 a system which treats all forms of productive human effort as 
 marketable goods, does not secure this human economy. The 
 humanist requires that the persons set to give out undesirable 
 effort, 'human cost', shall be those best capable of sustaining 
 this loss. Weak women or children, for example, shall not be 
 set to do work heavy or dangerous in its incidence, when strong 
 men are available who could do it easily and safely. The human- 
 ist requires that undesirable or humanly costly work shall not 
 merely be confined to classes of persons capable of performing 
 it most easily and safely, but that the distribution of such effort 
 shall, as regards length of time and intensity of pace, be such as 
 to reduce the human cost per unit of product to a minimum. 
 The humanist criticism of Industry upon the Costs side consists 
 in pointing out that there is no adequately reliable or normal 
 tendency for the business economy of costs to conform to this 
 three-fold human economy. 
 
 Similarly, turning to the consumption side, the humanist 
 points out: i. That many of the 'goods' sold to consumers are 
 inherently destitute of human utility, or, worse, are repositories 
 of disutility; and that money values is no true key to human util- 
 ity. 2. That the amount of utility or welfare to be got out of 
 any goods depends upon the character, the natural or acquired 
 capacity, of the particular consumers or classes of consumers 
 into whose hands they fall. 3. That a true economy of consump- 
 tion, therefore, involves their distribution among consumers in 
 proportion to their capacity to use them for purposes of welfare. 
 It is contended that the current working of our industrial system, 
 on its distributive and consumptive side, makes no reliable pro- 
 vision for securing that the maximum of human utility shall at- 
 tach to the consumption of the national income. 
 
 7. To test in detail the exact validity of this humanist criti- 
 cism would require us to examine the costs and the utility, eco- 
 nomic and human, represented in each item of all the various 
 supplies of goods and services which constitute the national in- 
 come. This is manifestly impracticable. Nor is it necessary for 
 our purpose, which is to establish a sound method of valuation
 
 38 WORK AND WEALTH 
 
 rather than to endeavour to form an exact computation of the 
 values it discloses. With this object in view it will be sufficient 
 to direct our enquiry to the accepted classes or grades of human 
 activities figuring as economic costs, and the corresponding 
 classes or grades of human utilities affected by consumption. 
 
 Let us begin with the 'costs' side. 
 
 Accepting the general categories of costs of production, as 
 rent, interest and profit, salaries and fees, wages (for all other 
 business 'costs', as for instance, cost of material, machinery, 
 fuel, can be resolved into these), let us consider what is the nature 
 of the human costs for which these payments are made, in the 
 chief orders of industry, and how these human costs are related 
 to the economic costs. 
 
 At the outset of this enquiry, however, it will be convenient 
 to eliminate one economic 'cost' of considerable magnitude from 
 our consideration, viz. economic rent. For, although Nature, 
 or the earth, may in a study of objective industry be regarded 
 as a productive agent, yielding materials, physical energy, and 
 special utilities, this work involves no human effort, and there- 
 fore is represented by no human cost. This statement, of course, 
 by no means implies that human foresight and activities play no 
 part in the effective supply of land and other natural resources. 
 Such resources, hitherto existing outside the industrial system, 
 are continually being discovered, brought within reach and de- 
 veloped by human skill and effort, while new or improved uses 
 are continually being obtained from natural resources already 
 within reach. In such processes of discovery and development 
 much capital, ability, and labour, are constantly engaged, the 
 costs of which must be defrayed. Moreover, in certain uses of 
 land for agricultural and other purposes, provision must be made 
 for wear and tear or replacement. But all such costs or expenses 
 are really payments for the capital and labour employed on this 
 work of development or upkeep. They are not payments for 
 the use of natural resources. They are not economic rent. That 
 business cost has no human cost attached to it. From the stand- 
 point of the manager of a particular business the payment of 
 rent is necessary to enable him to get the use of the land or other 
 natural agent he requires. Where private property in land ex-
 
 REAL INCOME: COST AND UTILITY 39 
 
 ists, the payment of such rent is legally necessary. Where the 
 maintenance of such legal rights has enabled land values to ex- 
 change freely with other forms of wealth, a moral expediency may 
 be claimed for the payment of rent. But no human cost corre- 
 sponds to it. In the organic interpretation of industry, it figures 
 as waste. While, therefore, due account must be taken of this 
 division of wealth or human utilities in any final survey of our 
 social economy, it may be dismissed from our immediate con- 
 sideration. 
 
 8. In order to get a dear understanding of industry regarded 
 from the standpoint of human costs, it will be convenient to 
 fasten our attention first on the structure and working of the 
 single businesses which are the productive units of the system. 
 For the business is a closer, more compact, and more intelligible 
 structure than the trades, markets, or other larger divisions of 
 industry. We shall, therefore, endeavour to analyse the com- 
 binations of human effort as they are expressed in the various 
 types of business, so as to discover and to estimate the human 
 costs that are involved. 
 
 Though the term Business, as we use it here, must be extended 
 so as to include all sorts of centres of economic activity not com- 
 monly included, such as a school, a doctor's practice, a theatre, 
 it will be best to take for our leading case an ordinary manufac- 
 turing business. Here are gathered into close cooperation a large 
 number of human and non-human factors of production. The 
 centre of the little system is the manager, employer, or director, 
 whose ideas, desires, and purposes govern and regulate the move- 
 ments of the various forms of capital and labour. This man has 
 got together on his premises a quantity of machinery and other 
 plant which express a complicated growth of invention running 
 far back into the past and derived from great numbers of human 
 brains. These machines and plant embodying these inventive 
 ideas were made by past labour of various kinds. This manager 
 or director, in planning the Business, chose what seemed the best 
 apparatus for the purposes he had in mind. He induced a num- 
 ber of investors or capitalists to lend the money which enabled 
 him to obtain this apparatus, and to hire the various sorts of 
 labour power required to operate it. This labour power itself is
 
 40 WORK AND WEALTH 
 
 the product of the energies of man in the past, the direct ancestry 
 of the labourers who produced the beings that give forth the 
 labour-power, the past generations of men whose growing knowl- 
 edge and practice yielded the training and the habits of industry 
 and of cooperation essential for the productiveness of labour in 
 the modern arts of industry. 
 
 Here are evidently many different sorts of human effort, some 
 of them physical, others intellectual, some pleasurable, others 
 painful, some beneficial, others detrimental, to the individuals 
 who give out the effort, or to society. 
 
 All of these productive energies rank in Political Economy as 
 'costs', and as such are remunerated out of the product. Which 
 of these are human 'costs' and in what sense and what degree? 
 Such are the questions that lie immediately before us, if we are 
 seeking to reduce our 2,000,000,000 to terms of human well- 
 being. 
 
 9. In this conversion of economic into human costs we can 
 best begin by considering the fundamental distinction between 
 creation and imitation, enforced with so much penetration by the 
 French sociologist, M. Tarde. It is not in its primary signifi- 
 cance a doctrine of costs, but a division of productive energy into 
 two classes. All social progress, indeed all social changes up- 
 wards or downwards, according to this theory, comes about in 
 the following way. Some unusually powerful, original, or enter- 
 prising person, assisted often by good fortune, makes what is 
 called a discovery, some true and useful way of doing things or 
 of thinking about things, or even of saying things. This new 
 truth, new phrase, new dodge, is capable of being recognised as 
 interesting or useful, not only by its discoverer, but by the many 
 who had not the wit or the courage or the luck to discover it for 
 themselves. By suggestion, infection, contagion, or conscious 
 imitation, or by any combination of those forces and habits that 
 constitute the social nature of man, the novelty becomes adopted 
 and applied by an ever-growing number of persons, over a widen- 
 ing area, until it becomes an accepted practice or convention of 
 the whole society. Every new religious or moral idea or senti- 
 ment, every scientific law, every invention in the arts of industry, 
 every development of a new taste, thus proceeds from one or
 
 REAL INCOME: COST AND UTILITY 41 
 
 more special centres of original discovery, and spreads by a well- 
 nigh automatic process of expansion or imitation. 
 
 10. Now this distinction between creation and imitation, 
 as propounded and applied by M. Tarde, is doubtless open to 
 serious objections. The psychology of imitation is shallow, for 
 under this single term is covered what are in reality many dif- 
 ferent actions, while the whole conception of imitation as a pro- 
 cess is too mechanical. To some of these defects we shall refer 
 presently. But though, regarded as an explanation of the pro- 
 cesses of human progress, the antithesis of creation and imitation 
 does not satisfy, it furnishes an exceedingly useful starting point 
 towards a psychological analysis of economic processes. For in 
 the evolution of industry it is quite evident that improvements 
 do come about in this manner. A comparatively small number 
 of original or curious minds invent new uses or new ways of doing 
 things that are better than the old, or they recognise the value 
 of new ideas which others failed to recognise, and they have the 
 energy and enterprise to put the new ideas into operation. Many 
 of the inventions are not good enough or big enough; only by a 
 considerable number of little increments of novelty will a new 
 machine, or a new process, emerge into economic vitality, or, in 
 business language, become profitable. But where an invention 
 or improvement has once emerged, imitation multiplies it and it 
 passes into general use. 1 
 
 A comparatively small number of creative or inventive minds 
 thus undoubtedly play an exceedingly important part in the 
 development of industry. The brief acts of thinking of a Watt, 
 
 1 Tarde applies the same term 'imitation' to two different sorts of act. The busi- 
 ness man or employer who recognises some improved machine or method and copies 
 it is an imitator. Every improvement thus starting from a centre of discovery be- 
 comes diffused throughout a trade. 
 
 But the term 'imitation' is also applied to the regular work of the routine 
 operator, who is constantly engaged in repeating some single process. Now, re- 
 garded as psychological and as economic facts, these two imitations are distinct. 
 
 The former is the adoption of a discovery involving an act of recognition and of 
 judgment not a purely automatic imitation at any rate until it has become a 
 common form in the trade. The employer who copies or adopts an improvement 
 performs a single act he incorporates this improvement in the technique of his mill 
 or shop once for all. When, however, it is said of a machine-worker that his work 
 is imitative, something different is meant. He is continually repeating himself, 
 each act of repetition involving less consciousness in the adaptation of means to end.
 
 42 WORK AND WEALTH 
 
 a Stevenson, a Siemens or an Edison, appear to be incomparably 
 more productive in effect than the routine life-toil of the many 
 thousands of workers who simply repeat hour by hour, day by 
 day, year by year, some simple single process they have learned. 
 It is true that invention is too narrow a term properly to express 
 the distinction we are examining between that work which ex- 
 presses the creative energy of man and that which is essentially 
 imitative. For if a successful invention furnishes machinery or 
 methods which thus multiply the productivity of human labour, 
 the skilful organisation and administration of a business, the 
 work done by the employer, has the same sort of effect. An able 
 employer who directs his business with knowledge and foresight, 
 gathering together just the right men, materials and machinery, 
 producing the right goods at the right time, and marketing them 
 properly, seems by his personal ability greatly to enlarge the 
 valuable output of the entire business. In a big business he seems 
 to be as productive as a thousand men. 
 
 ii. So a broad distinction is built up between Ability and 
 common Labour, the creative and the merely imitative work of 
 man. From this distinction has been drawn an ingenious de- 
 fence of the current inequalities in distribution of wealth. Since 
 all the progress of modern industry is really attributable to the 
 ability and enterprise of a small group of inventing, organising 
 and enterprising people, common labour being in itself no more 
 skilful, no more productive than before, there can, it is main- 
 tained, be neither justice nor reason in the claims of labour to a 
 larger share of that huge increase of wealth due to the ability 
 of the few. 
 
 I do not propose just now to examine the validity of this con- 
 tention. What criticism I have to offer will emerge in the course 
 of my closer examination of the nature of industrial work. At 
 present I will only ask readers to observe that the doctrine as- 
 sumes that payment for industrial services must or ought to be 
 determined by the productivity of those services, not by their 
 'cost'. 
 
 Now, our immediate enquiry, we must remember, is into hu- 
 man costs. And the distinction between creative and imitative 
 work is particularly instructive in its bearing upon human costs.
 
 REAL INCOME: COST AND UTILITY 43 
 
 For if we grade the various sorts of human effort that contribute 
 to the production of wealth according to the amount of creative 
 and imitative character they seem to possess, some valuable light 
 will be thrown upon the distribution of human costs among the 
 various classes of producers. 
 
 Leaving out of consideration Land, which, as a factor in pro- 
 duction, involves no output of human effort, we shall find that 
 the provision and application of all the other factors, ability, 
 capital and labour, involve some human effort both of a creative 
 and an imitative type and contain some elements of 'cost'. 
 
 For the purpose of this analysis I propose to classify productive 
 activities under the following heads : Art, Invention, Professional 
 Service, Organisation, Management, Labour, Saving. The war- 
 ranty for this classification will emerge in the course of the analy- 
 sis.
 
 CHAPTER IV 
 
 THE CREATIVE FACTOR IN PRODUCTION 
 
 i. The most distinctively creative kind of human work is 
 called art. In motive and in performance it is the freest expres- 
 sion of personality in work. The artist in what are termed the 
 fine arts, e. g. as painter, poet, sculptor, musician, desires to give 
 formal expression to some beautiful, true or otherwise desirable 
 conception, in order either to secure for himself its fuller realisa- 
 tion or the satisfaction of communicating it to others. It is not, 
 however, necessary for our purpose to enter upon the exact psy- 
 chology of art motives or processes. Indeed, we are not concerned 
 with the whole range of artistic activity. So far as the artist 
 works simply and entirely for his own satisfaction, in order to 
 express himself to himself, he cannot be deemed to be contribut- 
 ing to the economic income of the nation. For us the artist is the 
 producer of a marketable commodity, and we are concerned to 
 discover the 'economic' and the 'human' costs which he incurs 
 in this capacity. 
 
 Now so far as the painter, poet, or musician works as pure 
 artist, exercising freely his creative faculty, his economic 'costs' 
 consist merely of his 'keep', the material and intellectual con- 
 sumption necessary to support him and to feed his art. The net 
 human costs of the creative work are nil. For though all creative 
 work may involve some pains of travail, those pains are more than 
 compensated by the joy that a child is born. Even if we dis- 
 tinguish the creative conception from the process of artistic exe- 
 cution, which may involve much laborious effort not interesting 
 or desirable in itself, we must still remember that these labours 
 are sustained and endowed with pleasurable significance as means 
 to a clearly desired end, so that the whole activity becomes in 
 a real sense a labour of love. In other words, the human costs 
 are outweighed by the human utility even in the processes of 
 production, so that the pure practice of art is a net increase of 
 
 44
 
 THE CREATIVE FACTOR IN PRODUCTION 45 
 
 life. The artist, who, following freely his own creative bent, pro- 
 duces pictures, plays or novels which bring him in great gains, 
 is thus in the position of being paid handsomely for work which 
 is in itself a pleasure to perform and which he would do just as 
 well if he were only paid his human 'keep'. The wasteful social 
 economy of the ordinary process of remunerating successful art- 
 ists needs no discussion. For the true art faculty resembles those 
 processes by which Nature works in the organic world for the in- 
 crease of commodities whose comparative scarcity secures for 
 them a market value. A poet who 'does but sing because he 
 must', and yet is paid heavily for doing so, is evidently getting 
 the best of both worlds. Our present point, however, is that the 
 'economic cost' which his publisher incurs in royalties upon the 
 sales of his poem is attended by no net 'human cost' at all, but 
 by a positive fund of 'human utility'. And this holds of all truly 
 creative work: the performance involves an increase of life, not 
 that loss which is the essence of all human cost. 
 
 2. I have spoken of the pure 'artist'. The artistic producer 
 who sells his freedom to the moneyed public may incur the heavi- 
 est of human costs, the degradation of his highest quality. The 
 temptation to incur these moral and intellectual damages is great 
 in any nation where the dominant standard of personal success 
 is money income and expenditure. But perhaps there is a false 
 simplicity in the romantic view of artistic genius, which assumes 
 that the artist and his work are necessarily degraded by induce- 
 ments to work for a public, instead of working for himself alone. 
 It may, indeed, be held that an artist who is so self-centred as to 
 have no conscious consideration of the artistic needs and capa- 
 bilities of his fellow-men, is so essentially inhuman as to be in- 
 capable of great work. The use of an art-gift for communion 
 with others, involving some measure of conscious social direction, 
 seems involved in the humanity of the artist. Even when that 
 direction takes the shape of market-prices, it does not necessarily 
 incur the violent censure bestowed by romantic persons. When 
 a sound public taste operates, this direction may be justified. 
 The portraits which Mr. G. F. Watts painted reluctantly for 
 money need not be considered a waste of his powers. The nature, 
 again, of many creative minds seems to require the application
 
 4 6 WORK AND WEALTH 
 
 of an external stimulus to break down a certain barrier of sterile 
 self-absorption or of diffidence, which would rob humanity of 
 many of the fruits of genius. At any rate it need not be assumed 
 that working for a public, or even for a market, is essentially in- 
 jurious. Where the taste which operates through the demand is 
 definitely base, and where the practice and the consciousness of 
 having sold one's soul for money are plainly realised, no doubt 
 can exist. But where public sympathy and appreciation, even 
 exercised through the market, induce the artist to subordinate 
 some of his private tastes and proclivities to the performance of 
 work which, though of secondary interest to himself, has a sound 
 social value, the pressure of demand may produce a larger body 
 of real wealth at no real human cost to the producer. Very dif- 
 ferent, of course, are the instances urged with so much passionate 
 insistence by Ruskin, where depraved public tastes, springing 
 directly from luxury and idleness, debauch the natural talents of 
 artists, and poison the very founts of the creative power of a na- 
 tion. Corruptio optimi pessima. The production of base forms 
 of art, in painting, music, the drama, literature, the plastic arts, 
 must necessarily entail the highest human costs, the largest loss 
 of human welfare, individual and social. For such an artist 
 poisons not only his own soul but the social soul, adulterating 
 the food designed to nourish the highest faculties of man. 
 
 There is, however, a sense in which it is true that every pressure 
 of social direction or demand upon the artist impairs the creative 
 character of his work. For such social demand rests upon a sim- 
 ilarity of taste among the members of a public, and its satisfac- 
 tion requires the artist to repeat himself. An artist, endowed by 
 the State or some other body, might express himself in unique 
 masterpieces, as was the case with the great artists of antiquity 
 or of the Renaissance who were fortunate in their private or 
 public patrons. But art, supported by numerous private pur- 
 chasers, whose social standards mould their tastes to tolerably 
 close conformity, must stoop to qualify creation by much imita- 
 tive repetition. This often involves a large human cost, im- 
 posing an injurious specialisation, mannerisms or mechanical 
 routine. This is particularly true of arts where a refractory 
 material gives great importance to technique, and where the
 
 THE CREATIVE FACTOR IN PRODUCTION 47 
 
 practice of this technique necessarily restricts the spontaneity 
 of execution. 
 
 3. The descent from Artist to the more or less mechanical 
 producer of art-products is marked by many grades. There is 
 the grade which does not pretend to any free exercise of the 
 creative faculty, confining itself to interpretation or execution. 
 This in music and in certain other fine arts is signified by adopt- 
 ing the French term 'artiste'. But some of this interpretative 
 work affords large scope for truly creative work. A traditional 
 or written drama, a score of music, or other necessarily imper- 
 fect and half-mechanical register of some great creative work, 
 requires a constant process of re-creation by a sympathetic spirit. 
 In such arts there is a genuinely creative cooperation between 
 the original composer and his interpreters, the latter enjoying 
 some real liberty of personal expression and giving merit to the 
 performance by this union of reproductive and creative achieve- 
 ment. The great actor or musician may thus even come to use 
 the work of the playwright or the composer as so much material 
 for his own creative expression. He may even carry this to an 
 excess, ousting his predecessor and parasitically utilising his rep- 
 utation for the display of his own artistic qualities or defects. 
 In painting and sculpture, of course, we come to a mode of skilled 
 imitation, that of the copyist, where the free creative element is 
 confined to far narrower limits. The main skill here is that of 
 technical imitation, not of interpretation. 
 
 As we descend from the higher grades of distinctively creative 
 art to these interpretative and more or less imitative grades, it 
 will be evident that larger human 'costs' of production are apt 
 to emerge. All imitation or repetition, either of oneself or of 
 another, is not inhuman. There is a rhythm in the processes of 
 organic life which even requires some repetition. But this repe- 
 tition is never precise, for organic history does not exactly repeat 
 itself. The attempt, therefore, to induce a person to perform an 
 intricate process many times and at short intervals with great ex- 
 actitude, is against humanity. It involves some physical and 
 moral injury, a human cost. We shall consider the more serious 
 effects of this procedure when we come to consider that work of 
 industry most widely removed from art. In considering, how-
 
 48 WORK AND WEALTH 
 
 ever, the sub-artistic workers it will not be right to rate the hu- 
 man costs too high. A good deal of scope for personal satisfaction 
 remains in many of these kinds of work. The sense of skill in 
 overcoming difficulties, evoked wherever any intricate work is 
 done by brain and hand, yields a vital joy. This the executant 
 artist, even though mainly a copyist, experiences in no mean 
 measure. It sustains a fine vitality, and, what is significant for 
 our particular enquiry, it involves low human cost, unless the 
 pace and strain of repetition are carried to excess. Wherever any 
 reasonable scope for individual expression or achievement re- 
 mains, though the main body of the product may be rigorously 
 prescribed by close imitation, or ordered by mechanical contriv- 
 ance, the art spirit lives and the human costs are low. The 
 photographer, or even the skilled performer on the pianola, re- 
 tains a larger measure of the nature and the satisfaction of the 
 artist than a merely cursory consideration of his occupation 
 would suggest. 
 
 A considerable and growing proportion of productive energy 
 is given out in these various levels of artistic or creative work, 
 and the proportion of the national income represented by this 
 product is growing with fair rapidity in every modern civilised 
 community. 
 
 4. From the fine arts we proceed by an easy transition to the 
 processes of discovery and invention which play so important a 
 role in progressive industry and are leading channels of creative 
 activity. The process of discovering a new relation between 
 phenomena, establishing a new fact or a new law, has much in 
 common with artistic creation. The scientific imagination is 
 creative through its use of the existing material of knowledge to 
 frame hypotheses. Indeed, the disinterested play of the mind 
 in the explanation of facts by bringing them within the range of 
 scientific laws, or, conversely, in extending the range of known 
 laws to new groups of facts, is a process of adventure containing 
 novelties of insight and of outlook akin to artistic production. 
 Those philosophers, indeed, who hold that the laws of science are 
 nothing other than the patterns which man imposes upon the 
 phantasmagoria of experience for his own private ends, would 
 make the whole of scientific discovery merely an art, differing
 
 THE CREATIVE FACTOR IN PRODUCTION 49 
 
 from the fine arts in having utility rather than beauty for its 
 goal. But we need not press this interpretation in order to per- 
 ceive the similarity of all disinterested pursuit of knowledge to 
 the fine arts. When a mathematician speaks of a beautiful solu- 
 tion to a problem, he is not using the language of hyperbole, but 
 attesting to the presence of an aesthetic emotion attendant on 
 the mode in which a truth is reached and stated. Modern physics 
 is full of discoveries containing some such artistic quality, e. g. 
 the grouping of the elements in the proportions of their atomic 
 weight which Mendelieff established, or Sir W. Ramsay's recent 
 discovery of the relations between helium and its chemical kin- 
 dred. But one need not labour the analogy between artist and 
 scientist. For our main enquiry is into human costs, and it will 
 be admitted that the zest of the scientific student and the joy of 
 discovery are emotions as vital and as valuable in themselves as 
 the emotions of the artist. So far, then, as the scientist comes 
 within our purview as a productive agent, his activity must rank 
 with the artist's, as yielding more human utility than cost. It 
 may, however, be contended that the man of science seldom, 
 as such, enters into the field of industrial productivity, save when 
 he adds to his scientific work the role of inventor. With the ad- 
 vent of the inventor the attainment of knowledge is bent to some 
 purpose of industrial utility. But though some definitely gainful 
 purpose may lurk in the inventor's mind, it does not commonly 
 impose upon his work the distinctive costs of labour. For inven- 
 tion, however narrowly utilitarian in its objects and results, still 
 remains in the realm of creation, still yields the satisfaction of a 
 production that is interesting and elevating in itself. It seems 
 to matter little whether the inventive process is a large bold spec- 
 ulative handling of some problem in which the inventor is a 
 pioneer, or whether he is engaged upon the narrower task of 
 bringing the past inventions of many greater minds up to the 
 level of industrial utility by some small new economy. The pro- 
 cess of invention carries the quality of interesting novelty which 
 from our standpoint is the badge of creative work. We shall, 
 doubtless, be reminded at this point that history shows the path 
 of the inventor to be almost as hard as that of the transgressor, 
 strewn with toil and disappointments. But though a great hi-
 
 5 o WORK AND WEALTH 
 
 vention, like a great work of art, often conceals an arduous and 
 painful gestation under the appearance of a spontaneous genera- 
 tion, too much must not be made of such a cost. 
 
 The training of a creative faculty, though like all training it 
 involves an exercise and a discipline not pleasing in themselves, 
 can, indeed, scarcely be regarded in our sense as a cost of labour. 
 It is a furtherance and not a repression of personality: the prac- 
 tice it involves, the technique it imparts are not merely mechani- 
 cal aptitudes, and they always carry in them the conscious hope 
 of creative achievement. The education of artistic or inventive 
 faculty involves no real wear and tear of human vitality beyond 
 that physical waste which every prolonged occupation involves. 
 Invention itself involves no cost. In none of these operations is 
 the characteristic of labour present, the giving-out of some single 
 sort of energy by constant repetition of identical acts in a narrow 
 groove of endeavour. Such acts of labour are indeed inimical to 
 invention: the act of invention comes commonly in times of 
 leisure. It is the product more of play than of work, and the ele- 
 ment of instinct, perhaps even of chance, is often a factor of 
 success. 
 
 5. M. Tarde, in his abrupt contrast between creation and 
 imitation or labour, has dogmatised upon the rarity of the crea- 
 tive faculty, and certain other sociologists and politicians have 
 busily engaged themselves in sowing fears lest the greed of or- 
 ganised labour or the rashness of socialistic legislation should, by 
 robbing genius and ability of its proper rewards, tamper with the 
 springs of industrial progress. Now, the important question of 
 the economic reward of ability and genius may be deferred until 
 we have ascertained more clearly what part these creative quali- 
 ties play in all the different modes of productive energy. But 
 the assumption that artistic and inventive faculty is exceedingly 
 rare, because it has so seldom been displayed, must be boldly 
 challenged. The studies of modern psychologists and education- 
 alists refute it. On the contrary, there is reason to believe that 
 human nature is exceedingly rich in all sorts of variations from 
 the normal, and that very many of these variations have valua- 
 ble uses, provided that suitable conditions for their discovery, 
 training and application are present.
 
 _____ 
 
 THE CREATIVE FACTOR IN PRODUCTION 51 
 
 The notion that genius, like murder, will 'out' is a false sen- 
 timentalism. Some men of genius do, indeed, make their way 
 in spite of adverse circumstances, forcing themselves out of the 
 obscurity of their surroundings: they 'break their birth's invid- 
 ious bar, and breast the blows of circumstance, and grasp the 
 skirts of happy chance.' That is to say some sorts of genius are 
 united witji qualities of audacity, persistence, and luck, which 
 enable them to win 'through'. But how many men of genius do 
 not possess these faculties and therefore do not emerge, it is from 
 the nature of the case impossible to learn. But it is probable 
 that much genius, talent, and ability, capable of yielding fine so- 
 cial service, is lost. Indeed it is probable that many of the finest 
 human variations, involving unusual delicacy of feeling and per- 
 haps of physique, will by natural necessity be incapacitated for 
 making their way and forcing recognition amid uncongenial 
 surroundings. 
 
 It is likely that far more human genius is lost than is saved, 
 even in the more civilised nations of to-day. For what are the 
 conditions of the successful utilisation of genius, and for what pro- 
 portion of the population are they securely attained? 
 
 Leisure is a first condition for all free and fruitful play of the 
 mind. Very few inventions have come from workers compelled 
 to keep their noses to the grindstone, and unable to let their eyes 
 and thoughts play freely round the nature of their work. This 
 is why slavery contributed so very little to the development of 
 the industrial arts: this is why so comparatively few inventions 
 of importance have been made by hired labourers in this and 
 other countries. The strongest economic plea for a shorter and 
 a lighter working-day is that it will liberate for invention and in- 
 dustrial progress the latent creative energy of countless workers 
 that is stifled under the conditions of a long day's monotonous 
 toil. 
 
 Education is the next condition. The great mass of the popula- 
 tion in this country have no such opportunity of education as is 
 needed to discover, stimulate, and nourish the creative faculties 
 in art, science, and industrial invention. One need not overrate 
 what even the best education can do for human talent of the crea- 
 tive order. Indeed, the education of the schools may sometimes
 
 52 WORK AND WEALTH 
 
 rather injure than improve the finest faculties. But education 
 can do one incomparable service to native genius or talent. By 
 putting the sensitive mind of a young man or woman in contact 
 with the innumerable waves of thought astir in the intellectual 
 atmosphere around, it supplies the first essential of all creative 
 activity, the fruitful union of two thoughts. Until all the new 
 minds brought into the world are placed in such free contact with 
 every fertilising current of thought and feeling, and enjoy free, 
 full opportunities of knowing the best that has been thought and 
 said in all departments of human knowledge, we cannot tell how 
 much creative faculty perishes for lack of necessary nutriment. 
 
 6. From artistic and inventive work which is essentially 
 creative, enjoyable, vitally serviceable and costless, we proceed 
 to review the regular skilled mental work of the professional and 
 administrative classes. 
 
 The bulk of the productive energy classed as Ability comes 
 under these heads. 
 
 It is evident that in most of this work the creative quality is 
 blended in various degrees with imitation or routine. We pass 
 from the more miraculous, interesting, and rapid modes of pro- 
 ductive achievement to a lower level, where the expenditure of 
 time and effort is greater and where the terms 'practice' and 
 'practitioner' themselves attest the more confined nature of the 
 activities. There can be no doubt that the practice of law or 
 medicine, even in its highest walks, involves a good deal of toil- 
 some and almost mechanical routine, though the most successful 
 practitioners generally shift the bulk of this burden on to the 
 lower grades of the profession. 
 
 The practice called 'devilling' in the law illustrates my mean- 
 ing. But every profession has its lower grades of routine workers, 
 assistants, dispensers, nurses, clerks and others, whose sphere of 
 liberty is closely circumscribed, and whose work, although in- 
 volving some qualities of personal skill and responsibility, mainly 
 consists in carrying out orders. 
 
 This consideration of the subsidiary professional services brings 
 to light, however, a certain defect in the use of the antithesis 
 between creation and imitation, regarded as an index of humanly 
 desirable and humanly undesirable work.
 
 THE CREATIVE FACTOR IN PRODUCTION 53 
 
 Mere repetition or close routine is not the distinctive character 
 of much of this work. The work of a private secretary, clerk, 
 or other subordinate to a professional man or a high official, may 
 contain much variety and novelty in detail or even in kind. The 
 same may be true of the work of a valet or other personal attend- 
 ant. It applies to all work which consists in carrying out an- 
 other's orders. There may be plenty of variety and scope for 
 skill in such work; in its initial stage, as conceived by the chief 
 or employer, it may contain elements of creative energy. But 
 the subordinate does not reap these elements of personal inter- 
 est because the initiation of the process does not rest with him. 
 The essentials of the work are imposed upon him by the intellect 
 and will of another: neither the design nor the mode of execution 
 is his own. Though, therefore, his work may not consist in mere 
 routine, but may be widely varied, the fact that it is not properly 
 'his' work, the expression of 'his' personality, deprives it of all 
 qualities of creation or achievement, save such fragments as 
 adhere to the details that are 'left to him.' Such work may, in- 
 deed, be described as imitative, in that it consists in executing a 
 design prescribed to him by another. But if the term imitation 
 be required, as it is, to designate the sort of labour which consists 
 in constant repetition of a single act or process, it would be better 
 to mark this distinction between free agent and subordinate in 
 a different way. The subordination of the secretary or the clerk 
 involves the human cost of a surrender of his personal judgment 
 and initiative. To the extent that he does this, he becomes an 
 instrument of another's will. The extent to which this involves 
 a human cost will vary greatly with the particular conditions, 
 technical or personal. Where such subordination belongs to 
 genuine education or apprenticeship, or where close sympathy 
 and mutual understanding happen to exist between superior and 
 subordinate, so that the mind of one is the mind of both, no hu- 
 man cost at all but a human utility may emerge. Or, in other 
 cases, the technical nature of the work may involve the necessity 
 of leaving to the subordinate a good deal of discretion and a cor- 
 respondingly large field for personal expression. But where the 
 subordinate becomes the mere tool of his master, a heavy cost is 
 entailed. That cost is heavier indeed than in ordinary manual
 
 54 WORK AND WEALTH 
 
 routine labour, because it involves more directly the subordina- 
 tion of the mind and will of the worker. Part of the distaste for 
 domestic and other closely personal service is due to the closer 
 bondage of the whole personality that is involved in the relation. 
 It is not so much that the work is intrinsically dull or unpleasant 
 as that it encroaches upon personality and inhibits initiative 
 and achievement. 
 
 7. The work of the highest, most honoured and best remuner- 
 ated members of the professions retains essentially the quality 
 of personal achievement. It consists of a number of detached 
 and usually brief acts of intellectual skill, the formation of a judg- 
 ment upon the meaning or merits of a complicated case, the pres- 
 entation of that judgment in advice or argument, the bringing 
 intellectual and moral influences to bear upon some line of con- 
 duct. 
 
 In some instances, as in the argument of a difficult case in 
 court, or the conduct of a complicated Bill in Parliament, pro- 
 longed and arduous exertion, both mental and physical, may be 
 involved. Even where the separate acts require no prolonged 
 output of energy, a professional career, comprising long series 
 of such acts, may strain or exhaust the mental and physical re- 
 sources even of a strong man. Though each case will be different, 
 and will call for qualities of personal skill and judgment, inter- 
 esting and agreeable in their exercise, all will fall within the limits 
 of a special line of practice, and this specialism will wear upon the 
 nervous system, bringing the activity under an economy of costs. 
 The temptations of a busy and successful professional career in- 
 sidiously sap the interest and joy which attend the earlier strug- 
 gle, unless a man has the rare wisdom and the strength of will 
 to limit his amount of work and income. 
 
 What is said here of the competitive professions is in large 
 measure applicable to the official grades of the public services. 
 The higher sorts of official work continually involve qualities of 
 judgment and imagination, and there is little mere repetition. 
 As one descends to the lower official levels, the routine or repeti- 
 tive element increases, until one reaches a sort of official, the 
 liberty, initiative, skill, and interest of whose work hardly exceeds 
 that of the ordinary machine-feeder in a factory. In all such dis-
 
 THE CREATIVE FACTOR IN PRODUCTION 55 
 
 tinctively routine work there is a heavy mental and even physi- 
 cal cost. But there is this distinction between the case of the 
 official and of the professional man. The former is not subject 
 to the constant drive of the competitive system and is usually 
 relieved from the sense of insecurity and anxiety which wears 
 upon the mind of most professional men. 
 
 8. The psychology of the entrepreneur or business man is 
 one of great interest and complexity. If we take the ordinary 
 activities of the manager of a well-established business in a staple 
 trade, they do not seem to involve much in the way of high in- 
 tellectual skill, imagination, or exploit but merely a limited 
 amount of special trade knowledge, ordinary intelligence, and 
 common sense. He has to perform a number of little acts of cal- 
 culation and decision. What we call his character, viz. honesty, 
 reliability, sense of responsibility, really counts for more than 
 intellect: there is little demand for constructive or creative im- 
 agination, or for high enterprise. The conduct of such a business, 
 even on the part of its manager, though not destitute of interest- 
 ing incident, involves a good deal of dull routine and even drudg- 
 ery which carries a distinct 'cost' in mental wear and tear. 
 
 The subordinate officials in such business are, of course, sub- 
 jected to a closer routine, though never to a merely mechanical 
 repetition, and their working life is less affected by hopes and 
 fears relating to the profits or loss on the half-year's working. 
 
 But a large proportion of business men work under very dif- 
 ferent conditions from these. 
 
 Most industries to-day are subjected to rapid changes in re- 
 gard to instruments and methods of work, markets for materials 
 and for finished products, wages and conditions of employment. 
 A keen eye for novelties, a rapid judgment, long-sighted calcu- 
 lation, commanding character, courage in undertaking risks 
 these are leading notes in the modern business life. 
 
 The business man who constructs, enlarges, and conducts a 
 modern competitive business, performs a good many functions 
 which call for various mental and moral qualities. He must plan 
 the structure of his business determine its size, the sizes and sorts 
 of premises and plant he will require, the place which he can best 
 occupy; he must get reliable managers and assistants, and a good
 
 56 WORK AND WEALTH 
 
 supply of skilled labour of various kinds. He must watch markets 
 and be a master of the arts of buying and selling: he must have 
 tact in managing employees and a quick eye for improvements in 
 methods of production and of marketing: he must be a practical 
 financier, and must follow the course of current history so far as 
 it affects trade prospects. 
 
 If we take the most generalised type of modern business man, 
 the financier who directs the flow of capital into its various chan- 
 nels, or the capitalist who lives by managing his investments, 
 we find the business ability in its most refined form. For these 
 men are the general directors of economic energy, operating 
 through joint stock enterprise. 
 
 The human costs of this work of speculation and direction 
 are difficult to assess. Such terms as labour and industry are 
 alien from the atmosphere of these high economic functions. 
 At the same time the strain of excitement, and, at certain seasons, 
 of prolonged intellectual effort and attention, the sense of re- 
 sponsibility for critical decisions, involve a heavy nervous wear 
 and tear. Probably the heaviest human cost, however, is a cer- 
 tain moral callousness and recklessness involved in the financial 
 struggle. For the paper symbols of industrial power, which 
 financiers handle, are so abstract in nature and so remote from 
 the human fates which they direct, that the chain of causation 
 linking stocks and shares with human work and human life is 
 seldom realised. How should the temporary holder of a block of 
 shares in Peruvian rubber concern himself with the conditions 
 of forced labour in the Amazon forests, or the group formed to 
 float a foreign government loan consider the human meaning of 
 the naval policy it is intended to finance? Except in so far as 
 they affect the values of their holdings and the price at which they 
 can market the shares, the human significance of the business or 
 political enterprises which are concrete entities behind finance, 
 has no meaning for them. These men and their economic ac- 
 tivities are further removed from human costs and utilities than 
 any other sort of business men. In view of the immense human 
 consequences which follow from their conduct this aloofness is a 
 demoralising condition. 
 
 So occult and so suspect are many of the operations of financiers
 
 THE CREATIVE FACTOR IN PRODUCTION 57 
 
 as somewhat to obscure the importance of the actual economic 
 services they render to our industrial system. General finance 
 is the governor of the economic engine: it distributes economic 
 power among the various industries, allocating the capital of the 
 saving classes to road-making, irrigation, mining, the equipment 
 of new cities, the establishment of staple manufactures, and the 
 supply of financial resources for various purposes of government. 
 The finest business instincts, the most rapid, accurate, and com- 
 plex powers of inference and prophecy, the best balance of au- 
 dacity and caution, the largest and best-informed imagination, 
 are needed for this work of general finance. It is intensely in- 
 teresting, and exerts a fascination which is traceable to a combi- 
 nation of appeals. The chief field for high economic adventure, 
 it evokes most fully the combative qualities of force and cunning; 
 it is full of hazard and fluctuation, with large, rapid gains and 
 losses: it neither requires nor permits close personal contact with 
 the troublesome or sordid details of industrial or commercial 
 life. 
 
 Such is the work of the financier and the skilled investor, 
 who found capitalistic enterprises and deal in their stocks and 
 shares over the whole area of the industrial world. It is the most 
 intellectual and, in one sense, the most 'moral' of business ac- 
 tivities, involving at once the finest arts of calculation and the 
 fullest faith in human nature. 
 
 For finance is most closely linked with credit, and credit is 
 only the business name for faith. When people talk of finance 
 as if it were riddled with dishonesty, facts give them the lie. 
 The normal honesty of finance is proved by the fact that larger 
 and larger numbers of men and women in every country of the 
 civilised world are coming to entrust their savings more and more 
 to men who are personal strangers, for investment in distant 
 countries and in businesses the exact nature of which is unknown 
 to them, and over which they cannot hope to exercise an appre- 
 ciable control. The working of the machinery of modern invest- 
 ment by which millions of men in England, France, and Germany 
 have sent their savings to make railways in S. America, or to 
 open up mines in S. Africa, or to build dams in Egypt, is the 
 largest tangible result of modern education that can be adduced.
 
 58 WORK AND WEALTH 
 
 It implies the intellectual and moral cooperation of larger num- 
 bers of distinct personalities across wider local and national 
 barriers than has ever occurred before in the history of the world. 
 
 9. A reasonable faith hi the future and a willingness to run 
 some risk are complementary motives in this growth of financial 
 investment. They are, however, by no means confined to opera- 
 tions of finance. All industry involves faith and risk-taking. 
 Every producer who acts as a free agent conceives some good 
 object which he thinks attainable by his work. He may be mis- 
 taken, either in conceiving wrongly, or in failing to carry out his 
 plan. His failure may be due to want of skill or knowledge, or 
 to adverse circumstances. In primitive societies, where a man 
 produces mostly for his own use, the risk is less. For he may be 
 supposed to know what he wants, how much, and when he wants 
 it. But when he makes for others, i. e. for a market, the risks are 
 greater. For he will not know so much about the wants of other 
 persons as about his own. It might seem as if small local mar- 
 kets, in which the producer dealt exclusively with neighbours, 
 would carry the least risk, and that the risk would expand with 
 each expansion of the market area. But this is not commonly 
 the case. As a rule, there is less risk for the producer serving 
 a large market, the individual members of which he does not 
 know, than a small market of his neighbours. For the fluctua- 
 tions of aggregate demand will be smaller in the larger market, 
 and though he will know less about the individual contributions 
 to its supply and its demand, his risk of failing to effect a sale, 
 when he desires to do so, will usually be less. This at any rate 
 applies to most standard trades. 
 
 Since effective access to large markets implies a fairly large 
 business, the economy of risk becomes one of the economies of 
 capitalism, and its calculation a chief branch of the employer's 
 skill. The watching of the market so as to reduce the waste of 
 misdirected production is the most delicate of the intellectual 
 activities of most managers. It takes him outside the scope of 
 his own business and the present process of production, to con- 
 sider the whole condition of the trade in the present and the 
 probable future. These calculations and acts of judgment issu- 
 ing from the brain of business managers are the psychical aspect
 
 THE CREATIVE FACTOR IN PRODUCTION 59 
 
 of the whole structure of markets and of the trade and traffic 
 arrangements which give such unity and order as are visible in 
 what is termed the industrial system. 
 
 Thus, not merely on the financial but on the commercial side, 
 industry is perceived to be a great fabric of beliefs and desires. 
 Though, as we shall recognise, in dealing with labour, and with 
 saving, risk-taking is by no means confined to employers and 
 entrepreneurs, its wider operations belong to the speculative 
 skill which comes under the general head of ability of manage- 
 ment. In the psychological interpretation of industry this func- 
 tion of the entrepreneur is of quite crucial significance, cooperat- 
 ing everywhere with the more abstract calculations of financiers 
 in directing the amounts, kinds, and directions, of the various 
 currents of industrial energy which move in the business world. 
 Since it involves a constant use of the constructive imagination 
 in the interpretation of the play of changing motives in many 
 minds, and the forecasting of future conditions which can never 
 be a mere repetition of the past, the 'creative' faculty obtains 
 here its highest expression. It is not for nothing that the great 
 modern master either of finance or industry is accredited with 
 some quality of imaginative power akin to that of the artist. 
 This, however, must in not a few instances imply, not merely 
 the genius of the prophet, but that of the skilled manipulator 
 of economic material and opportunity, who helps to secure the 
 due fulfilment of the prophecies upon which he stakes his faith.
 
 CHAPTER V 
 
 THE HUMAN COSTS OF LABOUR 
 
 i. The classical Political Economy of this country gave to 
 Labour a role of supreme importance in the production of wealth. 
 From Adam Smith, Ricardo, and other authoritative exponents 
 of the new 'science' many passages can be cited to support the 
 thesis that labourers are the only producers. Nor does it appear 
 that in these utterances Labour was usually intended to include 
 the services of organisation and management or other intellect- 
 ual activities. Wealth is baldly attributed to Labour in the sense 
 that the manual labour, which extracts raw materials from the 
 earth, shapes and composes them, and carries them from one 
 place to another, alone counts as a cost of production. It is 
 natural enough that the scientific socialism of Europe should have 
 accepted and enforced this doctrine. Though the more intelligent 
 socialists and 'labour men' admit the necessary work of super- 
 intendence and other mental work as useful and productive, the 
 materialism prevalent in the business world tends to relegate to 
 a quite secondary place all the higher forms of intellectual and 
 moral activity. 
 
 It was upon the whole, indeed, a sound instinct which thus led 
 the early theorists to use language which attributed to manual 
 labour the real burden of the 'costs' of production. For closer 
 investigation attests the force of the distinction between the pro- 
 ductive energy given out by the intellectual, the directing, and 
 administrative classes on the one hand, and by the labouring- 
 classes on the other. Moreover, the social as well as the eco- 
 nomic cleavage is so distinctive a feature of our life that it would 
 be inconvenient to ignore it. The cleavage will be found to 
 correspond pretty accurately to the distinction between the 
 creative and the imitative functions which we provisionally 
 adopted for a starting point in our analysis. 
 
 60
 
 THE HUMAN COSTS OF LABOUR 61 
 
 For most of the productive energy given out by the artistic, 
 inventive, professional, official, and managerial classes, which 
 have passed under our survey, is seen to be in large measure crea- 
 tive, varied, interesting, and pleasurable. 
 
 Now in the labour of the wage-earning classes these qualities 
 are generally lacking. Alike in motives and in methods, the con- 
 trast is clearly marked. The mind of the artist or the inventor, 
 even of the professional man or the administrator, is occupied 
 with the work in hand, as an object of interest and of desirable 
 achievement. The nature of the work and the conditions of re- 
 muneration conduce to fix his immediate thoughts and feelings 
 on the performance of his work. With the labourer it is different. 
 The conditions of most labour are such that the labourer finds 
 little scope for thought and emotional interest in the work itself. 
 Its due performance is hardly an end to him, but only a means 
 to a livelihood consisting in the consumable commodities got in 
 payment for his labour. 
 
 But the vital distinction is in the nature and method of the 
 work done. Whereas the artistic or inventive, or even the pro- 
 fessional man, is constantly doing something new, the labourer 
 continually repeats the same act or set of acts, in order to produce 
 a number of similar products. The success of most labour con- 
 sists in the exactitude and pace with which this repetition can 
 be carried on. The machine-tender is the typical instance. To 
 feed the same machinery with the same quantity of the same 
 material at the same pace, so as to turn out an endless number of 
 precisely similar articles, is the absolute antithesis of art. It is 
 often said that the man who feeds such a machine tends to be- 
 come as automatic as the machine itself. This, however, is but a 
 half-truth. If the tender could become as automatic as the ma- 
 chine he tended, if he could completely mechanise a little section 
 of his faculties, it might go easier with him. But the main trend 
 of life in the man fights against the mechanising tendency of his 
 work, and this struggle entails a heavy cost. For his machine im- 
 poses a repetition of the same muscular and nervous action upon 
 a being whose muscles and nervous resources are continually 
 changing. The machine, fed constantly with the same supply of 
 fuel, geared up to a single constant pace of movement, forced by
 
 62 WORK AND WEALTH 
 
 unchanging structure to the performance of the same operation, 
 friction and error reduced to an almost negligible minimum, works 
 through the longest day with a uniform expenditure of power. 
 The machine-tender is an organism, fed at somewhat irregular 
 intervals with different amounts and sorts of food, the assimila- 
 tion of which is also discontinuous, and incapable of maintaining 
 intact and constant in its quantity the muscular and nervous 
 tissue and the accompanying contractions which constitute the 
 physical supply of 'work'. This organism has also many other 
 structures and functions, physical and mental, whose activities 
 and needs get in the way of the automatic activity of machine- 
 tending. Thus the worker cannot succeed in becoming alto- 
 gether a machine-tending automaton. He will not always ex- 
 actly repeat himself, and his attempt to do so involves two sets 
 of organic costs or wastes, due to the fact that, though his labour 
 tries to make him a specialised mechanism, he remains a general- 
 ised organism. 
 
 So far as labour consists in specialised routine, absorbing the 
 main current of productive energy, it is the enemy of organic 
 health. It is hostile in two ways, first, in denying to man op- 
 portunity for the exercise of his other productive faculties, sec- 
 ondly, in overtaxing and degrading by servile repetition the 
 single faculty that is employed. 
 
 As the artist presents the supreme example of creative work, 
 with a minimum of human costs and a maximum of human 
 utility, so the machine-tender presents the supreme example of 
 imitative work, with a maximum of human costs and a minimum 
 of human utility. 
 
 2. Some particular consideration of these costs of machine- 
 tending will be the best approach to a more general survey of 
 the human costs of labour. 
 
 The indictment of the dominion of machinery by Ruskin, 
 Morris, and other humanist reformers, was primarily based upon 
 the degradation of the worker's manhood by denying him the 
 conditions of good work. 'It is a sad account,' said Ruskin, 
 'for a man to give of himself that he has spent his life in opening 
 a valve, and never made anything but the eighteenth part of a 
 pin.' But, important as is this charge of degraded and joyless
 
 THE HUMAN COSTS OF LABOUR 63 
 
 work, we must begin our analysis of the costs of mechanical or 
 factory labour at a lower level. 
 
 From the great body of the factory labour which goes to the 
 provision of our national income, the first great human cost that 
 emerges is the burden of injurious fatigue which results from 
 muscular or nervous overstrain, and from the other physical and 
 moral injuries which are the natural accompaniments of this 
 overstrain. 
 
 Modern physiology and pathology have done much to give 
 plain meanings to these costs. Physical fatigue is not of necessity 
 an injury to the body, nor is all feeling of fatigue a pain. The 
 ideally correct conduct of the organism may, indeed, appear to 
 preserve an exact and a continuous balance between the anabolic 
 and the catabolic, the nutrition of cell life and the expenditure in 
 function. Sir Michael Foster gives the following classical descrip- 
 tion of this process. 1 
 
 'Did we possess some optic aid which should overcome the 
 grossness of our vision, so that we might watch the dance of atoms 
 in this double process of making and unmaking in the human 
 body, we should see the commonplace living things which are 
 brought by the blood, and which we call the food, caught up into 
 and made part of the molecular whorls of the living muscle, 
 linked together for awhile in the intricate figures of the dance of 
 life; and then we should see how, loosing hands, they slipped back 
 into the blood, as dead, inert, used-up matter. In every tiny 
 block of muscle there is a part which is really alive, there are parts 
 which are becoming alive, there are parts which have been alive 
 but are now dying or dead; there is an upward rush from the life- 
 less to the living, a downward rush from the living to the dead. 
 This is always going on, whether the muscle be quiet and at rest, 
 or whether it be active and moving. Some of the capital of living 
 material is always being spent, changed into dead waste, some of 
 the new food is always being raised into living capital. 
 
 'Thus nutritive materials are carried by the blood to the 
 tissues, and the dead materials of used-up and broken-up tissues 
 are carried away for destruction or ejection. Under normal con- 
 ditions of healthy activity this metabolic balance is preserved 
 1 Weariness, the Rede Lecture, Cambridge, 1893.
 
 64 WORK AND WEALTH 
 
 by the alternation of work and repose, the tissue and energy built 
 up out of food during periods of rest forming a fund for expendi- 
 ture during periods of work, while the same periods of rest enable 
 the destructive and evacuative processes to get rid of any accu- 
 mulation of dead tissue due to the previous period of work. Ab- 
 normally intense or unduly prolonged activity of any portion of 
 the body uses up tissue so fast that its dead material cannot be 
 got rid of at the proper pace. It accumulates in the blood or in 
 the kidneys, liver or lungs, and operates as a poison throughout 
 the whole system. Over-fatigue thus means poisoning the or- 
 ganism. 
 
 'The poisons are more and more heaped-up, poisoning the 
 muscles, poisoning the brain, poisoning the heart, poisoning at 
 last the blood itself, starting in the. intricate machinery of the 
 body new poisons in addition to themselves. The hunted hare, 
 run to death, dies not because he is choked for want of breath, 
 nor because his heart stands still, its store of energy having given 
 out, but because a poisoned blood poisons his brain, poisons his 
 whole body.' l 
 
 The Italian biologist Mosso has demonstrated that the depress- 
 ing effect of fatigue is not confined to the local centre where it is 
 produced, but is carried to all parts of the body. When the blood 
 of a dog fatigued by continued running is injected into the vessels 
 of a sound dog, the latter exhibits all the signs of fatigue. The 
 inability of the system to dispose of the used-up tissue, which 
 thus accumulates and poisons the system, is one injurious factor 
 in fatigue. Another is the undue depletion of the stores of gly- 
 cogen and oxygen, which the organism provides for the output 
 of muscular activity. Glycogen is a compound of carbon, hydro- 
 gen, and oxygen made by muscle tissue out of the sugar or dex- 
 trine supplied to it by the blood. 'The stored glycogen of the 
 muscles keeps uniting chemically with the oxygen of the blood. 
 The glycogen is broken down into a simpler chemical form, giv- 
 ing off the gas carbon dioxide and other acid wastes, and releasing 
 heat and mechanical energy in the process. With the released 
 energy contraction of the muscles takes place and hence ulti- 
 mately the industrial labour which is our special theme.' 2 
 
 1 Foster. Op. cit. z Goldmarck, Fatigue and Efficiency, p. 22.
 
 THE HUMAN COSTS OF LABOUR 65 
 
 'Glycogen is, as it were, stored for use. It is always being 
 replenished, always being depleted. . . . But when the muscle is 
 active and contracts energetically, there is a run upon our gly- 
 cogen. It is used up faster than it is built in muscle. The glyco- 
 gen is spent so rapidly that there is not time for the blood-stream 
 to bring back to the tissue the potential material for its repair.' * 
 Though the liver furnishes an extra store of glycogen, this too 
 may be depleted by undue muscular activity. 
 
 'Thus we have reached the other fundamental factor in fa- 
 tigue the consumption of the energy-yielding substance itself. 
 Not only does tissue manufacture poison for itself in the very act 
 of living, casting off chemical wastes into the circling blood- 
 stream; not only are these wastes poured into the blood faster 
 with increased exertion, clogging the muscle more and more with 
 its own noxious products; but, finally, there is a depletion of the 
 very material from which energy is obtained. The catabolic proc- 
 ess is in excess of the anabolic. In exhaustion, the organism is 
 forced literally to "use itself up".' 2 
 
 3. So much for the physiological meaning of muscular fa- 
 tigue. Closely associated with muscular fatigue is nervous fa- 
 tigue. For every voluntary muscular action receives its stimulus 
 from a nervous centre. Though the nature of this nervous energy, 
 accumulated in the central nervous system and distributed in 
 stimuli, is not well understood, its economy is gravely disturbed 
 by conduct involving heavy muscular fatigue, as well as by work 
 of a mental kind involving heavy drains on its resources. A pro- 
 cess of building up, storage, and dissipation of nerve tissue and 
 energy-yielding material, corresponding to that which we have 
 traced for muscle tissue, must be accepted as taking place. Fa- 
 tigue of the nervous system will thus be attended by a similar 
 accumulation of poisonous waste products, and an excessive con- 
 sumption of substances needed for the maintenance of nervous 
 activity. 
 
 Though physiologists are not agreed as to how and when 
 fatigue acts on the nervous cells, there is no question of the real- 
 ity and of the importance of this injury of excessive work to 
 'the administrative instrument of the individual' which 'directs, 
 1 Goldmarck, p. 22. * Ibid, p. 23.
 
 66 WORK AND WEALTH 
 
 controls and harmonises the work of the parts of the organic 
 machine and gives unity to the whole.' 
 
 Still confining our attention to purely physical conditions, we 
 learn that work done in a state of muscular fatigue involves an 
 increase of nervous effort. 
 
 'Mosso showed that a much stronger electric stimulus is re- 
 quired to make a wearied muscle contract than one which is 
 rested. He devised an apparatus, the ponometer, which records 
 the curve of nervous effort required to accomplish muscular ac- 
 tion as fatigue increases. He showed that the nerve centres 
 are compelled to supply an ever stronger stimulus to fatigued 
 muscles.' 1 
 
 Professor Treves at Turin throws further light upon the rela- 
 tions between the muscular and the nervous economy. It is well 
 known that in muscular activity there is an opening period dur- 
 ing which efficiency, or practical response to nervous stimulus, 
 increases. Before fatigue begins to set in, the muscle appears to 
 gain strength, its working power being actually augmented. This 
 period of maximum efficiency continues for an appreciable time, 
 then fatigue advances more and more until muscular contraction 
 refuses any longer to respond to even a heightened nervous stim- 
 ulus. This, of course, is also an epitome of the course of organic 
 life itself, its rise towards maturity, its level of maximum power 
 and its decline. 
 
 Now training or practice can notoriously affect this natural 
 economy. The muscular system, or some part of it, can by prac- 
 tice accommodate itself to increasing quantities of fatigue-poisons, 
 and can draw from the general organic fund a larger quantity of 
 material for repair of local muscular tissue and energy. But it 
 has long been recognised that some real dangers attach to this 
 excessive specialisation of muscular activities. The pathological 
 nature of over-training in athletics has its plain counterpart in 
 industry. This, according to Professor Treves, lies in the failure 
 of the supply of nervous energy to rise in proportion to the re- 
 quirements for this higher pressure upon the muscular tissues. 
 
 'According to my experience, it has not been found that train- 
 ing has as favourable an effect upon [nervous] energy as upon 
 
 1 Goldmarck, p. 33.
 
 THE HUMAN COSTS OF LABOUR 67 
 
 muscular strength. . . . This fact explains why muscular 
 training cannot go beyond certain limits and why athletes are 
 often broken down by the consequences of over-exertion. And 
 this fact teaches also the practical necessity of preventing women, 
 children, and even adult men from becoming subjected to labour, 
 which, indeed, a gradual muscular training may make possible, 
 but at the price of an excessive loss of nervous energy which is 
 not betrayed by any obvious or immediate symptoms, either ob- 
 jective or subjective.' l 
 
 A series of experiments has been directed to the more detailed 
 study of the relations between activity and repose. Their general 
 result is to prove that muscular work, done after fatigue has set 
 in, not only costs more nervous effort but accomplishes less work. 
 The ergograph, an instrument for measuring work, yields ample 
 testimony to the recuperative effect of rest taken before exhaus- 
 tion is reached, on the one hand, and the rapid rate of decline in 
 achievement when activity is continued after the fatigue point 
 has been reached. 
 
 4. To this account of the physical costs of excessive work in 
 muscular and nervous waste must be added the greater liability 
 to accidents and the greater susceptibility to industrial and non- 
 industrial diseases which fatigue entails. 
 
 The statistics of industry in various countries prove that fa- 
 tigue is a very important factor in industrial accidents. Though 
 fatigue is not always proportionate to duration of work, the num- 
 ber of hours worked without intermission is usually a valid index 
 of fatigue. After a long stunt of work the attention of the worker 
 and his muscular control are both weakened. We find, therefore, 
 a marked similarity in the curves relating accidents to hours of 
 labour, accidents increasing progressively up to the end of the 
 morning's work, and again in the late afternoon as the day's 
 work draws to its close. Recent German statistics show that the 
 highest rate of accidents is during the fourth and fifth hours of 
 morning work. 
 
 That over-fatigue connected with industry is responsible for 
 large numbers of nervous disorders is, of course, generally ad- 
 mitted. The growing prevalence of cardiac neurosis and of neu- 
 
 1 Goldmarck, p. 37.
 
 68 
 
 WORK AND WEALTH 
 
 rasthenia in general among working-people is attested by many 
 medical authorities, especially in occupations where long strains 
 of attention are involved. But the general enfeeblement and 
 
 Percentage Killed and Injured 
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 %$% Numberof Hours Worked ar?dover 
 
 loss of resistance power to disease germs of all kinds are even 
 more injurious consequences of over-exertion. Many experi- 
 ments attest the fact that fatigue reduces the power of the blood 
 to resist bacteria and their toxic products. 
 5. So far I have dwelt exclusively upon the physiological
 
 THE HUMAN COSTS OF LABOUR 
 
 69 
 
 nature and effects of fatigue as costs of labour. But due account 
 must also be taken of the psychical or conscious costs. Much 
 work in its initial stage contains elements of pleasurable exercise 
 of some human organ or faculty, and even when this pleasure has 
 worn off a considerable period of indifference may ensue. Though 
 1 
 
 den 
 
 Percentage A 
 
 Percentage Accidents by the 
 
 Hour of the Day 
 (German Insurance Reports) ' 
 J9IO 
 
 6-7 7-8 8-9 
 
 9-/0 1CHI JI-12 12-1 
 Time of Day 
 
 1-2 2-3 3-4 4-5 5-6 
 
 boredom may set in before any strain of fatigue, the earlier period 
 of ennui may not entail a heavy cost. But, when fatigue ad- 
 vances, the irksomeness brings a growing feeling of painful ef- 
 fort, and a long bout of fatigue produces as its concomitant a 
 period of grave conscious irritation of nerves with a subsequent 
 period of painful collapse. Where the conditions of work are
 
 70 WORK AND WEALTH 
 
 such as to involve a daily repetition of this pain, its accumulative 
 effect constitutes one of the heaviest of human costs, a lowering 
 of mentality and of moral resistance closely corresponding to the 
 decline of physical resistance. Drink and other sensational ex- 
 cesses are the normal reactions of this lowered morale. Thus 
 fatigue ranks as a main determinant of the 'character' of the 
 working-classes and has a social significance in its bearing upon 
 order and progress not less important than its influence upon the 
 individual organism. 
 
 6. I have dwelt in some detail upon these phenomena of fa- 
 tigue, because they exhibit most clearly the defects of the work- 
 ing life which carry heaviest human costs. These defects are 
 excessive duration of labour, excessive specialisation, excessive 
 repetition, excessive strain and excessive speed. Though sepa- 
 rate for purposes of analysis, these factors closely interact. Mere 
 duration of labour does not necessarily involve fatigue, provided 
 it carries the elements of interest, variety, and achievement. The 
 degree of specialisation or subdivision of labour counts on the 
 whole more heavily. But even a high degree of specialisation is 
 alleviated, where it contains many little changes of action or posi- 
 tion, and affords scope for the satisfaction attending expert skill. 
 It is the constant repetition of an identical action at a prescribed 
 pace that brings the heaviest burden of monotony. 
 
 It is upon this combination of conditions that the first count 
 against the dominion of machinery is based. The brief physiolog- 
 ical consideration we have brought to bear upon the problem of 
 fatigue gives clearer significance to monotony as a 'cost'. It im- 
 plies, not merely a dull and distasteful occupation, but one which, 
 taxing continually the same muscles and the same nerve-centres, 
 increases the poison of fatigue. Hand labour of a narrow order, 
 or machine-tending however light, entails this heavy cost, if 
 maintained over a long period of time. 
 
 But where monotonous repetition is closely directed by the 
 action of a machine, as regards its manner and its pace, there is 
 a special nervous cost. For a hand-worker, however dull or 
 heavy is the work, retains some slight power of varying the pace 
 and perhaps of changing his position or mode of work. A worker 
 who either feeds a machine or adjusts his movements in obedience
 
 THE HUMAN COSTS OF LABOUR 71 
 
 to those of a machine, as for instance a cutter in the clothing 
 trade or in shoemaking, has no such liberty. The special cost 
 here entailed is that of trying to make an organism conform in its 
 movements to a mechanism. Now a human being, or any other 
 organism, has certain natural rhythms of movement for work, 
 related to the rhythms of heart and lungs and other organic pro- 
 cesses, and there are natural limits also to the pace at which he 
 can efficiently, or even possibly, continue working. A machine 
 also has rhythms and a maximum efficiency pace. But the 
 rhythms of a machine are determined by its mechanical con- 
 struction and the apparatus which furnishes its power: they are 
 continuously uniform, and are capable of being speeded up be- 
 yond the capacity of the human tender. 
 
 A human rhythm is really labour-saving, in as much as it eases 
 the strain to work in accordance with a natural swing. To set 
 a man to follow the rhythm of a machine not only loses this econ- 
 omy, but entails an extra effort of conformity. The tendency to 
 speed up a machine, so as to get the most out of it, is liable to 
 take out of the machine-tender even more than he is capable of 
 recognising in the way of nervous strain. Where considerable 
 muscular activity is also required in following a high pace set 
 by a machine, an appalling burden of human costs may be ac- 
 cumulated in a factory day. 
 
 When to such direct human costs of labour are added the risks 
 of industrial accident or of industrial diseases, the physical in- 
 juries involved in bad atmosphere, heat, noise and other inci- 
 dental pains and inconveniences which beset many branches of 
 industry, we begin to realise with more distinctness the meaning 
 of ' costs of labour ' in the human as distinguished from the eco- 
 nomic sense. 
 
 Later on we shall turn to consider how far the economic or 
 monetary 'costs' correspond with these human costs. 
 
 Our present task, however, is to conduct a brief survey of gen- 
 eral industry in order to form some idea of the magnitude of these 
 human costs in the leading branches of production, and to con- 
 sider how far they are offset or qualified by factors of human in- 
 terest or utility, such as we found widely prevalent in the work 
 of the artistic, official, and administrative classes.
 
 CHAPTER VI 
 
 THE REIGN OF THE MACHINE 
 
 i. If it were true that all the labour of the wage-earning 
 classes which went to produce the real national income were, 
 or tended to become, monotonous and highly specialised machine 
 tending, the workers constantly engaged in close repetition of 
 some single narrow automatic process, contributing to some 
 final composite product whose form and utility had no real mean- 
 ing for them, the tale of human costs would be appalling. 
 
 Fortunately this is not the whole truth about labour. Even 
 the charge against machinery of mechanising the worker is fre- 
 quently overstated. The only productive work that is entirely 
 automatic is done by machines. For the main trend of the de- 
 velopment of industrial machinery has been to set non-human 
 tools and power to undertake work which man could not execute 
 with the required regularity, exactitude, or pace, by reason of 
 certain organic deficiencies. While, then, the sub-divided labour 
 in most staple industries is mostly of a narrowly prescribed and 
 routine character, it is hardly ever so completely uniform and 
 repetitive as that done by a machine. Purely routine work, de- 
 manding no human skill or judgment is nearly always under- 
 taken by machinery, except where human labour can be bought 
 so cheap that it does not pay to invent and apply machinery so 
 as to secure some slightly increased regularity or pace of output. 
 Where, then, as in most modern factories, human labour coop- 
 erates with, tends and feeds machinery, this human labour is of 
 a less purely repetitive character than the work done by the 
 machines. Some portions of the labour, at any rate, contain ele- 
 ments of skill or judgment, and are not entirely uniform. 
 
 We can in fact distinguish many kinds and grades of human 
 cooperation with machinery. In some of them man is the ha- 
 bitual servant, in others the habitual master of the machine; in 
 others, again, the relation is more indirect or incidental. Though 
 
 72
 
 THE REIGN OF THE MACHINE 73 
 
 an increasing number of the processes in the making and moving 
 of most forms of material goods involves the use of machinery 
 and power, they do not involve, as is sometimes supposed, the 
 employment of a growing proportion of the workers in the merely 
 routine labour of tending the machines. Such a supposition, 
 indeed, is inconsistent with the primary economy of machinery, 
 the so-called labour-saving property. It might, indeed, be the 
 case that the machine economy was accompanied by so vast an 
 increase of demand for machine-made goods, that the quantity 
 of labour required for tending the machines was greater than 
 that formerly required for making by hand the smaller quantity. 
 In some trades this is no doubt so, as for instance in the print- 
 ing trade, and in some branches of textile industry where the 
 home market is largely supplemented by export trade. But the 
 displacement of machine-tenders by automatic machines is ad- 
 vancing in many of the highly-developed machine industries. 
 The modern flour or paper mill, for instance, performs nearly all 
 its feeding processes by mechanical means while in the textile 
 trade automatic spindles and looms have reduced the number and 
 changed the character of the work of minders. More and more 
 of this work means bringing human elements of skill and judg- 
 ment and responsibility to bear in adjusting or correcting the 
 irregularities or errors in the operations of machinery. Machines 
 are liable to run down, become clogged, break, or otherwise 'go 
 wrong'. These errors they can often be made to announce by 
 automatic signals, but human care is needed for their correction. 
 This work, however monotonous and fatiguing to muscles or 
 nerves, is not and cannot be entirely repetitive. 
 
 In many other processes where the machine is said to do the 
 work, human skill and practice are required to set and to regulate 
 the operations of the machine. The use of automatic lathes is an 
 instance of cooperation in which some scope for human judgment 
 remains. The metal and engineering trades are full of such in- 
 stances. Though machinery is an exceedingly important and in 
 many processes a governing factor, it cannot be said to reduce 
 the labour that works with it to its own automatic level. On the 
 contrary, it may be taken as generally true that, in the processes 
 where machinery has reached its most complex development, an
 
 74 WORK AND WEALTH 
 
 increased share of the labour employed in close connection with 
 the machinery is that of the skilled engineer or fitter rather than 
 of the mere tender. The heaviest and the most costly labour in 
 these trades is usually found in the processes where it has not 
 been found practicable or economical to apply machinery. In- 
 deed, the general tendency, especially noticed in America, in the 
 metal trades, has been to substitute for a large employment of 
 skilled hand labour of a narrowly specialised order, a small em- 
 ployment of more skilled and responsible supervisors of machin- 
 ery and a large employment of low-skilled manual labour in the 
 less mechanical departments, such as furnace work and other 
 operations preparatory to the machine processes. 
 
 2. Though accurate statistics are not available, it appears 
 that in this country the proportion of the working population 
 employed in manufactures is not increasing, and it is more than 
 probable that an exact analysis of the nature of the work of 
 our factories and workshops would show that the proportion 
 engaged in direct attendance on machinery was steadily fall- 
 ing. 
 
 For even in manufacture, the department of industry where 
 machine processes have made most advance, there are many 
 processes where hand labour is still required, in sorting and pre- 
 paring materials for machinery, in performing minor processes 
 of trimming or decoration, in putting together parts or in pack- 
 ing, etc. Where female labour is employed, a very large propor- 
 tion of it will be found to be engaged in such processes outside 
 the direct dominion of machinery. Though most of the distinc- 
 tively human 'costs' of machine processes, the long hours, high 
 pace, monotony of muscles and nerve strain, are usually present 
 in such work, it is not absolutely mechanical, some slight ele- 
 ments of skill and volitional direction being present. 
 
 There are other restrictions upon the purely repetitive or 
 routine character of manufacture. There is much work which 
 no machine can be invented to do because of certain inherent 
 elements of irregularity. Most of these are related to the organic 
 nature of some of the materials used. Where expensive animal 
 or vegetable products require treatment, their natural inequali- 
 ties often render a purely mechanical operation impossible or
 
 THE REIGN OF THE MACHINE 75 
 
 wasteful. The killing, cutting, and canning processes in the meat 
 trade, the picking, preparation and packing of fruit, many pro- 
 cesses in the tanning and leather trade, the finer sorts of cabinet- 
 making, are examples of this unadaptability of organic materials 
 to purely mechanical treatment. Where very valuable inor- 
 ganic materials are used in making high-grade products, similar 
 limitations in the machine economy exist. The finest jewellery 
 and watch-making still require the skill and judgment of the 
 practised human hand and eye. Some of the irregularities in 
 such processes are, indeed, so small and so uninteresting as to 
 afford little, if any, abatement of human costs; but they remove 
 the labour from the direct control of a machine. 
 
 A more important irregularity which restricts machinery in 
 manufacture exists where the personal needs or taste of the con- 
 sumer help to determine the nature of the process and the prod- 
 uct. Here again we are confronted by the antagonism of mech- 
 anism and organism. For the true demand of consumers is the 
 highest expression of the uniqueness which distinguishes the or- 
 ganic. As no two consumers are exactly identical in size, shape, 
 physical or mental capacities, tastes and needs, the goods re- 
 quired for their consumption should exhibit similar differences. 
 Machine economy cannot properly meet this requirement. It 
 can only deal with consumers so far as their human nature is com- 
 mon: it cannot supply the needs of their individuality. So far 
 as they are willing to sink their differences, consenting to con- 
 sume large quantities of goods of identical shapes, sizes and qual- 
 ities, the machine can supply them. But since no two consumers 
 are really identical in needs and tastes, or remain quite constant 
 in their needs and tastes, the fundamental assumption of routine- 
 economy is opposed to the human facts. 
 
 Consumers who refuse to sink their individuality and are 
 'particular' in the sort of clothes they wear, the sort of houses 
 and furniture and other goods they will consent to buy, exercise 
 a power antagonistic to routine labour. They demand that pro- 
 ducers shall put out the technical skill, the care, taste and judg- 
 ment required to satisfy their feelings as consumers. That is to 
 say, they demand the labour not of the routine-worker but of the 
 craftsman, work which, though not creative in the full free ar-
 
 76 WORK AND WEALTH 
 
 tistic sense, contains distinct elements of human interest and ini- 
 tiative. 
 
 3. The presence and the possibilities of this individuality 
 of labour, flowing from the educated individuality of consumers, 
 are a most important influence in the lightening of the human 
 costs of labour. At present no doubt a very small proportion of 
 the material goods turned out by the industrial system contains 
 any appreciable element of this individuality of workmanship. 
 It may, indeed, well appear that our recent course during the 
 development of the machine economy has been a retrograde one. 
 In the beginnings of industry it appeared as if there were more 
 scope for the producer's self-expression, more joy of work, more 
 interest in the product, even though destined for the commonest 
 uses. The guilds in the Middle Ages preserved not a little of this 
 happier spirit of craftsmanship. To those who brood upon these 
 visions of the past, our modern industrial development has often 
 seemed a crude substitution of quantity of goods for quality, 
 the character of labour deteriorating in the process. With the ele- 
 ment of truth in such a judgment is mingled much falsehood. 
 There has never been an age or a country where the great bulk 
 of labour was not toilsome, painful, monotonous, and uninter- 
 esting, often degrading in its conditions. Bad as things are, 
 when regarded from the standpoint of a human ideal, they are 
 better for the majority of the workers in this and in other ad- 
 vanced industrial countries than ever in the past, so far as we 
 can reconstruct and understand that past. Machinery has ren- 
 dered a great human service by taking over large masses of 
 heavy, dull, and degrading work. When fully developed and 
 harnessed to the social service of man, it should prove to be the 
 great liberator of his free productive tastes and faculties, per- 
 forming for him the routine processes of industry so that he may 
 have time and energy to devote himself to activities more inter- 
 esting and varied. 
 
 The uniqueness of the individual consumer has only begun to 
 make its impression upon industry. For it needs liberty and 
 education for a man to recognise this property of organic unique- 
 ness and to insist on realising it. The first movements of con- 
 scious tastes in a nation or a class are largely imitative, taking
 
 THE REIGN OF THE MACHINE 77 
 
 shape in fashions sufficiently wide-spread and uniform to lend 
 themselves to routine mechanical production. The self-assertion 
 of the individual is a slower fruit of culture. But, as it grows, 
 it will offer a continually stronger opposition to the dominion 
 of mechanical production. It will do this in two ways. In the 
 first place, it will cause a larger proportion of demand to be di- 
 rected to the classes of products, such as intellectual, aesthetic, 
 and personal services, which are by their nature less susceptible 
 of mechanical production. In the second place, weakening the 
 traditional and the imitative factors in taste and demand, it 
 will cause consumption, even of the higher forms of material com- 
 modities, to be a more accurate expression of the changing needs 
 and tastes of the individual, stamping upon the processes of pro- 
 duction the same impress of individuality. 
 
 But though the direct control of machinery over human labour 
 is obstructed in the earlier extractive processes by the refractory 
 uneven nature of materials, and in the final processes by the 
 nature and particular requirements of consumers, its influence 
 extends far beyond the middle processes of manufacture where its 
 prominence is greatest. Power-driven machinery plays a larger 
 part in agriculture every year: mining is the first of machine in- 
 dustries in the sense that it employs the largest amount of horse- 
 power per man; the transport trade by sea and land is mechan- 
 ised even in its minor local branches; the great public services, 
 supplying light, water, and other common wants, are among the 
 largest users of power-driven machinery; the greatest of our ma- 
 terial industries which still depends mainly upon hand labour, 
 the building and road-making group, is constantly increasing its 
 dependence on machinery for its heavier carrying work and for 
 the preparation of the metal, stone and woodwork it employs. 
 When we add the growth of new large manufactures, such as 
 chemicals and electrical apparatus, the enormous expansion of 
 the paper and printing trades under the new mechanical con- 
 ditions, the recent transference of the processes of the prepara- 
 tion of foods and drinks and laundry work from the private 
 house to the factory, we shall recognise that the net influence 
 of machinery, as determining the character of human labour, is 
 still advancing with considerable rapidity.
 
 78 WORK AND WEALTH 
 
 4. It is not easy to answer the two related questions, 'How 
 far is machinery the master, how far the servant, of the workers 
 who cooperate with it?' 'How far does machinery aggravate, 
 how far lighten the human costs of labour? ' Even when we com- 
 pare the work of the classes most subservient to machinery, 
 the feeders and tenders in our factories, with the domestic or 
 earlier factory processes under hand labour, it is by no means 
 self-evident that the net burden of the human costs has been en- 
 hanced. For, though the spinning and weaving work before the 
 industrial revolution had certain slight elements of freedom and 
 variety now absent, many of the hygienic conditions were far 
 worse, the hours of labour were usually longer, and the large em- 
 ployment of old folk and tender children, in work nearly as un- 
 varied as that enjoined by modern machinery, enslaved the en- 
 tire life of the home and family to the narrow and precarious 
 conditions of a small local trade. The real liberty of the worker, 
 as regards his work, or its disposal in the market, was hardly 
 greater than in the modern factory. 
 
 In most of the great branches of production, machinery is 
 rather an adjunct to labour than a director. The labourer in 
 charge of the machine tends more to the type of the engineer 
 than to that of the feeder or mere minder. Though the mining, 
 metal, chemical, paper, food and drink manufactures contain 
 large quantities of machinery, a large proportion of those who 
 have to deal with the machines are skilled manual labourers. 
 So in the transport trade, though the displacement of the old-time 
 sailor by the engineer and stoker, of the horse-driver by the en- 
 gine-driver and the motor-man, sometimes appears to involve a 
 degradation of labour, the issue is a doubtful one, if all the pros 
 and cons are taken into due account. As regards the employ- 
 ment of machinery in the building and contracting trades, as in 
 the mining, its first and obvious effect has been to relieve human 
 labour from much of the heaviest muscular toil. Though most of 
 such labour involves too slight elements of interest or skill greatly 
 to alleviate the physical fatigue, it cannot be said that machinery 
 has increased the burden.
 
 CHAPTER VH 
 
 THE DISTRIBUTION OF HUMAN COSTS 
 
 i. In endeavouring to estimate the human costs of labour 
 in terms of physical wear and tear and the conscious pains and 
 penalties entailed by the conditions under which many indus- 
 trial processes are carried on, we have hitherto considered these 
 costs as borne by workers, irrespective of age, sex, or other dis- 
 criminations. But it is self-evident that a given strain upon 
 muscles or nerves over a period of time will vary greatly, both 
 in the organic cost and in the conscious pain which it entails, 
 according to the strength and endurance, nervous structure, 
 physical and moral sensitiveness, of the different sorts of work- 
 ers. Indeed, a given output of productive energy will evidently 
 entail a different human cost in every person called upon to 
 give it out: for every difference of strength, skill, capacity and 
 character must to some extent affect the organic burden of the 
 task. 
 
 In endeavouring, therefore, to relate the human to the eco- 
 nomic costs of production of any quantity of material wealth or 
 services, it would be necessary to consider how far the conditions 
 of employment tend to economise human costs by distributing 
 the burden proportionately to the power to bear it. The human 
 wastes or excessive costs, entailed by conditions of employment 
 which impose unequal burdens upon workers with equal capacity 
 to bear them, or which distribute the burden unequally in tune 
 over the same set of workers, alternating slack periods with 
 periods of excessive over-time, are obvious. Unfortunately the 
 operation of our industrial system has not hitherto taken these 
 into sufficient account. Though the physical, moral and social 
 injuries, due to alternating periods of over and under work, are 
 generally admitted, the full costs of such irregularity, human and 
 even economic, are far from being adequately realised. While 
 some attempts at ' decasualisation ' are being made, the larger 
 
 79
 
 8o WORK AND WEALTH 
 
 and more wasteful irregularities of seasonal and cyclical fluctua- 
 tions are still regarded as irremediable. By the workers them- 
 selves and even by social reformers, the injury inflicted upon 
 wages and the standard of living by irregularity of employment 
 is appreciated far more adequately than the related injury in- 
 flicted on the physique and morale of the worker by sandwiching 
 periods of over-exertion between intervals of idleness. 
 
 This brief survey, however, is no place for a discussion of the 
 causes and remedies of irregular employment. It must suffice 
 to note that over a large number of the fields of industry the ex- 
 cesses and defects of such irregularity prevail to an extent which 
 adds greatly to the total human cost of the products. So far as 
 our nation is concerned, there is no reason to hold that this waste 
 is increasing. Evidence of hours of labour and of unemployment, 
 indeed, appear to indicate that it is somewhat diminishing. But 
 the unequal time-distribution of human costs must continue to 
 rank as a great enhancement of the aggregate of such costs. 
 
 2. But not less injurious than the unequal treatment of 
 equals, is the equal treatment of unequals. The bad human econ- 
 omy of working immature children is a lesson which even the most 
 ' civilised ' nations have been exceedingly slow to learn. The bad 
 human economy of working old persons of declining vigour, when 
 able-bodied adult labour is available, is so far from being gener- 
 ally recognised that employers are actually commended on the 
 ground of humanity for keeping at labour their aged employees, 
 when younger and stronger workers are available. Fortunately, 
 the larger provision for retiring pensions attests the growing 
 recognition of this aggravation of the human costs of industry. 
 In both cases alike, the employment of the young and of the old, 
 the error arises from a short-sighted view of the interests of the 
 single person or his single family, instead of a far-sighted view 
 of the welfare of the community. It is often a source of imme- 
 diate gain to a working-class family to put the children out to 
 wage-earning as early as possible, and to keep old people working 
 as long as they can get work to do. It does not pay the nation, 
 even in the economic sense, that either of these things should be 
 done. The case of child-labour is, of course, the more serious, 
 in that it evidently entails not merely a wasteful strain upon
 
 THE DISTRIBUTION OF HUMAN COSTS 81 
 
 feeble organisms, but an even heavier future cost in stunted 
 growth and impaired efficiency throughout an entire life. 
 
 When the play of current economic forces places upon women 
 work which men could perform more easily, or creates women's 
 industries with conditions of labour involving excessive strains 
 upon the organism, the double human costs are even heavier. 
 For if excessive fatigue or nervous strain affects a woman as 
 worker, the injurious costs are likely to be continued and en- 
 hanced through her capacity for motherhood. To use up or 
 damage its women by setting them to hard wage labour in mill 
 and workshop is probably the greatest human waste a nation 
 could practise or permit. For some of the prevailing tendencies 
 of modern industrialism appear to be more 'costly' in their bear- 
 ing upon women than on men. In regard to factory work, and 
 all other industrial work involving a long continuous muscular 
 or nervous strain, or, as in shop labour with its long hours of 
 standing, medical authorities are unanimous in holding that wo- 
 men suffer more than men. 1 'If a like amount of physical toil 
 and effort be imposed on women, they suffer to a larger degree/ 
 states Sir W. MacCormac. 2 Statistics of employment from va- 
 rious countries agree in showing that the amount of morbidity, 
 as measured by the number of days lost by illness, is greater 
 among working-women than among working-men, and that the 
 mortality of working-women is greater than that of working- 
 men, notwithstanding the fact that the average life of a female 
 is longer than that of a male. Long hours and speeding-up of 
 machinery thus evidently inflict graver organic costs on women 
 than on men. Where piecework is in vogue, it furnishes a stronger 
 stimulus to over-strain in women, because the general lowness of 
 their wage gives a larger importance to each addition. 
 
 3. Thus in comparing the human costs of producing a given 
 quantity of goods, due account must be taken of the distribution 
 of the output of productive energy among workers of different 
 sexes, and ages. The earlier tendency of the factory system 
 in this country, the existing tendency in some countries, has been 
 
 1 Cf. Goldmarck, Part II, pp. -126. 
 
 2 Report of the Select Committee of the House of Lords on Early Closing in Shops, 
 1901.
 
 82 WORK AND WEALTH 
 
 to impose a growing of monotonous and fatiguing labour upon 
 women and children. At certain stages in the development of 
 industrial machinery, this has been held to be a 'profitable' econ- 
 omy, and in many processes of hand labour subsidiary to the 
 factory system it still survives. Though legislation and other in- 
 fluences have done much to check the worst injuries of child em- 
 ployment in factories and workshops in more civilised communi- 
 ties, a great amount of human cost is still incurred under this 
 head. Child half-timers are still used in considerable numbers 
 in textile factories, while the vast expansion of distributive work 
 has sucked into premature wage-earning immense numbers of 
 boys who ought to be at school. It is probable that the net ten- 
 dency of British industry in recent years has been towards a 
 slow reduction of the more injurious and 'costly' forms of female 
 employment. Though an enormous number of females are en- 
 gaged in work the hours and hygienic conditions of which escape 
 legal regulation, probably a growing proportion of employed 
 women come under an economy of shorter hours. The drudg- 
 ery of domestic service engages a less number of women, while 
 the opening of a larger variety of employments both in manu- 
 facture and in commerce has somewhat improved their power 
 to resist the excessive pressure of machine-conditions. The re- 
 cent organised attack upon the 'sweated industries', however, 
 reveals the fact that at the lower level of many trades a great 
 mass of oppressive and injurious labour is extorted from working- 
 women. Certain forms of new mechanical labour, not involving 
 heavy muscular fatigue, but taxing severely the nervous system, 
 are occupying a large number of women. The type-writer and 
 the telephone have not yet been brought into conformity with 
 the demands of health. Though machinery is generally bringing 
 in its wake restrictions on hours of labour, the normal work-day 
 of factory, office and shop still imposes a gravely excessive strain 
 upon women employees. No small proportion of this excessive 
 cost of women's work, however, is attributable to legal, profes- 
 sional, or conventional restrictions, which, precluding women 
 from entering many skilled and lucrative employments, compel 
 them to compete in low-skilled and overstocked labour-markets. 
 The social waste of such sex discrimination is two-fold. Even in
 
 THE DISTRIBUTION OF HUMAN COSTS 83 
 
 trades and professions for which men have usually a greater apti- 
 tude than women, some women can perform the work better and 
 more easily than some men, and, if they are denied equal opportu- 
 nity of access, the work is done worse or at a greater human cost. 
 The refusal to admit women into the learned professions upon 
 equal terms with men undoubtedly involves a loss to society of 
 some of the finest service of the human intellect, while it en- 
 trusts some of the skilled and responsible work, thus denied to 
 women, to relatively ignorant and incompetent men. The other 
 human cost is perhaps even heavier. For the excessive competi- 
 tion, to which women are thus exposed in the occupations left 
 to them, depresses the remuneration in most instances below 
 the true level of physical efficiency, induces or compels excessive 
 hours of labour, breaks down the health of women-workers and 
 injures their life. 
 
 4. This general survey shows that the human 'costs' of la- 
 bour are closely associated in most cases with that subdivision 
 and specialisation of activities which takes its extreme form in 
 machine tending and which conforms most closely to mere 'repe- 
 tition' as distinguished from the creative branches of produc- 
 tion. But this identification of 'repetition' and human costs 
 cannot be pressed into a general law. For reflection shows that 
 repetition or routine does not always carry cost, and that on the 
 other hand some labour which has considerable variety is very 
 costly. Healthy organic life permits, indeed requires, a certain 
 admixture of routine or repetition with its more creative func- 
 tions. A certain amount of regular rhythmic exercise of the 
 same muscles and nerve-centres yields vital utility and satisfac- 
 tion. In some sports this exercise may be carried so far as to 
 involve considerable elements of fatigue and endurance which 
 are offset during their occurrence by the sense of personal prow- 
 ess and the interest of achievement, This sentimental zest of 
 endurance may notoriously be carried to extremes, injurious to 
 the physical organism. Moreover, a certain amount of narrow 
 physical routine often furnishes a relief element for the tired 
 nerves or brain. Digging or knitting, though intolerable as a 
 constant employment, may furnish by their very physical rou- 
 tine an organic benefit when applied as a recreation. The same,
 
 84 WORK AND WEALTH 
 
 indeed, is true of most other not too taxing forms of manual or 
 mental routine labour, especially if they contain some obvious 
 utility. Some slight element of skill seems needed for certain 
 natures, but a bare uninteresting repetition commonly suffices. 
 
 Such considerations dispose of the assumption that all repeti- 
 tion or routine in productive work is necessarily indicative of 
 human cost and carries no organic utility or satisfaction. It is 
 only when repetition is extended so as to engage too large a share 
 of the time and energy of a human being that it involves a cost. 
 
 So, on the other hand, it is not the case that all labour con- 
 taining variety and opportunity for skill is costless and organ- 
 ically good. Take for a notable example agricultural labour. 
 Irregularity of soil and weather, the changes and chances of 
 animal and vegetable life, the performance of many different 
 processes, remove such work from the category of exact routine. 
 Yet most of the labour connected with agriculture is, under the 
 actual conditions of its performance, heavy, dull and joyless. In 
 each process there is usually enough repetition and monotony 
 to inflict fatigue, and the accumulation of separate fatigues in a 
 long day's work, unalleviated by adequate personal interest in 
 the process or its product, makes a heavy burden of cost. 
 
 The same holds of other departments of industry where some 
 inherent elements of skill and interest are found. The total bur- 
 den of effort given out in a long day's work, continued week after 
 week, year after year, under the conditions of wagedom, greatly 
 outweighs these technical advantages. Duration and compul- 
 sion cancel most, though not all, of the superiority of such work 
 over machine tending, or clerking. A little labour in any of the 
 handicrafts, in machine-running, the management of motor-cars 
 or boats, in gardening and other modes of agriculture, serves as 
 a pleasant pastime when undertaken as a voluntary and occa- 
 sional employment. Make it regular, continuous, compulsory, 
 and the enjoyment soon vanishes. The very elements of inter- 
 est for the casual amateur often constitute the heaviest cost for 
 the worker who lives by doing this and nothing else. Take motor- 
 driving for an example. The quick exercise of nerve and muscle, 
 the keenness of eye, wrist and attention, required to drive easily, 
 quickly and safely, amid traffic or in a tangle of roads, gives
 
 THE DISTRIBUTION OF HUMAN COSTS 85 
 
 nerve and interest to driving as a recreation. But this multipli- 
 cation of little strains and risks, accumulating in a long day's 
 work, and undertaken day after day, in all conditions of health, 
 disposition and weather, soon passes from an agreeable and stim- 
 ulating exercise into a toilsome drudgery. 
 
 Consideration of the work in the distributive trades, whole- 
 sale and retail, which absorb an ever-growing proportion of our 
 wage-earners, is most instructive for understanding the respec- 
 tive parts played by specialisation, duration, and compulsion in 
 the human costs. Machinery has little direct control over the 
 work of these clerks, warehousemen, shop-assistants, typists, etc. : 
 their work contains constant little elements of variety in detail, 
 and a moderate amount of it imposes no fatigue. But the scope 
 afforded for personal skill or achievement is insufficient; most of 
 it is unmeaning and uninteresting so far as useful results are con- 
 cerned; it involves constant obedience to the orders of another; 
 and it is unduly prolonged. 
 
 5. We are now in a position to sum up the results of our gen- 
 eral analysis of the human costs of labour, in which Tarde's dis- 
 tinction between creation and imitation or repetition was our 
 starting point. So far as the merely or mainly physical costs 
 are concerned, the muscular and nervous strain and fatigue, 
 excessive repetition is a true description of the chief cause. 
 Machine tending at a high pace for a long working-day is in it- 
 self the most ' costly' type of labour, and, in so far as a machine 
 controls the sort and pace of work done by a human being, these 
 'costs' accumulate. But most work is not so directly controlled 
 by machinery, and yet is so highly specialised that the routine 
 constantly over-taxes with fatigue the muscles, nerves and atten- 
 tion. The duration and pace of such labour are usually such as 
 to heap up heavy costs of physical wear and tear and of physical 
 discomforts. 
 
 But the antithesis of creation and imitation or repetition has 
 a different significance for the interpretation of physical costs. 
 There it is not so much the absence of novelty involved hi repe- 
 tition, as the absence of personal liberty and spontaneity that 
 counts most heavily. There are, in fact, few sorts of necessary 
 productive labour which a man is not prepared to do for himself,
 
 86 WORK AND WEALTH 
 
 with some measure of personal satisfaction, if he has within his 
 own control the performance of this task and the result. But 
 when another's will and purpose supersede his own, prescribing 
 actions to be done under conditions of time, place and manner, 
 determined by that other, this servitude to another's will is al- 
 ways irksome and may be degrading. The human cost of most 
 domestic service lies largely here. The work itself has more de- 
 tailed variety and interest than most, and where the housewife 
 herself does it, it often furnishes a net fund of human satisfaction. 
 But the moral and intellectual costs of a hired servant, compelled 
 to obey the arbitrary and capricious orders of a mistress, and to 
 suppress her own will, tastes and inclinations in the execution 
 of her task, are often very heavy. In a smaller degree this applies 
 to all wage-earners engaged in any work where scope for their 
 free volition is technically feasible. To substitute another's will 
 for one's own, in matters where one has a will, is always a human 
 cost. That cost, however, need not be great. When a worker 
 is a unit of labour in some great business, his actions conforming 
 to rules which, however troublesome, belong to the system, the 
 consciousness of loss of liberty is far less than when the changing 
 will of a personal employer operating amid the details of his work 
 is the instrument of discipline. A shop-girl in a large business 
 has a feeling of greater independence than a domestic servant, 
 a factory-hand than a shop-girl, while the low wage of home- 
 workers is in part attributable to the removal of the worker from 
 the immediate domination of the employer's will. 
 
 6. In assessing the psychical elements of cost, it is well to 
 distinguish those related to a loss of liberty, or an encroachment 
 upon personality, from those which are the conscious results or 
 counterparts of the physical strains. For the enlargement of 
 certain of these psychical costs is an exceedingly important factor 
 in what is called ' industrial unrest'. This irksomeness of nar- 
 rowly specialised labour and of the 'enslaving' conditions of the 
 ordinary working life grows with the growth of intelligence and 
 sensibility among the working-classes. Under the older order, 
 of accepted class distinctions and economic status, implicit obe- 
 dience to the employer's will carried no conscious moral cost. A 
 new sense of personal dignity and value has now arisen in the
 
 THE DISTRIBUTION OF HUMAN COSTS 87 
 
 better educated grades of workers which interferes with arbi- 
 trary modes of discipline. When they are called upon to do work 
 in a way which appears to them foolish, injurious, or inequitable, 
 a sense of resentment is aroused which smoulders through the 
 working week as a moral cost. With every widening of education 
 there comes, moreover, a discontent not merely with the particu- 
 lar conditions of the labour, but with the whole system, or set 
 of conditions, which addicts so large a proportion of their working 
 hours and energies to the dull heavy task by which they earn 
 their living. So too the narrow limitation in the choice of work 
 which the local specialisation of industry involves, becomes a 
 growing grievance. The 'conditions of labour' for themselves 
 and others, taken as a whole, are realised as an invasion and a 
 degradation of their humanity, offering neither stimulus nor 
 opportunity for a man to throw ' himself ' into his work. For the 
 work only calls for a fragment of that 'self' and always the same 
 fragment. So it is true that not only is labour divided but the 
 labourer. And it is manifest that, so far as his organic human 
 nature is concerned, its unused portions are destined to idleness, 
 atrophy, and decay. 
 
 This analysis of the conditions may seldom be fully realised 
 in the consciousness of the worker. But education has gone far 
 enough to make them real factors of working-class discontent. 
 They constitute a large motive in the working-class movement 
 which we may call the revolt of the producer against the exces- 
 sive human costs of his production. 
 
 This is the great and serious indictment against the economy 
 of division of labour. Associated with it is the charge that the 
 worker in one of these routine subdivided processes has no ap- 
 preciation of the utility or social meaning of his labour. He does 
 not himself make anything that is an object of interest to him. 
 His contribution to the long series of productive processes that 
 go to turn out a commodity may be very valuable. But, as he 
 cannot from his little angle perceive the cooperative unity of the 
 productive series, it means nothing to his intelligence or heart. 
 
 So not only does the performance of his task afford him no 
 satisfaction, but its end or object is a matter of indifference to 
 him. There is this vital difference between the carpenter who
 
 88 WORK AND WEALTH 
 
 makes a cupboard or a door, fits it into its place and sees that it 
 is good, and the bricklayer's labourer who merely mixes mortar 
 and carries bricks upon a hod. A man who is not interested in 
 his work, and does not recognise in it either beauty or utility, is 
 degraded by that work, whether he knows it or not. When he 
 comes to a clear consciousness of that degradation, the spiritual 
 cost is greatly enhanced. It is true that specialisation in labour 
 is socially useful, and that, if that specialisation does not en- 
 croach too largely upon the energy and personality of the in- 
 dividual worker, he is not injured but helped by the contribu- 
 tion to social wealth which his special work enables him to make. 
 Larger enlightenment as to the real meaning and value of his 
 work, and the sense of social service which should follow, may 
 indeed be expected to reduce considerably the irksomeness of 
 its present incidence. But it can do so only upon two conditions. 
 In the first place, the duration and strain upon his physical and 
 moral nature must be diminished. Secondly, the general con- 
 ditions both of labour and of its remuneration must be such as 
 to lead him to recognise that the discipline which it enjoins is 
 conducive to a larger liberty, viz. that of willing cooperation 
 with his fellows in the production of social welfare. As yet the 
 attainment of these conditions has not kept pace with the new 
 desires and aspirations which have grown so rapidly among the 
 rank and file of workers in the advanced industrial countries. 
 Hence a new burden of spiritual costs, expressing an increased 
 divergence between conscious aspirations and the normal con- 
 ditions of the worker's lot. The education of the town worker, 
 the association with his fellows in large workshops, the life of 
 the streets, the education of the school, the newspaper, the li- 
 brary, the club, have made him increasingly sensitive to the 
 narrowness and degradation of excessive routine in joyless labour.
 
 CHAPTER VIII 
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 
 
 i. So far, in discussing the human 'costs' of production, we 
 have confined our attention to the activities of body and mind 
 directly operative in producing marketable goods or services, 
 grading them from the creative and generally 'costless' work 
 of the artist and inventor to the repetitive and 'costly' work of 
 the routine manual labourer. We now proceed to examine the 
 human costs involved in the processes of providing the capital 
 which cooperates with labour in the various productive opera- 
 tions. The economic 'costs', for which payment is made out 
 of the product to capital, are two, risk-taking and saving. What 
 are the human costs involved in these economic costs? 
 
 To clear the ground for this enquiry it will be well to begin by 
 making plain the sense in which risk-taking and saving are 'pro- 
 ductive' activities. Neither of them is 'work' in the ordinary 
 organic sense of the application of muscle or nervous energy to 
 the production of wealth. Both would rather be considered as 
 activities of the human will and judgment which increase the 
 efficiency of the directly productive operations. Their produc- 
 tivity may thus be regarded as indirect. But it is none the less 
 real and important on that account. For unless there was post- 
 ponement of some consumption which might have taken place, 
 and the application of the non-consumptive goods, which this 
 postponement enabled to come into existence, to uses involving 
 risks of loss, 'work' would be very unproductive in comparison 
 with what it is. 
 
 Risk-taking, the giving up of a present certain utility or sat- 
 isfaction for the chance of a larger but less certain satisfaction 
 in the future, is, we know, the essence of business enterprise. 
 Such enterprise by no means always entails a human cost. In 
 industry, as in all human functions, experiments, involving risk, 
 are frequently a source of vital interest and of conscious satis- 
 
 89
 
 90 WORK AND WEALTH 
 
 faction. There are two roots of this satisfaction, the staking of 
 one's judgment and skill in forecasting and determining future 
 events, and the actual joy of hazard. The former is a common 
 trait of intelligent personality, the latter a powerful, though less 
 general motive, involving a 'sporting' interest in life. The spirit 
 of adventure applied to business, enhances the conscious values. 
 Whether it be motived by some physical restlessness or by some 
 element of faith, it must be accounted an organic good, alike as 
 means and end. If all the risk-taking involved in current in- 
 dustry were of this nature, it would not then figure in our bill 
 of human costs, but on the other side of the account. But where 
 the conditions of actual business impose elements of risk that are 
 either in kind or magnitude compulsory, not voluntary, not only 
 does no satisfaction attend the taking of these risks, but consid- 
 erable loss and suffering may accrue. Risks that are either great 
 in themselves or great in relation to the capacity to bear them are 
 frequently required by the conditions of modern business enter- 
 prise. The men who undergo these risks do not deliberately or 
 with express intention stake their faith and foresight on a game 
 of gain or loss, or even enter into the risks with the gambler's 
 zest. They undergo these risks because they cannot help them- 
 selves, and the anxiety attendant on these risks is often one of the 
 heaviest psychical and physical costs of the business man. 
 
 2. In analysing risk-taking as a special cost of capital, I must 
 guard against one misunderstanding. Risk-taking, of both sorts, 
 humanly good and humanly bad, is not of course by any means 
 confined to administration of capital. Everyone who, either by 
 choice or by the necessity of his situation, devotes his personal 
 energies to making any product for the market, or to improving 
 some personal capacity with a view to its productive use, incurs 
 risks. In some cases the risks may not indeed entail real human 
 waste, as where the artist or inventor speculates with his crea- 
 tive faculty. Or the professional man, preparing for his career, 
 may willingly and with zest enter a competition in which prizes 
 are few. Men equipped with vigorous intellect and determina- 
 tion will get out of the struggle for professional or commercial 
 success a satisfaction of which the risk of failure is a necessary 
 condition. But for most men a small quantum of hazard
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 91 
 
 suffices. A little risk may stimulate but a larger risk will depress 
 efficiency. A doctor, a lawyer, an engineer is willing to put his 
 natural and acquired ability against those of his fellows in a fair 
 field where the chances of success are reasonably large. But when 
 the risks are so numerous and so incalculable as they are to-day 
 in most professional careers, the anxiety they cause must be 
 accounted a heavy human cost. The same applies to the career 
 of most modern business men. It also constitutes a new and 
 growing cost of labour. 
 
 For though it may be true that the actual risks of a working 
 life, personal or economic, are no greater than in former times, 
 the emotional and intellectual realisation of these risks is grow- 
 ing. Education enables and compels the intelligent workman to 
 understand the precarious nature of his livelihood, and his grow- 
 ing sensibility accumulates in 'worry'. This is certainly one of 
 the main sources of 'industrial unrest '. 
 
 But though risk- taking thus enters as a human cost into the 
 life of other owners of productive powers, we do right to accord 
 it special attention in relation to the supply of capital. For in 
 the provision of all forms of capital, and in the payment for its 
 use, risk-taking is an element of primary importance, and, though 
 in theory separable from the act of abstinence, postponement, or 
 waiting, which comes into prominence as the direct psychical 
 cost of saving, it is not separable in industrial practice. 
 
 3. Let us first examine the economic costs involved in the 
 provision of industrial capital. That process consists in making, 
 or causing to be made, non-consumable goods, which are useful 
 for assisting the future production of consumable goods, instead 
 of making, or causing to be made, directly consumable goods. 
 We need not discuss at length the shallow criticism pressed by 
 some socialists to the effect that since labour makes all goods 
 whether non-consumable or consumable, the only economic and 
 human cost of providing these forms of capital is the productive 
 energy of labour. For the decision and effort of mind or will, 
 which determines that non-consumables shall be made instead 
 of consumables, proceeds not from the labour employed hi making 
 them, but from the owners of income who decide to save instead 
 of spending. This decision to save instead of spending is the
 
 92 WORK AND WEALTH 
 
 economic force which causes so much of the productive power 
 of labour to occupy itself in making non-consumables. It is of 
 the first importance that the ordinary business man, to whom 
 'saving' is apt to mean putting money in a bank, or buying 
 shares, shall realise the concrete significance of his action. What 
 he is really doing is causing to be made and to be maintained 
 some addition to the existing fabric of material instruments for 
 furthering the future production of commodities. This is not, 
 as it may at first appear, a single act of choice, the determination 
 to use a portion of one's income, say 100, in paying men to 
 make steel rails or to put up a factory chimney, instead of pay- 
 ing them to make clothes, furniture, or wine for one's current 
 consumption. The effort of postponement, or the preference of 
 uncertain future for certain present consumables, necessary for 
 supplying capital, if it is an effort, is a continuous one lasting all 
 the time the capital is in use. The critic who asks, why a single 
 'act of abstinence' which is past and done with should be re- 
 warded by a perpetual payment of annual interest, fails to real- 
 ise that, so far as saving involves a serviceable action of the saver, 
 it goes on all the time that the saver lies out of the full present 
 enjoyment of his property, i. e. as long as his savings continue to 
 function as productive instruments. 
 
 This view, of course, by no means begs the question whether 
 there is of necessity and always some human cost or sacrifice 
 involved in such a process of saving. It is, indeed, clear that a 
 good, deal of capital may be supplied without any human costs 
 either in postponement of current satisfaction or in risk-taking. 
 The squirrel stores nuts by an organic instinct of economy 
 against the winter, as the bear stores fat. The thrifty housewife 
 lays up provisions by a calculation hardly less instinctive against 
 the probable requirements of the family in the near future. The 
 balancing of future against present satisfaction, involved in such 
 processes, cannot be considered as involving any human cost, 
 but rather some slight balance of utility. I am certainly in no 
 sense the loser in that I do not lay out all my income the same 
 day that I receive it in purchasing immediate satisfaction. Why 
 I am not the loser is evident. The first 5 per cent of my income 
 I can perhaps spend advantageously at once upon necessaries
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 93 
 
 and comforts which contribute immediately to my welfare. But 
 if I know the sum has got to last me for six months, it will evi- 
 dently pay me in organic welfare to spread nearly all the rest in 
 a series of expenditures over the whole period, so that I may have 
 these necessaries and comforts all the time. If my income is no 
 more than just sufficient to keep me in full health, i. e. in provid- 
 ing vital 'necessaries', organic welfare demands a quite even ex- 
 penditure, entailing the proper quantity of postponement. If 
 there is anything over for expenditure on unnecessaries, this will 
 not be quite evenly spread over the six months. For any com- 
 forts it affords appear to bring more pleasure if enjoyed now than 
 in three or six months' time. 1 And, besides, there is the question 
 of uncertainty of life, upon the one hand, and the risk of being 
 unable to get hold of the future comforts when I may want them. 
 This depreciation of future as compared with present satisfaction 
 and these risks will properly induce me to grade downwards the 
 expenditure on comforts during the period in question. But in 
 this laying out of my income, so as to secure for myself the max- 
 imum of satisfaction and utility, 2 there is no human cost or 
 sacrifice. On the contrary, any failure to 'save' or 'postpone* 
 might be attended by a heavy cost. Many a savage has died 
 of starvation because he has gorged to repletion instead of storing 
 food to tide him over till he gets possession of a new supply. Thus 
 this simplest economy of saving, the spreading of consumption 
 over a period of time, is evidently costless. 
 
 4. Now, though the saving which consists in keeping stores 
 of consumables for future consumption does not furnish what 
 would be called capital, and so does not come directly within the 
 scope of our particular enquiry into 'costs of capital,' it gives a 
 useful test for the economy of saving under modern capitalism. 
 The modern saver does not, indeed, usually keep in his possession 
 for future consumption a store of consumable goods. It would 
 
 1 Observe that this appearance is illusory. The maximum of organic utility 
 would probably involve an even expenditure of all the elements of income with- 
 out allowance for my preference of present over future. 
 
 2 It may be urged that, even in respect of necessaries, there will be some discount 
 for future as compared with present consumption. But in any class of civilised men, 
 whose income is paid at long intervals, this discount will be very small and may 
 be ignored.
 
 94 WORK AND WEALTH 
 
 be inconvenient to store them, many of them are by nature 
 perishable and so incapable of storage. Besides, modern indus- 
 try affords him a way of making industrial society store them for 
 him, or, more strictly, makes it produce a constant supply of 
 fresh consumables to which he can get access. Nay, it provides 
 still better for his needs, for it enables him, by postponing some 
 present consumption to which he is entitled, not merely to take 
 out of the constant social supply the full equivalent of his post- 
 poned consumption at any time he chooses, but to receive an 
 additional small regular claim upon other consumptive or pro- 
 ductive goods, called interest. 
 
 This extra payment was regarded by the classical economists 
 as a cost or price paid for an effort of abstinence. More recent 
 economists have usually chosen to substitute for abstinence 
 'waiting' or some equally colourless term. But abstinence is 
 better, for it does suggest a painful effort involving some human 
 cost, some play of motives naturally adverse to saving which re- 
 quires to be overcome by a positive economic payment. Thus, 
 not merely the economic, but the moral or human necessity of 
 interest is best asserted. 
 
 This abstinence or postponement of possible present consump- 
 tion of commodities is admittedly the condition or even the cause 
 of the supply of the productive instruments which increase the 
 production of future wealth and incidentally furnish the fund out 
 of which the interest is paid. For our present purpose, then, it 
 makes no difference whether we look at the primitive saving which 
 stored consumables for future use, or the modern saving which 
 causes productive instruments to be created, applied and main- 
 tained. The question whether there are human costs of saving, 
 and what they are, is in the last resort the same in both cases. 
 
 Out of any individual, or social, income a certain amount or 
 proportion of saving evidently may be 'costless' in the human 
 sense. That is to say, the person or society that saves it sustains 
 no organic loss or injury by doing so, though he may sometimes 
 think or feel he does. If he does so think or feel, society must 
 set a counter-weight against this false imaginary loss, in the shape 
 of interest. But, as we have already noted, there is a good deal 
 of saving which represents the calculated outlay over a period of
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 95 
 
 time, which the owner of an income will make in his own interest. 
 In such cases there is no human cost, and if an economic cost 
 (interest) is defrayed, it has no human correlative. From the 
 standpoint of human distribution of wealth it involves a waste. 
 
 The organic utility to individuals of hoarding, in order, by 
 distributing consumption over a longer period of time, to get 
 from it a larger aggregate of goods, will thus furnish a consider- 
 able quantity of instrumental capital to modern industry. For, 
 only by putting the postponed consumption into the form of in- 
 strumental capital, can the savers establish the lien they want 
 upon the future output of consumables. If all the required cap- 
 ital could be got by this simple play of motives, the savers bal- 
 ancing more useful future units of consumption against less useful 
 present units, with due allowance for risks connected with post- 
 ponement, the supply of capital would be humanly 'costless.' 
 Though some element of risk, inherent in the proceeding, would, 
 - taken by itself, carry a cost, the superior utility attaching to the 
 postponed units of consumption, as compared with that which the 
 same number of units would afford when added to the consump- 
 tion already provided, would offset that cost, so that the 
 arrangement, as a whole, would be costless. 
 
 5. Though the method of our analysis has obliged us to ap- 
 proach this problem of saving as part of our enquiry into proc- 
 esses of production, because it is the means by which a produc- 
 tive factor, viz. capital, is supplied, it appertains directly to 
 the process of consumption, or outlay of income on consumables. 
 As the current expenditure of any member of industrial society 
 will be distributed among a number of different purchases, con- 
 tributing by natural, conventional, or purely personal connec- 
 tions, towards a standard of consumption endowed with maxi- 
 mum utility (or what the consumer takes for such), so will it be 
 with the distribution of expenditure over points of time. Let 
 us elevate into a clear conscious policy of calculation what is in 
 large measure a blind instinctive conduct, and the organic relation 
 between the two ' economies ' is apparent. It involves an intricate 
 balancing of larger future utilities, weighted by risks, against 
 smaller present utilities not so weighted. To take the simplest 
 instance. If, out of an income of 600 coming in this year, I
 
 96 WORK AND WEALTH 
 
 decide to consume 500 in the current expenditure of the year 
 and to put aside 100 for consumption in five years' time (when 
 I purpose to work only half-time and earn only half my present 
 income), I shall have estimated that the luxuries which I could 
 buy this year by the sixth hundred pounds expenditure are 
 slightly less agreeable or 'useful' to me than the comforts pur- 
 chasable by the fourth hundred pounds as visualised five years 
 off, with an allowance for the chance that I may then be dead, or 
 that I may have come into a legacy which renders this postpone- 
 ment of consumption unnecessary. In a word, this economic ego 
 must be conceived as operating by a plan of outlay which, in 
 regard to the disposal of the current income, has a longitude and 
 latitude of survey and valuation. Just as the different ingredients 
 of present consumption make a complex organic whole with del- 
 icately proportioned parts, the size and form of each dictated by 
 the unified conception of the current standard of comfort, so 
 the disposition of the income over a series of points of time in 
 which present values of each several consumable and of the 
 whole standard are compared with future values, involves the 
 similar application of a plan for the realisation of my economic 
 ideal. Though a fully rational conception and calculus, either 
 for the composition of current expenditure or for prospective 
 outlays, is very rare, some half-conscious, half-instinctive cal- 
 culus of the sort must be accredited to everybody. 1 So far as it 
 is rightly conducted by their reasoning or just instinct, it means 
 that, out of all or most of the members of an industrial society, 
 some humanly costless saving could be got, some contribution 
 towards the socially desirable fund of capital. 
 
 6. As, then, we have seen that a certain proportion of the 
 various current activities, which are directly productive in the 
 shape of skilled and unskilled labour of brain and hand, are 
 either humanly costless or carry some positive fund of human 
 utility, so is it also with the processes of saving and risk-taking, 
 which go to the supply and maintenance of capital. It is not 
 difficult to conceive a society in which all the saving needed for 
 the normal development of industry might be costless. In a 
 primitive society, based chiefly on agriculture and simple handi- 
 1 For a discussion of the nature and limitations of this calculus see Chapter XXI.
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 97 
 
 crafts, one might find the bulk of the working population earn- 
 ing a secure and sufficient livelihood, but with no margin of sav- 
 ings for instrumental capital. The comparatively small amount 
 of such capital as was needed might be furnished mainly or en- 
 tirely from the surplus incomes of a landowning or a governing 
 class, extracted as rent or taxes. Of course, if, as would com- 
 monly occur, such rents or taxes were extorted from the peas- 
 antry by starving them or by imposing a burden of excessive 
 toil, the human costs of such saving would be very heavy. But 
 where a class of feudal lords drew moderate rents and fines from 
 their tenants, or where a governing caste, such as the Incas in 
 ancient Peru, applied to useful public works a large share of what 
 would be called the 'economic rent' of the country, taken in taxa- 
 tion, such saving need entail no human cost. Nor is such costless 
 provision of capital necessarily confined to a society living under 
 simple industrial conditions in which comparatively little saving 
 can be utilised. Even in an advanced industrial society the large 
 incessant increments of capital might be provided costlessly. For 
 if the national dividend were not only very large but so well or 
 equably distributed, as income, that all classes had more than 
 enough to satisfy their current organic needs, such a society would, 
 by a virtually automatic economy, secrete stores of capital to 
 meet the future needs of a growing population or a rising standard 
 of consumption, as every animal organism naturally lays up 
 stores of fat, muscle and physical energy, for future use. 
 
 A well-ordered socialistic state, were such possible, would cer- 
 tainly apply the industrial forces at its disposal, so as to secure 
 an adequate supply of costless capital. After making proper 
 provision out of current industry for the physical and moral 
 health of the whole population, and for normal progress in per- 
 sonal efficiency of work and life, it would apply the surplus of 
 industrial energy to improving the capital fabric of industry so 
 as to provide for the production of increasing wealth, leisure, 
 and other opportunities in the future. The calculation, as to 
 what proportion of current industrial energy should be thus ap- 
 plied to preparing future economic goods to ripen for utility at 
 various distances of time, would of course be a delicate opera- 
 tion. But so far as it were correctly carried out, it would be
 
 98 WORK AND WEALTH 
 
 socially costless. For on the hypothesis that adequate provision 
 for current needs of individual stability and progress had been 
 a first charge on the industrial dividend, the postponement of 
 any additional consumption involved in social saving could not 
 rightly be regarded as involving any net human cost. For, if, 
 instead of the surplus being saved, it had been paid out to in- 
 dividual members of society for current consumption, it would 
 ex hypothesi be unproductive of organic welfare, being applied in 
 an injurious and wasteful attempt to force the pace of advances 
 in the current standard of living. Applying the organic meta- 
 phor, one would say that it was a natural function of an organ- 
 ised society to secrete capital in due quantity for its future 
 life. 
 
 7. But how far can it be held that an industrial society like 
 ours is so organised as 'naturally' to secrete the 'right' quantity 
 of capital, to provide it in a costless way, and to distribute it 
 economically among its various uses? A full answer to these 
 questions must be deferred until our analysis of the consumption 
 side of the national dividend enables us to assess the human 
 utility of the productive work to which capital is applied. At 
 present we must assume the utility of the 300,000,000 of savings 
 applied out of the aggregate national income to the enlargement 
 of industry, and confine ourselves to enquiring what proportion 
 of this amount is likely to be 'costless' and how to estimate the 
 'human costs' attached to the other part. It is, of course, quite 
 evident that such answer as can be given is of a general and spec- 
 ulative nature, with no pretence at quantitative exactitude. 
 
 In considering savings with an eye to discovering the human 
 costs, it will be well to classify these savings under three heads. 
 First will come what may be termed the automatic saving of the 
 surplus income of the rich, that which, remaining over, after all 
 wants, inclusive of luxuries, are satiated, accumulates for invest- 
 ment. The proportion of new capital proceeding from this 
 source will vary with the amount and regularity of such income, 
 its distribution among the rich, and their attitude of mind to- 
 wards the expenditure of their incomes. The automatic or spon- 
 taneous character of this saving is due to the fact that no close 
 relation exists between progress in industry and the evolution
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 99 
 
 of a personal standard of consumption. Sudden rapid advances 
 of income are not usually accompanied by a corresponding pres- 
 sure of new personal wants tending immediately to absorb in 
 increasing expenditure each increase of income. Though no 
 limit can be set upon the expenses of a luxurious standard of con- 
 sumption and the vagaries of personal extravagance, expensive 
 habits take time for their establishment, and in a progressive in- 
 dustrial society where skilful, or lucky, business men are making 
 fortunes rapidly, their acquisitive power will be apt to run far 
 ahead of their consumptive practice. Moreover, the absorption 
 in the practice of making money evidently retards the full ac- 
 quisition of habits of lavish expenditure, giving full scope to the 
 development neither of tastes nor of opportunities. This will 
 be particularly true of incomes growing not by regular incre- 
 ments but by sudden rushes. Extreme instances abound in the 
 recent history of America. Where the quick skilful seizure of 
 new sudden opportunities, conjoined with a general development 
 of national resources at an abnormally rapid pace, enables a 
 Jay Gould or a John D. Rockefeller to amass millions within a 
 few years, a wide natural divergence is created between income 
 and expenditure. Enormous masses of unspent income thus roll 
 up into capital which again continually grows by the accumula- 
 tion of the unspent interest it earns. Though the number of 
 persons in this position of financial magnitude is very few, a 
 considerable class of successful business men in America and in 
 every advanced European country comes into the same category 
 as regards capacity of saving. While their personal and family 
 expenditure may be continually rising, it will tend to keep in 
 safe adjustment to what may be termed a conservative estimate 
 of their income. The occasional great trading coups, the enor- 
 mous profits of a commercial or financial boom, will not even tend 
 to be assimilated in expenditure. 
 
 Wherever the economic circumstances of a country are such 
 as to throw a large proportion of the growing wealth into the 
 hands of a class of busy rising men, by a series of great windfalls 
 or more or less incalculable increments, the new capital flowing 
 from these superfluous incomes will be large. Moreover, so far 
 as it is automatic, it will have little if any regard to rate of in-
 
 ioo WORK AND WEALTH 
 
 terest, and thus to 'social demand', so far as interest can be 
 considered a just index of social demand. 1 
 
 Even when the element of fluctuating or fortuitous increase 
 of income is not present, a fairly rapid advance of income, par- 
 ticularly where it is 'earned' and therefore carries no presump- 
 tion of indefinite continuance, will ordinarily leave a considerable 
 margin of automatic saving. This will be larger where the stand- 
 ard of living is already established on a high level. For though 
 certain curious psychological traits seem to show an extraordi- 
 nary concentration of personal interest in the extravagances 
 which give personal distinction in 'society', the low pressure of 
 organic utility, or the emergence of positive disutility inherent 
 in many of these forms of luxury, must be considered to exer- 
 cise some check. Putting the matter simply, one would say that 
 real primary human needs are more readily assimilated in a stand- 
 ard of consumption than purely conventional or positively in- 
 jurious modes of expenditure. So, making every allowance for 
 the depravity of tastes and the zest for competitive extravagance, 
 it will remain true that the classes with large incomes will tend 
 to contribute to capital a large amount of surplus income by a 
 process of automatic accumulation. 
 
 For such saving there is neither an economic nor a human cost 
 involved : the interest it receives is in the economic sense as much 
 a 'surplus' as the rent of land. Not merely is there no human 
 cost, there is a positive human utility in such saving, for it is an 
 instinctive rejection of the injurious effort to incorporate this 
 surplus in a current expenditure already adequate to satisfy all 
 felt wants, good or bad. 
 
 It is likely that a large and a growing proportion of the total 
 volume of saving in England and in the Western world is of this 
 order. For though it may not be generally true that the rich 
 are growing richer and the poor poorer, it is probably true that 
 both a larger quantity and a larger proportion of the national 
 income are in the hands of rich and well-to-do business men 
 whose means have been advancing faster than their expenditure. 
 
 1 ' So ingrained is the habit of accumulatibn among the prosperous classes of 
 modern society, that it seems to proceed irrespective of the rate of interest.' Taus- 
 sig, Principles of Economics, Vol. II, p. 27.
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 101 
 
 8. So much for the automatic saving of the rich. We have 
 next to take into account the admittedly large contribution of 
 the classes who in respect of income are 'middle'. This com- 
 prises the great majority of families engaged in the directive 
 work of manufacture and commerce, and almost the whole of the 
 upper grades of the professional and official classes in such a 
 country as ours, as well as a considerable number of persons of 
 moderate 'independent' means. A certain amount of conscious 
 'thrift' is traditional in these classes. It is by no means auto- 
 matic, but involves for the most part some conscious sacrifice of 
 current satisfaction in favour of a greater estimated future sat- 
 isfaction to the saver or his family. The motives which influence 
 such saving, alike in its amount and its application as capital, 
 are complex and various. But the sacrifice ascribed to such sav- 
 ing cannot be assumed to involve any economic cost, in the sense 
 that it requires the payment of economic interest to evoke it. 
 Still less can it be assumed to involve a human cost. A good deal 
 of this middle-class saving, though less automatic than the sav- 
 ings of the rich, is a calculated postponement of some expendi- 
 ture which might purchase present comforts or luxuries, in order 
 to make provision for the purchase of necessaries or conveniences 
 at some future time. In a word, it is of the nature of the ' stock- 
 ing' saving, which the better-to-do peasants have always prac- 
 tised before the opportunities of profitable and fairly safe in- 
 vestment were open to them. Though utilised to earn interest, 
 the saving would be made just the same if no objective interest 
 were attainable, provided it were tolerably secure against pillage 
 or destruction. Risk counts for more than interest in such sav- 
 ing, and the bulk of the so-called interest which such savings de- 
 mand, as a condition of loan or investment, is not true interest 
 but insurance. But in practice inseparable from such saving is 
 that undertaken with the direct object of earning interest upon 
 the capital. A great deal of middle-class saving, and some saving 
 of the rich class would not take place without the hope of receiv- 
 ing interest. If no interest were attainable, though some saving 
 might take place, in order to provide against the possibility of 
 a total collapse of current earning power and a consequent dep- 
 rivation of the necessaries of life, there would be little disposi-
 
 102 WORK AND WEALTH 
 
 tion to give up any present free expenditure on comforts in order 
 to provide for future comforts which might not be wanted, or 
 which, in consequence of loss of savings, might not be procurable. 
 A positive bonus in the shape of interest seems necessary to evoke 
 this latter saving. The operation of this bonus as an inducement 
 is, however, very complex. It might appear at first sight ob- 
 vious that, the larger the bonus in the shape of rate of interest, 
 the greater the aggregate of saving it would evoke. So far as 
 non-automatic saving is motived by a general desire to be better 
 off in the future, in order to attain a standard of consumption 
 and of social consideration which denote success and satisfy per- 
 sonal ambition, or in order to bequeath a large estate to one's 
 family, higher interest will tend to evoke a corresponding in- 
 crease of saving in those whose current incomes enable them to 
 save considerable sums without encroaching upon their estab- 
 lished standard of comfort. Young or middle-aged men, of an as- 
 piring nature and with rising incomes, will undoubtedly save more 
 if they see a handsome return on their investments. But, as most 
 men will realise more clearly and feel more keenly these future 
 economic and social gains if the full fruits of such savings will be 
 reaped by themselves, not by their heirs, ageing men will be 
 likely to respond less freely to this motive. Present comfort, 
 security, and power, will mean more to them than a future liber- 
 ality of living which they can only hope to enjoy for a few years, 
 if at all. The amount, therefore, of the acceleration of saving 
 achieved by a rise of interest will depend a good deal upon the 
 relative importance this general desire to be better off possesses 
 as an inducement to save. That relative importance again will 
 depend a good deal upon whether the economic and social con- 
 ditions of the community place considerable numbers of younger 
 business or professional men in a position of rising incomes and 
 of considerable saving power, or, on the contrary, confine such 
 surpluses chiefly to older men. 
 
 If, instead of taking as our motive a general desire to be better 
 off, we take a desire to save in order to make some limited 
 specific provision, as for example to buy an annuity of 100, the 
 effect of a higher rate of interest upon volume of saving is likely 
 to be different. Though it may serve to quicken in some degree
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 103 
 
 the pace at which the sum required will be amassed, it will re- 
 duce the absolute amount of saving. For when interest is higher, 
 the capital sum required to yield an annuity of 100 a year will 
 be less than before. Against this, however, must be set the fact 
 that, when a definite sum is needed in order to pay off some debt, 
 or to furnish a sufficiency for retirement, a high rate of interest 
 may be required in order to make this saving possible or certain. 
 If a man cannot save enough to attain such definite object, he 
 will not save at all, for an insufficient amount will be held futile; 
 whereas, if a rise of interest gives him a good prospect of saving 
 the required amount, he will put forth the effort. 
 
 9. But making due allowance for counteracting motives, it 
 is tolerably certain that a rise of interest, showing any signs 
 of continuance, will stimulate an increase of 'motived' saving, 
 though by no means a proportionate increase. Thus it will ap- 
 pear that, so far as this large section of middle-class saving is 
 concerned, some definite measurable economic costs, in the sense 
 of deprivation of current consumption, are involved, requiring 
 compensation in the shape of interest. But the question which 
 concerns us is whether there are human costs corresponding to 
 and involved in these economic costs. In answering this ques- 
 tion, it is not enough to point to the admitted fact that this sav- 
 ing involves the failure to satisfy some current desire for increased 
 consumption. It has to be considered whether the sacrifice of 
 current 'satisfaction' is really a sacrifice of welfare, either from 
 the standpoint of the saver, or of the society of which he is a mem- 
 ber. For we have not taken the view that the personal transient 
 desires and valuations of consumers are a final criterion, either 
 of personal or social welfare. If then the saving evoked by pay- 
 ing interest merely means that certain fairly well-to-do folks ab- 
 stain from comforts or luxuries, which, though agreeable and inno- 
 cent, carry no organic benefit, there is no human cost, or even 
 if there is some slight cost, it may be offset by the individual or 
 social benefit resulting from the postponement of consumption. 
 A large proportion of motived middle-class saving undoubtedly 
 falls within this category. But by no means all. A good deal 
 of lower middle-class saving eats into certain factors of humanly 
 serviceable expenditure, particularly expenditure in education
 
 io 4 WORK AND WEALTH 
 
 of the young. Frequently it injures the free life of the home by 
 the constant pressure of niggling economies, which, though not 
 perhaps injurious in the particular privations they impose, leave 
 no margin for the small pleasures and amenities which have 
 a vital value. Even though we assume that such saving brings, 
 in the ownership of property and the interest it yields, a full 
 vital compensation to the individual who saves, it by no means 
 follows that it is socially justified, when a true criterion of social 
 welfare is applied. Take for instance the saving which is di- 
 verted from expenditure on education, precluding the children 
 from getting a university or professional training and turning 
 them on the world to earn a living, less effectively equipped than 
 they might have been. Society may be a heavy loser by its 
 policy of evoking such thrift by means of interest, for it obtains 
 a certain amount of material capital in place of the more valua- 
 ble intellectual or moral capital which the money, expended upon 
 education, might have yielded. Even regarded from the stand- 
 point of future economic productivity, the stimulation of this 
 sort of saving is likely to be injurious. 
 
 10. Far graver importance attaches to this consideration when 
 we approach the savings of the working-classes. The contribu- 
 tion made from this source to the flow of fresh capital, the 
 300,000,000 per annum, is evidently attended by heavy human 
 costs. Very little of it can be regarded as the considered reason- 
 able outlay over a long period of time of income not needed for 
 current organically useful consumption. Most of it involves a 
 stinting of the prime necessaries or conveniences of life, or of 
 some rise in present expenditure which would promote the health 
 or efficiency of the family. Almost the only saving made by 
 ordinary wage-earners not attended by this human sacrifice is 
 that applied by young workers, who having only themselves to 
 keep, can afford to set aside some portion of their pay in full em- 
 ployment so as to furnish a future home, and to insure against 
 a few special emergencies involving loss of earning power or ex- 
 penses connected with death or sickness. Even such personally 
 serviceable insurances the married worker can seldom properly 
 afford. Though the narrower view of the economy of a self- 
 sufficing family may appear to justify savings made out of a
 
 HUMAN COSTS IN THE SUPPLY OF CAPITAL 105 
 
 wage the entire present expenditure of which can be applied to 
 purposes of organically useful consumption, the wider social 
 standpoint does not endorse this policy. For a workman to 
 pinch on housing, clothing, the education of his children, or upon 
 wholesome recreation, in order to avoid worse pinching in some 
 unforeseen but probable emergency, may be sound individual 
 economy. But, unless society is unable from other resources at 
 its disposal to provide against these emergencies of working- 
 class life, it is an unsound social economy, involving a heavy net 
 cost of social welfare. The issue is a very vital one. It may be 
 stated in this concrete form. Most of the savings effected in this 
 country out of a family income of 3o/ or less per week, and much 
 of the savings made out of a larger income when the worker's 
 family is young, involve a sort of abstinence which is fraught 
 with heavy net costs in the social economy. No part of the 
 economically necessary fund of annual capital ought to be drawn 
 from this sort of saving. It is literally a coining of human life 
 into instrumental capital, and the degradation of the term 
 'thrift' in its application to such saving is a damning commen- 
 tary upon the false standard of social valuation which endorses 
 and approves the sacrifice. The great risks of loss which actu- 
 ally attend such saving, and the heavy expenses of the machinery 
 of its collection and administration, aggravate the waste. If we 
 ascribe 50,000,000 l out of the 300,000,000 to this class of 
 savings, a proper social book-keeping would put the human costs 
 of this working-class abstinence as a large offset to the net utility 
 of the other 250,000,000. The forethought, endurance, and other 
 real or supposed benefits to the character of the workers imputed 
 to this ' thrift ' can no more be regarded as a compensation for such 
 social injury, than can the discipline and fortitude of soldiers 
 be regarded as a testimony to the net human economy of war. 
 
 1 This is most likely a gravely excessive estimate. Probably 30,000,000 or 
 YIO of the national saving would be nearer the mark. Moreover, a large proportion 
 of working-class savings is not destined to purposes of permanent investment but 
 to provision for some early probable emergency, e. g. burial or unemployment which 
 will cancel the saving. There exist no approximately reliable estimates of the 
 amount of capital belonging to the working-classes. The usually accepted figure in- 
 cludes under the head of Post Office Savings Bank and Building Societies a large but 
 unknown quantity of middle-class savings.
 
 CHAPTER IX 
 
 HUMAN UTILITY OF CONSUMPTION 
 
 i. When we turn to the other side of the account, the human 
 utility which this 2,000,000,00x3 of goods and services repre- 
 sents, we enter a country which, as we have already recognised, 
 Political Economy has hardly begun to explore. For though the 
 trend of a large modern school of economists has been to find in 
 consumption the vis matrix of all economic processes, and to 
 bring close study to bear upon the pressure of consumers' wants 
 as they operate through demand in the markets of commodities, 
 this volte face in the theory of values does not render much assist- 
 ance to our human valuation. For their analysis of demands 
 does not help us to interpret expenditure in terms of human util- 
 ity. As an instrument for such a purpose it is doubly defective. 
 For, in the first place, it is concerned entirely with the actual 
 felt wants and preferences which in fact determine purchases. 
 In the second place, it takes for granted the existing distribution 
 of incomes or consuming power, tracing the operation of this 
 power of demand upon the actual economy of economic processes. 
 Now these limitations, quite necessary for the purely economic 
 interpretation, are not suited to our requirements. 
 
 The current standard of valuations and of choice cannot be 
 taken as an adequate standard of individual or social welfare. 
 Felt wants, and demands based on them, form no doubt some in- 
 dex of welfare, but an insufficient one. 
 
 A considerable proportion of the goods and services included 
 in the real income which we are analysing must from our stand- 
 point be classed not as wealth, but as 'illth', to adopt Ruskin's 
 term. What proportion we should place in the category will of 
 course depend upon the degree to which we hold that the actual 
 evolution of the arts of consumption has been distorted from its 
 'natural' course. But everyone will admit that many sorts of 
 marketable goods and services are injurious alike to the individ- 
 
 106
 
 HUMAN UTILITY OF CONSUMPTION 107 
 
 uals who consume them and to society. A large proportion of the 
 stimulants and drugs which absorb a growing share of income in 
 many civilised communities, bad literature, art and recreations, 
 the services of prostitutes and flunkeys, are conspicuous instances. 
 Not merely does no human utility correspond to the economic 
 utility ascribed to such goods, but there is a large positive dis- 
 utility. The aggregate human value of a growing national in- 
 come may easily be reduced by any increase in the proportion 
 of expenditure upon such classes of goods, and tendencies of dis- 
 tribution which lead to such proportionate increase may even in- 
 validate the assumption that social welfare upon the whole grows 
 with the growth of the national dividend. We shall presently ' 
 consider some of the factors in our social structure which bring 
 about the development of definitely bad demands and bad prod-^ 
 ucts to satisfy them. 
 
 But just as we must write to the debit side of our human ac- 
 count a great many articles which figure on the credit side in 
 ordinary economic book-keeping, so we shall be compelled to 
 revise the comparative values attached to those articles which 
 contain actual powers of human utility. A valuation which sets 
 an equal value upon each part of a supply because it sells for 
 the same sum cannot serve the purposes of a human valuation. 
 For the amount of human utility, individual or social, attaching 
 to the consumption of any stock of goods or services, must evi- 
 dently depend in large degree upon who gets them and how much 
 each consumer gets, that is to say upon their distribution. 
 
 The same goods figure as necessaries of life or as waste accord- 
 ing to who gets them. Some quarters of the same wheat supply 
 furnish life and working energy to labourers, other quarters pass 
 unconsumed into the dustbins of the rich. 
 
 There is, moreover, a third consideration which counts in the 
 process of converting economic into human values. As in the dis- 
 tribution of productive energy human economy requires an ad- 
 justment to the individual capacity of production, so in the dis- 
 tribution of consumptive utilities a corresponding regard must 
 be paid to the natural or acquired capacity of the individual con- 
 sumer. Some persons have greater natural capacity than others 
 for the use or enjoyment of certain classes of goods, material or
 
 io8 WORK AND WEALTH 
 
 immaterial. An absolutely equal distribution of bread, or any 
 other necessity of life, on a per caput basis, would evidently be a 
 wasteful economy. What applies to the prime physical wants 
 will apply more largely to the goods which supply 'higher' wants. 
 For, as one ascends from the purely animal to the spiritual wants, 
 the divergences in capacity of utilisation will grow. This does 
 not necessarily imply very wide differences in the aggregate 
 quantity of wealth which can be usefully consumed by different 
 persons, because deficiencies in some tastes or capacities may be 
 compensated by development of others. Moreover, the widest 
 personal differences will usually lie outside the range of economic 
 satisfaction. Yet even among economic consumers there will 
 be considerable differences in the amount of organic service or 
 satisfaction that different persons can get out of the same amount 
 of goods. A noble work of art, as Ruskin insisted, has no value 
 for primitive peasants without cultivated tastes. The finest 
 library of serious literature has little value to-day in an ordinary 
 English industrial town. But it is needless to multiply examples 
 to illustrate the truth that the vital value got from any stock of 
 consumable wealth must depend upon the capacity of those into 
 whose hands it passes to make a good use of it. In other words, 
 it depends upon how far the consumer has acquired the art of 
 consumption. Nor is this merely a question of developing and 
 cultivating sound tastes in a class or a people. It is often a mat- 
 ter of knowledge how to extract and utilise the utility which goods 
 contain. It is sometimes pointed out that over 90 per cent of 
 the heating power of coal burned in domestic fires is wasted. 
 Improved grates, or the substitution of some central heating 
 system, might stop a considerable portion of this waste, securing 
 an increase of heating power and of its vital value out of each 
 ton burned. 
 
 2. Until we know then 'What are the concrete goods repre- 
 sented by the 2,000,000,000 income? How are they appor- 
 tioned among different classes of the consuming public? How 
 far are those who get these goods qualified to get the vital value 
 out of them?' we cannot compute, even in general terms, the 
 aggregate human utility they carry. 
 
 Our calculus of the human utility of consumption will thus in
 
 HUMAN UTILITY OF CONSUMPTION 109 
 
 form and method closely correspond with our calculus of the 
 human cost of production. Taking as the subject-matter of our 
 analysis the goods and services constituting the real income of 
 the nation, our analysis of production endeavoured to apply 
 two criteria, one relating to the Arts of Production actually em- 
 ployed, the other to the Distribution of the productive efforts 
 involved in the employment of these arts. Similarly, our analy- 
 sis of consumption rests upon the application of like criteria 
 to the Arts of Consumption and the Distribution of consuming 
 power. 
 
 In the productive analysis, considerations of the methods of 
 industry, in relation to the quantity of creative and imitative, 
 interesting and repellent work, the use of machinery and sub- 
 divided labour, the elements of forethought, risk-taking, and or- 
 ganisation, length of the work-day, regularity of employment, 
 apportionment of routine industry among the grades and classes 
 of producers, are found to be the main determinants of the sum 
 of human costs. A similar analysis, applied to the consideration 
 of the standards and methods of consumption prevailing among 
 the different grades and classes of consumers, and to the distribu- 
 tion of consuming power among these classes as to amount and 
 regularity, will yield a sum of human utility. 
 
 But in approaching the arts of consumption, we find they have 
 not developed in the same way as the arts of production. 
 
 Starting from primitive society with the practically self- 
 sufficing family-group, where everybody took a hand in the 
 different sorts of work and a share in the consumption of the 
 different products, we find ourselves carried along a career of con- 
 tinual differentiation of labour not attended by any correspond- 
 ing differentiation of consumption. Industry passes into large co- 
 operative forms outside the single family, with constantly finer 
 division of labour. But consumption is still chiefly carried on 
 within the limit of the single family, 1 and, so far from being 
 specialised, it becomes more generalised. This contrast of man 
 
 1 Collective or cooperative consumption outside the home or family is of course 
 increasing. Not only have we municipal supplies for public use, e. g. schools, libra- 
 ries, museums, parks, baths, lighting, etc., but many forms of private expenditure of 
 income on educational, recreative, philanthrophic and other cooperative modes of 
 consumption.
 
 no WORK AND WEALTH 
 
 as producer and consumer is of the first importance. Modern 
 industrial evolution shows a man becoming narrower and more 
 specialised on his producing side, wider and more various on his 
 consuming side. As worker, he is confined to the constant repeti- 
 tion of some section of a process in the production of a single 
 class of article. As consumer, he is in direct contact with thou- 
 sands of different sorts of workers in all parts of the world, and 
 by his various consumption applies a direct stimulus which vi- 
 brates through the whole industrial system. As producer he is 
 'the one', as consumer 'the many'. 
 
 This diverging tendency in the economic evolution of man has 
 important human implications which will concern us later. At 
 present it concerns us in its bearing upon the arts of consumption. 
 
 3. The great complex unit of productive activities which 
 engaged our attention was the Business. Productive economy, 
 the amount of human cost involved in the production of a given 
 quantity of goods, depended, as we saw, upon the structure and 
 working of this Business. What is the consumptive unit that 
 corresponds to the Business? It is the Family, or Home, re- 
 garded on its economic side. There is an economy of consump- 
 tion in the family standard of life as important for social welfare 
 as the economy of production in the Business. As the former 
 stands towards costs of Production, so the other stands towards 
 utility of Consumption. As the economy of Production chiefly 
 consists in minimising cost, so the economy of Consumption 
 should consist in maximising utility. But the standard of con- 
 sumption has in modern times not been subjected to the same 
 forces as have operated upon production. Though in the be- 
 ginning, as we saw, both were natural, organic and related proc- 
 esses, the modern rationalisation of industry has not been ac- 
 companied by a corresponding rationalisation of consumption. 
 Inventors and transformers of industry have not had their coun- 
 terpart in consumption. A hundred times the quantity of 
 thought and effort has gone into the recent evolution of a single 
 industry, such as cotton or chemicals, that has gone into the 
 improvement of consumption. It is not difficult to understand 
 the reasons of the great conservatism of the consumptive arts. 
 In primitive societies, where each family is a self-sufficing eco-
 
 HUMAN UTILITY OF CONSUMPTION in 
 
 nomic unit, or where division of labour is on the simplest lines, 
 the industrial arts are almost as conservative as the methods of 
 consumption. The adoption of a new way of working is nearly 
 as difficult as the adoption of a new want. Custom rules both 
 with an almost equal sway, though even at this stage its hold 
 upon the organic feelings will be somewhat stronger on the con- 
 suming side, especially in matters of food and of family or tribal 
 ritual. It will be a little easier to use a new sort of snare, or to 
 change the shape of a pot or basket, than to take to a new head- 
 gear or a new way of cooking meat. But when the industrial 
 arts have advanced a certain way, two forces combine to break 
 the bond of custom and to encourage experiments and improved 
 methods. While consumption continues to be carried on in a 
 number of simple actions involving no considerable effort or 
 conscious attention, industry has passed into a related series of 
 processes of considerable duration and involving many separate 
 acts of conscious effort and attention. The production of an ar- 
 ticle will thus present a far larger number of opportunities for 
 change than its consumption, and there will be a greater likeli- 
 hood that advantageous changes will be tried and adopted. A 
 new idea of saving labour, the chance discovery of some new 
 material, will be approved more readily than any suggestion for 
 some new food or an unaccustomed article of clothing. For, in 
 the former case, the reasoning faculty is of necessity alive and 
 operative to some degree, and the gain of the change can be real- 
 ised experimentally, while in the latter case, the reasoning fac- 
 ulty is hardly awake, and any novelty of consumption is apt to 
 have an initial barrier of natural aversion to overcome. 
 
 But there is another reason for the easier progress of the pro- 
 ductive costs. In proportion as work passes into the shape of 
 an organised business, administered by an employer for profit, 
 the control of any of its processes by primitive custom or taboo 
 tends to disappear. For the rationalism involved in the profit- 
 able conduct of the business compels the employer to break any 
 traditional barriers obstructing the adoption of profitable re- 
 forms. Though there are doubtless many reforms of the con- 
 sumptive arts as humanly economical and profitable as any of 
 the great industrial reforms, there is not the same concentrated
 
 ii2 WORK AND WEALTH 
 
 motive of large immediately realised gains to urge their claims 
 on any body of consumers. Not only are the gains from an im- 
 provement in production more immediate, more concrete and 
 more impressive, but the risks and inconveniences of the change 
 are largely borne by others than the reformer, viz. his em- 
 ployees, or his shareholders. The consumer, on the other hand, 
 has himself to bear all risks and inconveniences involved in the 
 abandonment of an old article or method of consumption, or 
 the adoption of a new one. Finally, it must be remembered 
 that the actual risks attending an innovation are greater for 
 the consumer. For the modern producer is a skilled specialist 
 in the particular art of production in which he is engaged, the 
 consumer is an unskilled amateur in a more general art, possess- 
 ing little knowledge and no effective power of organising for his 
 self-defence. 
 
 4. The fact that the monetary profit of producers is the 
 principal determinant of most changes in the nature of con- 
 sumables and the standards of consumption is one of the most 
 serious sources of danger in the evolution of a healthy social 
 economy. The present excessive control by the producer injures 
 and distorts the art of consumption in three ways. i. It im- 
 poses, maintains and fosters definitely injurious forms of con- 
 sumption, the articles of 'illth'. 2. It degrades or diminishes 
 by adulteration, or by the substitute of inferior materials or 
 workmanship, the utility of many articles of consumption used 
 to satisfy a genuine need. 3. It stimulates the satisfaction of 
 some human wants and depresses the satisfaction of others, not 
 according to their true utility, but according to the more or less 
 profitable character of the several trades which supply these 
 wants. 
 
 The prevalence of many of the most costly social evils of our 
 time, war, drink, gambling, prostitution, overcrowding, is 
 largely attributable to the fact that their material or trade ap- 
 pliances are sources of great private profit. Such trades are the 
 great enemies of progress in the art of life, and the rescue of the 
 consuming public from their grip is one of the weightiest prob- 
 lems of our time. Two methods of defence are suggested. One 
 is the education and cooperation of consumers. But while educa-
 
 HUMAN UTILITY OF CONSUMPTION 113 
 
 tion may do much to check the consumption of certain classes 
 of 'illth', it can hardly enable the consumer to cope with the 
 superior skill of the specialist producer by defeating the arts of 
 adulteration and deterioration which are so profitable. Con- 
 sumers' Leagues can perhaps do something to check adulteration 
 and sweating, by the employment of skilled agents. But it will 
 remain very difficult for any such private action to defeat the 
 ever-changing devices of the less scrupulous firms in profitable 
 trades. The recognition of these defects of private action causes 
 an increased demand for public protection, by means of legisla- 
 tive and administrative acts of prohibition and inspection. The 
 struggle of the State to stamp out or to regulate the trades which 
 supply injurious or adulterated foods, drinks, and drugs, to stop 
 gambling, prostitution, insanitary housing, and other definitely 
 vicious businesses, is one of the greatest of modern social ex- 
 periments. Though the protection of the consumer is in many 
 cases joined with other considerations of public order, it is the 
 inherent weakness of the consumer, when confronted by the re- 
 sources of an organised group of producers, that is the primary 
 motive of this State policy. How far the State protection is, 
 or can be made effective, is a question too large for discussion 
 here. It must suffice to observe that the conviction that the 
 private interests of producers will continue to defeat all at- 
 tempts at State regulation in socially 'dangerous trades' fur- 
 nishes to socialism an argument on which there is a tendency to 
 lay an ever greater stress. 
 
 5. These reflections are necessary as preliminary to the con- 
 sideration of the statics and dynamics of consumption in any 
 nation or class. For they represent the most important class of 
 disturbing influences in the evolution of standards of consump- 
 tion. 
 
 Now in considering the proper mode of estimating the human 
 utility contained in our 1,700,000,000 worth of 'consumables', 
 we must consider, first, the validity of the standards of consump- 
 tion in which they are incorporated. If we have grounds for 
 believing that actual standards of consumption are moulded by 
 the free pressure of healthy organic needs, evolving in a natural 
 and rational order towards a higher human life, there will be a
 
 ii 4 WORK AND WEALTH 
 
 presumption favourable to the attribution of a high measure of 
 human utility to the aggregate income. In this enquiry we may, 
 therefore, best start by considering the evolution of wants and 
 modes of satisfying them, as reactions of the half-instinctive, 
 half-rational demands of man upon his environment. Human 
 animals, placed in a given environment (with some power of 
 moving into another slightly different one or of altering slightly 
 that in which they are) develop standards of work and of con- 
 sumption along the lines of ' survival value'. The earliest stages 
 in the evolution of both standards, consumption and industry, 
 must be directed by the conditions of the physical struggle for 
 life. The modern historical treatment of origins applies this 
 principle in the analysis of physical environments, in which Le 
 Play and Buckle have done such valuable pioneer work, and 
 which such thinkers as Professor Geddes have carried further in 
 their schemes of regional survey. 
 
 Though the fundamental assumption which seems to under- 
 lie this method, at any rate in its fulness, viz. that there is only 
 one sort of mankind and that all the differences which emerge 
 in history, whether of 'racial' character or of institutions, are 
 products of environment, is open to question, 1 the dominant part 
 played by physical environment in determining the evolution of 
 economic wants and satisfactions, is not disputed. 
 
 Like other animals, men must apply themselves to obtain 
 out of the immediate physical environment the means of main- 
 tenance the food, shelter and weapons, the primitive tools, 
 which enable them to work and live at all. If we consider sep- 
 arately the consumptive side of this economy, we seem to grasp 
 the idea of an evolution of a standard of consumption, moulded 
 by the instinctive selection of means to satisfy organic needs 
 of the individual and the species. The sorts of food will be those 
 obtained by experiments upon the flora and fauna of the country, 
 guided mainly by 'instinct', though some early conscious cun- 
 ning of selection and of cultivation will serve to improve and in- 
 crease the supph'es. The clothing will consist of furs or plaited 
 fibres got from the same natural supplies. The shelter will con- 
 
 1 For the fullest and most recent exposition of this theory see Mr. J. M. Robert- 
 son's The Evolution of Slates (Watts & Co.).
 
 HUMAN UTILITY OF CONSUMPTION 115 
 
 sist of an easy adaptation of trees, caves or other protective pro- 
 visions of nature. Even the early tools, weapons and domestic 
 utensils, though admitting some more rational processes of se- 
 lection and adaptation, will remain half-instinctive efforts to 
 meet strong definite needs. So long as we are within this narrow 
 range of primary animal wants, there is perhaps little scope for 
 grave errors and wastes in standards of consumption. Doubtless 
 mistakes of omission are possible, e. g. a tribe may fail to utilise 
 some abundant natural supply of food which it is capable of as- 
 similating. But such omissions will probably be rare, at any 
 rate in cases where population comes to press upon the food 
 supply, so evoking experiments in all natural resources. Grave 
 errors of commission, e. g. the adoption of poisonous ingredients 
 into the supply of food or other necessaries, will be impossible, 
 so long as we are dealing with factors of consumption which have 
 a definite survival value. This seems to apply, whether we at- 
 tribute some instinctive wisdom or some more rational process 
 of selection as the evolutionary motive. In either case we have 
 substantial guarantees for the organic utility of most articles 
 which enter the primitive standard of consumption. This view 
 is, of course, quite consistent with the admission that in the de- 
 tailed operation of this economy there will be a large accumula- 
 tion of minor errors and wastes. The most accurate instinct 
 affords no security against such losses: indeed the very strength 
 of an animal instinct entails an inability of adaptation to ec- 
 centricities or irregularities of environment. No one can doubt 
 this who watches the busy bee or the laborious ant pursuing their 
 respective industries. 
 
 6. If man had always lived either in a stationary or a very 
 slowly changing environment, he would have remained a creature 
 motived almost wholly by specific instincts along a fairly ac- 
 curate economy of prescribed organic needs. The substitution 
 of reason for a large part of these specific instincts was evoked 
 by the necessity of adaptation to changes and chances of envi- 
 ronment so large, swift or complex, that specific instincts were 
 unfitted to cope with them. Hence the need for a general 'in- 
 stinct' of high adaptive capacity, endowed with a power of cen- 
 tral control operative through the brain. The net biological
 
 n6 WORK AND WEALTH 
 
 economy of this evolution of a central conscious 'control', 
 in order to secure a better adjustment between organism and 
 environment, carries us to a further admission regarding the 
 organic value of the basic elements in a standard of consump- 
 tion. 
 
 By the use of his brain man not merely selects from an indef- 
 initely changing environment foods and other articles condu- 
 cive to survival, but adapts the changing environment to his 
 vital purposes. He alters the physical environment, so as to 
 make it yield a larger quantity and variety of present and future 
 goods, and he combines these goods into harmonious groups 
 contributing to a 'standard' of consumption. In this adaptive 
 and progressive economy, evolving new needs and new modes of 
 satisfying old needs, shall we expect to find the same degree of 
 accuracy, the same immunity from serious error as in the nar- 
 rower statical economy of ' instinctive ' animalism? 
 
 In the processes of adapting external nature for the provision 
 of present, still more of future, goods, in discovering new wants 
 and methods of satisfying them, and in assimilating the new 
 wants in a standard of consumption, there will necessarily be 
 larger scope for error. But so long as the inventive and pro- 
 gressive mind of man confines the changes, alike of industry and 
 of consumption, to the sphere of simple material commodities 
 having a close and important bearing upon physical survival, 
 the limits of error and of waste must continue to be narrow. All 
 such progress will require experimentation, and experiment im- 
 plies a possibility of error. But at this early stage in the evolu- 
 tion of wants, any want, or any mode of supplying a want, which 
 is definitely bad, will be curbed or stamped out by the conditions 
 of the struggle for life. A tribe that tries hastily to incorporate 
 a tasty poison in its diet must very soon succumb, as many 
 modern instances of races exposed to the attraction of 'fire- 
 water' testify. Thus far it may be admitted that organic utility 
 will assert its supremacy as a regulative force, not only in the 
 rejection of the bad, but in the selection of the good. The low 
 standard of consumption of a prosperous caveman or of a primi- 
 tive pastoral family must conform to an economy of high utility. 
 Not only would all his ingredients of food, clothes, shelter, firing
 
 HUMAN UTILITY OF CONSUMPTION nj 
 
 and utensils, be closely conducive to physical survival, but they 
 would be closely complementary to one another. This comple- 
 mentary structure of the standard of consumption follows from 
 the organic nature of man. Unless all his organic needs are con- 
 tinuously met he perishes. While, therefore, he may know 
 nothing of the distinctions which science later will discover in 
 the necessary constituents of food, he must have worked out em- 
 pirically a diet which will give him some sufficiently correct com- 
 bination of proteids, carbohydrates and fats, and in the forms hi 
 which he can assimilate them. So also with his clothes, if he 
 wears them. No savage could possibly adopt, for ordinary wear, 
 costumes so wasteful and so inconvenient as flourish in civilised 
 societies. Similarly with housing and utensils. And not only 
 must the articles belonging to each group of wants be comple- 
 mentary, but the groups will themselves be complementary. 
 The firing will have relation to the times and sorts of feeding: 
 clothing and shelter will be allied in the protection they afford 
 against weather and enemies: tools and weapons will be even 
 more closely related. 
 
 Thus in the earlier evolution of wants, when changes, alike 
 of ways of living and ways of work, are few and slow and have 
 a close bearing on survival, a standard of consumption will have 
 a very high organic value. 
 
 7. But when man passes into a more progressive era, and a 
 definite and fairly rapid process of civilisation begins, the brain 
 continually devising new wants and satisfactions, we seem to 
 lose the earlier guarantees of organic utility. When the stand- 
 ard of consumption incorporates increasing elements, not of 
 necessaries but of material conveniences, comforts and luxuries, 
 and adds to the satisfaction of physical desires that of psychical 
 desires, how far may it not trespass outside the true economy of 
 welfare? So long as the requirements of physical survival dom- 
 inate the standard, it matters little whether animal instinct or 
 some more rational procedure maintains the standard. But when 
 these requirements lose control, and a standard of civilised hu- 
 man life contains ever larger and more numerous elements which 
 carry little or no 'survival value', the possibilities of error and of 
 disutility appear to multiply.
 
 ii8 WORK AND WEALTH 
 
 If civilisation, with its novel modes of living, be regarded as 
 an essentially artificial process, in which considerations of or- 
 ganic welfare exercise no regulative influence, there seems no 
 limit to the amount of disutility or illfare which may attach 
 to the consumption of our national income. This appears, in- 
 deed, to be the view of some of our social critics. Even those 
 who do not go so far as Mr. Edward Carpenter in diagnosing 
 civilisation as a disease, yet assign to it a very wide departure 
 from the true path of human progress. Indeed, it would be idle 
 to deny that this income, not only in the terms of its distribution 
 but also in its consumption, contains very large factors of waste 
 and disutility, and that the higher, later elements carry larger 
 possibilities of waste than the earlier. 
 
 But this admission must not lead us to conceive of the so- 
 called 'artificial' factors in a standard of consumption as the 
 products, either of chance, or of some normal perversity in the 
 development of tastes which foists upon consumption elements 
 destitute of human value. 
 
 For there are two possibilities to bear in mind. The first is 
 that even in the higher, less material, more 'artificial' ingre- 
 dients of consumption, the test of 'survival value' may still in 
 some measure apply. A too comfortable or luxurious mode of 
 life may impair vitality, lessen the desire or capacity of parent- 
 hood, or may introduce some inheritable defect injurious to the 
 stock. Such results may follow, not merely from bad physical 
 habits, but from what are commonly accounted good intellectual 
 habits. For it is believed that the high cerebration of an intel- 
 lectual life is inimical to human fertility. Again, so far as sexual 
 attractions determine marriage and parenthood, modes of living 
 which either impair or overlay the points of attraction will con- 
 tinue to be eliminated by natural selection. Habits of living, 
 which damage either manliness or womanliness will thus continue 
 to be curbed by Nature. 
 
 But Nature may possess another safeguard of a more general 
 efficacy. For any intelligible theory of evolution, either of an 
 individual organism or a species, involves the presence and opera- 
 tion of some central power which, working either through par- 
 ticular instincts, as in lower animals, or largely through a co-
 
 HUMAN UTILITY OF CONSUMPTION 119 
 
 ordinating 'reason', as in man, not only conserves but develops. 
 This organic purpose, or directive power, cannot be regarded as 
 confined to mere physical survival, either of the individual or 
 the species. It must also be considered as aiming at develop- 
 ment, a fuller life for individual and species. Now the evolution 
 of human wants and standards of consumption must be regarded 
 as an aspect of this wider process of development. Whatever 
 measure, then, of control be accorded to the central directive 
 power in organic development, must operate to determine eco- 
 nomic wants and economic standards of life. If such directive 
 action were infallible, securing, through the central cerebral con- 
 trol, a completely economical policy of conservation and develop- 
 ment, no problems of a distinctively social or moral character 
 would arise. The existence of error, waste, sin, attests the falli- 
 bility of this directive power. Aiming to keep the individual 
 and the species to lines of conduct that are psycho-physically 
 beneficial, its directions are either falsified or set aside by the 
 force of some particular impulse or emotion, usurping or defying 
 the central authority. The liability to such error and waste ap- 
 pears to grow pari passu with organic development. As reason- 
 ing man with his more complex life has more chances of going 
 wrong than lower animals guided by instincts along a narrow 
 life, so with each advance in the complexity of human life these 
 chances of error multiply. The explanation of this expanding 
 scope for error is not that reason is an inferior instrument to 
 instinct. Even in matters of 'life and death', with which animal 
 nature is primarily concerned, reason must be accounted in the 
 main an improvement upon instinct. For though a particular 
 instinct works more easily and accurately in an absolutely uni- 
 form environment, reason deals more successfully with eccen- 
 tricities and changes. Its essential quality is this superior adap- 
 tiveness. Therefore, in handling an environment, which not only 
 is various and ever changing by its own nature, but is made more 
 various and more changing by the interference of man, the human 
 reason must work more successfully even for purposes of physical 
 survival than any array of instincts could. In the struggle for 
 a sufficient regular supply of food, or in the war against microbes, 
 the rationalism of modern science and industry performs 'sur-
 
 120 WORK AND WEALTH 
 
 vival ' work for which the exactitude of animal instinct is essen- 
 tially unfitted. 
 
 The view then that error and waste necessarily increase with 
 the development of human society is not based upon any in- 
 feriority of reason to instinct. It is due to the fact that, as hu- 
 manity evolves further, a smaller proportion of its total energy 
 is needed for mere survival, and a larger proportion is free for 
 purposes of specific and individual progress. Now, the natural 
 economy for survival, whether working by instinct or by reason, 
 is far more rigorously enforced than the economy for progress. 
 So long as the arts of industry are so crude as to absorb almost 
 all the available work of man in provision for survival, the scope 
 for waste is rigorously circumscribed. But as industry develops 
 to a stage that yields a considerable 'surplus' beyond the needs 
 for mere survival, the possibility of waste increases. For, then, 
 it becomes possible for individuals, or groups within a community, 
 to divert to purposes of excessive personal enjoyment the surplus 
 of productive power which, 'economically' directed by Nature 
 or Reason, would have served to raise the general level of well- 
 being. 
 
 The widest aspect of this phenomenon does not concern us 
 here. It will be the subject of later commentary. We are here 
 concerned only to explain why it is likely that, as wealth grows, 
 waste also will grow, and why the higher standards of comfort 
 in a nation or a class will contain a larger proportion of socially 
 wasteful or injurious goods. Nature's guarantee of the sound 
 organic use of the basic constituents of a standard of consump- 
 tion does not extend with the same force to the conveniences, 
 comforts and luxuries built upon this basis. Though one need 
 not assume that no organically sound instinct of selection or 
 rejection operates in the adoption of new comforts or luxuries, 
 that natural safeguard must certainly be accounted weaker and 
 less reliable. As we study presently the actual modes by which 
 the higher ingredients are adopted into a class standard, we shall 
 see that this assumption is borne out by experience, and that 
 considerations of organic welfare play a rapidly diminishing part 
 in determining the spread of most of the higher forms of material 
 and intellectual consumption.
 
 CHAPTER X 
 
 CLASS STANDARDS OF CONSUMPTION 
 
 i. We may now apply these general considerations regarding 
 the evolution of wants to class and individual standards of con- 
 sumption. In a concrete class standard of consumption we may 
 conveniently distinguish three determinant factors: ist. The pri- 
 mary organic factor, the elements in consumption imposed by 
 general or particular conditions of physical environment, such 
 as soil, climate, in relation to physical needs. 2nd. The indus- 
 trial factor, the modifications in organic needs due directly or 
 indirectly to conditions of work. 3rd. The conventional factor, 
 those elements in a standard of consumption not based directly 
 upon considerations of physical or economic environment but 
 imposed by social custom. 
 
 So far as the first factor is concerned, we are for the most 
 part in the region of material necessaries in which, as we have 
 already seen, the organic securities for human utility are strong- 
 est. Where any population has for many generations been set- 
 tled in a locality, it must adapt itself in two ways to the physical 
 conditions of that locality. Its chief constituents of food, cloth- 
 ing, shelter, etc. must be accommodated to all the more perma- 
 nent and important conditions of soil, climate, situation and of 
 the flora and fauna of the country. A tropical people cannot be 
 great meat-eaters or addicted to strong drinks, though the ma- 
 terials for both habits may be abundant. An arctic people, on 
 the other hand, must find in animal fats a principal food, and in 
 the skins of animals a principal article of clothing. In a country 
 where earthquakes frequently occur, the materials and structure 
 of the houses must be light. In the same country the people of 
 the mountains, the valleys, the plains, the sea-shores, will be 
 found with necessary differences in their fundamental standard 
 of consumption. It is, indeed, self-evident that physical envi- 
 ronment must exercise an important selective and rejective 
 
 121
 
 122 WORK AND WEALTH 
 
 power represented in the material standard of consumption. 
 So far as man can modify and alter the physical environment, 
 as by drainage, forestry, or the destruction of noxious animals 
 or bacteria, he may to that extent release his standard of con- 
 sumption for this regional control. 
 
 Primitive man, again, and even most men in comparatively 
 advanced civilisations, are confined for the chief materials of 
 food, shelter and other necessaries, to the resources of their coun- 
 try or locality. They must accommodate their digestions and 
 their tastes to the foods that can be raised conveniently and in 
 sufficient quantities in the neighbourhood : they must build their 
 houses and make their domestic and other utensils out of the 
 material products within easy reach. The early evolution of a 
 standard of necessary consumption, working under this close 
 economy of trial and error, appears to guarantee a free, natural, 
 instinctive selection of organically sound consumables. 
 
 The primary physical characteristics of a country, also of 
 course, affect with varying degrees of urgency those elements in 
 a standard of consumption not directly endowed with strong 
 survival value, those which we call conveniences, comforts, 
 luxuries. The modes and materials of bodily adornment, the 
 styles of domestic and other architecture, religious ceremonies, 
 forms of recreation, will evidently be determined in a direct man- 
 ner by climatic and other physical considerations. 
 
 Recent civilisation, with its rapid extensive spread of com- 
 munications, and its equally rapid and various expansion of the 
 arts of industry, has brought about an interference with this 
 natural economy which has dangers as well as advantages. The 
 swift expansion of commerce brings great quantities of foods 
 and other consumables from remote countries, and places them 
 at the disposal of populations under conditions which give no 
 adequate security for organic utility of consumption. Under 
 an economy of natural selection exotics are by right suspect, 
 at any rate until time has tried them. The incorporation of 
 articles such as tea and tobacco in our popular consumption has 
 taken place under conditions which afford no proper guarantee 
 of their individual utility, or against the bad reactions they may 
 cause in the whole complex standards of consumption.
 
 CLASS STANDARDS OF CONSUMPTION 123 
 
 The back stroke of this commercial expansion is seen in such 
 occurrences as the deforestation of great tracts of country and 
 the alteration of the climatic character, with its effects upon the 
 lives of the inhabitants. 
 
 But though certain errors and wastes attend these processes 
 of commercialism and industrialism, they must not be exagger- 
 ated. There is no reason to hold that mankind in general has 
 been so deeply and firmly specialised in needs and satisfactions 
 by local physical conditions that he cannot advantageously 
 avail himself of the material products of a wider environment. 
 Though the digestive and assimilative apparatus may not be 
 so adaptable as the brain, there is no ground for holding that 
 conformity during many generations to a particular form of 
 diet precludes the easy adoption of exotic elements often con- 
 taining better food-properties in more assimilable forms. A 
 Chinese population, habituated to rice, can quickly respond in 
 higher physical efficiency to a wheat diet, nor is the fact that 
 bananas are a tropical fruit detrimental to their value as food for 
 Londoners. 
 
 How far the purely empirical way in which foods and other 
 elements in a necessary standard have been evolved can be ad- 
 vantageously corrected or supplemented by scientific tests, is a 
 question remaining for discussion after the other factors in 
 standards of consumption have been brought under inspection. 
 
 2. Industrial conditions, themselves of course largely de- 
 termined by physical environment, affect class and individual 
 consumption in very obvious ways. Each occupation imposes 
 on the worker, and indirectly upon all the members of his family, 
 certain methods of living. Physiological laws prescribe many 
 of those methods. A particular sort of output of muscular or 
 nervous energy demands a particular sort of diet to replace the 
 expenditure. The proper diet of an agricultural labourer, a mill 
 operative and a miner, will have certain recognised differences. 
 Muscular and mental, active and sedentary, monotonous and 
 interesting work, will involve different amounts and sorts of 
 nourishment, and different expenditures for leisure occupations. 
 These differences will extend both to the necessaries and the 
 higher elements in standards of consumption. Industrial re-
 
 i2 4 WORK AND WEALTH 
 
 quirements will stamp themselves with more or less force and 
 exactitude upon each occupation. An analysis of budgets would 
 show that the standard of the clergyman was not that of the 
 merchant or even of the doctor, and that the same family income 
 would be differently applied. The stockbroker will not live like 
 the mill-owner, nor the journalist like the shopkeeper. So right 
 through the various grades of workers. The skilled mechanic, 
 the factory hand, the railway man, the clerk, the shop-assistant, 
 the labourer, will all have their respective standards, moulded 
 or modified by the conditions of their work : their needs and tastes 
 for food, clothing, recreation, etc., will be affected in subtle ways 
 by that work. 
 
 'Productive' consumption is the term given by classical po- 
 litical economy to that portion of consumption applied so as to 
 maintain or improve the efficiency of labour-power in the worker 
 and his family. Necessaries alone were held absolutely produc- 
 tive, conveniences and comforts were dubious, luxuries were 
 unproductive. Regarded even from the commercial standpoint, 
 it was a shallow analysis, confined to a present utilisation of 
 immediately useful commodities, and ignoring the reactions upon 
 future productivity of a rise in education and refinement. It 
 belonged to an age before the economy of high wages or the 
 moral stimuli of hope and an intelligent outlook upon life had 
 won any considerable recognition as 'productive' stimuli. 
 
 But from the standpoint of our analysis the defect of this 
 treatment is a deeper one. For us the distinction between pro- 
 ductive and unproductive consumption is as fundamental as in 
 the older economic theory. The difference lies in the concep- 
 tion of the 'product' that is to give a meaning to 'productive'. 
 Productive consumption, according to the older economic theory, 
 was measured by the yield of economic productivity, according 
 to our theory by the yield of vital welfare. The two not merely 
 are not identical, they may often be conflicting values. 
 
 A diet productive of great muscular energy for a navvy, 
 foundryman or drayman, may produce a coarse type of animal- 
 ism which precludes the formation of a higher nervous structure 
 and the finer qualities of character that are its spiritual counter- 
 part. The industrial conditions of many productive employ-
 
 CLASS STANDARDS OF CONSUMPTION 125 
 
 ments are notoriously such as to impair the physique and the 
 muscle of the workers engaged in them, and there is no ground 
 for assuming that the habits of consumption, conducing to in- 
 creased productivity in such trades, carry any net freight of 
 human utility. 
 
 Nor is it only in manual labour that the industrial influences 
 moulding a standard of consumption may damage its human 
 quality. Much sedentary intellectual work involves similarly 
 injurious reactions upon modes of living. The physical abuses 
 of athleticism, stimulants and drugs, are very prevalent results 
 of disordered competition in intellectual employments. But, 
 as bad elements in standards of expenditure, the intellectual ex- 
 cesses, the fatuous or degrading forms of literature, drama, art, 
 music, which this life generates, are perhaps even more injurious. 
 One of the heaviest human costs of an over-intellectual life to- 
 day is its 'culture'. 
 
 3. When we come to 'conventional' elements in standards 
 of comfort, we enter a region which appears to admit an indefi- 
 nite amount of waste and error. 
 
 The very term 'conventional', set as it is in opposition to 
 'natural', indeed, suggests an absence of organic utility. We 
 hear of 'conventional necessaries' even in the lowest levels of 
 working-class expenditure. I presume that the expenditure in 
 beer, tobacco, upon sprees or funerals, or upon decorative cloth- 
 ing, would be placed in this category. 
 
 From the purely economic standpoint such expenditure has 
 been accounted either waste, or, even worse, 'disutility'. 
 
 It is often argued that a labouring family on 2is. per week 
 could be kept in physical efficiency, if every penny were expended 
 economically in obtaining 'organic value'. This is the ideal of a 
 certain order of advocates of thrift and temperance. Whole genera- 
 tions of economists have accumulated easy virtue by preaching 
 this rigorous economy for the working-classes. It has always 
 seemed possible to squeeze out of the standard of any working- 
 class enough of the conventional or superfluous to justify the 
 opinion that most of the misery of the poor is their own fault, 
 in the sense that, if they made a completely rational use of their 
 wages, they could support themselves in decency. The amount
 
 126 WORK AND WEALTH 
 
 spent by the workers on drink alone would, it is often contended, 
 make ample provision against most of the worst emergencies of 
 working-class life. 
 
 Now there are several comments to be made on this attitude 
 towards conventional expenditure, i. As one ascends above the 
 primary organic needs, the evolution of desires becomes less re- 
 liable and more complicated: the element of will and choice and 
 therefore of choosing badly, becomes larger. Some condiments 
 are useful for assisting the digestion of primary foods, but it is 
 easier to make mistakes in condiments than in staple foods. So 
 with all the higher and more complex wants. As one rises above 
 the prime requisites and conveniences, organic instincts, or 
 tastes directly dependent on them, play a diminishing part as 
 faithful directors of consumption. This natural guidance does 
 not indeed disappear. The evolution of a human being with 
 finer nervous structure, and with higher intellectual and moral 
 needs and desires related to that structure, is a fairly continuous 
 process. The finest and best-balanced natures thus carry into 
 their more complex modes of satisfaction a true psycho-physical 
 standard of utility. But it is already admitted that the liability 
 to go wrong is far greater in those modes of expenditure which 
 are not directly contributory to survival. This is the case, 
 whether individual tastes or some accepted convention determines 
 the expenditure. 
 
 This is so generally recognised that it is likely that the or- 
 ganic utility of personal tastes on the one hand, custom and con- 
 vention on the other, has been unduly disparaged. The temper 
 of economists in assessing values has been too short-sighted and 
 too inelastic. A good deal of personal expenditure that is waste- 
 ful or worse when taken on its separate merits may be justified 
 as a rude experimental process by which a person learns wisdom 
 and finds his soul. What is true of certain freakish personal con- 
 duct is probably true also of those conventional practices, in 
 which whole societies or classes conduct their collective experi- 
 ments in the art of living. 
 
 A too rigorous economy, whether directed by instinct or reason, 
 which should rule with minute exactitude the expenditure of 
 individuals or societies, in order to extract from all expenditure
 
 CLASS STANDARDS OF CONSUMPTION 127 
 
 of income the maximum of seen utilities, would be bound to sin 
 against that law of progress which demands an adequate provi- 
 sion for these experimental processes in lif e which, taken by them- 
 selves, appear so wasteful. 
 
 Social psychology brings a more liberal and sympathetic under- 
 standing to bear upon some of the practices which to a short- 
 sighted economist appear mere wasteful extravagance, destitute 
 of utility and displacing some immediately serviceable consump- 
 tion. Let me take some notable examples from current working- 
 class expenditure. The lavish expenditure upon bank-holidays, 
 in which large classes of wage-earners 'blow' a large proportion 
 of any surplus they possess beyond the subsistence wage, is the 
 subject of caustic criticism by thrifty middle-class folk. But 
 may not this holiday spirit, with a certain abandon it contains, be 
 regarded as a 'natural' and even wholesome reaction against the 
 cramping pressure of routine industrialism and the normal rigour 
 of a close domestic economy? It may not, indeed, be an ideally 
 good mode of reaction, may even contain elements of positive 
 detriment, and yet may be the vent for valuable organic instincts 
 seeking after those qualities of freedom, joy and personal dis- 
 tinction that are essential to a life worth living. 1 
 
 Or take the gravest of all defects of working-class expenditure, 
 the drink-bill. This craving, hostile as it is to the physical and 
 moral life of man, is not understood, and therefore cannot be 
 effectively eradicated, unless due account is taken of certain 
 emotional implications. The yielding to drink is not mere brutal- 
 ity. Brutes do not drink. It is in some part the response to an 
 instinct to escape from the imprisonment in a narrow cramping 
 environment which affords no scope for aspiration and achieve- 
 ment. It may indeed be said that the drinker does not aspire 
 and does not achieve. He is doubtless the victim of an illusion. 
 But it is a certain dim sense of a higher freer life that lures him 
 on. 'Elevation' is what is sought. 
 
 ' Kings may be blessed but Tarn was glorious 
 O'er a' the ills o' life victorious. ' 
 
 1 On the side of Consumption as of Production a progressive society that has not 
 abandoned itself to excessive rationalism will recognise the desirability of keeping 
 a scope for ' bonne chance' and ' hazard '. Cf Tarde, I., p. 130.
 
 128 WORK AND WEALTH 
 
 Or take still another item of working-class expenditure fre- 
 quently condemned as a typical example of extravagance, the 
 relatively large expense of funerals. Is this to be dismissed off- 
 hand as mere wanton waste? A more human interpretation will 
 find in it other elements of meaning. In the ordinary life of 
 'the common people' there is little scope for that personal dis- 
 tinction which among the upper classes finds expression in so 
 many ways. The quiet working-man or woman has never for a 
 brief hour through a long lifetime stood out among his fellows, 
 or gathered round him the sympathetic attention of his neigh- 
 bours. Is it wholly unintelligible or regrettable that those who 
 care for him should wish to give this narrow, thwarted, obscure 
 personality a moment of dignity and glory? The sum of life is 
 added up in this pomp of reckoning, and the family is gathered 
 into a focus of neighbourly attention and good-feeling, the out- 
 ward emblems of honour are displayed, and a whole range of 
 human emotions finds expression. Such excess as exists must be 
 understood as a natural fruit of those aspiring qualities of per- 
 sonality which, thwarted in their natural and healthy growth by 
 narrowness of opportunity, crave this traditional outlet. 
 
 In fact, the more closely we study the conventional factors in 
 consumption, the less are we able to dismiss them out of hand as 
 mere extravagance or waste. Some organic impulse, half physi- 
 cal, half psychical, nearly always enters into even the least de- 
 sirable elements. A margin of expenditure, either conventional 
 or expressing individual caprice, 1 which serves to evoke pleasure, 
 to stir interest, and above all to satisfy a sense of personal dig- 
 nity, even though at the expense of some more obvious and im- 
 mediate utilities, may be justified by considerations of individual 
 and social progress. 
 
 4. Such considerations must not, however, be pressed very 
 far in the defence even of the most firmly-rooted elements of 
 conventional consumption. For, though the deeper organic 
 forces which work through 'natural selection' must eliminate 
 
 1 Though the term ' conventional ' appears formally to preclude the play of in- 
 dividual taste or judgment, it is in fact only in such expenditures that these quali- 
 ties obtain scope for expression. For though convention prescribes the general mode 
 of such expenditure, it leaves a far krger scope for personal choice and capricious 
 variation than in the more necessary elements of expenditure.
 
 CLASS STANDARDS OF CONSUMPTION 129 
 
 the worst or most injurious modes of expenditure from the per- 
 manent standard of a race or class, it may leave elements fraught 
 with grave danger. For neither the animal nor the spiritual na- 
 ture of man is equipped with a selective apparatus for testing 
 accurately for purposes of organic welfare the innumerable fresh 
 applicants for 'consumption' which appear as the evolution of 
 wants, on the one hand, and of industries upon the other, becomes 
 more complex and more rapid. An extreme instance will enforce 
 my meaning. To take a Red Indian or a Bantu from a natural 
 and social environment relatively simple and staple, and to 
 plunge him suddenly into the swirl of a modern Western city life 
 is to court physical and moral disaster. Why? Because the 
 pressures of animal desires or the emotions of pride and curiosity, 
 which were regulated by effective 'taboos' in the primitive life 
 from which he is drawn, now work their will unchecked. For 
 the 'taboos' of civilised society are both ill-adapted to the emo- 
 tional texture of his nature, and in their novelty and complexity 
 are not adequately comprehended. But even for those born and 
 bred in the environment of a rapidly changing civilisation there 
 are evidently great hazards. Not only individual but widely 
 collective experiments in novelties of consumption will often be 
 injurious. This may be explained in the first instance as due to 
 the perversion or defective working of the 'instincts' originally 
 designed to protect and promote the life of the individual and 
 the species. An animal living upon what may be termed un- 
 modified nature is possessed of instincts which make poisonous 
 plants or animals repellent to its taste. A man living in a highly 
 modified environment finds such shreds of instinctive tastes as 
 he possesses inadequate to the risk of rejecting the fabricated 
 foods brought from remote quarters of the earth to tempt his 
 appetite. If this holds of articles of food, where errors may be 
 mortal and where some protection, however insufficient, is still 
 furnished by the palate and the stomach, still more does it hold 
 of the 'higher' tastes comparatively recently implanted in civil- 
 ised man. 'Bad tastes' thus may introduce the use of books or 
 art that disturb the mind without informing it, recreations that 
 distract and dissipate our powers without recreating and restor- 
 ing them. Nor does the 'social organism' furnish reliable checks
 
 i 3 o WORK AND WEALTH 
 
 which shall stop the spread of individual errors into conventional 
 consumption. 
 
 5. The question of individual errors and wastes in the pro- 
 cess of evolving standards of consumption must not detain us. 
 For though it rightly falls within the scope of a fully elaborated 
 valuation of consumption, it must not be allowed to intrude into 
 our more modest endeavour to discuss the several grades of 
 wants which comprise a class standard of consumption. The 
 relative size of the wastes or defects of the conventional factors 
 in a class standard will not indeed depend upon the mere addi- 
 tion of the perversion of the separate choices of its individuals. 
 For a convention is not produced by a mere coincidence of sep- 
 arate actions of individual desire. 
 
 It may be well here to revert to the distinction which we found 
 convenient to employ in our analysis of the human value of 
 different forms of work, viz. the distinction between creation and 
 imitation. Here it will take shape in an enquiry as to the ways 
 in which new wants are discovered and pass into conventional 
 use. Let us take for an example the case of a medicine which has 
 become a recognised remedy for a disease. Among animals or 
 'primitive' man the habit of eating a curative herb may be re- 
 garded as due to an organic instinct common to each member of 
 the herd or group. Such consumption, however, would not really 
 fall within the category of our 'conventional consumption'. It 
 would in effect be confined to a limited number of articles con- 
 taining strong elements of 'survival value', in a pre-economic 
 period, though, as soon as tribal society began to evolve the med- 
 icine man, his prescriptions would add many elements of waste 
 and error. But the consumables whose origin we are now con- 
 sidering must be regarded as involving invention or discovery, 
 and conscious imitation or adoption by the group. Unless we 
 suppose that the chewing of cinchona bark had a backing of in- 
 stinctive adaptation, and so passed by tradition into later ages 
 of Indian life, we must hold that the first beginnings of the use of 
 quinine as a cure for intermittent fevers in South America were 
 due either to chance or to early empiricism in treatment. Some 
 person, probably enjoying distinction in his tribe, tried cinchona 
 bark and recovered of his fever, others tried it upon this example
 
 CLASS STANDARDS OF CONSUMPTION 131 
 
 and got benefit, and so the fame of the remedy spread first from 
 a single centre, and afterwards from a number of other personal 
 centres by conscious imitation. Or, similarly, take the adoption 
 of some article of diet, such as sugar or tobacco, which is an ele- 
 ment not of prime physical utility but of comfort or pleasure. 
 The first men who chewed the sugar-cane, or tried the fumes of 
 the herba nicotina, must be deemed to have done so 'by accident'. 
 Liking the result, they repeated the experiment by design, and 
 this personal habit become the customary habit of the group, 
 moulded by a tradition continuously supported by a repetition 
 of the feeling which attended the first chance experience. 
 
 Such accretions to a standard of consumption may be regarded 
 as possessing guarantees of utility or safeguards against strong 
 positive disutility in their method of adoption. They have grown 
 into the conventional standard 'on their merits'. Those 'merits' 
 may indeed be variously estimated from the 'organic' stand- 
 point. Quinine has a high organic virtue, sugar perhaps an even 
 wider but less vital virtue, while the virtue of tobacco may be 
 purely superficial and compensated by considerable organic de- 
 merits. But both discovery and propagation have been in all 
 these cases 'natural' and 'reasonable' processes, in the plain or- 
 dinary acceptation of these terms. Some actual utility has been 
 discovered and recognised, and new articles thus incorporated 
 in a standard of consumption, either for regular or special use, 
 have at any rate satisfied a preliminary test of organic welfare. 
 
 If all new habits of consumption arose in this fashion, and the 
 preliminary test could be considered thoroughly reliable, the 
 economy of the evolution of standards of consumption would be 
 a safe and sound one. This hypothesis in its very form indicates 
 the several lines of error discernible in the actual evolution of 
 class standards. A falsification of the standard, involving the 
 admission of wasteful or positively noxious consumables, may 
 arise, either in the initial stage of invention, or in the process of 
 imitative adoption. This will occur wherever the initial or the 
 imitative process is vitiated by an extraneous motive. A very 
 small proportion of medicines in customary use among primi- 
 tive peoples have the organic validity of quinine. Most of them 
 are ' charms ', invented by medicine men, not as the result either
 
 i 3 2 WORK AND WEALTH 
 
 of a chance or planned experiment, but as the work of an im- 
 agination operating upon the lines of an empirical psychology, 
 in which the relation of the actual or known properties of the 
 medicine towards the disease play no appreciable part. So a 
 whole magical pharmacopoeia will be erected upon a basis of 
 totemist and animist beliefs, mingled with circumstantial mis- 
 conceptions and gratuitous fabrications, and containing no or- 
 ganic utility. Each addition or variant will begin as an artificial 
 invention and will be adopted for reasons of prestige, authority 
 or fear, carrying none of that organic confirmation which se- 
 cured its position for quinine. The limit of error in such cases 
 will be that the medicine must not frequently cause a serious 
 and immediate aggravation of the suffering of the patient. The 
 patent or ' conventional ' medicines among civilised peoples must 
 be considered in the main as containing a falsification of stand- 
 ard of the same kind, though different in degree. As the primi- 
 tive medicine man, called upon to cure a fever or a drought, is 
 primarily motived by the desire to maintain or enhance his per- 
 sonal or caste prestige, while the adoption of his specific into a 
 convention is due to a wholly irrational authority or to a wholly 
 accidental success, so is it with a large proportion of modern rem- 
 edies. Even in the orthodox branches of the medical profession 
 the process of converting vague empiricism into scientific ex- 
 periment has gone such a little way as to furnish no guarantee 
 for the full organic efficacy of many of the treatments upon 
 which the patient public spends an increasing share of its in- 
 come. But as regards the profession there is at any rate some 
 basis of confidence in the disinterested application of science to 
 the discovery of genuine organic utility. 
 
 In the patent medicine trade there is very little. Here we 
 have a condition very little better than that of the power of the 
 witch-doctor in primitive society. The maxim 'caveat emptor' 
 carries virtually no security, for the guidance of the palate is 
 ruled out, while the test of experience, except for purgation or 
 for some equally simple and immediate result, is nearly worthless. 
 
 6. When the invention and propagation of a mode of con- 
 sumption have passed into the hands of a trade, the guarantees 
 of organic utility, the checks against organic injury, are at their
 
 CLASS STANDARDS OF CONSUMPTION 133 
 
 weakest. For neither process is directed, either by instinct or 
 reason, along serviceable channels. Where the commercial mo- 
 tive takes the initiative, there can be no adequate security that 
 the articles which pass as new elements into a standard of con- 
 sumption shall be wealth, not illth. Where an invention is stim- 
 ulated to meet a genuinely 'long-felt need', the generality and 
 duration of that need may be a fair guarantee of utility. But 
 this is not the case where the supply precedes and evokes the 
 demand, the more usual case under developed commercialism. 
 Neither in the action of the inventor, nor in the spread of the 
 new habit of consumption, is there any safe gauge of utility. 
 The inventor, or commercial initiator, is only concerned with the 
 question, Can I make and sell a sufficient quantity of this article 
 at a profit? In order to do so, it is true, he must persuade enough 
 buyers that they 'want* the article and 'want' it more than 
 some other articles on which they otherwise might spend their 
 money. To unreflecting persons this, no doubt, appears a suffi- 
 cient test of utility. But is it? The purchaser must be made to 
 feel or think that the article is 'good' for him at the time when 
 it is brought before his notice. For this purpose it must be en- 
 dowed with some speciously attractive property, or recommended 
 as possessing such a property. A cheap mercerised cotton cloth, 
 manufactured to simulate silk, sells by its inherent superficial 
 attraction. A new line in drapery 'pushed' into use by the re- 
 peated statement, false at the beginning, that 'it is worn', illus- 
 trates the second method. In a word, the arts of the manufac- 
 turer and of the vendor, which have no direct relation whatever 
 to intrinsic utility, overcome and subjugate the uncertain, un- 
 trained or 'artificially' perverted taste of the consumer. Thus 
 it arises that in a commercial society every standard of class 
 comfort is certain to contain large ingredients of useless or nox- 
 ious consumption, articles, not only bad in themselves, but often 
 poisoning or distorting the whole standard. The arts of adulter- 
 ation and of advertising are of course responsible for many of 
 the worst instances. A skilled combination of the two processes 
 has succeeded in cancelling the human value of a very large pro- 
 portion of the new increments of money income in the lower 
 middle and the working-classes, where a growing susceptibility
 
 i 34 WORK AND WEALTH 
 
 to new desires is accompanied by no intelligent checks upon the 
 play of interested suggestion as to the modes of satisfying these 
 desires. 
 
 Where specious fabrication and strong skilled suggestion co- 
 operate to plant new ingredients in a standard of consumption, 
 there is thus no security as to the amount of utility or disutility 
 attaching to the 'real income' represented by these 'goods'. 
 But this vitiation of standards is not equally applicable to all 
 grades of consumption, or to all classes of consumers. Some 
 kinds of goods will be easier to falsify or to adulterate than others, 
 some classes of consumers will be easier to 'impose upon' than 
 others. These considerations will set limits upon the amount of 
 waste and 'illth' con tamed in the goods and services which com- 
 prise our real income. 
 
 First, as to the arts of falsification. Several laws of limitation 
 here emerge. Some materials, such as gold and rubber, have no 
 easily procurable and cheaper substitutes for certain uses. Other 
 goods are in some considerable degree protected from imitation 
 and adulteration by the survival of reliable tests and tastes, touch 
 and sight, in large numbers of consumers. This applies to simpler 
 sorts of goods whose consumption is deepest in the standard and 
 has a strong basis of vital utility. It will be more difficult to adul- 
 terate bread or plain sugar to any large extent than sauces or 
 sweets: it will be easier to fake photographs than to pass off 
 plaice for soles. But it cannot be asserted as a general truth that 
 the necessaries are better defended against encroachments of 
 adulteration and other modes of deception than conveniences, 
 and conveniences than luxuries. Indeed, there are two consider- 
 ations that tell the other way. A manufacturer or merchant 
 who can palm off a cheaper substitute for some common neces- 
 sary of life, or some well-established convenience, has a double 
 temptation to do so. For, in the first place, the magnitude and 
 reliability of the demand make the falsification unusually profit- 
 able. In the second place, so far as a large proportion of articles 
 are concerned, he can rely upon the fact that most consumption 
 of necessaries lies below the margin of clear attention and criti- 
 cism. Except in the case of certain prime articles of diet, it is 
 probable that a consumer is more likely to detect some change
 
 CLASS STANDARDS OF CONSUMPTION 135 
 
 of quality in the latest luxury added to his standard than in the 
 habitual articles of daily use, such as his shoe-leather or his soap. 
 In fact, so well recognised is this protection afforded to the seller 
 by the unconsciousness which habit brings to the consumer, 
 that, in catering for quite new habits, such as cereal breakfast 
 foods or cigarettes, the manufacturer waits until the original 
 attractions of his goods have stamped themselves firmly in cus- 
 tomary use, before he dares to lower the quality or reduce the 
 quantity. 
 
 These considerations make it unlikely that we can discover 
 a clear law expressing the injury of commercialism in terms of 
 the greater or less organic urgency of the wants ministered to 
 by the different orders of commodities. It will even be difficult 
 to ascertain whether the arts of adulteration or false substitu- 
 tion play more havoc among the necessaries than among the 
 luxuries of life. In neither is there any adequate safeguard for 
 the organic worth of the articles bought and sold, though in both 
 there must be held to be a certain presumption favourable to 
 some organic satisfaction attending the immediate act of con- 
 sumption. If a ' law ' of falsification can be found at all, it is more 
 likely to emerge from a comparative study not of necessaries, 
 conveniences, comforts and luxuries, in a class standard, but of 
 the various sorts of satisfactions classified in relation to the needs 
 which underlie them. Where goods are consumed as soon as 
 they are bought, and by some process involving a strong appeal 
 to the senses, there is less chance for vulgar fraud than where 
 consumption is gradual or postponed, and is not attended by 
 any moment of vivid realisation. Other things equal, one might 
 expect more easily to sell shoddy clothing than similarly damaged 
 food : the adulteration of a jerry-built house is less easily detected, 
 or less adequately reprobated, than that of a jerry-built suit of 
 clothes. 
 
 Along similar lines we might, in considering non-material 
 consumption, urge that there are more safeguards for utility in 
 the expenditure upon books or music-hall performances than 
 upon education or church membership. And in a sense this is 
 true. If I buy a book or attend a concert, I am surer to get 
 what I regard as a quid pro quo for my expenditure than in the
 
 136 WORK AND WEALTH 
 
 case of a prolonged process involving many small consecutive 
 acts. 
 
 So far as this is true, it means that relics of organic guidance 
 are more truly operative in some kinds of satisfaction than in 
 others, and furnish some better check upon the deception which 
 commercialism may seek to practise. But, of course, our valua- 
 tion of such checks will depend upon how far we can accept them 
 as reliable tests, not of some short-range immediate satisfaction, 
 but of the wider individual and social welfare. The fact that so 
 many notoriously bad habits can be acquired by reason of an 
 immediate 'organic' attractiveness that is a false clue to the 
 larger welfare, must put us on our guard against accepting any 
 easy law based on the test of 'natural' tastes. 
 
 7. But, in considering the degradation of standards of con- 
 sumption, it is well to bring some closer analysis to bear upon the 
 processes of suggestion and adoption that are comprised in 'imi- 
 tation'. In analysing the forms of wealth, the goods and ser- 
 vices, which are the real income of the nation, in terms of their 
 production, we recognised that, other things equal, the human 
 cost of any body of that wealth varied directly with the amount 
 of routine or purely imitative work put into it, and inversely 
 with the amount of creative or individual work. That judgment, 
 however, we felt bound to qualify by the consideration that a 
 certain proportion of routine work, though in itself perhaps dis- 
 tasteful and uninteresting, had an organic value both for the 
 individual and for society. How far can we apply an analogous 
 judgment to the same body of Wealth on its consumption side? 
 Can we assume that the utility of consumption of any given 
 body of wealth varies directly with the amount of free personal 
 expression which its use connotes, and inversely with the routine 
 or conventional character it bears? Evidently not. The same 
 analysis does not apply. The chief reason for the difference has 
 already been indicated, by pointing out that, in a modern in- 
 dustrial society, each man, as producer, is highly specialised, as 
 consumer highly generalised. The high human costs of routine 
 work were, we saw, a direct result of this specialising process. 
 A little routine work of several sorts, regularly practised, would 
 involve no organic cost, and might indeed yield a fund of posi-
 
 CLASS STANDARDS OF CONSUMPTION 137 
 
 tive utility as a wholesome regime of exercise, provided it was not 
 carried so far as to encroach upon the fund of energy needed for 
 the performance of other special work, creative and interesting. 
 
 Indeed, the usual economic justification of the excessive divi- 
 sion of labour existing at present in advanced industrial societies 
 is that it is essential to yield that large body of objective wealth 
 which, by its distribution, enriches and gives variety to the con- 
 sumption of all members of the society. The producer is sacri- 
 ficed to the consumer, the damage done to each man in his former 
 capacity being more than compensated by the benefits conferred 
 upon him in his latter capacity. 
 
 The full validity of this doctrine will be considered when we 
 gather together the two sides of our analysis and consider the 
 inter-relations between production and consumption as an as- 
 pect of the problem of human values. At present we may begin 
 by accepting variety of consumption as a condition in itself fa- 
 vourable to the maximisation of human welfare. This assump- 
 tion is not, however, quite self-evident. The routine factors, 
 in a standard of consumption (and a standard qua standard 
 consists of routine), so far as they are laid down under the direc- 
 tion of an instinctive or a rational evolution of wants, must be 
 regarded as containing a minimum of waste or disutility. Since 
 they are also the foundation and the indispensable condition for 
 all the 'higher' forms of material or non-material consumption 
 in which the conscious personality of individuals finds expression, 
 they may be held to contain per unit a maximum of human value. 
 From this standpoint there would seem to emerge a law of the 
 economy of consumption, to the effect that the maximum of so- 
 cial welfare would be got from a distribution of wealth which 
 absorbed the entire product in this routine satisfaction of the 
 common needs of life. This economy need not be conceived 
 merely hi terms of a uniform standard of material satisfactions. 
 A wider interpretation of life and of necessaries might extend it 
 so as to cover many higher grades of satisfaction, all the 'joys 
 that are in widest commonalty spread. ' The natural evolution 
 of such an economy of consumption might, it is arguable, yield 
 the greatest quantity of social welfare. 
 
 8. But a high uniform level of welfare throughout society
 
 138 WORK AND WEALTH 
 
 does not exhaust the demands of human welfare. It evidently 
 overstresses the life of the social as against the individual or- 
 ganism, imposing a regimen of equality which absorbs the many 
 into the one. Now, desirous to hold the balance fair between 
 the claims of individual personality and of society, we cannot 
 acquiesce in an ideal of economical consumption which makes 
 no direct provision for the former. So far, however, as the con- 
 sumption of an individual is of a routine character, expressing 
 only the needs of a human nature held in common with his fel- 
 lows, it does not really express his individuality at all. The real- 
 isation of the unique values of his personality, and the conscious 
 satisfaction that proceeds from this individual expression, can 
 only be got by activities which lie beyond the scope of custom 
 and convention. Though this issue has most important bearings 
 that are outside the economic field, it is also vitally connected 
 with the use of economic goods. For, unless a due proportion 
 of the general income (the aggregate of goods and services) is 
 placed at the free disposal of individuals in such forms as to nour- 
 ish and stimulate the wholesome and joyous expansion of their 
 powers, that social progress which first manifests itself in the 
 free experimental and creative actions of individuals whose 
 natures vary in some fine and serviceable way from the common 
 life, will be thwarted. This brings us to a better understanding 
 of the nature and origin of the human injury and waste contained 
 in large sections of that conventional consumption which plays 
 so large and so depressing a part in every class standard of com- 
 fort. Where the production of an economic society has grown 
 so far as to yield a considerable and a growing surplus beyond 
 that required for survival purposes, this surplus is liable to sev- 
 eral abuses. Instead of being applied as food and stimulus to 
 the physical and spiritual growth of individual and social life, 
 it may be squandered, either upon excessive satisfaction of ex- 
 isting routine wants in any class or classes, or in the stimulation 
 and satisfaction of more routine wants and the evolution of a 
 complex conventional standard of consumption, containing in 
 its new factors a diminishing amount of human utility or even 
 an increasing amount of human costs. If the industrial struc- 
 ture is such that particular groups of business men can make
 
 CLASS STANDARDS OF CONSUMPTION 139 
 
 private gains by stimulating new wasteful modes of conventional 
 consumption, this process, as we have seen, is greatly facilitated. 
 
 But, after all, the business motive is not in itself an adequate 
 explanation. Business firms suggest new wants, but the sus- 
 ceptibility to such suggestions, the active imitation by which 
 a new article passes into the conventional consumption of a group 
 or class, requires closer consideration. Falsification of a standard 
 can seldom be understood as a mere perversion of the free choice 
 of individuals. A convention is not produced by a mere coinci- 
 dence of separate choices. Imitation plays an important part in 
 the contagion and infection of example. In endeavouring to as- 
 sess the human utility of the consumption of wealth we see the 
 play of several imitative forces. Current Prestige, Tradition, 
 Authority, Fashion, Respectability supplement or often displace 
 the play of individual taste, good or bad, in moulding a class 
 and family standard of consumption. The psychology and 
 sociology of these distinctively imitative forces which form or 
 change standards are exceedingly obscure. 
 
 The merely gregarious instinct may lead to the spread in a 
 class or group of any novelty which attracts attention and is not 
 offensive. Where supported by any element of personal pres- 
 tige, such novelty, irrespective of its real virtues or uses, may 
 spread and become embedded in a standard of consumption. 
 The beginnings of every fashion largely belong to this order of 
 imitation. Some prestige is usually needed fairly to launch a 
 new fashion; once launched it spreads mainly by 'gregarious- 
 ness', the instinct to be, or look, or act, like other people. The 
 limits of error, disutility or inconvenience, which can be set upon 
 a novelty of fashion, appear to depend mainly upon the initial 
 force of prestige. The King might introduce into London so- 
 ciety a really inconvenient high hat, though the Queen perhaps 
 could not carry a full revival of the crinoline. 
 
 Fashions change but they leave deposits of conventional ex- 
 penditure behind. What is at first fashionable often remains as 
 respectable and lives long in the conventional habits of a class. 
 Every class standard is encrusted with little elements of dead 
 fashion. 
 
 9. But this formative influence of Prestige itself demands
 
 i 4 o WORK AND WEALTH 
 
 fuller consideration. For it not merely implants elements of 
 expenditure in the standard of consumption, but infects the 
 standard itself. 
 
 A true standard would rest on a basis of organic utility, ex- 
 penditure being apportioned so as to promote the soundest, full- 
 est human life. But all conventional consumption is determined 
 largely by valuations imposed by the class possessing most pres- 
 tige. It is, of course, a commonplace that fashions in dress, and 
 in certain external modes of consumption, descend by snobbish 
 imitation from high life through the different social strata, each 
 class copying the class above. It is a matter of far more vital 
 importance that religion, ethics, art, literature and the whole 
 range of intellectual activities, manners, amusements, take their 
 shapes and values largely by the same process of infiltration from 
 above. 
 
 This is not the case everywhere. In many nations the dis- 
 tinctions of caste, class, locality or occupation, are so strong as 
 to preclude the passage of habits of material consumption, man- 
 ners, tastes and ideas, from one social stratum to another. The 
 exclusive possession of a code of life, of language, thought and 
 feelings by a caste or class, is itself a matter of pride, and often 
 of legal protection. This holds not only of most Asiatic civilisa- 
 tions but, though less rigorously, of those European countries 
 which have not been fully subjected to the dissolving forces of 
 industrialism. 
 
 But in such countries as England and the United States, where 
 the industrial arts are rapidly evolving new products and stim- 
 ulating new tastes, and where at the same time the social strata 
 present a continuous gradation with much movement from one 
 stratum to another, the process of imitation by prestige is very 
 rapid and general. 
 
 The actual expenditure of the income of every class in these 
 countries is very largely determined, not by organic needs, but 
 by imitation of the conventional consumption of the class im- 
 mediately above in income or in social esteem. That conven- 
 tional consumption in its turn is formed by imitation of the class 
 above. The aristocracy, plutocracy, or class with most power or 
 prestige, thus makes the standards for the other classes.
 
 CLASS STANDARDS OF CONSUMPTION 141 
 
 Now, even if it were a real aristocracy, a company of the best, 
 it by no means follows that a standard of living good for them 
 would be equally good for other social grades. But there would 
 be at least a strong presumption in its favour. To copy good ex- 
 amples, even if the copying is defective, is an elevating practice, 
 and in as much as the essentials of humanity are found alike in 
 all, thoughtless imitation of one's betters might raise one's own 
 standard. If in a society the men of light and leading occupied 
 this place because they had discovered a genius for the art of 
 noble living, the swift unconscious imitation of their mode of 
 life, the morals and manners of this aristocracy, would surely be 
 the finest schooling for the whole people: the models of the good, 
 the true, the beautiful, which they afforded, would inform each 
 lower grade, according to its capacity. 
 
 But where the whole forces of prestige and imitation are set 
 on a sham aristocracy, copying as closely as possible their modes 
 of consumption, their ways of thought and feeling, their valua- 
 tions and ideals, incalculable damage and waste may ensue. For 
 the defects in the standard of the upper few will, by imitation, 
 be magnified as well as multiplied in the lower standards of the 
 many. Let me illustrate. 
 
 If gambling is bad for the upper classes, its imitation becomes 
 progressively worse as it descends, poisoning the life and con- 
 suming a larger proportion of the diminishing margin of the in- 
 come of each class. If the inconvenience of decorative dress is bad 
 for rich women, who live a life of ease and leisure, its imita- 
 tion by the active housewives of the middle, and the women- 
 workers of the lower classes, inflicts a graver disutility. For the 
 waste of income is more injurious and the physical impediments 
 to liberty of movement are more onerous. It is the immeasur- 
 able importance of this prestige of the upper class, percolating 
 through all lower social grades, and imposing, not merely ele- 
 ments of conventional consumption, but standards and ideas of 
 life which affect the whole mode of living, that requires us to 
 give closer consideration to the life of the leisure class. 
 
 10. Here we can find valuable aid in a remarkable book en- 
 titled The Theory of the Leisure Class, by Mr. Veblen, an Ameri- 
 can sociologist. Regarded as a scientific study, which it rightly
 
 i 4 2 WORK AND WEALTH 
 
 claims to be, this book has two considerable defects, one of 
 manner, one of matter. Its analysis is conducted with a half- 
 humorous parade of pompous terminology apt to wear upon the 
 temper of the reader. Its exaggerated stress upon a single strain 
 of personality, as a dominant influence in the formation of habits 
 and the direction of conduct, is a more serious blemish in a work 
 of profound and penetrating power. But for our present purpose, 
 that of discovering the elements of waste in national consumption, 
 it is of first-rate importance. 
 
 Mr. Veblen's main line of argument may be summarised as 
 follows. In primitive society war and the chase will be the chief 
 means by which men may satisfy that craving for personal dis- 
 tinction and importance which is the most enduring and impor- 
 tunate of psychical desires. Personal prowess, mainly physical, 
 displayed in fight or hunt, will secure leadership or ascendency 
 in tribal life. So those trophies which attest such prowess, the 
 skulls or scalps of enemies, the skins of slain animals, or the live 
 possession of tame animals, will be the most highly-prized forms 
 of property. When the capture and enslavement of enemies has 
 taken the place of promiscuous slaughter, the size and variety 
 of his retinue of slaves for personal service, concubinage, or 
 merely decorative show, attest the greatness of the warrior-chief. 
 When the industrial arts are sufficiently developed, slaves will 
 be set to produce such other forms of property, enlarged housing, 
 quantities of showy garments, cultivated fields, herds of cattle, as 
 afford conspicuous evidence of the personal prowess of the chief. 
 Glory, far more than utility or comfort, continues to be the dom- 
 inant motive. 
 
 As civilisation begins to make way, the notion of what consti- 
 tutes personal prowess begins to be modified. Though physical 
 force may still remain a chief ingredient, skill and cunning, wis- 
 dom in counsel, capacity for command and law-making, come to 
 be recognised as also giving prestige. As not only the strong man 
 by his strength, but the cunning man by his cunning, can get 
 that wealth or property which are the insignia of prowess, prop- 
 erty will however still be valued by its owner mainly for the 
 prestige it affords him among his fellows. It will still for the 
 most part take shape in external forms of adornment or magnifi-
 
 CLASS STANDARDS OF CONSUMPTION 143 
 
 cence. As it develops into the culminating form of the oriental 
 court, the element of display will remain the paramount consid- 
 eration, to which even the sense-enjoyments of the owner will be 
 secondary. 
 
 The effect of this early Unking of property to personal prowess 
 will be that in the general mind of man the possession of prop- 
 erty is honorific. It secures for its owner a presumption of per- 
 sonal greatness. Therefore, its possession must be kept in full 
 and constant evidence, especially where inheritance destroys the 
 direct presumption of the personal prowess of the actual owner. 
 Hence the two essential features of the mode of living of the dom- 
 inant class or caste, ostentatious waste and conspicuous leisure. 
 For thus the prestige of property is best enforced. Gorgeous 
 palaces with luxurious grounds, magnificent banquets and enter- 
 tainments, extravagant refinements of sensual luxury, adorn- 
 ments of fabrics, jewels and articles of laborious skill, magnificent 
 tombs and other monuments the elaborate parade of waste, 
 in order to fasten on the common imagination the sense of wonder 
 and of admiration of the person who could afford so lavish a 
 waste! The family of the rich man is chiefly valued as an in- 
 strument for making this display effective. His wife or wives 
 must do no work, not even copy his parasitic activities; they must 
 stand as open monuments of conspicuous leisure, their personal 
 adornments, their retinues of servants, the entire elaborate 
 ritual of their futile lives, must be devoted to showing how much 
 their possessor can afford to waste. Such was the life of the aris- 
 tocracy in olden and mediaeval days! 
 
 It has passed in most essentials, by tradition and imitation, 
 to the life of the upper class in modern civilised nations. The 
 modes and conceptions of personal prowess and prestige have in- 
 deed shifted. The man of business has dethroned the warrior 
 or the political chieftain. The typical great man of our time is 
 the great entrepreneur, the financier who directs the flow of capi- 
 tal and rules prices on change, the railway or shipping magnate 
 who plans a combine, the able and astute merchant, who con- 
 trols a market, the manufacturer who conducts a great produc- 
 tive business, the organiser of a successful departmental store. 
 The personal qualities and activities involved in these tasks are
 
 144 WORK AND WEALTH 
 
 very different from those possessed by barbarian chieftains or 
 oriental despots. Add to such men the surviving landed aristo- 
 cracy of rent-receivers, and a considerable number of families that 
 live on dividends, taking no real part in the administration of 
 industry, and we have a synopsis of the class which to-day wields 
 prestige. Though the elaboration of modern arts of pleasure 
 directs a great part of the expenditure of this, our upper class, 
 the traditional habits of ostentatious waste and conspicuous 
 leisure as modes of glory are still paramount motives. Most 
 rich people value riches less for the pleasures they afford than for 
 the social consideration, the personal distinction, they procure. 
 The craving to realise superiority over others, as attested by 
 their servility or imitation, the power of money to make others 
 do your will, the sense of freedom to realise every passing ca- 
 price, these remain the chief value of riches, and mould the valua- 
 tions of life for the bulk of the well-to-do. 
 
 Such are the inevitable effects of easily-gotten and excessive 
 wealth upon the possessors. So far as they operate, they in- 
 duce futile extravagance in expenditure. Instead of making for 
 utility, they make for disutility of consumption. Such is the 
 gist of this analysis of the leisured life. 
 
 ii. Expenditure which is to be effectively ostentatious, so 
 as to impress its magnificence upon the largest number of other 
 people, cannot be directed to the satisfaction of a real personal 
 want, even a bad want. Futility is of its essence. The very 
 type of this expenditure is a display of fireworks: there is no 
 other way of consuming so large a quantity of wealth in so short 
 a time with such sensational publicity and with no enduring ef- 
 fect whatever. This private extravagance may perhaps be par- 
 alleled in public expenditure by the squandering of millions upon 
 war-ships which are not needed, will never be used, and will be 
 obsolete within a few years of their construction. 
 
 The defects which every sane social critic finds in the modes 
 of living of the rich, their frivolity, triviality and futility, are il- 
 lustrations of Mr. Veblen's thesis. Perhaps the largest complex 
 of forms of futile waste, waste of money and of time, is con- 
 tained in the performance of what, with curious aptness of 
 phrase, are termed 'social duties', the idle round of visits, enter-
 
 CLASS STANDARDS OF CONSUMPTION 145 
 
 tainments and functions which constitutes the 'society life'. I 
 speak of the aptness of the term 'social duties'. This is no par- 
 adox, but merely the finest instance of that perversion of values 
 and valuations which is inherent in the situation. For it is es- 
 sential to the accuracy of this analysis that the rich members of 
 society should regard their most futile activities as 'duties', and 
 their small section of humanity as ' society '. 
 
 Of the expenditure which is laid out on the satisfaction of 
 material wants, the waste or disutility will often be considerable. 
 But Nature is strong enough to enforce some sense and modera- 
 tion in the satisfaction of primary organic desires. While, there- 
 fore, there is much luxury and waste in the material standard 
 of comfort of the rich, we do quite wrong to find in food and 
 clothing and other material consumption our chief instances of 
 luxury and waste. It is in the non-material expenditure that 
 the proportion of waste or disutility is largest. The great moral 
 law, corruptio optimi pessima, requires that this be so. If we 
 seek the largest sources of injurious waste in the standard of the 
 well-to-do classes, we shall find them in the expenditure upon 
 recreation, education and charity.
 
 CHAPTER XI 
 
 SPORT, CULTURE AND CHARITY 
 
 i . It is no mere chance that makes sport the special field for 
 the attainment and display of personal prestige among the well- 
 to-do classes. Primitive man in his early struggle for life had 
 to put all his powers of body and mind, all his strength and cun- 
 ning, into the quick, sure, and distant discovery of beasts or 
 other men who would destroy him. He must pursue and kill 
 them, or successfully avoid them. He must seek out animal or 
 vegetable foods, tracking them by signs and snares, rapid of 
 foot, keen of eye and scent, quick, strong, and accurate of grasp. 
 To run and spring, to climb and swim and strike and throw were 
 necessary human accomplishments. They had a high survival 
 value. Nature had to evolve and maintain a man who had the 
 capacity to do these things well, and who was willing to undergo 
 the necessary toil and pain of acquiring and exercising these arts 
 and crafts. To ride, to shoot, to manage boats, were occupa- 
 tions of prime utility. Successful mating was also necessary for 
 survival, and so the arts of courtship, dancing, music, decoration, 
 and various displays of grace and vigour were evolved. The 
 simple activities that were elaborated into these arts of hunting, 
 fighting, mating, were instinctive, and strong feelings of pleasure 
 were attached to them, as Nature's lure. When reason, or con- 
 scious cunning, came to cooperate with instinct, complicating 
 and refining the useful arts, the specific pleasures of instinctive 
 satisfaction were accompanied by a general sense of personal ela- 
 tion or pride. Now, in man, as in other animals, practice was 
 needed for the successful performance of these useful activities. 
 This practice takes the form of play, a more or less realistic sim- 
 ulation of the practices of fighting, hunting, courtship, in which, 
 however, considerable scope exists for variations and surprises, 
 the survival value of which is real, though indirect. Since these 
 forms of play appeal to and exercise the same activities as are 
 
 146
 
 SPORT, CULTURE AND CHARITY 147 
 
 involved in the serious affairs of life, the same sorts of satisfac- 
 tion are attached to them. The natural meaning of play is 
 that it is a preparation for work, i. e. for the arduous, painful, 
 and often dangerous tasks involved in 'the struggle of life,' and 
 the pleasure of play is the inducement to the acquisition of this 
 useful skill. 
 
 2. If this be so, it may be possible for some men to suck the 
 pleasure from the play without performing the useful work for 
 which it is a preparation. The play instincts can be made to 
 yield a desirable life of interest and pleasure to any class of men 
 who are enabled to get others to perform their share of useful 
 work, and thus to provide them with the time, energy and ma- 
 terial means for the elaboration of the play side of life. Such 
 is the physical explanation of the sportsman. The play which 
 Nature designed as means to life, he takes as an end, and lives 
 'a sporting life'. Some of his sports bear on the surface few 
 signs of biological play about them. The manual and mental 
 dexterity of such indoor games as bridge and billiards, appear 
 quite unrelated to the arduous pursuits of mountaineering or 
 big-game hunting. Between these two lie the great majority of 
 active sports, such as shooting, racing, and the various games of 
 ball. No one who analyses carefully the feelings of pleasure got 
 from a boundary hit, a run with the ball, a neck-to-neck race, 
 or any other athletic achievement, can doubt their nature. 
 
 Fighting, hunting, fishing, climbing, exploring, reduced to 
 sports, contain just as much ' realism ' as is needed to evoke the 
 pleasurable excitement which sustained these skilful efforts when 
 they belonged to the struggle for life. Some of the imitations 
 may be so close to reality as to recall in almost its full intensity 
 the primal thrill, as in tiger-stalking, in boxing, or rock climbing. 
 In ball-games the fictitious circumstances call for more imagina- 
 tion, though the pleasure of the actual stroke is chiefly a race 
 memory of a blow struck at an enemy, or of a blow warded off. 
 No one can doubt the nature of the fierce pleasure of the football 
 scrimmage with its mortal make-believe. 
 
 Although in many sports some element of physical risk is 
 needed to sustain the realism, it is usually reduced to trifling 
 dimensions. This is also true of the painful endurance inci-
 
 i 4 8 WORK AND WEALTH 
 
 dental to the primitive struggle. The modern sportsman or 
 explorer commonly devises ways of economising both his per- 
 sonal risk and his personal effort. Beaters find the animal or 
 bird for him to shoot; native porters and guides carry food for 
 him, and ease his path. His object is to secure the maximum 
 pleasure of achievement with the minimum risk and effort. Per- 
 haps the most highly-elaborated example is the playful revival 
 of the migratory and exploring instincts, from the picnic to the 
 world-tour, with the complex apparatus of pleasure-travel which 
 occupies so large a part in the life of the well-to-do classes. The 
 luxurious life of travel in which the motor-car, the train de luxe, 
 or the yacht carries men and women from the gorgeous hotel of 
 one beauty spot to that of another, is made pleasurable or tol- 
 erable by waking up the dim shadow of some wandering ances- 
 tor, whose hunting or pastoral habits required some satisfaction 
 to evoke the life-preserving effort. Camping-out and caravan- 
 ning are somewhat more realistic reproductions, bringing in more, 
 of the gregarious or corporate instinct of the tribe. 
 
 How subtle are the artifices by which human cunning seeks 
 to exploit the past is best illustrated, however, in the purely 
 spectatorial or sympathetic surroundings of sport. To play 
 football is one remove from battle, to watch the game is two 
 removes, to watch the "tape" or follow the scores in the news- 
 papers is three removes. Yet millions of little thrills of satisfac- 
 tion are got from this simulation of a simulated fight. Blended 
 in various degrees with other zests, of hazard, of petty cunning, 
 and avarice, where betting enters into sport, the sporting inter- 
 est ranks highest of all in the scale of values among the able- 
 bodied males of all classes in English-speaking peoples. 
 
 Added to the pleasure from the output of strength or skill in 
 sport is the general sentiment of exultation, the sense of glory. 
 To what must that be attributed? Not to the magnitude of the 
 strength or skill. A navvy may display greater strength or en- 
 durance in his work, a trapper or a common fisherman a finer 
 skill in catching his prey. But the true glory of sportsmanship 
 is denied them. Why? Because their work is useful, and they 
 are doing it for a living. The glory of the successful sportsman 
 is due to the fact that his deeds are futile. And this conspicuous
 
 SPORT, CULTURE AND CHARITY 149 
 
 futility is at the root of the matter. The fact that he can give 
 time, energy, and money to sport testifies to his possession of 
 independent means. He can afford to be an idler, and the more 
 obviously useless and expensive the sport, the higher the pres- 
 tige attaching to it. His personal glory of strength, endurance, 
 or skill is set in this aureole of parasitism. The crucial test of 
 this interpretation is very simple. Let it turn out that a Mara- 
 thon winner, who seemed to be a gentleman, was really a pro- 
 fessional, what a drop in his personal prestige! The professional 
 is a man who has to earn a living, his reputation as a sportsman 
 is damaged by that fact. Can there be any more convincing 
 proof that the high prestige of sport is due to the evidence of 
 financial prowess which it affords? 
 
 The hunting and the fighting instincts evidently underlie the 
 pleasure of nearly all the exclusively male sports. Doubtless 
 other instinctive satisfactions enter in, such as the gregarious 
 instinct with its conscious elaboration of esprit de corps. When- 
 ever any game or sport brings the sexes into relation with one 
 another, the mating instincts are evidently involved. The cross- 
 ing of war with sex in the theory and practice of chivalry was a 
 conscious and artistic blending of these pleasure motives. 
 
 But this treatment of sport as a frivolous pursuit of pleasure 
 ignores one important aspect. Sport, it will be urged, after all 
 has health for its permanent utility. It is exercise for the body 
 and diversion for the mind. It wards off the natural conse- 
 quences of the purely parasitic life, which a private income ren- 
 ders possible, by providing work-substitutes. The primal law, 
 'in the sweat of thy face shalt thou eat bread,' is gracefully 
 evaded by games that include a gentle perspiration. Golf may 
 take the place of spade-labour to win appetite and digestion; 
 bridge will save the brain from absolute stagnation. So Nature's 
 self-protective cunning elaborates these modes of sham-work. 
 
 3. The social condemnation of a sporting-life is two-fold. In 
 the first place, it diverts into lower forms of activity the zests 
 and interests intended to promote a life of work and art. The 
 sporting-life and standards choke the finer arts. The sportsman 
 and the gamester are baser artists choosing the lower instead of 
 the higher modes of self-realisation in manual and intellectual
 
 i S o WORK AND WEALTH 
 
 skill. This maintenance of barbarian standards of values by the 
 classes possessing social prestige is a great obstacle to the develop- 
 ment of science, art, and literature. In the second place, sport 
 spoils the spontaneity and liberty of play, which is a necessity 
 of every healthy life. It spoils it for the sportsman by reason of 
 its artificiality and its excess. For the sporting-life does not sat- 
 isfy those who practise it. It carries the Nemesis of boredom. 
 The sense of triviality and of futility gradually eats through, 
 and the make-believe realism, when confronted with the serious 
 values of life, shows its emptiness. A heavier social damage is 
 the economic cost which the expensive futility imposes. For 
 sport involves the largest diversion of unearned income into un- 
 productive expenditure. Not only does it dedicate to extrava- 
 gant waste a larger share of the land, the labour, and the enter- 
 prise of men than any other human error, unless it be war itself, 
 but it steals the play-time of the many to make the over-leisure 
 of the few. If the parasitic power which sustains the sporting- 
 life were taken away, the world would not be duller or more 
 serious. On the contrary, play would be more abundant, freer, 
 more varied, and less artificial in its modes. 
 
 The identification of a sportsman with a gentleman has carried 
 great weight in the unconscious settling of social values, and in 
 England has been subtly serviceable as a sentimental safeguard 
 against the attacks upon the economic supports not only of land- 
 lordism but of other wealth which has covered itself with the 
 trappings of sport. 
 
 The relative prestige of other occupations is determined to a 
 considerable extent by their association with the sporting-life 
 or with the original activities which sport reproduces. Not only 
 the idle landowner, but the yeoman, and in a less degree the ten- 
 ant farmer, enjoy a social consideration beyond the measure of 
 their pecuniary standing, by virtue of the opportunities for hunt- 
 ing and other sport which they enjoy. Part of the reputation of 
 the military and the naval services is explained by the survival 
 of the barbarian feeling that a life of hazard and rapine contains 
 finer opportunities for physical prowess than a life of productive 
 activity. Though a good deal of this prestige belongs to the glory 
 of 'command' and extends even to a great employer of labour,
 
 ( 
 
 -. *^-^ 
 
 SPORT, CULTURE ANTTCHARITY 151 
 
 the glamour of the soldier's, hunter's, sportsman's life hangs in 
 a less degree about all whose occupations, however servile, keep 
 them in close contact with these barbarian activities. A pub- 
 lican, a professional cricketer, a stud-groom, a gamekeeper, enjoy 
 among their companions a dignity derived from their association 
 with the sporting-life. 
 
 4. If physical recreations thus carry prestige, so in a less de- 
 gree and in certain grades of society do intellectual recreations. 
 Once a sportsman alone had a claim to be regarded as a gentle- 
 man. Only in comparatively modern times did the association 
 of 'a scholar and a gentleman' seem plausible. Even now prow- 
 ess of the mind can seldom compete in glory with prowess of the 
 body. The valuation of achievements current in our public- 
 schools persists, though with some abatement, among all sorts 
 and conditions of men. But as mental skill becomes more and 
 more the means of attaining that financial power which is the 
 modern instrument of personal glory, it rises hi social esteem. 
 As manners, address, mental ability and knowledge more and 
 more determine personal success, intellectual studies become in- 
 creasingly reputable. 
 
 It might appear at the first sight that the highest reputation 
 would attach to those abilities and studies which had the high- 
 est immediate utility for money-making. But here the barba- 
 rian standard retains a deflecting influence. To possess money 
 which you have not made still continues to be far more honor- 
 ific than to make money. For money-making, unless it be by 
 loot or gambling, involves addiction to a business life instead of 
 the life of a leisured gentleman. So it comes to pass that studies 
 are valued more highly as decorative accomplishments than as 
 utilities. A man who can have afforded to expend long years 
 in acquiring skill or knowledge which has no practical use, 
 thereby announces most dramatically his possession, or his 
 father's possession, of an income enabling him to lead the life 
 of an independent gentleman. The scale of culture-values is 
 largely directed by this consideration. Thus not only the choice 
 of subjects but the mode of treatment in the education of the 
 children of the well-to-do is, generally speaking, in inverse ratio 
 to their presumed utility. The place of honour accorded to
 
 i 5 2 WORK AND WEALTH 
 
 dead languages is, of course, the most patent example. Great 
 as the merits of Greek and Latin may be for purposes of intel- 
 lectual and emotional training, their predominance is not mainly 
 determined by their merits, but by the traditional repute which 
 has made them the chosen instruments for a parade of 'useless' 
 culture. Though some attempt is made in recent times to ex- 
 tract from the teaching of the ' classics' the finer qualities of the 
 'humanities' which they contain, this has involved a revolt 
 against the pure ' scholarship ' which sought to exclude even such 
 refined utilities and to confine the study of the classics to a grace- 
 ful, skilful handling of linguistic forms and a purely superficial 
 treatment of the thought and knowledge contained in the chosen 
 literature. It is significant that even to-day 'culture' primarily 
 continues to imply knowledge of languages and literature as ac- 
 complishments, and that, though mathematics and natural 
 sciences enter more largely into the academic curriculum, they 
 continue to rank lower as studies in the education of our wealthy 
 classes. 
 
 Most convincing in its testimony to the formation of intellec- 
 tual values is the treatment of history and modern English 
 literature. Although for all purposes of culture and utility, it 
 might have been supposed that the study of the thought, art, 
 and events of our own nation and our own times, would be of 
 prime importance, virtually no place is given to these subjects. 
 History and literature, so far as they figure at all, are treated not 
 in relation to the life of to-day, but as dead matter. Other sub- 
 jects of strictly vital utility, such as physiology and hygiene, 
 psychology and sociology, find no place whatever in the general 
 education of our schools and universities, occupying a timid posi- 
 tion as ' special ' subjects in certain professional courses. 
 
 Pedagogues sometimes pretend that this exclusion of 'utility' 
 tests for the subjects and the treatment in our system of educa- 
 tion rests upon sound educational principles, in that, ignoring 
 the short-range utilities which a commercial or other 'practical' 
 training desiderates, they contribute to a deeper and a purer 
 training of the intellectual faculties. But having regard to the 
 part played by tradition and ecclesiastical authority in the es- 
 tablishment of present-day educational systems, it cannot be
 
 SPORT, CULTURE AND CHARITY 153 
 
 admitted that they have made a serious case for the appraise- 
 ment of studies according to their human values. Probably our 
 higher education, properly tested, would be found to contain a 
 far larger waste of intellectual 'efficiency' than our factory sys- 
 tem of economic efficiency. And this waste is primarily due to 
 the acceptance and survival of barbarian standards of culture, 
 imperfectly adjusted to the modern conditions of life, and chiefly 
 sustained by the desire to employ the mind for decorative and 
 recreative, rather than for productive or creative purposes. Art, 
 literature and science suffer immeasurable losses from this mis- 
 government of intellectual life. The net result is that the vast 
 majority of the sons and daughters even of our well-to-do classes 
 grow up with an exceedingly faulty equipment of useful knowl- 
 edge, no trained ability to use their intellects or judgments freely 
 and effectively, and with no strong desire to attempt to do so. 
 They thus remain or become the dupes of shallow traditions, or 
 equally shallow novelties, under the guise of scientific, philo- 
 sophic, economic or political principles which they have neither 
 the energy of mind nor the desire to test, but which they permit 
 to direct their lives and conduct in matters of supreme importance 
 to themselves and others. 
 
 As education is coming to take a larger place as an organised 
 occupation, and more time, money and energy are claimed for 
 it, the necessity of a revaluation of intellectual values on a sane 
 basis of humanism becomes more exigent than ever. For there 
 is a danger of a new bastard culture springing up, the product 
 of a blending of the barbarian culture, descending by imitation 
 of the upper classes, with a too narrowly utilitarian standard im- 
 provised to convert working-class children into cheap clerks 
 and shopmen. Our high-schools and local universities are al- 
 ready victims to this mesalliance between 'culture' and 'busi- 
 ness', and the treatment of not a few studies, history and eco- 
 nomics in particular, is subject to novel risks. 
 
 5. Dilettantism is the intellectual equivalent of sport. What 
 is the moral equivalent? The sporting-life has an ethics of its 
 own, the essence of which lies in eschewing obligations with 
 legal or other compulsory external sanctions, in favour of a vol- 
 untary code embodying the mutual feelings of members of a
 
 iS4 WORK AND WEALTH 
 
 superior caste. In an aristocracy of true sportsmen honesty 
 and sexual 'morality' are despised as bourgeois virtues, while 
 justice is too compulsory and too equalitarian for acceptance. 
 Honour takes the place of honesty, good form of morals, fair- 
 play and charity of justice. It is the code of the barbarian super- 
 man or chieftain, qualified, softened and complicated to suit the 
 conditions of the modern play-life. Courage and endurance, 
 fidelity, generosity and mercy are his virtues: temperance, mod- 
 esty, humility, gratitude, have no proper place in such a code, 
 which is indeed based upon a free exercise of the physical func- 
 tions for personal pleasure and glory. 
 
 The hazard belonging to a sporting life makes for superstition. 
 Nobody is more crudely superstitious than the gambler, and 
 everybody to whom life is primarily a game conceives of it as 
 proceeding by rules which may be evaded or tampered with. 
 This aspect of the sporting character gave the priestly caste its 
 chief opportunity to get power. So pietism was grafted on the 
 sportsman and the fighting-man, and religion kept a hold on 
 the ruling and possessing classes, adapting its moral teaching 
 to his case. The wide divergence of British Christianity from 
 the teaching of the gospels finds its chief explanation in this ne- 
 cessity of adaptation. Its doctrines and its discipline had to be 
 moulded so as to fit the character and conduct of powerful men, 
 who not only would repudiate its inner spiritual teaching, but 
 whose lust, pride, cruelty and treachery, the natural outcome of 
 their animal life, were constantly leading them to violate the 
 very code of honour they professed. As industry and property, 
 peace and order, became more settled and wide-spread, there 
 came up from below a powerful commercial class, whose eco- 
 nomic and social requirements evolved a morality in which the so- 
 called puritan virtues of industry, thrift, honesty, temperance, 
 sexual purity, prevailed, and a Christianity designed primarily 
 to evoke and to sustain them. Just as the intellectual culture 
 of the aristocracy came to clash with the utilitarian education 
 of the bourgeois and to produce the confusing compromise which 
 at present prevails, so with the differing ethics of the same two 
 classes. The incursion of the wealthy tradesman into ' high life ' 
 and of the landed gentry into the 'city' has visibly broken
 
 SPORT, CULTURE AND CHARITY 155 
 
 down the older standards both of morals and of manners. The 
 prestige of the sporting virtues has played havoc with the sim- 
 plicity and austerity of the puritan morals and creeds, though it 
 may fairly be maintained that the saner utilities of the latter 
 have tempered to a perceptible degree the morals and manners 
 of the sportsman. Luxuries and frivolities of a more varied order 
 have largely displaced the older sporting-life, introducing into 
 it some elements of more intellectual skill and interest, though 
 it remains primarily devoted to the pursuit of pleasurable sensu- 
 ous futilities. !*r- w; 
 
 But, though the modes of the leisure life are shifting, the defi- 
 nitely parasitic attitude and career which it embodies remain un- 
 changed. The sense of justice and of humanity among its mem- 
 bers is as defective as ever. This truth is sometimes concealed 
 by the change in social areas that is taking place. Class honour 
 and comradeship have a somewhat wider scope as the range of 
 effective intercourse expands, and classes which formerly were 
 wide apart come partially to fuse with one another, or are brought 
 within the range of sympathy, as regards their more sympathetic 
 members. So intercourse upon a fairly equal basis can take 
 place hi such a country as England between most persons who 
 have reached a certain level of refinement of living. This cer- 
 tainly implies some transfusion of moral standards, the union of 
 common sentiments regarding industry and property with the 
 downward spread of a modified conception of a sporting life. 
 Indeed, imitation has gone a certain way towards infecting all 
 the stabler grades of the working-classes with this blend of bar- 
 barian and puritan valuations. While the larger pecuniary 
 means and leisure which they possess has introduced into their 
 standard of life sporting habits largely imitative of the fully 
 leisured aristocracy, it has implanted habits of 'respectability' 
 as the contribution of the bourgeois type immediately above 
 them in the social scale. 
 
 6. But when we dip down below the bourgeois and the regu- 
 lar working-classes which he has drilled in industry, we find a 
 lower leisure class whose valuations and ways of living form a 
 most instructive parody of the upper leisure class. Both in 
 country and town life these types appear. They include 'gyp-
 
 I5 6 WORK AND WEALTH 
 
 sies', tramps, poachers and other vagabonds, who have never 
 been enlisted in the army of industry, or have deserted in favour 
 of a 'free ' life of hazard, beggary and plunder. In towns natural 
 proclivities or misfortune account for considerable groups of 
 casual workers, professional or amateur thieves and prostitutes, 
 street-sellers, corner-men, kept husbands, and other parasites 
 who are a burden on the working-classes. Alike in country and 
 in town, these men practise, so far as circumstances allow, the 
 same habits and exhibit the same character as the leisure class 
 at the top. The fighting, sporting, roving, generous, reckless, 
 wasteful traits are all discernible, the same unaffected contempt 
 for the worker, the same class camaraderie, often with a special 
 code of honour, the same sex license and joviality of manners. 
 Even their intelligence and humour, their very modes of speech, 
 are the half-imitative, half-original replica of high life as it shows 
 in the race-course, in the club smoke-room, or the flash music- 
 hall. Often the parasites and hangers-on to upper-class sports 
 and recreations, these form a large and growing class of our pop- 
 ulation, and their withdrawal from all industry that can be 
 termed productive, coupled with the debased mode of consump- 
 tion which they practise, count heavily in the aggregate of social 
 waste. 
 
 7. As the opportunities of leisure and of some surplus income 
 beyond the current accepted standard of class comfort become 
 more general, this sympathetic imitation of recreations, educa- 
 tion and morals, undoubtedly makes for a national standardisa- 
 tion of life, though the enormous discrepancies in economic re- 
 sources greatly limit the efficacy of such a tendency to unity. 
 But the apparent gain in humanity thus suggested is largely 
 counterworked by the stronger sense of national and especially 
 of racial cleavage which has come with modern world intercourse. 
 If class barriers of conduct, education and feeling are somewhat 
 weakening in the foremost European nations, a clearer and in- 
 tenser realisation of national and racial barriers takes their 
 place. Every modification of class exclusiveness, and of eco- 
 nomic plunder, upon the smaller scale, is compensated by this 
 wider racial exclusiveness, with its accompanying parasitism. 
 The civilised Western world is coming more consciously to mould
 
 SPORT, CULTURE AND CHARITY 157 
 
 its practical policy, political and economic, and its sentiments 
 and theories, upon a white exploitation of the lower and the back- 
 ward peoples. Imperialism is displacing, or at present is crossing, 
 class supremacy, and is evolving an intellectualism and a morals 
 accommodated to the needs of this new social cleavage. It is 
 moving towards a not distant epoch in which Western white 
 nations may, as regards their means of livelihood, be mainly de- 
 pendent upon the labour of regimented lower peoples in various 
 distant portions of the globe, all or most members of the domi- 
 nant peoples enjoying a life of comparative pleasure and leisure 
 and a collective sense of personal superiority as the rulers of 
 the earth. 
 
 That standards of recreation, education and morals, thus 
 formed and transformed, are likely to contain enormous 'wastes' 
 in their direct and indirect bearing upon economic life, is ob- 
 vious. How far this waste is to be imputed to imitation of the 
 prestige-possessing habits of 'the leisured class', how far to 
 'original sin' or the errors or excesses natural to all sorts and 
 conditions of men, it is not possible to ascertain. But it will be 
 evident that in these higher satisfactions, to which an increasing 
 'surplus' of wealth, leisure and energy can be devoted, will be 
 found the largest wastes. For the conventional expenditure em- 
 bedded in these strata of the various class standards will be 
 largely directed by motives which are very loosely related to 
 any real standard of organic welfare. One need not exaggerate 
 this expenditure of time or money, or deem it wholly unproduc- 
 tive. It may even be conceded that few of the pursuits of pleas- 
 ure are wholly destitute of benefit, nor are prestige and the imi- 
 tation it engenders wholly valueless. But such practices contain 
 much that is obsolete, incongruous or indigestible, much that is 
 actively injurious, both to the individual and to society. Re- 
 garded from the standpoint of pecuniary expenditure, the mis- 
 direction of the surplus income into empty or depraved modes 
 of recreation, culture, religion and charity is the largest of all 
 economic wastes. Could it be set forth in veracious accounts, 
 its enormity would impress all reflective minds. How small the 
 total yield of human welfare or even of current pleasurable sat- 
 isfaction from the idle travel, racing, hunting, motoring, golfing,
 
 i S 8 WORK AND WEALTH 
 
 yachting, betting and gambling, in comparison with the human 
 gain from the work and arts of which they are the futile substi- 
 tutes! Consider the damage to agriculture, the sheer loss of 
 human energy, the selfishness, sensuality and brutality inci- 
 dental to many sports, the empty-mindedness, obtuseness of 
 intelligence and insensate pride, the shutting of the senses and 
 the emotions to most of the finer and nobler scenes in the spec- 
 tacle of nature and the drama of humanity, that are the natural 
 and necessary consequences of 'a sporting life.' Or could one 
 accurately analyse the costs of dilettantism, sham culture, with 
 its monstrous perversions of productive energy in the fields of 
 pedagogy, art, science, and literature, in a descending scale of 
 frivolousness or depravity, as they seize by imitation the awaken- 
 ing mind of ever larger strata of our populations! But even 
 worse than sham intellectualism is the sham morality which tricks 
 itself out in pietistic formulas and charitable practices, so as to 
 evade obedience to the plain laws of human brotherhood and 
 social justice in this world. 
 
 The widest and deepest implications of this parasitic life of 
 luxury and leisure, the substitution of recreation for art and 
 exercise, of dilettantism for the life of thought, of pietism, and 
 charity for human fellowship, lie beyond the scope of our formal 
 enquiry. We are concerned with them primarily as affecting 
 economic production and consumption. Sport, dilettantism and 
 charity are for us characteristic products of mal-distribution seiz- 
 ing that surplus-income which is the economic nutriment of social 
 progress, and applying it to evolve a complicated life of futile 
 frivolities for a small leisured class who damage by their conta- 
 gious example and incitement the standards of the working 
 members of the society in which they exercise dominion.
 
 CHAPTER XII 
 
 THE HUMAN LAW OF DISTRIBUTION 
 
 i. In seeking at once to establish and apply to industry a 
 standard of human value, we have taken for our concrete subject- 
 matter the aggregate of marketable goods and services that 
 constitute the real income of the nation. This real wealth, 
 distributed in income among the various members of the com- 
 munity, we subjected to a double analysis, tracing it backwards 
 through the processes of its production, forward into its consump- 
 tion. Some of the activities of its production we recognised as 
 being in themselves interesting, pleasant, educative or other- 
 wise organically useful: others we found to be uninteresting, 
 painful, depressing or otherwise organically costly. A similar 
 divergence of human value appeared in the consumption of those 
 forms of wealth. Some sorts and quantities of consumption were 
 found conducive to the maintenance and furtherance of healthy 
 life, both pleasant and profitable. Other sorts and qualities of 
 consumption were found wasteful or injurious to the life of the 
 consumers and of the community. 
 
 The general result of this double analysis may be summarised 
 in the following tabular form. 
 
 WEALTH 
 PRODUCTION CONSUMPTION 
 
 Art & Exercise. I Human f Needs. 
 
 Labour. Utility [Abundance. 
 
 Toil. Human f Satiety. 
 
 Mai-production. J Cost ( Mai-consumption. 
 
 In the ordinary economic account 'costs' appear entirely on 
 the Production side of the account, 'utility' entirely on the Con-
 
 160 WORK AND WEALTH 
 
 sumption side. Production is regarded not as good or desirable 
 in itself, but only as a means towards an end, Consumption. 
 On the other hand, all parts of Consumption are regarded as in 
 themselves desirable and good, and are assessed as Utilities ac- 
 cording to the worth which current desires, expressed in pur- 
 chasing power, set upon them. 
 
 Our human valuation refuses to regard work as a mere means 
 to consumption. It finds life arid welfare in the healthy func- 
 tioning of productive activities, as well as in the processes of 
 repair and growth which form sound consumption. 
 
 If all production could be reduced to Art and Exercise, the 
 creative and the re-creative functions, all consumption to the 
 satisfaction of physical and spiritual needs, we should appear to 
 have reached an ideal economy, in which there would be no hu- 
 man costs and a maximum amount of human utility. The con- 
 ditions of a complete individual life would seem to be attained. 
 But we are not concerned with a society in which completeness 
 of the individual life is the sole end, but with a society in which 
 the desires, purposes and welfare of the individuals are com- 
 prised in the achievement of a common life. For this reason I 
 have included under the head of Utility on the Productive side 
 of our account, not only the Art and Exercise which are directly 
 conducive to individual well-being, but a quantum of Labour 
 which represents the economic measure of the inter-dependency, 
 or solidarity, of the so-called individuals. Such labour is the 
 so-called 'sacrifice' required of 'individuals' in the interest of 
 the society to which they belong. To the individualist it ap- 
 pears a distortion of the free full development of his nature, an 
 interference with his perfect life. But it is, of course, neither 
 sacrifice nor distortion. For the so-called individual is nowise, 
 except in physical structure, 1 completely divided from his fel- 
 lows. He is a social being and this social nature demands recog- 
 nition and expression in economic processes. It requires him to 
 engage in some special work which has for its direct end the wel- 
 
 1 Even there he is not separated in physical functions. The sexual, philoprogeni- 
 tive, and the gregarious instincts, which are rooted in physical structure, negate 
 physical individualism. So does the structure of his brain, which in solitude decays 
 or becomes diseased.
 
 THE HUMAN LAW OF DISTRIBUTION 161 
 
 fare of society, In addition to the work of using his own powers 
 for his own personal ends. How far this routine labour for so- 
 ciety can be taken into his conception of his human nature, and 
 so become a source of personal satisfaction, is a question we shall 
 discuss later on. At present it will suffice to recognise that each 
 man's fair contribution to the routine labour of the world, though 
 irksome to him, is not injurious but serviceable to his 'human' 
 nature. Thus interpreted, it stands on the utility, not on the 
 cost, side of the account. It must be distinguished from its ex- 
 cess, which we here term 'toil', and from work, which whether 
 from an abuse of the creative faculty or of social control, is bad 
 and degrading in its nature and is here termed mal-production. 
 
 A similar distinction between the narrowly personal and the 
 broader social interpretation of welfare is applicable on the con- 
 sumption side. It is clearly not enough that the income which 
 is to furnish consumption should suffice only to make provision 
 for the satisfaction "of the material and spiritual needs of the in- 
 dividual or even of his family. The expenditure of every man 
 should contain a margin which I here call 'abundance' from 
 which he may contribute voluntarily to the good of others. There 
 will be public needs or emergencies, which are not properly 
 covered by State services but remain a call upon the public 
 spirit of persons of discernment and humanity. There are also 
 the calls of hospitality and comradeship, and the wider claim of 
 charity, the willing help to those in need, a charity that is spon- 
 taneous, not organised, that degrades neither him who gives nor 
 him who receives, because it is the natural expression of a spirit 
 of human brotherhood. For the sting alike of condescension 
 and of degradation would be removed from charity, when both 
 parties feel that such acts of giving are an agreeable expression 
 of a spirit of fellowship. From the consumption which is thus 
 applied to the satisfaction of sound personal needs, or which 
 overflows hi 'abundance' to meet the needs of others, we dis- 
 tinguish sharply that excessive quantity of consumption, which 
 in our Table ranks as 'Satiety', and those base modes of con- 
 sumption which in their poisonous reactions on personal and 
 social welfare strictly correspond to the base forms of production. 
 
 2. Such are the general lines of demarcation between the
 
 162 WORK AND WEALTH 
 
 strictly business and the human valuation of the productive and 
 consumptive processes. We now perceive how close is the re- 
 semblance of the laws of human valuation as applied to the two 
 sides of the equation of Wealth. This similarity is, of course, 
 no chance coincidence: it inheres in the organic nature of so- 
 ciety and of individual life. But, in order to proceed with our 
 main purpose, the expression of the economic income in terms 
 of human income, we must bring the two sides of the enquiry 
 into closer union. We can thus get a fair survey of the current 
 life of industry from the standpoint of wealth and waste, health 
 and disease. So far as our national income, the 2,000,000,000 
 of goods and services, are produced by activities, which in their 
 nature and distribution can be classed as Art, Exercise and Social 
 Labour, and are consumed in ways conducive to the satisfac- 
 tion of individual and social Needs, our industrial society is 
 sound. 
 
 Probably the greater part of our income is thus made and 
 spent. The necessity of attending more closely to the defects 
 than to the successes of the present system must not lead us to 
 disparage the latter. 
 
 If industry were in fact the irrational, unjust and utterly in- 
 human anarchy it is sometimes represented to be, it would not 
 hold together for twenty-four hours. Not merely is the individ- 
 ual business in its normal state a finely adjusted, accurately- 
 working complex of human skill, industry and cooperative good- 
 will, but the larger and less centralised structures, which we call 
 trades and markets, show a wonderful intricacy of order in their 
 form and working. To feed the thousands of mills and workshops 
 of England with a fairly regular supply of countless materials 
 drawn from the wide world, to feed the millions of mouths of 
 our people with their regular supply of daily food, are notable 
 achievements of industrial order. In concentrating, as we must, 
 our chief thought upon the disorder of the system, the places 
 where it fails, and the damage of such failure, we gain nothing 
 by exaggerating the industrial maladies and their social injuries. 
 
 The proportions of order and disorder, health and disease, 
 human cost and human utility, in the working of our industrial 
 system are best ascertained by turning once more to our con-
 
 THE HUMAN LAW OF DISTRIBUTION 163 
 
 crete mass of wealth, our income, and enquiring into the quantita- 
 tive method of its distribution. 
 
 In examining the human costs involved in a given output of 
 labour-power (and of other productive energy) we recognised 
 that very much depended upon the conditions of that output, and 
 particularly upon the length and intensity of the working-day 
 and working-week. 
 
 Similarly, in examining the human utility got from the con- 
 sumption of a given quantity of goods, we recognised that it will 
 depend upon the sort and the number of persons who receive it 
 for consumption. 
 
 So from both sides of the question we approach the central 
 issue of the distribution of Wealth. 
 
 If the 2,000,000,000 of goods were found to be so distributed 
 in the modes of their production as to involve no burden of toil 
 and no injury upon the producers, while they were so distributed 
 in income as to involve no waste or damage in consumption, the 
 human utility it represented would reach a maximum and cost 
 would be zero. 
 
 If, on the other hand, the same goods were largely produced 
 by ill-nourished labourers, working long hours under bad hy- 
 gienic conditions, and using capital largely furnished by the pain- 
 ful and injurious saving of the poor, while the distribution of 
 the goods was such as to assign the bulk of them to a small af- 
 fluent class, the masses living on a bare subsistence level, the 
 human utility of such a system would be very small, its human 
 cost very great. Judged indeed from any right standard of 
 civilisation, an industrial society of the latter sort might repre- 
 sent a minus quantity of human welfare. 
 
 There might even be two nations of equal population and 
 economic income, equally prosperous from the standpoint of 
 statistics of commerce, which nevertheless, by reason of the 
 different apportionment of work and income, stood poles asunder 
 in every true count of human prosperity. 
 
 3. Now the Human Law of Distribution, in its application to 
 industry, aims, as we have seen, to distribute Wealth, in relation 
 to its production on the one hand and its consumption on the 
 other, so as to secure the minimum of Human Costs and the max-
 
 164 WORK AND WEALTH; 
 
 imum of Human Utility. No bare rule of absolute equality, 
 based upon the doctrine of equal rights, equal powers or equal 
 needs, will conduce to this result. The notion that the claims 
 of justice or humanity would be met by requiring from all per- 
 sons an equal contribution to the general output of productive 
 energy is manifestly foolish and impracticable. To require the 
 same output of energy from a strong as from a weak man, from 
 an old as from a young, from a woman as from a man, to ignore 
 those actual differences of age, sex, health, strength and skill, 
 would be rejected at once as a preposterous application of human 
 equality. If such an equal output were required, it could only 
 be obtained by an average task which would unduly tax the 
 powers of the weak, and would waste much of the powers of 
 the strong. A similar human economy holds of the provision 
 of capital through saving. To impose saving upon working folk 
 whose income barely maintains the family efficiency, when other 
 folk possess surplus-incomes out of which the socially necessary 
 capital can be provided, is a manifestly wasteful policy. Those 
 who have no true power to save should not be called upon to 
 undergo this 'cost': all saving should come proportionately out 
 of higher incomes where it involves no human sacrifice. Alike, 
 as regards labour and capital, the true social economy is ex- 
 pressed in the principle that each should contribute hi accord- 
 ance with his ability. 
 
 It should be similarly evident that exact equality of incomes 
 in money or in goods for all persons is not less wasteful, or less 
 socially injurious. I cannot profess to understand by what rea- 
 soning some so-called Socialists defend an ideal order in which 
 every member of society, man, woman and child, should have 
 an absolutely equal share of the general income. The needs of 
 people, their capacity to get utility out of incomes by consuming 
 it, are no more equal than their powers of production. Neither 
 in respect of food, or clothing, or the general material standard 
 of comfort, can any such equality of needs be alleged. To say 
 that a big strong man, giving out a correspondingly large output 
 of energy, needs exactly the same supply of food as a small 
 weakly man, whose output is a third as great, would be as ridicu- 
 lous as to pretend that a fifty-horse power engine needed no
 
 THE HUMAN LAW OF DISTRIBUTION 165 
 
 more fuel than a ten-horse power one. Nor will the differences 
 in one set of needs be closely compensated in another. Mankind 
 is not equal in the sense that all persons have the same number 
 of faculties developed, or capable of development, to the same 
 extent, and demanding the same aggregate amount of nutriment. 
 To maintain certain orders of productive efficiency will demand 
 a much larger consumption than to maintain others. Because 
 differences of income and expenditure exist at present which are 
 manifestly unjust and injurious, that is no reason for insisting 
 that all differences are unwarrantable. Equality of opportu- 
 nity does not imply equality but some inequality of incomes. 
 For opportunity does not consist in the mere presence of some- 
 thing which a man can use, irrespective of his own desires and 
 capacities. A banquet does not present the same amount of 
 opportunity to a full man as to a hungry man, to an invalid as 
 to a robust digestion. 1,000, spent in library equipment for 
 university students, represents far more effective opportunity 
 than the same sum spent on library equipment in a community 
 where few can read or care to read any book worth reading. 
 Equality of opportunity involves the distribution of income ac- 
 cording to capacity to use it, and to assume an absolute equality 
 of such capacity is absurd. 
 
 It may no doubt be urged that it is difficult to measure in- 
 dividual needs and capacities so as to apply the true organic 
 mode of distribution. This is true and any practical rules for 
 adjusting income, or for distribution of the product, according 
 to needs, will be likely to involve some waste. But that is no 
 reason for adopting a principle of distribution which must in- 
 volve great waste. However difficult it may be to discover and 
 estimate differences of needs in individuals or classes of men, to 
 ignore all differences insures a maximum of waste. For, assum- 
 ing, as it does, a single average or standard man, to which type 
 no actual man conforms, it involves a necessary waste in each 
 particular case. Everyone, in a word, would under this mechan- 
 ical interpretation of equality possess either a larger or a smaller 
 income than he could use. Such a doctrine, though sometimes 
 preached by persons who call themselves socialists, is really a 
 survival of the eighteenth-century doctrine of individual rights,
 
 166 WORK AND WEALTH 
 
 grafted on to a theory of the uniformity of human nature that 
 is contradicted by the entire trend of science. 
 
 This levelling doctrine only serves to buttress the existing 
 forms of inequality, by presenting in the guise of reform a spu- 
 rious equality, the folly and the waste of which are obvious even 
 to the least reflecting of mankind. 
 
 4. Distribution of income according to needs, or ability to 
 use it, does not, indeed, depend for its practical validity upon 
 the application of exact and direct measurements of needs. The 
 limits of any sort of direct measurement even of material needs 
 appear in any discussion of the science of dietetics. But inexact 
 though such science is, it can furnish certain valid reasons for 
 different standards of food in different occupations, and for other 
 discriminations relating to race, age, sex and vigour. What 
 holds of food will also hold of housing, leisure, modes of recrea- 
 tion and intellectual consumption. Nor must it be forgotten 
 that, for expenditure, the family is the true unit. The size and 
 age of the family is certainly a relevant factor in estimating needs, 
 and in any distribution on a needs basis must be taken into ac- 
 count. 
 
 Public bodies, and less commonly private forms, in fixing sal- 
 aries and wages, are consciously guided by such considerations. 
 The idea is to ascertain the sum which will maintain a worker, 
 with or without a family, in accordance with economic efficiency, 
 and having regard to the accepted conventions of the class from 
 which he will be drawn. Having determined this 'proper' salary 
 or wage, they seek to get the best man for the work. It is true 
 that the conventional factor looms so big in this process as often 
 to obscure the natural economy. When it is determined by a 
 municipality that its Town Clerk ought to have 1500 a year 
 and its dustman 225. a week, it appears a palpable straining of 
 language to suggest that differences of 'needs' correspond to 
 this discrepancy of pay. For, though it is true that in the ex- 
 isting state of the market for legal ability and experience the 
 town may not be able to get a really good town clerk for less, 
 that state of the legal market is itself the result of artificial re- 
 strictions in opportunity of education and of competition, which 
 have no natural basis and which a society versed in sound social
 
 THE HUMAN LAW OF DISTRIBUTION 167 
 
 economy will alter. But the fact that the existing interpretation 
 of needs is frequently artificial and exaggerated must not lead 
 us to ignore the element of truth embodied in it. The wages of 
 policemen, the real wages of soldiers and sailors, are determined 
 with conscious relation to the needs of able-bodied men engaged 
 in hard physical work, and with some regard to the existence of 
 a wife and family. But I need not labour the point of the dif- 
 ference between the salary and the 'commodity' view of labour. 
 The acceptance among all thoughtful employers of ' the economy 
 of high wages ' applied within reasonable limits is itself the plain- 
 est testimony to the actuality of the 'needs' basis of income. 
 That unless you pay a man enough to satisfy his needs, you can- 
 not get from him his full power of work, is a proposition which 
 would meet with universal acceptance. 
 
 But it will commonly be added that the safest way of measur- 
 ing needs is by means of output. This output, measured by 
 work-time, or by piece, or by a combination of the two, still re- 
 mains the general basis of payment. How far is this conform- 
 able to our theory of human distribution, according to needs? 
 That there is some conformity will, I think, be easily perceived. 
 If one docker unloads twice as much grain or timber as another 
 docker in the same time, or if one hewer working under the same 
 conditions 'gets' twice as much coal as another, there is a reason- 
 able presumption that the larger actual quantity of labour has 
 taken a good deal more ' out of him '. 
 
 Putting the comparison on its barest physical basis, there has 
 been a larger expenditure of tissue and of energy, which must 
 be replaced by a larger consumption of food. A strong man 
 doing much work may not be exerting himself more than a weak 
 man doing little work. But all the same there is some propor- 
 tion between the respective values of their output of physical 
 energy and their intake of food. This, of course, is a purely 
 physiological application of our law of human distribution. It 
 applies both to sorts of work and to individual cases in the same 
 sort of work, and constitutes an 'organic' basis for difference of 
 'class' wages and individual wages. We urge that it is appli- 
 cable to other factors of consumption than food, and throughout 
 the whole area of production and consumption. But applied as
 
 i68 WORK AND WEALTH 
 
 a practical principle for determining distinctions of class or 
 grade payment, and still more for individual payment within a 
 class, it has a very limited validity. Rigorously applied it is 
 the pure 'commodity' view of labour, the antithesis of the 'sal- 
 ary' view which best expresses the 'needs' economy. But, 
 though output cannot be taken as an accurate measure of 'needs' 
 for the purpose of remuneration, it clearly ought to be taken 
 into account. The practical reformer will indeed rightly insist 
 that it must be taken into account. For he will point out that 
 output is a question not merely of physiological but still more of 
 moral stimulus. A strong man will not put out more productive 
 energy than his weaker fellow unless he knows he is to get more 
 pay; a skilful man cannot be relied upon to use his full skill un- 
 less he personally gains by doing so. If the sense of social ser- 
 vice were stronger than it is, a bonus for extra strength or skill 
 might be unnecessary. But as human nature actually stands, 
 this stimulus to do a 'best' that is better than the average, must 
 be regarded as a moral 'need' to be counted for purposes of re- 
 muneration along with the physiological needs. Too much need 
 not be made of this distinctively selfish factor. In many sorts 
 of work, indeed, it may not be large enough to claim recognition 
 in remuneration. But where it is important, the application of 
 our needs economy of distribution must provide for it. This ad- 
 mission does not in the least invalidate our organic law. For the 
 moral nature of a man is as 'natural' as his physical nature. 
 Both are amenable to education, and with education will come 
 changes which will have their just reactions upon the policy of 
 remuneration. 
 
 5. The organic law of distribution in regarding needs will, 
 therefore, take as full an account as it can both of the unity and 
 the diversity of human nature. The recognition of 'common' 
 humanity will carry an adequate provision of food, shelter, 
 health, education and other prime necessaries of life, so as to 
 yield equal satisfaction of such requirements to all members of 
 the community. This minimum standard of life will be substan- 
 tially the same for all adult persons, and for all families of equal 
 size and age. Upon this standard of human uniformity will be 
 erected certain differences of distribution, adjusted to the spe-
 
 THE HUMAN LAW OF DISTRIBUTION 169 
 
 cific needs of any class or group whose work or physical conditions 
 marks it out as different from others. The present inequalities 
 of income, so largely based upon conventional or traditional 
 claims, would find little or no support under this application of 
 the organic law. Indeed, it seems unlikely that any specific re- 
 quirements of industrial or professional life would bulk so largely 
 in interpreting human needs as to warrant any wide discrimina- 
 tion of incomes. There seems no reason to maintain that a 
 lawyer's or a doctor's family would require, or could advanta- 
 geously spend, a larger income than a bricklayer's, in a society 
 where equality of educational and other opportunities obtained. 
 But, if there were any sorts of work which, by reason of the spe- 
 cial calls they made upon human faculties, or of the special condi- 
 tions they imposed, required an expenditure out of the common, 
 the organic law of distribution according to needs would make 
 provision for the same as an addition to the standard minimum. 
 So likewise the hours of labour would be varied from a standard 
 working-day to meet the case of work unusually intense or wear- 
 ing in its incidence. To what extent society would find it nec- 
 essary to recognise individual differences of efficiency within each 
 grade as a ground for particular remuneration and how far 
 such claims would represent, not payment according to true 
 needs but power to extort a personal rent is a question which 
 can only be answered by experience. It may, however, be re- 
 garded as certain that the high individual rents which prevail 
 at present in skilled manual and mental work, could not be 
 maintained. For these high rates depend upon conditions of 
 supply and of demand which would not then exist. The enor- 
 mous fees which specialists of repute in the law or medicine can 
 obtain depend, partly, upon the inequality of educational and 
 social opportunities that limits the supply of able men in these 
 professions; partly, upon other inequalities of income that en- 
 able certain persons to afford to pay such fees. Equality of 
 opportunity and even an approximate equalisation of income 
 would destroy both these sources of high rents of ability. What 
 applies in the professions would apply in every trade. Individ- 
 ual 'rents' of ability might survive, but they must be brought 
 within a narrow compass.
 
 i 7 o WORK AND WEALTH 
 
 While, then, the selfishness of individual man might give a 
 slight twist to the application of the social policy of distribution 
 according to needs, it would not impair its substantial validity 
 and practicability. 
 
 Thus we see this law of distribution, operative as a purely 
 physical economy in the apportionment of energy for mechan- 
 ical work, operative as a biological economy through the whole 
 range of organic life, is strictly applicable as a principle of social 
 economy. Its proper application to social industry would en- 
 able that system to function economically, so as to produce the 
 maximum of human utility with the minimum of human cost. 
 
 6. If we can get an industrial order, in which every person 
 is induced to discover and apply to the service of society his 
 best abilities of body and mind, while he receives from society 
 what is required to sustain and to develop those abilities, and 
 so to live the best and fullest life of which he is capable, we have 
 evidently reached a formally sound solution of the social problem 
 on its economic side. We are now in a position to approach the 
 actual processes of economic distribution that prevail to-day, 
 so as to consider how far they conform to this sound principle 
 of human industry. 
 
 We are not justified at the outset in assuming that any wide 
 discrepancy will be admitted. On the contrary, in many quar- 
 ters there survives a firm conviction that our actual system of 
 industry does work in substantial conformity with the human 
 law of distribution. 
 
 The so-called laissez-faire theory of industrialism based its 
 claims to utility and equity upon an assertion of the virtual 
 identity of the economic and the human distribution. If every 
 owner of capital or labour or any other factor of production were 
 free to apply his factor in any industry and any place he chose, 
 he would choose that industry and that place where the highest 
 remuneration for its employment was attainable. But since all 
 remuneration for the factors of production is derived from the 
 product itself, which is distributed among the owners of the sev- 
 eral factors, it follows that the highest remuneration must al- 
 ways imply the most productive use. Thus, by securing com- 
 plete mobility of capital and labour, we ensure both a maximum
 
 THE HUMAN LAW OF DISTRIBUTION 171 
 
 production and an equitable distribution. 'Led as by an in- 
 visible hand, ' every owner of capital, labour or other productive 
 power, disposed of his factor in a manner at once most service- 
 able to the production of the general body of wealth and most 
 profitable to himself. The application of this theory, of course, 
 assumed that everybody knew or could get to know what em- 
 ployment he would be likely to find most profitable for his capi- 
 tal or labour, and would use that knowledge. It was, moreover, 
 held that the actual conditions of industry and commerce did 
 and must substantially conform to this hypothesis of mobility. 
 Any circumstances, indeed, which contravened it by obstruct- 
 ing the mobility and liberty of employment were treated as 
 exceptional. Such exceptions were monopolies, the exclusive 
 owners of which forbade freedom of entry or of competition to 
 outside capital and labour, and secured higher rates of profit 
 than prevailed in other businesses. The harmony of perfect in- 
 dividualism demanded that all such monopolies, together with 
 protective duties and other barriers to complete liberty of com- 
 merce and of industry, should be removed. All productive power 
 would then flow like water through the various industrial chan- 
 nels, maintaining a uniform level of efficient employment, the 
 product being distributed in accordance with the several costs 
 of its production and being absorbed in the processes of produc- 
 tive consumption that were required to maintain the current 
 volume of productive power or to enhance it. 
 
 There was a little difficulty in the case of rents of land. Though 
 differential rents, measuring the superior productivity of various 
 grades of land as compared with the least productive land in use, 
 were necessary payments to landowners, they could not rank as 
 costs and could not be productively consumed. So likewise with 
 the scarcity rents, paid even for the least productive lands where 
 the supply for certain uses was restricted. Both scarcity and 
 differential rents were classed as surplus. But though the mag- 
 nitude of this exceptional element might seem to have been a 
 fatal flaw in the individualist harmony, a characteristic mode of 
 escape was found in the doctrine of parsimony which prevailed. 
 Though economic rents could not be productively consumed by 
 their recipients, they furnished a natural fund of savings, so pro-
 
 i; 2 WORK AND WEALTH 
 
 viding the growing volume of new capital which was necessary 
 to set labour to productive work. So, by a somewhat liberal 
 interpretation, it was contended that 'the simple system of 
 natural liberty', even operating on a basis of private ownership 
 of land, drew from each man the best and fullest use of his pro- 
 ductive powers, and paid him what was economically necessary 
 to maintain and to evoke those powers. Early critics of this 
 theory, of course, pointed out that the interpretation of distribu- 
 tion 'according to needs' was defective from the standpoint of 
 humanity, since the only needs taken into account were effi- 
 ciency for productive work, the nourishment and stimulus to 
 produce a larger quantity of marketable goods, not the attain- 
 ment of the highest standard of human well-being. But to most 
 economists of that day such a criticism seemed unmeaning, so 
 dominant in their minds was the conception of economic wealth 
 as the index and the instrument of human welfare. 
 
 7. It is commonly asserted and assumed that this laissez- 
 faire theory is dead, and that the attainment of a harmony of 
 social welfare, by the free intelligent play of individual self- 
 interest in the direction of economic forces, has been displaced 
 by some theory of conscious cooperative or corporate direction 
 in which the State takes a leading part. But at this very time, 
 when the policy of every civilised nation is engaged more and 
 more in checking monopolies and industrial privileges upon the 
 one hand, and in placing restraints upon the havoc of unfettered 
 competition on the other, a distinct and powerful revival of an 
 economic theory of production and distribution undistinguish- 
 able in its essentials from the crude i8th century laissez-faire 
 has set in. Largely influenced by the desire to apply mathemat- 
 ics, so as to secure a place for economics as an 'exact' science, 
 many English and American economists have committed them- 
 selves to a 'marginalist' doctrine, which for its efficiency rests 
 upon assumptions of infinite divisibility of the factors of produc- 
 tion, and frictionless mobility of their flow into all the channels 
 of industry and commerce. These assumptions granted, capital 
 and labour flow into all employments until the last drop in each 
 is equally productive, the products of the 'marginal' or final 
 drops exchanging on a basis of absolute equality and earning
 
 THE HUMAN LAW OF DISTRIBUTION 173 
 
 for their owners an equal payment. Among English economists 
 Mr. Wicksteed has set out this doctrine in all its economic ap- 
 plications most fully. He shows how by a delicate balance of 
 preferences 'at the margins' i. e. in reference to the last portion 
 of each supply of or demand for anything that is bought or sold, 
 there must be brought about an exact equivalence of utility, of 
 worth, and of remuneration, for the marginal increments in all 
 employment. ' So far as the economic forces work without fric- 
 tion, they secure to everyone the equivalent of his industrial 
 significance at the part of the industrial organism at which he 
 is placed.' * Elsewhere 2 he asseverates that, as regards the 
 workers hi any employment, this means that 'they are already 
 getting as much as their work is worth,' and that if they are to 
 get more, this 'more' can only be got either out of 'communal 
 funds,' or by making their work worth more. The same ap- 
 plication of the marginalist doctrine is made by Professor Chap- 
 man. 'The theory, then, merely declares that each person will 
 tend to receive as his wage his value that is, the value of this 
 marginal product no more and no less. In order to get more 
 than he actually does get, he must become more valuable, work 
 harder, for instance that is, he must add more to the product 
 in which he participated.' 3 This is precisely the old 'laissez- 
 faire, laissez-aller ' teaching, fortified by the conception that some 
 special virtue attaches to the equalising process which goes on 
 ' at the margin ' of each employment of the factors of production. 
 The 'law of distribution' which emerges is that every owner 
 of any factor of production 'tends to receive as remuneration' 
 exactly what it is 'worth'. Now this 'law' is doubly defective. 
 Its first defect arises from the fact that economic science assigns 
 no other meaning to the 'worth' or 'value' of anything than what 
 it actually gets hi the market. To say, therefore, that anybody 
 'gets what he is worth', is merely an identical proposition, and 
 conveys no knowledge. The second defect is the reliance upon 
 a ' tendency ' which falsely represents the normal facts and forces. 
 It is false in three respects. It assumes in the first place an in- 
 finite divisibility of the several factors, necessary to secure the 
 
 1 The Comtnon-sense of Political Economy, p. 698. 
 
 2 P. 345- 3 Work and Wages, Vol. I, p. 14.
 
 i 7 4 WORK AND WEALTH 
 
 accurate balance of 'preferences' at the margins. It next as- 
 sumes perfect mobility or freedom of access for all capital and 
 labour into all avenues of employment. Finally, it assumes a 
 statical condition of industry, so that the adjustment of the fac- 
 tors on a basis of equal productivity and equal remuneration at 
 the margins may remain undisturbed. All three assumptions 
 are unwarranted. Very few sorts of real capital or labour ap- 
 proach the ideal of infinite divisibility which marginalism re- 
 quires. An individual worker, sometimes a group, is usually the 
 minimal 'drop' of labour, and capital is only infinitely divisible 
 when it is expressed in terms of money, instead of plants, 
 machines or other concrete units. Still less is it the case that 
 capital or labour flows or 'tends' to flow with perfect accuracy 
 and liberty of movement into every channel of employment where 
 it is required, so as to afford equality of remuneration at the sev- 
 eral margins. Lastly, in most industrial societies the constant 
 changes taking place, in volume and in methods of industry, 
 entail a corresponding diversity in the productivity and the re- 
 muneration of the capital and labour employed in the various 
 industries 'at the margin.' * 
 
 8. This slightly technical disquisition is rendered necessary 
 by the wide acceptance which 'marginalism' has won in aca- 
 demic circles. Its expositors are able to deduce from it practical 
 precepts very acceptable to those politicians and business men 
 who wish to show the injustice, the damage and the final futility 
 of all attempts of the labouring classes, by the organised pressure 
 of trade unionism or by politics, to get higher wages or other ex- 
 pensive improvements of the conditions of their employment. 
 
 1 Professor Pigou (Wealth and Welfare, p. 176), though adopting the general posi- 
 tion of marginalism, makes a concession, as to its applicability, which is a virtual 
 admission of its futility. For by showing that only in 'industries of constant re- 
 turns' are 'supply price' and 'marginal supply price* equal, and that in industries 
 of 'decreasing' or of 'increasing' returns there exists a tendency to exceed or to 
 fall short of ' the marginal net product yielded in industries in general,' he virtually 
 endorses the criticism that 'marginalism' assumes a statical condition of industry. 
 For only in a statical condition would all industries be found conforming to con- 
 stant returns: the operation of increasing or diminishing returns means nothing else 
 than that changes in volume or methods of production are raising or lowering pro- 
 ductivity and remuneration above or below the equal level which 'marginalism' 
 desiderates.
 
 THE HUMAN LAW OF DISTRIBUTION 175 
 
 For if 'marginalism' can prove that, as Professor Chapman 
 holds, 'in order to get more than he actually does get, he must 
 become more valuable work harder, for example,' it has evi- 
 dently re-created the defences against the attacks of the workers 
 upon the fortresses of capital which were formerly supplied by 
 the wage-fund theory in its most rigorous form. If wages can 
 only rise on condition of the workers working harder or better, 
 no divergence of interests exists between capital and labour, no 
 injustice is done to any class of labour, however low its 'worth' 
 may be, and no remedy exists for poverty except through im- 
 proved efficiency of the workers. If our political economists 
 can bring this gospej of marginalism home to the hearts and 
 heads of the working-classes, they will set aside all their foolish 
 attempt to get higher wages out of rents and property and will 
 set themselves to producing by harder, more skilful and more 
 careful labour an enlarged product, the whole or part of which 
 may come to them by the inevitable operation of the economic 
 law of equal distribution at the margin ! 
 
 It is right to add that an attempt is sometimes made to bring 
 marginalism into a measure of conformity with the notorious 
 fact that large discrepancies exist in the rates of remuneration 
 for capital or labour or both in various industries, by treating 
 these inequalities as brief temporary expedients for promoting 
 the 'free flows' of productive power from less socially productive 
 into more socially productive channels, and for stimulating im- 
 provements in the arts of industry. Abnormal gains, of the na- 
 ture of prizes or bonuses, are thus obtainable by individual em- 
 ployment, or by groups of employers, who are pioneers hi some 
 new industry or in the introduction of some new invention or 
 other economy. But these rewards of special merit, it is argued, 
 are not lasting, but disappear so soon as they have performed 
 their socially serviceable function of drawing into the favoured 
 employments the increased quantity of new productive power 
 which will restore the equality of productivity and remuneration 
 'at the margins'. 
 
 Now, even were it possible to accept this rehabilitation of 
 laissez-faire theory, accepting this equalising 'tendency' as pre- 
 dominant and normal, and classifying all opposing tendencies
 
 176 WORK AND WEALTH 
 
 as mere friction, it would not supply a law of distribution that 
 would satisfy the conditions of our 'human' law. It would af- 
 ford no security of distribution according to 'needs', or human 
 capacity of utilising wealth for the promotion of the highest 
 standard of individual and social welfare. It would remain an 
 ideally good distribution only in the sense that it would so ap- 
 portion the product as to furnish to all producers a stimulus 
 which would evoke their best productive powers, so contributing 
 to maximise the aggregate production of marketable goods. Only 
 so far as man was regarded as an economic being, concerned 
 merely in the nourishment and improvement of his marketable 
 wealth-producing faculties, would it be a sound economy. 
 
 Just as in the case of the older, cruder 'freedom of competi- 
 tion', it rests upon the fundamental assumption that all the prod- 
 uct, the real income of the community, will be absorbed in 'pro- 
 ductive consumption', defraying the bare 'costs' of maintaining 
 and improving the productive powers of capital, labour and 
 ability, for the further production of objective economic goods 
 and services. It would remain open to the objection that it as- 
 sumed an identity of economic wealth and human welfare which 
 is inadmissible, and that it refused to provide that subordination 
 of economic production and consumption to the larger concep- 
 tion of human welfare which sound principles of humanity re- 
 quire. Though all work might be most productively applied, it 
 might still contain excessive elements of human cost, and though 
 all products were productively consumed many of the finer needs 
 of individual men and of society might still remain without 
 satisfaction. 
 
 9. But the full divergence between the operation of the 
 actual economic law of distribution and the human law can best 
 be discovered by unmasking the fundamental falsehood of all 
 forms of the laissez-faire or competitive economy, viz. the as- 
 sumption that the national income tends to be distributed in a 
 just economy of costs. Is there in fact any operative law which 
 distributes or 'tends' to distribute the 2,000,000,000 worth of 
 goods that form our income, so that all, or even most of it, acts 
 as a necessary food and stimulus to evoke the full and best pro- 
 ductive work of those who receive it? Or, if there are failures
 
 THE HUMAN LAW OF DISTRIBUTION 177 
 
 in this economical distribution, are they so few, so small, and so 
 ephemeral, that they may reasonably be treated as 'friction', or 
 as that admixture of error or waste which is unavoidable in all 
 human arrangements? 
 
 Now it is of course true that the national income must con- 
 tinually provide for the subsistence of the labour, ability and 
 capital, required to maintain the existing structure of industry 
 and the current output of goods and services. The brain-workers 
 and the hand-workers of every sort and grade, from artist and 
 inventor to routine labourer, must be continuously supplied with 
 the material and non-material consumables sufficient to enable 
 them to replace in their own persons, or through their offspring, 
 the physical and psychical wear and tear involved in their work. 
 The fertility of the soil, the raw materials, fuel, buildings, tools 
 and machines, requisite in the various productive processes, 
 must similarly be maintained out of the current output. These 
 bare costs of subsistence, the wages, salaries and depreciation 
 funds necessary to replace the wear and tear of the human and 
 material agents of production, are a first charge upon the na- 
 tional dividend. To refuse the payments which provide this sub- 
 sistence would be suicidal on the part of the administrators of 
 the income. They rank, from the standpoint of society 1 as costs 
 of production. If the product which results from the productive 
 use of these factors exceeds what is necessary to defray these 
 costs, the surplus may be employed in either of two ways. It 
 may be distributed among the productive classes in extra- 
 payments so as to evoke by a set of economically-adjusted 
 stimuli such enlarged or improved efficiency as will provide for 
 a larger or a better product in the future. In a society of a pro- 
 gressive order where the numbers or the wholesome needs, or 
 both, are on the increase, no surplus, however large, can be ex- 
 cessive for such provision. A socially sound and just distribu- 
 tion of the surplus would be one which absorbed it entirely in 
 what may be called the 'costs of growth'. This, however, does 
 not by any means imply that the whole of the surplus must ad- 
 
 1 From the standpoint of the individual business firm 'costs of production' may 
 include many higher rates of payments, necessary under the actual conditions of 
 competitive industry to secure the use of the required agents.
 
 i 7 8 WORK AND WEALTH 
 
 vantageously be distributed directly among the individual owners 
 of labour, ability or saving power, in order to evoke from them the 
 maximum extension of their several productive powers. A good 
 deal of the surplus may, indeed, be thus applied in higher in- 
 dividual incomes of producers. But the State, politically or- 
 ganised society, must look to the 'surplus' for its costs, not only 
 of upkeep but of progress. For whatever part we may assign to 
 the State in aiding industrial production, all will agree that much 
 of its work, in the protection and improvement of the conditions 
 of life, is essential to the stability and progress of industry, and 
 involves 'costs' which can only be met by a participation in the 
 industrial dividend. It may even be urged that the claims of 
 the State to maintenance and progress are equal to the claims 
 of individuals upon the surplus. For it is evident that industrial 
 progress demands that both individual and social stimuli and 
 nutriment of progress must be provided from the surplus by 
 some considered adjustment of their several claims. A surplus, 
 thus properly apportioned in extra-subsistence wages and other 
 payments to producers and in public income, would be produc- 
 tively expended and would thus contribute to the maximum 
 promotion of human welfare. 1 
 
 10. But though in such a society as ours a certain part of 
 the surplus is thus 'productively' applied, and is represented in 
 industrial and human progress, a large part is not so expended 
 in 'costs of progress'. A large quantity of 'surplus' is every- 
 where diverted into unproductive channels. The income which 
 should go to raise the efficiency of labour, to evoke more saving, 
 and to improve the public services, is largely taken by private 
 owners of some factor of production who are in a position to ex- 
 tort from society a payment which evokes no increase of produc- 
 tive efficacy, but is sheer waste. This power to extort super- 
 fluous and unearned income is at the root of every social-economic 
 malady. Indeed, it often goes beyond the diversion of surplus 
 from productive into unproductive channels. It often encroaches 
 upon costs of maintenance. For the vital statistics of large 
 
 1 For it must be kept in mind that the 'productive expenditure' to which refer- 
 ence is here made refers ultimately to a standard not of market but of human 
 values.
 
 179 
 
 classes of labour show that the food, housing and other elements 
 of real wages, are insufficient for the upkeep of a normal working 
 life and for the rearing of a healthy and efficient offspring. This 
 means that surplus is actually eating into 'costs', in that the 
 costs of maintenance, which sound business administration au- 
 tomatically secures for the capital employed, are not secured for 
 the labour. The reason why this policy, which from the social 
 standpoint is suicidal, can nevertheless be practised, is obvious. 
 For the capital 'belongs to' the business, hi a sense in which the 
 labour does not. A sweating economy which 'lets down' the 
 instruments of capital is of necessity unprofitable to the individ- 
 ual firms : a similar sweating economy applied to the instruments 
 of labour need not be unprofitable. To the nation as a whole, 
 indeed, regarded merely as a goods-producing body, any such 
 withholding of the true costs of maintenance must be unprofit- 
 able. But there are businesses, or trades, where 'sweated' la- 
 bour may be profitable to the employers or the owners of capital. 
 There are many more where such a wage-policy, though not 
 really profitable, appears so, and is actually practised as 'sound 
 business '. How large a proportion of the 14,0x30,000 wage-earners 
 whose incomes are paid out of our 2,000,000,000 come under 
 this category of ' sweated ' workers, we cannot here profitably dis- 
 cuss. But, apart from the great bulk of casual workers in all less 
 skilled trades, there are large strata of skilled and trained adult- 
 labour in the staple trades of the country which are not paid a 
 full subsistence wage. Such are the large bodies of women em- 
 ployed in factories and workshops and in retail trade, at wages 
 varying between eight and fourteen shillings. Indeed, it may 
 safely be asserted that the average wage of an adult working- 
 woman in this country, not in domestic service, is a sweating 
 wage, definitely below true economic maintenance, and still more 
 below the decent human requirements of life. The same state- 
 ment also holds of the wage of agricultural labour in most dis- 
 tricts of the middle and southern counties of England. In such 
 employments the true economic 'costs' of maintenance are not 
 provided out of the present distribution of the national income. 
 Of a far wider range of labour is it true that the true wages of 
 progressive efficiency, which we have seen are vital to the eco-
 
 i8o WORK AND WEALTH 
 
 nomic progress of the nation, are withheld. Though this depriva- 
 tion does not form the whole case for labour as stated from the 
 'human' standpoint, it constitutes the heaviest economic count 
 against the current distribution of wealth. The full physical and 
 spiritual nutriment, the material comforts, the education, leisure, 
 recreation, mobility and broad experience of life, requisite for 
 an alert, resourceful, intelligent, responsible, progressive working- 
 class, are not provided either by the present wage-system, or by 
 the growing supplements which the communal action of the State 
 and the municipality are making to the individual incomes of 
 the workers. Out of the 2,000,000,000 a wholly insufficient sum 
 is distributed in wages of progressive efficiency for labour. 
 
 In certain other respects also the current 'costs' distribution 
 is exceedingly defective. The saving which goes to provide for 
 the enlargement of the capital structure of industry is very waste- 
 fully provided. A large proportion of such savings as are con- 
 tributed out of working-class incomes involves an encroachment 
 upon their costs of progressive efficiency, and represents, from 
 the standpoint both of the individual family and of society, bad 
 economy. Moreover, the methods of collection and of applica- 
 tion of such capital are so wasteful and so insecure as to render 
 working-class thrift a byword in the annals of business admin- 
 istration. 
 
 u. But these deficiencies in the economy of 'costs' can only 
 be understood by a study of that large section of the national 
 income which in its distribution furnishes no food or stimulus 
 whatever to any form of productive energy. Even in v the ideal- 
 ist laissez-faire economics we saw that rent of land was distin- 
 guished from the wages, interest and profits, which constituted 
 the 'costs of production', and was described as 'surplus'. It 
 was recognised that, where land was required for any productive 
 purpose, its owners would receive in payment for its use any por- 
 tion of the product, or its selling value, which remained over after 
 the competitively determined 'costs' of capital and labour had 
 been defrayed. The payment was economically necessary be- 
 cause suitable land for most industrial uses was scarce, and the 
 amount of the payment would depend upon how much was left 
 when capital and labour had received their share. For the land-
 
 THE HUMAN LAW OF DISTRIBUTION 181 
 
 lord would take all the surplus. There are those who still insist 
 that the owners of land are everywhere in this position of resid- 
 uary legatees. Land, they think, is always relatively scarce, 
 capital and labour always and everywhere relatively abundant. 
 Free competition then between the owners of the relatively abun- 
 dant factors will keep down the price for them to bare 'costs', 
 leaving a maximum amount of surplus which the so-called land 
 ' monopolists ' will receive as rent. This surplus evokes no pro- 
 ductivity from the soil or its owners; its payment does nothing 
 to stimulate any art of industry. But, if the landowner did not 
 take it, and it was kept by farmers as profits, or by labourers as 
 wages, it would be just as wasteful from the productive stand- 
 point, as if it passed as rent, for, upon the hypothesis of such 
 economists, the full competitive wages and profits are the only 
 payment entitled to count as cost, and no addition to such pay- 
 ments would increase the productivity of capital or labour. 
 
 12. Now though there have been times and countries in 
 which rent of land was the only considerable surplus, this is not 
 the case in any developed industrial community to-day. Other 
 factors of production, capital, ability, or even in some instances 
 labour, share with land the power to extort scarcity prices. 
 
 The hypothetical abundance, mobility and freedom of com- 
 petition, which should prevail among all owners of capital, abil- 
 ity and labour, keeping down all their remuneration to a common 
 minimum, are everywhere falsified by industrial facts. At va- 
 rious points in industry capital or managerial ability is found 
 strongly entrenched against the competition of outsiders, and 
 able to set limits upon internal competition. Wherever this con- 
 dition is found, the owners of the capital or the ability so advan- 
 tageously placed are able to obtain a 'surplus', which, in its 
 origin and its economic nature and effects, nowise differs from 
 the economic rents of land. The fluidity and complete freedom 
 which appear to attach to the term capital, so long as we treat 
 it in its abstract financial character, disappear as soon as for 
 capital we substitute certain skilfully made machinery con- 
 structed under patent rights and operated by more or less secret 
 processes, turning out, with the assistance of carefully trained 
 and organised labour, goods which enjoy a half-superstitious
 
 i8 2 WORK AND WEALTH 
 
 fame and special facilities of market. An examination of the 
 capitalist system will disclose in every field of industry numer- 
 ous instances of businesses or groups of businesses, sometimes 
 constituting whole trades, which by reason of some advantage 
 in obtaining raw materials, transport or marketing facilities, 
 public contracts, legal privilege or protection, by using some su- 
 perior process of manufacture, skill in advertising, established 
 reputation, financial backing, or by sheer magnitude of opera- 
 tions, are screened from the full force of free competition, and are 
 earning interest and profits far exceeding the minimum. Some 
 such businesses or groups of businesses possess a virtual monopoly 
 of the market, and can control output and prices, so as to secure 
 abnormal dividends. Such control is, to be sure, never absolute, 
 its control of prices being subject to two checks, the restriction 
 of demand which attends every rise of prices, and the increasing 
 probability of competition springing up if profits are too high. 
 But qualified monopolies, earning dividends far larger than are 
 economically necessary to support the required capital, are 
 everywhere in evidence. Trusts, cartels, pools, combines, con- 
 ferences, and trade agreements of various potency and strin- 
 gency, pervade the more highly organised industries, substitut- 
 ing the principle of combination for that of competition. In all 
 major branches of the transport trade by land and sea, in large 
 sections of the mining industry, in the iron and steel industry 
 and in many branches of machine-making, in many of the spe- 
 cialised textile trades, in the chemical and other manufactures 
 where special scientific knowledge counts, in many departments 
 of wholesale and retail distribution, and, last not least, in bank- 
 ing, finance and insurance, freedom of investment and of com- 
 petition have virtually disappeared. To assume that fresh 
 streams of capital, labour and business ability, have liberty to 
 enter these fields of enterprise, and by their equal competition 
 with the businesses already in possession so to increase the out- 
 put, lower selling prices and keep interest and profits at a bare 
 ' costs' level, is a childish travesty of the known condition of 
 these trades. To affirm that such mobility and liberty of com- 
 petition is the sole normal 'tendency', and that the monopolis- 
 tic and combinative forces merely represent friction, is so grave
 
 THE HUMAN LAW OF DISTRIBUTION 183 
 
 a falsification of the facts as to put out of court the whole method 
 of economic interpretation which is based thereon. Concrete 
 capital has none of the qualities assigned to the abstract capital 
 of these economists. It is neither infinitely divisible, nor abso- 
 lutely mobile, nor accurately directed, nor legally and econom- 
 ically ' free ' to dispose itself in any part of the industrial system 
 where the current interest or profit exceeds the average. Over 
 large tracts of industry combination is more normal and more 
 potent than competition, and where this is not the case, the most 
 competitive trades will be found honeycombed with obstructive 
 clots, businesses enjoying special advantages and earning corre- 
 spondingly high profits. 
 
 13. Because certain qualities of business ability are requi- 
 site, to wit astuteness, keenness of judgment, calculating power, 
 determination, capacity for organisation and executive ability, 
 it is sometimes claimed that the high rates of profit which accrue 
 from such businesses as we have indicated are really the creation, 
 not of monopoly or combination, but of the talents of these entre- 
 preneurs. But even though it be admitted that some such ability 
 is essential to produce or to maintain a successful combination, 
 can the entire profits of such a combination be imputed to this 
 ability or regarded as its natural and proper reward? Take the 
 common instance of the 'forestalled, who stops the supply of 
 some commodity on its way to a market, secures the whole supply 
 at competitive prices from the various contributors, and then 
 sells it at a monopoly price fixed by himself. Are the profits of 
 this corner a product of ability and a reward of ability, and not a 
 'surplus' representing an artificially contrived scarcity value? 
 Or take the case of a contracting firm, which persuades all the 
 other firms in a position to compete to come into an arrange- 
 ment as to a minimum tender. Are the extra profits due to such 
 an arrangement to be regarded as wages of ability, because some 
 tact was needed to work the thing? But suppose we granted 
 the whole contention, and agreed that the extra dividends paid 
 to shareholders in favoured or protected businesses were really 
 produced by the ability of the entrepreneur or manager, what 
 then? It is not proved that these extra profits are 'costs', not 
 'surplus'. On the contrary, the fact that they can be taken as
 
 i8 4 WORK AND WEALTH 
 
 extra dividends or bonuses by the owners of the capital, instead 
 of passing in 'wages of ability' to the entrepreneur, is proof posi- 
 tive that they are surplus. For if they were a subsistence wage 
 of ability, or even a 'prize', essential to evoke some special out- 
 put of skill or energy, they could not be thus diverted from the 
 entrepreneur to the shareholders. In fact, there is no reason to 
 suppose that any very rare or conspicuous ability is evinced in 
 working a successful pool or combine, or even in organising a 
 successful business. Still less is there reason to suppose that the 
 profits attending such an enterprise are in any way proportion- 
 ate to the skill or energy of the entrepreneur. Everyone is aware 
 that the contrary is the case. Indeed, so far as scientific, pro- 
 fessional, and business ability is industrially useful and has a 
 claim to income, enquiry shows that there is no better security 
 for mobility, freedom of competition and equality of payment, 
 than in the case of capital. Inequalities of economic conditions 
 between various classes of our population, involving inequalities 
 of nurture and of education, and of every other sort of 'oppor- 
 tunity' relevant to the discovery, training, equipment and suc- 
 cess of 'natural ability', set up a series of almost impenetrable 
 barriers to the free flow of natural ability throughout the in- 
 dustrial system, and give rise to an elaborate hierarchy of re- 
 stricted employments where the rates of remuneration repre- 
 sent, not any inherent services of ability, but the degree of the 
 restriction in relation to the importance of the work. All such 
 advantages of opportunity are reflected in rates of payment for 
 1 ability ' which carry elements of ' surplus. ' 
 
 Though some portion of the higher remuneration paid to suc- 
 cessful professional workers may be regarded as interest upon 
 the capital-outlay of their education and training, there is no 
 reason to hold that the extra payment is adjusted to the costs 
 of this outlay. Still less can any such argument avail in the case 
 of high business profits. Though ability and expensive training 
 may be favouring conditions to such financial success, restricted 
 competition must be accounted the principal direct determinant 
 of all such extra payments. 
 
 14. There remains one final demurrer to our doctrine of the 
 unproductive 'surplus'. If you take into consideration, it is
 
 THE HUMAN LAW OF DISTRIBUTION 185 
 
 urged, all the unsuccessful as well as the successful businesses, 
 you will find that the average return for capital and for business 
 ability is low enough, not in fact more than represents a bare 
 'costs' economy. Similarly with the high incomes earned by 
 the few successful men in the professions and in other walks of 
 life. Set the failures fairly against the successes and there is no 
 net ' surplus ' to take account of. 
 
 But this contention is one more abuse of the method of aver- 
 ages. To the charge that one man is overpaid, it is no answer 
 that another is underpaid. To the statement that surplus 
 emerges in the payment for some orders of capital or ability it 
 is no answer to say that other capital and ability does not even 
 get its true 'costs' or subsistence wages. The force of this re- 
 buttal is still further strengthened when it is realised to what 
 extent the success of those who succeed is directly responsible 
 for the failure of those who fail. For the economic strength of 
 those whose superior advantages have secured for them a posi- 
 tion of control will necessarily operate to make the competition 
 of outsiders difficult and their failure probable. Indeed, a por- 
 tion of the gains which combination yields will often be con- 
 sciously applied to kill the competition of outsiders, or to re- 
 strict their trade to the less profitable or the more precarious 
 forms of enterprise. But even where this business policy is not 
 adopted, the very fact that strong firms and 'combines' control 
 many markets, must, by limiting the area of free competition, 
 intensify the competition within that area and so cause the fail- 
 ures to be numerous. 
 
 The contention, that the excessive profits of successful firms 
 are balanced and in some way cancelled by the losses of those 
 that fail, is also contradicted by the psychology of the case. If 
 it could be shown that the chance of winning these high gains 
 was in fact a necessary inducement to the winners to stake their 
 capital and business capacity in an inherently risky line of enter- 
 prise, there might be some force in this plea. But to the men 
 who achieve these successes business is not a simple game of 
 hazard in which they have merely the same chance as the others. 
 Success is commonly achieved by force, strategy and the posses- 
 sion of known advantages, and is used to strengthen these ad-
 
 186 WORK AND WEALTH 
 
 vantages and so to increase continuously the 'pull' by which 
 they accumulate their gains and ruin their would-be competitors. 
 Although tight forms of monopoly are very rare, loose or partial 
 restrictions upon competition are very numerous and often very 
 profitable. All these extra gains, issuing from various forms of 
 natural or contrived scarcity in all sorts of industries, are rightly 
 classed as unproductive surplus. Many of them are as constant 
 and as certain as the economic rents of land, arise in the same 
 way from a limitation of some productive factor, and are 'un- 
 earned' income in the same sense of that term. Other of these 
 gains are more fluctuating, proceeding from less stable forms of 
 privilege or combination, but while they exist they equally be- 
 long to unproductive 'surplus'. 1 
 
 15. The distinction between that portion of the social in- 
 come which goes as necessary payments to support and evoke 
 the energies of body and mind of wealth-producers, i. e. costs 
 of production, and that which goes as unproductive 'surplus' 
 to those who, possessing some necessary instrument of produc- 
 tion that is relatively scarce, can exact a scarcity price, is fun- 
 damental in a valuation of industry. For this surplus not only 
 represents sheer economic waste, regarded from the social stand- 
 point, but it can be shown to be directly responsible, as an ef- 
 ficient cause, for most of those particular maladies in our cur- 
 rent processes of production and consumption which impede the 
 economic and the human progress of the nation. 
 
 For if our analysis of this surplus is correct, it consists in the 
 seizure of a large portion of the fruits of individual and social 
 productive energies, required for the full support and further 
 
 1 Economists, following the classical distinction made by Adam Smith in the case 
 of land-values, may break up the surplus into various species of scarcity rents on 
 the one hand and differential rents on the other. A scarcity or 'specific' rent will 
 occur when the whole supply of some factor of production, e. g. all the land available 
 for some particular use, or all the capital employed in some trade, is in a position to 
 take a payment higher than is obtainable where more land or capital is available 
 for this particular use than is required to turn out the supply of goods that is actually 
 sold. The worst hop land in use in England obtains a positive rent, the worst 
 equipped ships in the Atlantic combine obtain a surplus-profit: better acres of hop 
 land, better-equipped ships obtain a differential rent or profit in addition. Both 
 specific gain and differential gain are surplus, and the basis of each is a scarcity of 
 supply and a restraint of competition.
 
 THE HUMAN LAW OF DISTRIBUTION 187 
 
 stimulation of these energies and for the wider human life which 
 they are designed to serve, and their assignment to persons 
 who have not helped to make them, do not need them, and can- 
 not use them. The payment of surplus takes large sections of 
 the income, needed to raise the economic and human efficiency 
 of the working-classes, or to enable society to enlarge the scope 
 and to improve the quality of the public services, and disposes 
 them in ways that are not merely wasteful but injurious. In 
 effect, all the excessive human costs of production and all the 
 defective human utilities of consumption, which our separate 
 analysis of the two processes disclosed, find their concrete and 
 condensed expression in this 'surplus'. The chief injuries it 
 causes may be summarised as follows: 
 
 (1) Flowing abundantly as 'unearned' income into the posses- 
 sion of 'wealthy' individuals and classes, it thereby causes large 
 quantities of the national income to be consumed with little or 
 no benefit. For much, if not most, of this surplus, being devoted 
 to luxury, waste, extravagance and 'illth', furnishes by its ex- 
 penditure not human utility but human 'cost', not an enhance- 
 ment but a diminution of the sum of human welfare. 
 
 (2) By enabling its recipients to disobey the sound biological 
 and moral precept, 'In the sweat of thy face thou shalt eat 
 bread,' it calls into being and sustains a leisured or unem- 
 ployed class whose existence represents a loss of productive 
 energy and of wealth-production to the nation. 
 
 (3) The evil prestige and attraction of the life of sensational 
 frivolity this idle class is disposed to lead tends by suggestion 
 to sap the wholesome respect for work in the standards of the 
 rest of the community, and to encourage by servile imitation in- 
 jurious or wasteful methods of expenditure. 
 
 (4) The economic necessity of producing this surplus imposes 
 excessive toil upon the productive classes, being directly re- 
 sponsible for the long hours and speeding-up which constitute 
 the heaviest burden of human costs. The direction which the 
 expenditure of the surplus gives to capital and labour degrades 
 the character of large bodies of workers by setting them to futile, 
 frivolous, vicious or servile tasks. 
 
 (5) The disturbing irregularity of the trades which supply
 
 i88 WORK AND WEALTH 
 
 the capricious and ever-shifting consumption, upon which the 
 1 surplus' is so largely spent, imposes upon the workers a great 
 cost in the shape of irregularity of employment, and a consider- 
 able burden of costly saving by way of insurance against this 
 irregularity. 
 
 (6) By stamping with the badge of irrationality and inequity 
 the general process of apportionment of income, the surplus im- 
 pairs that spirit of human confidence and that consciousness of 
 human solidarity of interests which are the best stimuli of in- 
 dividual and social progress. 
 
 The surplus element in private income thus represents the hu- 
 man loss from defects in the current distribution of wealth, not 
 only the loss from wasteful and injurious consumption but from 
 wasteful and injurious production, an exaggeration of human 
 costs and a diminution of human utilities. The primary object 
 of all social-economic reforms should be to dissipate this surplus 
 and to secure its apportionment partly as useful income for in- 
 dividual producers, partly as useful income for society, so that, 
 instead of poisoning the social organism as it does now, it may 
 supply fuller nourishment and stimulus to the life of that or- 
 ganism and its cells. 
 
 Thus directed, partly into higher wages of efficiency for 
 workers, partly into further income for the enrichment of the 
 common life, the 'surplus' will in effect cease to be surplus, 
 being completely absorbed in satisfying the human requirements 
 of individuals and society. For not only will it furnish the ex- 
 penditure required to bring the standard of consumption of all 
 grades of workers up to the level of a full satisfaction of human 
 needs, but it will establish an entirely new conception of public 
 income. For it will be recognised that the public revenue, taken 
 either by taxation or as profits of public industry, is earned by 
 public work precisely as the revenue of individuals is earned by 
 private work, and is required for public consumption just as 
 private income is required for private consumption. Thus the 
 whole of what now figures as a wasteful ' surplus * would be applied 
 in productive consumption. 
 
 The scope of the operation of this organic law, of course, 
 widely transcends this special application to the distribution
 
 THE HUMAN LAW OF DISTRIBUTION 189 
 
 of economic income. It is the general law of order and of pro- 
 gress in all departments of organic activity. But for our task, 
 that of a human valuation of industry, its worth is supreme. For 
 in the application of the organic law of distribution all the great 
 antagonisms which loom so big as social Problems, Luxury and 
 Poverty, Toil and Idleness, The Individual and Society, Au- 
 thority and Liberty, find their solution. 1 
 
 1 For a detailed and more technical defence of the fundamentally important dis- 
 tinction between 'costs' and 'surplus' and for a closer analysis of the sources of 
 'unproductive surplus ', readers may be referred to the author's earlier work, The In- 
 dustrial System: an enquiry into earned and unearned income. (Longman's 2nd and 
 revised edition, 1909).
 
 CHAPTER XIII 
 
 THE HUMAN CLAIMS OF LABOUR 
 
 i. The validity of the human law of distribution is well 
 tested by considering the light it sheds upon the modern claims 
 of Labour and the Movement which is endeavouring to realise 
 these claims. For the significance of the Labour Movement 
 will continue to be misunderstood so long as it is regarded as a 
 mere demand for a larger quantity of wages and of leisure, im- 
 portant as these objects are. The real demand of Labour is 
 at once more radical and more human. It is a demand that 
 Labour shall no longer be bought and sold as a dead commodity 
 subject to the fluctuations of Demand and Supply in the market, 
 but that its remuneration shall be regulated on the basis of the 
 human needs of a family living in a civilised country. 
 
 At present most sorts of labourers are paid according to the 
 quantity of labour-power they give out, and according to the 
 market-price set upon a unit of each several sort of labour- 
 power. This means that the actual weekly earnings of some 
 grades of labourer are much higher than those of other grades, 
 not because the work takes more out of them, or because it in- 
 volves a higher standard of living, but because some natural, 
 some fortuitous, or some organised scarcity of supply exists 
 in the former grades, while there is abundance of supply in the 
 latter. 1 Moreover, the weekly earnings for any of these sorts of 
 labour will vary from week to week, from month to month, or 
 year to year, with the variations of Supply and Demand in the 
 Labour Market. The income of the working family will thus 
 vary for reasons utterly beyond its control, though its require- 
 ments for economic and human efficiency show no such varia- 
 tion. Thus there is no security for any class standard of living. 
 
 Within each class or grade of labour there will be variations 
 
 1 The width of variations in the weekly earnings, involving in most instances a 
 nearly corresponding variety of family income, may be illustrated by the following 
 
 190
 
 THE HUMAN CLAIMS OF LABOUR 
 
 of the individual family wage, based on the amount of labour- 
 power actually given out in the week. A less effective worker, 
 
 estimate compiled by Mr. Webb, from a careful analysis of official wage returns. 
 New Statesman, May 10, 1913. 
 
 TABLE SHOWING ESTIMATED EARNINGS OF EMPLOYED MANUAL 
 WORKING WAGE-EARNERS IN THE UNITED KINGDOM IN THE 
 YEAR 1912 
 
 MEN 
 
 Class 
 
 Numbers 
 
 Average rate 
 of earnings 
 in a full week 
 (including all 
 emoluments) 
 
 Average wages 
 bill for a full 
 week 
 
 Yearly wages 
 bill (allowing 
 5 weeks for 
 short time, 
 sickness, in- 
 voluntary holi- 
 days and un- 
 employment) 
 
 Men in Situations: 
 Below 153 
 
 320,000. 
 640,000 . 
 1,600,000. 
 1,680,000. 
 1,680,000. 
 1,040,000. 
 560,000. 
 480,000 . 
 
 4% 
 - 8% 
 
 20% 
 21% 
 21% 
 13% 
 
 7% 
 . 6% 
 
 s.d. 
 (abt.) 13.0 
 (abt.) 18.0 
 
 22.6 
 
 27.6 
 32.6 
 37-6 
 42.6 
 50.0 
 
 Million 
 
 O.2I 
 0.58 
 1. 80 
 2.31 
 
 2-73 
 i. 95 
 
 1.20 
 I. 2O 
 
 Million 
 
 10 
 
 27 
 
 85 
 109 
 128 
 92 
 56X 
 56^ 
 
 153. to 203 
 
 203. to 253 
 253. to 303 
 
 ?os. to KS. . . 
 
 3^3. to 4OS. . . 
 
 403. to 455 
 
 Over 453 
 
 
 Men in Situations . . 
 Casuals 
 
 8,000,000. 
 700,000 
 
 .100% 
 
 30.0 
 
 12. 
 
 12. 
 O.42 
 
 564 
 18.5 
 
 
 Adult Males 
 
 8,700,000 
 
 28.4 
 
 12.42 
 
 582.5 
 
 
 Boys 
 
 1,900,000 
 
 IO.O 
 
 0-95 
 
 44.0 
 
 
 All Males 
 
 10,600,000 
 
 25-3 
 
 I3-38 
 
 626.5 
 
 Average Earnings per Adult Man throughout the year: 
 per week. 
 
 WOMEN 
 
 66.95 or i-5-9 
 
 Class 
 
 Numbers 
 
 Average earn- 
 ings in a full 
 week 
 
 Average 
 weekly wages 
 bill for a full 
 week 
 
 Yearly wages 
 bill (net as 
 above) 
 
 Women 
 
 3,000,000 
 
 s.d. 
 
 12. O 
 
 Million 
 1.8 
 
 Million 
 8?. o 
 
 Girls 
 
 1,500,000 
 
 8.0 
 
 0.6 
 
 28.0 
 
 Casuals 
 
 100,000 
 
 3.6 
 
 o.oi<; 
 
 o ? 
 
 
 
 
 
 
 All Females . . 
 
 4,600,000 
 
 10.6 
 
 2.4.1"; 
 
 IZl.K 
 
 Average Earnings per Adult Woman throughout the year: (~) 27.58, or IDS. 
 7d. per week. 
 Total Wages Bill (both sexes) for the year, net: 740,000,000.
 
 i 9 2 WORK AND WEALTH 
 
 even though he puts out as much effort, will earn less money than 
 a more effective. This seems necessary, reasonable and even 
 just, so long as we accept the ordinary view that labour should 
 be bought and sold like any other commodity. 
 
 But once accept the view that to buy labour-power, like other 
 commodities, at a price determined purely by relations of Supply 
 and Demand, is a policy dangerous to the life and well-being of 
 the individual whose labour-power is thus bought and sold, to 
 those of his family and of society, your attitude towards the 
 labour-movement in general, and even to certain demands which 
 at first sight seem unreasonable, will undergo a great change. 
 
 The fundamental assumption of the Labour Movement, in 
 its demands for reformed remuneration, is that the private hu- 
 man needs of a working family should be regularly and securely 
 met out of weekly pay. The life and health of the family, and 
 that sense of security which is essential to sound character and 
 regular habits, to the exercise of reasonable foresight, and the 
 formation and execution of reasonable plans, all hinge upon this 
 central demand for a sufficiency and regularity of weekly income 
 based upon the human needs of a family. 
 
 2. This explains alike the working-class objections to piece- 
 work, the demand for a mimmum wage, and the policy of limita- 
 tion of individual output. For piece-work, even more than 
 time-work, is based upon a total ignoring of the human condi- 
 tions which affect the giving out of labour-power. It is the plain- 
 est and most logical assertion of the commodity view of labour, 
 the most complete denial that the human needs of the worker 
 have any claim to determine what he should be paid. 
 
 So firmly-rooted in the breast of the ordinary non-working 
 man, and of many working-men, is the notion that a man, who 
 has produced twice as large an output as another man, ought, as 
 a simple matter of right or justice, to receive a payment twice as 
 large, that it is very difficult to dislodge it. It represents the 
 greatest triumph of the business point of view over humanity. 
 If a man has done twice as much, of course he ought to receive 
 twice as much! It seems an ethical truism. And yet I venture 
 to affirm that it has nothing ethical in it. It has assumed this 
 moral guise because of a deep distrust of human nature which
 
 THE HUMAN CLAIMS OF LABOUR 193 
 
 it expresses. How will you get a man to do his best unless you 
 pay him according to the amount he does? It is this purely prac- 
 tical consideration that has imposed upon the piece-work system 
 the appearance of axiomatic justice. 
 
 It is not difficult to strip off the spurious ethics of the princi- 
 ple. You say that piece-wages or payment by result is right be- 
 cause it induces men to do their best. But what do we mean by 
 'doing their best'? A weak man may hew one ton of coals while 
 a strong man may hew two. Has not the former 'done his best' 
 equally with the latter? The strength of a strong man, the nat- 
 ural or even the acquired skill of a skilful man, cannot be as- 
 sumed as a personal merit which deserves reward in the terms of 
 payment. If there is merit anywhere, it is in the effort, not in 
 the achievement or product, and piece-wages measure only the 
 latter. 
 
 No ! there is nothing inherently just in the piece-wage system. 
 Its real defence is that it is the most practical way of getting men 
 to work as hard as they can: it is a check on skulking and sugar- 
 ing. It assumes that no other effective motive can be made op- 
 erative in business except quantity of payment. 
 
 3. As Ruskin and many others have remarked, the lie is 
 given to this assumption in an increasing number of kinds of 
 work where the highest qualities of human power, the finest 
 sorts of mental skill and responsibility, are involved. Public 
 servants of all grades, from Cabinet Ministers and Judges down 
 to municipal dustmen, are paid by salaries, not by piece-wages. 
 The same is true of the more remunerative and more responsible 
 work in private businesses. No Government, no private firm, 
 buys the services of its most valuable employees at the lowest 
 market-price, or attempts to apply to them a piece-work scale. 
 It would not pay them to do so, and they know it. Nor is this 
 merely because some sorts of work do not easily admit of being 
 measured by the piece. It would be possible to pay Judges, as 
 counsel are paid, by the case: Cabinet Ministers might be paid 
 on piece-wages for Laws measured by the number or length of 
 their clauses. The chief reason for adopting payment by fixed 
 salary is that it is reckoned a wise mode of securing good individ- 
 ual services. It is recognised that each piece of work will be
 
 i 94 WORK AND WEALTH 
 
 better done, if the workers set about it in a thoroughly disinter- 
 ested manner, concentrated in their thoughts and feelings en- 
 tirely on the work itself, and not entangled in the consideration 
 of what they are to get out of it. This is supposed to be the 
 difference between the professional man and the tradesman, 
 that the former performs a function and incidentally receives a 
 fee, while the latter, by the very acts of buying and selling that 
 constitute his business, keeps his mind set upon the profit from 
 each several transaction. 
 
 But the fixed and guaranteed salary for public servants has 
 another ground. It may profit a business firm to practise an 
 economy of sweating, to drive its employees and consume their 
 health and strength by a few years' excessive toil, to take on new 
 casual workers for brief spurts of trade, to sack employees ruth- 
 lessly, as soon as trade begins to flag, or their individual powers 
 of work are impaired by age. A piece-work system, with no 
 guarantee of employment or of weekly wage, may be a sound 
 business economy for a private firm. It cannot be a sound 
 economy for a State or a Municipality. 
 
 For a large and increasing share of the work and the expendi- 
 ture of most States and Municipalities is applied in trying to 
 mend or alleviate damages or dangers to the health, security, 
 intelligence, and character of the workers and their families, 
 arising from insufficiency of work and wages or other defects of 
 private industrialism. It would obviously be bad public economy 
 to break down the lives and homes of public employees by under- 
 paying or overworking them, or by dismissing and leaving them 
 to starve when work was slack. For what was saved in the wage- 
 bill of the particular department, would be squandered in poor- 
 law, police, hospitals, old-age pensions, invalidity and employ- 
 ment relief. Nor is that all. A mass of ill-paid, ill-housed 
 workers, alternately overworked and out of work, stands as a 
 chief barrier in every one of those paths of social progress and 
 national development which modern statecraft sets itself, to 
 follow. The low wage of unskilled labour is to-day a source of 
 infinite waste of the forces of national education. Still keeping 
 our argument upon the narrowest lines of economy, we plainly 
 realise that the financial resources, upon which the State can
 
 THE HUMAN CLAIMS OF LABOUR 195 
 
 draw for all her services, depend in the last resort upon the 
 general economic efficiency of the working population, and that 
 a system of public employment which was, however indirectly, 
 detrimental to this health, longevity and intelligence, would 
 rank as bad business from the public standpoint. 
 
 It is possible that in this country the salary mode of payment 
 is gaining ground. Apart from the public services, national and 
 municipal, which now employ some 7 per cent of the total em- 
 ployed population, the great transport and the distributive in- 
 dustries are almost entirely run upon the salary basis. These 
 departments of industry are constantly increasing, not only in 
 absolute size, but in the proportion of the total employment they 
 afford. To them must be added the large class of domestic 
 service. Such great salaried services cannot, indeed, be claimed 
 as triumphs for the organic principle of distribution, or payment 
 according to needs. For the most part they are very unsatis- 
 factory modifications of the piece-wage or commodity view of 
 labour. For, except for the small higher grades of officials, they 
 mostly retain the two chief defects of the ordinary wage-system, 
 a payment of weekly income not based on a proper computation 
 of human needs, and a lack of adequate security of tenure. Over 
 a large part of the field of industry and commerce where weekly 
 fixed salaries are paid, there exists a flagrant disregard for all 
 considerations of human subsistence. Some of the worse, though 
 not the worst, forms of 'sweating' are found in shops, workshops 
 and factories where women are employed on weekly salaries. 
 
 None the less, it remains true that the salary is a more ra- 
 tional form of payment for labour than the time or piece wage, 
 and that, as the humanisation of industry proceeds, it will more 
 and more displace the wage-system. For where salaries are paid, 
 the consideration of needs or subsistence does tend always to 
 qualify the mere commodity view of labour. 
 
 Piece-wage or time-wage ignores the worker as a human being 
 and the supporter of a family: it ignores him as a personality 
 and regards him merely as an instrument for giving out units of 
 productive power to be paid for on the same terms as the units 
 of mechanical power used hi working machinery. 
 
 4. The Labour Movement insists that the personal and
 
 196 WORK AND WEALTH 
 
 human factor is fundamental as a condition in the labour bar- 
 gain. If labour is treated as a mere commodity, its price affords 
 no security of life to the labourer. It may not find a customer 
 at all, and so he starves and with him his family, the future 
 supply of labour. Or, left to the fluctuations of the market, it 
 may sell at a price which is insufficient for his maintenance. The 
 fluctuations of price in all other markets involve only the pe- 
 cuniary profit or loss of those who sell, fluctuations of the price 
 of labour involve the existence and well-being of human families 
 and of the nation. Hence the attack of organised labour on this 
 whole conception of the labour-market, and the demand that the 
 remuneration of labour shall not be left to the higgling'of a market. 
 
 The chief fight is for a secure weekly income, or for conditions 
 of employment which lead up to this. A minimum or a living 
 wage is the usual name given to this demand. Complaint is 
 made of the vagueness of the demand. But this vagueness does 
 not make the demand unreasonable. A living wage indeed is 
 elastic as life itself: it expands and will continue to expand, with 
 the development of life for the workers. But what in effect is 
 meant at the present by a living or subsistence wage is such a 
 regular weekly sum as suffices to maintain the ordinary working 
 family in health and economic efficiency. 
 
 It is contended that no purchase of labour should be permitted 
 which entails the degradation of that standard. When a mini- 
 mum rate of piece-wages is demanded, the implicit understanding 
 is that it is such as will yield under normal conditions the ordi- 
 nary weekly subsistence or standard wage. Since piece-wages 
 are so firmly established in many trades that it is impracticable 
 to demand their immediate abolition, the actual struggle be- 
 tween employees and employers is as to whether these piece- 
 wages shall be allowed to fluctuate indefinitely, being dragged 
 at the heels of the prices of commodities, or whether an absolute 
 limit shall be set upon their fall. The employer says, 'When 
 trade is good and prices and profits high, labour will share the 
 prosperity in high rates of wage and large weekly earnings: so, 
 when trade is bad and prices and profits low, labour must share 
 this adversity and take low pay.' Organised labour replies, 
 'No, there is no parity between the power of capital and of
 
 THE HUMAN CLAIMS OF LABOUR 197 
 
 labour to bear depressions: capital is strong and can bear up 
 against low profits without perishing, labour is weak and cannot 
 bear up against low wages. We will only sell our labour-power 
 on condition that a lower limit is set upon its price, such a limit 
 as will enable the labourer to keep body and soul together, and 
 to maintain that efficiency which constitutes his working capital. 
 This minimum wage should be regarded as a fixed cost in your 
 production. At present the prices of your goods oscillate with- 
 out any assigned limit. You accept low contracts for work, and 
 then adduce this low price as a reason for reducing wages. Let 
 a minimum wage once be adopted in the trade, and contract 
 prices cannot be accepted on so low a level. The minimum wage 
 will thus help to steady selling prices and to regulate employ- 
 ment and output.' 
 
 Both the economics and the social ethics of this labour con- 
 tention are in substance sound. So long as the price of labour 
 is left to higgling in a competitive market, there is nothing 
 to prevent the wages falling to the lowest level at which a 
 sufficient number of workers can be induced to consent to 
 work, and that level may involve a reduction of the standard 
 of living in their families below the true subsistence point. 
 The fixing of wages by so-called free competition affords no 
 security for a family wage of efficiency or even of subsistence. 
 There should be no mistake upon this essential matter. The 
 doctrine of 'economy of high wages' has no such general effi- 
 cacy as is sometimes suggested. Though in many cases high 
 wages are essential to maintain and evoke the energy and effi- 
 ciency required, in other cases they are not. From the standpoint 
 of the immediate profits of employers ' sweating ' often pays. But 
 from the standpoint of society it never pays. 
 
 Therefore, the policy of the organised workers, in seeking to 
 enforce the doctrine of a minimum wage, is not only a policy of 
 self-preservation for the working-classes but a salutary social 
 policy. It is for this reason that the State intervenes in favour 
 of the practice, establishing Trade Boards to enforce its applica- 
 tion in so-called 'sweated trades', and acknowledges, in theory 
 at any rate, its validity in aU public employments and public 
 contracts.
 
 198 WORK AND WEALTH 
 
 5. Although this minimum wage is tolerably remote from 
 the ideal of a fixed weekly salary in most trades, it is a true step 
 in this direction. The most controverted item in trade-union 
 policy, the limitation of individual output, is also partly actuated, 
 by the same motive. Few things make the ordinary business 
 man more indignant than the trade-union regulations in certain 
 trades which restrain stronger or quicker workers from putting 
 forth their full productive energy. They denounce alike its 
 dishonesty and its bad economy. It is based, they say, upon the 
 'lump of labour' fallacy, the false notion that there exists an 
 absolutely limited amount of employment, or work to be done, 
 and that if the stronger or quicker men do more than their share, 
 the others will go short. This refusal to allow each man to do 
 his best, like the related refusal to get the full work out of new 
 labour-saving machinery, appears monstrously perverse and 
 wicked. But, though partly animated by short-sighted economic 
 views, this policy is not entirely to be thus explained. The level- 
 ling down of the output of all workers to a standard has partly 
 for its object the establishment of greater evenness of income 
 among the workers in a trade. At any given time in a given 
 mill, or factory town, the actual amount of available employ- 
 ment is limited, and for the time it is true that by limitation of 
 individual output a larger number of workers are employed, and 
 a larger number of working families are provided with a normal 
 wage, than would have been the case if a certain number of men 
 were encouraged to an unrestricted energy and unlimited over- 
 time. In the long run, it may be better to encourage full indi- 
 vidual liberty of output, even in the interest of the aggregate of 
 employment, but the restraints to which I here allude become 
 more intelligible when they are regarded as attempts to enforce 
 a common class weekly wage by means of an even distribution of 
 employment. 
 
 A minimum piece-wage, based on a moderate computation of 
 the weekly output per worker, and accompanied by a substantial 
 security of full regular employment, would in effect place the 
 piece-worker in the position of a salaried employee. But, of 
 course, a minimum piece-wage, however high, does not go far 
 to this end, unless security of tenure at fairly full employment is
 
 THE HUMAN CLAIMS OF LABOUR 199 
 
 obtained. The problem of un- and under-employment and of 
 irregular employment is now beginning to be recognised in its 
 full social gravity. A weekly wage of bare efficiency with regular 
 employment is socially far superior to a higher average wage 
 accompanied by great irregularity of work. The former admits 
 stability of modes of living and ready money payments: it con- 
 duces to steadiness of character and provision for the future with- 
 out anxiety. Rapid and considerable fluctuations of wages, even 
 with full employment, are damaging to character and stability 
 of standards: but irregularity of employment is the most de- 
 structive agency to the character, the standard of comfort, the 
 health and sanity of wage-earners. The knowledge that he is 
 liable at any tune, from commercial or natural causes that lie 
 entirely outside his control, to lose the opportunity to work and 
 earn his livelihood, takes out of a man that confidence in the 
 fundamental rationality of life which is essential to soundness 
 of character. Religion, ethics, education, can have little hold 
 upon workers exposed to such powerful illustrations of the un- 
 reason and injustice of industry and of society. 
 
 The regularisation of industry, so as to afford substantial 
 guarantees of full regular employment, thus ranks with the 
 minimum wage as the most substantial contribution towards the 
 substitution of salary for wages, which the organic law of Dis- 
 tribution requires. The State is beginning to cooperate with 
 the Labour Movement for the attainment of this social object, 
 stimulating employers to organise their industries so as to furnish 
 a more even volume of employment. 
 
 6. This interpretation of the Labour Movement as a half- 
 conscious manifold endeavour to rescue the remuneration of 
 Labour from the risks and defects of the competitive labour- 
 ftiarket, and to establish it on an economy of human needs, is 
 not fully understood without some further reference to the action 
 of organised society. The Labour Movement, in its endeavour 
 to get a better distribution of the income, is not confined to 
 trying to secure a satisfactory minimum or standard wage, 
 fortified by greater security of work and personal insurance 
 against unemployment. It seeks also to supplement its wages 
 by cooperative and public provisions.
 
 2 oo WORK AND WEALTH 
 
 The cooperative movement is an attempt to convert into real 
 wages some of the profits of employers and shareholders in manu- 
 facturing and commercial businesses, so enlarging the proportion 
 of the real income of the nation which goes to the remuneration 
 of labour. But the growing attachment of the Labour Organisa- 
 tions to politics is equally motived by the endeavour to secure 
 from the State, not merely legal supports for higher wages and 
 improved conditions of employment, but actual supplements to 
 wages in the shape of contributions from the public services to 
 their standard of living. Free education, old-age pensions, and 
 public subsidies towards insurance are a direct contribution from 
 the State to the higher standard of life which modern civilised 
 society demands. Health, education, recreation, and provision 
 against emergencies, are coming more and more to be recognised 
 as proper objects of governmental action, and other important 
 services, such as transport, credit, art, music and literature, are 
 far on the way to becoming communal supplies. Although these 
 modes of social provision may be chiefly motived by considera- 
 tions of public health and other common goods, they neverthe- 
 less must rank as contributions to the standard of comfort and 
 well-being of the working-class families who are the special bene- 
 ficiaries. Relieving, as they do in many instances, the private in- 
 comes of the workers from expenditure which otherwise the 
 family would find it to its private interest to incur, these grow- 
 ing public services form a genuine and a considerable contribution 
 to the available real income of the working-classes. So far as 
 by taxation direct or indirect the cost of such public services 
 can be considered a burden upon, or a deduction from the wage- 
 income of the workers, it forms, of course, no net addition to 
 their share, but is only a public control over methods of ex- 
 penditure. But inasmuch as the distinct tendency of modern 
 taxation is toward,s an increasing taxation of the incomes and 
 property of the non-working classes, these public services rank 
 as supplementary income, paid in kind, and tending to equalise 
 the standard of living of individual workers and grades of workers. 
 The criticism sometimes directed against this State socialism, 
 upon the ground that it tends to weaken the force of wage- 
 bargaining and transfers to the shoulders of 'society' costs which
 
 CAI.MARA. 
 
 THE HUMAN CLAIMS OF LABOUR 201 
 
 employers would otherwise have to bear in the shape of higher 
 money wages, would have considerable force, if the old laissez- 
 faire principle of 'free contract' were allowed otherwise to work 
 unimpeded. But this, as we see, is not the case. The growing 
 policy of minimum and standard rates, supported by public 
 opinion and, where necessary, by public law, and hardening 
 into a policy of fixed salaries, is nowise inconsistent with a simul- 
 taneous development of communal supplies of goods and services 
 which usually lie a little above the normal standard of comfort 
 of those who are the chief beneficiaries. 
 
 The growing political activities of a labour movement which 
 once eschewed State aids not merely attest the general growth of 
 conscious democracy but imply a recognition of the direct con- 
 tribution which the State is making towards a general distribu- 
 tion of the national income in accordance with an economy of 
 human needs.
 
 CHAPTER XIV 
 
 SCIENTIFIC MANAGEMENT 
 
 i. No humanist treatment of modern industry can ignore 
 the recent advances of scientific methods into the regulation 
 both of standards of production and standards of consumption. 
 In both arts alike the crude empiricism of the past is giving place 
 to a more ordered, conscious rationalism. As is only natural, 
 the advance of science is more rapid in the productive arts. 
 
 In recent years many scattered attempts have been made to 
 apply physiology and psychology to economic processes. Busi- 
 ness men by scientific observation and experiment have brought 
 criticism to bear upon the traditional and empirical modes of 
 organising and conducting businesses. The more or less hand- 
 to-mouth methods which were possible in small businesses where 
 the manager was owner, and could keep a close personal super- 
 vision of his employees and all their work, were found increasingly 
 unsuitable to modern types of large capitalist business. It was 
 necessary to devise regular methods for correlating the work of 
 the different departments, and for enabling a single central pur- 
 pose to operate by complex delegation through several grades of 
 subordinate officials with automatic checks and registers. More 
 accurate methods of book-keeping, especially of cost-taking, 
 were devised; experiments were made in bonuses, profit-sharing, 
 fines, pace-making and various modifications of the wage-systems 
 applied to evoke more energy, skill, or care from the workers 
 and officials; hours of labour and shift-systems were subjected 
 to measured tests. Still more recently the detailed technology 
 of manual and mental labour has been made material of physi- 
 ological and psychological investigation. Scientific Manage- 
 ment has become a conscious art. Business colleges in America 
 and Germany give courses of instruction in this art, and a new 
 profession has arisen of expert advisers who are called in as 
 specialists to diagnose the deficiencies or wastes of industrial or 
 
 202
 
 SCIENTIFIC MANAGEMENT 203 
 
 financial power in particular businesses and to prescribe reme- 
 dies. 
 
 Economic progress, regarded from the standpoint of the busi- 
 ness man, consists in getting a given quantity of saleable goods 
 turned out at a lower cost of production. That cost of production 
 consists of the salaries and wages paid to various grades of em- 
 ployees for mental and manual labour, cost of materials and 
 power, standing expenses for maintenance of plant and premises, 
 including replacement and insurance, and interest upon capital. 
 Anything that reduces any one of these costs, without a cor- 
 responding increase of another, is profitable from the standpoint 
 of the individual employer, or of all employers in the trade, if it 
 be generally adopted, or of the consuming public, if it wholly or 
 partly goes to them in lower selling prices. Where the reduction 
 of costs simply takes the shape of reduced wages for the same 
 work, however, it causes no net increase of concrete wealth, but 
 merely distributes the same amount (or less by reason of reduced 
 efficiency of labour) in a different manner. Such a reduction 
 cannot then be regarded as economic progress, from the national 
 standpoint. 
 
 But every other reduction of cost carries with it prima facie 
 evidence of a net increase of concrete wealth. Inventions of 
 machinery, improved chemical or other treatment of materials, 
 better business organisation and subdivision of labour, improved 
 skill and energy in employees, better book-keeping, credit, 
 marketing arrangements, all such technical improvements 
 promote the increase of concrete wealth. In all these ways 
 many great advances have been made in various industries. But, 
 alike in invention and in organisation, too much has been left 
 to chance, or to the pressure of some emergency, too little is the 
 result of ordered thought. Business has been conducted too 
 much in the spirit of an art, too little in that of applied science. 
 The modern tendency is to introduce the exacter methods of 
 science. The modern large manufacturing or mining enterprise 
 employs expert engineers and chemists, not only to test and 
 control the operation of existing processes, but to invent new 
 and cheaper ways of carrying out a process, to discover new pro- 
 ducts and new uses for by-products. It employs expert account-
 
 204 WORK AND WEALTH 
 
 ants to overhaul its book-keeping and finance and to suggest 
 improvements. Initiative and economy are to be studied, evoked 
 and applied along every path. 
 
 2. But until lately the detailed organisation of labour and 
 its utilisation for particular technical processes had received 
 little attention in the great routine industries. Even such tech- 
 nical instruction as has been given to beginners in such trades 
 as building, engineering, weaving, shoemaking, etc., has usually 
 taken for granted the existing tools, the accepted methods of 
 using them and the material to which they are applied. To make 
 each sort of job the subject-matter of a close analysis and of 
 elaborate experiment, so as to ascertain how it could be done 
 most quickly and accurately and with the least expenditure of 
 needless energy, comes as a novel contribution of business enter- 
 prise. To get the right man to use the right tools in the right 
 way is a fair account of the object of Scientific Management. 
 At present a man enters a particular trade partly by uninstructed 
 choice, partly by chance, seldom because he is known by him- 
 self and his employer to have a natural or acquired aptitude for 
 it. He handles the tools that are traditional and are in general 
 use, copying the ways in which others use them, receiving chance 
 tips or suggestions from a comrade or a foreman, and learning 
 from personal experience how to do the particular work in a way 
 which appears to be least troublesome, dangerous, or exhausting. 
 Both mode of work and pace are those of prevailing usage, more 
 or less affected by machinery or other technical conditions. 
 
 The scientific manager discovers enormous wastes in this way 
 of working. Part of the waste he finds due to improper tools and 
 improper modes of working, arising from mere ignorance; part he 
 attributes to systematic or habitual slacking, more or less con- 
 scious and intentional on the part of the workers. The natural 
 disposition of the worker to "take it easy" is supplemented by a 
 belief that by working too hard he deprives some other worker 
 of a job. Scientific Management, therefore, sets itself to work 
 out by experiment the exact tool or machine appropriate to 
 each action, the most economical and effective way by which a 
 worker can work the tool or machine, and the best method of 
 selecting workers for each job and of stimulating them to perform
 
 SCIENTIFIC MANAGEMENT 205 
 
 each action with the greatest accuracy and celerity. By means 
 of strictly quantitative tests it works out standard tools, standard 
 methods of work and standard tests for the selection, organisa- 
 tion, stimulation, and supervision of the workman. 
 
 In his exposition of this economy l Mr. Taylor takes as his 
 simplest illustration of choice of tools the 'art' of shovelling. 
 Left to himself, or working with a gang, the shoveller will use 
 a shovel whose weight, size, and shape have never been considered 
 in relation to the particular material it has to move or the sort of 
 man who has to use it. ' By first selecting two or three first-class 
 shovellers, and paying them extra wages for doing trustworthy 
 work, and then gradually varying the shovel load and having all 
 the conditions accompanying the work carefully observed for 
 several weeks by men who were accustomed to experimenting, 
 it was found that a first-class man would do the biggest day's 
 work with a shovel load of about 21 pounds.' 2 As a result of this 
 discovery, instead of allowing each shoveller to choose his own 
 shovel, the company provided eight or ten different kinds of 
 shovels accommodated to the weight of different materials and to 
 other special conditions. Again, thousands of stop-watch obser- 
 vations were made to discover how quickly a labourer, provided 
 with his proper shovel, could push the shovel into the materials 
 and draw it out properly loaded. A similar study was made of 
 ' the time required to swing the shovel backward and then throw 
 the load for a given horizontal distance, accompanied by a 
 given height. ' With the knowledge thus obtained it was possible 
 jfor the man directing shovellers, first to teach them the exact 
 method of using their strength to the best advantage, and then 
 to assign the daily task by which they could earn the bonus paid 
 for the successful performance of this task. For, though the 
 skilled director can prescribe the right tool and the right method, 
 he cannot get the required result without the willing cooperation 
 of the individual worker. For this purpose a bonus is applied, 
 the size of which is itself a subject of scientific experiment. The 
 relation of this bonus to the ordinary day or piece wage will vary 
 with the various types of work and workers. In the Bethlehem 
 
 1 The Principles of Scientific Management (Harper & Bros.). 
 
 2 Op. cit., p. 65.
 
 206 WORK AND WEALTH 
 
 Steel Works it was found that the best effect in stimulating energy 
 was got by a bonus of about 60 per cent, beyond the wages 
 usually paid. ' This increase in wages tends to make them not 
 only thrifty but better men in every way; they live rather better, 
 begin to save money, become more sober, and work more steadily. 
 When, on the other hand, they receive much more than a 60 
 per cent increase of wages, many of them will work irregularly 
 and tend to become more or less shiftless, extravagant, and dis- 
 sipated. Our experiments showed, in other words, that it does 
 not do for most men to get rich too fast.' * 
 
 Considering that it was claimed that the result of this new 
 plan of work was to raise the average daily output per man from 
 1 6 to 59 tons, and to secure an annual saving in the labour-bill 
 amounting to between $75,000 and $80,000, it would have been 
 interesting to follow the effects of a rapid advance of wealth 
 upon the dividend-receivers who gained so disproportionate a 
 share of the advantages of the new economy. 
 
 3. So far as the selection and adaptation of tools to the 
 special conditions of the work are concerned, there exists no 
 opposition between the business and the human economy. If a 
 shoveller can shovel more material without greater exertion by 
 using a particular shovel, the system which ensures his using this 
 shovel is beneficial to everybody, assuming that he gets some 
 share of the value of the increased output. When we turn from 
 a simple tool to more elaborate machinery, it becomes evident 
 that quantitative testing is capable of achieving enormous 
 technical economies. Mr. Taylor describes the gains in the out- 
 put of metal-cutting machines made by means of such economies. 
 ' Its pulling power at the various speeds, its feeding capacity, and 
 its proper speeds were determined by means of the slide-rules, 
 and changes were then made in the countershaft and driving 
 pulleys so as to run it to its proper speed. Tools, made of high- 
 speed steel and of the proper shapes, were properly dressed, 
 treated and ground. A large special slide-rule was then made, 
 by means of which the exact speeds and feeds were indicated at 
 which each kind of work could be done in the shortest possible 
 time in this particular lathe. After preparing in this way so 
 1 The Principles of Scientific Management, p. 74.
 
 SCIENTIFIC MANAGEMENT 207 
 
 that the workman should work according to the new method, 
 one after another, pieces of work were finished in the lathe, cor- 
 responding to the work which had been done in our preliminary 
 trials, and the gain in time made through running the machine 
 according to scientific principles ranged from two and one-half 
 times the speed in the slowest instance to nine times the speed in 
 the highest'. 1 
 
 This illustration, however, makes it evident that when we 
 pass from technical improvements of tools to improved methods 
 of working, we open possibilities of opposition between the busi- 
 ness and the human interest. An improvement in the shape or 
 contour of the * cutting edge ' for a particular material is an un- 
 qualified gain. So is a discovery as to the ways in which hard- 
 ness or softness of metals affects the cutting rate. But when it is 
 a question of evoking from the workman a higher pace of move- 
 ment to meet the requirements of the speeded-up machine, no 
 such consistency of interests can be assumed. The fact that by 
 selection, instruction, and minute supervision, workmen can 
 be got to work successfully at the higher speed, and regard them- 
 selves as sufficiently compensated by a bonus of 35 per cent, 
 does not settle the question of human values. So far as the 
 selective process simply chooses the men most easily capable of 
 working at a higher speed and of eliminating those who could 
 not easily or possibly adapt themselves to it, no net increase of 
 human cost is involved. But so far as the bonus and the 'ath- 
 letic' spirit which it is used to evoke, 2 induce workmen to give 
 out an amount of muscular or nervous energy injurious to them 
 in the long run, the human cost may greatly outweigh both the 
 social value of the increased output and the utility to them of 
 higher wages. How crucial is this question of speeding-up the 
 human labour is well illustrated by the experiments in bricklay- 
 ing, by means of which the bricklayers engaged on straight work, 
 were raised from an average of 120 bricks per man per hour to 
 
 1 The Principles of Scientific Management, p. 100. 
 
 z ' While one who is not experienced at making his men really enthusiastic in 
 their work cannot appreciate how athletic contests will interest the men, it is the real 
 secret of the success of our best superintendents. It not only reduces costs, but it 
 makes for organisation and thus saves foremen's time.' F. G. Gilbreth, Bricklaying 
 System, p. 13.
 
 208 WORK AND WEALTH 
 
 350. By alterations of apparatus Mr. Gilbreth dispenses with 
 certain movements which bricklayers formerly considered neces- 
 sary, while saving time in the actual process of laying by using 
 both hands at the same time, bricks being picked up with the 
 left hand at the same instant that a trowel of mortar is seized 
 with the right. 
 
 'It is highly likely that many times during all of these years individual 
 bricklayers have recognised the possibility of eliminating each of these 
 unnecessary motions. But even if, in the past, he did invent each one of 
 Mr. Gilbreth's improvements, no bricklayer could alone increase his speed 
 through their adoption, because it will be remembered that in all cases 
 several bricklayers work together in a row and that the walls all around a 
 building must grow at the same rate of speed. No one bricklayer, then, 
 can work much faster than the one next to him. Nor has any workman the 
 authority to make other men cooperate with him to do faster work. It is 
 only through enforced standardisation of methods, enforced adoption of the 
 best implements and working conditions, and enforced cooperation that 
 this faster work can be assured. And the duty of enforcing the adoption 
 of standards and of enforcing this cooperation rests with the management 
 alone. The management must supply continually one or more teachers to 
 show each new man the new and simpler motions, and the slower men must 
 be constantly watched and helped until they have risen to their proper 
 speed. All of those who, after teaching, either will not or cannot work in 
 accordance with the new methods and at the higher speed, must be dis- 
 charged by the management. The management must also recognise the 
 broad fact that workmen will not submit to this more rigid standardisation 
 and will not work extra hard, unless they receive extra pay for doing it.' 1 
 
 This makes it clear that, though part of the larger output, or 
 increased speed, is got by improved arrangements or methods of 
 work that need not tax the workers' powers, part of it does in- 
 volve their working "extra hard." Not only a better direction 
 but a larger amount of energy is required of them, with an in- 
 crease of wear and tear and of fatigue. It is an unsettled point 
 of great importance, how much of the enlarged output can be 
 imputed to the former, how much to the latter. Even more im- 
 portant is the allusion in the passage just quoted to 'the rigid 
 standardisation ' to which workmen will not submit, unless they 
 are well paid to do so. For this rigid standardisation of the work 
 involves a corresponding mechanisation of the workmen. Men 
 who formerly exercised a certain amount of personal choice in the 
 details of their work, as regards action and time, must abandon 
 
 1 The Principles of Scientific Management, p. 83.
 
 SCIENTIFIC MANAGEMENT 209 
 
 this freedom and follow exactly the movements prescribed to 
 them by the taskmaster with a chart and a stop-watch. He 
 will prescribe the particular task for each, the tool he shall use, 
 the way he shall use it, the intervals of work and rest, and will 
 take close note of every failure to conform. The liberty, initia- 
 tive, judgment, and responsibility of the individual workman are 
 reduced to a minimum. 
 
 This is admitted by the advocates of Scientific Management, 
 though in a qualified manner. One of the elements of success is 
 said to be: 'An almost equal division of the work and responsi- 
 bility between the workman and the management. All day long 
 the management work almost side by side with the men, helping, 
 encouraging and smoothing the way for them, while in the past 
 they stood on one side, gave the men but little help, and threw 
 on to them the entire responsibility as to methods, implements, 
 speed, and harmonious cooperation.' 1 But in the broader dis- 
 cussion of the difference between the ordinary business method 
 and Scientific Management, in relation to the numerous little 
 problems that arise in every kind of work, we are told that, 
 'the underlying philosophy of this (ordinary) management nec- 
 essarily leaves the solution of all these problems in the hands of 
 each individual workman, while the philosophy of Scientific 
 Management places their solution in the hands of the manage- 
 ment.' 2 Elsewhere 3 it is stated that Scientific Management 
 'involves the establishment of many rules, laws, and formulas 
 which replace the judgment of the individual workman.' 
 
 4. Now in endeavouring to apply to this policy of Scientific 
 Management a standard of human welfare, we are confronted by 
 three questions: 
 
 (1) What is the effect of this policy upon the human costs of 
 
 labour? 
 
 (2) How far will any increase of human costs of labour be 
 
 offset by the greater human utility of the higher wages 
 they receive? 
 
 (3) How far is any balance of human costs, which is imposed 
 
 on special classes of producers, compensated by the in- 
 creased wealth at the disposal of society at large? 
 1 Taylor, p. 85. 2 Op. cit., p. 103. 3 Op. cit., p. 37.
 
 2io WORK AND WEALTH 
 
 There is some tendency among the advocates of Scientific 
 Management to burke a full discussion of these issues by as- 
 serting that their policy is only a fuller and more rational appli- 
 cation of that principle of division of labour which is by general 
 consent the economic foundation of modern civilised society. 
 If some sacrifice of individual freedom in industrial work is in- 
 volved, it is assumed to be more than compensated by gains to 
 society in which every individual, as a member of society, has 
 his proper share. 
 
 But we cannot consent thus to rush the issue. For it may 
 turn out that the new method, though but a stricter and finer 
 application of the old, carries this economy so far that the in- 
 creased human costs imposed upon the producer grow faster 
 than the human gains which the increased productivity confers 
 either upon him or upon society at large. In other words, the 
 human indictment brought by the mid- Victorian humanists 
 against the factory system of their day and rejected on a general 
 survey of the economic situation, might be validated by the 
 increased standardisation and specialisation of labour under 
 scientific management. For though the division of labour under 
 modern capitalism in all its branches has narrowed the range of 
 productive activity for the great bulk of workers, a survey of 
 those activities shows that within their narrowing range there 
 may and does survive a certain scope for skill, judgment, and 
 initiative, a certain limited amount of liberty in detailed modes 
 of workmanship. Moreover, the conditions of most organised 
 work form a certain education in discipline and responsibility. 
 It is only a small proportion of the workers who are converted 
 into mere servants of the machine. Though large classes are 
 engaged in monotonous routine, the paces and the detailed 
 movements are not rigidly enforced upon them. Different work- 
 men will be doing the same work in a slightly different way. 
 
 Now the standardisation under the new method is expressly 
 designed so as to extirpate these little personal equations of 
 liberty and to reduce the labour of the ordinary employee to an 
 automatic perfection of routine. It is, indeed, contended by 
 Mr. Taylor that the knowledge of each man that he is working 
 at his highest personal efficiency will be a satisfaction to him,
 
 SCIENTIFIC MANAGEMENT 211 
 
 that the attention he must pay to the detailed orders of the task- 
 master will evoke intelligence and responsibility, and that his 
 initiative in the way of suggesting improvements, which has 
 hitherto been prized as an element of liberty and a source of 
 industrial progress, can be conserved under scientific manage- 
 ment. But a careful examination of the illustrations of the 
 method compels our rejection of these claims. The knowledge 
 of a routine worker that he is speeded up to his highest pitch by 
 a method whose efficiency is prescribed by others, does not yield 
 a sense of personal efficiency. Mere meticulous obedience is not 
 a proper training in the discipline of a 'person', and a workman 
 operating under these conditions will not have the practical 
 liberty for those little experiments in trial and error on his own 
 account which makes his suggestions of improvement fruitful. 
 Mr. Taylor, however, carries his defence so far as to deny all 
 narrowing effects of subdivision of labour on the worker. Ad- 
 mitting that the workmen frequently say when they first come 
 under the system, 'Why, I am not allowed to think or move 
 without someone interfering or doing it for me/ he seems to 
 think the following answer satisfactory: 
 
 'The same criticism and objection, however, can be raised against any 
 other modern sub-division of labour. It does not follow, for example, that 
 the modern surgeon is any more narrow or wooden a man than the early 
 settler in this country. The frontiersman, however, had to be not only a 
 surgeon, but also an architect, house-builder, lumber-man, farmer, soldier, 
 and doctor, and he had to settle his lawsuits with a gun. You would hardly 
 say that the life of the modern surgeon is any more narrowing or that he is 
 more of a wooden man than the frontiersman. The many problems to be 
 met and solved by the surgeon are just as intricate and difficult and as 
 developing and broadening in their way as were those of the frontiersman.' 1 
 
 Now as to this we can only reply, first that it is untrue that 
 the surgeon's life on its productive side (the issue under discus- 
 sion) is as broad and as varied as that of the frontiersman. In the 
 second place, even if we accepted the view that a narrow field of 
 activity admitted of as much variety and interest as a wider 
 field, provided liberty of action were equal in the two, that view 
 is quite inapplicable to the case at issue. For there all liberty 
 of action in the subdivided field of labour is excluded. 
 
 1 Taylor, p. 126.
 
 2 WORK AND WEALTH 
 
 5. So far, then, as initiative, interest, variation, experiment, 
 and personal responsibility are factors of human value, qualify- 
 ing the human costs of labour, it seems evident that Scientific 
 Management involves a loss or injury to the workers. Are there, 
 however, any personal considerations, apart from wages, that 
 may be taken as an offset? Suppose that workers can be found 
 of a dully docile character with a large supply of brute muscular 
 energy, will any harm be done them by utilising them to carry 
 pig-iron or to shovel earth under "scientific" supervision? Mr. 
 Taylor has an interesting passage bearing on this question: 
 'Now one of the very first requirements for a man who is fit to 
 handle pig-iron as a regular occupation is that he shall be so 
 stupid and so phlegmatic that he more nearly resembles in his 
 mental make-up the ox than any other type.' 1 These ox-like 
 men, it may be held, do not really suffer any injury, undergo any 
 human cost, by having no opportunity furnished them for exer- 
 cising faculties and activities of mind which they do not possess 
 and are unlikely to acquire. If then, in every grade of workers, 
 there are to be found enough men who appear destined by nature 
 for a rigidly mechanical task conducted under servile conditions, 
 it may be thoroughly sound social economy to put them to per- 
 form all labour of such kind as is required for the supply of human 
 needs. 
 
 This is a problem of applied psychology, or of psycho-physi- 
 ology. Professor Miinsterberg, in a recent volume, 2 makes a 
 contribution towards its solution, and towards a finer art of 
 Scientific Management than that which has been evolved by 
 business men. For since all industry primarily involves the 
 voluntary ordered application of human faculties to manual 
 and mental actions, the psychologist must be in a position to 
 give important advice in all economic operations. For he alone 
 is qualified by scientific tests to discover and estimate the various 
 mental capacities which count for success in industry, to ascer- 
 tain how they cooperate and conflict, and how they may be best 
 applied to the performance of the various operations in each pro- 
 cess. Attention, memory, ideas, imagination, feeling, volition, 
 suggestibility, ability to learn, ability to discriminate, judgment, 
 1 Taylor, p. 59. 2 Psychology and Industrial Efficiency.
 
 SCIENTIFIC MANAGEMENT 213 
 
 space-sense, time-sense, and other mental qualities, enter in 
 varying measures as factors of industrial ability. Economic 
 psychology may, it is contended, increase the efficiency of in- 
 dustry in three ways. 
 
 'We ask how we can find the men whose mental qualities make them best 
 fitted for the work they have to do; secondly, under what psychological 
 conditions we can secure the greatest and most satisfactory output of work 
 from every man; and finally, how we can produce most completely the in- 
 fluences on human minds which are desired in the interests of business. 
 In other words, we ask how to find the best possible man, how to produce 
 the best possible work, and how to secure the best possible effects.' 1 
 
 The first of these services, fitting the man to the job, involves 
 a double psychological enquiry, first into the vocational needs, 
 and secondly into the personal ability of each applicant to 
 meet these needs. We must examine the task to learn what 
 combination of mental qualities in the employee is required to 
 do it well, and we must examine each applicant for such work to 
 learn whether he possesses the requisite qualities. 
 
 Two illustrations will serve to indicate what is meant. The 
 problem of selecting fit motor-men for electric railways was 
 brought to Professor Miinsterberg's attention. To drive fast 
 and at the same time avoid accidents were the requirements of 
 the companies. Fitness for this purpose he found to centre in 
 a single mental process: 
 
 'I found this to be a particular complicated act of attention by which the 
 manifoldness of objects, the pedestrians, the carriages, and the automobiles, 
 are continuously observed with reference to their rapidity and direction in 
 the quickly-changing panorama of the streets. Moving figures come from 
 the right and from the left towards and across the track, and are embedded 
 in a stream of men and vehicles which moves parallel to the track. In the 
 face of such manifoldness there are men whose impulses are almost inhibited 
 and who instinctively desire to wait for the movement of the nearest objects; 
 they would evidently be unfit for service, as they would drive the electric 
 car far too slowly. There are others who, even with the car at full speed, 
 can adjust themselves for a time to the complex moving situation, but 
 whose attention soon lapses, and while they are fixating a rather distant 
 carriage, may overlook a pedestrian who carelessly crosses the track im- 
 mediately in front of this car. In short, we have a great variety of mental 
 types of this characteristic unified variety, which may be understood as a 
 particular combination of attention and imagination. ' * 
 
 1 Op. cit., p. 23. z Op. cit., p. 66.
 
 2i 4 WORK AND WEALTH 
 
 An apparatus was devised, representing the psychological 
 conditions involved in the actual problem, not a mere miniature, 
 but an adaptation which should call out and test the same mental 
 qualities. A number of actual motor-men were then carefully 
 examined in the working of this apparatus so as to test the 
 amounts of speed and accuracy and the relation between the 
 two. Quantitative estimates were thus reached of fitness in 
 working the apparatus, values being assigned respectively to 
 speed and accuracy. In this way a psychological standard of 
 fitness was attained, such as would be available for selecting 
 applicants for the motor service. So in ship-service, where 
 everything may turn upon prompt and accurate handling of a 
 sudden complicated emergency. Ship officers are found whom 
 a sudden danger paralyses, or keeps vacillating until it is too 
 late. Others, feeling only the urgency of prompt action, jump 
 to a too hasty decision. The desirable type is ' the men who in 
 the unexpected situation quickly review the totality of the 
 factors in their relative importance and with almost instinctive 
 certainty immediately come to the same decision to which they 
 would have arrived after great thought.' 1 Here again it was 
 possible to conduct a series of experiments, testing the mental 
 processes and measuring the degrees of rapidity, correctness, 
 and constancy. 
 
 Other tests can be applied for the qualities desirable in such 
 work as the telephone service, in which memory, attention, 
 intelligence, exactitude, and rapidity are involved. Sometimes 
 the mental qualities can be separately tested, sometimes their 
 inter-relation is such as to require a simultaneous testing. 
 
 6. It is equally obvious that a good deal can be done to 
 increase the productive efficiency of those who have been se- 
 lected for any work, by methods of teaching that involve psy- 
 chological guidance. In learning such processes as typewriting 
 and telegraphy, for instance, much can be achieved by technical 
 adjustments of movement such as we have already described, 
 and by considered adaptations of machine and materials to 
 suit human faculties. But methods of improving memory and 
 securing a more regular and accurate attention, of increasing 
 
 1 Op. cit., p. 85.
 
 SCIENTIFIC MANAGEMENT 215 
 
 the rapidity of repeated actions with the least nervous wear 
 and tear, of educating delicacy of touch and sight for specific 
 purposes, the utilisation of rhythmic tendencies, the proper 
 balance of intervals of work and rest, the influence of imitation 
 and social cooperation in gang labour, and finally the effects of 
 different quantities and modes of remuneration in evoking and 
 maintaining the various factors of efficiency all such considera- 
 tions offer a fruitful field for psychological investigation. 
 
 Hence psychology, it is urged, can contribute greatly to pro- 
 ductivity by finding the best man for each job and adjusting 
 his mental equipment to conditions of work which in their turn 
 can be modified to fit his powers. But, regarding production as 
 designed to satisfy human demands, psychology can be utilised 
 also to assist in getting the right quantities and qualities of 
 goods to the right persons. Commercial organisation exists for 
 this purpose. It does study the wants and demands of con- 
 sumers. But it might do so with more 'science'. Professor 
 Miinsterberg makes an exceedingly interesting study of the arts 
 of advertising and of selling over the counter, to illustrate how 
 much might be done by substituting experimental laws for in- 
 stinctive and traditional practices. One comment upon this 
 application of his science, however, is called for. Though the 
 social-economic view would oblige the psychologist to approach 
 the subject specifically from the standpoint of the consumer 
 and the psychology of satisfactions in his standard of comfort, 
 Professor Miinsterberg virtually confines himself to the psy- 
 chology of commerce and of marketing regarded from the stand- 
 point of the manufacturer or merchant. 
 
 Thus psychology can be made to devise and prescribe econo- 
 mies of human power in industry, which, like the technical im- 
 provements of Scientific Management, would seem to increase 
 greatly the productivity of industry, turning out larger quanti- 
 ties, and perhaps better qualities, of goods, with the same amount 
 of labour. 
 
 7. What would be the human valuation of these processes 
 of scientific economy? Assuming that this economy fructifies 
 in an enlarging volume of wealth, it would appear to be accom- 
 panied by an increase of welfare, unless the human costs of labour
 
 216 WORK AND WEALTH 
 
 were correspondingly increased, or the distribution of the larger 
 volume of wealth were made so much more unequal that it fur- 
 nished a smaller volume of utility in its consumption. Neither 
 of these qualifications is, indeed, excluded by the terms of the 
 economy. For each stroke of Scientific Management is pri- 
 marily justified as a profit-making device, advantageous to the 
 capitalist-employer in a particular business. It enables him to 
 turn out goods at a lower labour-cost and so to make a larger 
 margin of profit on their sale. If we suppose this economy to 
 be of wide or general adoption, it would be equivalent to an all- 
 round increase in the technical efficiency of labour. Unless we 
 suppose the aggregate quantity of production to be a fixed 
 quantity (a supposition not in accordance with experience), it 
 would seem to follow that at least as large a quantity of this 
 more efficient labour would be employed in turning out an in- 
 creased volume of goods. In that event, it would be possible 
 that the workers, as well as the capitalist employers, should enjoy 
 a higher rate of remuneration. Whether they would do so, 
 however, and to what extent, seems quite uncertain. For though 
 the payment of a considerable bonus in addition to current wages 
 was necessary in the experiments described by Mr. Taylor, in 
 order to evoke from a particular group of workers submission to 
 the new terms of work, it does not follow that, once adopted by 
 all employers in the trade, the method would entail or even 
 permit a continuance of this higher pay. For the pioneer firm 
 admittedly pays the bonus partly in order to overcome the pains 
 and scruples of workers subjected to a speeding-up system. If 
 it did not pay a bonus, the workers would quit this employment 
 for some other that was open to them. But if no other employ- 
 ment upon the old terms were open, this part of the bonus might 
 be unnecessary as an inducement. Even that part of the bonus 
 which seems to be directed to stimulate the ambition and energy 
 of the individual worker, and to break up the habitual slackness 
 of the group and its regulation stroke, would seem to stand on a 
 precarious footing, when the new method of work was once well 
 established and itself became a habit. Only that part, if any, 
 of the bonus, or higher wage, which was necessary to replace the 
 greater muscular or nervous wear and tear of the speeded-up
 
 SCIENTIFIC MANAGEMENT 217 
 
 and more automatic work, would necessarily survive. It would 
 stand as a necessary cost of production. If, however, as Mr. 
 Taylor and Professor Miinsterberg appear to hold, the scientific 
 management need entail no such additional wear and tear, there 
 seems no ground for holding that, after the method became 
 general, any bonus to the workers would be necessary. And if 
 it were unnecessary, it would not, indeed under competitive 
 terms could not, be paid. On this hypothesis, the additional 
 wealth created by the improved efficiency of the system might 
 go entirely to capital. Indeed, so far as the determination were 
 left to individual bargaining, this result would appear almost 
 inevitable. For the greater average efficiency of labour would be 
 equivalent to a larger supply of labour (though it might also 
 mean a better quality), and since no immediate or corresponding 
 increase of demand for labour need accrue, the price per unit of 
 labour would fall. This would mean that the labourer would 
 get no higher payment for his higher productivity. Even if the 
 increasing rate and amount of profits brought increased saving 
 and larger masses of competing capital, it would still seem doubt- 
 ful whether the aggregate demand for labour would be found to 
 keep pace with the growth of the supply which scientific manage- 
 ment plus psychological selection would yield. 
 
 Though, therefore, the aggregate product increased, it remains 
 doubtful whether any considerable share of the increase must or 
 would go to labour. But suppose that organisation of labour or 
 social intervention were able to secure some considerable rise 
 of real wages from the enlarged product, so that as consumers the 
 workers were better off, the human value of the process is not 
 yet established. Two related questions still remain for settle- 
 ment. First, that already tentatively raised, the question 
 whether the workers may not suffer more from increased human 
 costs of production under the new scientific regime than they 
 gain in human utilities of consumption. Some of the 'science' 
 in its application would indeed appear to be wholly beneficial. 
 The improved methods of selecting and of training labour, so as 
 to get the best man for each job, and to enable him to do his work 
 in the best way, is pure gam, provided that best way does not 
 unduly strain his energy or dull his mind. Other elements of
 
 2i8 WORK AND WEALTH 
 
 applied psychology are more doubtful in their net effect. The 
 practices of scientific advertising and of suggestive selling have 
 very little proved utility and are nearly as likely to be applied 
 to force the wrong articles on the wrong purchasers as to distrib- 
 ute wealth along the lines of its maximum utility for consump- 
 tion. The persons engaged for a livelihood in palming off goods 
 on a public irrespective of any intrinsic merits they contain, pay 
 a heavy toll in character for the work they are called upon 
 to do. 
 
 8. But, turning to the main problem, there remains the issue 
 of the increased mechanisation, or standardisation, of the worker 
 under Scientific Management. Admitting that a certain amount 
 of subdivision of labour, and of diminishing variety, interest and 
 initiative, accruing therefrom, is justified in a human sense by 
 the benefits of enhanced production, is there any limit to this 
 economy, and if there be, is that limit transgressed under Scien- 
 tific Management? The question does not admit perhaps of 
 any general or certain answer. Suppose it be admitted, as I 
 think it must, that every application of this Scientific Manage- 
 ment does squeeze out of the labour-day some human interest, 
 some call upon initiative, reason, judgment, responsibility, 
 surviving under previous conditions even in the most routine 
 and subdivided toil, must we necessarily regard this loss as a 
 heavy increased human cost of labour? Surely it depends upon 
 the particular labour in question. In some, perhaps most, 
 branches of heavy routine toil, the shreds of human interest, 
 the calls on personality, are usually so trifling that it seems 
 absurd to take them into much account. The work of carrying 
 pig-iron, or of shovelling continually the same material, con- 
 tains so little scope for the play of initiative, responsibility, etc., 
 that any such regimentation as is described can hardly be said 
 to damage the quality of the work or the character of the worker 
 as affected by his work. If a higher efficiency and a larger out- 
 put can enable a smaller number of workmen to be kept on labour 
 of so low a grade, there ought to be a net social gain. But there 
 is another compensation possible for any loss of liberty, or in- 
 crease of monotony, involved in Scientific Management. If it 
 be accompanied by a shortening of the hours of labour, the
 
 SCIENTIFIC MANAGEMENT 219 
 
 damage inflicted by the rigour of mechanical discipline may be 
 compensated by a larger leisure. This compensation, of course, 
 is reduced or even nullified, if the greater intensity of labour in 
 the shorter day takes more out of the man, as often happens, 
 than was taken out before. But, assuming that this is not the 
 case, and that for a longer dull routine work-day is substituted 
 a shorter but even more mechanical day, a net gain for labour is 
 still possible. I am disposed to hold that a good case might be 
 made out for Scientific Management as regards those orders of 
 routine labour which, as ordinarily carried on, contain very 
 little interest or humanity. Even then, however, there is a 
 danger that deserves attention. If this regimentation can re- 
 duce the cost per unit of dull, heavy muscular toil, as is likely, 
 it may prevent the discovery and application of wholly mechan- 
 ical substitutes for this work. 
 
 But the human economy is far more doubtful in the case of 
 labour which, though subdivided and mainly of a routine char- 
 acter, still contains a margin for the display of skill, initiative 
 and judgment. To remove these qualities altogether from such 
 work and to vest them, as is proposed, not even in the over- 
 seers, but in a little clique of scientific experts, would mean the 
 conversion of large bodies of skilled, intelligent workers into 
 automatic drudges. The life and character of these men would 
 suffer as an inevitable reaction of this drudgery, and it is doubt- 
 ful whether a somewhat shortened work-day and somewhat 
 higher wages would compensate such damage. While we may 
 recognise the general desirability of division and specialisation 
 of labour, some detailed liberty and flexibility should be left to the 
 worker. 
 
 9. Indeed, were the full rigour of Scientific Management to 
 be applied throughout the staple industries, not only would the 
 human costs of labour appear to be enhanced, but progress in 
 the industrial arts itself would probably be damaged. For the 
 whole strain of progress would be thrown upon the Scientific 
 Management and the consulting psychologist. The large assist- 
 ance given to technical invention by the observation and ex- 
 periments of intelligent workmen, the constant flow of sug- 
 gestion for detailed improvements, would cease. The elements
 
 220 WORK AND WEALTH 
 
 of creative work still surviving in most routine labour would 
 disappear. On the one hand, there would be small bodies of 
 efficient taskmasters carefully administering the orders of expert 
 managers, on the other, large masses of physically efficient but 
 mentally inert executive machines. Though the productivity 
 of existing industrial processes might be greatly increased by 
 this economy, the future of industrial progress might be im- 
 perilled. For not only would the arts of invention and improve- 
 ment be confined to the few, but the mechanisation of the great 
 mass of workmen would render them less capable of adapting 
 their labour to any other method than that to which they had 
 been drilled. Again, such automatism in the workers would react 
 injuriously upon their character as consumers, damaging their 
 capacity to get full human gain out of any higher remuneration 
 that they might obtain. It would also injure them as citizens, 
 disabling them from taking an intelligent part in the arts of 
 political self-government. For industrial servitude is inimical 
 to political liberty. It would become even more difficult than 
 now for a majority of men, accustomed in their work-day to 
 mechanical obedience, to stand up in their capacity of citizens 
 against their industrial rulers when, as often happens upon 
 critical occasions, political interests correspond with economic 
 cleavages. 
 
 I would not dogmatise upon the necessity of these human 
 disadvantages of Scientific Management. The more rigorous 
 routine of the work-day might be adequately compensated by 
 shorter hours, higher wages, increased opportunities for educa- 
 tion, recreation, and home life. But there can be no security 
 for adequate compensations of these orders under a scientific 
 management directed primarily by private profit-making motives. 
 For there is no guarantee that the larger profits to a business 
 firm do not entail a damage to its employees, not offset by the 
 bonus which they may obtain. Nor have we the required se- 
 curity that any social gain in the way of increased product and 
 lower prices may not be cancelled by the human injury inflicted 
 upon large bodies of workers and citizens by the more mechan- 
 ical and servile conditions of their labour.
 
 SCIENTIFIC MANAGEMENT 221 
 
 10. A little reflection will make it clear that the complete 
 success of such a business economy would involve a correspond- 
 ing ' science ' on the side of consumption. The standardised 
 worker ought also to be a standardised consumer. For the reg- 
 ular reliable conformity of work must involve a similar con- 
 formity in diet and in other habits of life. If the 'scientific 
 manager' were the full owner of his workmen, it would evidently 
 be a function of his science to work out experimentally, with the 
 assistance of the bio-psychologist, the cheapest and best way of 
 living for each particular trade and type of worker. He would 
 discover and prescribe the precise combination of foods, the most 
 hygienic clothing and housing, the most appropriate recreations 
 and the 'best books' for each class, with a view to the produc- 
 tive efficiency of its members. He would encourage by bonuses 
 eugenic, and discourage by fines dysgenesic marriages among his 
 employees. So far as intelligent employers are in a position to 
 determine or to influence the expenditure of the wages they pay 
 and the general conduct of the lives of their employees outside 
 the working hours, they are disposed to practice this policy. 
 Where they are the owners of the town or village in which the 
 workers find it most convenient to live, they can often do so with 
 considerable effect. Philanthropic motives are often combined 
 with business motives, and the combination may often be 
 genuinely conducive to the human welfare of the community. 
 Temperance, sanitation, and hygiene, educational and recreative 
 opportunities may be made available. Certain regulations, 
 chiefly of a prohibitory nature, regarding the use of alcohol, 
 betting, or marriage, are imposed by some employers as con- 
 ditions of employment. Such interferences outside the hours 
 of labour are, however, exceptional and are generally justified 
 on special grounds of economic safety and efficiency. 
 
 ii. But an altogether wider issue is opened up in the claims, 
 not of the particular employer but of industrial society to im- 
 pose or evoke standards of consumption scientifically adjusted 
 to the various grades of industrial efficiency. If we regard a 
 nation as an economic society, putting out productive energy in 
 wealth-creation, it becomes evident that science has much to 
 say, and can have more, regarding the expenditure of incomes
 
 222 WORK AND WEALTH 
 
 and the consequent consumption of wealth. The science of 
 scientific management, with all its psycho-physical apparatus 
 for measuring results, can be applied to standards of living foi 
 individuals and families. The beginnings of this idea are found 
 in the distinction which figured so largely in the classical Political 
 Economy between productive and unproductive consumption. 
 The discussions of Arthur Young, Eden and others, regarding 
 the respective merits of wheat and oatmeal, beer and tea, as 
 ingredients of working-class diet, were directed avowedly by 
 this conception of economy. A good food was one that yielded 
 more muscular energy or endurance per penny of expenditure. 
 The more enlightened doctrine known as 'the economy of high 
 wages' was early recomended by philanthropists like Robert 
 Owen, or business men like Mr. Brassey, on the score of experi- 
 ments relating to the larger output of labour-power which higher 
 wages with better feeding rendered possible. But there was 
 no 'science' worth mention in these crude experiments. Only 
 within recent years, with the advance of organic chemistry and 
 physiology, has the 'science' of dietetics begun to emerge, 
 analysing the various foods and assigning them their values as 
 producers of tissue and of energy. We are now told the quanti- 
 ties of proteids, carbohydrates and fats contained in various 
 foods, and dietaries based upon these analyses are prescribed 
 for different sorts of workers, and for different ages of members 
 of a family. At present the science does not pretend to any 
 large amount of accuracy, indeed wide divergences still exist in 
 its very foundations. But there is no reason to doubt that further 
 analysis and experimentation may be able to reach food stand- 
 ards which on the consumption side will correspond to the econo- 
 omy of standard methods of work under scientific management. 
 It may be quite possible to lay down with considerable exacti- 
 tude the amounts and combinations and intervals of food for 
 coal-miners, weavers, clerks, motor-men, etc., together with 
 estimates of the amount of expenditure required to maintain the 
 different forms of industrial efficiency. The productive value 
 of other elements of the wage-earner 's expenditure will not indeed 
 admit of so much exactitude, partly because his own 'utility' 
 obtained from such expenditure will not easily be separable
 
 SCIENTIFIC MANAGEMENT 223 
 
 from that of his faniily. But though family expenditure cannot ' 
 thus be regarded as exclusively directed by productive con- 
 siderations, the physical efficiency which is its chief test may be 
 regarded primarily as an industrial asset. Indeed, this view 
 is implicit in most talk of standards of comfort and in most 
 discussions of a 'minimum' or 'living' or 'subsistence' wage. 
 It means such wage as, economically expended, will enable a 
 wage-earner to rear an average family in that measure and kind 
 of efficiency required to do work of a sort similar to that by which 
 he earns the wage. No doubt this notion is tempered by some 
 slight considerations of education and of betterment. But 
 productive efficiency is always the basic factor. Food and hous- 
 ing, by far the most important elements in working-class ex- 
 penditure, are clearly in process of being standardised by hy- 
 gienics in the service of a science of productive consump- 
 tion. 
 
 12. Two other sciences, by which society may seek to stand- 
 ardise the lives of workers, are eugenics and education. In both 
 of these the humanists may have a fierce battle to fight against 
 the dominion of the industrialists. Eugenics, if it can get recog- 
 nition as a social art, will regulate marriage for the purposes of 
 good stock. But good for what? Perhaps for industry and war, if 
 some specialists should have their way. So too with education. 
 Primary education has already been ear-marked in our towns 
 for the production of cheap clerks, and technical and professional 
 training under various guises invade our citadels of higher learn- 
 ing. All is part of the same great claim of society to economise 
 and standardise the body and the mind of its citizen, primarily 
 in order that he may do more efficiently the social or routine 
 services it requires of him. 
 
 This economic standardisation, as we recognise, is not identical 
 in motives or in operation as it bears respectively upon the pro- 
 ductive and consumptive functions. On its productive side it 
 is regulated by considerations of private business profits. Its 
 primary aim is to get men to work in such a way as to produce 
 the largest margin between the wage necessary to evoke full 
 efficiency under 'scientific management' and the market value 
 of the output. Indirectly, it is claimed, this policy redounds to
 
 224 WORK AND WEALTH 
 
 the advantage of industrial society in an increase of the body 
 of consumable wealth, some considerable share of which will 
 pass into the general store. On its consumptive side the scien- 
 tific standardisation works differently. It is plied more directly 
 as a social-economic art, working out for the family, as well as 
 for the individual workman, a standard of living, physical, in- 
 tellectual, and moral, conducive to the interests of society re- 
 garded as an economic or wealth-producing entity. 1 But though 
 society, in thus seeking to secure standards of economic effi- 
 ciency for its family units, is not directly concerned in further- 
 ing the profit-seeking ends of private business firms, indirectly 
 it is doing so. For, so long as expenditure of income, or family 
 budgets, are estimated strictly in accordance with the economic 
 efficiency they yield to the present and prospective working 
 members, the process is in reality supplementary to the science 
 of business management. For the better birth, better rearing, 
 better health and education which it furnishes, will all even- 
 tually be translated into larger quantity and better quality of 
 labour-power for scientific management to handle in its various 
 profit-making processes. 
 
 Now the thoughtful members of the working-classes have 
 always half-instinctively regarded with some suspicion the en- 
 deavours of social reformers to make them use cheaper foods 
 yielding more nutriment for the money, temperance movements 
 to keep down their conventional necessaries, and technical 
 education to make their labour-power more productive. For 
 they have doubted whether the cheaper living or the increased 
 productivity would necessarily come home to them in improved 
 conditions of life. Nor has their suspicion been wholly ground- 
 less. Though in the long run, it might seem to follow that as 
 consumers and even perhaps, though less surely, as wage-earners, 
 they would get some gain from the more economical use of their 
 labour-powers, the bulk of the visible gains might very well 
 
 1 This rationalisation of life for distinctively economic purposes, alike on its pro- 
 ductive and expenditure side, has been carried further by the Jews than by any other 
 people, i. e., their religion, politics, eugenics and education have been directed more 
 exclusively and more rationalistically towards the business arts in which they excel, 
 those of the financier, undertaker, trader, than in the case of other peoples. 
 
 See Sombart, The Jews and Modern Capitalism, Chs. IX and X.
 
 SCIENTIFIC MANAGEMENT 225 
 
 pass into the hands of the employing classes in higher profits or 
 salaries of management. 
 
 This consideration opens the deeper criticism which human- 
 ism and Sociology are entitled and required to press upon the 
 policy of the industrial economists. Every improvement in the 
 technique of the arts of industry or of consumption may be con- 
 sidered as conducive to economic progress, yielding an increase 
 of marketable wealth. But, if such improvements increase the 
 human costs of production, or dimmish the human utilities of 
 consumption, as may happen if they consist largely in the 
 standardising of productive and consumptive processes, they may 
 bring no increase, possibly may bring a decrease, of human 
 welfare. Proposals for scientific management or for standardised 
 dietaries are not indeed to be condemned, upon the general 
 application of such criticism. For it is agreed that such standard- 
 isation within certain limits is socially advantageous. The 
 question, therefore, is partly one of degree, partly as to the 
 security there exists that the economic gains of the improved 
 economy shall be properly apportioned. 
 
 13. But the final test would not consist in determining 
 whether increased costs and diminished utilities did or did not 
 offset the prima facie advantages of the economic improvements. 
 The art of social welfare, humanism, will insist upon considering 
 the reactions of the standardisation of work and consumption 
 upon other faculties and functions than the economic, and in 
 considering prospective as well as present gains. A scientific 
 rigour in economy of work and of expenditure, which should 
 remove, both from the industry and the lives of the great masses 
 of a population, all opportunities for initiative, experiment, 
 risk-taking and the display of personality, might reduce the 
 human value of life for the average man, and so impair 
 the worth of the society. Humanism, therefore, while ap- 
 proving the application of science to the arts of production 
 and consumption, insists that it shall be shown to be the 
 servant not the master of humanity. Such proof is sought, 
 because the assumption, so often made, that all such eco- 
 nomic progress must be humanly profitable, is seen to be un- 
 warranted.
 
 226 WORK AND WEALTH 
 
 A 'scientific' view of human industry would establish the 
 following lines of investigation. 
 
 (1) The productive ability of each producer would be con- 
 
 sidered in relation to its technical efficiency, i. e., the 
 best -way for him to do his job. 
 
 (2) His special productive function would be considered in 
 
 its reactions (a) upon his general standard of life on 
 its economic side, i. e., in relation to his productive 
 and consumptive functions; (b) upon his individual 
 human life. 
 
 (3) The standard of consumption of each consumer would 
 
 be considered in relation to its technical efficiency (a) 
 for purposes of production; (b) for purposes of indi- 
 vidual welfare. 
 
 (4) Industry as a social function would be subjected to criti- 
 
 cism from the wider standpoint of social welfare, i. e., 
 as one element contributing to the life of a nation. 
 
 Finally, an analysis of the human worth of existing industry 
 on its productive and consumptive sides would not suffice. For 
 such an analysis merely accepts the existing system of industry 
 and enquires into the best human methods of working it. 
 
 But humanist criticism must, of course, go behind this accept- 
 ance. The problem of industry which it will envisage will be 
 one that takes as its data the existing resources of the nation, 
 natural and human, and considers how these resources may, in 
 accordance with present knowledge, be best applied for the pro- 
 vision of organic welfare according to the best accepted inter- 
 pretation of that term. However difficult it may be to secure, 
 to justify and to apply that standpoint, this is the form in which 
 the economic problem must present itself to the statesman, the 
 publicist, and the social reformer, so far as they are clear-sighted, 
 rational and disinterested in their work. 
 
 So regarded, each individual would be considered as a complex 
 of activities and wants, whose specialised work for society must 
 be harmonised with that freedom and exercise of his non- 
 specialised functions needed to enable him to realise himself as 
 a human personality. Due consideration would be given to the 
 interplay of his productive and consumptive functions within
 
 SCIENTIFIC MANAGEMENT 227 
 
 his economic life. His economic life must, however, be kept in 
 due subordination to his wider human life, consisting, as the 
 latter does, mainly of non-economic functions. 
 
 Finally, his economic and human life as a personality must 
 be harmonised with the economic and human life of the society 
 of which he is a member. 
 
 Such are the main implications of what might be termed the 
 human scientific calculus of industrial values.
 
 CHAPTER XV 
 
 THE DISTRIBUTION OF LEISURE 
 
 i. Leisure, regarded as an economic good, comes under the 
 general law of distribution of wealth. But the notorious defects 
 of its distribution, and their human consequences, are such as to 
 claim for it a separate place in our enquiry. Modern indus- 
 trialism by its large unearned surplus has greatly increased the 
 size of the leisure classes. For wherever such surplus goes, 
 there is the possibility and probability of a life of leisure. In 
 our study of Consumption we traced the part played by con- 
 spicuous leisure as an element of pride and power in the economy 
 of the rich. In Great Britain the size of this leisure class is by 
 no means measured by the number of those who stand in the 
 census as 'unoccupied.' In the top stratum of the business 
 world we find considerable numbers of the directing and man- 
 agerial class who are seldom or ever 'busy.' Their office hours 
 are short and irregular, their week-ends extend from Friday to 
 Tuesday, their holidays are long and frequent. 
 
 Most of their leisure is accompanied by profuse consumption, 
 involving thus from the standpoint of society a double waste, 
 a waste of time and of substance. Where does all this leisure 
 come from? The answer to this question seems tolerably simple. 
 It has often been observed that labour-saving machinery and 
 other devices for abridging human toil have done very little to 
 lighten or shorten the work-day for the workers. What then 
 has become of the labour that is saved? Most of it has gone to 
 enlarge the leisure of the leisured class, or perhaps we should 
 say, of the leisured classes. For we saw that there existed a 
 lower as well as an upper leisure class, a necessary product of 
 the same mal-distribution of resources as sustains the latter. 
 For an industrial system that grinds out unproductive surplus 
 breaks down the physical and moral efficiency of large numbers 
 of actual or potential workers as a by-product of the overdriving 
 
 228
 
 THE DISTRIBUTION OF LEISURE 229 
 
 and underfeeding process. The reckless breeding of the class 
 thus broken down furnishes a horde of weaklings, shirkers and 
 nomads, unassimilated, unassimilable by the industrial system. 
 These beings, kept alive by charity and poor-laws, have grown 
 with modern industrialism and constitute the class known as 
 'unemployables.' They are often described as a 'standing men- 
 ace to civilisation, ' and are in fact the most pitiable product of 
 the mal-distribution of wealth. 
 
 2. But the irregularities of modern production and con- 
 sumption are also responsible for a vast amount of involuntary 
 and injurious leisure among the genuine working-classes. That 
 leisure is commonly termed 'unemployment.' It is not true 
 leisure, in the sense of time for recreation or enjoyment, though 
 it might become so. For the most part it is at present wasteful 
 and demoralising idleness. 
 
 A certain amount of unemployment is of course unavoidable 
 in any organisation of industry. There will be some leakage of 
 time between jobs and unpredictable irregularities of weather 
 and climate will involve some idleness. Expansions and con- 
 tractions of special trades, changes in methods of production 
 and of consumption, the necessary elasticity of economic life, 
 will continue to account for the temporary displacement of 
 groups of workers. There is, of course, no social wastage in 
 this process, if it is properly safeguarded. But hitherto it has 
 been a great source of individual and social waste. Society is 
 only beginning to realise the duty, or indeed the possibility, of 
 taking active steps to reduce the quantity of this unemployment 
 and to utilise what is unavoidable for the benefit of the unem- 
 ployed and of society. The cultivation of these spare plots of 
 time in the normal life of the workers may become a highly 
 serviceable art. 
 
 If all unemployment could be spread evenly over the working 
 year, taken out in a shortening of the ordinary working-day and 
 in the provision of periodic and sufficient holidays, an immense 
 addition would be made to the sum of industrial welfare. Thus, 
 without any reduction in the aggregate of labour-time, a sensible 
 reduction in the human cost of labour might be achieved, if law, 
 custom, or organised labour policy made it impossible for em-
 
 23 o WORK AND WEALTH 
 
 ployers to vary violently or suddenly the volume of employment 
 and to sandwich periods of over-time with periods of short-time. 
 These baneful irregularities of employment appear inevitable so 
 long as they remain permissible, as do sweating wages and other 
 bad conditions of labour. When they are no longer permissible, 
 the organised intelligence of the trade will adjust itself to the 
 new conditions, generally with little or no loss, often with positive 
 gain. 
 
 If there are trades upon which season, fashion, or other un- 
 controllable factors impose great irregularity of employment, 
 a sound social policy will have close regard to the nature of this 
 irregularity. Where an essentially irregular trade is engaged 
 in supplying some necessary or convenience of life, as, for in- 
 stance, in gas-works and certain branches of transport, alter- 
 native trades may be found whose fluctuations tend to vary 
 inversely with those of the former trades, and which can furnish 
 work suitable in kind and place to those who are out. 
 
 Statistics of employment show that the aggregate of employ- 
 ment during any given year does not vary much. It would vary 
 less, if every man engaged in an essentially irregular trade had 
 an alternative, in which he was qualified to earn a living when 
 employment in the other trade was short. For there is little 
 truth in the contention that specialisation for most manual 
 trades is carried so far that an alternative or subsidiary employ- 
 ment spoils a worker for efficiency in his prime trade. If there 
 are any necessary trades for whose unavoidable unemployment 
 no such effective provision can be made, society must either 
 saddle the trade with the obligation of keeping the 'reserve' 
 of labour while it stands in waiting, or it must itself undertake 
 the administration of the trade as one which cannot safely be left 
 in private hands. In the case of fashion or luxury trades, which 
 furnish many instances of greatest irregularity, legal prohibition 
 of over-time will often operate most beneficially. Where much 
 unemployment still remains, a high contribution to an un- 
 employed insurance fund would stimulate advantageous re- 
 adjustments. Finally, if there are trades incapable of bearing 
 the true costs of maintenance of the labour they employ, it 
 would still be right to place on them the obligation to do so,
 
 THE DISTRIBUTION OF LEISURE 231 
 
 for their destruction will be a gain not a loss to a society that 
 understands its human interests. 
 
 But the main problem of leisure would still remain unsolved. 
 For the normal burden of industrial toil, imposed by our present 
 economic system upon most workers, is excessive. That excess 
 consists primarily in duration of the work-day, though aggra- 
 vated in many cases by intensity or pace of working. Great 
 numbers of workers, especially among women, are employed 
 in occupations where neither law, custom, nor trade organisation, 
 imposes any limits. No factory day affects the employees in 
 shops or offices or most warehouses, or in most transport trades, 
 or in domestic service departments of employment which 
 absorb a rapidly increasing number and proportion of the em- 
 ployed population. There are vast numbers of domestic work- 
 shops and home trades in which men and women are employed, 
 where all hours are worked. No legal restrictions of hours are 
 set upon adult male labour in manufacturing and other in- 
 dustrial work in most of the metal and other trades which are 
 exclusively or predominantly men's employments, though in 
 trades where women also are employed restrictions are often 
 imposed which in fact extend to men the factory day. 
 
 But there is a generally recognised feeling that the length of 
 the factory day is gravely excessive, that 10^2, or even 9 hours 
 per diem, under modern conditions of speeded-up machinery 
 and nervous tension, involve too heavy a human cost. 
 
 3. It is this growing volume of feeling that has crystallised 
 in the demand for an eight-hours day. This is no immoderate 
 demand. A regular contribution of eight hours' working energy 
 of hand, or brain, or nerves, to some narrow routine process, is 
 as much as, or more than, the ordinary man or woman can 
 afford, in the wholesome interest of his personality, to give up to 
 society. For we have recognised quite clearly that a specialisa- 
 tion of function, a division of labour, growing ever finer, is 
 required of the individual in the interests of society. He must 
 make this apparent sacrifice of his private tastes, feelings and 
 interests, for the good of the society of which he is a member. 
 It is not, as we perceive, a real sacrifice, unless the demand 
 made upon him is excessive, for the good of the society he serves
 
 232 WORK AND WEALTH 
 
 is his good, and what he gives out comes back to him in par- 
 ticipation of the common life. But, when the task imposed is too 
 long or too hard, the sacrifice becomes an injury, the encroach- 
 ment upon the human life of the worker inflicts grave damage, 
 which damage again reacts upon society. 
 
 The stress of the Labour Movement upon the urgency of 
 shortening the work-day to-day is extremely significant. It 
 testifies to two advances in the actual condition of the labouring 
 classes. In the first place, it indicates that some substantial 
 progress has been made towards a higher level of material 
 standard of consumption. For workers on the lower levels of 
 poverty dare not ask for reduced hours of labour, involving, 
 as may well occur, a reduction of pay. Workers struggling 
 for a bare physical subsistence cannot afford to purchase 
 leisure. 
 
 Of course I know that even the better-to-do workers who 
 voice a demand for an eight-hours day are not ready to proclaim 
 their willingness to pay for it in diminished wages. Nor need 
 they in all cases. Where the shorter day is attended by improved 
 efficiency or increased intensity of labour, or merely by better 
 organisation of the business, there may be nothing to pay. 
 More leisure has been squeezed out of the working-day. There 
 are many cases where this can be done, for the working-day in 
 many instances is wastefully prolonged. But, though in cer- 
 tain trades a ten-hours day may be reduced to nine, or even 
 eight, without any reduction of output, this is not the case in 
 other trades, nor even in the former trades could the process be 
 carried far without a loss of output. In a great many employ- 
 ments a short working-day will involve a larger economic cost 
 of labour, and where, as is usual in competitive trade, this 
 larger cost cannot be made good out of profits, labour will have 
 to buy this leisure, in part at any rate, by reduced wages. For 
 even if he can get it shifted on to the consumer in the shape of 
 higher prices, as consumer he will in his turn have to bear a 
 part of it. 
 
 Where the demand for shorter hours is genuine, and is not 
 a mere cover for extended over-time, to be paid for at a higher 
 rate, it must be taken as indicative of the workers' willingness
 
 THE DISTRIBUTION OF LEISURE 233 
 
 to take part of his share of industrial progress in leisure instead 
 of wages. 
 
 4. But leisure, as an economic asset, is not a mere question 
 of hours. A shorter work-day might be dearly bought at the 
 cost of an intensification of labour which left body and mind 
 exhausted at the end of each day. The opposition of workers 
 to a policy of speeding-up, or the use of pace-setters, is usually 
 a sane act of self-defence, and not the fractious obstruction 
 to industrial progress it is sometimes represented. No con- 
 siderations of human endurance limit the pace at which ma- 
 chinery driven by mechanical power may be worked. Unless, 
 therefore, restraints are put by law, custom or bargaining, upon 
 the speed of machines, or the number which a worker is called 
 upon to serve, competition may impose a work-day which, though 
 not unduly long in hours, habitually exhausts the ordinary 
 worker. It is not always realised how great a change took place 
 when the weaver, the shoemaker, the smith, passed from the 
 workshops, where the pace and other conditions of work were 
 mostly regulated by their voluntary action, to the steam-driven 
 factory. The shoemaker and the tailor under the old conditions 
 had time, energy and liberty for thought while carrying on their 
 work: they could slacken, break off or speed up, their work, 
 according to their inclination. The clicker or heeler in a shoe 
 factory, the cutter-out in a clothing factory, have no such meas- 
 ure of freedom. This is, of course, a normal effect of modern 
 industrialism. Closer and more continuous attention is demanded 
 during the working hours. 
 
 Thus the real question of leisure is a question of spare human 
 energy rather than of spare hours. The shorter working-day is 
 chiefly needed as a condition favourable to spare energy. Though 
 therefore, an eight-hours day may not unreasonably be taken as 
 a proximate reform, for labour in general, there is no reason why 
 the work-day in all occupations should be cut to this or any other 
 exact measure. Such arithmetical equality would evidently 
 work out most inequitably, as between trade and trade, or pro- 
 cess and process in the same trade. In many large departments 
 of industry, the transport and distributive trades in particular, 
 numerous interstices of leisure are inserted in a day's work, easing
 
 234 WORK AND WEALTH 
 
 the burden of the day, and sometimes affording opportunity for 
 recreation and intercourse. In the more arduous processes of 
 manufacture, mining, or in clerical and other routine brain work, 
 there is little or no scope for such relaxation. 
 
 But while such considerations evidently affect the detailed 
 policy of the shorter day in its pressure on the several occupa- 
 tions, they do not affect the general policy. 
 
 There can be no doubt that an excessive and injurious amount 
 of specialised labour is exacted from the workers by the ordinary 
 industrial conditions of to-day in nearly all industrial processes. 
 
 5. The first plea for a shorter day is one which our analysis 
 has made self-evident. 
 
 It will greatly reduce the human cost of production in most 
 processes. For, as we recognise, the strain of muscular and nerv- 
 ous fatigue, both conscious and unconscious, gathers force and 
 grows with great rapidity during the later hours of the work- 
 day. Though the curve representing the variations of the human 
 cost will of course differ in every sort of work and for different 
 workers, their age, sex, strength, health and other personal con- 
 ditions affecting it, the last hours of each shift will contain a 
 disproportionate amount of fatigue, pain and other 'costs,' 
 while the quality and quantity of the work done in these last 
 hours will be inferior. 
 
 If out of any stock of material goods, we were able to separate 
 the product of the last hour's work from that of the earlier hours 
 in the work-day, and could subject it to the analysis of human 
 cost and utility, which we have endeavoured to apply to the 
 general income, what should we find? This last increment of 
 the product would contain a heavier burden of human cost of 
 production than any of the earlier increments. Again, turning 
 to the consumption side, what should we find? This last in- 
 crement must be considered as furnishing the smallest amount 
 of human utility in its consumption. Indeed, if we are right in 
 holding that a considerable fraction of each supply, even of 
 what are commonly classed as material necessaries of life, such 
 as foods, clothings, etc., is wastefully or even detrimentally con- 
 sumed by the well-to-do, there is reason to hold that this last in- 
 crement of product, involving the largest human cost in its
 
 THE DISTRIBUTION OF LEISURE 235 
 
 production, contains no utility but some amount of human dis- 
 utility in its consumption. 
 
 If this analysis be true, the last hour's work may be doubly 
 wasteful from the standpoint of human welfare. 
 
 Of the 2,000,000,000 which constitutes our income it may 
 very likely be the case that 200,000,000 of it represents wealth, 
 which, from the human standpoint, is 'illth,' alike in the mode 
 of its production and of its consumption. If it had not been 
 produced at all, the nation might have been far better off, for by 
 abstaining from the production of this sham wealth, it would 
 have produced a substantial amount of leisure. 
 
 It is of course true that the particular groups of producers, 
 who by their last hour's labour made these goods, may not have 
 been losers by doing so; their heavy toil may have been compen- 
 sated by the enhanced wage which they could not otherwise have 
 got, and the loss of which would have injured their standard of 
 life. It is, indeed, the operation of competition upon wages that 
 actually forces into existence this sham-wealth. Drawn out of 
 over-wrought workers by the unequal conditions of the wage- 
 bargain, it passes into wasteful consumption by the back-stroke 
 of the same law of distribution, which pays it away as 'surplus' 
 or 'unearned' wealth. 
 
 It is only the clear consideration of its production and con- 
 sumption from the social standpoint that exhibits the waste of 
 the last hour's product. 
 
 But from the standpoint of the individual worker the economy 
 of a shorter work-day has a double significance. We have seen 
 that it more than proportionately diminishes his personal cost, 
 by cancelling the last and most costly portion of his work-day. 
 But it also increases the human utility which he can get out of 
 his wages. A day of exhausting toil entails the expenditure of a 
 large portion of his wage in mere replacement of physical wear 
 and tear, or incites to expenditure on physical excesses, while 
 the leisure hours are hours of idleness and torpor. A reduction 
 of the work-day will, by the larger leisure and spare energy it 
 secures, reduce the expenditure upon mere wear and tear, and 
 increase the expenditure upon the higher and more varied strata 
 of the standard of comfort. More leisure will in general so alter
 
 236 WORK AND WEALTH 
 
 the mode of living as to enable the worker to get more and better 
 utility out of the expenditure of his wages. Take an extreme 
 case. A man who toils all day long at some exhausting work, and 
 goes home at night too tired for anything but food and sleep, so 
 as to enable him to continue the same round to-morrow, though 
 he may earn good wages from this toil, can get little out of them. 
 If he were induced to work less and leave himself some time 
 and energy for relaxation and enjoyment, he would get a larger 
 utility out of less money income. 
 
 The matter, however, does not need labouring. It is evident 
 that many modes of consumption depend in part, for the pleasure 
 and gain they yield, upon the amount of time given to the con- 
 suming processes. It would be mere foolishness for a tired 
 worker to spend money upon improving books which he had 
 not the time and energy to digest. Shorten his hours, leave him 
 more energy, such expenditure may be extremely profitable. 
 Even the enjoyment and good of his meals will be increased, if 
 he has more time and energy for wholesome processes of digestion 
 and for the exercise which facilitates digestion. And what is 
 true of his food will hold also of most other items in his standard 
 of consumption. No consumption is purely passive: to get the 
 best utility or enjoyment out of any sort of wealth, time and 
 energy are requisite. The greater part of a workman's income 
 goes to the upkeep of his home and family. Does the normal 
 work-day in our strenuous age permit the bread-winner to get 
 the full enjoyment out of home and family? He belongs per- 
 haps to a club or a cooperative society. Can he make the most 
 of these opportunities of education and of comradeship, if his 
 daily toil leaves him little margin of vitality? Most of the grow- 
 ing public expenditure which the modern State or City lays out 
 upon the amenities of social life, the apparatus of libraries, 
 museums, parks, music and recreation, is half wasted because 
 industry has trenched too much upon humanity. 
 
 6. More leisure means an increased fund of utility or welfare 
 got out of the income at the disposal of each worker. 
 
 This introduces us to the fuller economy of leisure regarded 
 as the opportunity of opportunities the condition of all effective 
 social reconstruction and progress.
 
 THE DISTRIBUTION OF LEISURE 237 
 
 Consider it first in relation to industrial welfare. We have 
 seen how society enforces its claims upon the worker by division 
 of labour and specialisation of functions. This specialisation is 
 usually justified by the variety of consumption which it yields. 
 But will not this more complex and refined consumption in 
 large part be wasted or perverted to base ends, if the producer 
 becomes ever narrower in his productive function? 
 
 The Organic Law presses here insistently. It would be going 
 too far, doubtless, to assert that he who can produce one thing 
 can only consume one thing. But everyone familiar with the 
 finer arts of Consumption will admit that a consumer who is 
 utterly unskilled in the production of these goods cannot extract 
 from their consumption the full enjoyment or utility which they 
 contain. A true connoisseur of pictures must, in training and 
 in study, be a good deal of an artist: the exquisite gourmet must 
 be something of a cook. 
 
 In other words, our industrial civilisation offers a dangerous 
 paradox, if it merely presents man exposed to two opposed 
 forces, tending on the one hand to greater narrowness of pro- 
 duction, on the other, to greater width and complexity of con- 
 sumption. To solve this paradox is the first service of the large 
 new fund of leisure which, for the first time in history, the new 
 economies of industry render available not for a little class but 
 for whole peoples. 
 
 The first use of leisure, then, is that it supplies a counterpoise 
 to specialisation by the opportunity it gives for the exercise of 
 the neglected faculties, the cultivation of neglected tastes. As 
 the specialisation grows closer, this urgency increases. More 
 leisure is required for the routine worker to keep him human. 
 
 In the first place, it must afford him relaxation or recreation 
 by occupations in which the spontaneity, the liberty, the elements 
 of novelty, increasingly precluded from his work-day, shall find 
 expression. It must liberate him from automatism, and afford 
 him opportunity for the creative and interesting work required 
 to preserve in him humanity. 
 
 An eight-hours day would mean that thousands of men, who 
 at present leave the factory or furnace, the office or the shop, 
 in a state of physical and mental lassitude, would take a turn at
 
 238 WORK AND WEALTH 
 
 gardening, or home carpentry, would read some serious and 
 stimulating book, or take part in 'some invigorating game. 
 
 Thus each man would not merely get more out of each item 
 of his economic consumption, but he would add to the net sum 
 of his humanity, and incidentally of his economic utility, by cul- 
 tivating those neglected faculties of production which yield him 
 a positive fund of interest and human benefit. 
 
 7. So far I have set forth the economy of leisure from the 
 standpoint of physical and moral health: the order and harmony 
 of human powers. This, however, is in the main a statical 
 economy. Now, Order is chiefly valuable as the means of Pro- 
 gress, Health as the means of Growth. The dynamic economy 
 of Progress demands leisure even more insistently. 
 
 Everyone will formally admit that Education is impossible 
 without leisure. It is often pointed out that the Greek word 
 which has been converted into our word ' School ' means Leisure. 
 One might, therefore, suppose that the utmost care would be 
 taken to get the fullest use out of the leisure which child-life 
 affords, and to ensure that throughout life there should remain 
 a sufficient supply of this raw material of progress the surplus 
 energy beyond the bare needs of existence needed for organic 
 growth. 
 
 The prodigal waste of this sacred store of leisure for child-life 
 in the processes of our Elementary Education is only too familiar 
 to all of us. Mr. Stephen Reynolds 1 hardly overstates the case 
 when he says, ' It gives to the children about three years ' worth 
 of second-rate education in exchange for eight or nine years of 
 their life. ' 2 
 
 I believe that the trained educationalist of the next genera- 
 tion, examining the expensive education given even in the best- 
 equipped of our secondary schools and our universities, in the 
 light of a more rational conception of human progress, will find 
 
 1 (Times, 23 Dec. 1912.) 
 
 2 The best that can be said for this education has recently been said by Mr. George 
 Peel, who writes of London children (The Future of England, p. 96) : 
 
 'They spend 28 hours a week continuously during nine years under fairly satis- 
 factory conditions of air, warmth and light, engaged in wholesome and stimulating 
 pursuits. Considering what their homes often are, this itself must be reckoned an 
 immense benefit.'
 
 THE DISTRIBUTION OF LEISURE 239 
 
 at least as large a waste of opportunity in these seats of learning 
 as in our elementary schools. Not until educational standards and 
 methods are better adjusted to true conditions of the vital pro- 
 gress of individuals and of societies, will the chief significance 
 of leisure be realised. 
 
 8. But the value of leisure is by no means exhausted by 
 these considerations. The finest fruits of human life come not 
 by observation. To lay out all our spare time and energy to the 
 very best advantage by a scrupulous seizure of opportunities is 
 in reality a false economy. Industrialism has undoubtedly done 
 much both to discipline and to educate the powers of man. But 
 it has preached too arrogantly the gospel of economy and in- 
 dustry. It is not good for any man to account for his time either 
 to himself or to another, with too great exactitude, or to seek to 
 make a mosaic of his days. The Smilesian philosophy of thrift 
 and industry imparts more calculation into life than is good for 
 man. We should not be so terribly afraid of idleness. Dr. Watts 
 held that 'Satan finds some mischief still for idle hands to do.' 
 But far saner is Wordsworth's view, ' that we can feed this mind 
 of ours in a wise passiveness,' and Thoreau's demand for a 
 'broad margin of life.' 
 
 We are not yet sufficiently advanced in psychology to know 
 much of the processes within the mind by which novel thoughts 
 and feelings seem to enter of their own accord, starting new im- 
 pulses to action, or by which the unchecked imagination works 
 along some rapid line of intuition. But that such seasons of 
 vacancy and reverie are essential to many of the finest processes 
 of the intellect and heart, is indisputable. To deny this to any 
 man is to deprive him of a part of his rightful heritage of human 
 opportunity. The inventor, the poet, the artist, are readily 
 allowed such free disposal of time. Everyone allows that genius 
 must have ample periods of incubation. But the implication 
 that common men ought to have their faces kept to the grind- 
 stone is quite false. Everybody wants leisure for his soul to 
 move about in and to grow, not by some closely prescribed plan 
 of education, but by free experimentation of its secret powers. 
 A very slender harvest of happy thoughts and feelings will 
 justify much apparent idleness.
 
 2 4 o WORK AND WEALTH 
 
 In the narrower investigation of methods of industry which 
 we essayed, we realised the critical part played by leisure in the 
 art of invention. The lack of leisure for the great majority of 
 workers is assuredly a waste of inventive power. We think our 
 society prolific in inventions, especially in the age we are living 
 in, but it is likely that the pace of progress through industrial 
 inventions would be greatly quickened if the proper play-time 
 of the mind were not denied to the great majority of men and 
 women. 
 
 Biologists and psychologists have made many interesting en- 
 quiries into the motives that prompt animals and human beings 
 to play. The forms of play, the rhythm or patterns into which 
 the organic cooperations of muscular and nervous tensions and 
 discharges cast themselves, are found to have some direct re- 
 lation to the serious pursuits of adult life, the protection against 
 enemies, the pursuit of prey and other food, courtship, mating 
 and the care of the young, and the corporate movements nec- 
 essary for the protection of the horde or tribe. So interpreted, 
 play is an instinctive education for life. Nature is full of in- 
 directness, and a great deal of this play is not closely imitative 
 of any particular sort of useful activity but is directed to. general 
 fitness. This applies particularly to the higher animals who are 
 less exclusively directed by separate particular instincts and are 
 liable to have to meet novel and irregular emergencies that call 
 for general adaptability of body and of mind. The play of higher 
 animals and especially of human young will thus run largely 
 into forms in which the intellectual and emotional powers will 
 have large scope, where spontaneous variation and free imagina- 
 tion will express themselves, and where the more or less routine 
 rhythms of the primitive dance or song or mock fight will pass 
 into higher forms of individual cunning and competitive exploit, 
 having as their main biological and social 'meaning' the practice 
 of an efficient mental and emotional equipment. Play thus con- 
 sidered is an experimentation of vital powers. Its utility for 
 child-life is commonly admitted. In fact, there is a grave danger 
 lest the spontaneity and instinctive direction which nature has 
 implanted should be damaged by the attempts of education- 
 alists to force the vital utility of play by organising it into
 
 THE DISTRIBUTION OF LEISURE 241 
 
 'set games.' Though we need not rudely rule out reasonable 
 regulation from this, as from any other department of life, it 
 would be well to remember that play has powerful directive 
 instincts behind it in child-life which adult notions of economy 
 may gravely misconceive and injure by over-regulation. Hasty 
 endeavours to displace instinct by reason in child-life are likely 
 to prove costly to human welfare in the long run. The spon- 
 taneous joy of those activities of childhood that seem most 
 'wasteful' is probably a far better index to welfare than any 
 pedagogic calculations. 
 
 But because the human utility of play is great for children, 
 it does not follow that it is small for men and women. Even the 
 physiological and much more the psychological utility of play 
 lasts through life, though doubtless in diminishing value. For 
 adult workers mere repose never exhausts the use of leisure. 
 The biological or the social utility of his play may be much 
 smaller than in the case of the young. But it will remain con- 
 siderable. Nor is this utility chiefly expressed in the relation 
 between play and invention. The chief justification for leisure 
 does not consist in its contribution to the arts of industry but 
 rather in raising the banner of revolt against the tyranny of 
 industry over human life. 
 
 9. We have grown so accustomed to regard business as 
 the absorbing occupation of man, that which necessarily and 
 rightly claims the major part of his waking hours, that a so- 
 ciety based on any other scale of values seems inconceivable. 
 Though history has made us familiar with civilisations, such 
 as those of Athens and of Rome, where a large body of 
 free citizens regarded politics, art, literature and physical 
 recreations as far more important occupations, we know that 
 such civilisations rested on a basis of slave labour. We do 
 not seem to realise that for the first time in history two 
 conditions are substantially attained which make it technically 
 possible for a whole people to throw off the dominion of toil. 
 Machinery and Democracy are these two conditions. If they 
 can be brought into effective coordination, so that the full eco- 
 nomics of machine production can be rendered available for the 
 people as a whole, the domination of Industry over the lives, the
 
 24 2 WORK AND WEALTH 
 
 thoughts, and the hearts of men, can be overthrown. This is the 
 great problem of social-economic reconstruction, to make in- 
 dustry the servant of all men, not the servants of the few, the 
 masters of the many. Its solution demands, of course, that 
 after the wholesome organic needs are satisfied, the stimulation 
 of new material wants shall be kept in check. For if every class 
 continues constantly to develop new complicated demands, 
 which strain the sinews of industry even under a socially-ordered 
 machine-economy, taking the whole of its increased control of 
 Nature in new demands upon Nature for economic satisfaction, 
 the total burden of Industry on Man is nowise lightened. If we 
 are to secure adequate leisure for all men, and so to displace the 
 tyranny of the business life by the due assertion of other higher 
 and more varied types of life, we must manage to check the lust 
 of competitive materialism which Industrialism has implanted 
 in our hearts. 
 
 I am aware how difficult it is to translate these handsome 
 aspirations into practical achievement. To urge the working- 
 classes of this country, or even considerable sections of the 
 middle-classes engaged in the trades and professions, to sacrifice 
 some immediately attainable rise in their material and intellect- 
 ual standard of comfort, in order thereby to purchase more 
 leisure, will be taken to indicate a blank ignorance of the actual 
 conditions of their lives. I shall be reminded that recent sta- 
 tistics of wages in this country show that about one-third of our 
 working-class families are living upon precarious weekly incomes 
 amounting to less than 255. a week, and that this computation 
 does not take into account a large body of the population living 
 upon casual earnings indefinitely lower than this sum. Now Mr. 
 Rowntree and other searchers into working-class expenditure 
 have shown that 255. will hardly purchase for an ordinary family 
 in any English town a sufficiency of food, clothing, housing, 
 fuel and other requisites to maintain its members in full physical 
 efficiency. It will seem idle to contend that working-people in 
 this case would do well to prefer a shortening of their working 
 day, however long it be, to an increase of their wages. None of 
 the considerations I have urged relating to the better utilisation 
 of their consumption will be held to justify so obviously wasteful
 
 THE DISTRIBUTION OF LEISURE 243 
 
 a policy. These workers simply cannot afford to buy more leisure 
 at so high a price. They dare not sacrifice any fraction of their 
 current wages to procure a reduction of hours from ten hours to 
 eight, even if the conditions of their trade otherwise admitted 
 such a change; and if increasing prosperity in their trade presents 
 them with the option of obtaining higher wages or shorter hours, 
 their pressing demands for better food and housing will rightly 
 compel them to choose the former of the two alternatives. 
 
 Nor is this reasoning refuted by dwelling upon the undeniable 
 facts, that most standards of working-class comfort contain 
 elements of conventional consumption which might be cut out 
 with positive advantage, and that, apart from this, a more in- 
 telligent housekeeping would enable most of them to do much 
 better with their actual incomes than they do. For when a due 
 allowance has been made for such errors or extravagance, the 
 ordinary labourer's wage in town and in country still remains 
 below the margin of family efficiency. Of course, in almost 
 every occupation there will be a considerable number of workers 
 who, having no family dependent on them, will have some means 
 at their disposal for comforts, luxuries, saving or leisure. But 
 the normal standard wage for unskilled or low-skilled labour in 
 this country does not appear to have attained a height at which 
 the purchase of a shorter working day is sound economy. We 
 must always bear in mind, besides, that the existence in a trade 
 of even a considerable minority of workers who could afford to 
 take in increased leisure what they might take in enhanced wages, 
 would not make this step practicable or desirable. For most 
 trades are now so organised that a common standard working 
 day is even more essential than a uniform rate of wages. 
 
 These facts enable us to realise why it is that so much elas- 
 ticity or ambiguity attends the actual labour movement for a 
 shorter working day. The demand is seldom framed in such a 
 way as to preclude the common use of over-time, though such a 
 use of course defeats the aim for leisure, converting it into an 
 aim for higher wages, the time and a half rate usually paid for 
 over-time. 
 
 But, though this open or secret competition between more 
 leisure and more wages continues to take place in trades where
 
 244 WORK AND WEALTH 
 
 general conditions of labour are improving, the relative strength 
 of the claim for leisure is advancing. There comes a point in the 
 improved conditions of each working-class when the demand for 
 liberty and ease and recreation begins to assert itself with so 
 much insistence that it outweighs some part of the chronic de- 
 mand for higher wages. Though workers are usually reluctant to 
 admit the economic necessity of making a wage-sacrifice in order 
 to purchase leisure, and will hardly ever claim a shorter day, if 
 they know it to involve an actual fall of wages, they will some- 
 times risk this fall, and more often they will forego a portion of 
 a contemplated rise of wage, so as to get a shorter day. The 
 strength and effectiveness of this demand for leisure in com- 
 parison with wages must, of course, vary with the actual standard 
 of comfort that obtains, the onerousness or irksomeness of the 
 work, the age, sex and intelligence of the workers, and the va- 
 riety and sorts of opportunities which increased leisure will 
 place at their disposal. In the ordinary English feudal village, 
 or even in the small country town, leisure commonly means 
 torpor qualified by the public-house. The price of such leisure, 
 in terms of sacrifice of wage, would be very low, for the utility in 
 the sensational enjoyment of the leisure would be slight as com- 
 pared with the substantial addition to the material standard of 
 family comfort which even a shilling would afford. On the other 
 hand, to the better-paid mechanic, compositor, or skilled factory 
 worker, where the family wage was relatively high, and where 
 organised city life presented many opportunities for the use and 
 enjoyment of leisure, it might seem well worth while to pay 
 something in cash for the advantage of a longer evening. 
 
 10. This problem, of course, is merely one illustration of the 
 complicated issues which arise in any orderly study of the 
 human economics of class and individual standards of consump- 
 tion. Even such a merely cursory glance at this delicate organic 
 problem will serve to expose the fatuity of so much of the crude 
 dogmatic criticism lavished upon working-class economy by 
 well-to-do reformers who have not sufficient imagination or 
 discretion to abstain from applying the standards of valuation 
 appropriate to an income of 1,000 a year to a family living upon 
 60 a year. The exact income-point where a West Ham worker
 
 THE DISTRIBUTION OF LEISURE 245 
 
 can afford to observe the legal requirements against overcrowding 
 by hiring another room, where he can join a Club with a reason- 
 able chance of keeping up the subscriptions, where he can afford 
 to keep the boys or girls at school beyond the legal age-limit, 
 such questions cannot be settled by general maxims as to the 
 duty of thrift or the advantages of education, or even the dangers 
 of bad sanitation. It must be remembered that even in this 
 highly-civilised and Christian land there are still some millions of 
 people who cannot afford to set aside anything for a rainy day, 
 or to let their children enjoy the education which the State 
 freely provides, or even to obey some of the fundamental laws 
 of health. As the family wage rises beyond a bare minimum of 
 current subsistence, a point will emerge where each of these and 
 many other sound practices becomes economically feasible: the 
 particular income-point, of course, will differ with each family 
 according to its composition, its needs, and the opportunities 
 of meeting them. 
 
 What applies so evidently to the narrow incomes of the wage- 
 earners is, of course, equally applicable to the higher incomes 
 of other classes. The well-to-do professional man recognises 
 that an annual expenditure of five or even ten per cent of his 
 income on holidays may be a sound economy, just as he cal- 
 culates that he is doing better for his son by spending 1,000 on 
 his professional training than by putting him to business at 
 sixteen with the same sum for capital. Not only is it impossible 
 to generalise for a whole people, or for all families in a given 
 trade or of a given income, but there will be no two cases where 
 a rising income ought to be laid out precisely in the same way. 
 This is of course nothing else than saying that, as no two persons, 
 or families, are precisely alike in physical and moral make-up, 
 in tastes, needs, opportunities, their expenditure cannot rightly 
 be the same. 
 
 Though this belongs to the most obvious of common-places, 
 none is more habitually ignored. And that neglect is largely due 
 to the fact that the platitudinarian moralist has always been 
 allowed to have a free run in the region of commentary on ex- 
 penditure. 
 
 Eulogia of thrift and industry have been as indiscriminate
 
 24 6 WORK AND WEALTH 
 
 and as unprofitable as diatribes against luxury and idleness. 
 What is needed is a flow of orderly investigation into the real 
 needs and capacities of the individuals and groups who constitute 
 industrial society, not confined to the hard facts which can be 
 tabulated and plotted in curves but taking count of those softer 
 and more plastic facts which a closer study of human life will 
 always show as the main determinants of any art of conduct. 
 
 The place of leisure in the organic standard of a group or class 
 or nation will be one of the most delicate problems in sucha study. 
 Its delicacy for the individual economy may, indeed, be deduced 
 from the expression which we used at the outset of this treatment, 
 in describing it as 'the opportunity of opportunities.' In other 
 words, its human utility to any man, and, therefore, its impor- 
 tance, relative to his wages or any other good he gets from them, 
 will depend upon the nature of all the opportunities it opens up, 
 and that in its turn depends upon the entire sum of those con- 
 ditions which we name his Nature and his Environment. 
 
 The progressive achievement of this economy of leisure is 
 closely linked with a gradual reorganisation of industry so as to 
 eliminate the large waste of time and energy which present pro- 
 ductive methods involve. With science and humanity co- 
 operating in the art of social organisation it ought to be 
 possible to effect such economies as would place all English- 
 men in private possession of the greater part of their 
 waking day for their own purposes in life. It requires, 
 however, a genuine faith in the organic progress of Human 
 Nature to urge with confidence the fuller measure of such 
 a reform. We need at least to assume that the normal tendency 
 will be towards the use, not the abuse, of more leisure, as of 
 higher wages. That some waste will be incurred in learning to 
 use leisure, as also in building up each stage in a rising standard 
 of expenditure, is of course inevitable. Much might be said 
 about the conditions which facilitate the assimilation both of 
 leisure and of wages to nourish a higher human life. Race, 
 climate, social traditions and surroundings, the nature of the 
 work, age, sex and, indeed, many other conditions, must help 
 to determine how a given shortening of hours, or enhancement 
 of wages, will affect the standard of life. Some crude distinc-
 
 THE DISTRIBUTION OF LEISURE 247 
 
 tions of great significance have been observed. The Bantu and 
 most other Africans, new to processes of wage-labour and to the 
 needs of civilised life, will take the whole of a sudden rise of 
 wages in increased leisure, but that leisure will be spent almost 
 wholly in idleness. Pushful German traders in tropical countries 
 commonly complain of the 'verdammte Bedurfnislosigkeit' (ac- 
 cursed wantlessness) of the inhabitants. This low conservative 
 standard of living impedes economic processes of exchange. 
 It also precludes the fruitful use of leisure, the satisfaction of 
 the non-economic needs. Though there is no reason to hold 
 that any race or type of man is unprogressive, in the sense that 
 his mind is impervious to new wants and is incapable of inciting 
 him to new efforts for their satisfaction, the extent and pace of 
 such progress vary greatly with the economic environment and 
 with the degree of conscious culture hitherto attained. The 
 stimuli of economic needs and of non-economic needs will nor- 
 mally proceed together, and in the masses of a working popula- 
 tion will manifest themselves in a simultaneous demand for 
 higher wages and more leisure. But as wages reach a tolerably 
 high standard of economic comfort, it might be expected that the 
 relatively stronger pressure of the non-economic needs would 
 give increasing emphasis to the demand for a shorter and easier 
 working day. This, indeed, will seem to accord with the general 
 claim which socialists as well as individualists make for progress- 
 ive industrialism, that it shall make larger provision for personal 
 liberty and self-development. As specialised and regimented 
 industry represents the direct economic service each must render 
 to society, the demands of expanding personality are held to 
 require that an increasing proportion of each man's time and 
 energy shall be put at his disposal. 
 
 ii. No abstract considerations indeed, can be adduced to 
 support an indefinite reduction of the work-day. As a high level 
 of civilisation is attained in any community, the proportion 
 of energy devoted to material, as compared with non-material 
 commodities and services, will doubtless be reduced. But that 
 does not necessarily imply a corresponding reduction of eco- 
 nomic time and activity. For among economic goods them- 
 selves, those which are wholly or mainly non-material will
 
 248 WORK AND WEALTH 
 
 form an increasing proportion of the whole. A community like 
 that of Great Britain, with a population declining in its growth, 
 will tend to take a continually increasing share of its real income 
 in the shape of intellectual, moral, aesthetic, recreative, and 
 other non-material services. These will absorb an ever-growing 
 share of the productive energy of the people. This demand for 
 the satisfaction of higher economic needs will be likely to put a 
 check upon the tendency towards an illimitable reduction of the 
 work-day. For most of these higher non-material goods do not 
 admit the application of those economies of capitalist produc- 
 tion available in the making of material goods. Take one ex- 
 ample, that of education. Here is a sendee which will probably 
 absorb a continually increasing percentage of the total time and 
 energy devoted to economic services. The same is probably 
 true of hygienic services. Though portions of these and other 
 activities may pass from the economic into the non-economic 
 sphere, being undertaken by individuals as private occupations, 
 for their leisure, as public services they will certainly furnish 
 employment to an increasing number of employees. 
 
 Thus the claims of a growing progressive social organisation 
 will impose some necessary limits upon the demands of the in- 
 dividual for larger liberty and leisure. 
 
 There is, however, no final conflict between the claims of 
 personal liberty and the social order. Even though the process 
 of readjustment between the claims of industry and leisure 
 should incline generally in favour of more leisure, with the prime 
 purpose of nourishing more fully the private personality and 
 affording larger scope for home life and recreation, society is 
 not thereby the loser. For some of the finest and most profitable 
 uses of leisure will consist of the voluntary rendering of social 
 services of a non-economic order. I allude in particular to a 
 fuller participation in the active functions of citizenship, a more 
 intelligent interest in local and national politics, in local adminis- 
 tration and in the numerous forms of voluntary association 
 which are generally social in the services they render. More 
 leisure is a prime essential of democratic government. There 
 can be no really operative system of popular self-government 
 so long as the bulk of the people do not possess the spare time
 
 THE DISTRIBUTION OF LEISURE 249 
 
 and energy to equip themselves for effective participation in 
 politics and to take a regular part in deliberative and admin- 
 istrative work. This is equally applicable to other modes of 
 corporate activity, the life of the churches, friendly societies, 
 trade unions, cooperative societies, clubs, musical and educa- 
 tional associations, which go to make up the social life and in- 
 stitutions of a country. Leisure, demanded primarily in the 
 interests of the individual for his personal enjoyment, will thus 
 yield rich nutriment to the organic life of society, because the 
 individual will find himself drawn by the social needs and de- 
 sires embedded in his personality to devote portions of his leisure 
 to social activities which contribute to the commonwealth as 
 surely as do the economic tasks imposed upon him in his daily 
 industry.
 
 CHAPTER XVI 
 
 THE RECONSTRUCTION OF INDUSTRY 
 
 PART I 
 
 CAPITAL AND LABOUR 
 
 i. Since industry is a great cooperative process for the 
 mutual aid of members of society, it is well that the fact should 
 be held in the consciousness and will of individuals as clearly as 
 possible. For this conscious realisation of the meaning of in- 
 dustry will have a helpful influence on their intelligence and 
 feelings. 
 
 Now there are general related tendencies in modern industry 
 which are powerful obstacles to this realisation of the social 
 meaning of industry. 
 
 The first is the growing subdivision of labour with the related 
 expansion of markets. When a man made a watch or a pair of 
 shoes and sold them to a neighbour, or known customer, his 
 work had for him a distinct human significance. For, making 
 the whole of a thing, he realised its nature and utility, while, 
 seeing the man who wore his watch or shoes, he realised the 
 human value of his work. Now he performs one of some ninety 
 processes which go to make many watches, or he trims the heels 
 of innumerable shoes. The other processes he cannot do, and 
 does not accurately know how they are done. His separate con- 
 tribution has no clear utility, and yet it solely occupies his 
 attention. Not only does he thus lose grasp of the meaning of 
 his work, but he has no opportunity of realising its consumptive 
 utility. For he cannot know or care anything about the un- 
 known person in some distant part of the world who shall wear 
 the boots or watch he helped to make. The social sympathy of 
 cooperative industry is thus atrophied by the conditions of his 
 work. Division of labour, in its first intent, thus divides each 
 
 250
 
 -oLLECse 
 
 "ORNIA 
 
 THE RECONSTRUCTION OFlNDUSTRT" ~2 
 
 worker into a section of a producer, and separates each set of pro- 
 ducers from the consumers of their products. 
 
 Though, therefore, this division of labour is in itself a finer 
 mode of cooperation, it is not realised as such by those who are 
 subjected to it. 
 
 2. The second dehumanising and derationalising influence 
 is the stress which the operations of modern industry lay on 
 competition between trade and trade, business and business, 
 worker and worker. No graver injury has been inflicted on the 
 mind of man, hi the name of science, than the prepotence which 
 the early science of Political Economy assigned to the competi- 
 tive and combative aspects of industrial life. To represent 
 commerce between individuals and nations as a 'competitive 
 system, ' mainly dependent for its sucessful operation upon the 
 absorption of each man in seeking his own gain, and in getting 
 the better of others in his trade, was an error of the first magni- 
 tude. Nor was this error sufficiently corrected by the qualifying 
 theory that from this pursuit by each of his separate gains the 
 greatest good for all would somehow emerge. For, by laying the 
 stress upon the competitive aspect of industry, this teaching 
 stifled the growth of intellectual and moral sympathy between 
 the various human centres of the industrial system, and im- 
 paired the sense of human solidarity which, apart from its spirit- 
 ual value, is the mainspring of efficient economic organisation. 
 The presentation of industry as competition with attendant 
 cooperation, instead of as cooperation with attendant competi- 
 tion, has greatly contributed to the popular misunderstanding 
 of commerce, alike upon its domestic and its international 
 scales. 1 
 
 Competition, if defended as a socially useful method of in- 
 dustry, must, like division of labour, be proved to contribute 
 to cooperative ends. The general underlying assumption, that 
 it will do so, we have seen to be false. Equally unjustified have 
 been the accounts of actual industry which assume the general 
 
 1 Adam Smith, by opening his Wealth of Nations with a dissertation upon the 
 economy of division of labour, without explaining that this economy rests upon a 
 prior conception of cooperation, unwittingly assisted to set English Political Econ- 
 omy upon a wrong foundation.
 
 252 WORK AND WEALTH 
 
 prevalence of free competition. At all times the area and liberty 
 of effective competition between business and business, worker 
 and worker, have been limited, and tend in recent times to 
 closer limitation. 
 
 But if division of labour and competition, apart from a reali- 
 sation of their cooperative values, are dehumanising and anti- 
 social, so likewise is the growing anonymity of modern business. 
 'Compagnie Anonyme' is the significant French name for a 
 Jointstock Company with its unknown shareholders. But this 
 depersonalising process is everywhere inseparable from the mag- 
 nitude and intricacy of modern businesses and modern markets. 
 The capital belonging to a crowd of persons, who are strangers 
 to one another, is massed into an effective productive aggregate, 
 and is set to cooperate with masses of labour power whose owners 
 are divorced from all direct contact, either with the owners of 
 the tools and material, or with the purchasers of the product. 
 An effective comradeship among large numbers of workers, dis- 
 tributed over diverse processes and often severed widely in their 
 places of work, is also difficult to maintain. A great modern 
 business is in its structure less effectively human than was the 
 small workshop which it displaced. One effect of this weaker 
 humanity of the business, especially in the relations between 
 capital and labour, employer and employee, has been to shift 
 the sentimental attachment of the worker from his business to 
 his trade-union. He is less a member of a business firm, serving 
 some directly productive function, than a member of a labour- 
 group extending over the area of a local or even a national 
 trade. 
 
 3. This consideration brings to the front the antagonism be- 
 tween capital and labour which has in modern times assumed ever 
 graver dimensions and clearer consciousness. In considering 
 the industrial system as an effective economic harmony it is not 
 easy to determine whether the cooperative or the competitive 
 forces are gaining ground. On the one hand, the competition 
 between businesses in the same trade is in all great staple trades 
 giving place to combinations, which not only unite the formerly 
 conflicting businesses, but weld into close unity the capital of 
 various related trades. Trusts, cartels, pools, conferences and
 
 THE RECONSTRUCTION OF INDUSTRY 253 
 
 various experiments in federal compacts, for regulating output 
 and selling prices, are everywhere engaged in substituting in- 
 dustrial peace for war. Direct and conscious harmony thus 
 grows among formerly antagonistic capitalists and employers. 
 The organisation of labour in the several trades, on the basis of 
 a standard wage upheld by collective bargaining, marks a similar 
 though less close harmony on the side of labour. 
 
 But these advances towards conscious harmony among hitherto 
 competing capitalists and labourers have been attended by a 
 widening and intensification of the conscious antagonism between 
 capital and labour within the several trades. Indeed, there are 
 signs of a growing extension of combination for definitely hostile 
 purposes, a ranging of capital on the one side, labour on the 
 other, animated by a broad class consciousness which is new in 
 the history of industry. 
 
 In fact, it has all along been inevitable that the combinatory 
 forces, which appeared to make for social solidarity in industry, 
 should be brought up at what appears to be an impenetrable 
 barrier, the class hostility between the owners of instruments 
 of production and the workers. For this hostility is inherent in 
 the distribution which evokes an Unproductive Surplus. So 
 long as economic advantages permit some groups of capitalists, 
 landowners and owners of organising power, to take for themselves 
 large masses of unearned income, which might have gone to 
 improve the conditions of the workers, had they been able to 
 divert it into wages, no false platitudes about the harmony of 
 capital and labour will secure industrial peace. 
 
 For that harmony, as we have seen, only extends to the por- 
 tion of the product distributed as costs. Now, the enormously 
 increased productivity of modern industry has resulted in an 
 increase of the size and relative importance of the surplus, and 
 the large proportion of that surplus which is distributed un- 
 productively in 'unearned' income represents a growing element 
 of discord. 
 
 This real divergence of economic interests between capital 
 and labour is not then to be bridged by an economy of costs 
 based upon the fact that, since each factor needs the other, it is 
 interested hi its proper remuneration. The complaints of the ex-
 
 254 WORK AND WEALTH 
 
 isting system made by the workers not merely testify to a growing 
 realisation of their economic weakness and a growing sensitive- 
 ness to the inequitable modes of distribution. They are founded 
 on the belief that upon the whole distribution is becoming more 
 inequitable and more wasteful. For though the absolute share 
 of the workers and the standard of real wages have been rising 
 in most countries, 1 that rise has not been commensurate with 
 the aggregate increase of wealth. In other words, a larger pro- 
 portion of the total is passing into unproductive surplus, the 
 factor of discord, a smaller into costs, the factor of harmony. 
 If this is true, it implies inevitably a worsening of the relations 
 between capital and labour. For, so long as the owners of strong 
 or scarce factors of production are rewarded according to their 
 strength or scarcity, no peace is possible. The absorption of the 
 unassimilated mass of wealth in a higher standard of life for the 
 workers and an enlargement and improvement of the public 
 services is essential to secure the substance and the sense of 
 social harmony in industry. 
 
 4. Leaving out for the moment the claim of the State for 
 public services, this socially sound distribution of the product 
 could only be achieved by a recasting of the governmental struc- 
 ture of the Business, the Trade and Industry. Towards this 
 governmental reform many different experiments are afoot. 
 Various modifications of the ordinary wage-system, by way of 
 bonuses upon individual and departmental efficiency of labour, 
 are tried. More direct attempts to harmonise the interests of 
 capital and labour within the business take shape in schemes of 
 profit-sharing, which are sometimes carried further into the 
 closer form of co-partnership, by which the workers own a share 
 of the capital and, by virtue of this ownership may be admitted 
 to a share of the administration. 
 
 Regarded as methods of harmonising capital and labour in the 
 business structure, most of these schemes appear to be of dubious 
 worth, when we apply the proper test, viz, the ability to divert 
 
 1 Even this measure of working-class progress has been checked during the last 
 decade. Recent statistics show that in Great Britain and in most other Western 
 civilised countries, the rise of prices since 1896 and still more since 1905 has not been 
 attended by a corresponding rise of wages, though profits and rate of interest have 
 risen at least equally with prices.
 
 THE RECONSTRUCTION OF INDUSTRY 255 
 
 into wages a portion of the unproductive surplus. For, though 
 the stimulus of a 'bonus' or a so-called ] share of profit may in- 
 crease the absolute wage of the workers in the business, if at the 
 same time it proportionately increases the dividend or profit, it 
 does nothing to reduce either the aggregate or the proportion 
 of unproductive surplus. Moreover, if the increased produc- 
 tivity of labour under such a stimulus is attended by enhanced 
 intensification of effort in muscle or in nerve, with accompany- 
 ing exhaustion, the total utility of the process to the worker may 
 be a negative quantity, when the increased human cost of pro- 
 duction has been set against the utility of the higher income, less 
 advantageously consumed by reason of the exhaustion. Again, 
 though many of these schemes expressly induce the workers to 
 become small shareholders in the business, by applying the 
 'bonus' or 'profit' to the purchase of shares, nowhere has this 
 ownership by the workers been permitted to go so far as to give 
 them any determinant voice in the administration of the business. 
 Finally, many of these schemes by express intention, nearly all 
 of them in actual tendency, weaken the attachment of the work- 
 
 1 The ordinary profit-sharing scheme is vitiated, alike in theory and in practice, 
 by the erroneous attribution of the concept 'profit ' to that which is 'shared.' This 
 is recognised at once when the experiment is properly described. For the ordinary 
 profit-sharing scheme begins by laying down a normal rate of wages and of profits, 
 based upon current facts of commerce. The provision for this standard wage and 
 standard profit constitutes a first charge upon the takings of the business. Under 
 normal conditions this would absorb the whole. But the workers are now told that, 
 if they produce an additional income, they shall have in extra wages half of it. Now 
 the whole of this additional income is due to the increased efficiency of labour under 
 the new stimulus. For if any more capital than before is required, provision for 
 its payment at the normal rate is made before account is taken of the so-called 
 profit that is shared. No more ability or effort of superintendence is required; in 
 fact it is usually contended that the greater care taken by the workers renders less 
 supervision necessary. Thus 'profit' is a misnomer for what is 'shared.' For this 
 so-called 'profit' is entirely produced by greater intensity, skill or care on the part 
 of labour. The fact that labour gets only half, and that only after the whole of what 
 should be called the deferred 'wage-fund' has served to meet any deficiency in the 
 sum required to pay the normal dividends, explains why most of these schemes fail 
 after a short trial. The proportion of the extra-product (evoked entirely by the 
 increased stimulus applied to labour), that is actually paid to labour, is too small 
 to maintain the efficiency of the stimulus. When these profit-sharing schemes suc- 
 ceed, the success is nearly always traceable to the fact that in the original agreement, 
 the benevolent employer has fixed his rate of interest or salary, or both, upon a 
 lower scale than is current in the trade, so that the stimulus to labour is 
 effective.
 
 256 WORK AND WEALTH 
 
 ers in these businesses to their fellow-workers in other businesses 
 belonging to the trade. So, whatever power proceeds from col- 
 lective bargaining, for raising wages and improving the other 
 conditions of employment, is diminished by these attempts to 
 harmonise the capital and labour within the area of the single 
 business. 
 
 It is significant that nearly all the businesses where co-partner- 
 ship shows signs of enduring success are legal monopolies, or 
 are otherwise protected from free competition, so that the prices 
 for the commodities or services they sell contain a considerable 
 element of surplus. A fraction of this surplus is diverted from 
 unproductive into productive purposes by a subsidy to wages. 
 In the case of gas-works, the most conspicuous example, this 
 process is furthered by the fact that legal restrictions upon 
 dividends make what at first sight appears a policy of generosity 
 to labour, costless to capital. 
 
 5. This criticism of the defects of these private experiments 
 in industrial peace is reinforced by the experience of cooperative 
 movements. Of the completely self-governing workshop or 
 other business in which the whole body of the workers are sole 
 owners of the whole capital they employ, there have been too few 
 examples to enable any conclusion to be drawn. But nearly all 
 the cases where the actual full administration of a business has 
 been in the hands of those employed have been signal failures, 
 save in rare instances where the possession of some skill or 
 situation endowed with a scarcity value has assisted them. 
 Experiments in the self-governing workshop make it evident 
 that direct government by the workers in their capacity of pro- 
 ducers is technically worse than government by the owners of the 
 capital. The selection and the remuneration of ability of manage- 
 ment are always found defective, and the employees are often 
 unwilling to submit to proper discipline, even when they have 
 elected the persons who shall exercise it. A few successful 
 experiments conducted in favourable circumstances, i. e., where 
 a special market is available, or where only a section of the 
 employees wield the power of administration, afford no con- 
 siderable grounds of hope for this mode of cooperative settle- 
 ment.
 
 THE RECONSTRUCTION OF INDUSTRY 257 
 
 Thus there seems no ground for holding that any really satis- 
 factory settlement of the conflicts between capital and labour 
 can be got by private arrangements of a profit-sharing or a 
 cooperative character. 
 
 PART II 
 
 PRODUCER AND CONSUMER 
 
 6. Before considering more definitely ' socialistic ' remedies, 
 it is best, however, to open out the other conflict of interest, 
 between producer and consumer. It is, of course, often held, 
 even by those who recognise some reality in the opposition be- 
 tween capital and labour, that the supposed opposition between 
 producer and consumer has no real foundation. 
 
 When producers compete, the gains of such competition in 
 lower prices, better quality, etc., drop into the consumer's lap. 
 Even where producers combine, or a single business holds the 
 market, it is supposed that the monopolist will generally find it 
 most profitable to furnish a sound article at a moderate price. 
 
 But this natural harmony between producer and consumer 
 is subject to precisely the same qualification as that between 
 capital and labour. Producer and consumer are necessary to 
 one another, there is community of interests up to a limit. But 
 beyond that limit there is an equally natural conflict. It is true 
 that where producers compete freely prices are cut down for the 
 consumer. But it is by no means true that he tends to get the 
 cheapest goods which current arts of production render possible. 
 For the expenses of competition, which are enormous, are de- 
 frayed by him in the price he pays. Nor does free competition 
 secure quality of product. It stimulates the arts of adulteration 
 and deceit, and sets the cunning of the skilled producer against 
 the simplicity of the unskilled purchaser. While, therefore, it 
 may be urged that where competition of producers is effective, 
 comparatively little 'surplus' passes into their hands, the waste 
 of industrial power through the maintenance of excessive ma- 
 chinery of production and of distribution is a grave social loss. 
 
 Still less can it be admitted, that where combination has dis- 
 placed competition, the consumer's interests are safe. On the
 
 258 WORK AND WEALTH 
 
 contrary, it is recognised by all economists that where any 
 effective monopoly is established, the selling prices to consumers 
 will always be such as to secure a surplus profit to the producer. 
 Prices may not always be as high as, or higher than, they would 
 have been if a wasteful competition were maintained, but they 
 will always be such as to extract a higher profit than is needed 
 for the remuneration of capital and ability. Where the articles 
 sold are necessaries or prime conveniences of life, and do not 
 admit of effective substitutes, the prices will be indefinitely 
 higher than under competition, and the conflict between pro- 
 ducer and consumer more acute. Since under modern capi- 
 talism an ever-increasing number of 'routine' requirements, 
 covering the chief necessaries of large populations, are passing 
 under some form or other of effective combination, it is clear 
 that the problem of industrial peace must come to concern it- 
 self more and more with the conflicts of producer and consumer. 
 At present the consumer, at any rate in England, largely real- 
 ises this conflict as a by-product of the struggle between capital 
 and labour. Though the strikes and lock-outs, which express 
 that struggle, disastrously affect his welfare, he is told that they 
 are not his business, and he has no right to interfere. Where 
 a settlement has taken place between capital and labour on a 
 basis of higher wages or shorter hours, he finds the cost of this 
 settlement is usually passed on to him in higher rates or prices. 
 As joint-agreements between employers' federations and trade 
 unions become more common and more effective, as methods 
 of conciliation and arbitration receive legal sanction and assist- 
 ance, as wage-boards extend to new fields of industry, the false- 
 hood and the social wrong which underlie the maxim 'caveat 
 emptor* become more manifest. The consumer will become in- 
 creasingly more impotent to protect himself against the depre- 
 dations of organised groups of producers. Indeed, experience 
 proves that even where combinations are subject to the sanction 
 and control of the State, which theoretically is dedicated to the 
 service of the public as a whole, and might at least be expected to 
 hold the balance even between producer and consumer, pro- 
 ducers' interests are preferred. In the present policy of state 
 control of Railways, and in the various schemes for the extension
 
 THE RECONSTRUCTION OF INDUSTRY 259 
 
 of Wage Board legislation, there is no proper recognition of the 
 interests of the consumer. An ill-devised lopsided Socialism is 
 springing up, the likely result of which appears to be to set up 
 groups of selected and preferred employments, whose higher 
 wage-bill will in reality be defrayed not out of rents, surplus 
 profits or any other unearned income, but in large measure out 
 of the reduction of real wages which arbitrary rises of consumers ' 
 prices will impose upon other wage-earners. A flagrant instance 
 of this defective social policy is supplied by the recent arrange- 
 ment by which the railways of this country have been empowered 
 by Government to raise the wages of their employees by reducing 
 the real wages of the general body of the wage-earners, who are 
 called upon to bear a large part of the cost in the higher prices of 
 commodities which follows upon the rise of railway rates. 
 
 7. Now, admitting, as we must, that a real divergence of 
 interests between producers and consumers may and must arise 
 in the ordinary course of industry, what remedy is possible? 
 
 There is one large working-class movement which seems ex- 
 pressly designed for the protection of the consuming public. I 
 allude of course to the great Cooperative Movement on the 
 Rochdale plan, in which the supreme control is vested in the 
 consumers and their representatives. How far does this scheme 
 represent a true reconcilement of producers' and consumers' 
 interests? A very little investigation will show that, however 
 excellent the other services it renders to the working-classes, its 
 conduct of business affords no complete harmony of the interests 
 of the several factors. 
 
 For its entire structure and working are motived by the in- 
 tention to absorb in real wages (by means of dividends on pur- 
 chases) the 'profits' to which in ordinary trade most of the un- 
 productive surplus seems to adhere. By dispensing with the 
 profits of various grades of middlemen, by reducing the expenses 
 of management, by saving most of the costs of advertising and 
 other incidental costs of distribution, much surplus is diverted 
 into real wages. But, regarding this scheme from the stand- 
 point which immediately concerns us, as a reconcilement of 
 capital and labour within the business, we find an obvious defect. 
 There is nothing in the theory, or commonly in the practice, oi
 
 260 WORK AND WEALTH 
 
 the cooperative store or workshop, to evoke from the employees 
 any special interest in its successful conduct. If they are mem- 
 bers, they do indeed get in this capacity a gain equal to that en- 
 joyed by other members not employed in the business. But, as 
 employees, they have no voice in the administration and no 
 share in the gains. Where, as in the Scottish Wholesale, a profit- 
 sharing scheme is attached, this scheme is exposed to the same 
 criticism that we have applied to other profit-sharing schemes. 
 There is no security afforded by this cooperative form of busi- 
 ness for the full reconcilement of the claims of capital and labour 
 within the business. But, after all, it might be objected, that 
 does not really matter. For, if the worker in a cooperative mill 
 or store is also a cooperative consumer, he will, as such, enjoy 
 a collective gain as great as he could hope to gain if he were 
 assigned a special lien upon the surplus that emerged from the 
 successful conduct of the particular business in which he worked. 
 It will be his intelligent interest, as consumer, to help to elect 
 and to maintain an effective administration in all the various 
 productive and distributive businesses from which are derived 
 the half-yearly dividend on purchases which he receives. 
 
 Now if the working-classes of the nation made all their pur- 
 chases through cooperative stores, and if these stores, in their 
 turn, bought what they sell exclusively from cooperative pro- 
 ductive businesses, and if all working-class consumers were em- 
 ployed in these cooperative businesses, a solution of the social 
 problem on cooperative lines might be plausible. For any surplus 
 made at any stage would flow in the ordinary course of events 
 into consumers ' dividends, forming an addition to the real wages 
 which they earned as producers. Nor need it matter that the 
 cooperative consumers were not full owners of all the capital 
 they needed to employ, provided they could borrow it in a free 
 market. If the agricultural and mining lands, whose produce 
 they required, did not belong to them, there would indeed remain 
 a large leakage in the shape of economic rent. But the nature 
 of the so-called land monopoly is not such as to prevent the 
 cooperative consumers from taking in real wages the great bulk 
 of the surplus which otherwise would have gone to capitalists 
 and entrepreneurs in unearned income.
 
 THE RECONSTRUCTION OF INDUSTRY 261 
 
 Unfortunately, large and important as is this Cooperative 
 Movement, it falls far short of the full conditions here laid down. 
 The majority of the wage-earners are not members of Coopera- 
 tive Stores: those who are members only purchase certain sorts 
 of goods at the store: owing to the slighter development of 
 productive cooperation, a large proportion of the goods sold in 
 the stores are bought in the ordinary markets: comparatively 
 few of the cooperative consumers are employed in coopera- 
 tive businesses. There are large tracts of industry, such as 
 agriculture, mining, transport, building, 1 metal-working and 
 machine-making, which the Cooperative Movement has hardly 
 touched, nor are there signs of any rapid extension in these 
 fields of enterprise. In point of fact, cooperation has almost 
 entirely confined itself to trades and industries where com- 
 petition is normally free, and where the object of cooperation 
 has rather been to save and secure as 'divi' certain ordinary 
 expenses of competitive businesses than to invade the strong- 
 holds of highly profitable capitalism where unearned surpluses 
 are large. While, then, a considerable proportion of the total 
 working-class income is expended upon articles bought in the 
 stores 2 and valuable economies are affected, only a small pro- 
 portion of the eleven millions paid in dividends and interest to 
 consumers can be taken to represent unproductive surplus 
 absorbed into wages. While, therefore, the advance of the 
 Cooperative Movement in recent years, alike in membership, 
 in volume of trade and in profits, has been rapid, a careful 
 examination of the field of cooperative progress does not indicate 
 any solution of the main problem of distribution along these 
 lines. The areas of really profitable private enterprise are to all 
 appearance unassailable by the Cooperative Movement. 
 
 8. But we find within the Cooperative Movement some 
 experiences which shed light upon the problem of business ad- 
 ministration. If the truly social nature of the ' business ' is to be 
 expressed in its government, the Rochdale plan, upon which the 
 
 1 Building Societies are only in a very restricted sense cooperative. 
 
 J In 1909 the aggregate sales at the Retail Stores amounted to 70, 423,359, or 
 about 10% of the working-class income, and the profit (including interest paid on 
 shares) was 10,851,739.
 
 262 WORK AND WEALTH 
 
 main cooperative structure has been erected, contributes an 
 element of really vital importance. It asserts that a business 
 exists, not to furnish profit to the capitalist employer or wages 
 to the workers, but commodities to consumers. The consumer, 
 being the end and furnishing by his purchase-power the stimulus, 
 should hold the reins of government. He is the owner, he shall 
 rule, he shall receive the whole gain. This is a complete reversal 
 of the ordinary idea of the business world, to which a business 
 exists to secure profits to business men, the worker and the 
 market (consumer) being mere instruments in profit-making. 
 Hardly less does it counterwork the ordinary ideas and feelings 
 of the working-man, for whom the business exists merely as a 
 means of remunerative employment, and whose sole idea of re- 
 form is to secure in higher wages and improved conditions of 
 labour as much of the profits as possible. To neither does it 
 for one moment seem reasonable that the consumer should 
 interfere in the administration of the business, or take any share 
 in its gains, save such as must come to him in the ordinary course 
 of trade. 
 
 Thus the success of the Rochdale plan is a dramatic assertion 
 of a revolutionary idea in the organisation of business. It is 
 proved that large numbers of routine businesses can be conducted 
 by and for consumers. But it cannot be assumed that this con- 
 centration of the meaning, the utility and the government of 
 industry in the consumer, has complete validity. It may be 
 called consumers' socialism, as distinguished from the sort of 
 producers' socialism which prevails among trade unionists. 
 As the latter aims at controlling businesses in order to divert 
 directly into wages all surplus profit, so the former aims at con- 
 trolling businesses in order to divert the same fund into con- 
 sumers' dividends. Now, if the producers and the consumers 
 of the goods produced in any business were the same, it might 
 seem a matter of indifference in which capacity they took the 
 gain. But they are not. The workers in a particular mill or 
 store buy for their own use a very minute fraction of the goods 
 there produced. Even if the workers, by means of their unions 
 or their cooperative societies, could capture the whole industrial 
 machinery, it would still remain a matter of importance how far
 
 THE RECONSTRUCTION OF INDUSTRY 263 
 
 they paid themselves in higher wages, how far in consumers' 
 dividends. For unless their claims as producers and as con- 
 sumers were properly adjusted in the control of the several 
 businesses, there would be little or nothing to distribute. 
 
 Few thoughtful cooperators will claim finality and all-suffi- 
 ciency for the cooperative idea as embodied in the present 
 movement. 
 
 The persistent struggles in the movement itself to temper the 
 absolutism of the consumer by the assertion of cooperative em- 
 ployees to a higher rate of pay than obtains in the outside labour 
 market and to a share of the profits, is an interesting commentary 
 on the problem of social administration of the business. It is 
 widely felt that the view that a business exists in order to supply 
 utilities to consumers is defective as a principle of business govern- 
 ment. The claim of the owners of the factors of production em- 
 ployed in the business to some voice in the conduct of that 
 business is not lightly to be set aside by asserting that the factors 
 of production are mere means to the consumer's end. If the 
 consumers themselves own the share-capital or borrow other 
 capital at market rates with good security, the issue of the con- 
 trol of capital need not arise. But the labour employed in a co- 
 operative business has a human interest in the conduct of the 
 business separate from that of the consumers. In virtue of this 
 human interest, these workers impugn the doctrine that the busi- 
 ness exists solely for the consumers, and insist that their human 
 interest shall be adequately represented in the conduct of the 
 business and the distribution of its gains. 
 
 9. Those who have followed and accept the general princi- 
 ples of our analysis of industry into human costs of produc- 
 tion and human utilities of consumption will be disposed a 
 priori to accept the view that, in the equitable control of every 
 business, the interests of the worker as well as of the consumers 
 should be represented. Regarded from the social standpoint, it 
 is as important that good conditions of employment shall prevail 
 in a business, as that good articles shall be furnished cheaply 
 to consumers. Nor, as we recognise, can we assume that an 
 enlightened business government by consumers, any more than 
 by capitalists, will necessarily secure these good conditions for
 
 264 WORK AND WEALTH 
 
 employees. Definite and not inconsiderable instances of sweating 
 inside the cooperative movement itself testify to the reality of 
 this need. But it is urged not merely on grounds of equity, as a 
 protection against possible abuses of power by consumers or 
 their representatives, but on grounds of sound economy. For 
 if it be admitted that the employees in a cooperative business 
 have a special human interest, it is idle to argue that it is socially 
 advantageous to leave this interest without representation in 
 the conduct of the business. 
 
 The cooperation which assigns all power and all gain to the 
 consumer is in fact vitiated by the same social fallacy as the 
 syndicalism which would assign the same monopoly to the em- 
 ployee, or as the capitalism which does assign it to the profit- 
 monger. Equity and economy alike demand that the interests 
 of all three shall be adequately represented. Social remuneration 
 in its application to the business unit must proceed upon this 
 fundamental principle. A business consists of capital, labour, 
 and the market. To place unlimited control in the hands of any 
 of those factors is wasteful and dangerous. The human defects 
 of uncontrolled capitalism have been made sufficiently apparent. 
 Any adequate experiment in uncontrolled trade-unionism or in 
 syndicalism would disclose similar abuses. The idea of the 
 miners running the mine, or the factory-hands the factory, the 
 railway workers the railway, is not so much unsound in the 
 sense that they must fail to run it properly. For though unlikely, 
 it is at least conceivable that they might have enough intelli- 
 gence and character to buy competent managers and carry out 
 their detailed instructions. Its fundamental vice consists in 
 ignoring the factor of the market, and in building up a number of 
 separate industrial structures in which the consumers' interests 
 are unrepresented. It may appear plausible to argue that the 
 control of each process of production should be left to the pro- 
 ducers who may be presumed to know it best. But it becomes 
 evident, even to the syndicalist, that no business could be con- 
 ducted upon this policy unmodified. No housebuilding could 
 proceed, if the plasterers, the bricklayers, the carpenters, had 
 each full power to determine when they would work, at what 
 pace they would work, and what remuneration they should exact.
 
 THE RECONSTRUCTION OF INDUSTRY 265 
 
 There must be a definite arrangement between the groups of 
 workers in the several processes within each business, which will 
 qualify the control of plastering by the plasterers, bricklaying 
 by the bricklayers, by a wider control that represents the common 
 interests of the business. Not merely does the syndicalist idea 
 recognise this cooperation of the processes within a business, 
 but it extends the cooperative character of the control to the 
 trade as a whole. Under syndicalism the building trade would 
 not be broken into a number of businesses in each of which 
 would be made a separate arrangement between the carpenters, 
 bricklayers, etc., employed in it. The arrangements as to hours 
 and pace and remuneration, etc., would be determined by rep- 
 resentatives of the various crafts on a trade basis, and would be 
 the same for all businesses and all jobs. But the organisation of 
 producers could not stop there. Each trade could no more be 
 entirely self-governing than each business or each process in a 
 business. The trade-organisation of the miners could not, hav- 
 ing regard to the interests and needs of other trades, be safely 
 entrusted with the absolute control of mining, or the railway 
 workers with the absolute control of the railways. There must 
 be some power to prevent the miners reducing their amount of 
 work and their output to an extent which will cripple the other 
 trades which need coal, and to compel the railway workers to 
 afford reasonable facilities of transport on reasonable terms to 
 shippers and travellers. For, otherwise, there would be substi- 
 tuted for the conflict of capital and labour within each business 
 or each trade, a conflict of trades, each striving to do as little 
 and to get as much as possible out of the aggregate wealth. Nor 
 can it be assumed that the intelligent self-interest or social 
 sympathy of the miners, or railwaymen, or other trades, would 
 be adequate safeguards against such abuses. This is evident 
 when we bear in mind the central concrete problem before us, 
 the social distribution and utilisation of the surplus. For it will 
 be technically possible for any strongly-placed special group of 
 workers, such as the miners or railway workers, to take to them- 
 selves, in remuneration or in leisure, an excessive proportion of 
 this surplus, leaving very little for any other group of workers. 
 The guild-feeling, upon which syndicalism mainly relies, not
 
 266 WORK AND WEALTH 
 
 merely supplies no safeguard against this abuse of power, but 
 would almost certainly evoke it, unless a potent control, rep- 
 resenting industry in general, were established over the indi- 
 vidual trades or guilds. Experience of cases where local trade- 
 unions are occasionally placed in a position of tyranny shows 
 that they will play for their own hand with a disregard to the 
 interests of their fellow-workers in other trades as callous as is 
 displayed by any trust of capitalists. Assuming, then, that it 
 were possible for guild-societies to develop to the point that the 
 workers in each trade were in possession of all the instruments 
 of production, and were able to conduct the processes efficiently, 
 the problem of distributing the 'surplus' among the several 
 trades or guilds, in the shape of pay or leisure, would still re- 
 main unsolved. Among the groups of producers, in a word, there 
 would remain divergencies of interest, which would be incapable, 
 upon a producers' policy, of solution. Syndicalists, confronted 
 with this phase of their problem, plunge into vague assurances 
 that the process of agreement which had taken place between the 
 workers in the several processes and the several businesses in a 
 trade, could be extended to the workers grouped in the larger 
 trade-units, and that the real solidarity of working-class interests 
 would somehow instinctively express itself in equitable and 
 durable arrangements. But the moment one passes from the 
 region of phrases to that of concrete facts the difficulties thicken. 
 An elected council of national workers would have to devise 
 some practicable method of comparing units of railway service 
 with units of mining, bricklaying, doctoring, acting, waiting, etc., 
 so as to apply to each productive process the support and stimu- 
 lus needed to induce the workers engaged in it to do their share 
 of work and to receive their share of wealth. No mere time 
 basis for such competition would be practicable. It would be 
 necessary to induce a body of labour and capital to apply itself 
 to each process of each occupation, sufficient in quantity and in 
 efficiency to supply the requirements of the working community 
 as a whole, and to devise a mode of remuneration, or distribution 
 of products, which would satisfy this requirement. 
 
 It is quite evident that all this adjustment of the claims and 
 needs of individuals within a process in a business, of businesses
 
 THE RECONSTRUCTION OF INDUSTRY 267 
 
 in a trade, of trades in industry, would need an elaborate hierachy 
 of representative government, with a supreme legislature and 
 executive, whose will must over-rule the will of the national or 
 local groups within the several trades, as to the quantity and 
 method of work to be done in each concrete process, and as to 
 the remuneration of each sort of work. In other words, society, 
 as a whole, would have imposed its final control upon each 
 group of workers, diminishing to that extent their power to de- 
 termine the conditions under which they would work, and their 
 effective separate ownership of the instruments of production. 
 The ideal of the self-governing mine, or factory, or railway, 
 would thus be over-ridden by the superior ideal of a self-governing 
 society. But that self-government by society, the supreme leg- 
 islation of industry, could not perform its work by confining 
 its attention to the various productive processes, and the busi- 
 nesses and trades in which they were conducted. It would be 
 compelled to study the wants and will of the consumers, or, if it 
 be preferred, of the workers in their capacity of consumers. For, 
 only by the study of the consumer, or the market, could the work 
 of adjusting the application of productive power at the different 
 productive points, and the process of remuneration by which 
 that distribution was achieved, possibly be accomplished. Thus, 
 although the whole body of this syndicalist legislature might 
 have been elected to represent the interests of separate groups 
 of producers, or trades, it would be compelled to give equal atten- 
 tion to the wants and the will of the consuming public. But it 
 would discover that, just in proportion as it was accurately 
 representative of the separate interests of groups of producers, 
 to that extent was it disqualified for safeguarding the interests 
 of the consuming public, which in each concrete problem would 
 be liable to cut across the interests of special groups of producers. 
 In other words, it would be impossible properly to regulate the 
 railway service without direct regard to the interests of the 
 travelling and trading public as a whole, to regulate the mining 
 industry without regard to the local, seasonal and other needs 
 of coal consumers. But these consumers' interests could not be 
 properly considered in a legislature chosen entirely by separate 
 groups of producers, with the object of promoting the special in-
 
 268 WORK AND WEALTH 
 
 terests of these groups. The impossibility of syndicalism thus 
 turns upon ignoring in the control of business the will of the con- 
 sumer. 
 
 10. Thus we are compelled to recognise that in a sound 
 social organisation of the industrial system, and of each part of 
 it, the business, the trade, (or the group of trades) and the con- 
 sumer or market must be introduced as integral factors of 
 government. We cannot content ourselves with the view that 
 a producer, or any composite body of producers, is necessarily 
 impelled by its self-interest to safeguard the interests of the 
 consumer. Nor can the consumer safeguard his interests ade- 
 quately through the guidance or stimulus he brings to bear 
 through his separate individual acts of demand. He is incapable 
 of protecting himself properly, even when producers are not 
 combined but are competing. When they are combined he is 
 helpless. The cleavages of immediate economic interest be- 
 tween the worker and the consumer are so numerous that no 
 abstract identity of interests in a community where all consumers 
 were also workers, all parasites being excluded, would suffice to 
 secure the requisite economy and harmony. This economy and 
 harmony can only be secured by giving the consumer a direct 
 voice in the government of industry. 
 
 Syndicalism is in large measure a reaction against forms of 
 state socialism which are vitiated by a defect similar to that 
 which we find in the Rochdale cooperative plan. So far as the 
 public services are honestly and efficiently administered by 
 public officials, the public which these officials represent is pri- 
 marily the citizen in his capacity of consumer. The municipal 
 services are run, either to give him cheap transport or lighting 
 of sound standard quality, or else to enable him to get police, 
 street-cleaning or some other service which he could not other- 
 wise have got. But this bureaucratic socialism is apt to neglect 
 or to ignore the interests of its employees, and to deny them any 
 influence in determining the conditions of their employment, 
 other than that which they can bring to bear as citizen-consumers. 
 Thus are found cases where public departments, or the contrac- 
 tors they employ, are allowed to pay wages so low or to offer 
 such irregular employment, as to contribute to that inefficiency
 
 THE RECONSTRUCTION OF INDUSTRY 269 
 
 and destitution for which the same public is subsequently called 
 upon to make financial and administrative provision. This is an 
 inevitable defect of a one-sided or consumers' socialism. Nor 
 is it likely to be remedied by any general perfunctory recognition 
 of the duty of the public employer to observe standard conditions. 
 For in most cases public employment will, by virtue of its mono- 
 polistic character, contain features that have no precise analogy 
 in the outside business world, so that some separate method of 
 determining the application of standard conditions is necessary. 
 Unless that method admits direct representation of the interests 
 of the employees, there can be no sufficient security that these 
 interests shall receive proper consideration. This is not a demand 
 that the employees shall 'interfere' with the public management, 
 or 'dictate' the terms of their employment. On the contrary, 
 it is clear that the official managers must, in the ordinary course 
 of business, secure the execution of their orders. But, consider- 
 ing that their standpoint must always be biassed towards a 
 special interpretation of the public interest in the sense of effi- 
 ciency and economy of a particular output, this narrower public 
 interest must be checked by reference to a wider public interest 
 in which the human costs of production shall be represented. 
 An accumulating weight of recent experience in various countries 
 makes it evident that state-socialism must fail unless adequate 
 provision is made for safeguarding the interest of particular 
 groups of public employees. This safeguard cannot, of course, be 
 given by any mere concession of the right of combination and 
 of collective bargaining. For while collective bargaining may 
 enable the employees to secure fair terms where they are dealing 
 with competing private businesses, it cannot where the sole 
 employer is the State or Municipality. The latter is technically 
 able to impose its terms upon any group of workers who are 
 specialised for the work it offers. Recognition of the Union, and 
 an admission by the management of the right of union-officials 
 to consultation and discussion of conditions of employment, do 
 not really furnish any basis of settlement, though they may often 
 ease a difficulty and remove misunderstanding. What is required 
 is a statutory right of appeal to a public authority, outside of and 
 independent of the particular department, competent to take that
 
 270 WORK AND WEALTH 
 
 wider view of public interest from which the departmental public 
 official is, by the necessity of his situation, precluded. That 
 claim of the public employee is frequently misunderstood. It 
 does not arise from any real or pretended opposition of interests 
 between the public and a group of its employees, and a claim on 
 the part of the latter that the public shall make some concession 
 or sacrifice to their particular group interest. There is no such 
 real opposition of interests. The valid claim for an appeal from 
 the arbitrary decisions of the public departmental managers is 
 based upon the fact that the latter are disqualified for a full im- 
 partial view of the public interest, so far as that public interest 
 is affected by the conditions of employment of the employees 
 under them. The fact that the employees are often likely to 
 make unreasonable demands and to claim in wages, hours and 
 other conditions, an excessive share of the public revenue, does 
 not affect the validity of this contention. For practical conven- 
 ience official departmentalism exists. But this departmentalism 
 involves a business management essentially defective from the 
 standpoint of public welfare, inasmuch as it tends to depreciate 
 or overlook the interest which the public has in the total welfare 
 of that section of the public which is in its direct employment. 
 ii. Of course, in treating the issue of a public business as if 
 it consisted simply in reconciling the immediate interests of the 
 consuming public with those of the public employees, we have 
 intentionally excluded another view which may often be more 
 important. State socialism may be run primarily in the interests, 
 neither of the citizen-consumer nor of the employer, but of the 
 bureaucracy, who here occupy the place of the capitalist-managers 
 under private enterprise. The official may be held to be naturally 
 disposed to magnify his office and to abuse any power which can 
 be made to subserve his personal or class interests. Practical 
 permanency of tenure of his office, and the special knowledge 
 which it brings, enable him, with safety, either to neglect his 
 public duties, or to encroach upon the liberties of citizens, accord- 
 ing as he is lethargic or self-assertive. He may squander the 
 resources of the public upon ill-considered projects, or in serving 
 the private interests of his friends. Or, he may practice a tyran- 
 nical or a niggardly policy towards his employees, not through
 
 THE RECONSTRUCTION OF INDUSTRY 271 
 
 a narrow interpretation of public economy, but from sheer care- 
 lessness or from defective sympathy. These charges against 
 officialism are too familiar to need expansion here. However 
 carefully the public service is recruited, such abuses will be liable 
 frequently to occur, and the structure of Government should be 
 such as to supply effective checks and remedies.
 
 CHAPTER XVH 
 
 THE NATION AND THE WORLD 
 
 i. We have examined the chief defects in the structure of a 
 business and a trade, regarded in the light of instruments of 
 human welfare, and we have considered some of the remedies, 
 applied sometimes for purposes of distinctively industrial econ- 
 omy, sometimes as devices of social therapeutics. 
 
 There remains, however, one other mode of economic antag- 
 onism deserving of consideration. Until modern times a nation 
 was to all intents and purposes not only a political but an eco- 
 nomic area, in the sense that almost all trade and other economic 
 relations were confined within the national limit. The small 
 dimensions of foreign, as compared with domestic trade, and 
 the nature of that trade, confined to articles not produced at 
 home, had little tendency to generate a feeling of international 
 rivalry. Foreign trade was almost wholly complementary and 
 not competitive. With the modern changes, which have altered 
 this condition and made nations appear to be hostile competitors 
 in world commerce, we are all familiar. The development of 
 capitalist production to a common level and along similar lines 
 in a number of Western nations, the tendency towards an in- 
 crease of output of manufactured goods at a price exceeding the 
 demands of the existing markets, the consequent invasion of the 
 markets of each industrial country by the goods of other coun- 
 tries, and the growing competition of the groups of traders in 
 each nation to secure and develop new markets in the back- 
 ward countries, with the assistance of the physical and military 
 forces of their respective governments, have imposed upon the 
 popular mind a powerful impression of economic opposition 
 between nations. No falser and more disastrous delusion pre- 
 vails in our time. The only facts which seem to give support to 
 it are the Tariffs, Commercial Treaties and the occasional uses of 
 political pressure and military force by States for the benefit of 
 
 272
 
 THE NATION AND THE WORLD 273 
 
 financiers, investors, traders or settlers belonging to their na- 
 tionality. This intervention of Governments for the supposed 
 advantage of their citizens has had the unfortunate effect of 
 presenting nations in the wholly false position of rival business 
 firms. Groups of private manufacturers, traders and financiers, 
 using their government to secure their private profitable ends, 
 have thus produced grave conflicts of international policy. The 
 worst instrument of this antagonism, because the most obvious 
 and the most vexatious, is the protective Tariff, and the most 
 singular proof of its derationalising efficacy is found in the con- 
 duct of our recent fiscal controversy. The fiercest fight in all 
 that controversy has raged round the relative size, growth and 
 profitable character of the foreign trade of Great Britain, Ger- 
 many, America, etc. These States are actually treated, not 
 merely by Protectionists but by many Free Traders, as if they 
 were great trading firms, engaged in struggling against one 
 another for the exclusive possession of some limited economic 
 territory, the success of one being attended by a loss to the 
 others. Now, Great Britain, Germany and America are not 
 economic entities at all; they are not engaged in world commerce, 
 either as competitors or as cooperators; the respective advances 
 or declines made by certain groups of merchants within their 
 confines in overseas trade have no net national significance at all. 
 Finally, overseas trade, by itself, furnishes no index of the collect- 
 ive prosperity of each nation. 
 
 2. The whole presentation of the case under the head of 
 Nations is irrelevant and deceptive, conveying, as it is designed 
 to do, the false suggestion that Englishmen, grouped together 
 as a people, are somehow competing with Germans grouped 
 together as another nation, and Americans as a third nation. 
 Now no such collective competition exists at all. So far as trade 
 involves competition, that competition takes place, not between 
 nations, but between trading firms, and it is much keener and 
 more persistent between trading firms belonging to the same 
 nation than between those belonging to different nations. Bir- 
 mingham or Sheffield firms compete with one another for machin- 
 ery and metal contracts far more fiercely than they compete with 
 Germans or Americans in the same trade, and so it is in every
 
 274 WORK AND WEALTH 
 
 other industry. The production of import and export figures, 
 and of balances of trade, under national headings, is a mis- 
 chievous pandering to the most dangerous delusion of the age. 
 It has done more than anything else to hide the great and benef- 
 icent truth, that the harmony and solidarity of economic in- 
 terests among mankind have at last definitely transcended 
 national limits, and are rapidly binding members of different 
 nations in an ever-growing network of cooperation. Within the 
 last generation a more solid and abiding foundation for this 
 cooperation than ordinary exchange of goods has been laid in the 
 shape of international finance. Though certain dangerous 
 abuses have attended its beginnings, this cooperation of the 
 citizens of various countries in business enterprises in all parts 
 of the world is the most potent of forces making for peace and 
 progress. More rapidly than is commonly conceived, it is bring- 
 ing into existence a single economic world-state with an order 
 and a government which are hardly the less authoritative be- 
 cause, as yet, they possess a slender political support. That 
 economic world-state consists of all that huge area of indus- 
 trially developed countries in regular and steady intercourse, 
 linked to one another by systems of railroads and steamship 
 routes, by postal and telegraphic services, administered by com- 
 mon arrangements, by regular commerce, common markets and 
 reliable modes of monetary payment, and by partnerships of 
 capital and labour in common business transactions. 
 
 3. The actuality of this world-system has preceded its con- 
 scious realisation. But the growing fact is educating the idea 
 and the accompanying sentiment in the minds of the more en- 
 lightened members of all civilised nations. We hear more of 
 internationalism from the side of labour. But, in point of fact, 
 the corporate unity of labour lags far behind that of capital. 
 For the mobility of capital is much greater, and its distribution 
 is far better organised. But, as the financial machinery for the 
 collection and distribution of industrial power over the whole 
 economic world is further perfected and unified, it will be at- 
 tended by a loosening of those local and national bonds which 
 have hitherto limited the free movement of labour. As the 
 centre of gravity in the economic system shifts from land, which
 
 THE NATION AND THE WORLD 275 
 
 is immovable, to money, the most mobile of economic factors, 
 so the old local attachment which kept most labour fastened to 
 some small plot of the earth, its native village, will yield place to 
 liberty of movement accommodated to the needs and opportuni- 
 ties of modern profitable business. Within the limits of each 
 country the increased mobility has long been evident: it has 
 helped to break up parochialism and provincialism of ideas and 
 feelings, and to evolve a stronger sense of national unity. But 
 there is to be no halting at the limits of the nation. Already 
 large forces of international labour exist. Not merely do vast 
 numbers of workers migrate with increased ease from Belgium 
 into France, from Russia into the United States, from Germany 
 into South America, for settlement in these countries, but large 
 bodies of wage-earners are being organised as a cosmopolitan 
 labour force following the currents of industrial development 
 about the world. So far as unskilled labour is concerned, large 
 tracts of China, India and the Straits Settlements, form a re- 
 cruiting ground in Asia; while Italy and Austro-Hungary furnish 
 a large European contingent. But not less significant are the 
 higher ranks of cosmopolitan labour, the British and American 
 managers, overseers and workmen in the engineering, railroad, 
 electrical and mining industries, who to-day are moving so 
 freely over the newly developing countries of three continents, 
 placing their business and technical ability at the service of the 
 economic world. The new movements in the economic develop- 
 ment of Asia and of South America will enormously accelerate 
 this free flow of business ability and technical skill from the 
 more advanced Western nations over the relatively backward 
 countries, and will also bring into closer cooperation at a larger 
 number of points the capital and management of Western 
 peoples. 
 
 My object in referring to these concrete economic movements 
 of our time is to illustrate the powerful tendencies which are 
 counteracting the old false realisation of industry in terms of 
 human competition and antagonism, and are making for a con- 
 scious recognition of its cooperative and harmonious character.
 
 CHAPTER XVIII 
 
 SOCIAL HARMONY IN ECONOMIC LIFE 
 
 i. A brief summary of the actual tendencies towards har- 
 mony and discord at present visible in the economic world may 
 be conveniently presented here. 
 
 We see among the fundamental industries the transformation 
 of the structure of the single business; large numbers of little 
 rivulets of savings from innumerable separate personal sources 
 merging to form a single body of effective capital; large numbers 
 of workers closely welded into a single body of effective labour- 
 power; both operating in normal harmony under the direction 
 of a common central management, and engaged in the continuous 
 work of turning out a product, the price of which forms the com- 
 mon income alike for capitalists and workers. So far as that 
 portion of the dividend is concerned which forms the economically 
 necessary costs of these masses of capital and labour, there exists 
 a harmony of interests between the two groups of claimants, 
 which is more clearly recognised with every improvement of the 
 general standard of intelligence and information. In most 
 businesses that common area of interest covers by far the larger 
 part of the business dividend. Where a surplus emerges in excess 
 of these economic costs, an initial discord arises between the 
 claims of the capital and labour. But this discord may be re- 
 solved in two ways, in each of which important experiments, 
 attended by a growing measure of success, are being carried on. 
 Large patches of the area of discord are being reclaimed to order 
 by the modern State, whose policy is more and more directed 
 to absorbing by taxation, and applying to the use of the com- 
 munity, great shares of these business surpluses, as they emerge 
 in incomes and inherited properties. As regards the surplus 
 which is not so absorbed, the grouped forces of capital and labour 
 within the business are constantly engaged in seeking to discover 
 pacific and equitable modes of division which shall reconcile, or 
 
 276
 
 SOCIAL HARMONY IN ECONOMIC LIFE 277 
 
 at least mitigate, the remaining opposition. Though this re- 
 mains at present the sharpest field of conflict, pacific forces are 
 making more gain than perhaps appears upon the surface. Some 
 of those industries, where such discords have been most rife and 
 most wasteful, have been taken over by the State or the Mu- 
 nicipality. In these cases such quarrels as may still arise in 
 connection with the claims of labour admit of settlement by 
 other means than economic force. In others, the State inter- 
 venes on behalf of public order by assisting to promote processes 
 of arbitration or conciliation. In others, again, the organisation 
 of the forces of capital on the one hand, labour on the other, over 
 the whole range of businesses comprising a national trade, has 
 tended to make actual conflicts rarer, and presents a machinery 
 capable of application to pacific settlements. Grave as are the 
 defects in the working of this machinery of Joint Boards, Sliding 
 Scales, Conciliation and the like, and terrible as are the injuries 
 these defects cause, they ought not to blind us to a recognition 
 of the fact that the number of actual conflicts between capital 
 and labour is constantly diminishing. 
 
 2. This truth is better realised when we turn from the struc- 
 ture of the business to that of the trade or market. There, 
 though keen and even cut-throat competition still survives, the 
 tendency is more and more, especially in the great staple in- 
 dustries where large aggregates of capital and labour are em- 
 ployed, towards cooperation, combination and trade agreements. 
 If, for the moment, we ignore the dangers which such combina- 
 tions of ten threaten to consumers, and regard them from the stand- 
 point of trade structure, we cannot fail to recognise the enormous 
 advance they represent in the cause of industrial harmony. For 
 whatever the degree of unity attained by such a Trust, Cartel, 
 Conference, Trade Agreement, Federation, it means pro tanto 
 a saving of the energy of capital and labour formerly expended 
 upon conflict, and a concentration of the thoughts and purposes 
 of business men upon the best performance of the useful functions 
 of production which constitute the social value of their trade. 
 So long as a trade remains in a distinctively competitive con- 
 dition, an enormous part of the actual energy is consumed not 
 in production but in warfare. The thoughts and wills of the con-
 
 278 WORK AND WEALTH 
 
 trollers of the several businesses are deflected from the economical 
 fulfilment of their social function to conscious rivalry. Neither 
 the capital nor the labour in each several business enjoys a 
 reasonable measure of security; and not only the profits but the 
 wages of each firm are jeopardised by the success of a stronger 
 competing firm. The growing displacement of this condition of 
 a trade by the principle and practice of combination is perhaps 
 the most conspicuous movement towards industrial peace. I 
 am aware that, in itself, this concentration and combination of 
 businesses within a trade afford no sure settlement for the differ- 
 ences between capital and labour. They may even aggravate 
 those differences in several ways. For, in the first place, such 
 combinations are expressly and chiefly designed to produce a 
 larger quantity of surplus profits, thus stimulating conflict by 
 offering a larger object of attack to labour. In the second place, 
 such combinations, if at all complete, may prove more clearly than 
 in any other way the superiority of organised capital over or- 
 ganised labour in the determination of wages and conditions 
 of labour. Finally, private ownership of natural resources, 
 producing for its owners economic rent, remains an unsolved 
 antagonism. Though the extent to which the 'surplus', which 
 monopolistic, protected or otherwise well-placed businesses 
 obtain, as open or concealed 'rent', is not capable of exact 
 estimate, many, if not most, profitable businesses derive some of 
 their surplus from the possession or control of natural resources. 
 Such natural resources are to all intents and purposes capital, so 
 far as relates to issues of conflict between capital and labour. 
 The amount and possibly the proportion of surplus (taking the 
 whole industrial world into consideration) which is plain or dis- 
 guised rent, is probably upon the increase. Even in Great 
 Britain, though aggregate rents do not keep pace with profits and 
 other incomes derived from business capital, they probably form 
 an increasing proportion of that income which, according to our 
 definition, ranks as 'unproductive surplus.' Though these 
 rents, like other ' unproductive surplus,' could be advantageously 
 diverted into wages on the one hand, public revenue upon the 
 other, they are kept on the side of capital by the full force of 
 combination.
 
 SOCIAL HARMONY IN ECONOMIC LIFE 279 
 
 Thus the labour in any trade may be confronted by a larger 
 body of wealth which it would like to secure for higher wages, 
 while at the same time it finds itself less able to achieve this object. 
 
 3. Equally sharp may be the antagonism of interests set up 
 between such a combine and the general body of consumers, by 
 means of the control of prices which the former possesses. For 
 the large surplus, which we see to be an object of desire to the 
 workers hi a combination or trust, represents to the consumer an 
 excess of prices. So it comes to pass that the consumer, unable 
 to combine in his economic capacity, as the workers do in their 
 trade unions, combines as citizen and calls upon the Govern- 
 ment to safeguard him against monopolies. His first instinctive 
 demand is, that such combinations shall be declared illegal 
 bodies, acting in restraint of trade, and broken up. But nothing 
 proves more plainly the inherent strength of the cohesive uni- 
 fying tendencies than the completeness of the failure to achieve 
 this object. When business men desire to combine, it is impossible 
 to force them to compete. The alternatives are, either to leave 
 the consuming public to the tender mercies of a monopoly, which, 
 from mere considerations of profit, may not be able to raise its 
 prices beyond a certain limit, or else to impose legal regulations, 
 or, finally, to buy out the business, transferring it from a private 
 into a public monopoly. 
 
 Wherever the modern State is driven to confront this problem, 
 it is compelled, in proportion as public opinion is articulate and 
 politically organised, to fasten an increasing measure of public 
 control upon such powerful combinations, and to take over into 
 the sphere of State enterprises those which cannot effectively be 
 controlled. In such ways does modern society seek to heal the 
 new discords generated by the very processes employed by the 
 several businesses and trades in their search after an internal 
 harmony. 
 
 But the largest forms of capitalistic enterprise will tend more 
 and more to transcend the limits of any single state, not only in 
 their composition but in the powers they exercise upon subsidiary 
 industries, and upon the general body of consumers throughout 
 the industrial world. 1 The privately organised apparatus of 
 
 1 The foremost example of such organisation in a great staple industry is the In-
 
 2 8o WORK AND WEALTH 
 
 economic machinery, which constitutes the fabric of this eco- 
 nomic world-state, has been described as a striking example of 
 the expansion of industrial solidarity and harmony. But here 
 again the possibilities, nay, certainties, of new discord between 
 capital and labour, producer and consumer, cannot be ignored. 
 Hence the great social problems of the future will to a less and 
 less extent lie within the political competence of single states or 
 be soluble by the separate action of the Governments of those 
 states. The vast currents of international capital and labour 
 cannot flow without great disturbances of order and of economic 
 interests often affecting several nations. The safe, successful, 
 profitable, pursuit of large foreign enterprises by the capital and 
 labour of persons belonging to many nationalities, will more and 
 more involve common political action. 
 
 4. We are already beginning to recognise that our State is 
 disabled for the fully satisfactory solution of some of the most 
 pressing of our social problems. The immigration of foreign 
 labour complicates our treatment of sweated industries. The 
 improvement of conditions of labour in our trades may be ren- 
 dered more difficult by the admission of sweated imports, or our 
 feelings may be shocked by the influx of the products of slave 
 labour. The policy of taxing interests and profits may be 
 thwarted by our inability to trace the incomes derived from 
 foreign investment and trade. A financial crisis in America or 
 Germany may deplete our gold reserve and work havoc on our 
 credit. As these movements gather force and frequency, the 
 impotence of any single State to exercise an effective control 
 over the primary economic interests of its people will grow more 
 apparent. The gravest social-economic problems will be found 
 insoluble except by international arrangement. An era of free 
 conferences and of more or less loose agreements between States 
 will lay the foundation for what in time must amount to inter- 
 national regulation of industry. In other words, the economic 
 internationalism, which I have traced, will weave for itself the 
 
 ternational Iron & Steel Association, formed in July 1911 by representatives of 
 Austria, Belgium, Canada, France, Germany, Great Britain, Hungary, Russia, 
 Spain, United States. The objects of this organisation were to regulate production, 
 so as to control profitable prices and to prevent undercutting in times of depression. 
 (Cf. Chiozza-Money, Things that Matter, Ch. XI).
 
 SOCIAL HARMONY IN ECONOMIC LIFE 281 
 
 necessary apparel of political institutions. The true germ of 
 world-federation is perhaps to be traced to-day less clearly at the 
 Hague than at Bern, where the representatives of the leading 
 industrial nations have already met to set the seal of their re- 
 spective governments upon undertakings to promote common 
 policies of legislation in such matters as the regulation of night 
 labour for women, and the disuse of poisonous ingredients in the 
 match trade. In such agreements, as in the better-known Postal 
 Union (which also has its offices at Bern), one finds the earliest 
 contributions made by modern industrialism to the federal gov- 
 ernment of the world. 
 
 These facts I cite, partly to enforce the thesis that the ten- 
 dencies of modern industry which make for harmony and coopera- 
 tion are gaining, both in the smaller and the larger areas, over 
 those which make for discord and for competition. This grow- 
 ing harmony of fact must tend to evoke a corresponding harmony 
 of thought and feeling. But here we are retarded by a set of 
 psychological obstacles which pervert or disguise the truth. I 
 have alluded to the damage due to the false representation of na- 
 tions as rival traders, contending for a limited market upon terms 
 which signify that the gain of one is the loss of another. But the 
 whole intellectual and moral atmosphere is thick with similar mis- 
 takes of fact and fallacies of reasoning, chiefly sustained by false 
 phrases which evoke false images and arouse injurious desires 
 and passions. Ordinary business language is filled with selfish, 
 separatist and combative phrases, representing trade as a warfare, 
 in which every man must fight for his own hand, must force his 
 wares upon the public, outwit or bludgeon his competitors, con- 
 quer new markets, beat down the prices of the goods he buys, 
 or in finance become a 'bull' or a 'bear.' In certain large de- 
 partments of the business world there still remains so much dis- 
 order, insecurity and competition as to afford support to these 
 combative views and feelings. But they are no longer repre- 
 sentative of the main normal activities of industry, and they 
 ought and must by degrees be displaced by views and feelings 
 accommodated to the more organic conception. It is an im- 
 portant task of economic science to enforce conceptions of 
 the operation of economic laws which will support these newer
 
 282 WORK AND WEALTH 
 
 and sounder views and feelings. For only with this growing 
 recognition of the social harmony represented by industry can 
 the social will be nourished that is necessary to support and 
 further it. So long as the ordinary business man or worker has 
 his eyes, his mind, his heart and will, glued to the tiny patch of 
 industry to which his own directly personal effort is applied, the 
 pulse of humanity beats feebly through the system of industry. 
 But let the ordinary education of every man and woman impose 
 clear images of this economic order as a great human coopera- 
 tion in which each bears an essential part, as producer, consumer 
 and citizen, the quickened intelligence and sympathy will 
 respond, so that the blind processes of cooperation will become 
 infused and strengthened by the current of a conscious will.
 
 CHAPTER XIX 
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 
 
 i. Our examination of the existing industrial system discloses 
 certain discords of interest and desire between the owners of the 
 several factors of production, on the one hand, between pro- 
 ducers and consumers on the other. Among the owners of factors 
 of production the sharpest antagonisms are those between the 
 capitalist employer and the wage-earner, and between the land- 
 owner and the owners of all other factors. Except as regards the 
 ownership of land, these antagonisms are not absolute but 
 qualified. The interests of capital and labour, of producer and 
 consumer, march together up to a certain point. There they 
 diverge. These discords of interest materialise in what we term 
 'the surplus,' that portion of the product which, though not 
 essential to the performance of the economic process, passes 
 to capital, labour or the consumer, according to the economic 
 strength which natural or artificial conditions assign to each. 
 The humanisation and rationalisation of industry depend, as we 
 recognise, upon reforming the structure of businesses and in- 
 dustries, so as to resolve these discords, to evoke the most 
 effective cooperation, in fact and will, between the several parties, 
 and to distribute the whole product, costs and surplus, among 
 them upon terms which secure for it the largest aggregate utility 
 in consumption. The operation of industry upon this truly and 
 consciously cooperative basis, would, it is contended, evoke in- 
 creased productive powers, by bringing into play those instincts 
 of mutual aid that are largely inhibited by present methods, 
 and by distributing the increased product so as to evoke the 
 highest personal efficiency of life and character. 
 
 But it would be foolish to ignore the doubts and objections 
 which are raised against the spiritual assumption upon which 
 this ideal of human industry is based. It is often urged that 
 man is by nature so strongly endowed with selfish and com- 
 
 283
 
 284 WORK AND WEALTH 
 
 bative feelings, so feebly with social and cooperative, that he 
 will not work efficiently under the reformed economic structures 
 that are proposed. He must be allowed free scope to play for 
 his own hand, to exercise his fighting instincts, to triumph over 
 his competitors, and to appropriate the prizes of hazard and 
 adventure, the spoils attesting personal force and prowess, or 
 else he will withhold the finest and most useful modes of his 
 economic energy. 
 
 The distinctively spiritual issue thus raised is exceedingly 
 momentous. Suppose that the business life can be set upon 
 what appears to be a sound and equitable basis, is human nature 
 capable of responding satisfactorily to such an environment? 
 Putting it more concretely, are the actual powers of human 
 sympathy and cooperation capable of being organised into an 
 effective social will? This issue is seen to underlie all the doubts 
 and difficulties that beset the proposals to apply our organic 
 Law of Distribution for purposes of practical reform. All pro- 
 posals by organised public effort to abolish destitution give rise 
 to fears lest by so doing we should sap the incentives to personal 
 effort, and so impair the character of the poor. Among such 
 critics there is entertained no corresponding hope or conviction 
 that such a policy may, by the better and securer conditions of 
 life and employment it affords, sow the seeds of civic feeling and 
 of social solidarity among large sections of our population whose 
 life hitherto had been little else than a sordid and unmeaning 
 struggle. Proposals to secure for public use by process of taxa- 
 tion larger shares of surplus wealth are met by similar apprehen- 
 sions lest such encroachments upon private property should 
 impair the application of high qualities of business and profes- 
 sional ability. The growing tendency of States and Municipa- 
 lities to engage in various business operations is strongly and 
 persistently attacked upon the ground that sufficient public 
 spirit cannot be evoked to secure the able, honest management 
 and efficient working of such public concerns. 
 
 Finally, the whole basic policy of the Minimum Wage and the 
 Maximum Working-day is assailed on the same ground as a 
 levelling down process which will reduce the net productivity 
 of industry and stop all economic progress.
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 285 
 
 2. To such criticism two replies are possible, each valid 
 within its limits. The first consists in showing that the existing 
 business arrangements are extremely ill-adapted for offering the 
 best and most economically effective stimuli to individual pro- 
 ductivity. They are not well-directed to discover, apply, and 
 improve the best and most profitable sorts of human ability 
 and labour. In other words, the actual system for utilising 
 selfishness for industrial purposes is wofully defective: nine- 
 tenths of the power remains unextracted or runs to waste. 
 
 Those who rely upon this criticism base their reform policy 
 upon the provision of better economic opportunities and better 
 personal stimuli to individuals. But such reforms will not suffice. 
 What is needed above all is a social soul to inhabit the social 
 body in our industrial system. A conscious coordinating prin- 
 ciple an industrial government, in which the consent of the 
 governed shall be represented in their several wills and con- 
 sciousness as well as in some central organic control is to be 
 desiderated. Now is this condition of thought and of desire 
 really attainable? Can we really suppose that any sort of educa- 
 tion is likely to arouse and maintain in the rank-and-file of em- 
 ployees either in the public services or in the great private 
 industries a sense of public duty and a realisation of the larger 
 industrial harmony, which will compensate in any appreciable 
 measure for the dulness and drudgery of their particular job, 
 and furnish an effective check upon shirking or slacking? Sup- 
 pose that a salary basis of payment, a shortened work-day and 
 security of tenure, with adequate insurance against economic 
 mishaps, had been obtained in all regular occupations, would the 
 quickened sense of cooperation yield a productive energy ade- 
 quate to the requirements? 
 
 To this question it must, I think, be frankly answered, that 
 we cannot tell. We have no sufficient data for a confident reply. 
 The general reply of business men and of economists would, I 
 think, be in the negative. It would be urged that the greater 
 part of the routine work of industry will always remain so dull 
 and tiresome, the sense of public duty so weak and intermittent, 
 that the fixed salary basis of remuneration will not prove an 
 adequate incentive for the required amount of human effort.
 
 2 86 WORK AND WEALTH 
 
 The experience of existing social services would be adduced 
 in support of this judgment. Public employees, it is complained, 
 work with less energy than private employees; there is more 
 slacking and scamping and more malingering; the 'government 
 stroke' has become a by-word. The dignity of social service 
 does not evoke any clear response in the breast of the employee. 
 Such is the complaint. It is probably not ill-founded. The 
 great mass of public employees are certainly not animated by 
 much conscious pride and satisfaction in rendering social service. 
 But, before registering a final judgment upon such evidence, 
 certain qualifying considerations must be taken into account. 
 
 The attitude of a worker towards his work will be strongly 
 affected by the prevailing attitude of those around him. So 
 long as the general economic environment is one hi which the in- 
 terests of employer and employed are represented as antagonistic, 
 similar ideas and sentiments will continue to affect the feelings 
 of public servants. They will not realise that they are working 
 for themselves in working for society of which they are members: 
 they will treat the department for which they work rather as 
 an alien or a hostile body, bent upon getting as much out of 
 them and giving as little as possible. It is just here that we 
 touch the most sensitive spot in the psychology of government, 
 the best recognised defect of bureaucracy. The higher officials, 
 who control and manage public businesses, evoke in the rank- 
 and-file of the public employees very much the same sentiments 
 of estrangement or opposition that prevail in most private 
 businesses between employer and employee. For in point of 
 fact, the temper and mental attitude of higher officials are those 
 of a master in his own business, not those of a public servant. 
 That affects their dealings not only with the rank-and-file in 
 their department, but with the outside public. In a so-called 
 democracy, where the highest as well as the lowest officers of 
 state are paid by the people to do work for the people, no method 
 of effective popular control over the official services has yet been 
 devised. The absence of any such control is clearly recognised 
 by all high officials, and it powerfully influences their mind and 
 their behaviour. Uncontrolled, or insufficiently controlled power, 
 of course, affects differently different types of men. It induces
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 287 
 
 slackness and the adoption of a slow conservative routine in 
 those of torpid disposition. Men of arbitrary temper will be 
 led to despotic treatment of their staff. Men of brains and en- 
 terprise will be free to embark upon expensive enterprises, to 
 the gain or loss of their paymasters. But in no case does the 
 actual situation favour the permeation of the public service by 
 a full sense of social cooperation and joint responsibility. High 
 officials may and often do exhibit great energy and disinterested 
 zeal in the public service. But the sense of mastery, both in 
 relation to the lower grades of employee and to the public, is 
 always discernible. They have this power and they know it. 
 Until, therefore, the sense of public service can be made a reality 
 among the higher public officers, no true test of the efficacy of 
 the general will is to be obtained. This reformation of Bureau- 
 cracy is the chief crux of modern democracy. For unless some 
 mode is found of expelling from the higher public servants the 
 pride of caste, and of keeping them in sympathetic contact with 
 the general current of popular feeling, the mass of the subordinate 
 employees will not respond to the social claim upon their eco- 
 nomic energies. 
 
 Finally, the familiar criticism of the inefficiency of public em- 
 ployees in this country does not take proper account of conditions 
 of employment. For while the top grade of officials is paid more 
 handsomely and enjoys more dignity and security than in other 
 countries, the lower grades are often subject to conditions of pay, 
 hours and tenure, not appreciably better than those prevailing 
 in the ordinary labour-market. Until these conditions are im- 
 proved, it may reasonably be contended that the dignity of 
 public service cannot be expected to furnish an effective economic 
 motive. 
 
 If, however, increased security of life and livelihood could be 
 obtained for the people, with such improvement of our educa- 
 tional system as provided adequate opportunities for enabling the 
 children of the poorer classes to enter all grades of the public 
 services, the beginnings of a great change in the spirit of those 
 services might be attained. For, if the wide gaps of dignity and 
 of emoluments, which divide at present the higher from the 
 lower grades, could be reduced, while at the same time effective
 
 288 WORK AND WEALTH 
 
 publicity and criticism could be brought to bear upon all de- 
 partments of public work, the 'bureaucratic state' might be 
 transformed into something more nearly approaching a self- 
 governing society. 
 
 3. The cool practical business men will, however, probably 
 insist that none of these devices for improving education and 
 for stimulating public spirit will enable a public department to 
 get out of its employees so large an output of productive energy 
 as can be secured by the stimuli of private profit-seeking enter- 
 prise. And this may possibly be true. But those who have 
 accepted the general lines of our analysis will recognise that such 
 an admission is not fatal to the case for salaried employment and 
 public service. For the private business is primarily concerned 
 with one side of the human equation, the product, and is able 
 in large measure to ignore the human costs involved in getting 
 it. But the State, as representing the human welfare of its 
 members, must take the costs into account as well. An intelli- 
 gent Society would regard it as a foolish policy to attempt to get 
 out of its employees the amount of daily toil imposed under the 
 conditions of most profit-making businesses. While, therefore, 
 it is true that a public service, run upon an adequate basis of 
 fixed salary and short work-day, would stand condemned, if the 
 output of effective energy per man fell greatly below that furnished 
 under the drive of ordinary capitalism, a slight reduction of that 
 output might be welcomed as involving an actual gain in human 
 welfare. The diminished utility of the product might be more 
 than compensated in terms of human welfare by the diminished 
 human cost of the productive process. 
 
 It is not, therefore, incumbent upon the advocates of a new 
 industrial order, based upon a closer application of the organic 
 law, to show that such an order will yield at least as large an 
 output of economic energy and economic product as can be got 
 out of the mixed competition and combination which prevail 
 at present. Applying this standard of human valuation, they are 
 entitled to set off against any reduction of purely economic 
 stimuli that may ensue from their reforms, not only the relief 
 in human costs which accompanies such reduction but the en- 
 largement of other human gains.
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 289 
 
 For, though in this endeavour to value industrial activities 
 and products in terms of human welfare, we have for the most 
 part confined ourselves to the human costs and utilities directly 
 connected with the processes of economic production and con- 
 sumption, we cannot ignore the wider meaning of these pro- 
 cesses. Man lives not by bread, or economic goods, alone, but 
 by 'admiration, hope and love/ Though the various non- 
 economic goods and activities do not directly enter into our 
 human valuation of industry, we cannot neglect the interac- 
 tions between the economic and the other human interests in- 
 volved in the organic nature of man and of society. 
 
 4. The wider problem of human economy, the employment 
 of all human powers for human welfare, must in fact involve a 
 continual readjustment between the respective claims of the 
 economic and the non-economic activities upon our lives. Most 
 thoughtful critics of our age complain that this adjustment is 
 defective in that business bulks too largely in our lives. They 
 consider that our modern command over the resources of nature 
 for the satisfaction of our wants ought to issue not so much in 
 the larger supply of old, and the constant addition of new eco- 
 nomic wants, as in the increased liberation of human powers for 
 other modes of energy and satisfaction. There exist whole coun- 
 tries even in our time, such as China, where population lies so thick 
 upon the earth, and where the arts of industry remain so primi- 
 tive, that virtually the whole vital energy of the people must be 
 absorbed in the economic processes. This is not our case. With 
 our improving arts of industry and our dwindling growth of 
 population, we can afford to give an increasing share of our in- 
 terests and energies to the cultivation and enjoyment of intel- 
 lectual and moral goods. The gradual realisation of this human 
 economy is the best measure of our civilisation. Our greatest 
 impediment in this progress is the superstitious and excessive 
 value put by all classes of our people upon industry and property. 
 This is almost identical with a charge of materialism, for economic 
 values centre round material forms of property. 'Getting and 
 spending we lay waste our powers. ' This is a literal statement 
 of our bad economy. Until we can, as a nation, throw off the 
 dominion of the economic spirit, we cannot win the spiritual
 
 29 o WORK AND WEALTH 
 
 liberty needed for the ascent of man. So long as we stand, for 
 full six-sevenths of our time and more, with hands and eyes, in- 
 telligence and will, dedicated to the service of industrialism, we 
 cannot see, much less realise, better ideals of humanity. Ab- 
 sorbed in earning a livelihood, we have no time or energy to live. 
 
 Such sentences as these, I am well aware, have become com- 
 monplaces, and such wisdom as they contain has so become 
 almost impotent. This drawing of the fangs of truth by reducing 
 it to truisms is one of the most serious obstacles to intellectual 
 and moral progress. From the time of Wordsworth to the 
 present day our wisest teachers have demanded that industry 
 and property shall be put in their right places as servants, not 
 masters, of men, and that our conquest over nature shall be 
 attended by a liberation of all sorts and conditions of men from 
 the tyranny of matter. In no adequate degree has this liberation 
 been achieved. The iron of industrialism has entered so deeply 
 into our souls that we are loth to use our liberty. Why is 
 this so? 
 
 Man is a spiritual as well as a material being. His ascent in 
 civilisation implies an increasing satisfaction of his spiritual 
 needs. In this higher life economic processes and market values 
 play a diminishing part. How comes it, then, that the vast 
 economies of modern industry have done so little to release us 
 from the bondage of the economic system? Why have industry 
 and property retained so dominant a grasp upon our thoughts and 
 feelings, continually checking our aspirations to the higher life, 
 continually encroaching on the time and energy which by rights 
 would seem to belong to that life? 
 
 5. The true answer to these questions is not difficult to 
 find. We have sketched a growing order, harmony and unity, 
 of industrial life, concerned with the regular supply of economic 
 needs for mankind. Were such an order effectively achieved, 
 in accordance with the rational and equitable application of our 
 human law of distribution, the economy of industrial processes 
 would be accompanied by a corresponding economy of thought 
 and emotion among the human beings engaged in this common 
 cooperation. This social economy demands, as we have seen, the 
 substitution of social welfare for private profit as the directing
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 291 
 
 motive throughout industry. But it does not imply a com- 
 pletely socialistic system in which each productive process is 
 under the direct and exclusive control of Society. For that 
 assertion of absolute unity would contain a denial of the mani- 
 foldness of desire and purpose involved in the very concept 
 cooperation. Scope must remain, in the interests of society it- 
 self, for the legitimate play of individuality. The well-ordered 
 society will utilise the energies of egoism in fruitful fields of in- 
 dividual activity. The human ego will always seek a directly 
 personal self-expression in the free exercise of artistic instincts 
 and other creative or adventurous activities that yield the glory 
 of achievement. 
 
 These primarily self-regarding impulses are made socially pro- 
 fitable by allowing them free expression in these fields. The 
 attempt to regulate and direct these impulses and their pro- 
 ductive activities would be disastrous. This play of unfettered 
 personality in the fine arts, in literature, in the unsettled and 
 experimental section of each profession and each trade, must be 
 conserved, not as an inherent right of individuals but as a sound 
 social economy. For the distinction between these free creative 
 activities and the ordinary run of routine work in the trade and 
 professions is fundamental. It is not that the former, the free 
 unorganised activities, are not as truly social as the latter in their 
 ultimate significance and worth. But their social value is best 
 secured by leaving them to the stimuli of personal interests. The 
 creative activities, including all work which pleasure, interest, 
 surprise or personal pride, cause to be desired upon its own 
 account, need no social compulsion to evoke them. Their product 
 is the free gift which the individual makes to the commonwealth 
 out of the riches of his active personality. As their cost to him 
 is more than compensated by the pleasures of creation, he will 
 contribute them freely to the service of mankind. But even if 
 a coarser streak of selfishness causes the creative artist, poet, 
 inventor, discoverer, to claim some large share of the marketable 
 value of his product for himself, it will better serve society to 
 pay him his price, than to attempt to 'organise' creation on a 
 public basis. Such sufficient material rewards of genius or high 
 talent, if they are really necessary to evoke the creative activity,
 
 292 WORK AND WEALTH 
 
 must rightly be considered 'costs' rather than 'surplus.' There 
 will remain a margin of such unfettered private enterprise, not 
 only in the fine arts and the learned professions, where the crea- 
 tive mind seems most in evidence, but at the growing point of 
 every living industry. For the distinction between creation and 
 imitation or routine, as we have seen, cannot be applied in a 
 wholesale way to entire trades and occupations. Budding and 
 experimental industries, involving large application of inventive 
 and constructive energy, appealing to new and uncertain tastes, 
 carrying heavy risks of capital and reputation, are better left to 
 individual enterprise. The same industries, settled on estab- 
 lished lines, with smaller risks and smaller opportunities of useful 
 change, will properly pass under direct social control. It is hardly 
 conceivable that the development of the motor-car and the aero- 
 plane could have been so rapid, if these industries had been at the 
 outset claimed as State monopolies and official experts had alone 
 been set to operate them. The injurious retardation of electric 
 lighting and transport in this country by the legal shackles im- 
 posed upon them has been a striking testimony to the social harm 
 done by premature application of social control to an industry in 
 its early experimental stage. 
 
 On the other hand, it is equally foolish to exclude from effect- 
 ive social regulation or state organisation entire professions, 
 such as teaching, law, or medicine, on the ground that they are 
 essentially 'creative.' For they are not. The very name pro- 
 fession implies the adoption of prescribed and accepted methods 
 for dealing with large ordinary classes of cases, that is to say 
 routine procedure. Though, as we recognise, such procedure 
 may never reach the same degree of mechanical routine as pre- 
 vails in ordinary processes of manufacture, the common factors 
 may be so predominant as to bring them properly under the same 
 public regimen. Though, for example, class-teaching will always 
 carry some element of originality and personal skill, a true regard 
 for public interests establishes close public control of curriculum 
 and method in those branches of instruction in which it is con- 
 venient to give the same teaching to large numbers of children 
 at the same time. In education, as in medicine and in every 
 other skilled calling, there are grades of practice rightly classed
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 293 
 
 as regular or routine. Where it is important for members of the 
 public to be able to obtain such services, in reliable qualities 
 upon known and reasonable terms, effective social control of them 
 must be secured. For, otherwise, a power of private tyranny or 
 of extortion or neglect is vested in the producers of such services. 
 The inadequate public control over the medical and legal services 
 in this country is raising a crop of grave practical problems for 
 early solution. 
 
 So in every industry or occupation the relatively routine work 
 requires direct social organisation while the preponderantly 
 creative work should be left to 'private' enterprise. The former 
 class contains the great bulk of those industries which, concen- 
 trated in large businesses for the profitable supply of the prime 
 needs and conveniences of ordinary men and women, breed com- 
 binations and monopolies. Whereas in the creative industries 
 there exists a natural harmony of interests between producer 
 and consumer that will secure to society the best fruits of in- 
 dividual effort, this is not the case in the routine industries. 
 There the operation of the human law of distribution can only 
 be secured by direct social organisation. Only thus can excessive 
 private surplus, involving a tyranny over labour on the one hand, 
 the consumer on the other, be prevented. In no other way can 
 the main organs of industry be infused with the human feelings 
 of solidarity and cooperation essential to the stability and pro- 
 gress of social industries. 
 
 6. For to this vital point we must return. The substitution 
 of direct social control for the private profit-seeking motive in the 
 normal processes of our industries is essential to any sound scheme 
 of social reconstruction. For not otherwise can we get the social 
 meaning of industry represented consciously in the cooperative 
 will of the human factors of production. It is not too much to 
 say that the pace of civilisation for nations, of moral progress 
 for individuals, depends upon this radical reconstruction of 
 common industry. For the existing structure of ordinary busi- 
 ness life inhibits the realisation of its social meaning by the stress 
 it lays upon the discordant and the separatist interests. The 
 struggle to keep or to improve one's hold upon some place in the 
 industrial system, to win a livelihood, to make some gain that in-
 
 294 WORK AND WEALTH 
 
 volves a loss to someone else, derationalises the intelligence and 
 demoralises the character of all of us. 
 
 This derationalisation and demoralisation are seen to be 
 rooted in the defective structure and working of industrialism 
 itself. 
 
 If Industry were fairly apportioned among all, according to the 
 capability of each, if Property were allotted to each according to 
 his needs, by some natural process of distribution as regular and 
 certain as the process of the planets, persons would not need to 
 think or feel very keenly about such things as Industry and 
 Property: their intellects and hearts would be free for other in- 
 terests and activities. 
 
 But the insecurity, irregularity and injustice of economic 
 distribution keep Industry and Property continually in the fore- 
 ground of the personal consciousness. 
 
 Here comes into terrible relief the moral significance of the 
 unearned Surplus the term which gathers all the bad origins 
 of Property into the focus of a single concept. 
 
 At present much Industry is conducted, much Property is ac- 
 quired, by modes which are unjust, irrational and socially in- 
 jurious. Legal privilege, economic force, natural or contrived 
 scarcity, luck, personal favour, inheritance such are the means 
 by which large quantities of property come to be possessed by 
 persons who have not contributed any considerable productive 
 effort to their making. 
 
 Such property stands in the eye of the law, and in the popular 
 regard, upon precisely the same footing as that owned by those 
 who have earned it by the sweat of their brow, or the effort of 
 their brain. The failure of so many thoughtful men and women 
 to appreciate the vital bearing of the issue of origins upon the 
 validity of property is the supreme evidence of the injurious re- 
 actions of the present property system upon the human mind. 
 The crucial moral fallacy which it evokes is the contention, 
 seriously put forth by certain social philosophers, as well as by 
 social reformers, that property acquired in the ways I have just 
 indicated is validated in reason and morality by the good uses to 
 which it may be put by its owners. Mr. Carnegie and Mr. 
 Rockefeller have seriously propounded the theory that certain
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 295 
 
 individuals are endowed by nature or by circumstances with the 
 opportunity and power of accumulating great wealth, but that 
 their wealth, though legally their private property, is rightly to 
 be regarded by them as a ' social trust' to be administered by 
 them for the benefit of their fellow-men. It seems to them a 
 matter of indifference that this wealth is 'unearned,' provided 
 that it is productively expended. So fragments of profits, earned 
 by sweating labour or by rack renting tenants, are spent on pen- 
 sions, public hospitals or housing reform. Fractions of the ex- 
 cessive prices the consuming public pays to privileged transport 
 companies or 'protected' manufacturers are given back in parks 
 or universities. Great inheritances, passing on the death of rich 
 bankers, contractors or company promoters, drop heavy tears 
 of charity to soften the fate of those who have failed in the busi- 
 ness struggle. Fortunes, gained by setting nation against nation, 
 are applied to promote the cause of international peace. This 
 humor is inevitable. Unearned property can find no social uses 
 more exigent than the application of charitable remedies to the 
 very diseases to which it owes its origin. So everywhere we find 
 the beneficiaries of economic force, luck, favour and privilege, 
 trying to pour balm and oil into the wounds which they have 
 made. The effect of the process, and what may be called its 
 unconscious intention, is to defend the irrationality and injustice 
 of these unearned properties by buying off clear scrutiny into 
 their origins. Sometimes, indeed, the intention attains a measure 
 of clear consciousness, as in the cases where rich men or firms 
 regard the subscriptions given to public purposes as sound busi- 
 ness expenditure, applying one fraction of their gross profits to 
 a propitiation fund as they apply another to an insurance fund. 
 7. The radical defect of this doctrine and practice of the 
 ' social trust' is its false severance of origin from use. The organic 
 law of industry has joined origin and use, work and wealth, pro- 
 duction and consumption. It affirms a natural and necessary 
 relation between getting and spending. A man who puts no 
 effort into getting, a rent-receiver, cannot put well-directed 
 effort into spending. He is by natural proclivity a wastrel. A 
 man who is purely selfish in his getting, as the sweater, gambler, 
 or monopolist, cannot be social in his spending. The recipient
 
 296 WORK AND WEALTH 
 
 of unearned income is impelled by the conditions of his being to 
 a life of idleness and luxury: this is the life he is fitted for. He is 
 unfitted for the administration of a social trust. 
 
 These obvious truths, so fatally neglected, are no vague 
 maxims of revolutionary ethics, but are firmly rooted in physical 
 and moral fact. We have seen that there is throughout organic 
 life a quantitative and a qualitative relation between function 
 and nutrition, each being the condition of the other. He who 
 does not eat cannot work: he who does not work cannot eat. 
 It is true that the latter law works less directly and less imme- 
 diately than the former. Parasitism, individual or social, con- 
 tinues to exist in many walks of life. But it never thrives, it 
 always tends to degeneration, atrophy and decay. Normally, 
 and hi the long run, it remains true that 'Whosoever will not 
 work, neither can he eat.' If then the recipiency of unearned 
 wealth, parasitism, disables the recipient from putting his 'prop- 
 erty' to sound personal uses, is it likely that he can put it to 
 sound social uses? Though abnormal instances may seem, here 
 as elsewhere, to contravene the natural law, it remains true that 
 the power of individual earning, not merely involves no power 
 of social spending, but negates that power. It might even be 
 contended that there will be a natural disposition in the recipient 
 of unearned wealth to spend that wealth in precisely those ways 
 in which it injures most the society he seeks to serve. This is 
 probably the case. It is more socially injurious for the mil- 
 lionaire to spend his surplus wealth in charity than in luxury. 
 For by spending it on luxury, he chiefly injures himself and his 
 immediate circle, but by spending it in charity he inflicts a 
 graver injury upon society. For every act of charity, applied to 
 heal suffering arising from defective arrangements of society, 
 serves to weaken the personal springs of social reform, alike by 
 the 'miraculous' relief it brings to the individual 'case' that is 
 relieved, and by the softening influence it exercises on the hearts 
 and heads of those who witness it. It substitutes the idea and 
 the desire of individual reform for those of social reform, and so 
 weakens the capacity for collective self-help in society. The 
 most striking testimony to the justice of this analysis is furnished 
 by the tendency of 'model millionaires' to direct all their charity
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 297 
 
 to wholesale and what they deem social purposes, rather than to 
 individual cases. In order to avoid the errors of indiscriminate 
 charity, they fasten their munificence upon society in the shape 
 of universities, hospitals, parks, libraries and other general 
 benefits. Realising quite clearly, as they think, that the char- 
 acter of an individual is weakened and demoralised by a charitable 
 donation which enables him to get what otherwise he could only 
 have got by his personal exertion, they proceed to weaken and 
 demoralise whole cities and entire nations, by doing for these 
 social bodies what they are quite capable of doing for themselves 
 by their own collective exertions. These public gifts of million- 
 aires debauch the character of cities and states more effectively 
 than the private gifts of unreflecting donors the character of 
 individuals. For, whereas many, if not most, of the private re- 
 cipients of charity are victims of misfortune or of lack of oppor- 
 tunity, and are not fully responsible for the evil plight in which 
 they stand, this is not the case with an organised self-governing 
 community, a City or a State. Such a society is able, out of its 
 own resources, if it chooses to secure and use them, to supply 
 for itself all its own legitimate needs. It has a far larger self- 
 sufficiency for meeting all ordinary emergencies and for following 
 an economy of self-development and progress, than has the indi- 
 vidual citizen. For it can supply its needs out of the social in- 
 come which its collective life is constantly assisting to produce, 
 out of that very surplus which, wrongly allowed to flow, unearned, 
 into the coffers of rich individuals, is the very fund used for this 
 debasing public charity. 
 
 8. The clear recognition of these truths is closely germane to 
 our central consideration in this chapter, viz. , the question whether 
 there can be evoked in the common consciousness a flow of true 
 social or cooperative feeling strong and steady enough to evoke 
 from individual citizens a sufficient voluntary efficiency in pro- 
 duction. No absolutely convincing answer to the question is 
 at present possible. But, if any such experiment is to be tried 
 hopefully, it can only be done by setting Property upon an in- 
 telligible moral and social basis, so that it passes into the pos- 
 session of him to whom it is really 'proper,' in the sense that he 
 has put something of himself into its making. Only by resolving
 
 unearned Into earned income, so that all Property is duly earned 
 either by individuals or by societies, can an ethical basis be laid 
 for social industry. So long as property appears to come mirac- 
 ulously or capriciously, irrespective of efforts or requirements, 
 and so long as it is withheld as irrationally, it is idle to preach 
 'the dignity of labour' or to inculcate sentiments of individual 
 self-help. 
 
 When all Property is visibly justified, alike in origin and use, 
 the rights of property will for the first time be respected, for they 
 will be for the first tune respectable. To steal, to cheat, to 
 sweat, to cadge or beg, will be considered shameful, not because 
 the law forbids, but because such acts will be felt by all to be 
 assaults upon the personality of another. For the first time in 
 history, also, the tax-dodger, the contractor who puts up his 
 price for public works, the sinecurist, the jobber, the protec- 
 tionist and other parasites upon the public purse, will receive 
 the general reprobation due to robbery. For when the State is 
 recognised as having rights of property identical in origin and 
 use with those of individual citizens, that property will claim 
 and may receive a similar respect. Property, in a word, becomes 
 a really sacred institution when the human law of distribution is 
 applied to the whole income, surplus as well as costs. Such 
 inequalities in income as survive will be plainly justified as the 
 counterpart of inequality of efforts and of needs. The wide 
 contrasts of rich and poor, of luxury and penury, of idleness 
 and toil, will no longer stagger the reason and offend the 
 heart. 
 
 So the standard of sentimental values which affects the con- 
 ventional modes of living of all classes largely by snobbish 
 imitation and rivalry will be transformed. 
 
 Ostentatious waste and conspicuous leisure, with all their 
 injurious reactions upon our Education, Recreation, Morals, 
 and Esthetics, will tend to disappear. The illusory factor of 
 Prestige will be undermined, so that the valuations, both of 
 productive activities and of consumption, will shift towards a 
 natural, or rational, standard. 
 
 9. Not merely will the wide gulf which severs mental from 
 manual workers disappear, but all the elaborate scale of values
 
 INDIVIDUAL MOTIVES TO SOCIAL SERVICE 299 
 
 for different sorts of intellectual and manual work would undergo 
 a radical revision. 
 
 The effect of setting on a human basis the industry of the 
 country would, of course, react upon all other departments of life, 
 Religion, Family and Civic Morality, Politics, Literature, Art and 
 Science. For though economics alone cannot mould or inter- 
 pret history, the distinctively economic institutions of Industry 
 and Property have always exercised a powerful, sometimes 
 a dominant influence, upon other institutions. The reforma- 
 tion of economic life must, therefore, produce equally bene- 
 ficent effects upon all other departments transforming their 
 standards and feeding the streams of their activities with new 
 thoughts and feelings, drawn no longer from the minds of a 
 little class or a few original natures, but from the whole tide of 
 human life flowing freely along every channel of individual and 
 social endeavour. 
 
 The security and rationality of the economic order will give 
 to all that confidence in man, and that faith in his future, which 
 are the prime conditions of safe and rapid progress. For the 
 brutal and crushing pressure of the economic problem in its 
 coarsest shape how to secure a material basis of livelihood- 
 has of necessity hitherto absorbed nearly all the energy of man, 
 so that his powers of body, soul and spirit have been mainly 
 spent on an unsatisfactory and precarious solution of this per- 
 sonal economic problem. Religion, politics, the disinterested 
 pursuits of truth or beauty, have had to live upon the leavings of 
 the economic life. 
 
 An economic reformation which, by applying the human law 
 of distribution, absorbs the unproductive surplus, would thus 
 furnish a social environment which was stronger and better in 
 the nourishment and education it afforded to man. Every or- 
 gan of society would function more effectively, supplying richer 
 opportunities for healthy all-round self-development to all. 
 So far as the economic activities can be taken into separate 
 consideration, it is evident that this justly-ordered environment 
 would do much to raise the physical, and more to raise the moral 
 efficiency of the individual as a wealth-producer and consumer. 
 But its most important contribution to the value and the growth
 
 300 WORK AND WEALTH 
 
 of human welfare would lie in other fields of personality than the 
 distinctively economic, in the liberation, realisation and im- 
 proved condition of other intellectual and spiritual energies at 
 present thwarted by or subordinated to industrialism.
 
 c 
 
 P U- P%*H. CAUI 
 
 CHAPTER XX 
 
 THE SOCIAL WELL AS AN ECONOMIC FORCE 
 
 i. To secure by education and reflection such a revaluation 
 of human activities, aims and achievements, as will set economic 
 processes and products in a definitely lower place than that 
 which they occupy at present, is, I think, essential to safe and 
 rapid progress. For the early steps towards a better industrial 
 order will very likely involve some economic sacrifice, in the sense 
 of a reduced output of personal energy and of wealth-production 
 on the part of the average member of society. Although this 
 loss may be more than compensated by the elimination of 
 large wastes of competition and by improved organisation, 
 we are not warranted in assuming that this will at once take 
 place. 
 
 We need not assume it. For even if we do not, our analysis has 
 shown that an economic system, thus working at a lower rate 
 of human costs, and turning out a smaller quantity of goods, may 
 nevertheless yield a larger quantity of human welfare, by a better 
 distribution of work and product. But the great gain, of course, 
 will consist in the increased amount of time, interest and energy, 
 available for the cultivation of other human arts outside the 
 economic field. Upon the capacity to utilise these enlarged 
 opportunities the actual pace of human progress in the art of 
 living will depend. At present this capacity may seem small. 
 The increased opportunities of leisure, travel, recreation, culture, 
 and comradeship, which have come hi widely different degrees to 
 all classes, have often been put to disappointing uses. But a 
 great deal of such waste is evidently attributable to that prevail- 
 ing vice of thought and feeling which the domination of industrial- 
 ism has stamped upon our minds, the crude desires for physical 
 sensations and external display. Not until a far larger measure 
 of release from our economic bonds has been acquired, shall we 
 
 301
 
 302 WORK AND WEALTH 
 
 enjoy the detachment of mind requisite for the larger processes 
 of revaluation and realisation. 
 
 2. One word remains, however, to be said upon the all- 
 important subject of motives and incentives. We have seen 
 that, in so far as it is possible to displace the competitive system 
 of industry, with its stimulation of individual greed and com- 
 bativeness, by a more consciously cooperative system, the will 
 of the individual engaged upon industrial processes will be af- 
 fected in some measure by the social meaning of the work he 
 is doing, and will desire to forward it. The efficacy of this social 
 will is not, however, adequately realised so long as it is regarded 
 merely as a feeling for the public good originating from a number 
 of separate centres of enlightened personality. The growing 
 recognition on the part of individual workers, that the structure 
 of society establishes a strong community of interests, will no 
 doubt supply some incentive to each to do his fair share to the 
 necessary work. But this personal incentive may not go very 
 far towards overcoming the selfishness or sluggishness of feebler 
 personalities. If, then, the social will be taken merely to mean 
 the aggregate of feeling for the public good thus generated in the 
 separate wills, it may not suffice to support the commonweal. 
 But if our organic conception of society has any validity, the 
 social will means more than this addition of separately stimulated 
 individual wills. The individual soldier may have a patriotic 
 feeling expressing his individual love of his country, which has a 
 certain fighting value. But, as his attachment to his profession 
 grows, another feeling of wider origin and more enduring force 
 fuses with the narrower feeling, enhancing greatly its effective- 
 ness. That feeling is esprit de corps, a corporate spirit of the 
 service, capable of overcoming personal defects, the cowardice, 
 apathy or greed of the individual, and of evoking an enormous 
 volume of united effort. I have no intention of suggesting that 
 the routine of ordinary industry can yield scope for displays of 
 this esprit de corps comparable in intensity with the dramatic 
 examples of great military achievements. But I do affirm that 
 every conscious corporate life is accompanied and nourished by 
 some common consciousness of will and purpose which feeds and 
 fortifies the personal centres, stimulating those that are weaker
 
 THE SOCIAL WILL AS AN ECONOMIC FORCE 303 
 
 and raising them to a decent level of effort, reducing dissension, 
 and imparting conscious unity of action into complex processes of 
 cooperation. 
 
 The power of this social will as an economic motive-force ought 
 not to be ignored. As the processes of industrial cooperation 
 grow closer, more numerous, more regular in their operation, 
 this cooperation and coordination, representing a unity of will 
 and purpose far transcending the vision and the purpose even 
 of the most enlightened and altruistic member, will form a 
 powerful current of industrial consciousness, influencing and 
 moulding the will and purposes of individuals. 
 
 Such a force, emanating from the social whole, will of necessity 
 not be clearly comprehensible to the individuals who feel its 
 influence and respond to it. They are the many, while it flows 
 from their union, which must always be imperfectly mirrored 
 in the mind of each. Yet this direct social will only works through 
 its power to stimulate and direct the will of each, so as to produce 
 a more effective harmony. Vague theory this will seem to some, 
 utterly remote from the hard facts of life! The problem is how 
 to induce public or other salaried employees to do a fair day's 
 work, when they might shirk it without loss of pay. Well, we 
 suggest that when that fair day's work is not unduly long or 
 onerous, when it is fairly paid, and when each sees that all the 
 others are called upon to do their proper share, the general sense 
 of fairness in the arrangement will come to exercise a compelling 
 influence on each man to keep his output up to a decent level. 
 This power of the social will has never yet been tested. For a 
 society with arrangements based on manifest principles of 
 justice and reason has never yet been set in operation. But 
 though our organic law of distribution may never attain a perfect 
 application, so far as it is applied it may surely be expected to 
 act in the way here described, appealing to the springs of honour, 
 equity, comradeship and respect for public opinion, with a 
 force immeasurably greater than is possible in a system of in- 
 dustry and property where reason and fair play in the apportion- 
 ment of work and its rewards are so imperfectly apparent. 
 
 3. These conditions of organic welfare in the apportionment 
 of work and wealth do not imply a conception of industrial soci-
 
 304 WORK AND WEALTH 
 
 ety in which the individual and his personal desires and ends are 
 impaired or sacrificed to the interests of the community. They 
 do imply a growth of the social-economic structure in which the 
 impulses of mutual aid, which from the earliest times have been 
 civilising mankind, shall work with a clearer consciousness of 
 their human value. As the individual perceives more clearly 
 how ultimately his personal efforts and effects are, in process and 
 in product, linked with those of all the other members of society, 
 that perception must powerfully influence his feelings. He will 
 come consciously to realise his personal freedom in actions that 
 are a willing contribution to the common good. This conscious- 
 ness will make it more difficult for him to defend in himself or 
 others economic conduct or institutions in which individual, 
 class or national conflicts are involved. Thus a better social 
 consciousness and a better economic environment will react on 
 one another for further mutual betterment. The unity of this 
 social-industrial life is not a unity of mere fusion in which the 
 individual virtually disappears, but a federal unity in which the 
 rights and interests of the individual shall be conserved for him 
 by the federation. The federal government, however, conserves 
 these individual rights, not, as the individualist maintains, be- 
 cause it exists for no other purpose than to do so. It conserves 
 them because it also recognises that an area of individual liberty 
 is conducive to the health of the collective life. Its federal 
 nature rests on a recognition alike of individual and social ends, 
 or, speaking more accurately, of social ends that are directly 
 attained by social action and of those that are realised in in- 
 dividuals. I regard such a federation as an organic union because 
 none of the individual rights or interests is absolute in its sanction. 
 Society in its economic as in its other relations is a federal state 
 not a federation of states. The rights and interests of society 
 are paramount: they override all claims of individuals to liberties 
 that contravene them. 
 
 4. So far as industry is concerned, we perceive how this 
 harmony between individual and social rights and interests is 
 realised in the primary division of productive activities into Art 
 and Routine. The impulses and desires which initiate, sustain 
 and direct what we term art, including all the creative activities
 
 THE SOCIAL WILL AS AN ECONOMIC FORCE 305 
 
 in industry, flow freely from the individual nature. We recog- 
 nise that productive activities in which these elements are of 
 paramount importance form an economic field which society, 
 guided by its intelligent self-interest, will safely and profitably 
 leave to individuals and private enterprise. Industries which 
 are essentially of a routine character, affording little scope for 
 creative activities of individuals, must pass under direct social 
 administration. For free individual initiative and desires will 
 not support them. They can only be worked under private 
 enterprise on condition that great gains are procurable for the 
 entrepreneurs and an unfree body of proletarian labour is available 
 for compulsory service. The routine services of society cannot 
 properly be secured by appeals to the separate self-interests of 
 individuals. So administered, they involve the waste of vast 
 unearned gains accruing to a private caste of masters, the injury 
 and degradation of economic servitude in the workers, and a 
 growing insecurity and irregularity of service to the consumers. 
 The only volume of free-will and voluntary enterprise that can 
 support those routine industries is the free-will and enterprise 
 of Society. If we can bring ourselves to regard the great normal 
 currents of routine industry, engaged in supplying the common 
 daily needs, from the standpoint of a real live Society, we shall 
 recognise that to that Society this industrial activity and its 
 achievements are full of interest and variety. What to the in- 
 dividual is dull routine is to Society creative art, the natural em- 
 ployment of social productive energies for the progressive satis- 
 faction of social needs. Though the individual will soon flags 
 before demands for work so irksome and repellent to its nature, 
 the social will gladly responds to work in which that will finds 
 its free natural expression. 
 
 This is the ultimate argument in favour of the socialisation 
 of the routine industries, viz., the release of the individual will 
 from work that is costly, repellent and ill-done, in order to enable 
 the social will to find in that work its healthy, interesting, educa- 
 tive self-realisation. For once conceive Society as a being capable 
 of thought and feeling, these processes have an interest for it. 
 They are social art, part of the collective life in which Society 
 realises itself, just as the individual realises himself in individual
 
 306 WORK AND WEALTH 
 
 art. Once accept the view of Society not as a mere set of social 
 institutions, or a network of relations, but as a collective per- 
 sonality, the great routine industrial processes become the vital 
 functions of this collective being, interesting to that being alike 
 in their performance and their product. That subdivision of 
 labour and that apparent contradiction of interests between 
 producer and consumer which seem designed to feed personal 
 antagonisms and to thwart individuality, now acquire rational 
 justification as the complex adaptive play of healthy vital func- 
 tions in Society. 
 
 5. Labour, thus interpreted, becomes a truly social function, 
 the orderly half -instinctive half -rational activity by which society 
 helps itself and satisfies its wants, a common tide of productive 
 energy which pulses through the veins of humanity, impelling 
 the individual members of society to perform their part as con- 
 tributors to the general life. Whether those individual actions 
 are strictly voluntary, pleasurable and interesting in themselves 
 to those who perform them, as in the finer arts, or are compulsory 
 hi their main incidence upon the individual, and accompanied 
 by little interest or social feeling on his part, is a matter of quite 
 secondary importance as viewed from the social standpoint. As 
 labour is social, so is capital. The other apparent discrepancy, 
 that between the interests of present and future, spending and 
 saving, also disappears when we consider the social signific- 
 ance of saving. For society secretes capital by the same half- 
 instinctive half-rational process by which it generates, directs 
 and distributes, its supply of labour. Only by a hypothesis 
 which thus assigns a central industrial purpose to society can 
 we possibly understand the life of industry and the complex 
 cooperation it displays. 
 
 Take for a single instance the wheat supply of the world or 
 the cotton industry of Lancashire. We see large rhythmic 
 actions, elaborate in their complicated flows, responsive to 
 innumerable stimuli of world-markets, a nervous system of 
 affluent and effluent currents, directed by the desires and beliefs 
 of innumerable producers and consumers, each consciously 
 actuated by his own particular motives and yet cooperating 
 towards large social ends.
 
 THE SOCIAL WILL AS AN ECONOMIC FORCE 307 
 
 We can neither grasp, intellectually or emotionally, the human 
 or social significance of these processes, if we persist in resolving 
 them into the ideas, feelings and actions of individual persons. 
 The harmony becomes either fortuitous or purely mystical. 
 But, if we regard Society as having a large life of its own, the 
 cooperative harmony of individual aims and activities becomes 
 a corporate organic process. The social life does not suffer from 
 division of labour and specialisation of function, but gains, as in 
 the animal organism. The social life is not oppressed, degraded 
 or injured by the routine of the smaller working lives, any more 
 than the animal organism by the regularity and repetition of the 
 respiratory, circulating and other routine operations of its organs 
 and their cells. 
 
 6. "But," it will be objected, "even if we are justified in 
 pushing the organic analogy so far as to claim the existence of a 
 real social life with a meaning and end of its own, superior to 
 that of the individual, as the life of every organism is superior to 
 that of its organs and cells, that larger social being can only re- 
 main a shadowy or hypothetical being to actual men and women. 
 And it is the aims, ideas, feelings and activities of these little 
 units that, after all, will always absorb our attention and occupy 
 our hearts and minds." 
 
 Here is the final quintessence of individualism surviving hi 
 many professing socialists, the denial of the existence of a ra- 
 tional moral society. Yet such a society exists. The earliest 
 beginnings of animal gregariousness, sexual feelings, and other 
 primary instincts of association, with the mutual aid they give 
 rise to, are a first testimony to the existence, even at the open- 
 ing of the human era, of a real though rudimentary society, 
 physical and psychical in its nature. Civilisation has its chief 
 meaning in the extension and growing realisation of this unity 
 of Society, by utilising these secret threads of social feeling for 
 the weaving of the fabric of social institutions. Thus, through 
 these instruments of common social life, language, art, science, 
 industry, politics, religion, society gathers a larger, more solid 
 and various life. Race, Nationality, Church, the bond of some 
 common interest in a science, an art, a philanthropic purpose, 
 often present intense examples of genuinely common life and
 
 3 o8 WORK AND WEALTH 
 
 purpose. These are not mere social contracts of free individuals, 
 seeking by cooperation to forward their individual ends. Such 
 a conception of mutual aid is as false for religion, science, art or 
 industry, as for politics. The statement that 'man is a social 
 animal' cannot merely signify that among man's equipment of 
 feelings and ideas there exists a feeling and idea of sympathy 
 with other men. That is only how it looks from ilie standpoint of 
 the cell. It means that humanity in all its various aggregations is 
 a social stuff, and that whatever forms of coalescence it assumes, 
 i. e. a nation, caste, church, party, etc., there will exist a genuinely 
 organic unity, a central or general life, strong or weak, but, so far 
 as it goes, to be considered as distinct from and dominant over 
 the life and aim of its members. 
 
 This central life, though distinguishable from the lives of its 
 members, as an object of thought and will, is yet only lived in 
 and through the life of the organs and cells. This is the subtle 
 nature of the organic bond. 
 
 We are told indeed that "Society only exists in individuals." 
 This, however, is only true in the same restricted sense in which 
 it is true that an animal organism only exists in the life of its 
 cells. There is nothing but the cells plus their organic coopera- 
 tion. But I should rather say that the organism exists in the 
 cooperation of the cells. So I should say that Society exists in 
 the cooperation of individuals. 
 
 This is not a matter of theoretic accuracy of statement, but of 
 immense practical significance. For the future progress of the 
 arts of social conduct, especially of industry and politics, must 
 largely depend upon the measure and manner of acceptance of 
 this view of the nature of Society. It must, indeed, to the in- 
 dividual mind always remain as a hypothesis, incapable of full 
 and exact verification. For such verification would imply an 
 absolute merging of individual personality in the social unity. 
 Such a public spirit can never absorb and displace private spirits. 
 But the hypothesis may, for all that, possess both intellectual 
 and emotional validity. Its clear provisional acceptance will 
 not only explain many of the difficulties and reconcile many of 
 the discrepancies in those tendencies, industrial and political, 
 which are generally accepted as making for human progress, but
 
 THE SOCIAL WILL AS AN ECONOMIC FORCE 309 
 
 will afford increased economy of direction and of motive. For 
 once let us realise Society as possessing a unity and a life of its 
 own, to the furtherance of which each of us contributes in the 
 pursuance of the particular life we call 'our own,' the so-called 
 sacrifices we are called upon to make for that larger life will be 
 considered no longer encroachments on but enlargements of our 
 personality. We shall come in larger measure to identify our 
 aims and ends willingly with the aims and ends we impute to 
 society, and every step in that public conduct will enrich or 
 strengthen that social sympathy which we shall recognise to be 
 the very life of society flowing in our veins. This is the spirit 
 of social reform, as distinguished from the concrete measures of 
 reform. Upon the creation and recognition of this spirit the 
 possibility, the usefulness, the durability of every one of the 
 institutions and policies, which are evolved by modern civili- 
 sation, depend. It is, therefore, of supreme and critical impor- 
 tance to obtain the widest possible acceptance of the conception 
 of Society as a living being to which each of us ' belongs, ' a being 
 capable of thinking and feeling through us for itself, and of de- 
 siring, pursuing and attaining ends which are its ends, and which 
 we are capable of helping to realise. So long as Society is spoken 
 of and thought of as an abstraction, no social conduct can be 
 sound or safe. For an abstraction is incapable of calling forth 
 our reverence, regard or love. And until we attribute to Society 
 such a form and degree of 'personality' as can evoke in us those 
 interests and emotions which personality alone can win, the 
 social will will not be able to perform great works. 
 
 The final claim we make for the human valuation of industry 
 presented here is that it helps to bring into clear relief a set of 
 human problems which, from the conception of society as a mere 
 arrangement for securing individual ends, are perceived to be 
 insoluble, but for which reason and emotion alike demand a 
 satisfactory solution. Only by substituting for the attainment 
 of individual welfare the ideal and the standard of social welfare, 
 are we able to obtain a method of analysis and valuation which 
 furnishes satisfactory solutions to the problems that industry 
 presents.
 
 CHAPTER XXI 
 
 PERSONAL AND SOCIAL EFFICIENCY 
 
 i. What light does our human valuation of economic pro- 
 cesses throw upon the conditions of individual and social pro- 
 gress? Our examination of industry has shown us the ways in 
 which the actual production and consumption of wealth affect 
 the personal efficiency and welfare of individuals. The organic 
 law of distribution clearly indicates personal efficiency, alike for 
 purposes of economic productivity and for the wider art of life, to 
 depend primarily upon the maintenance of sound relations be- 
 tween the output of economic activities and the income of eco- 
 nomic satisfactions. A healthy system of industry will demand 
 from each producer an amount and kind of 'costly' labour accom- 
 modated to his natural and acquired powers. By such a distribu- 
 tion of the socially useful work which is not in itself agreeable to 
 its performers, the common economic needs of society are supplied 
 with the smallest aggregate amount of human cost. Similarly, we 
 see how, by a distribution of wealth according to the needs of each 
 member, i. e. according to his 'power' as consumer, the largest 
 aggregate amount of human utility is got out of the wealth dis- 
 tributed. 
 
 But this burden of 'costly' work, required of the producer and 
 adjusted to his powers, is not the only work that he can do. The 
 main object of the shorter work-day and the better apportion- 
 ment of 'costly' labour, as we have already recognised, is to lib- 
 erate the individual so that he has time and energy for the volun- 
 tary performance of 'productive' activities that are 'costless,' 
 interesting and beneficial to his personal life. Some of these 
 voluntary activities will be 'economic' in the sense that they may 
 produce goods or services which have an exchange value. Such 
 is the gardening or the wood-carving which a man may do in his 
 spare time. Though it may bring him a direct return of per- 
 sonal gain and satisfaction that is non-economic, it may also be 
 
 310
 
 PERSONAL AND SOCIAL EFFICIENCY 311 
 
 a supplementary means of income. There is no reason why a 
 man whose hobby is his garden should not be able to exchange 
 some of the fruit and flowers, which it has been a pleasure for 
 for him to grow, for the photographs or the book-bindings on 
 which his neighbours may prefer to spend a portion of their 
 leisure. Most of the spare energy or leisure, however, won for 
 the worker by a fair distribution of 'costly' labour, will, of course, 
 usually be applied to personal employments, to the arts of home 
 life and of society, which, though highly conducive to personal 
 efficiency, lie outside the range of 'economics.' Each person 
 would apply this free time and energy differently, his voluntary 
 work having some natural relation as 'relief or 'variety' to the 
 sort of 'costly' or routine labour which earned his livelihood. 
 Thus on this true equalitarian basis there would arise an immense 
 variety of freely active personalities. Each person would have 
 what may be called a personal standard of production, an orderly 
 application of his productive energies, which, though partly im- 
 posed by his status as a member of society bound to do his share 
 in social work, would largely represent his personal tastes, choices 
 and interests, selfish or altruistic, according to his temperament. 
 2. Turning to the other side of industry, the distribution of 
 wealth to each according to his needs, i. e. capacities of use, per- 
 sonality would impress itself similarly upon an immense variety 
 of actual standards of consumption, or modes of applying in- 
 come to the satisfaction of desires. There is, however, an im- 
 portant distinction to be noted between standards of consump- 
 tion and of production. Whereas in modern industry the earning 
 of income is normally an individual art, its consumption is nor- 
 mally a family act. While the family, except in some agricultural 
 societies, is very rarely a unit of production, it remains usually a 
 unit of consumption. It would appear, then, that our human 
 distribution would affect personal efficiency differently upon the 
 two sides of its application. As producer his standard of pro- 
 duction, or of use of productive activities, would appear to be 
 directed by a balance between the social requirements of labour 
 and his personal proclivities, whereas on the side of consumption 
 the balance would be between the social requirements and the 
 family. Society must secure for the standard of family comfort
 
 3 i2 WORK AND WEALTH 
 
 such an expenditure as will sustain the working numbers of the 
 family in full economic efficiency, i. e. a proper economy of what 
 the classical economists called 'productive consumption' must 
 take place. But, outside this limit, the particular requirements 
 and conditions, not of the earner alone, but of the family as a 
 whole, must determine the expenditure that makes for efficiency. 
 This discrepancy, however, is not really so great as it appears 
 at first sight. The direct interest of society in the productive and 
 consumptive life of its individual members lies in their perform- 
 ance of this proper share of 'costly' or social service and their 
 use of a proper portion of their income for consumption adjusted 
 to maintain their efficiency for this social service. The rest of 
 their productive energy, the rest of their consumptive wealth, lie 
 under their own control for their personal life. The fact that this 
 personal life may be more narrowly personal on the productive 
 side, more of a family life on the consumptive side, does not 
 seriously affect the issue. Indeed, the discrepancy almost wholly 
 disappears when we look a little closer at the liberties which a 
 better social economy of production secures for the worker. The 
 better life which a slackening of the industrial strain will bring to 
 the producer will consist in the cultivation of interests and activi- 
 ties which, precisely because they are voluntary and in them- 
 selves desired, cannot rightly be classified as either production or 
 consumption but unite the qualities of both. We have seen that 
 this is the characteristic of all art, or all work which is good and 
 pleasant in itself. Any activity that carries a surplus of human 
 utility over human cost is at once function and nutrition, produc- 
 tion and consumption. In a word, it is an increase of life. So it 
 comes about that the 'human distribution' feeds personal effi- 
 ciency equally on its productive and consumptive sides. A 
 healthy application of productive activities will contribute as 
 much to individual progress as a healthy standard of consump- 
 tion. 
 
 3. It remains to recognise that the organic treatment of our 
 problem does not permit society to adopt a separatist view of the 
 distribution of work and its product. A distribution of work 'ac- 
 cording to the powers ' of workers is conceivable on terms which 
 would cause heavy damage to society through ignoring the reac-
 
 PERSONAL AND SOCIAL EFFICIENCY 313 
 
 tions of work upon consumption. It might appear superficially 
 a sound human economy to place all the burden of the heaviest 
 and most repellent muscular toil upon classes or races of men 
 whose powerful bodies and insensitive minds seemed to indicate 
 that they were best fitted by nature for such work. 1 But if the 
 effect of such an economy were, as it would be, to keep consider- 
 able bodies of population in a low grade of animalism, as repre- 
 sented in coarse modes of living and brutal recreations, this one- 
 sided view, by neglecting these organic reactions, would injure 
 the personality of these lower grades of citizens, and through 
 them damage the efficiency of the society of which they were 
 members. Or, taking an opposite instance, a Society which en- 
 abled classes of artistic or literary folk to escape all share of 
 'costly' social labour, so as to cultivate exclusively their indi- 
 vidual activities and tastes, would incur a similar social danger 
 through the presence of highly stimulating personalities, un- 
 checked by any adequate sense of social responsibilities, who by 
 their example and influence might undermine the routine activi- 
 ties which are the feeders of social life. 
 
 So far, then, as economic reforms are aiming at personal 
 efficiency, they must take simultaneously into consideration the 
 effects which each reform will have upon the production and the 
 consumption of wealth. For example, a shortening of the work- 
 day ought to be accompanied by improved opportunities of edu- 
 cation and of recreation as an integral part of the reform. 
 
 4. Our setting of the problem, which brings into contrast the 
 routine social production that is 'costly' to individuals and the 
 creative or individual production which is ' costless, ' might seem 
 to involve the view that social progress, as distinct from indi- 
 vidual, would involve an increasing total burden of routine work 
 under direct social control. Thus an antagonism between the 
 conscious interests of the individual and the social interests might 
 appear to remain. For, though a better social will, operating 
 upon the individual, might dispose him to accept his duty of 
 serving society in the performance of his share of routine work, it 
 
 1 Ruskin had a curious notion of this sort (cf. Time and Tide, par. 107, Munera 
 Puheris, par. 109, Fors Clavigera, Letter Ixxxii), and the recent American 'Scientific 
 Management' appears to endorse it.
 
 3 i 4 WORK AND WEALTH 
 
 would still be true that such service was less desirable to him and 
 less nourished his personal life than the free personal activities 
 upon which it encroached. This opens up an exceedingly import- 
 ant issue in social economy. It has been assumed that a really 
 enlightened society will so administer industry that a light day's 
 labour shared among all will suffice to win the wealth necessary 
 for the support of society and the satisfaction of the common 
 material needs of its members. Thus an increasing proportion of 
 human energy will be liberated for the performance of those 
 activities which are pleasant and interesting to those who engage 
 in them. A diminishing amount of time and energy will be ap- 
 plied to the mechanical processes of getting food and other ma- 
 terials from the earth, and of fashioning them and carrying them 
 about. Thus there will be more time and energy for the fine 
 arts and crafts, which depend less upon quantity of materials and 
 more upon the skilled application of personal powers. From the 
 standpoint of human welfare such an economy is obvious. It 
 means, on the productive side, a progressive increase of activity 
 that is humanly 'costless' and pleasurable, a progressive de- 
 crease of that which is costly and unpleasurable. On the con- 
 sumptive side, it means the substitution of non-material wealth, 
 such as books, pictures, poetry, science, which are virtually in- 
 finite in the human utility that they are capable of yielding, for 
 material wealth which is mostly consumed in a single act of appro- 
 priation. The higher kind of goods thus brings a minimum of 
 costs and a maximum of utilities, and that upon each side of the 
 organic equation. 
 
 In most advanced nations of our time this gain in the relative 
 importance of the arts and professions engaged in artistic, pro- 
 fessional, recreative, educational, scientific and other creative 
 activities, is recognised as being an evidence and a measure of 
 advancing civilisation, and some offset to the advance of material 
 luxury. 
 
 5. If, however, there is to be a continuous increase in the 
 proportion of time and energy available for the production and 
 consumption of the higher grades of non-material economic goods 
 and for other activities of a non-economic nature, some limitation 
 must take place of the demand and supply of material economic
 
 PERSONAL AND SOCIAL EFFICIENCY 315 
 
 goods. If in any country, or throughout the industrial world, 
 the growth of population were such as, in the old phrase, to press 
 ' upon the means of subsistence, ' the amount of productive energy 
 needed for the arts of agriculture, mining, and the staple branches 
 of manufacture and transport would be such as to defeat the 
 economy of social progress just indicated. Even if the popula- 
 tion did not advance, but were chiefly engaged in seeking fuller 
 satisfaction of an increasing number of distinctively physical 
 wants, the same result would follow. Larger drafts must con- 
 tinually be made upon the natural resources of the soil, by means 
 of industries subject to what political economy calls "the law 
 of diminishing returns, " and an increasing proportion of labour 
 must be engaged in these industries. Though mechanics and the 
 division of labour in the manufactures, and even in agriculture, 
 temper the tyranny of matter, enabling a given amount of rou- 
 tine toil to achieve an increasing output of goods, this policy of 
 human liberation is impeded and may be entirely frustrated by 
 a constant preference among large populations for a strictly quan- 
 titative satisfaction of new material wants. The root issue of 
 social progress from the economic standpoint is here disclosed. 
 It is the question of the relative importance of quantity of matter 
 in the satisfaction of wants. In urging that social progress re- 
 quires a progressive diminution of the part played by matter 
 and the industries in which quantity of matter is a chief deter- 
 minant factor, I do not merely mean that civilisation implies an 
 increasing valuation of the intellectual and moral faculties and of 
 their activities. Most of the fine arts require some matter for 
 their manipulation and for their instruments; every branch of the 
 intellectual life needs some material equipment. But in these 
 occupations and in their products quantity of matter is of an im- 
 portance that is slight, often wholly negligible. A fine art, a 
 skilled craft, a machine industry, may each handle the same sort 
 of material, metal, stone or wood, but the quantity of this mate- 
 rial will have a rapidly increasing importance, as one descends 
 from the manipulation of the artist to the craftsman and from the 
 craftsman to the manufacturer. 
 
 If, then, we are to secure an economy of social progress in which 
 relatively less importance is to be given to those industries which
 
 3 i6 WORK AND WEALTH 
 
 are less humanly desirable, alike in the work they involve and in 
 the satisfaction their products yield, we must have a society 
 which becomes increasingly qualitative in its tastes and interests 
 and in its human constitution. A larger proportion of its real 
 income must take shape in non-material goods, or in material 
 goods which depend more for the satisfaction they yield upon 
 their quality. In a word, there must be a tendency to keep life 
 simple in regard to material consumption. 
 
 But when one says that society itself must grow more qualita- 
 tive in its constitution, a more difficult consideration emerges. 
 In the discussion regarding the bearing of the growth of popula- 
 tion upon general welfare too much attention was formerly ac- 
 corded to the merely quantitative question. Too little is now 
 accorded. Under the title of eugenics the population question 
 threatens to become entirely qualitative. Now this is evidently a 
 mistake. For whatever interpretation we accord to social welfare, 
 some consideration as to the desirable number and rate of growth 
 of the population is evidently of importance. Though it may be 
 agreed that vital values in their spiritual and even in the physi- 
 cal meanings are distinctly qualitative, and that, as far as pos- 
 sible, a society should set itself to maintain conditions of sex se- 
 lection favourable to admittedly finer and healthier types, this 
 issue of quality must not be detached from the issue of quantity. 
 As in the economy of the individual life a proper allowance of at- 
 tention must be secured for physical wants and for the material 
 production and consumption they involve, so in a society the size 
 of its physical structure, the number of cooperating human cells 
 through which it lives, is a consideration that inheres in the art 
 of social life. Ruskin was surely right in his general setting of the 
 social question 'How can society consciously order the lives of 
 its members so as to maintain the largest number of noble and 
 happy human beings?' 1 How much consciousness or calculation 
 can advantageously be brought to bear upon the regulation of the 
 play of the sexual and related instincts and desires, is a highly 
 controversial question into which we need not enter here. But 
 so far as social reform can make good any claim to regulate the 
 growth of the population, its regulation should clearly have re- 
 1 Time and Tide, par. 123.
 
 PERSONAL AND SOCIAL EFFICIENCY 317 
 
 gard to quantity as well as quality. A large number of physi- 
 cally sound and happy human beings must be taken as a prime 
 condition of social welfare. It is not easy to defend the prosper- 
 ity of a people who shall seem to purchase a fuller and even a 
 more spiritually complex life for some or all their members by a 
 continuous reduction of their numbers. Where life is valued and 
 valuable the natural disposition to extend its values as widely as 
 is consistent with their maintenance is a natural instinct difficult 
 to impugn. If it be contended that this is in some sense an ad- 
 mission of the social validity of the tendency to multiply so as to 
 'press on the means of subsistence,' I might admit the interpre- 
 tation, provided it were understood that 'means of subsistence' 
 included all the essentials of spiritual as well as of physical life. 
 I do not, however, wish to dogmatise upon a difficult and exceed- 
 ingly debateable matter, but only to insist that a conscious art of 
 social progress can no more ignore quantity than quality of popu- 
 lation in any general calculus of human welfare. 
 
 6. The greater equalisation of incomes which would follow 
 from the absorption of unproductive surplus into public income 
 and into remuneration of labour, would be favourable to the two 
 conditions of social progress here laid down, a restriction upon 
 the growth of material consumption and a reasonable regulation 
 of the growth of population. For, as luxury and material waste 
 are seen largely to arise as instruments for the display of individ- 
 ual prowess in competitive industry, the removal of that compe- 
 tition from fields which yield large means for such display would 
 necessarily quench the zest which it exhibits, as well as stop the 
 sources of such extravagant expenditure. For when profuse dis- 
 play of material apparatus is no longer possible, the natural de- 
 sire for personal distinction, which is the deepest-rooted of all per- 
 sonal desires, will tend more and more to find expression in those 
 arts of refined living which are more truly personal in that they 
 cause the more intellectual and spiritual qualities of personality 
 to shine forth. If, for the quantitative display of material 
 goods, there can gradually be substituted a qualitative dis- 
 play of spiritual goods, this change will be attended by a cor- 
 responding change in economic activities. There will be a re- 
 duction in the coarser forms of productive energy making large
 
 3 i8 WORK AND WEALTH 
 
 drafts upon the material resources of nature, and an increase of 
 the higher forms of energy whose drafts on these material re- 
 sources are relatively small. 
 
 The proportion of non-material to material wealth will increase, 
 and there will be a corresponding increase in the proportion of 
 productive activities that contain large factors of creative in- 
 terest. Every enlargement of the scope for free individual ex- 
 pression through economic demand, even for purely material 
 goods, will have a necessary effect in curbing the dominion of ma- 
 chinery and of routine labour. For social arrangements which 
 enable and incite each consumer to seek a more personal satis- 
 faction of his individual needs will force producers to study these 
 individual needs and satisfy them. This cannot be done by mere 
 machine-economy, which rests upon the opposite hypothesis that 
 large numbers of consumers will consent to sink their individual 
 differences of need and taste accepting certain routine forms of 
 goods which do not exactly meet the requirements of any one of 
 them. It is, therefore, reasonable to expect that a more equal 
 and equitable distribution of income will evoke in the masses of 
 population, who now consent to consume common 'routine' 
 goods because they cannot afford to consult their particular 
 tastes and preferences, a more personal and discriminative de- 
 mand, which will set strict limits upon the machine economy and 
 call for a larger application of individual skill in the various crafts. 
 Or if, valuing more highly as fields for personal expression the less 
 material elements in their standard of living, they still consent to 
 utilise routine industry for the satisfaction of their common phys- 
 ical needs, they will apply an increasing proportion of their in- 
 terests and their incomes to the acquisition and enjoyment of 
 those goods, artistic, intellectual, emotional, which are more 
 ennobling alike in their production and their consumption. 
 
 7. A final word upon population. Is there not reason to be- 
 lieve and hope that this sounder distribution of work and wealth 
 will contribute to a satisfactory solution both of the quantitative 
 and the qualitative population question? If women were no 
 longer forced by economic pressure into marriages for which they 
 had no natural inclination, much unfit parentage and much in- 
 competent nurture would be averted. If they were free to live
 
 PERSONAL AND SOCIAL EFFICIENCY 319 
 
 unmarried, or to choose the father of their children and the size 
 of their family, the normal current of those instincts making for 
 the preservation and instinct of the race, obstructed by artificial 
 barriers of economic circumstances, would be restored to their 
 natural course. If the support of a young family were no longer 
 a heavy and injurious strain upon the economic resources of the 
 parents and their future career a grave anxiety, the human love of 
 children and the attractions of a complete home life would proba- 
 bly check that rapid decline of the birth-rate which to many is 
 one of the darkest features of our present order. It would not, 
 indeed, restore the reckless propagation of former times which 
 imposed on parents, and chiefly upon the mother, a burden in- 
 jurious in its private incidence and detrimental to society. But 
 while the better economic order would stop compulsory mar- 
 riages and undesired and therefore undesirable offspring, it 
 would restore the play of the normal philoprogenitive instincts. 
 The net effect would seem to be some retardation of the de- 
 cline of birth-rate in those types of families where the condi- 
 tions, physical and psychical, appear favourable to good nature 
 and good nurture for children, and a positive elimination of cer- 
 tain types of union unfavourable to sound offspring. The to- 
 tal effect upon the quantitative issue would of course depend upon 
 the balance between this freer play of the philoprogenitive in- 
 stinct and the other influences, not directly affected by economic 
 causes, which make for smaller families. But that the quality 
 or character of the population must be improved by the more 
 natural play of the rejective and selective influences here indi- 
 cated can hardly admit of controversy. Indeed, it may well be 
 urged that the crowning testimony to the validity of the human 
 law of distribution will consist in the higher quality of human 
 life it will evoke by liberating and nourishing the natural art of 
 eugenics in society.
 
 CHAPTER XXII 
 
 SOCIAL SCIENCE AND SOCIAL ART 
 
 i . The task of a human valuation of industry involved at the 
 outset the arbitrary assumption of a standard of value. That 
 standard consisted in a conception of human well-being appli- 
 cable to the various forms of human life, man as individual, as 
 group or nation, as humanity. Starting from that conception of 
 the health, physical and spiritual, of the individual human or- 
 ganism, which is of widest acceptance, we proceeded to apply the 
 organic metaphor to the larger groupings, so as to build up an in- 
 telligible standard of social well-being. This standard, at once 
 physical and spiritual, static and progressive, was assumed to be 
 of such a kind as to provide a harmony of individual welfares 
 when the growing social nature of man was taken into due 
 account. 
 
 With the standard of human well-being we then proceeded to 
 assign values to the productive and the consumptive processes of 
 which industry consists, examining them in their bearing upon 
 the welfare of the individuals and the societies engaging in them. 
 
 Now this mode of procedure, the only possible, of course in- 
 volved an immense petitio principii. The assumption of any close 
 agreement as to the nature of individual well-being, still more 
 of social well-being, was logically quite unwarranted. 
 
 Economic values have, indeed, an agreed, exact and measur- 
 able meaning, derived from the nature of the monetary standard 
 in which they are expressed. Now, no such standard of the hu- 
 man value of economic goods or processes can be established. 
 Yet we pretended to set up a standard of social value and to apply 
 a calculus based upon it, claiming to assess the human worth 
 which underlies the economic costs and utilities that enter into 
 economic values. 
 
 Has this procedure proved utterly illicit? I venture to think 
 not. Though at the outset our standard was only a general phrase 
 
 320
 
 SOCIAL SCIENCE AND SOCIAL ART 321 
 
 committing nobody to anything, the process of concrete applica- 
 tion, in testing the actual forms of work and wealth which make 
 up industry, gave to it a continual increase of meaning. While 
 the widest divergence would be found in the formal definitions of 
 such terms as "human welfare" or "social progress," a large and 
 growing body of agreement would emerge, when a sufficient num- 
 ber of practical issues had been brought up for consideration. The 
 truth of our standard and the validity of our calculus are estab- 
 lished by this working test. It is not wonderful that this should 
 be so, for the nature and circumstances of mankind have so much 
 in common, and the processes of civilisation are so powerfully as- 
 similating them, as to furnish a continually increasing community 
 of experience and feeling. It is, of course, this fund of ' com- 
 mon sense' that constitutes the true criterion. The assumption 
 that ' common sense ' is adequate for a task at once so grave and 
 delicate may, indeed, appear very disputable. Granting that 
 human experience has so much in common, can it be claimed that 
 the reasoning and the feeling based on this experience will be so 
 congruous and so sound as to furnish any reliable guide for con- 
 duct? Surely ' common sense ' in its broadest popular sense can 
 go a very little way towards such a task as a human interpreta- 
 tion of industry. 
 
 There is no doubt a good deal of force in this objection. If we 
 are to invoke 'common sense' for the purposes of an interpreta- 
 tion or a valuation, it must evidently be what is termed an 
 ' enlightened common sense. ' And here at once we are brought 
 into danger lest enlightenment should not supply what is re- 
 quired, viz., a clearer or more fully conscious mode of common 
 sense, but a distorted or sophisticated mode. How real this 
 danger is, especially in the conduct of public affairs, may be re- 
 cognised from the excessive part played by certain highly con- 
 scious and over-vocal interests of the commercial and intellect- 
 ual classes in the art of government. The most pressing task of 
 civilisation in the self-governing nations of our tune is so to spread 
 the area of effective enlightenment as to substitute the common 
 sense of the many for that of the few, and to make it prevail. It 
 is this common sense, more or less enlightened, that the disin- 
 terested statesman takes for the sanction of his reading of the
 
 3 22 WORK AND WEALTH 
 
 general will which he endeavours to express in the conduct of 
 public affairs. That it is never at any time a certain, a perfectly 
 coherent, a precise criterion, will be readily admitted. But that 
 it is sufficiently intelligible, sufficiently sound, is the necessary 
 presupposition of all democratic statecraft. And, so far as it is 
 thus serviceable, it supplies a valid standard and a valid calculus 
 of social values. Though the reading of this standard and the 
 application of this calculus will always be subject to some bias 
 of personal idiosyncrasy, the weight of the general judgment 
 commonly prevails in the more important processes of social 
 valuation. 
 
 But, hi pinning our faith to enlightened common sense for an 
 interpretation or valuation of industry, we must not allow our- 
 selves to be deceived as to the amount of 'scientific accuracy' 
 which attends such a procedure. While this standard can and 
 must supply the rules and measurements which we apply in the 
 processes of detailed analysis and comparison by which we esti- 
 mate the costs and utilities and the net human values of the va- 
 rious industrial activities and products, we must not put into this 
 standard a stability it does not possess, or into the quantitative 
 methods it uses an authority for social conduct which they are 
 inherently disqualified from yielding. 
 
 2. The science and art of society have suffered so much from 
 want of exact and measured information that it is only right and 
 natural for immense importance to be attached to the collection of 
 masses of ordered and measured social facts. If a sufficient num- 
 ber of trained investigators could be set to work to gather, meas- 
 ure, sift and tabulate, the various orders of crude fact relating to 
 the employment, wages, housing, expenditure, health, thrift, edu- 
 cation, and other concrete conditions of the poorer grades of town 
 and country dwellers, it seems as if a number of accurate and 
 valid generalisations would emerge by clear induction upon which 
 could be constructed an absolutely scientific treatment of poverty. 
 Or, again, to take a narrower and more distinctively economic 
 issue, that of the shorter working day. If a careful series of ob- 
 servations and experiments could be made in a number of rep- 
 resentative businesses, as to the effect upon the size, cost and 
 quality of output produced by given reductions in the hours of
 
 SOCIAL SCIENCE AND SOCIAL ART 323 
 
 labour among various classes of workers, it might appear as if an 
 accurately graded social economy of the working day could be 
 attained by calculations. 
 
 But though statesmen, philanthropists and reformers are more 
 and more influenced in their judgments and policies by these 
 measured facts, no safe mechanical rules for the guidance of their 
 conduct in any social problem can be based upon them. The 
 facts and figures which appear so hard and so reliable are often 
 very soft and ineffective tools for the social practitioner. There 
 are several defects in them regarded as instruments of social prog- 
 ress. 
 
 It is hardly ever possible to prove causation by means of them. 
 You may obtain the most exact statistics of housing conditions 
 and of death-rates for the population of a group of towns, but you 
 cannot prove to what extent 'back to back' houses affect infant 
 mortality. No figures professing to measure the causal connec- 
 tion between drink and crime or insanity, income and birth-rate, 
 or any other two social phenomena, possess the degree of validity 
 they claim. Why? Because you can never isolate the factors 
 completely in any organic or social problem, and you can never 
 know how far you have failed to isolate them. You may, indeed, 
 by varying the conditions of your experiments or observations 
 sufficiently, obtain practical proof of organic causation, but you 
 can seldom express this causation in terms of any quantitative 
 accuracy. Still more is this true of psychological and social prob- 
 lems. A purely descriptive science of society may attain a con- 
 siderable degree of quantitative accuracy, but the laws expressing 
 the causal relations of these measured facts will always lack the 
 certainty of operation and the measurability of action belonging 
 to the laws of chemistry and physics. 
 
 Now the chief facts with which the statesman and the social 
 reformer are concerned in forming judgments and policies are 
 these laws of causal relation, and not the crude measured facts 
 that constitute the raw material of statistics. This comparative 
 inexactitude or lack of rigidity in the laws of social science con- 
 stitutes the first difficulty in applying the science to the art of 
 social conduct with the same amount of confidence with which 
 the laws of physics and chemistry are applied to the mechanical
 
 3 2 4 WORK AND WEALTH 
 
 arts. But another difficulty quite as grave as this want of rigidity 
 in social facts is the instability of the standard. In all processes 
 of physical measurement it is customary to make allowances for 
 errors due to what is called ' the personal equation, ' abnormali- 
 ties of observation in the experimenter. But the standard of 
 human valuation, the enlightened common sense of a community, 
 applied to interpret social phenomena in terms of 'utility' or 
 'welfare,' will evidently be subject to much wider variations, and 
 the interpretation of this standard by statesmen, or other indi- 
 vidual agents of society, will be subject again to wide errors of 
 personal bias. 
 
 Illustrating from the economic sphere which is our concern, 
 that specialisation of industrial life which has made three quarters 
 of our population town-dwellers and is making our nation con- 
 tinually more dependent upon foreign supplies of food, will have 
 a very different value set on it by the narrower nationalism 
 which believes the interests and ambitions of nations to be ir- 
 reconcilable, and by the wider political outlook which conceives 
 the economic interdependence of nations as in itself desirable and 
 as the best guarantee of national security. Or again, a difference 
 of view or sentiment regarding the relative worth of the personal 
 qualities of enterprise and self-reliance on the one hand, of plod- 
 ding industry and sociality upon the other, must materially af- 
 fect the values given to such phenomena as emigration, public 
 provision against unemployment, copartnership, taxation of high 
 incomes or inheritances. Indeed it is quite manifest that with 
 every difference of the range of sympathy and imagination the 
 meaning which enlightened common sense will give to social 
 welfare, and to every fact submitted to this test, will vary. 
 
 These considerations may seem at first sight to invalidate the 
 entire purpose of this book, the endeavour to apply a social cal- 
 culus for the valuation of industry. So long as the cost and 
 utility of economic material and process is expressed in terms 
 of money, you have a fixed standard capable of yielding exact 
 valuations. Endeavour to resolve this cost and utility into terms 
 of human welfare or desirability, you appear to have adopted a 
 fluctuating standard that can give no serviceable information. 
 
 3. The truth, of course, is that a scientific valuation of any-
 
 SOCIAL SCIENCE AND SOCIAL ART 325 
 
 thing can only proceed by way of quantitative analysis. A 
 standard of valuation which should regard qualitative differences 
 as ultimate would not be scientific at all. It might be aesthetic 
 or hygienic or ethical, according to the nature of the qualitative 
 differences involved. A strictly scientific valuation of wealth, or 
 of cost or of utility, or of life itself, must apply a single standard 
 of measurement to all the various objects it seeks to value, i. e. it 
 must reduce all the different objects to terms of this common 
 denominator. It can measure and value all forms of purchasable 
 goods or services, however various in nature, through the market 
 processes which reduce them to a single monetary equivalent. It 
 can measure and value labour-costs of different sorts, either by 
 a monetary standard or by some measure of fatigue or vital ex- 
 penditure. It can measure the utility of various sorts of food or 
 of fuel, by comparing the quantities of working-power or output 
 which upon an average they yield. It can ascertain the vital 
 values of different towns and occupations, incomes, races, in 
 terms of longevity, fertility, susceptibility to diseases, etc. 
 
 This method, essential to scientific analysis, rests on an assump- 
 tion that i worth of bad books is of the same value as i worth 
 of good books. This assumption is true for the purpose to which 
 it is applied, that of a market valuation. It assumes that a year's 
 life of an imbecile or a loafer is worth the same as a year's life of 
 a saint or a genius, and so it is for the purpose of vital statistics. 
 
 This is of course universally admitted. Science proceeds by 
 abstraction: it does not pretend to describe or explain the indi- 
 viduality or particular qualities of individual cases, but to dis- 
 cover common attributes of structure or composition or behav- 
 iour among numbers of cases, and to explain them in terms of 
 these common characters. 
 
 So far, then, as the so-called value of anything, or any happen- 
 ing, consists in its uniqueness or idiosyncrasy, this value neces- 
 sarily evades scientific analysis. It is only the common proper- 
 ties, the regularities, the conformities, that count for scientific 
 valuation. Nay, more. So far as science takes account of indi- 
 vidual qualities, it is in the capacity of eccentricities, i. e. it 
 measures the amount of their variation from the average or normal. 
 It cannot entertain the notion that there is any sort of difference
 
 326 WORK AND WEALTH 
 
 which is inherently immeasurable, i. e. that there is difference 
 in kind as well as in degree. 1 
 
 4. A scientific analysis treats all differences as differences of 
 degree. So-called difference of quality or kind it either ignores, 
 or it seeks t9 reduce them to and express them in differences of 
 quantity. This endeavour to reduce qualitative to quantitative 
 difference is the great stumbling-block in all organic science, but 
 particularly in the departments of psychology and sociology. The 
 difficulty is best illustrated in the recent extension of quantitative 
 analysis into economics by the method of marginal preferences. 
 Not content with the assumption that the particular costs, con- 
 sumable qualities, etc., of any two articles selling for i each may 
 be disregarded, and the single property of their market value 
 abstracted for consideration, the mathematical economists now 
 insist that the study of marginal preferences discloses impor- 
 tant laws of the psychology of individuals and societies. 
 
 The whole process of expenditure of income appears to be 
 replete with instances of the capacity of the human mind to 
 measure and apply a quantitative comparison to things which 
 seem to be different in kind. It might seem as if my desire to help 
 the starving population of India in a famine, and my desire to 
 attend a Queen's Hall concert this evening were feelings, not 
 merely of different intensity, but of such widely different nature 
 that they could not be accurately measured against each other. 
 And yet this miracle is said to be actually performed, when I 
 decide upon due consideration to divide the 7$ 6d in my purse so 
 as to give 55 to the Famine Fund and to buy a 2S 6d ticket for the 
 concert, instead of the more expensive ticket I should have 
 bought had I not been lured to the Famine meeting. I might 
 have given the whole 7$ 6d to the Famine Fund, and missed the 
 concert. Why did I not? I must have performed the very deli- 
 cate spiritual operation of reducing my humanitarian feeling to 
 common terms with my love of music, and to have struck a 
 balance which can only mean that I consider the additional satis- 
 
 1 It was precisely on this rock that J. S. Mill's utilitarianism split. He tried to 
 incorporate in the quantitative calculus of Benthamite pleasure and pain distinc- 
 tions of the quality or worth of different sorts of pleasure and pain, and failed to 
 furnish any method of reducing them to common terms.
 
 SOCIAL SCIENCE AND SOCIAL ART 327 
 
 faction I would have got from giving another 25 6d to the Famine 
 Fund to be a little less than the satisfaction I would get from the 
 concert. But this, of course, is a single crude instance of a far 
 more elaborate process of comparison which underlies the whole 
 expenditure of my income. After the routine expenditure upon 
 necessaries and comforts, which may be said to represent my 
 habitual standard of consumption, has been defrayed, there are 
 various attractive uses to which every other sovereign and shil- 
 ling may be put. All sorts of different appeals of pleasure, duty, 
 pride, press their claims through a thousand different channels. 
 In order to apportion my expenditure as I do, I must be conceived 
 as reducing all these claims to some common standard of desir- 
 ability, and deciding how much to lay out on this, how much on 
 that. That physical satisfactions can be compared with one 
 another, by the application of some standard of pleasure may 
 appear intelligible enough. But that a sense of moral duty can 
 be brought into direct comparison with a physical pleasure, or 
 that various duties can be compared in size or strength with one 
 another, would seem almost impossible. Yet this is done inces- 
 santly and quickly, if not easily. Even when it is claimed that 
 some duties are so paramount that a good man will refuse to 
 ' weigh' any other claim against them, assigning them a value 
 which, he says, is 'infinite,' the marginal economist will not 
 admit the claim to exemption. ' This only means that to him the 
 total difference between the command of things in the circle of 
 exchange that he already enjoys, and an indefinite, or unlimited 
 command of them, does not weigh as heavy in his mind as the dis- 
 honour or the discomfort of the specific thing he is required to do. 
 It does not mean that his objection is "infinite." It merely 
 means that it is larger than his estimate of all the satisfaction 
 that he could derive from unlimited command of articles in the 
 circle of exchange, and this is a strictly, perhaps narrowly, limited 
 quantity. ' 1 
 
 But though there are men whose honour is so incorruptible as 
 always to 'outweigh' other considerations, the ethics of bribery 
 make it clear that a weaker sense of honour can be measured 
 against material satisfaction, and that is all that seems necessary 
 
 1 Wicksteed, Common Sense of Political Economy, p. 405. The italics are mine.
 
 328 WORK AND WEALTH 
 
 to support the view that such qualitative distinctions can ' be re- 
 duced to questions of quantity.' Nor is it merely a matter of the 
 monetary valuation through expenditure of incomes. Precisely 
 the same problem arises in the disposal of one's time or energy. 
 How much shall be given to the performance of this or that per- 
 sonal or family duty, to recreation, or to study? In what propor- 
 tions shall we combine these activities? If a curtailment of money 
 or of time is necessary, how much shall be taken from this, how 
 much from that employment? 
 
 But it is needless to multiply examples. When any scientific 
 valuation is taken, all qualities are abstracted and quantities 
 only are compared and estimated. As in economics, so in ethics. 
 The moral struggle to resist a temptation is nearly always set in 
 scientific psychology as a mechanical problem, for when the ethi- 
 cist professes to introduce some imponderable 'freedom of the 
 will' he has to throw overboard his science. A 'conflict of duties/ 
 as Mr. Wicksteed recognises, implies that 'duty itself is a quanti- 
 tative conception. ' l 
 
 5. Similarly with the scientific politician who seeks to make 
 full use of quantitative analysis. He too is compelled to visu- 
 alise and represent the psychological operation through which a 
 political judgment is reached as a mechanical one, conceived in 
 terms of size, weight, strain or intensity. In his Human Nature 
 in Politics Mr. Graham Wallas gives a very interesting example 
 of the scientific valuation of a process of political thinking, viz. 
 the process by which Mr. Gladstone, in the autumn and winter 
 of 1885-6, must be conceived to have arrived at his Home Rule 
 policy, ' thinking incessantly about the matter' and 'preparing 
 myself by study and reflection. ' 
 
 After describing, with the aid of Lord Morley's Life, the 
 various studies and courses of reflection employed, the 'calcu- 
 lations ' of the state of f eeling in England and Ireland, the exami- 
 nation of various types of federation, as found in past and current 
 history, the statistical reports upon finance, law and other con- 
 crete issues, considerations of the time and opportunity, the 
 play of the emotional valuations, 'the irresistible attraction for 
 him of all the grand and external commonplaces of liberty and 
 
 'P. 409.
 
 SOCIAL SCIENCE AND SOCIAL ART 329 
 
 self-government/ Mr. Wallas sees the results of all this acquisi- 
 tion of knowledge and reflection gathering and being coordinated 
 into a problem in which the factors are quantities and the solu- 
 tion 'a quantitative solution/ 'a delicate adjustment between 
 many varying forces.' 1 'A large part of this work of complex 
 coordination was apparently in Mr. Gladstone's case uncon- 
 scious/ an operation he declares, 'rather of art than of science.' 
 Now, since ' the history of human progress consists in the gradual 
 and partial substitution of science for art/ it is desirable to bring 
 out with clearer consciousness, and fortify with greater accuracy 
 of knowledge, the processes of political thinking. 'Quantitative 
 method must spread in politics and must transform the vocabu- 
 lary and the associations of that mental world into which the 
 young politician enters. Fortunately, such a change seems at 
 least to be beginning. Every year larger and more exact col- 
 lections of detached political facts are being accumulated; and 
 collections of detached facts, if they are to be used at all in po- 
 litical reasoning, must be used quantitatively.' 2 Since the prob- 
 lems of political conduct are thus essentially quantitative, they 
 can, in theory at any rate, be 'solved' by science. 'The final 
 decisions which will be taken either by the Commons or by 
 Parliament in questions of administrative policy and electoral 
 machinery must therefore involve the balancing of all these and 
 many more considerations by an essentially quantitative proc- 
 ess. 3 
 
 6. Now how far is it true that any political problem is essen- 
 tially quantitative and soluble by a quantitative process? It is 
 of course to be admitted at once that the science of statistics 
 will feed a statesman's mind with a variety of ordered and meas- 
 ured facts. But will this mind, working either scientifically or 
 artistically, consciously or subconsciously, go through a dis- 
 tinctively mechanical process of balancing and measuring and 
 register a quantitative judgment? A scientific setting of the 
 process must indeed so present it. But, then, a scientific setting 
 of any process whatsoever sets it thus in purely quantitative 
 form. The real issue is how far this scientific setting is competent 
 to interpret and explain the facts, and to deliver a judgment 
 1 P. 153. * P. 156. * P. 159. The italics are mine.
 
 330 WORK AND WEALTH 
 
 which shall be authoritative for the conduct of an individual or a 
 society. 
 
 In order to test the scientific claim let us take what seems to 
 be a very different sort of action from that of the politician or 
 the business man, that of the artist. Follow the mind of the 
 painter as he plies his art. Each of his operations too involves 
 considerations of quantity and measurement, scope and focus, 
 adjustment, coordination, balance, the application of definite 
 blends of colours: optics, anatomy, and other sciences feed his 
 mind with exact knowledge. A delicate adjustment of quantities 
 in line and colour is involved in every part of his artistic operations. 
 But does the operation consist of these quantitative arrangements 
 and can it be understood or 'appreciated' by analysing them? 
 Evidently not. Why not? Because in such an analysis or ex- 
 planation the essentially qualitative or creative action of the 
 artist, which gives unity and artistic value to the whole operation, 
 escapes notice. Science kills in order to dissect. So in the case 
 of every other art. A poem involves certain ordered arrange- 
 ments of sound which may be expressed in quantitative terms of 
 rhythm and prosody. But any attempt to 'resolve' it into these 
 forms loses its spirit, its unity, its value as a poem. Students of 
 the drama have sometimes explained or interpreted a tragedy of 
 Sophocles or Shakespeare in terms of the gradation of intensity 
 of the various emotions involved, the length of pauses of suspense, 
 the balancing, relief and interlacing of the plots or episodes, the 
 relative strength or height of the climaxes and subclimaxes, the 
 growing rapidity of movement towards the catastrophe. But can 
 it be pretended that this 'mechanics' of the drama can furnish a 
 standard of appreciation, or supply laws according to which a 
 'good' drama may be constructed or appreciated? No. An 
 artistic operation is essentially organic, creative and qualitative. 
 None of these characters can really be reduced to quantity. 
 Science by quantitative analysis can only deal with the skeleton 
 not with the life that informs it. 
 
 I think this eternal inability of science adequately to interpret 
 value, or explain a work of art, will be generally admitted. It is 
 due to the fact that this work and its value are inherently inca-
 
 SOCIAL SCIENCE AND SOCIAL ART 331 
 
 pable of being reduced to quantities. The difference between one 
 picture and another, one poem and another is a difference of 
 quality. It is of course true that by a merely linguistic necessity 
 we often speak of a picture as being 'much' finer than another, 
 and compare the 'greatness' of one poet with that of another. 
 But we are aware all the time that we are really comparing un- 
 likes, dealing with qualitative differences. On no other sup- 
 position indeed can we understand the valuation set upon a work 
 of genius as compared with one of talent. 
 
 " Oh the little more, how much it is, 
 And the little less what worlds away." 
 
 What then do economists mean when they insist that quali- 
 tative differences, the desires and satisfactions which have such 
 widely diverse origins and natures, can be weighed and measured 
 against one another, and that problems of industry are essentially 
 and ultimately quantitative? Our examination of artistic activ- 
 ities has shown that in each case quantities are involved, but 
 that in no case do quantities constitute the problem of action. . 
 But how, it may be said, do you dispose of the admitted facts 
 that by means of monetary valuations these diverse desires and 
 satisfactions are reduced to a common standard, are compared, 
 and that a course of conduct is apparently based upon these 
 quantitative considerations? 
 
 The answer is that this is an entirely illusory account of the 
 psychical process by which a man lays out his money, or his time, 
 or his energy. He does not take the several uses to which he 
 might apply the means at his disposal, reduce them, in thought 
 or in feeling, to some common term, and so measure the amount 
 he will expend upon each object that the 'marginal' or 'final' 
 portion of each use shall be exactly equal in the utility it yields. 
 The 'marginalist' 1 is correct in saying that the utility imputed 
 to the last sovereign I expend on bread during the year must be 
 
 1 This older doctrine of marginalism, concerned with the comparison of marginal 
 utilities, or marginal costs, in the application of expenditure of productive energy, 
 must not be confused with the novel doctrine which we discussed in Chapter XI 
 in relation to wages. In the newer doctrine any unit of a supply may be regarded as 
 the marginal unit and every unit as equally productive or useful. According to th 
 older doctrine each unit has a different cost or utility.
 
 332 WORK AND WEALTH 
 
 considered to be neither greater nor less than that imputed to the 
 last sovereign's worth of tobacco, or books, holiday or charitable 
 subscriptions. In precisely the same sense it is true that the last 
 brushful of green and brown and Turkey red expended on a pic- 
 ture has the same art- value to the painter. 
 
 Perhaps the issue can be made clearer by reference to an art 
 usually considered less 'fine' and more closely affected by quanti- 
 tative considerations than painting, the culinary art. The com- 
 position of a dish is here expressed in proportions of its various 
 ingredients, so much flour, so many ounces of raisins, so many 
 eggs, so much sugar, etc. The marginalist would dwell upon the 
 crucial fact that the last pennyworth of the flour, raisins, eggs 
 and sugar, taken severally, had an equal value for the pudding, 
 and that these marginal or final increments were in some way 
 causal determinants of the composition of the pudding, because 
 in using the ingredients the cook took care to use just so much of 
 each, and neither more nor less. And it is quite true that the 
 delicacy of the culinary art will in fact be displayed in deciding 
 whether to put in another handful of raisins, another egg, or a 
 spoonful more sugar. But, from the standpoint of trying to ap- 
 preciate the virtue or worth of the dish as a culinary creation, it 
 cannot be admitted that any special importance or causal deter- 
 mination attaches to the last increments of the several ingre- 
 dients. For it is evident that the 'how much' and therefore the 
 'margin' of each ingredient is itself determined by the conception 
 of the tout ensemble in the mind of the creator or inventor. 
 
 And this evidently applies to every form of composition em- 
 bodying some unity of design or purpose, whether the treatment 
 of a subject in pictorial or dramatic art, the making of a new dish, 
 the construction of a machine, the arrangement of a business, or 
 the laying out of a garden or a fortune. So far as an economical 
 use is made of materials or means of any kind for the attainment 
 of any end this marginal equivalence is implied. The scientific 
 analysis of any composite arrangement, mechanical, organic, 
 conscious, involves this marginal assumption. It is an axiom of 
 all 'economy' whatsoever. 
 
 But it explains nothing. Nay, in dealing with any organic be- 
 ing on any plane of action, it darkens counsel. It does so in sev-
 
 SOCIAL SCIENCE AND SOCIAL ART 333 
 
 eral ways. First by assuming or asserting that the human mind 
 can and does get rid of qualitative differences by referring them 
 to a quantitative standard: secondly, by assuming or asserting 
 that organic unity can be broken up into its constituent parts and 
 explained in terms of these measured parts; thirdly, by assuming 
 or asserting a uniformity of nature which conflicts with the 
 'novelties' in which creative energy expresses itself. All these 
 fallacies are just as much involved in the attempt to explain the 
 expenditure of an income as a purely quantitative problem, as in 
 the attempt to explain the art-value of a picture in terms of the 
 respective quantities of line and colour. In each case the root- 
 fallacy is the same, the illicit substitution of the abstract ' quan- 
 tity' for the actual stuff, which is always qualitative and is never 
 identical in any two cases, or at any two tunes. 
 
 7. In laying out my income, I do not in fact compare all my 
 several needs or tastes, and having assigned so much utility or 
 desirability to each, plan my expenditure so as to spend on each 
 just as much as it is worth, equalising all expenditure at the mar- 
 gins so as to maximise the aggregate. Even Benjamin Franklin or 
 Samuel Smiles would not really do this, though they might think 
 they did, and perhaps draw up schedules to enforce the notion. 
 So far as I act like a free, rational being, not a creature of blind 
 custom or routine, I employ all my personal resources of knowl- 
 edge, taste, affection, energy, time, and command of material 
 resources, in trying to realise my ideal of a good or desirable life. 
 In the execution of this design, however it be regarded, self- 
 realisation or career, I utilise my various resources in a manner 
 strictly analogous to that in which the artist employs the mate- 
 rials and instruments of his art. Upon the canvas of time I paint 
 myself, using all the means at my disposal to realise my ideal. 
 Among these means is my money income. Its expenditure goes 
 into the execution of my design. So far as I am justified in sepa- 
 rating my expenditure of money from the expenditure of my 
 time and other resources, and in regarding the design as an ' eco- 
 nomic picture,' I can readily perceive that the unity of my artis- 
 tic purpose involves and determines the expenditure of my in- 
 come in definite proportions upon the various objects whose 
 'consumption' contributes to the design. But these proportions
 
 334 WORK AND WEALTH 
 
 are not determined by a calculation of the separate values of the 
 various items. For, strictly speaking, they have no separate 
 value, any more than have the lines or colours in a picture. Only 
 by consideration of what we may term indifferently the artistic 
 or organic purpose of the whole can a true appreciation or valua- 
 tion be attained. The full absurdity of suggesting that anything 
 is learned, either in the way of valuation or of guidance, by the 
 quantitative analysis, or the wonderful discovery of equivalence 
 of value at the margins, will now be apparent. This mathemati- 
 cal analysis can do no more towards explaining the expenditure 
 of income than explaining the expenditure of paint. Of course, 
 the expenditure at the margins appears to produce an equal 
 utility: that truth is obviously contained in the very logic of the 
 quantitative analysis. But that quantitative analysis, neces- 
 sarily ignoring, as it does, the qualitative character which the 
 organic unity of the whole confers upon its parts, fails to perform 
 the psychological interpretation claimed for it. 
 
 So far as it is true that the last sovereign of my expenditure in 
 bread equals in utility the last sovereign of my expenditure in 
 books, that fact proceeds not from a comparison, conscious or 
 unconscious, of these separate items at this margin, but from the 
 parts assigned respectively to bread and books in the organic 
 plan of my life. Quantitative analysis, inherently incapable of 
 comprehending qualitative unity or qualitative differences, can 
 only pretend to reduce the latter to quantitative differences. 
 What it actually does is to ignore alike the unity of the whole 
 and the qualitativeness of the parts. 
 
 Nor is this all. It is not even true that an application of quan- 
 titative analysis does find exact equivalence of values at the mar- 
 gins. Taking a concrete instance, it is not true that the last sov- 
 ereign of my expenditure in books equals, or even tends exactly 
 to equal, in utility, that of my last sovereign's expenditure on 
 bread. This would be the case if the future tended precisely to 
 repeat the past. In that event my experience of the economy of 
 last year's expenditure would progressively correct any errors, 
 and I should come to employ my resources with greater economy 
 or exactitude to the attainment of the same design. But I am 
 not the same this year as last, my environment is not the same,
 
 SOCIAL SCIENCE AND SOCIAL ART 335 
 
 my resources are not the same, and the plan of life I make will 
 not be the same. This awkward factor of Novelty, involved in 
 organic nature, belongs to every creative art, being indeed of the 
 very essence alike of art and of creation, and impairs to an in- 
 calculable extent the quantitative calculus and its marginal in- 
 terpretation. An addition of 100 to my income this year 
 cannot be laid out by calculation so as to increase each sort of 
 expenditure to an extent which will secure marginal equivalence 
 of utility. That is to say, I cannot tell what will be the best em- 
 ployment of my larger income, until I have tried. The larger 
 income will produce nowhere a strictly proportionate increase 
 of expenditure on a number of several objects. It would shift 
 my economic plan of life, making a new kind of life, and involving 
 all sorts of changes in the items, which follow as consequences 
 from the changed organic plan. This new plan I cannot accu- 
 rately calculate or forecast. It will work itself out as I proceed. 
 Its execution involves no doubt elements of forethought and even 
 calculation, but the central and essential change will proceed 
 from some novelty of conception, some qualitative change of 
 purpose. In a word, it is the creative power of man, the artist, 
 that is ever at work, and the art faculties of inspiration, faith and 
 adventure will lead him to experiment anew with his resources. 
 As a man gains more intelligence, undergoes some new critical 
 experience of his outer or his inner life, encounters some new 
 personal influence, his entire mode of living will change, and in- 
 numerable alterations in the outlay of his income will take place. 
 Some articles of earlier expenditure will disappear, new articles 
 will take their place, and the respective importance of many arti- 
 cles remaining in the expenditure will be shifted. A change of 
 residence from country to town, a 'conversion,' religious or 
 dietetic, a transfer from an outdoor manual to an indoor sedentary 
 employment, marriage, or any other critical event, must bring 
 about some such large complex organic alteration. A comparison 
 of the items of expenditure before and after will shed interesting 
 light upon the results of the psycho-economic change of which 
 they afford a quantitative register, but it cannot be regarded as 
 an explanation of the change of heart or of outlook which is the 
 determinant act from which these shifts of values flow.
 
 33 6 WORK AND WEALTH 
 
 8. The life of a society presents this same problem on a larger 
 scale. On the plane of economic conduct which directly concerns 
 us, every one of the innumerable and incessant alterations in 
 methods of production and consumption ranks as an organic 
 novelty, and, in so far as it is novel, necessarily baffles quantita- 
 tive analysis and scientific prediction. It would, of course, be 
 incorrect, either in the case of an individual or of a society, to 
 represent any change as entirely novel. Organic growth itself 
 is largely a quantitative conception: the changes are proportion- 
 ate in size to former changes, and are in definite quantitative 
 relations to one another. The doctrine of continuity thus enables 
 us to go far in calculating the character of future changes. So 
 far the scientific interpretation of uniformity of nature carries 
 us. But quantitative growth, or any other set of quantitative 
 changes, however calculable, always carries some qualitative 
 and essentially incalculable elements of change. These are what 
 we signify by novelty. It is their occurrence in evolution that 
 baffles the clean logic of the geologist, still more of the biologist, 
 and far more of the psychologist. Whether they show them- 
 selves as 'faults' or 'sports' or 'mutations,' they represent the 
 disability of past experience to furnish 'laws' for their calculation, 
 and the practical importance which attaches to these incalculable 
 or qualitative changes is very considerable. Though they may 
 be comparatively infrequent and may appear on first inspection 
 almost negligible breaks in the otherwise calculable continuity of 
 the evolutionary process, their determinant importance is receiv- 
 ing ever greater recognition. In human conduct, individual or so- 
 cial, these mutations seem to play a larger part, chiefly by reason 
 of the operation of the so-called ' freedom ' of the human will. For 
 whatever philosophic view be held regarding the determination 
 of the acts of the will, its operation scatters mutations thickly 
 over the realm of human conduct. Hence it remains true that 
 science can do so much less in explaining and predicting human 
 history than in any other department of nature. No doubt here, 
 as elsewhere, science hopes to apply quantitative analysis of such 
 increasing accuracy as to enable it to determine and predict a 
 larger number of such mutations. Since there doubtless exist 
 quantitative conditions for every qualitative change, it may
 
 SOCIAL SCIENCE AND SOCIAL ART 337 
 
 seem theoretically possible for science some day to catch up with 
 'the art of creation.' This supposition, however, assumes that 
 the number of permutations and combinations in 'nature' is 
 limited, and that, therefore, in some extensive run history does 
 repeat itself. The final victory of science thus seems to depend 
 upon the adoption of a cyclical view of the history of the universe. 
 But, for all present practical purposes of social processes, science 
 is so far removed from this perfection that the economist and the 
 sociologist are continually compelled to allow for unpredictable 
 changes of such frequency and of such determinant importance 
 that their claim to direct ' the general will ' and to mould the con- 
 scious policy of a society must be very modestly expressed. 
 
 Such laws of causation as they derive from past observation 
 and experiment must usually be conceived as laws of tendencies, 
 seldom endowed with any rigorous authority of close determina- 
 tion, and still more seldom with accuracy of quantitative predic- 
 tion. 
 
 9. It is sometimes supposed that this hampering effect of the 
 uniqueness, irregularity, novelty and freedom of the individual 
 and social organisms can be got rid of by a process of multiplica- 
 tion in which particular eccentricities will cancel. To economists, 
 in particular, there is a strong temptation to fall back upon the 
 average man, in the belief that scientific determinism justifies 
 itself through averages. Now the radical defect of measurement 
 by averages, as a mode of social valuation, has already been dis- 
 closed. The ascertained fact that the average money income, or 
 even the average real income, of the British people may have 
 risen 10% within the last decade, disables itself, by the very process 
 of averaging, from informing us as to the effect of this increase of 
 national wealth upon national welfare. For this effect depends 
 upon the distribution of the increase, and the process of averag- 
 ing consists in ignoring this vital fact of distribution. 
 
 This defect of averages for purposes of interpretation, of course, 
 involves a consequent defect for purposes of guidance in economic 
 conduct. The calculation that a given course of national conduct, 
 e. g., the expenditure of so many millions upon improved trans- 
 port, will raise the national or average income by so much, loses 
 all the worth of its superficial exactitude unless we know how
 
 33 8 WORK AND WEALTH 
 
 much of the increase is going to the landlord in rising rent, how 
 much to the labourer in rising wages. 
 
 This, of course, involves no repudiation of the true utility of 
 averages, but only of the spurious accuracy which their forms 
 suggest. The exact statement that the average income of an 
 English family has risen 10% in the last decade does imply a 
 reasonable probability that an increase of total national welfare 
 has taken place. 1 But it gives no information as to the amount of 
 that increase, and is consistent with the fact that there may have 
 been a decrease, owing to a worsening of the distribution of the 
 growing income, or of the labour and other costs involved in its 
 production. 
 
 10. So far upon the supposition that welfare is a quantity. 
 It will occur to statisticians that the information to be got from 
 averages of income may be justified by nicer discrimination. If, 
 in addition to learning that the average income of all families has 
 risen 10%, we discovered the different percentages which had 
 been added to rent, interest, profits and wages, or, better still, the 
 ratio of increase for the different income levels, we should surely 
 then, by this extended use of averages, get nearer towards a quan- 
 titative estimate of the increase of welfare that had been achieved ! 
 
 This must certainly be admitted. By the nicer and more com- 
 plex application of these measures, we should approach a more 
 accurate account of welfare, so far as it is ultimately expressible 
 in terms of quantity. If we discovered that a proposed course of 
 national policy would not only increase the average income by 
 10% but would increase the lower incomes of the population in a 
 higher ratio, we should seem to have got a scientific warrant for 
 the policy. But even this degree of scientific authority would 
 be purchased to some extent by an artificial simplification of the 
 actual problem of social-economy. To the statesman no prob- 
 lem of actual finance is capable of being set in such distinctively 
 quantitative terms. Not merely cannot an earthly Chancellor 
 of the Exchequer know how much can be added to the incomes 
 
 1 Professor Pigou in his Wealth and Welfare discusses with skill and precision the 
 measurable influences of an increase of the general dividend upon general welfare, 
 but omits to take into consideration the 'cost' factors which enter into 'welfare,' 
 however that term be defined.
 
 SOCIAL SCIENCE AND SOCIAL ART 339 
 
 of the several classes by the expenditure of so many millions upon 
 transport, or upon any other single service, but, if he could, he 
 would not be much nearer to the standard he requires. There 
 are many different ways of raising the revenue hi question and an 
 infinite number of combinations of these ways. The same holds 
 of expenditure. To take the simplest case; the ten millions 
 that he raises may be applied to transport, or to education, or to 
 defence, all the sum or any proportion, to each. Each expendi- 
 ture claims to be beneficial, an outlay for public welfare. But 
 the benefit in the several outlays is not equally presentable in 
 terms of money income, and, so far as definitely economic gains 
 accrue, they are not equally immediate or equally assured. It is 
 evident that no amount of possession of statistical knowledge 
 can possibly reduce the problem entirely, or even mainly, to one 
 of quantitative calculation. It is equally true that when the 
 problem is solved, its solution will appear in quantitative shape, 
 i. e. so much money for transport, so much for education, so much 
 for defence. It will seem to have been worked out by reducing 
 the three forms of desired benefits to common terms, and then 
 dividing the ten millions among them so as to secure an equiva- 
 lence of gains at the margins. Economists will point out trium- 
 phantly the alleged fact that the last 100 spent on education 
 produces a national return of welfare exactly equal to that ob- 
 tained by the last 100 spent on gunboats, though his assertion 
 remains inherently insusceptible of proof. In truth, the Chan- 
 cellor's mind does not work in this way. So far as his statecraft 
 is disinterested, or even allowing for every form of bias, his mind 
 forms an ideal of social progress, of a happier or better state of 
 things, and allots the outlay of his ten millions in an endeavour 
 to assist in realising this ideal. Now the ideal itself is not chiefly 
 a product of quantitative calculus, but of his more or less in- 
 formed imagination, and his more or less wholesome sympathies. 
 His views as to the means of realising this ideal can never be 
 purely scientific, though science may here be of considerable 
 assistance. 
 
 If, treating expenditure more widely as an act of public policy, 
 we consider it as an operation of the general will of the commu- 
 nity, a true act of political economy, the problem remains essen-
 
 340 WORK AND WEALTH 
 
 tially the same. When looked at through scientific spectacles, 
 it is a purely quantitative and mechanically ordered act, because 
 the scientific method by its very modus operandi ignores the 
 qualitative factors. So the nation is supposed to balance this 
 gain against another, and to lay out its revenue so as to get the 
 largest aggregate of some common homogeneous stuff called 'wel- 
 fare ', in such a way that the last 100 spent on education is equiv- 
 alent in its yield of this 'welfare' to the last 100 spent on the 
 latest super-dreadnaught, or the last lot of old-age pensions. 
 In truth, the common will no more functions in this fashion 
 than the personal will of the Chancellor. In each case State- 
 craft is an Art, and the financial policy is an artistic or creative 
 work in which quantities are used but do not direct or dominate. 
 
 By this line of argument it may appear as if we had repudiated 
 the entire utility of a scientific calculus. This, however, is not 
 the case. For though all the determinant acts of policy or wel- 
 fare, performed by an individual or a society, involve organic 
 unity of design, and the qualitative considerations appertaining 
 thereto, important and 'indeed necessary assistance is rendered 
 by the quantitative analysis of past acts expressed in the form of 
 scientific generalisations. A clearer understanding of the nature 
 and extent of this cooperation between science and art in the 
 conduct of life enforces this truth. 
 
 ii. Science takes its stand upon a twofold application of the 
 assumption of the uniformity of Nature, first, that all differences 
 of composition can be treated as differences of quantity or de- 
 gree, secondly, that history repeats itself. Now, just so far as 
 these assumptions fit the facts, Science is valid for interpretation 
 and for guidance. This explains why astronomy, physics and 
 chemistry are more 'exact' sciences than biology or psychology, 
 and why they are able to give more reliable and authoritative 
 rules for the arts of navigation, engineering and drug-making, 
 than the latter can for medicine, for breeding or for education. 
 Edward Carpenter has remarked that astronomy is the most 
 exact of the applied sciences, because we know least about it, 
 i. e. because we treat its subject-matter almost entirely from the 
 single quantitative standpoint of space relations. In all arts 
 dealing entirely or mainly with inorganic matter science occupies
 
 SOCIAL SCIENCE AND SOCIAL ART 341 
 
 a seat of high authority, because of the high relative uniformity 
 of this matter and the comparative regularity of its behaviour. 
 In physics or in inorganic chemistry the individual differences 
 or eccentricities of the material are so trivial that they can usually 
 be disregarded, and history repeats itself with so much regularity 
 that quantitative laws apply. 
 
 The passage from the inorganic to the organic involves, as we 
 recognise, a double assertion of the qualitative: first, in re- 
 spect of the unity and uniqueness of the organic structure, and 
 secondly, by reason of the novelty that attends each act of or- 
 ganic change, vital movement, assimilation, growth, reproduc- 
 tion or decay. The uniqueness of the individual organism and the 
 novelty of each of its changes are an assertion of the qualitative 
 nature of the subject-matter. So far as this qualitative nature 
 prevails and counts for ' conduct, ' scientific analysis is impotent 
 for interpretation and advice. When organic matter attains the 
 character of consciousness and the still higher character of self- 
 consciousness, the qualitative considerations reach a maximum, 
 and the interpretation and directive power of science a minimum. 
 But that minimum must not be disparaged. It is not incon- 
 siderable. The assistance which scientific laws can render to the 
 finest arts of human conduct is very important and is capable of 
 constant augmentation. For so far as human nature is uniform 
 and stable among the units which constitute the life whose con- 
 duct and welfare are in question, the interpretation and direction 
 of science has validity. To this extent a utilitarian calculus, 
 based upon analysis of past experience, can aid the statesman or 
 the philanthropist in working out his design. In the region of 
 industry the extent of this scientific service will be even greater 
 than in the arts of conduct whose material is more exclusively 
 organic or psychical. For industry, considered as an art of human 
 welfare, will consist largely in the orderly and progressive adapta- 
 tion of inorganic matter, or of organic matter whose organic dif- 
 ferences can be ignored, to the satisfaction of those needs of man- 
 kind in which men are similar. That is to say, in industry there 
 exists and will remain a great deal of work and of consumption 
 which is essentially of a uniform or routine character, requiring 
 to be done by measured rules, and depending for its utility upon
 
 342 WORK AND WEALTH 
 
 the exclusion of all individuality or quality. This applies, not 
 only to those industrial processes which we term strictly mechani- 
 cal, but to a great many others where quality is a matter of com- 
 parative indifference. In the progressive economy of human 
 welfare mechanical or routine production will even frequently 
 displace an art in which quality was once displayed. So home- 
 baking, into which no small degree of culinary skill could go, has 
 given way to machine-baking in which the element of personal 
 skill plays a diminished part, and on which the individual taste 
 of the consumer exerts little directive influence. This may be 
 taken as a typical example of the displacement of qualitative 
 art by quantitative mechanism. It is, of course, of very wide ex- 
 tension, being, in fact, commensurate with the application of 
 scientific methods in the world of industry. Indeed, the sciences 
 of chemistry and physics, botany and biology, are everywhere 
 invading the 'arts' of industry and imposing 'rules' upon indus- 
 trial processes. Even more significant is the application of the 
 still infantile science of psychology to the arts of business organ- 
 isation and enterprise and of marketing. How can psychology 
 assist in the delicate art of recommending goods to possible pur- 
 chasers? Only on the supposition that there is sufficient uni- 
 formity and stability in human nature to enable the measured 
 rules of past experiment upon other men to hold of this man. 
 Only so far as men are really the same sort of stuff, or so far as 
 any differences are measurable and calculable. Novelty alone 
 can baffle applied science. 
 
 If it were true, as some appear to think, that machinery and 
 routine method were destined continually to absorb a larger and 
 larger proportion of human work, and to direct a larger and 
 larger share of human life, economic science with its quanti- 
 tative calculus would acquire a continual increase of exactitude, 
 and a growing capacity for direction in the art of social conduct. 
 But if, as seems more reasonable, progressive industry must serve 
 to feed a richer liberty and novelty of individual and social life, 
 the domain of quantitative calculus, though absolutely enlarging, 
 may be relatively shrinking. 
 
 We now seem able to get a more accurate understanding of 
 what a scientific calculus can do for the assistance of the art of
 
 SOCIAL SCIENCE AND SOCIAL ART 343 
 
 social welfare. It can do for that art what it can do for every 
 other art, viz. furnish rules for the regular. So far as the stuff 
 which constitutes or composes human welfare is uniform, i. e. 
 so far as men are alike in their needs, and the material for the 
 satisfaction of these needs is similar, it can supply rules of social 
 economy which will have a high degree of validity. Though no 
 two human organisms are identical in structure, all human or- 
 ganisms within a wide range of environment are so similar in the 
 kinds of food, air and other material goods which they require, 
 that it is sound 'social policy' to ignore their differences and to 
 treat them as identical in the qualities of their demands and 
 dissimilar only in the quantities. The practical economy of 
 'markets' stands upon this basis, and the quantitative treat- 
 ment finds its true justification in the utility of markets. There 
 can be no market for the single or 'singular' consumer. A mar- 
 ket, i. e. a practical instrument for measurement of economic 
 wants, implies a standardisation of the desires of buyers and 
 sellers. Just so far as the members of an economic community 
 are thus standardised in their preferences, are economic laws 
 applicable. Thus, for the scientific interpretation of such a com- 
 munity, much depends upon the relative strength and impor- 
 tance of the standardising and the individualising forces. In a 
 society where the so-called ' arts ' of industry and of consumption 
 have alike passed by imitation or tradition into firm conventions 
 from which the least transgression is branded as an impiety or a 
 wickedness, economic laws, based upon a sufficient study of the 
 past and present, will enable one to predict the future with con- 
 siderable accuracy. Primitive or backward communities are 
 usually in this conservative condition. Moreover, as they ad- 
 vance and become economically progressive, it is observable that 
 the most conservative and most calculable wants and activities 
 are those relating to the satisfaction of the primary material 
 needs. Hence it is evident that scientific predictions, based 
 either upon general considerations of human nature or upon past 
 measurements, will come nearest to fulfilment, according as they 
 relate to the production and consumption of those articles most 
 deeply embedded in the standard of living. Conveniences and 
 comforts are more changeable than necessaries, and luxuries most
 
 344 WORK AND WEALTH 
 
 changeable of all. Now the marginal or least useful portion of 
 those supplies, which in the earlier or most useful increments 
 satisfy some prime need, are often luxuries. The marginal portion 
 of the wheat supply goes for cakes, or is thrown into the dust-bin 
 as waste bread: the marginal oil goes into motor rides. Taking 
 expenditure in general, we find the last ten per cent of every in- 
 come most incalculable in its outlay, because it represents those 
 purchases in which custom is weakest and individual taste or 
 opportunity the strongest. In a word, it is precisely in those eco- 
 nomic actions which express marginal preferences, the pivot of 
 the mechanical calculus, that we find the maximum of insta- 
 bility and incalculability. For each of these nice marginal pre- 
 ferences proceeds directly from the changing nature of the organic 
 personality. Whereas fifty per cent of a man's expenditure may 
 express the common satisfaction of the fixed physical needs 
 which custom has embedded in a standard of subsistence, thirty 
 per cent the lighter but fairly stable comforts belonging to his 
 class, the last twenty per cent is the part in which he expresses 
 his individual character and his cravings for personal distinction 
 and variety of enjoyment. 
 
 The formal invalidity of the 'marginalist' method has already 
 been disclosed. The considerations just adduced indicate its 
 practical futility as a means of guidance for economic art. Nei- 
 ther as a deductive nor as an inductive science can Economics 
 furnish accurate rules for calculating or directing future economic 
 events. It can only prophesy within such limits as are set by the 
 assumptions of the stability of human nature and of its environ- 
 ment. Its rules or 'laws' will best interpret and predict those 
 economic actions which are most remote from the margin, i. e. 
 those which are most conservative or regular. Marginal prefer- 
 ences will therefore be precisely those which it is precluded from 
 interpreting or predicting by the necessary defect of the intellect- 
 ual instrument. 
 
 12. Thus the final futility of the mechanical method of mar- 
 ginalism lies in its insistence upon applying a quantitative method 
 of interpretation to the most qualitative portion of the subject- 
 matter, that portion where the organic conditions of personality 
 and novelty are of paramount significance.
 
 SOCIAL SCIENCE AND SOCIAL ART 345 
 
 Indeed, it is for this reason that economic science, though able 
 to supply relevant and important evidence, can never solve con- 
 clusively any social-economic problem, even in that field of action 
 where her authority is most strongly asserted. A given rise or 
 fall of price can never produce the same effect upon demand 
 twice running. Why? Because the desires and beliefs of the 
 more unsettled section of buyers, the 'marginal' buyers, will have 
 changed. Nor can this alteration in effect upon demand be cal- 
 culated. Why not? Because the changes in desires and be- 
 liefs are organic qualitative changes. Observations of past price- 
 movements and laws based upon them are not thereby rendered 
 useless. For these organic changes will often be negligible so 
 far as the bulk of the market is concerned. But they negate the 
 possibilities of exact prediction, and often of approximate pre- 
 dictions on the margin. 
 
 This is why the 'great' business man often prefers to act by 
 intuition than by express calculation. He recognises that, so far 
 as the more delicate judgments are concerned, his 'feeling' of 
 ' how things will go ' is more trustworthy than any estimate. He 
 does not act blindly. He feeds and fortifies his mind with facts 
 and figures, until he is steeped in familiarity with the subject- 
 matter. But he does not deliberately balance against one another 
 these measured forces and commit himself to the resultant. For 
 he is aware that the problem is not one of mere mechanics, a 
 counting-house proposition, but one involving for its solution 
 sympathy and imagination. 
 
 But the crucial instance of the organic and spiritual nature of 
 a distinctly economic problem is in the case of credit. The math- 
 ematical mechanical treatment claims to find its supreme justi- 
 fication in the part played by money, the most abstract of eco- 
 nomic phenomena. Credit, in its objective sense, is the economic 
 plenipotentiary, the absolute representative of economic power. 
 For he who has credit has the command of land, capital, labour, 
 ability of every sort, at any time and in any place. Credit is pro- 
 ductive power and purchasing power, for he who possesses it can 
 convert it into any sort of supply or demand he chooses. It is 
 absolutely quantitative, fluid, divisible and measurable. Such 
 is credit, treated objectively by economic science. But credit
 
 34 6 WORK AND WEALTH 
 
 is also the heart and brains of the industrial system. Subjec- 
 tively regarded, it is an essentially spiritual thing, a delicate, 
 sensitive creature of human beliefs and desires. Its volume and 
 its power for practical work are affected by this spiritual nature. 
 For its springs are fear, hope, prestige, superstition, sympathy 
 and understanding. Its true basis is neither gold, nor goods, 
 but credibility. And that quality of credibility is fluctuating 
 all the time for every individual, every business, every state. 
 New unpredictable events are constantly affecting it. No one 
 can therefore say with any assurance of correctness "a Bank 
 should keep 20% of its resources in reserve or at call," or put 
 any such rigid limit for the operations of any Bank. If we do 
 set any such quantitative limit, we should realise that it is only a 
 rough practical rule, which, if interpreted with automatic rigour, 
 leads to waste and error in the actual working of finance. For by 
 no plotting of curves can you reckon the future flow of human 
 credibility, or the application of a given amount of concrete 
 credit to the ever-changing gains and risks of human industry. 
 Take the critical case of a collapse of credit and the run upon a 
 Bank. To predict with even approximate accuracy the course of 
 such a run, or to check it by calculations, based upon past expe- 
 rience of similar crises applied to the records of present assets and 
 liabilities, would be impossible. Why? Chiefly because of the 
 psycho-physical factors, the play of organic forces. You can 
 calculate with close exactitude the strain imposed upon a bridge 
 of a given size, material and structure by a given weight, dis- 
 tribution and pace of traffic. You cannot calculate with equal 
 exactitude the strain which a given quantity of liabilities, how- 
 ever carefully analysed and graded, will impose upon a Bank re- 
 serve of a given size. 
 
 The incalculable element consists of organic novelty, the 
 changes due to having to deal with matter not dead and homo- 
 geneous but living and organised. The citation of such instances 
 is not designed to prove that monetary and other statistics are 
 practically useless for the prediction and solution of social- 
 economic problems. On the contrary, they are exceedingly use- 
 ful. But the formal exactitude which they carry in their method 
 can never be conveyed into the work they are required to assist
 
 SOCIAL SCIENCE AND SOCIAL ART 347 
 
 in doing. The most abundant supply of the most accurate sta- 
 tistics, utilised by the most approved methods of economic 
 science, can only afford results of a rude approximate validity, 
 expressed in tendencies. The practical man in business, in poli- 
 tics, in every mode of social conduct, will supplement and correct 
 the application of the scientific rule by the play of private judg- 
 ment and intuition. 
 
 * * * 
 
 13. If this is true as regards all predictions of future economic 
 happenings, it is still more true of the conscious purposive guid- 
 ance of these happenings by the application of a human standard 
 of values. The practical statesman or social reformer, confronted 
 with a concrete social problem, e. g. the demand for a state 
 enforcement of a national minimum of wages, local option for 
 the closure of public houses, or a referendum for constitutional 
 changes, will find himself 'paying attention' and 'giving weight' 
 to a number of diverse and opposing considerations. How will the 
 selection and the 'weighing' of these considerations be brought 
 about? Not directly and consciously by the application of what 
 may be termed his social ideal, the image in his soul of the society 
 which seems to him absolutely the most desirable. The relation 
 of that ultimate ideal to the particular scheme under considera- 
 tion, e. g. a national minimum wage, may be too distant and too 
 dubious to afford valuation and direction. The operative ideal 
 will be derivative, one of a related set of possible-desirables, 
 limited and practicable ideals which form the most potent in- 
 struments of his statecraft. Such an operative ideal for an 
 Englishman at the present time might be the vision of the State, 
 as the collective will, securing by law a clearly conceived standard 
 of sound efficient life for the ordinary working-class family. This 
 present practical ideal, derived from a wider conception of the 
 duty of the State in relation to the individual members of a civi- 
 lised society, would itself be a far wider scheme than the partic- 
 ular proposal, that of national minimum wage, which it was 
 invoked to assess. The statesman, enlightened by this deriva- 
 tive ideal, would apply it as a test and standard to the particular 
 proposal. He would consider it, not merely 'upon its own merits ' 
 but as incorporated in the more complex organic plan of his
 
 34 8 WORK AND WEALTH 
 
 national minimum. This organic plan and purpose would de- 
 termine the 'value' he gave to the various 'pros' and 'cons,' as 
 for instance to the consideration how far legal intervention might 
 weaken the private organisation of workmen in their trade-unions, 
 so damaging other benefits of trade-unionism, or the considera- 
 tion how far it was better to wait and secure a more demo- 
 cratically administered State before entrusting it with the delicate 
 function of adjusting pecuniary arrangements between workmen 
 and employers. This plan or purpose of a national minimum, 
 as a possible desirable, will of course not remain quite stable in 
 his mind, will not be a rigid standard. It will change somewhat 
 in pattern, and in defmiteness of outline, as some fresh outer or 
 inner experience makes any part of it, or the whole, seem more 
 or less desirable, or more or less possible, than formerly. 
 
 14. But the important point to note is that it is this larger 
 organic plan or vision, the character and changes of which are 
 essentially qualitative, that furnishes the standard and stamps 
 with their respective 'values' the various considerations which 
 are said to 'determine' the practical value of the proposal and 
 its acceptance or rejection. No social-economic proposal, how- 
 ever distinctively quantitative it appears, can be humanly val- 
 ued in any other way. It is for this reason that a mere econo- 
 mist is always disabled from giving practical advice in any course 
 of conduct. Take two examples. Political economy can legi- 
 timately apply laws of value so as to show that, under competi- 
 tive conditions, a nation must produce a larger quantity of mar- 
 ketable goods under a policy of free imports than under any sort 
 of Tariff. But that proof in itself can never be sufficient ground 
 for rejecting either a Tariff for revenue, or even a Tariff for pro- 
 tection. For the Statesman can never take the maximum of 
 marketable values as his final and sufficient test. If it could be 
 shown that national security were involved in a protective system 
 which kept all necessary industries within the national limits, he 
 might plead ' defence is more than opulence. ' Or, if it could be 
 shown that a protective tariff could be operated so as to distrib- 
 ute a slightly reduced aggregate of wealth in a manner more 
 conducive to the popular welfare and that this consideration was 
 not offset by fear of corruption or of impaired industrial efficiency,
 
 SOCIAL SCIENCE AND SOCIAL ART 349 
 
 or other disadvantages, the Statesman might rightly adopt a 
 Tariff in the teeth of ' economic laws. ' l 
 
 Or, take another example, the proposal for an eight hours day, 
 secured by law. A purely economic enquiry might, by consider- 
 ing the elasticity of labour in various employments, arrive at the 
 conclusion that a general shortening of the work-day would involve 
 a present reduction of the product by so much percentage in dif- 
 ferent trades, and that it might involve a reduction of profits and 
 of wages and a probable loss of so much export trade in various 
 industries. It might even present some tentative estimates as to 
 the effects of the pressure of this new cost of production in stimu- 
 lating improved economies in mines, factories or railways. Such 
 information would be useful and relevant, but not authoritative 
 upon the judgment of the Statesman. For the social value of a 
 shorter work-day would depend mainly upon the organic reactions 
 of increased leisure upon the whole standard of life of the working 
 family, how it affected his expenditure of his wages, its effect 
 upon his health, education and recreations, the cultivation of 
 family affection, the better performance of neighbourly and civic 
 duties, and all that is involved in more liberty and a larger out- 
 look upon life. It is evident, in the first place, that these essential 
 considerations lie outside the calculations of the economist, and, 
 secondly, that the actual value set on each of them will depend 
 upon and be derived from the whole faith and social vision of 
 the statesman in question. 
 
 This social or human valuation of a so-called economic process 
 or good, involves then two departures from a quantitative calcu- 
 lus; first, the reduction of the particular economic factors them- 
 selves from financial or other quantitative terms to vital or sub- 
 jective terms; secondly, the restoration of this artificially severed 
 economic process to the larger integrated process of human life 
 from which it was abstracted by the scientific specialism of the 
 economist. The economist can find the facts, but he cannot find 
 their human importance or value, because assigning human value 
 
 1 Protectionists can seldom, if ever, plead successfully either of these cases. By 
 reducing the community of economic interests between nations Protection normally 
 increases the chances of war, while lessening the national resources which are the 
 sinews of war. So, likewise, its normal tendency is to worsen the distribution of 
 wealth within the nation.
 
 350 WORK AND WEALTH 
 
 means referring to an extra-economic standard. It means more 
 than this. It means a reference to an extra-scientific standard, 
 one whose distinctive character consists in its being the expression 
 and operation of the organic complex of forces composing the 
 social personality as mirrored in the conscious or unconscious 
 efforts of the individuals and of the Society who make the valua- 
 tions and frame their conduct upon them. 
 
 15. In conclusion it is necessary to enforce an exceedingly 
 important distinction in the conception of social or human 
 valuation. The term means two things, the attribution of human 
 or social value by an individual and by a society. In most of our 
 illustrations we have taken the standpoint of the Statesman or 
 the reformer, or of some other person, and regarded social values 
 from his eyes. We have taken his ideal as a social ideal. So it 
 is in the sense of being his ideal of a society. But it is essential 
 also to consider society as seeking to realise its own ideal. 'The 
 whole succession of men during many ages/ said Pascal, 'should 
 be considered as one Man, ever living and constantly learning.' 
 This is the true organic view of humanity, regarded either as a 
 single whole or in its several races, nations or communities. The 
 apophthegm is not primarily of political or of ethical significance, 
 but a statement of natural history. It is corroborated in a 
 striking manner by modern biological teaching, with its continuity 
 of the germ-plasm, its embryonic recapitulation and its specific 
 evolution. But not until natural history is rescued from the 
 excessive domination of a purely physical biology, and is read in 
 the language of collective psycho-physics, do we grasp the full 
 bearing of the organic conception in its application to a society. 
 For this conception of mankind as working out the human career 
 by the operation of its original supply of faculties and feelings, 
 in which instinctive physical motives take an increasing admix- 
 ture of conscious rational guidance, is the key to an understand- 
 ing of the ascent of man. There is no clear evidence of the con- 
 tinuous ascent of man regarded as individual, at any rate within 
 'historic' times. There is evidence of the ascent of human so- 
 ciety towards a larger and closer complexity of human relations 
 and a clearer intellectual and moral consciousness. This means 
 that mankind, as a whole, and its several societies, is becoming
 
 B 
 
 SOCIAL SCIENCE ANTTS^CIAL ART 351 
 
 more capable of a human valuation and of a collective conduct of 
 affairs guided by this conscious process. In politics, regarded 
 in its wider meaning, this truth has taken shape in the modern 
 conception of the general will, which in popularly-governed 
 States functions through public opinion and representative in- 
 stitutions. Following our examination of the limits of science or 
 'rationalism' in the processes of valuation and of conduct on the 
 part of individuals, we shall expect to find some corresponding 
 limits in collective man. In other words, the general will of a 
 people cannot be regarded, either in its estimates or its deter- 
 minations, as a merely or a mainly calculative process, working 
 out the respective values of existing circumstances, or proposed 
 changes, in terms of clearly-defined utility. It does not even 
 with fuller information, wider education and firmer self-control, 
 tend towards this scientific politics. Collective self-government, 
 like individual self-government, will always remain essentially 
 an art, its direction and determinant motives being creative, 
 qualitative, and rooted in the primal instincts of man. 
 
 1 6. It is upon this conception of the collective instincts of 
 society regarded as an organism that a rational faith in demo- 
 cracy is based. The animal organism, itself a society of cells, is 
 endowed with energy of body and mind, operating through an 
 equipment of instinctive channels towards its own survival and 
 development and the survival and development of its species. 
 Where there is danger lest too much of this energy should be con- 
 sumed upon individual ends, too little on specific ends, the social 
 or self-sacrificing instincts are strengthened in the individual, 
 and are reinforced by the herd or specific feelings of other indi- 
 viduals, as where plunderers of the common stock or shirkers in 
 the common tasks are destroyed by the hive or herd. The in- 
 stinct for the survival and development of the hive, herd or 
 species, cannot be satisfactorily explained as belonging only to the 
 psycho-physical equipment of the individual members. On 
 this basis, viz. that of attributing a social nature only to the 
 individual members of a society, the acts of devotion and 
 self-sacrifice, and still more the acts of preparatory skill, the 
 elaborate performance of deeds that are means to the sur- 
 vival and well-being of a future generation, become mere hap-
 
 352 WORK AND WEALTH 
 
 hazard miracles. Take the familiar example of the Hunting 
 Wasp. 
 
 'The larvae'of the various Hunting Wasps demand a motionless prey who 
 will not, by defensive movements, endanger the delicate egg and, afterwards, 
 the tiny grub fixed to a part of the prey. In addition, it is necessary that this 
 inert prey shall be nevertheless alive; for the grub would not accept a corpse 
 as food. Its victuals must be fresh meat and not preserved provisions. 
 These two antagonistic conditions of immobility and life the Hymenoptera 
 realises by means of paralysis, which destroys movement and leaves the 
 organic principle of life intact. With a skill which our most famous vivisec- 
 tors would envy, the insect drives its poison sting into the nerve centres, the 
 seat of muscular stimulation. The operator either confines himself to a single 
 stroke of the lancet, or else gives two, or three or more, according to the 
 structure of the particular nervous system and the number and grouping of 
 the nerve centres. The exact anatomy of the victim guides the needle.' 1 
 
 Such conduct is not made intelligible by any other hypothesis 
 than that of a collective life of the species, the individual lives 
 being, in fact, parts of a common specific life towards which they 
 contribute in a manner similar to that in which the cells, with 
 their particular lives, contribute to the life of their organism. 
 Only by this application or extension of the 'organic metaphor' 
 to the relations between members of an existing generation, and 
 between successive generations, can we construct an intelligible 
 sequence of causation between these preparatory acts of indi- 
 vidual insects of one generation and the results accruing to other 
 individuals of another generation. 
 
 This 'general will' (may we not call it so?), urging the indi- 
 viduals to the fulfilment of a purpose which is but slightly theirs, 
 and is not mainly that of the existing generation, but which em- 
 bodies the general purpose of the species or some wider purpose of 
 a still larger organic whole, can only be realised for thought and 
 feeling as a single current of will implying and conferring unity of 
 life upon the species or the larger unity. 
 
 In 'lower' animal spheres we recognise this fact. But there is 
 a tendency to hold that man, subject to some such specific urge or 
 instincts in his primitive stages, has become more and more indi- 
 vidualised and has done so largely by becoming more rational. 
 The gradual displacement of instinct by reason, it is contended, 
 has made man more self-sufficient, his life more of the nature of an 
 
 1 Henri Fabre, The Eng. Review, Dec., 1912, The Modern Theory of Instincts.
 
 SOCIAL SCIENCE AND SOCIAL ART 353 
 
 end, less of a means towards the life of his tribe or nation, or even 
 towards that of humanity as a whole. Is this so? There are two 
 issues that open here. In the process of civilisation a man cer- 
 tainly becomes more individual. He differs in character more 
 from his fellows than in earlier times; he is able to devote, and 
 does devote, a larger share of his energies of body and mind to 
 activities which are primarily self-regarding. Moreover, he 
 tends to rely less exclusively or predominantly upon what would 
 be called his instincts and more upon his reason. 
 
 17. The 'general will', which through forms of tribal custom 
 and of gregarious instinct pulsed so vigorously and so insistently 
 in tribal life, seems to have weakened with every expansion of 
 social area and with the advancing complexity of social relations. 
 The economy of human energy allows individuals to apply a 
 larger share of the life-force that flows through them to what 
 appear to them their private purposes, a smaller to the protec- 
 tion and development of the society or species. If we were to 
 assign any final validity to the opposition of individual and so- 
 ciety, this change might be regarded as a shrinkage of the domin- 
 ion of the 'general will,' the specific as contrasted with the indi- 
 vidual purpose. But though the narrow intense tribal will may 
 thus appear to have yielded to a broader, feebler and less im- 
 perative form of national or social will, it by no means follows 
 that this latter works less effectively for the common good. As 
 man becomes more intelligent and more reflective, and has for- 
 tified himself with larger and more reliable records and better 
 methods of controlling his environment, the instinctive operations 
 of the will of groups of tribal animals give place to more conscious, 
 more rational, purposes. 
 
 The change must not indeed be over-stressed. The validity of 
 the general will does not depend upon the degree of conscious 
 rational purpose it has attained. It remains to-day in the most 
 highly civilised communities what it was in primitive tribal life, 
 an organic instinct. The rationalisation of this blind faculty of 
 organic self-protection and advancement has not yet gone very 
 far. Indeed, it is exceedingly important to recognise that an 
 organic instinct of conservation and of progress underlies the 
 wisdom of the people. Those who consider politics a rightful
 
 354 WORK AND WEALTH 
 
 monopoly of the educated classes doubly err; first, in ignoring 
 the instinctive wisdom of the people, secondly in claiming for 
 education a higher value for political direction than it possesses. 
 The political wisdom of the Roman or the Germanic peoples par- 
 takes far more of a natural sagacity than of a reasoned process. 
 If this applies to the great statesman, it is still more applicable to 
 the body of the people whose consent or active cooperation con- 
 tributes to the evolution of a stable and a progressive state. 
 It is impossible to understand or to explain any long and complex 
 movement in national history by piecing together the conscious 
 rational designs of the individuals or groups of men who executed 
 the several moves of which the movement seemed to consist. 
 Such a structure as the British Constitution, such an episode as 
 the French Revolution, cannot be otherwise regarded, in its 
 organic unity, than as a product of energies of common will and 
 purpose, wider, deeper and obscurer in their working than the 
 particular intelligible motives and aims which appeared on the 
 stage of parliamentary debates, military campaigns or mob vio- 
 lence. Every student of the ' spirit' of one of these great national 
 dramas is driven to recognise some moulding or directing influ- 
 ence, some urge of events, by which they seem to unfold them- 
 selves in a larger and more complex pattern or consistency than 
 is perceived by any of the agents. There is sometimes a tendency 
 to give a mystical interpretation to this truth. So Victor Hugo 
 writes of the French Revolution: 
 
 'fetre un membre de la Convention, c 'etait etre une vague de 1 'Ocean. 
 Et ceci etait vrai des plus grands. La force d'impulsion venait d'en haut. 
 II y avait dans la Convention une volonte qui etait celle de tous et n 'etait 
 celle de personne. Cette volonte etait une idee, idee indomptable et de- 
 mesuree qui soufflait dans Pombre du haut du ciel. Nous appelons cela la 
 Revolution. Quand cette idee passait elle abattait 1'un et soulevait Pautre; 
 elle emportait celui-ci en 6cume et brisait celui-la aux ecueils. Cette idee 
 savait ou elle allait, et poussait le gouffre devant elle. Imputer la revolution 
 aux hommes, c'est imputer la maree aux flots.' " 
 
 The explanation of our colonial empire as the result of a career 
 of conquest and expansion conducted 'in a fit of absence of mind' 
 is an exact statement of the truth. For though a few great empire- 
 builders, such as Warren Hastings, Molesworth, Elgin, Grey and 
 1 Quaire-vingt-treize, Livre III, Chapter XI.
 
 SOCIAL SCIENCE AND SOCIAL ART 355 
 
 Rhodes, may have played their parts with some measure of con- 
 scious design, the individual channels of this current of adven- 
 turous and constructive energy embodied in the general process 
 had as little an idea of the imperial edifice as any working bee of 
 the great symmetrical structure of the hive. 
 
 1 8. This sense of 'manifest destiny' is surely no illusion. 
 It is the evolutionary method by which all organic process is 
 achieved, whether in the growth of an oak tree from its acorn, of 
 a motor car from the earliest hand-barrow, a musical symphony 
 from a savage tom-tom, or a modern federal state from the prim- 
 itive tribal order. In every case a number of what seem separately 
 motived actions are seen to carry and express the continuity of 
 some common tendency which brings them under the control of 
 a single collective design. This wider purpose is seen operating 
 upon the larger organic stage of conduct in ways closely analogous 
 to the operations of the poet or the artist in any human fine art. 
 It exhibits the urge of an inner flow of psycho-physical energy 
 seeking ever finer modes of expression by moulding the materials 
 at its disposal. As soon as we grasp this idea of the collective 
 artistry of a species or any other organic group, we recognise 
 how lacking in logical finality is the accepted antithesis of in- 
 stinct and reason. The reason of the organism will appear as a 
 blind instinctive drive to the cell whose conduct it directs. So 
 the specific purpose will show itself as instinct in the individual 
 organism, though it may be neither blind nor unconscious to the 
 species taken as the organic unit. Nay, we may go further and 
 suggest that advancing reason in the individual animal may con- 
 sist in a growing sympathy and syn-noesis with the operations of 
 the wider organism. Must not this be what happens when what 
 we term reason endorses and reinforces the instinctive actions of 
 specific preservation and well-being, substituting reflection for 
 impulse, plans for customs, orderly and changing institutions 
 for blind ordinances whose authority is gregarious imitation or 
 superstitious prestige? Are we wrong when we trace an instinct 
 of obedience to a chief transformed into a reasoned submission 
 to the law? May not then the whole process of the rationalisation 
 of man be regarded as a bringing of the individual man into vital 
 communion of thought and feeling with the thoughts and feelings
 
 35 6 WORK AND WEALTH 
 
 of the race, of humanity, perhaps of the larger organic being of the 
 kosmos? For a man only becomes rational so far as he takes a 
 disinterested view of himself, his fellow-men and of the world he 
 lives in, and the wider, closer, keener that view the more rational 
 he becomes. Thus the evolution of the mind of man into a 
 fuller rationality means the strengthening and clarifying of those 
 relations of feeling and thought which bind him to his fellows 
 and to his world and which are rooted in the 'blind' instincts of 
 gregarious, superstitious, curious man. 
 
 19. The upshot of these considerations is to break down the 
 abruptness of the contrast between reason and instinct and to 
 recognise in reason itself the subtlest play of the creative in- 
 stinct. The 'disinterested' nature of the search for truth has 
 been a subject of derision among some thinkers, who see no way 
 by which man the individual can disengage himself from the 
 selfish motives which seem to rule him and to dispose alike of his 
 emotional and intellectual energies. In man regarded as indi- 
 vidual it is very difficult to recognise any possibility of a dis- 
 interested motive, because all such motives are ruled out ex 
 hypothesi. But regard the individual man as subject to the dom- 
 inant control of some wider life than his, that of race, society, 
 humanity or kosmos, and the difficulty disappears. He becomes 
 capable of 'disinterested' curiosity, 'disinterested' love, 'self- 
 sacrifices' of various kinds, because he is a centre of wider in- 
 terests than those of his own particular self. The action of a 
 Japanese who throws himself upon the Russian bayonets at the 
 word of command, of a doctor who inoculates himself with a 
 deadly poison for the sake of science, the steady lifelong toil of 
 millions of peasants growing the food supply for unknown mil- 
 lions of town-dwellers, are no longer 'disinterested' when they 
 are looked at from the standpoint of the interests of humanity 
 as a whole. This collective will and intelligence can never be 
 considered wholly 'blind' when regarded from the collective 
 standpoint. Every directive instinct of an organism, at any rate 
 in the animal world, must be accredited with some related emo- 
 tion 1 , and this emotion, regarded as a fact in consciousness, must 
 be accredited with some measure of intelligence. The creature 
 1 Cf. McDougall, Social Psychology.
 
 SOCIAL SCIENCE AND SOCIAL ART 357 
 
 subject to the drive of an emotion must have some idea of what 
 he is about, though the full psycho-biological 'purpose' of his 
 action may be hidden from him. This organic standpoint gives 
 an intelligible meaning to what we may call the 'natural wisdom 
 of the people.' The herd, the tribe, the nation is endowed with 
 instincts of self-protection and of growth. These instincts are 
 accompanied by corresponding emotions which, according to the 
 degree of intelligence they contain, impel it to a right or eco- 
 nomical use of the physical and spiritual environment for sur- 
 vival and 'progress.' The instinctive and emotional stream of 
 this common life becomes more 'rational' as the factors of in- 
 telligence accompanying the emotions become clearer, better 
 coordinated and endowed with larger capacity of central direc- 
 tion. In the evolution of animal organisms this growth of ra- 
 tionality implies, and is compassed by, a decline of the special 
 instincts with a consequent weakening of the special emotions 
 attached to them, and the substitution of a flexible general in- 
 stinct operating through a centralised nervous system and co- 
 ordinating the special organic emotions and activities to serve 
 a more clearly conceived organic purpose of the individual or the 
 race. Reason, regarded as a motive power and not as a mere 
 intellectual organ, must be considered as this general instinct of 
 survival and growth, having its roots in the apparently separate 
 instincts of hunger, procreation, shelter, pugnacity, flight, gre- 
 gariousness, protection of young, curiosity, constructiveness, ac- 
 quisitiveness and the like, and utilising the emotions proper 
 to these several instincts for the economy of some more general 
 plan of life. Reasoning, as an 'intellectual process, ' will probably 
 derive its emotional food and impetus principally from the emo- 
 tions carried by the instincts of flight and pursuit, which involve 
 quick judgment in the use of means, and by the curiosity and 
 constructiveness which impel the more reflective study and adap- 
 tation of material environment. 
 
 It is, however, no purpose of mine to enter into the particulars 
 of this theory of the natural origins of reason. It is sufficient 
 to recognise; first that prior to the dawn of 'reason' in organic 
 evolution, the instincts carry and apply a wisdom of direction of 
 their own; secondly that when reason takes over much of this
 
 35 8 WORK AND WEALTH 
 
 directing power it operates by coordinating, not by creating, 
 motive power. 
 
 So when we substitute for the individual organism the herd, 
 the tribe, the nation, ascending to larger collective wholes, sus- 
 tained by a clearer consciousness of unity and a fuller use oi 
 central conscious purpose, we follow the same economy of gov- 
 ernment. If, as is often urged, a nation, regarded as an organism, 
 must be classed as a comparatively primitive type, on a level 
 rather with the sponges or algae than with the higher animals, 
 we shall expect to find that a very large measure of such ' wisdom ' 
 as it possesses will be instinctive rather than 'rational.' The 
 evolution of a general will, whether operative by public opinion 
 or governmental institutions, will on such a hypothesis possess 
 no great degree of centrality or clear consciousness. Good gov- 
 ernment in such a society could not be compassed by an oligarchy 
 or even a representative assembly assuming a measure of de- 
 tailed and far-sighted policy for which the collective life was not 
 yet ripe. A large measure of what from the rational standpoint 
 would rank as 'opportunism' would be the true policy at such 
 a stage of social evolution, and the wise statesman would keep 
 his ear to the ground so as to learn the instinctive movements of 
 the popular mind which would yield the best freight of political 
 wisdom at his disposal. Only as education and closer and more 
 reliable communications elevated the organic structure of Society, 
 imparting higher spirituality, more centrality and clearer con- 
 sciousness to its life, should we expect any considerable rationali- 
 sation of the general will. Meanwhile arise the temptation and 
 danger of the formal instruments of government falling into the 
 hands of a little highly self-conscious group or class, who may seek 
 to impose upon the conduct of the nation its clearer plans and 
 far-sighted purposes "under the name and pretext of the com- 
 monwealth." The absolute or actual wisdom of their will they 
 will be apt to represent as embodying the reality of the general 
 will. It is what they think 'the people' ought to will and there- 
 fore what the people will come to will as soon as they are really 
 capable of willing intelligently! 
 
 It is, however, exceedingly important to try and recognise the 
 instinctive wisdom of the people, in order that a misrepresenta-
 
 SOCIAL SCIENCE AND SOCIAL ART 359 
 
 tive government may be prevented from ignoring it and substi- 
 tuting the rationalism of some little conscious class. 
 
 This does not mean that a Government must always govern 
 and adapt its laws to the level of the current feelings, desires and 
 aspirations of the average man, giving him no lead or stimulus 
 to higher rationality. Such a course would be to ignore that 
 capacity for progress and that susceptibility to proximate ideals 
 which are themselves implanted in the instincts of mankind. 
 But it does require that a Government shall keep itself in the 
 closest sympathy with the concrete feelings and ideas of the peo- 
 ple, maintaining such contacts as shall enable its acts of policy 
 to rank as substantially correct interpretations of the general will, 
 not as the designs of a supreme governing caste or group of in- 
 terests, pumped down through some artfully contrived electoral 
 machinery so as to receive the false formal impress of 'the gen- 
 eral will.' 
 
 These reflections upon the nature of popular government may 
 appear to have carried us far afield. But they have been no 
 irrelevant excursion. For upon our view of the nature and meas- 
 ure of rationality to be imputed to the processes of reform or prog- 
 ress in national life must depend our view of the part which can 
 be played by the social sciences which are invoked as the chief 
 instruments of conscious collective conduct. 
 
 Recognising that social progress in all its departments re- 
 mains always a collective art, inspired and sustained by creative 
 impulses which owe neither their origin or their validity to sci- 
 ence, we shall regard the social sciences as servants rather than 
 directors of social progress. We shall be concerned to ask, 
 What are the proper and particular services such sciences can 
 render? How can they assist a people in utilising its human and 
 natural resources for the attainment of the best conditions of 
 human life, individual and social? 
 
 This work is written as a partial and illustrative answer to 
 these questions. Taking industry, that department of social 
 conduct most susceptible of the quantitative measurement which 
 is the instrument of science, we have endeavored to construct 
 and apply an organon of human valuation to its activities and 
 achievements. Recognising that industry, regarded from the
 
 360 WORK AND WEALTH 
 
 individual or the social standpoint, was an organic activity, in- 
 volving continual reactions upon the whole life of the individual 
 and the society, we insisted that the standard of valuation must 
 be constructed in terms of organic well-being. In other words, in- 
 dustry, both from its productive and its consumptive side, must 
 be valued in terms of individual and social health, that term 
 being selected as the one which best expresses the conditions of 
 conservation and of progress universally recognised as the essen- 
 tials of a 'valuable' life. In the actual interpretation of this 
 organic welfare, we took for our valuer 'enlightened' common- 
 sense. The roots of this common-sense we find laid in the 
 silent, instinctive organic strivings of mankind. It is the 
 business of science, or organised knowledge, to direct these 
 strivings so as to enable them to attain their ends more economi- 
 cally. It does this by interpreting experience and supplying 
 the interpretation in the shape of 'laws' to enlighten common- 
 sense and so enable it to choose its paths. For the economy of 
 blind instincts is only accommodated to simple activities in a sta- 
 ble environment, and is even then subject to enormous vital 
 wastes. For complicated activities in a rapidly changing and 
 complex environment, a general instinct of adaptability of means 
 to ends, involving conscious reflection, is required. Reason is this 
 general instinct and science is its instrument. Society, as its proc- 
 esses of evolution become more conscious, will be able to use more 
 profitably the services of science. Those services consist not in 
 authoritative legislation for social conduct, for laws based upon 
 experience of the past can have no full authority to bind the fu- 
 ture. Faith and risk-taking, involving large elements of the in- 
 calculable, are inherent in organic processes, and are the very sap 
 of spiritual interest in life. They can never be brought under the 
 dominion of a scientific economy. 
 
 But the main staple in every art of conduct is repetition and 
 considered adaptation, resting upon a continuity of conditions. 
 For this part of social conduct science, when sufficiently equipped, 
 can and will offer authoritative advice. Throughout all nature 
 the arts of conservation and creation run together. The art 
 of conservation is the practical function of science: the art of 
 creation ever remains a region of beckoning liberty, continually
 
 SOCIAL SCIENCE AND SOCIAL ART 361 
 
 .nnexed by science, and yet undiminished in its size and 
 ts appeal. 
 
 ' For all experience is an arch where through 
 Gleams that untravelled land whose margin fades 
 For ever and for ever as we move.'
 
 INDEX 
 
 Ability, costs of, 53. 
 
 Abstinence, 94. 
 
 Abundance, 161. 
 
 Accidents, increased by fatigue, 67. 
 
 Adulteration, 112, 134. 
 
 Advertising, 218. 
 
 Aged workers, 80. 
 
 Alien immigration, 280. 
 
 Animals, rudimentary industry, 20. 
 
 Arbitration and Conciliation, 277. 
 
 Art, human costs, 44; in industry, 304; 
 
 in the new economy, 314; analysis of 
 
 works of art, 330. 
 Averages, defects, 337. 
 
 B 
 
 Bank holidays, 127. 
 
 Bethlehem Steel Works, 205. 
 
 Birth rate, 319. 
 
 Brassey, M., 222. 
 
 Bucher, Industrial Evolution, 23. 
 
 Buckle, M., 114. 
 
 Bureaucracy, its defects, 268; in state 
 
 socialism, 268. 
 Business, costs illustrated, 38; human 
 
 costs of management, 54. See also 
 
 Scientific Management. 
 
 Capital, 250 seq. ; increase out of income, 
 30; economic costs, 89; share in in- 
 dustry, 92; sources, 98; maintenance 
 of 177; anonymity of, 252; antago- 
 nism to labour, 252. 
 
 Carnegie, M., 294. 
 
 Carpenter, Edward, 118, 340. 
 
 Casual labour, earnings, 190. 
 
 Census of Production, 29. 
 
 Chapman, Prof., Work and Wages, 173. 
 
 Child Labour, 80. 
 
 Children, utility of play, 240-241. 
 
 Chiozza-Money, Things that Matter, 280. 
 
 Charity, 161; its wastefulness, 157; its 
 ends, 296. 
 
 Citizenship, necessary leisure, 248. 
 
 Combination, 253; trusts, etc., 276 seq.; 
 international, 279. 
 
 Common sense, 321. 
 
 Commercial expansion, effect on con- 
 sumption, 122. 
 
 Commercial Treaties, 272. 
 
 Commercialism, vitiates standards, 133. 
 
 Competition, undue stress on, 251; not 
 national, 272; restrictions, 276. See 
 Combination. 
 
 Consumer, his interests neglected, 257; 
 in the co-operative movement, 261; 
 conservative habits, no; inequalities 
 in capacity, in. 
 
 Consumption, neglected by economists, 
 4; human utility, 37, 106 seq.; class 
 standards, 121 seq.; imitative, 130; 
 novelties, 129; economy of, 137; in- 
 fluenced by prestige, 139; tabular 
 statement, 159; scientific, 221; con- 
 ventional, 243. 
 
 Conventional standards, 125 seq. 
 
 Cooperation, in division of labour, 251; 
 social, 200, 303; in consumption, 109. 
 
 Cooperative Movement, 200, 256, 259, 
 264. 
 
 Co-partnership, 254 seq. 
 
 Cost, tabular statement, 159. 
 
 Costs of labour, varying incidence, 79; 
 
 363
 
 364 
 
 INDEX 
 
 psychical, 219. 
 
 Costs of production, 35 seq., 203; gener- 
 al categories, 38 seq. 
 
 Costs of progress, 178. 
 
 Craftsmanship, 69. 
 
 Creative work, 41; under scientific 
 management, 219; exemption from 
 social control, 292. 
 
 Credit, 5 7, 345. 
 
 Culture, wasteful expenditure on, 152. 
 
 D 
 
 Dancing, accompanies early industry, 
 
 25- 
 
 Democracy, 170, 241. 
 
 Dietetics, 222. 
 
 Dilettantism, 153. 
 
 Diminishing returns, 315. 
 
 Disinterestedness, 356. 
 
 Distribution, organic law, vi, 157, 237, 
 283. See also Consumption. 
 
 Distribution of labour, 164, 311. 
 
 Distribution of leisure, 228. 
 
 Distribution of wealth, 163; actual and 
 "human" compared, 176; insufficient 
 share of labour, 178. See also Con- 
 sumption. 
 
 Division of labour, 210, 250. 
 
 Drink Bill, 127. 
 
 Early closing, Report, 81. 
 
 Economics, mechanical tradition, 7; 
 
 boundaries of, 8. 
 Eden, M., 222. 
 Education, false standards of utility, 
 
 152; the place of leisure, 153. 
 Efficiency, personal and social, 310 seq. 
 Eight-hours day, 231, 349. 
 Employment, regularity, 198. 
 Environment, effects on consumption, 
 
 120; effect of rapid changes, 129. 
 Equality of opportunity, 165. 
 Ergograph, 67. 
 Eugenics, 316. 
 
 Evolution, of human society, 119, 336 
 
 seq.; instinct and reason, 355. 
 Exchange, 3. 
 
 Fabre, Henri, Modern Theory of Instinct, 
 
 352- 
 
 Factories and workshops, 77. 
 Family, as unit of consumption, 109, 
 
 222, 242,312. 
 Fashion, 139. 
 
 Fatigue, relation to accidents, 67. 
 Fatigue, nervous, physiologists on, 65. 
 Fatigue, physical biologists on, 63-65. 
 Finance, its normal honesty, 57. 
 Financial operations, human costs, 56. 
 Flux, M., estimate of British income, 29. 
 Foreign trade, 273. 
 Foster, Sir Michael, Weariness, 63. 
 Franklin, Benjamin, 333. 
 Free contract, 201. 
 Free trade, 272. 
 French Revolution, the "general call", 
 
 354- 
 
 Geddes, Prof., 114. 
 
 "General will", 353. 
 
 Genius, undiscovered, 51. 
 
 Gilbreth, F. G., Bricklaying System, 207. 
 
 Gladstone, M., 329. 
 
 Goldmark, Fatigue and Efficiency, 64, 
 
 66, 67, 81. 
 Gould, Jay, 99. 
 Guild societies, 266. 
 
 H 
 
 Haldane, Dr., Mechanism, Life of Per- 
 sonality, 1 8. 
 
 Half-timers, 82. 
 
 Hobson, J. A., The Industrial System, 
 189. 
 
 Hours of labour, 231; relation to acci- 
 dent, 67; diagrams, 68, 69. 
 
 Hugo, Victor, Quatre-vingt-treize, 180.
 
 INDEX 
 
 365 
 
 Imitation, 130; psychology of, 41. 
 Imitative work, 60. See also Routine 
 
 work. 
 
 Income, real income, 28 seq.; British 
 national, 29; relation to welfare, 31; 
 human value, 33; national income, 
 34~35- See also Surplus. 
 Individual standards, of consumption, 
 136, 158; of production, 311. 
 
 Industrial agreements, 258. 
 
 Industrial conditions, effect on con- 
 sumption, 123. 
 
 Industrial efficiency, psychological tests, 
 214. See also Scientific Management. 
 
 Industrialism, 242; laissez-faire, 170; ill 
 effects, 290. 
 
 Industry, fabric of, 5; of animals, 20; 
 human origins, 19 seq.; of primitive 
 man, 21; organisation, 161; scientific 
 investigation, 225; humanist criticism, 
 229; reconstruction, 250 seq.; coop- 
 eration and coordination, 303; sum- 
 mary of conclusions, 182. 
 
 Insurance, industrial, 104. 
 
 International combines, 279. 
 
 International Postal Union, 281. 
 
 Internationalism, of capital, 274; of 
 labour, 274. 
 
 Invention, 41; creative quality, 49. 
 
 Iron and steel, international combine, 
 280. 
 
 Jevons, W. S., 5. 
 
 Labour, physical costs, 60 seq.; psychi- 
 cal costs, 67; defined, 70; human 
 claims, 190. 
 
 Labour Movement, its demand, 190; 
 political action, 199; cosmopolitan 
 organisation, 275. 
 
 Land, monopoly, 181. See also Rent. 
 
 Le Play, 114. 
 
 Leisure, 228; use of, 237, 246. 
 Leisure class, 141; imitated, 155. 
 Living wage, 196. 
 Luxuries, 122, 245. 
 
 M 
 
 MacCormac, 81. 
 
 McDougall, Social Psychology, 356. 
 
 Machinery, skilled labour required, 72; 
 
 relief afforded by, 76-77; limitations, 
 
 76. 
 Machine-tending, 70 seq.; human cost, 
 
 61. 
 
 Mai-production, 161. 
 Man, social history, 23; evolution, 350. 
 Marginal expenditure, 344. 
 Marginal preferences, 327, 334. 
 Marginalism, 331. 
 Marginalist doctrine, 172 seq. 
 Market, the, 263. 
 Medicine, primitive, 130. 
 Mendelieff, 49. 
 Migration, of labour, 274. 
 Mill, J. S., 326. 
 Minimum wage, 197, 347. 
 Monetary standard, 29. 
 Monopoly, 181, 257. 
 Mosso, 64, 66. 
 
 Municipality, as employer, 269, 283. 
 Munsterberg, Prof., 215; Psychology and 
 
 Industrial Efficiency, 212. 
 Mutual aid, 304. 
 
 N 
 
 Nation, the, organic structure, 358; 
 
 expenditure, 340. 
 National income. See Income. 
 Nations, artificial barriers, 272. 
 Neurasthenia, 67. 
 
 Organic welfare, vi, 12; relation to na- 
 tional income, 32; in consumption, 
 161; in state services, 288; in the 
 new economy, 301 seq.
 
 366 
 
 INDEX 
 
 Organic Law of Distribution. See Dis- 
 tribution. 
 
 Output, as wage-basis, 167; limitation 
 of individual output, 198; under 
 scientific management, 208. 
 
 Overtime, 243. 
 
 Owen, Robert, 222. 
 
 Parasitism, 296. 
 
 Pascal, 350. 
 
 Peel, M. George, Future of England, 238. 
 
 Personal efficiency, 310. 
 
 Personal expenditure, 327 seq. 
 
 Personal liberty, 85. 
 
 Pigou, Prof., Wealth and Welfare, 32, 
 
 174, 338. 
 
 Play, 240. See also Sport. 
 Political Economy. See Economics. 
 Politics, social science applied, 347; 
 
 quantitative analyses, 167. 
 Popular government, share of instinct, 
 
 357- 
 
 Population, 316, 318. 
 Poverty, 243. 
 Prestige, 139, 150. 
 Primitive man, 22, 116, 122. 
 Private enterprise, in the new economy, 
 
 293- 
 
 Producer, 257; divergence of group 
 interests, 266. 
 
 Production, human costs, 35, 36; crea- 
 tive factor, 44; share of labour, 61; 
 tabular statement, 159; artistic and 
 routine, 303. 
 
 Productive consumption, 123. 
 
 Professional services, 52, 54. 
 
 Profit-sharing, 255. 
 
 Protection, 272, 348. 
 
 Property, 294; an ethical basis, 298. 
 
 R 
 
 Races, 156; in industry, 314. 
 Railways, state control, 258. 
 Ramsay, Sir W., 49. 
 
 Rent, 38, 171, 181, 278; individual, 169; 
 
 contribution to capital, 96. 
 Reynolds, W. Stephen, 238. 
 Ricardo, 60. 
 
 Risks of business, human costs, 89. 
 Robertson, J. M., The Evolution of 
 
 States, 114. 
 
 Rockefeller, J. D., 99, 294. 
 Routine work, 304, 313. 
 Rowntree, M., 242. 
 Ruskin, John, 9, 12, 46, 62, 106; Munera 
 
 Pulveris, 10; Time and Tide, 313, 316. 
 
 Salary basis, 195. 
 
 Satiety, 161. 
 
 Saving, 92, 102, 104. 
 
 Scientific analysis, 164 seq. 
 
 Scientific Management, 202; increased 
 output, 209; human costs, 212, 218; 
 Munsterberg on, 212. 
 
 Seasonal trades, 80, 230. 
 
 Self-governing workshop, 256. 
 
 Smiles, Samuel, 333. 
 
 Smith, Adam, 60, 186; Wealth of Na- 
 tions, 251. 
 
 Social instinct, 351. 
 
 Social science, 322. 
 
 Social service, 283. 
 
 "Social will", 301. 
 
 Socialist state, 97. 
 
 Society, organic structure, 13, 16, 306, 
 
 351- 
 
 Sociology, scope of, 15. 
 
 Sombart, The Jews and Modern Capital- 
 ism, 224. 
 
 Specialisation of labour, costs of, 70. 
 
 Speeding-up, 206, 233. 
 
 Sport, 146 seq.; moral standards, 153. 
 
 Standard of comfort, 96. 
 
 Standard of consumption, 343. 
 
 Standard of living, 113, 166; class stand- 
 ards, 121; minimum, 168; subsidised 
 by the state, 200; science applied, 251; 
 standardisation in industry, 202.
 
 INDEX 
 
 367 
 
 State, the costs of, 178; control of in- 
 dustry, 258, 294; as employer, 269, 
 283; subsidies, 200. 
 
 State socialism, 268 seq. 
 
 Statistics, limitations, 323. 
 
 Surplus, unproductive, 138, 256. 
 
 Surplus income, of rich, 98; of middle 
 class, 101; taxation, 276. 
 
 Surplus profits, 183, 276. 
 
 Survival value, 118. 
 
 Sweated imports, 280. 
 
 Sweated labour, 179. See also Trade 
 Boards. 
 
 Syndicalism, 264 seq. 
 
 Tarde, M., 7, 40, 50, 85, 127. 
 
 Tariffs, 272. 
 
 Taxation, 188. 
 
 Taussig, Principles of Economics, 100. 
 
 Taylor, M., Principles of Scientific 
 
 Management, 205, 210. 
 Technical instruction, 204. 
 Thoreau, 239. 
 Trade Board, 197. 
 Treves, Prof., 66. 
 Trusts. See Combination. 
 
 U 
 
 Under employment, 199. 
 
 Unearned surplus, 96, 187. 
 
 Unemployables, 229. 
 
 Unemployment, 229, 162. 
 
 Unproductive surplus, 181 seq. See also 
 Waste. 
 
 Utility, tabular statement, 159; of con- 
 sumption, 36, 106 seq., 169, 221-223. 
 
 Value, humanist standard, v, i seq.; 
 
 Ruskin's theory, 9; social standard, 
 
 162; extra scientific standard, 150. 
 
 See also Organic Welfare. 
 Veblen, M., Theory of the Leisure Class, 
 
 141. 
 
 W 
 
 Wage Boards, 258. 
 
 Wages, 166; M. Well's analysis, 190; 
 piece work or salary, 192; economy 
 of high wages, 196; under scientific 
 management, 216; real wages, 254; 
 under cooperative movement, 259. 
 
 Wallas, M. Graham, Human Nature 
 and Politics, 328. 
 
 Wasps, Social instincts, 352. 
 
 Watts, D., 239. 
 
 Watts, G.F., 45. 
 
 Waste, in consumption, 118 seq.; on 
 sport, 159. 
 
 Wealth, 3; Ruskin's view, 9; monetary 
 standard, 29; tabular statement, 159. 
 
 Webb, M. Sydney, 190. 
 
 Wicksteed, Common Sense of Political 
 Economy, 8, 173, 328. 
 
 Working classes, expenditure, 125 seq.; 
 wasteful 'thrift', 179; marginal ex- 
 penditure. See also Family, Stand- 
 ard of Living, 126. 
 
 Women, employment, 82; cost of labour, 
 80; in early arts, 25; wages, 191. 
 
 Wordsworth, Wm., 239. 
 
 World state, 274, 280. 
 
 Young, Arthur, 222. 
 
 Printed in the United States of America.
 
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