re r tmmmmmmmtmmmmmmmttm e ^ * r* m rx \\ I | l |||| l IIHll'l "Til Poverty; its Genesis and Exodu t/ r.GOI THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES ACO 10 14 POVERTY: ITS GENESIS AND EXODUS. POVERTY / * ITS GENESIS AND EXODUS Un Snqutn? into Causes anb tbe /Ifeetbob of tbeir IRemoval BY JOHN GEORGE GODARD AUTHOR OF " GEORGE BIRKBECK, THE HONEER OF PUBLIC EDUCATION," ETC. SECOND EDITION. LONDON SWAN SONNENSCHEIN & CO. NEW YORK: CHARLES SCRIBNER'S SONS 1S92 Printed by Caivan &* Co., Limited. Perth, UNIVERSITY OF SOUTHERN CALIFORNIA UBBWV V CONTENTS. . I. THE PROBLEM STATED. Page The Depth of Poverty— Number of Paupers— Percentage to Population— Over- crowding — The Death- Roll ... ... ... 1 The Nature of the Problem — Duty of Investigation— To what is Poverty due ?— Can it be removed ? ... ... ••• ••• ■ Definition of Poverty — Necessaries— Minimum Requirements ... ... 5 II. THE CAUSES OF POVERTY. There is Plurality of Causes — Popular Misconceptions ... ... .. •-. 8 Three possible Causes of Poverty — A Simple Illustration— The Causes may co-exist ... 10 Insufficient Production — Th-e- National Income— Wealth Defined— The Annual Income : Population — Average Income ... 13 Insufficient Production of Necessaries- Luxuries— Wrong Production— 1 he Annual Saving —The Reduced National Income ... ... 17 Waste — Individual Waste— Idla Consumption— Excep- tions— Meaning of ' Producer "—Amusements of the Idle— Consumption of Luxuries— The Annual Drink Bill 22 Industrial Waste— Loss of Capital— Speculation — Adulteration— Strikes— Middlemen — Professional Services ... ... ••• ••• ■■• 26 National Waste — Crime— Our Imperial Expendi- ture—The cost of ' • Military Operations " ... 29 Unequal Distribution— The Extent of the Inequality— Corpus— Income — The average Share of Rich and Poor 31 The Nature and Effect of the Inequality— Monopolists— "The Three Rents": Their Amount — Relative Savings — Indirect Effects ... ... 33 Is the Inequality Increasing ?— Improvements in Instruments of Production—Effect of Machinery on Distribution and Price — Cheapening of manufac- tured and imported Goods— Rise of Rent — Increased cost of Food— General Results ... ... ••• 33 1928687 CONTENTS. Page Yet a Fourth Cause — The Effect becomes it Cause — Poverty leads to Insuffi- cient Production : and Waste : and Unequal Dis tribution — How the Evil is Perpetuated .... 40 III THE PROBLEM SOLVED. Poverty is Preventible — Is due to Man— The Law of Nature — A Gradual Me- thod — Obligations Recognised — Effects hitherto dealt with ... ... ... .. ... 43 The Means of Increasing Production — Mechanical and Scientific Aids — Machinery — — Specialisation of Industry — Progress of Science 46 The Social Organisation of Labour — Its pre- sent Inefficiency — Production for private Profit — Quasi instances of Social Organisation — In ■ creased Production of Wealth ... ... ... 49 Political and Industrial Reforms — Democratis- ing of Institutions : Extension of their Functions — The Eight Hours Day ... ... ... 55 Increased Production of Necessaries — Cause of Insufficiency— Demand for Luxuries : Their Supply ... ... ... ... ... 57 Limitation of Expenditure— Saving— Selec- tion of Investments — Foreign Supply and Demand 59 Control of Population — Increase of Wealth and Necessaries per head — Limitation of Numbers ... 02 Restriction on Pauper Immigration — A Law of Aliens ... ... ... ... ... 65 The Means of Preventing Waste — Non-preventible Waste — Vis major — Instances 67 The Extinction of Idle Consumption — Funda- mental Misconceptions — The Circulation of Money — Making Work — Spread of Economics — Taxation of Unearned Incomes — Noblesse oblige ... 68 The Diminution in the Consumption of Luxuries— Temperance Reform — The Weighing of Expenditure — Ethics of Luxuries ... ... 72 The Minimising of Loss of Capital — Avoid- ance of Recklessness and Speculation — Social Demand — Capitalism ... ... ... ... 75 The Extermination of Shams and Adulter- ation — Production for Use — Saving in Advertise- ments and Puffing ... ... ... ... 77 CONTENTS. xi Page The Termination of the Conflict between Capital and Labour — The Scissors .Simile — Avoidance of Strikes — Collective Ownership >f Capital ... ... ... ... ... 80 The Avoidance of 'Waste in Distribution — Its Cause and Cure— Socialised Distribution ... 82 The Desuetude of many Professional Ser- vices — Their Origin in the Monopolistic System —Tour of Law Courts— The Auction Mart- Appraisers — Methods... ... ... 85 The Prevention and Repression of Crime — Equitable Remuneration of Labour — Reforma- tion of Society — Treatment of Criminals ... 87 The Restriction of Military Expenditure- Cause of Evil— Adult Suffrage : Female Influence —Reform of Military Organisation and Adminis- tration — Commercial Embroilments — International Conferences ... ... ■•■ ••• ••■ 90 The Means of Establishing Equitable Distribution— Equality not Necessary — Misconceptions ... 95 Equitable Distribution— The Two Essentials : No Idlers : To Each the Product of his Labour- Nationalisation of Monopolies— The Cry of Con- fiscation—Monopolist Morality ... •■ 96 Democratic Socialism — Nature of Rent — Ac- cumulated Wealth— Future Produce — Taxation of Monopolies— Collective Industry— Individualistic Consumption— True Individualism ... ... 100 The Programme for To-Day— Its Nature- Evolutionary Stages ... •• 10.3 The Transfer of Rent to the Community- Ground- Values— Land Tax— Death Duties— Inci- dental Reforms : Disendowment of Church — Muni- cipalization of Land ... ... ••• ••• 107 The Transfer of Interest to the Community — The Single Tax Examined— Differentiated and Graduated Income Tax— Graduated Pro- bate and Legacy Duties— Socialising of Industry- Extension of Public Works : The Unemployed- Position of Women Workers ... ... ... 112 The Raising of the Standard of Ability- Analysis of the Rent : Traceable to Capital, Op- portunity, and Merit— Levelling-up— Education- Remaining Inequality... ... ... ... 121 The Newer Economics— The "Dismal Science": Its New Dignity— The Spirit of Inquiry ... ... ••■ ••• ••■ 126 xii CONTENTS. IV. OBJECTIONS, PALLIATIVES, CONCLUSION Page The Individualistic Position — "The Difficulties of Socialism" — Arguments Examined — Lack of Novelty — Communism — Con- fiscation — Inequality of Ability — Repression of Originality and Invention — Adjustment of Supply and Demand — General Criticism ... ... 130 The Individualistic Remedy— Difficulties of Individualism — Constructive Proposals — Educa- tion : Temperance : Prudence : Sympathy — An Anti-Climax — The Individualist's Dream — An- archism ... ... ... ... ... 135 Palliatives and Nostrums — The Poor Law — Its Vices — Reform of Representa- tion and Administration — State Pensions — London Reforms ... ... ... ... ... 139 Philanthropy — Its Object— Misdirection — Its Sig- nificance ... ... ... ... ... 14C Emigration — Its Advantages and Disadvantages — Difficulties of the Poor — General Booth's Scheme — Expatriation... ... ... ... .. 141 Peasant Proprietorship — Extension of Monopoly - Security of Tenure — Compensation for Improve- ments ... ... ... .. ... 142 Leasehold Enfranchisement — A Quack Remedy — The "Rights of Property " — Tenants' Protection Act... .. ... ... 144 Trade Unionism — Its Object — Effect on Labour and Consumption — Restriction of Numbers — Ex- clusion of the Poor— Benefits ... ... ... 145 Co-Operation — Its Socialistic Principle — Its Limi- tations — Progress of Movement — Barriers — Gene- ral Utility 147 Summary — Resume of Causes and Remedies— Politics : Duties of Citizenship — Monopolists' Position ... ... 149 The Zeitgeist — The Age of Individualism Past — Apotheosis of Laisser- faire — The Humanitarian Revolt — Socialistic Leg- islation of the Century— Signs of the Times — The Onward March ... ... ... ... 152 POVERTY: ITS GENESIS AND EXODUS. I— THE PROBLEM STATED. The problem o fjooverty^ i s an ever-present, a,nr l__gn_ ever-pressing problem. JBome to us on the winds of the centuries is the sad refrain — " For the poor always ye have with you/' and to-day we take up the same bitter cry. Nay, it has grown in volume as the years have sped; and increasing prosperity seems but to accentuate it. The nation has accumulated riches, but the poor remain ; and the very advance of civilisation, with its diver- sified refinements, comforts, and luxuries, its expansion of industry and development of commerce, has given rise to forms of poverty peculiar to itself ; and with masses of the w r orkers has rendered their toil more severe, their surroundings more dreary, and their lot more depressing. " Progress and poverty " have gone hand in hand. THE DEPTH OF POVERTY. "Wo may endeavour to derive consolation from the fact that the relative number of the poor is somewhat A THE DEPTH OF POVERTY. less than it was ; but as against this it must be borne in mind that our annual wealth-production per head has, in less than three generations, nearly doubled ; and that " never in the whole history of England, ex- cepting during the disastrous period at the beginning of the century, has the absolute number of the very poor been so great as it is now." 2 Some faint idea of the magnitude of the evil may be gathered from the fact that nearly one-tenth of the population are in the receipt of Poor Law relief; 3 but the idea thus conveyed is only faint; for whilst many will die rather than enter a workhouse, many others suffer abject want without being actually penniless, and the great bulk of the residuum of the wage-workers just contrive to drag on a more or less cheerless existence by means of intense and bitter drudgery. Said Mr. Frederick Harrison but a few years ago : " Ninety per cent, of the actual producers of wealth have no home that they can call their own beyond the end of a week ; have no bit of soil, or so much as a room that belongs to them ; have nothing of value of any kind except as much as will go in a cart ; have the precarious chance of weekly wages which barely suffice to keep them in health ; are housed for the most part in places that no man thinks fit for his horse ; are separated by so narrow a margin 1 Mulhall's Dictionary of Statistics, p. 245. 2 Problems of Poverty, by John A. Hobson, p. 26. (London: Methuen & Co. 1891.) 3 Fabian Tract, No. 17, p. 5. (London : The Fabian Society, 63 Fleet Street. 1891.) VERCR0WD1NG— THE DEA TH-ROLL. 3 from destitution that a month of bad trade, sickness, or unexpected loss brings them face to face with hunger and pauperism." l The manifestations of poverty are numerous and varied, but Mr. Harrison gives prominence to one which should be peculiarly repugnant to English susceptibilities: the repulsive homes — if homes they can be called — of large masses of the people. The Royal Commission appointed in 1884 "to inquire into the Housing of the Working Classes " reported that the evils of overcrowding, especially in London, were a public scandal, and were becoming in certain locali- ties more serious than they ever were 2 Six, nine, and even twelve persons of both sexes inhabiting one small room ; seven people in an underground kitchen, six in a washhouse, thirty-eight in a small house ; two families living together; husband, wife, four children, and a female lodger and baby occupying a single room; more than sixty persons in a house of nine rooms, in none of which was more than a single bed ; people sleeping on shelves as on ship-board ; children sleeping under their parents' beds — such are some few of the facts which the Commission brought to light 3 Their appalling significance, especially as regards their influence upon the physical and moral condition of the people, is too patent to call for comment. The death-roll tells the same tale of wide-spreac poverty. Out of 79,009 deaths in London in 1888, 17,GG3 occurred in public institutions; 10,170 being 1 Report of five Industrial Remuneration Conference, 1886, p 429. 2 Report, p. 4. 3 j u ; iL) pp> 7; 8> 10> THE NATURE OF THE PROBLEM. in workhouses, 7,113 in hospitals, and 380 in lunatic asylums. This showed an increasing percentage, being 22'3 as against 20'6 in the previous year. In the richest city in the world, one out of every five persons, or probably one of every four adults, dies a pauper's death ! 1 THE NATURE OF THE PROBLEM. Investigation of the problem of poverty is thus a solemn duty imposed upon all who share in the benefits which progress implies. If the privileges some of us possess are so great that to our ancestors even the conception of them would have been well- nigh impossible, all the more reason is there for us to ascertain at what cost they are purchased. If in what we deem this enlightened nineteenth century, indigence and want can thus prevail, surely our boasted civilisation has somehow missed its mark. Pove rty can not be ignored by m oral men ; the pro- blem does not admit of ev asion. We are jace to face ^ with the s tern fact that ln jllipns of our fellow- creatures are at present doomedt o lives j rfjniservj ministering to our wan ts, but _un able to satisfy their own; and with little or no hope this side of the grave , whither the} 7- are prematurely hastening. Can we, dare we, shut our eyes ? Must the poor, then, be always with us ? Is poverty due to some grim law of nature from which there is no escape ? Is it even due to a Divine ordinance, enunciated, as a sapient preacher once suggested, that 1 Fabian Tract, No. 17, p. 6. DEFINITION OF POVERTY. the rich may have scope for benevolence and philan- thropy ? Or is it due simply to the artificial condi- tions of society ? Must we trace it to Nature or to Providence, and accept it as part of the inevitable ? Or can we trace it to man, — and therefore remove it ? And if the latter, how ? This is the problem. DEFINITION OF POVERTY. As to what is meant by poverty, most people have a more or less adequate conception — too many, as we have seen, experimentally. But the term is not con- vertible into the lack of any defined minimum mone- tary income ; and some indication is desirable of the sense in which it will be used. Roughly, we ma}'' define poverty as " An insuffi ci^ ency of ne cess arie s"; or, m are fully, as-liAnjn^ sutncient sup ply~ofthose things which are re- quisite ior an individual to maintain himself and those dependent upon himln health and vigour." And the degree of poverty "will obviously be deter- mined by the extent of the insufficiency. Of course, this leads to the further question as to what things are requisite : and it must at once be stated that there is no sharply defined line between necessaries and unnecessaries — or luxuries. A given article may be requisite to one man and not to an- other, and may be requisite at one time and not at another; whilst the requirements of an individual that he may adapt himself to his environment natur- ally depend upon the nature of the environment. The REQUISITES TO HEALTHY EXISTENCE. personality, the time, and the circumstance, have all to be taken into account, and no general rule can therefore be laid down. Obviously, however, an adequate supply of whole- some food and suitable clothing, and a sanitary dwelling, with sufficient sleeping apartments, are amongst the first requisites. To these must be added the means of obtaining some amount of education. Eecreation also, and consequently the ability to pro- cure it, and leisure to enjoy it, are scarcely less neces- sary to healthy existence. Medical aid and medicine in times of sickness, and more expensive forms of nourishment then, and during convalescence, are equally essential. And freedom for the married women, and -to some extent for many of the unmarried, to devote themselves to domestic work must also be included in our category. All these things are " necessaries" in the case of the very humblest members of society. Those who have to endure the strain of town life will have increased requirements ; and in the case of those devoted to the more skilled branches of industry and to mental avo- cations, if their productive powers are to be properly utilised, the list will have to be still further augmented, and it will include many things which for the manual labourer would be comparatively useless or luxurious. 1 Some amount of elasticity, then, must be given to the term " necessaries " ; and this fact is, of course, of fundamental importance in dealing with individual cases. Our investigations, however, will have refer- 1 See Principles of Economics, by Professor Alfred Marshall, vol. i., book ii., chap. iv. (London : Macmillan & Co. 1890.) NATURE OF INVESTIGATION. ence more especially to poverty in the mass, as un- mistakably manifested, though in varying degrees, in the condition of the large majority of the wage- earners; and the definition will, it is hoped, prove adequate to the purpose. II— THE CAUSES OF POVERTY. Accueate diagnosis is a pre-requisite to the successful treatment of a disease. Tfwft_wish tn removp poverty, we must clearly ascertain from what it proceeds. Hence/tKe first p ortion of our investigation will con- sisTTof an inquiry into Causes. THERE IS PLURALITY OF CAUSES. And it is to be remarked at the outset that social problems are almost invariably complex, and the science of Sociology cannot approach to exactness. Although, however, our inquiry leads us into the domain of Sociology, it is into that part of it which comes within the special jurisdiction of another science more exact in its nature — namely, Economics. We have, in the main, to deal with men as wealth-pro- ducing animals— a side of their character in which motives can be measured. And whilst, later on, we must also enter the domain of Ethics, yet, so far as our investigation of causes is concerned, the inquiry is one purely of economic and statistical science. But it is important at once to disabuse our minds of the supposition that poverty can be traced to any one cause — a supposition upon which many enthusiasts for particular reforms frequently act. Thus, we are oftentold that Drink is the cause of poverty ; once POPULAR MISCONCEPTIONS. make the people sober, and all will be well, — a dictum which overlooks the fact that many are both sober and poor, and that many are both intemperate and rich. O thers tell us that poverty is due to Impro- vi dence^ the working-man has only to acquire habits of thrift and " self-help," and he will be able to make provision for a rainy day, — oblivious of the circum- stance that with some almost all days are rainy, and that the most rigid economy cannot do more than make both ends meet. Others, again, discover that the_cause of_ poverty is Ove r-pnpniatirm, a,r.r1 tj ia fr we h ave merely to limit our numbers, and the problem wil l_be solved, — f orgetful that Ireland proclaims the futility of simply relying on a diminution of popula- tion. And finally, Mr. Henry George appears upon the scene, and in eloquent language traces poverty entirely to the individual appropriation of Rent of Land, — ignoring the fact that the private ownership of the soil is not an isolated monopoly, and that the economic effect of all monopolies is, undoubtedly, the same in kind. Now, each one of these views embodies, as we shall see, a certain amount of truth ; but it does not con- tain the whole truth, or even the greater part of the truth. The mistake is in regarding drink, impro- vidence, over-population, or rent of land, or anything else as the cause of poverty. As a matter of fact, it is scarcely accurate to say that any one of them is in itself a cause ; it is only an illustration or part of a cause, or, in other words, only one of several factors, the sura of which is alone worthy of being dignified by the name of a cause. io POSSIBLE CAUSES OF POVERTY. THREE POSSIBLE CAUSES OF POVERTY. What we want is a classification of causes on something like a scientific basis. If poverty consists in an " insufficiency of necessaries," then we must ascertain in what way an insufficiency can arise. The first point, therefore, to ascertain, is what are the possible causes of this insufficiency. And we can perhaps best discover this by narrow- ing our vision, and taking a simple hypothetical case. If we imagine a small island inhabited by, say, only ten people, we can without effort follow the working of the problem. The probabilities are that in our minia- ture State money would be unknown ; but it will still further simplify the investigation if we reduce the wealth of the island to English currency ; and we will therefore premise that a sufficiency of necessaries for each person (assuming also, for still further sim- plicity, that each requires the same) means wealth equivalent to not less than £50 sterling per annum. Obviously, then, our ten people must produce £500 worth of wealth in any given year. If they produce, say, only £400, poverty will ensue. And in that case the poverty will be due to insufficient production. Or, even if they produce £500, but £100 of that consists of luxuries — articles which are not absolutely re- quisite to any, and which usurp the place of articles which are — poverty will still result, and will be caused by the insufficient production of necessaries. Or, again, if part of the £500 should be represented INSUFFICIENT PRODUCTION— WASTE. II by things which, though useful to the community, have been produced at the cost of the non-production of things which are more urgently needed, — if, for example, a gymnasium be erected, to the neglect of the building of requisite dwellings, — once more poverty will be brought about, and will be due to wrong production, or the insufficient production of the more immediate necessaries. Insufficient Production, then, is one possible cause of poverty. But our little community may produce £500 worth of necessaries, and may recklessly consume a portion, or allow it to spoil. They may indulge in a series of orgies, and squander their possessions, or they may leave them exposed to the elements or the depreda- tions of animals. If they do, their £500 will inevit- ably be reduced, and poverty must therefore ensue ; but in that case it will result from what may be termed the waste of necessaries. And if they should be so foolish as to allow some of their number to lead idle lives, and (out of the consequently diminished wealth) still supply such with all they require, the same result will follow, and from the same cause ; for idle consumption is waste. And Ave can also classify under this head of waste the consumption of luxuries produced at the expense of necessaries ; for such con- sumption indirectly leads to the misapplication of labour; and misapplied labour is waste. Waste, then, is another possible cause of poverty. But again, our group of islanders may produce -k /: r 12 UNEQUAL DISTRIBUTION. their £500 worth of necessaries, and they may avoid waste ; but they may divide their wealth amongst themselves in different proportions, with the inevit- able result that as some get more than £50, others get less. And since £50 is the minimum upon which each can properly subsist, poverty will once more ensue. And in this case it will be due to inequality cf division. Unequal Distribution, then, is a third possible cause of poverty. And these three hypotheses will, we think, be found to cover the field of inquiry. Insufficient pro- duction, waste, and unequal distribution are the only possible causes of poverty. To one or more of them can be reduced every factor which could tend to pauperise the inhabitants of our little island. And the causes, it will be noticed, are not antagon- istic : they can all operate at the same time. Thus, instead of the minimum of £500 worth of necessaries, only £400 might be produced : of that £100 might be wasted, reducing the available amount to £300 ; ami this latter sum might be unequally distributed. And in this case, evidently, poverty will be most acute. Of course we have only dealt with the actual re- quirements of the community, — that is to say, with the production of necessaries to the extent of £500 in value. If their labour can result in a larger product, the excess need not take the form of necessaries ; it can (however objectionable the procedure may be from other points of view) even be wasted ; and it is not requisite that it should be equally distributed. IS PR OD UC TION INS UFFICIENT ? 1 3 But if ..poverty is to be avoided, the production of luxuries or quasi-luxuries, carelessness or squandering, and inequality of division can only be indulged in after the real wants of everyone have been provided for. Thus, then, we see definitely the course our inquiry must take. We bid farewell to our Liliputian island with its ten inhabitants, and returning to the 120,000 square miles of territory known as the British Isles, with their teeming millions, proceed to ascertain whether any one or more of the three possible causes of poverty are in actual operation in the United Kingdom to-day. INSUFFICIENT PRODUCTION". The first point then to be determined is whether sufficient wealth, and that of a suitable class, is pro- duced. We must, therefore, endeavour to ascertain what is the amount of the annual produce relatively to population, and what proportion of it takes the form of necessaries. The National Income. Wealth has been briefly defined as anything which is useful and possesses an exchange-value. 1 The 1 The above definition is the one usually employed by economists, though in varying and more elaborate forms. Pro- fessor Marshal], however, gives the term a wider meaning by including some non-transferable and free goods, and uses the term "exchangeable wealth" to express the narrower meaning. Principles of Economics, vol. i., p. 110. 14 DEFINITION OF WEALTH—INCOME. term " useful " is employed in its widest sense, re- gardless of the nature of the utility, which may con- sist simply in giving pleasure, as in the case of articles of personal adornment. And the term " exchange- value " implies not only the existence of the quality of transferableness, but that there has been effort in attainment ; so that anything of which there is a free unlimited supply (as air, for example, under ordinary circumstances) cannot, however useful or even indis- pensable, be regarded as wealth. With the definition, as a definition, no fault need be found. But, accepting it, we must the more care- fully bear in mind that in dealing with poverty the nature of the utility embodied in wealth is really all- important. For a nation may be very rich and yet very poor ; it may pile up " wealth," and at the same time be sadly deficient in the essentials of healthy existence. What we require in the first instance is a sufficiency of those forms of wealth which possess social utilities — that is, which are capable of satisfy- ing the real wants of the community. And whilst, therefore, it is desirable, as a starting-point, to know the total amount of wealth which the nation pro- duces, this is really only a starting-point. One other preliminary observation. The wealth which the nation produces, or in other words, its income, consists of "commodities" and "services." The first embrace substantially all consumable material things (the land, to which all produce must be directly or indirectly traced, is an " instrument of production," and even as an instrument it has been largely made available by labour). The second may be seen in the AVERAGE ANNUAL INCOME. 15 benefits- rendered, say, by a physician or a school- master, which benefits, though they do not take the form of material wealth, are, nevertheless, useful, and possess an exchange-value. "No wealth whatever can be produced without labour ; " x and in the one case labour is devoted to the production of food, clothes, and houses, for example ; in the other labour is devoted to heal the body or develop the mind. The total annual income of the United Kingdom may be taken to be of the value, in round figures, of £1,350,000,000 2 ; this is the money price of the com- modities and services produced in the year. The total population is about thirty-eight millions. 3 An equal division of the nation's income would, therefore, give to each person somewhere about £35 per annum 4 — in other words, that is the sum which may be said to represent the annual income of every member of the community on the basis of equality of distribution. Or, if we assume a division amongst the adult males 1 Professor Fawcett. Manual of Political Economy, p. 13. 2 Mr. Giffen estimated it, in 1886, at £1,270,000,000. Essays in Finance, vol. ii., pp. 460, 472. 8 The Census Returns for 1891 gives the number at 37,740,283 (18,319,157 males, and 19,421,126 females). If the 147,870 in- habitants of the islands of the British seas are added, we get 37,888,153. See Preliminary Eeports. It is convenient to take the round number of 38,000,000; and this makes no appreciable difference to our calculations. Indeed it is probable that the actual population is greater than that shown by the Census Reports, as some persons elude the vigilance of the oflicials. 4 Professor Marshall gives the average annual income at "about £33." Principles of Economics, vol. i., p. 46, foot-note. 16 INSUFFICIENT PRODUCTION OF WEALTH. only, then (taking their number at nine millions) each would receive about £150 per annum, subject to the obligation of maintaining the adult females (say rather more than nine millions) and all of both sexes who have not arrived at maturity (say rather less than twenty millions). These figures may not be absolutely exact, but they at least closely approximate to ac- curacy. Whether an annual income, for each person, of £35, or, for each adult male, of £150, would be sufficient to prevent poverty, is a question upon which opinions may differ. There are, no doubt, many to whom such a sum would seem like affluence ; and there are, no doubt, many others to whom it would seem like ex- treme indigence. The probabilities are that, in the majority of cases, it would prove sufficient to provide all that we have comprised under the head of neces- saries, but that in some it certainly would not. Those whose occupations compel them to live at high tension, and those who, on account of ill-health and infirmity, have special wants, would undoubtedly find the amount inadequate ; and unless, therefore, we assume that with a sufficient number of others it would prove more than adequate, we must come to the conclusion that some slight amount of poverty would always exist, unless production per head were increased. Insufficient Production of Wealth, then, may be regarded as an actual cause of poverty, but one of minor importance, and referred to chiefly as leading up to the main inquiry of the present section. PROD UC TION OF L UXURIES. 1 7 The Insufficient Production of Necessaries. For, as has been indicated, it is not simply wealth we require ; that wealth, in order to prevent poverty, must take the form of necessaries. And a very large proportion of the annual product obviously cannot be regarded as taking this form. It consists chiefly of commodities and services which are wholly or partly luxuries (not being requisite at all, or not being requisite in the quantity in which they exist), and to some extent of commodities and services which are wholly or partly useless and some of which are positively deleterious. 1 We have only to stroll through some of the prin- cipal thoroughfares of our wealthy towns to at once realise the existence of luxury. We shall probably discover palatial residences, which we may safely conclude to be gorgeously furnished (oftentimes with little regard either to comfort or to art), and to possess well-stocked wine-cellars, and larders replete with delicacies. Or we may descry spacious shops and emporiums, with their glittering array of jewellery and trinkets, their collection of sealskins, velvets, and silks, their exhibits of special vintages, or importations from Havana, and their display of those thousand and one curiosities which are gathered from the four corners of the globe. If we extend our stroll, we may, perchance, come across some building which, under the innocent title of the " Stock Exchange," is the daily haunt of numbers of men who are chiefly occupied in 1 See p. 27. B i S PROD UC TION OF L UXURIES. gambling for others. Or we may find ourselves at a somewhat kindred institution where sundry " gentle- men " are engaged in making, paying, and receiving bets, under the guise of improving the breed of horses; from which we may infer the nature of the services by which this product of civilisation is maintained. And even if we should confine our ramble to the less attractive poorer districts, we shall discover displays of tawdry finery, adulterated wares, goods "cheap and nasty," and flaming gin-palaces at every few 3'ai*ds. Now, by far the greater part, and in some cases the whole, of each of these and many similar commodities and services, far too numerous to tabulate, cannot come within the most elastic definition of " necessaries." It has even been maintained that they cannot be re- garded as wealth, and should rather receive the desig- nation of "illth" 1 — a suggestion provoked by the fact that they are co- existent with extreme indigence. Clearly, however, their value must be deducted from our £1,350,000,000 if we wish to ascertain that por- tion of the national income which is available for the prevention of poverty. The precise deduction which ought to be made it is not possible to ascertain, but we may safely regard one-third of the total income as represented by luxuries (the probabilities are that this is considerably below the mark 2 ), so that the 1 Fabian Essays in Socialism, p. 22. (London : The Fabian Society, 63 Fleet Street, 1889.) 2 "Perhaps £100,000,000 annually are spent even by the working-classes, and £400,000,000 by the rest of the population of England, in ways that do little or nothing towards making life nobler or truly happier." Principles of Economics. By Professor Marshall. Vol. i., p. 731. wrong production: iq annual amount of necessaries produced must be taken as not exceeding £900,000,000 in value. But we have seen also 1 that wealth, whilst taking the form of useful things — articles which can fairly, under given circumstances, come within the category of necessaries — may be produced at the cost of things for which there is greater need, with the result that there is an insufficient production of the more im- mediate necessaries. We must not, therefore, assume that even the whole of our £900,000,000 is represented by the most appropriate class of wealth, or is avail- able for the prevention of poverty. On the contrary, we know that it is not ; for the same causes (to be investigated later on 2 ) which indirectly lead to the production of luxuries also conduce to wrong produc- tion even in the matter of some articles which need not be characterised as luxuries. Here, again, the exact extent to which this takes place it would be difficult to ascertain, but there is one fact which throws some light upon the subject — ■ namely, that, out of the total annual product, more than one-seventh (of the value of £200,000,000) is " saved," 3 the bulk of it existing in the form of new railways, roads, houses, machinery, and other aids to future labour. 4 These are all very useful things ; but they form an addition to accumulated wealth, and their consumption is necessarily extended over a long 1 Page 11. - Sue p, 58. 8 Mr. R. Oiffen's Essays in Finance, vol. ii., p. 407. 4 Fabian Tract, No. 5, p. 3. 20 THE ANNUAL SAVING. period. To the extent, therefore, to which this produc- tion involves an insufficient supply of food and clothing, for example, they are instances, for the time being, of wrong production ; and their value must be deducted from our £900,000,000 to arrive at the net amount of the annual income represented by that form of wealth which is capable of satisfying the annual wants. Of course that class of saving which simply consists in storing up suitable necessaries for consumption in the immediate future — a process which is constantly going on, since we can only consume the products of past labour (although much of it cannot be stored for long) — stands on a different footing. But the greater part of our £200,000,000 is not a mere credit of necessaries to next year's account, corresponding to a credit previously made to the present year's account of necessaries now being consumed. It is largely a pure addition to capital ; and whilst that addition is partly required, if capital is to grow with population, and whilst the whole of it tends to increase future production, and is thus beneficial, the point to be determined is whether we can afford to make it — whether, in fact, it is not equivalent to a man going without a dinner that he may deposit sixpence in the savings' bank. In order to ascertain this we must subtract from the total produce the amount that is thus saved in excess of what is requisite for capital to keep pace with population. If we take this latter at £100,000,000 we shall be erring on the safe side, and we have therefore a deduction to make from our £900,000,000 of a like sum of £100,000,000. This THE DIMINISHED ANNUAL INCOME. 21 will reduce to £800,000,000 the proportion of the annual income which is available to meet the actual necessities of the year. Thus our £35 per head 1 dwindles down to about £21, and our £150 per adult male 2 to about £90. And even if we exclude from consideration the question of wrong production lastly dealt with, and venture to take £900,000,000 as our available annual produce, we are still left with only about £24 per head, or with, in round figures, £100 per adult male. And we have little hesitation, therefore, in arriving at the conclusion that the production of necessaries is insufficient. An average annual income of £21, or even of £24, would not be enough to maintain the community in health and vigour. Insufficient Production of Necessaries, then, is a cause of poverty, — though we shall hereafter see it is not the most potent cause. WASTE. The next point to determine is whether there is waste ; and, if so, of what character. And we may conveniently make the inquiry, first, as to the indi- vidual ; secondly, as to the industrial community ; and thirdly, as to the nation collectively; although, of course, the division cannot be regarded as an absolutely rigid one. 1 See p. 15. 2 See p. 16. 22 IDLE CONSUMPTION. Individual Waste. We commence by recalling the fact that idle con- sumption is waste — that is to say (with the modifica- tion to which attention will be immediately called) not only luxuries, but the very necessaries of exist- ence, when consumed by people who produce nothing, are, so far as the rest of the community is concerned, absolutely wasted ; and a part of the consumption of the semi-idle is attended with the same result. Such people are more or less parasites — " drones in the hive," as the late Professor Cairnes put it, " gorging at a feast to which they have contributed nothing,'' x or to which they have not contributed their fair share. From this class, however, must be excluded the young, whom it is both cruel and impolitic to draft into the industrial ranks before their physical and mental powers are developed ; and the aged, whose powers are declining, and who, after giving their best years to the service of the State, are entitled to im- munity from further labour ; and the sick and afflicted, who are unable to work, and have a peculiar claim upon the community. Nor must we be misunderstood on another point. Production, in the economic sense, as we may gather from our brief analysis of wealth, 2 does not mean the mere manufacture of material articles. For man, in reality, makes nothing : by all his labour he cannot add one particle to the sum of matter in the universe. 1 Some Leading Principles of Political Economy, p. 32. 2 See p. 14. MONO POL Y OF SER VICES. 23 All he does is to "move" or alter the form of material substances ; or, in other words, he produces simply " utilities." But utilities may be embodied in human beings as well as in outward objects; and everyone who creates utilities is a producer, whether he makes a table (to use conventional language) or causes a blade of grass to grow, or whether he increases the mental powers or improves the moral character of his fellows. Yet the fact remains, that, with these limitations, there are tens of thousands who produce practically nothing, and hundreds of thousands who produce far less than the equivalent of what they consume. 1 Waste, therefore, takes place ; and unless we had, as we have seen we have not, a superfluous production equal to the amount squandered, this becomes a cause of poverty. Nor is the waste caused by the drones confined to their personal consumption. To minister to their pleasure they monopolise the services of large numbers of other individuals, who, although not themselves idle consumers, are fed, clad, and housed, simply that they may add to the comfort of the privileged class. Large armies of domestic servants and personal attendants are kept, in order that magnificent estab- 1 It appears from the Census of 1881 that 407,169 adult males returned themselves as of no occupation. (The Preliminary Report of 1891 does not give information on this point.) The number of those who do a few hours daily " work," after the manner of the " Circumlocution Olliee" worthies, we can only- guess at. 24 CONSUMPTION OF LUXURIES. lishments may be maintained, and that their owners may be spared exertion. And, having little or nothing to do, they seek to " kill time " and combat ennui by amusements of the most diversified and costly char- acter. They must have their shooting and their opera-boxes, their race-horses and jockeys and clubs, their house-boats and yachts and four-in-hands, and all the other forms of diversion which are regarded as essential to " fashionable life." All this represents so much waste. The consump- tion by those who are thus engaged simply in contri- buting to the pleasure of the idlers has the same economic effect as the consumption of the idlers them- selves : nothing is given to the community in exchange for the wealth destroyed. But, again, even with active producers not engaged wholly or partially in ministering to those who con- tribute little or nothing to the national income, the consumption of luxuries has the same effect : it is equally " unproductive consumption." 1 The guests who assemble at the hospitable board of the Mansion House, for example, may be highly useful members of society ; but gorgeous civic banquets, to the extent to which they are in excess of necessary fare, must be condemned as waste. And the working-man Avho squanders some of his hard-earned wages at the public-house is contributing to the same evil. Pro- fessor Marshall intimates that " perhaps more than half of the consumption of the upper classes of society 1 See Principles of Political Economy. By John Stuart Mill. Book i., chap, hi., sec. 5. THE ANNUAL DRINK BILL. 25 in England is wholly unnecessary;" 1 and there is no doubt that a considerable, though naturally a much smaller, proportion of the consumption of the " lower el isses " is equally so. Many instances of unproductive consumption might be cited, but we may be content with selecting the most notorious. Our annual Drink Bill is, in round figures, £125,000,000 — it has been more — and although about £30,000,000 of this goes to the Government in the shape of duties, a very large proportion of that sum may be set off against the cost to the community of coping with the crime, vice, and disease which are caused by strong drink. Not, however, to overstate the case, let us say that the consumption of alcoholic beverages costs us £100,000,000 per annum. The greater part of this is absolute waste. We do not for one moment suggest that under no circum- stances can alcohol be considered a necessary, but it certainly is not food ; and although alcoholic beverages contain a fractional proportion of nutriment, there cannot be any reasonable doubt that if the amount consumed were reduced to one-twentieth, or, say, £5,000,000, no one would suffer, whilst we should obviously effect an enormous saving. The probable total amount of the wealth annually produced, which is represented by luxuries, we have already had occasion to refer to, 2 in order to arrive at that portion which is represented by necessaries. The consumption of luxuries, however, which are pro- cured at the cost of an insufficient supply of the 1 Principles of Political Economy, vol. i. p. 124. 2 Sue p. lb. 26 LOSS OF CAPITAL— SPECULATION. requisites of life, has naturally called for observation under the present section. Industrial Waste. Passing from the individual consumer to the in- dustrial society, we may next inquire whether waste takes place in connection with production and dis- tribution. And so many instances at once occur to us, that there can be no hesitation in answering: the question. Perhaps the most prevalent form of industrial waste arises from the loss of Capital. Under our system of competition merchants embark in the most risky enterprises; and the general public, especially that portion with limited means, is often induced, by mis- representation and deceit, to contribute to absolutely worthless undertakings. The result is that much wealth is annually lost — that is to say, it is unpro- ductively consumed to the extent to which it is devoted to labour that proves abortive. And even with more reliable or bona fide commercial pursuits, owing to the difficulty in accurately gauging demand (especially with regard to articles which are not absolutely requisite), to the changes in fashion, and the ever varying caprices of the wealthy consumer, productive waste is constantly taking place. And Speculation, whilst also often giving rise to direct loss of capital, in any case involves a wasteful tax on the community, by the maintenance of numbers of persons whose chief occupation is to promote and protit by the speculation. Joint-stock companies, ADUL TERA TION— STRIKES. 27 productive though they have been of great good in many respects, have considerably extended gambling, and have resulted in what is known as " rigging the market," and in the buying and selling of shares simply for an anticipated rise or fall. "Rings and corners" are other instances of the same evil; and although large speculators at times fulfil useful functions, to the extent to which they are engaged in artificially inflating or depressing prices and in con- tributing to industrial crises, their labour and their consumption is worse than wasted. Capitalists, again, deliberately promote the evil. The manufacture of practically useless articles, to be palmed upon the purchasing public by means of .chicanery and deceit, and adulteration, or the com- pounding with useful articles of spurious or deleterious ingredients, represent some of the worst forms of waste ; for they are the outcome of deliberate fraud, and oftentimes of a criminal disregard for health. And they lead to further waste by the expenditure of enormous sums in the elaborate puffing and advertising of these objectionable wares. In "Strikes" and "Lock-outs" we have other instances of industrial waste. They cause machinery to remain idle, labour to be thrown upon the streets, industry to be suspended, and commerce to be deranged. And these effects are very far-reaching; for, with the intcr-dependence of the various industrial groups, a disturbance in one trade, or even in one centre, extends with varying intensity to many others ; and the evil results are often felt long after the particular dispute is settled. 28 WASTE IN DISTRIBUTION. All this means enormous loss to the community, though the burden, as a rule, falls most heavily upon those least able to bear it — namely, the poorer classes. Waste is also characteristic of our system of dis- tribution. Commodities are filtered through numerous channels before they reach the consumer, at the cost of the maintenance of a large army of " middlemen, " whose sole function it is to pass on the products of industry from hand to hand, each one retaining a portion, or its equivalent, for himself, in the shape of " profit." To the extent to which their services could be dispensed with, their labour is socially unpro- ductive, and their consumption of wealth another in- stance of the evil with which we are dealing. And, once more, many professional services must come within the same category. Our lawyers, valuers, auctioneers, and others in the same industrial grade, are, in the main, very estimable individuals, (though, with regard to the first, it is customary to give them credit for more mischief than even that attributed to much-maligned woman); but if they attempt to analyse — which they probably rarely do — the nature of the services they render, they must come to the conclusion that the less those services are required the better it will be for the communit} 7 . So far, therefore, as the labours of the professional classes are rendered necessary by an undesirable artificial condition of society — and that they are, to no small extent, so rendered necessary will hereafter be seen, 1 — they represent a form of industrial (though not of individual) waste. 1 Page 85 et seq. CRIME AS WASTE. 29 National Waste. There are yet other manifestations of the evil to which brief reference must be made; and, although both individual and industrial waste necessarily affects the community as a whole, there are some forms which are more appropriately classified as distinctly national. Crime (we regard it from the economic rather than from the moral standpoint) is waste. The criminal is engaged in producing, not utilities, but what may be termed " disutilities " — that is to say, he is engaged in working mischief. He often lives on the labour of the community, and he necessitates labour being- devoted to thwarting his designs and keeping him in restraint. Policemen, magistrates, gaolers, and others have to be maintained in order to cope with him ; and even the production of locks, bolts, and bars, and similar safeguards, may be regarded as chiefly re- quired for the same purpose. From one aspect of the question the expense thus entailed upon the community may be considered as individual waste : its proximate cause is the vicious- ness of individuals. But this aspect is a narrow one, and does not embrace the cause of that viciousness. Hereafter we shall have occasion to inquire to what it is crime is due } and meantime we prefer to classify this instance as one of national waste, indicating- thereby that the ultimate responsibility rests in the main with the community rather than with the 1 See p. 87 et seq. 30 GOVERNMENTAL WASTE. criminal himself. But with whomsoever it rests, the viciousness affords one of the most painful exempli- fications of waste. The evil is also manifested to some extent in our Government departments, which, owing largely to the lack of identity of interests between the officials and the general public, are seldom conducted with a suffi- cient regard to economy ; whilst any criticism is often considered as satisfactorily disposed of by being denounced as a " cheese-paring policy." Our Imperial expenditure is about £86,000,000 per annum ; but from this ought to be deducted some £8,000,000, the cost of the Post and Telegraph ser- vices, which, as a whole, constitute a well-managed and profitable business ; thus leaving about £78,000,000 net. The mere amount, however, in itself proves no- thing, since the necessary expense of Government must depend on the functions it discharges. But of the sum in question, we find that about £25,000,000 is for interest on the National Debt, " made up, for the most part, of the cost of unnecessary wars, or gross extravagance and corruption on the part of our rulers of the past." 1 Another £33,000,000 goes to the present maintenance of the Army and Navy, devoted, not simply to self-defence, but to that ag- gression and chastisement for insult, real or im- aginary, which forms part of a spirited foreign policy. And of the remaining £20,000,000, the greater part represents the expenditure on the miscellaneous Civil 1 Financial Reform Almanack, 1891, p. 46. MILITARY OPERATIONS. 31 Services, the costly collection of revenue by indirect taxation, and annuities, pensions, and allowances. That some saving could be effected in many of these departments, without any sacrifice of efficiency, is undoubted. But probably the only very large item which is open to grave objection is the £33,000,000 above referred to (of which more than £17,000,000 represent the cost of our land forces), to which must be added loans raised for similar purposes. When we investigate 1 the motives inducing " military opera- tions " — as the process is euphemistically termed — we shall see that much of this expenditure is wholly un- necessary. Thus our second question receives on all hands an emphatic affirmative answer. Waste of Wealth is a cause of poverty, — though even yet we have not seen the most potent cause. UNEQUAL DISTRIBUTION. The third and last stage of the inquiry which the visit to our Liliputian island suggested relates to the distribution of the products of industry. The Extent of the Inequality. That wealth is unequally divided is, of course, patent to everyone. But how unequally it is divided com- paratively few seem to realise. Yet since, as wo shall hereafter see, 2 absolutely equal distribution is 1 Page 90 et seq. - Page 95. 32 INEQUALITY IN DIVISION OF WEAL 1H not necessary to prevent poverty, the question of degree becomes of importance ; and a clear concep- tion of the extent of the inequality is, therefore, essential. Just a few significant illustrations. Of the total accumulated wealth of the United Kingdom, estimated, upon the basis of a table pre- pared some years ago by Mr. Giffen, at over £10,000,000,000, 1 one-half is owned by something over a quarter of a million of persons 2 — that is, by about a hundred and fiftieth part of the population, or a seventieth part of the adult population ! And, of the remaining half, only a small fraction, amounting probably to not more than £180,000,000 3 (or a fifty- fifth of the whole), is owned by that large number who constitute the manual-labour class. If we in- clude the families of the quarter of a million persons, we shall have, in round figures, one million individuals enjoying £5,000,000,000 accumulated wealth, giving an average for each of £5,000 ; whilst the remaining thirty-seven millions enjoya like sum of £5,000,000,000 accumulated wealth, giving an average for each of £135. But of the thirty-seven millions, the weekly wage-earners and those dependent uponthem, estimated at thirty millions, 4 enjoy only £180,000,000; thus givino- an average for each of £6 only. One thirty- eighth of the population thus possess on the average 1 Fabian Tract, No. 7, p. 7. 2 Ibid., p. 9. Mulhall's Dictionary of Statistics, pp. 278, 9. s Ibid., p. 9. 4 This class embraces about four-fifths of the total workers. Professor Leoni Levi, Times, 13th January, 1885. INEQUALITY IN DIVISION OF INCOME. 33 ,£5,000 per head; and thirty thirty-eighths of the population possess on the average £6 per head. In- equality of distribution can scarcely be carried much further than this. Nor shall we now be surprised to find that gross inequality prevails in the distribution of the national income. The total, we have seen, is £1,350,000,000 ; and of this, our thirty million weekly wage-earners ob- tain £500,000,000 only ; the remaining eight million persons thus receiving £850,000,000. This means that the average annual income of the one class is less than &V7 per head, and the average annual in- come of the other class is more than £106 per head. But, of course, the greatest inequality also prevails amongst the members of both classes, many receiving infinitely more than £106, and many much less than £17. The Nature and Effect of Unequal Distribution. The eight million persons are monopolists ; they are the owners, save to a trifling extent, of the instru- ments of production; and it is to this fact that the grave inequality in the distribution of the produce is traceable. Because they possess such an enormous sliare of the accumulated wealth, they are able to c 'inmand an enormous share of the annual income. " Unto everyone that hath shall be given." The £850,000,000 is the amount of what are known as the " three rents." Rent of Land (and houses) l 1 Strictly speaking, house-rent is interest on capital, but it is generally more convenient, when dealing with land-values, to 34 THE " THREE KENTS." annexes about £220,000,000 ; and Rent of Capital (or interest) appropriates £270,000,000. These two sums, amounting to £490,000,000, represent the price paid for permission to work, and leave only £800,000,000 of the £1,350,000,000 for the workers themselves. But of this it is estimated that Rent of Ability (or the additional remuneration commanded by skill) absorbs for the benefit of about one-fifth only of the industrial group as much as £360,000,000, leaving our net sum of £500,000,000 for the remaining four-fifths of the workers. x The average income of the weekly wage-earners is thus reduced from the £35, which equal distribution would give, to the £17 already referred to, and that of the adult males, from £150 to about £70. If, thei*e- f ore, any have more than this, others have less ; and, as a matter of fact, of the number of separate incomes, only about one-eleventh amount to £150 per annum. 2 Thus the average income of this class is even less than it would be if the whole of that portion only of the annual wealth-product which is represented by necessaries were equally divided. And we, therefore, include the buildings upon them, not upon the principle of the old legal maxim quicquid plcmtatur solo, solo cedit, but because we can only guess at the separate values of the land and build- ings respectively. It makes no difference to our conclusions, provided we exclude the value of the buildings when dealing with capital ; since, as will hereafter appear, the economic effect of interest is the same as that of rent. The annual rental-value of the land alone is roughly estimated at £130,000,000. 1 The figures given in this paragraph are taken from Fabian Tract, No. 5, where the various authorities for them are stated. 2 Mr. R. Giffen'a Essays in Finance, vol. ii., p. 467. INDIRECT EFFECTS OF UNEQUAL DISTRIBUTION. 35 arrive at the conclusion that it is the privileged mono- polists alone who can afford to indulge in luxuries ; and that for the masses of the people any such indul- gence is impossible, save at the cost of a still further diminution in their insufficient supply of necessaries. Obviously, also, the majority of the wage-earners can have little, if any, opportunity of " putting by for a rainy day." Having regard to their means, however, there is really more saving amongst the working- classes than amongst their wealthy brethren. The number of small deposits in savings banks afford some indication of this ; and the membership of the numerous benefit societies is another pertinent in- stance. Yet, of the £200,000,000 which is annually saved, the wage-earners contribute only an infini- tesimal portion ; and substantially the whole of it represents the superfluous income remaining to the favoured plutocrats, after providing for their every want, both natural and artificial. And it is largely owing, be it also observed, to this grossly unequal distribution of wealth that we have an insufficient production of necessaries and great waste. As we shall hereafter see, 1 the large produc- tion of luxuries at the expense of necessaries, and their wasteful consumption, is in part indirectly traceable lo the fact that a section of society possesses a greater amount of wealth than is requisite to satisfy its actual requirements. Thus, not only is unequal distribution a cause of poverty, but it gives latitude, so to speak, to the other causes, and must be held 1 Page 58. 36 IS THE INEQUALITY INCREASING? chiefly responsible for the existence of the problem we are investigating. Is the Inequality Increasing or Diminishing? Special interest, therefore, attaches to the further inquiry, whether or not the tendency is for the in- equality to become greater. That the rich are growing richer is sufficiently indicated by the amount of their annual savings, to which reference has just been made. But it is not a necessary corollary of this that the poor are growing poorer, since, as has been intimated, the annual wealth-production per head has enormously increased. 1 This increase is mainly due to improvements in the instruments of production, especially by the great development of machinery ; and it thus becomes of importance to ascertain what is the effect upon dis- tribution of such improvements. Now, it has been pointed out that substantially the whole of the accumulated wealth is owned by a comparatively small number of persons (half of it by a mere fraction of the population), and that they are, therefore, monopolists of the instruments of produc- tion. True, these instruments must be used in order to produce wealth ; and to use them, employment must be given to labour. But the amount of the produce which the labourer receives is mainly deter- mined, not by the efficiency of the instrument or the absolute quantity of the output, but by the ratio be- tween the supply and demand of labour. A machine 1 Page 2. EFFECT OF MA CHINE R Y. 37 which produces, say ten articles per hour, may be superseded by a machine winch produces ten thou- sand ; but if no greater labour or skill is required to work the one than the other, the owner of the machine will not have to pay a single penny more in wages on account of its increased productiveness. Hence, with a practically unlimited supply of labour — such as now exists — and with unrestrained competition, it is (ignoring the consumer for the moment) the mono- polist who mainly benefits from improved methods of industry. No doubt, to the extent to which a better machine calls for greater ability to work it, he must pay more wages, since the supply of skilled workmen is much less than that of the unskilled. But so lono- as the work is practically mechanical, the labourer qua labourer can derive no benefit from an improved instrument ; the diminished cost of production does not result in lessening his toil or in raising his wages ; on the contrary, growing competition for employment tends to increase the first and lower the second. " Hitherto," said John Stuart Mill, not so many } T ears ago, " it is questionable if all the mechanical inven- tions yet made have lightened the day's toil of any human being;" significantly adding, "they have enabled a greater population to live the same life of drudgery and imprisonment, and an increased number of manufacturers and others to make fortunes." l But if there is competition among the labourers, there is also competition amongst the capitalists ; and hence they cannot for long make an abnormal profit, 1 Principles of Political Economy, book iv., chap, vi., sec. ii. 3S DIVERSITY IN CONSUMPTION. so that a diminished cost of production eventually lowers prices, and the consumer benefits. And be- cause we are all consumers it is a very common, but very erroneous, assumption that we all substantially benefit ; and that the labourer in this way obtains his full share of the productive gain resulting from im- provements in machinery. True, we are all consumers, but we are not all consumers to the same extent, or even of the same class of commodities. The consump- tion of the poorer classes is necessarily meagre, and it chiefly consists of those things which are directly traceable to the land ; whilst, in the main, it is the price of manufactured goods which machinery lowers. The primary essentials of existence are food and dwelling ; and mechanical inventions have not suc- ceeded in reducing the cost of many of the staple articles of diet, nor can they enlarge the area of Bethnal Green or other localities where the poor congregate. Meat, vegetables, butter, eggs, and other food-stuffs are much dearer than they formerly were ; and. house-rent has enormously risen. By opening our ports to foreign grain we have secured the boon of a cheap loaf ; and clothes are also less costly, but the poor are not given to fastidiousness in dress. In short, it is principally manufactured and imported goods which are cheaper; and these are the goods which are consumed mainly by the upper and middle classes, and upon which (with the exception of corn) the bulk of the poor spend but a comparatively small portion of their scanty earnings, for the simple reason that the greater part of those earnings are absorbed in the satisfaction or attempted satisfaction of prior wants. EFFECTS OF POVERTY. 41 constitute a body of able workers ; and though they may plod through a certain amount of me- chanical drudgery, even this will be laboriously and slowly performed, and much productive power will be frittered away. If a man is to be an efficient pro- ducer, his soul must be in his work ; but when the body is pinched the soul shrivels; and hence the victim of poverty often displays less intelligence than the horse, owing to the fact that he lacks the material comforts the average horse enjoys. Again, if Waste is a cause of Poverty, Poverty is a cause of Waste. Improvidence and recklessness are not unfrequently engendered by indigence. x\n en- feebled mind is not conducive to habits of foresight or thrift, even when an occasional opportunity for their cultivation exist. If an extra shilling is earned it is too often squandered ; pleasure is chiefly identi- fied with the gratification of appetite, and intemper- ance is thus promoted. Moreover, it is the poverty of the poor which permits of the extravagance of the rich : they are able to indulge in prodigality because others are doomed to penury. Profusion and wanton self -gratification are only possible to those who possess considerably more than a sufficiency of wealth ; and they possess this mainly because others cannot command a sufficiency. The greater part, therefore, of all wasteful expenditure can be indirectly traced to the existence of poverty. And, once more, if Unequal Distribution produces Poverty, Poverty leads to Unequal Distribution. The more abject the want of the labourer, the greater is his anxiety to obtain work, and the lower, therefore, 42 PO VERTY BREEDS PO VERTY. the price he will accept for his services ; whilst the restrictions placed upon his productive powers by infirm physical and mental stamina also make his labour less remunerative. Moreover, his comparative ignorance and want of means prevent his effective organisation ; and without organisation he cannot hope to improve his position. Poverty, thus, in various ways, conduces to a continued and increasing disparity in the division of the produce of labour. It is easy to sink to the bottom of the social scale: Facilis est descensus Averni. To ascend the ladder is often an arduous undertaking; to slide down it requires no effort. And large numbers never have the opportunity of placing their feet on the lowest rung. For with the absence of prudence and self- restraint, which control those who have a standard of comfort to maintain, the poor often marry early and have large families ; with the result that thousands are born into the most abject poverty, and never even have a fair start. And thus the disease is constantly fed. Everything seems to combine to keep down the poor, and to recruit the army of paupers ; and though some of them possess that ability which in others com- mands special rewards, comparatively few find oppor- tunity to develop or utilise it. "Slow rises worth, by poverty depressed." Poverty, then, is a cause of poverty ; and this its incidental effect has, not less than have its primary causes, an important bearing on our problem. III.— THE PROBLEM SOLVED. Having ascertained the genesis of poverty, we have to put to ourselves the crucial question — "Are we justified in predicting its exodus ? " Unless there is a solution to the problem, the suggested duty of investi- gation might well be met with a " cui bono?" The plutocracy must be regarded with the envy of despair ; the toilers regaled with moral reflections on the dignity of labour, the reward of virtue, and other cold scraps of philosophy ; and the " submerged tenth " exhorted to pray diligently and fervently for speedy euthanasia. POVERTY IS PItEVENTIBLE. But our research, though gloomy in its character, has been encouraging. We have not discovered any stern law of nature proclaiming poverty to be in- evitable. We have seen no trace of a Divine ordinance which decrees that the many shall always be poor. But we have, on the contrary, clearly discerned that poverty is due to man, and need not, therefore, be perpetuated. Necessaries, it is true, can only be procured by labour ; and nature does emphatically proclaim what the moral law has enunciated, " that if any would not work, neither should he eat." Some have contrived 43 44 A GRADUAL METHOD. to cheat nature, and have broken the moral law, by eating without working — and there has been vicarious atonement for their sins. But under an altered con- dition of things — a condition which we are warranted in believing can be brought about — none who are able and willing to work would lack the necessaries of life. The poor, then, need not be always with us — the problem can be solved. But poverty will not be exterminated in a day. The method of extermination can be clearly appre- hended ; its practicability readily demonstrated ; its ethical justification fully established ; but its actual adoption can only be gradual. A sudden revolution in the industrial organisation is not possible ; and if it were, would be productive of catastrophe. Hence, whilst the extinction of the causes is the ultimate object, this can only be attained by continuously diminishing their power. Every step in the right direction is so much gain ; and although the abolition of poverty must necessarily be a work of time, each decade may witness its appreciable decline if we keep the goal steadily in view. It must not be forgotten that we have for long recognised some obligation in the matter. Theoreti- cally no one is allowed to be reduced to absolute starvation. As an actuality we have in one year a hundred deaths recorded as clue to this cause ; x and if we could get at the truth we might doubtless multiply 1 Problems of Poverty (note, ante p. 2), p. 18. NATURE OF THE SOLUTION. 45 the number by itself. And the reason is that we have given comparatively so little thought to causes, and have so largely limited our attention to effects. During the last half-century certain phases of the evil, as they have become painfully prominent, have been dealt with by legislation (which, whilst bene- ficent in itself, has had the scarcely less important result of establishing valuable precedents for more extended action) ; but there has been no wide-spread recognition of the problem as a whole, and our one systematised effort is still directed not to prevention, but to relief — and that of an inadequate and de- moralising character. It is the fans et origo mali that we have yet to suppress. The solution of our problem, therefore, consists in the discovery of practical methods for the removal of the causes of poverty ; and hence we have once again to make a threefold investigation. THE MEANS OF INCREASING PRODUCTION. It may at first glance seem that production cannot be increased. With the wheels of industry constantly revolving; with the return to labour nearly doubled in less than a century ; what more, it may be asked, can possibly be done ? Machinery has been de- veloped to an extent which can only be described as marvellous ; year after year has science exacted further tribute from nature ; and " Tools and the man" is the epic of this practical nineteenth century. 46 AIDS TO rRODUCTION. Mechanical and Scientific Aids. Enormously, however, as discovery and invention have increased our productive power, to their triumphs there is no discernible finality. Sooner or later, as Professor Marshall tells us, " any manufacturing operation that can be reduced to uni- formity, so that exactly the same thing has to be done over and over again in the same way," is sure to be taken over by machinery. 1 And we have now entered upon what he terms " the new era of Inter- changeable Parts ; " 2 an era when machinery is ex- tensively employed in the manufacture of machinery ; with the result that every piece in the intricate mechanism can be duplicated with absolute exactness, and replaced therefore at trivial cost ; and there are, he considers, many signs that this principle " will do more than any other to extend the use of machine- made machinery to every branch of production, in- cluding even domestic and agricultural work." 3 In short, we may safely predict a larger return to labour by the further development of labour-saving appli- ances. And all this is productive gain. It is quite true, as was previously pointed out, 4 that improved methods of industry have hitherto been of little benefit to the poor ; and that in the main they have merely added to the luxuries of the rich and the comforts of the 1 Principles of Economics, vol i., p. 315. 2 Ibid., y>. 317. 3 Ibid., -p. 318. 4 Page 37, et seq. MACHINERY— INDIRECT GAIN. 47 middle classes. But this is obviously not an inherent vice of machinery itself: mechanical inventions can be utilised for the good of all, and the simple fact is, as John Stuart Mill himself tells us in continuation of the passage already quoted, that "they have not yet begun to effect those great changes in human destiny, which it is in their nature and in their futurity to ac- complish." x Hereafter, we shall endeavour to show how these changes are to be brought about ; but before we can have an equitable distribution of produce, we must have the produce itself ; and any means there- fore by which it is increased in proportion to the capital and labour employed (or, in other words, by which the cost of production is diminished) ought to be heartily welcomed. Nor is it by the mere additional output directly traceable to machinery that productive gain arises. There is a greater return to labour in various other directions. For production can be carried on upon a much larger scale ; and, indeed, must be so carried on to profitably employ some of the very elaborate and more costly forms of machinery ; and this leads to economy of material and skill. Moreover, industry becomes more specialised and localised ; and full advantage can be taken of physical conditions, such as climate, soil, and facilities of water-transit ; whilst a local market is established for special skill, which thus becomes almost hereditary ; and subsidiary trades spring up in the neighbourhood conducing to further economy. Thus labour is employed under the most favourable conditions ; and by these methods also we 1 Note, p. 37. 48 SCIENTIFIC AIDS— ED UCA TION. may look for its return being continuously en- hanced. 1 And science will still further come to our aid. Many as are the secrets she has wrested from nature, each generation will doubtless see her crowned with new laurels, as she increasingly subdues the forces of the universe to the service of man. By bringing to light additional agencies for pro- moting the fertility of the soil and improving the methods of agriculture ; by new discoveries which shall result in the still greater utilization of what were previously waste products ; by enabling us to yet more effectually grapple with disease, and extend our sanatory resources ; and especially by conducing to the further subjugation of the marvellous power of electricity, men of science and research will maintain their honourable position as benefactors of the race, and render less arduous the satisfaction of our material wants. None of these methods of increasing production, however, call for defence or advocacy. Unlike the means we have yet to consider, they provoke no hostility, and give rise to little, if any, difference of opinion. The one point which requires to be empha- sised is, that to promote the development of these mechanical and scientific aids we must be lavish in our Education of the people, and give every facil- ity for technical training and the development of 1 Professor Marshall's Principles of Economics, vol. i., book iv., chaps, x. and xi., from which this paragraph is substantially epitomised. ORGANISATION OF LABOUR. 49 latent talent. If in the little country churchyard some "mute inglorious Milton" may rest, who can say what inventive geniuses have not lain buried and neglected in the smoke and grime of our large cities ? Only by affording to all the means of acquir- ing knowledge, and by giving special opportunities to those who exhibit constructive powers and origin- ality of ideas, can we hope to obtain the full harvest which science and art offer to the skilled husbandmen. The Social Organisation of Labour. But the one industrial factor to which we must look for an increased production is obviously Labour. To it, as we have seen, all the produce is due. Of the instruments of production even, Capital is en- tirely the result of labour, and the Land has received much of its potentiality from the same source ; whilst neither capital nor land will yield its fruits to man unless he put forth his strength. The efficiency of labour, therefore, and its effective organisation as a means of securing this efficiency, become of paramount importance. Yet, strange to say, these are matters, which, from the national point of view, receive as a rule but scant consideration. At any moment we are confronted with the as- tounding anomaly of large numbers of men being reduced by incessant toil to a condition akin to that iii' abject slavery, and of large numbers of men being unable to find any place in the industrial ranks. Civilisation presents the strange spectacle of practi- cally dividing the great bulk of those who belong to 50 LABOUR ANOMALIES. the manual-labour class into the Overworked and the Out-of-work! Men are kept at the treadmill until they almost drop from exhaustion : and men are soliciting alms because the}^ cannot procure employ- ment. Whilst, on the one hand, we have an over- whelming majority of the national workers engaged in prolonged toil, in some cases extending to a hundred hours per week ■} we have, on the other, an average of about fifteen per cent, subjected to enforced idle- ness. 2 Even of men belonging to the more skilled branches of industry, and protected by the powerful Trades Unions, whilst the average hours of labour are excessive, the number of the unemployed is nine per cent. ; 3 and at some periods it has been three times as great. 4 These men practically represent the aristo- cracy of manual labour ; and the percentage is, naturally, less than the total average ; the percentage amongst the competing unskilled workmen and those outside the Trades Unions being correspondingly in- creased. But of the total thirteen millions belonging to the industrial ranks, we tax the powers of the majority beyond their strength ; and we allow pro- bably some two millions 5 to subsist as best they can on parish or charitable doles, unless they prefer to starve outright. And so accustomed are we to this condition of things 1 See The Eight Hours Day, by Sidney Webb and Haruld Cox (London : Walter Scott. 1891). Appendix i. 2 Problems of Poverty (note, ante p. 2) p. 16. 3 The Eight Hours Day, pp. 169, 170. 4 Problems of Poverty, p. 16. 5 Ibid., p. 17. WASTE OF PRODUCTIVE POWER. 51 that it never seems to present itself to us as a mani- festation of pure imbecility. Yet this is what it in fact is; for, if it means anything, it means plainly and unmistakably an absohite waste of productive power. To keep one man idle all the clay, while we work another for sixteen hours, is not simply cruel to both, but, from the national point of view, is industrial lunacy. It needs no profound insight to see that if we employed both for eight hours the productive gain must in many industries be enormous. Instead of having a jaded, spiritless worker, and a despairing, importunate idler, we should have two comparatively cheerful and healthy producers. And the efficiency of labour would be enhanced, not only by the utilizing of the maximum ability of the labourer, but by an in- crease of the ability itself. For the ranks of the 'Overworked" and the "Out-of-work" are not con- tinuously composed of the same men ; a migration from one group to the other is constantly going on, with the result that some of the skill which accrues from uninterrupted practice is lost, and that many of those for the time being engaged in produc- tion are less competent than they would otherwise be. It is a physical law that powers develop or deteriorate according to their reasonable use or their neglect; muscles become sinewy or flabby in proportion to the energy or lethargy displayed; and "new men" are rarely as able as are " old hands." It would therefore seem that we do our best to obtain a minimum return to labour. The reason that we adopt this eminently irrational 52 EFFECT OF CAPITALISM. course is to be found in the fact that the motive for production is private profit. It is not that the workers deliberately choose now to resort to excessive toil, and now to indulge in absolute idleness : they cannot help themselves under a competitive system. Many no doubt will work " overtime " in order to obtain increased wages ; and some few are loafers who will never work, if they can exist without it. But the bulk of those who labour the lono*est have no choice in the matter, and obtain at the best a bare subsistence wage ; and the bulk of those who lack employment are only too anxious to obtain it. 1 It is the subserviency of production to the personal gain of the monopolist that gives rise to the anomaly. Two men working half the time of one, or three men working a third less of the time of two, would gene- rally be far more productive ; but they would not be so productive to the employer — or, at any rate, so he thinks — for they would command a larger portion of the produce ; and, although the total would be more, his proportion would in some cases be less. 2 And, since with all of us self-regarding motives largely prevail, the inquiry of the typical capitalist is, not what is best for the workers, still less what is best for the community, bat what is best for himself. So long 1 " The fact that in 1890 the mass of unemployed was almost absorbed disposes once for all of the allegation that the un- employed in times of depression consist of idlers who do not choose to work." Problems of Poverty, p. 16. And of cases of extreme poverty in the East End of London, investigated by Mr. Charles Booth, he attributes only 18 per cent, to voluntary idle- ness, drink, and thriftlessness. 2 See The Eight Hours Day, pp. 121, 122. SOCIAL ORGANISATION OF LABOUR. 53 as he finds it more profitable to work one man into the grave whilst another is left to starve or go to the union, so long will he pursue this course, without the slightest qualms of conscience, and in the blissful belief that he is merely exercising the just rights of a free-born citizen of that glorious State whose watch- word is Liberty. Of course the effect of his conduct is seldom seen by him in the nakedness in which it is here presented ; and on the other hand instances are not wanting of praiseworthy emploj-ers who treat their men with genuine consideration — some of whom have discovered that a shorter labour day does not necessarily mean a diminished output. x But the general tendency of Capitalism is undoubtedly anti- social. And this suggests the remedy for the evil. It is not much use condemning the individual capitalists : nay, in many instances, they cannot justly be held responsible; for they can scarcely help themselves. Despite their boasted freedom, they too are the slaves of competition, and are bound to buy their labour in the cheapest market or be driven out of the field. It is the system which is vicious, and it is the system which must be altered. " The mere conflict of private interests will never produce a well-ordered common- weath of labour ; " 2 and, hence, it is the social organisation of labour which must be brought about. In superseding private capitalists by the State, 1 The Eiqht Hours Day, appendix ii. 2 Dr. J. K. Ingram in the Encyclojxxdia Britannica, vol. xix. 188G, p. 382. 54 STATE AND MUNICIPAL INDUSTRIES. or by local representative bodies, the workers would become both employers and employed ; mutual depen- dence and support would be established ; and it would be to the interest of all to promote economy and efficiency. The organisation, then, of labour by the labourers themselves through their elected representatives is the most effectual method of increasing the production of wealth. We have scarcely any true instance of such organisation at present, for large masses of the wage- earners are still practically excluded from the fran- chise. 1 But we have quasi-instances in the Imperial Post Office, and in certain municipal undertakings; and, capable though these organisations are of im- provement, they are an immense advance on private enterprise. The penny postage — the benefits of which it would scarcely be possible to over-estimate — could never have been obtained without the aid of the State ; and the normal day of post-office officials is one of eight hours, though it is spread over a longer period, and sometimes shows an undesirable elasticity. The London County Council, which has already accom- plished wonders, has set a good example in the length of the labour day of its employes; and whilst private tram and omnibus companies work their servants for about fourteen hours per diem, the Huddersfield Town Council manages its tram-ways by a system of shifts, 1 The number of registered electors (excluding duplicate registrations) is still only about 5,800,000 — about 3,000,OUO less than the total number of adult males. Numbers of the working classes are excluded owing to the length of the residential qualification. ELECTORAL REFORMS. 55 and grants its workmen the boon of an eight hours day. Some of these instances, however, are not those of employments where a reduction of the hours of individual labour affords special facilities for increased efficiency, but such redaction at least has the effect of drawing from the ranks of the " Out-of-work " by creating a larger demand for labour, and it thereby indirectly tends to diminish " Overwork " in other branches. But the instances are at present too few to have any very substantial effect upon the solid mass of the unemployed. Political and Industrial Reforms. To secure the social organisation of labour, a two- fold method must be employed. Our institutions must be thoroughly democratised, in order that they may be really representative of labour ; aud their functions must be gradually extended in the direction of increased control of industrial enterprise. ' Hence Electoral Reform, both in connection with Parliamentary and municipal representation, occupies a prominent place in our programme. Adult Suffrage, with the abolition of plural voting for Parliament, and a short residential qualification, so that none may be disfranchised, are the first requisites. To avoid disturbing elements and prolonged agitation, elections should be held on the same day ; and, to insure the representation of majorities, the principle of the Second Ballot should be adopted. To give no undue advantage to wealth, the official expenses of the election should fall upon the rates, and members SOCIALISING OF INDUSTRY. should be paid a reasonable sum for their services. To keep the representatives in touch with the elector- ate, and prevent the abuse of power, there should be an appeal to the constituencies at intervals of not more than three years. " Home Rule " must be granted to the various nationalities of the kingdom, and the business of the Imperial Parliament ultimately limited to Imperial affairs. And the anomaly of a Second Chamber, vetoing or emasculating popular measures must, of course, be brought to an end. This is a pro- gramme, which a generation ago would have been regarded as Utopian ; to-day men look forward with confidence (or with dread) to its adoption in the not very distant future. Simultaneously we must extend the Socialising of industry by vesting in the State or municipalities various national and local undertakings. To a branch of the Government will be best entrusted the manage- ment of the railways and other means of transit, as also enterprises not distinctly local in their character. Upon the municipalities will fall the duty — already undertaken by several of them — of supplying water, gas, electric-lighting, and means of urban transit ; to be followed by an extension of the principle to other large industrial enterprises. The end in view will also be promoted by the im- position of further restrictions on monopolistic pro- duction. The extension of the Factory Acts — only recently undertaken by the Government, though not in a very vigorous manner — the determined grappling with the evils of sweating, and the general curtail- AN EIGHT HOURS DA Y. 57 ment oLthe power of Capitalism will all be steps in the right direction. One practical proposal, which is rapidly growing in favour, is to secure an Eight Hours Working Day 1 as a statutory maximum, though subject probably in many industries to the principle of Trade Option. From a priori reasoning we have had little difficulty in arriving at the conclusion that this must result in more efficient labour and increased production. But our conclusion is confirmed by inductive inquiry. In the course' of a valuable article dealing with Victoria, Mr. John Rae intimates it is, he thinks, "beyond question that the shortening of the day to eight hours has improved the efficiency of labour during the time employed both as to quantity and quality." 2 And in their recently published exhaustive treatise on the subject, Messrs. Sidney Webb and Harold Cox present us with numerous instances of the beneficial effect, in this amongst other directions, of a reduction in the length of the labour day: ,3 The Increased Production of Necessaries. We have dwelt at some length on the means of in- creasing the production of wealth, since, although what 1 There is no magic in the figure eight ; but the period named cannot in the majority of callings be exceeded, consistently with the due development of the physical, mental, and moral powers of the workers, and therefore with the maximum efficiency of labour. 2 The Eight Hoxirs Day in Victoria, Economic Journal, vol. i. p. 37. 3 2Vte Eifjht Hours Day, chap. iv. see. 2, and appendix ii. 5S INCREASED PRODUCTION OF NECESSARIES. we chiefly require is not so much more wealth as that wealth should more largely take the form of neces- saries, any increase in our productive powers would obviously permit of more necessaries being produced. But it does not follow that they would be produced ; and the investigation must, therefore, be pursued. Since poverty is in part traceable to the insufficient production of necessaries, and is probably to a further extent due to wrong production, even in the case of articles which are not luxuries, we have still to con- sider how to bring about such an exercise of our industrial powers as shall result in the satisfaction of the urgent wants of the community. What we re- quire is, not merely that labour should be more efficient, but that it should be more wisely applied. The production of gold-lace, or even of a new church, when men are lacking food or healthy dwellings, is another instance of industrial aberration. And should there be any lingering doubt as to the power to produce a greater amount of wealth, there can be none as to the power to produce a considerably greater amount of necessaries. That more are not produced is due to the fact that a demand for luxuries is created, owing to large numbers of individuals pos- sessing a superfluity of purchasing power, and that under a system of production for private profit capitalists will satisfy any demand if it pays them to satisfy it. So long as men have a superabundance of wealth, they will ever be devising new wants, and others will readily gratify those wants, since by so doing they can add to their own store of wealth. It matters not to the capitalist what he produces, pro- CAUSE OF PRODUCTION OF LUXURIES. 59 vided he can make a profit ; and it is the expectation of the profit and not the utility of the product which determines his action. Demand a dog-collar made of gold and inlaid with diamonds, and, if you are re- garded as solvent, it will be forthcoming, though its cost equal that of a year's necessaries for a hundred workmen. So that the same cause which leads to less efficiency of labour and consequently less produc- tion of wealth — namely, an industrial system based upon individual rather than communal gain — leads to luxuries being produced at the expense of necessaries. 1 It follows, therefore, that the remedy (or at any rate one remedy) lies in the same direction. As the result of the political and industrial reforms to which reference has been made, 2 not only would there be an increased productivity, but, in consequence of the power the workers would possess of commanding a larger portion of the produce, and of, therefore, more effectually controlling its form, there would be a gradual increase in the production of necessaries. But we can also contribute to this result in other ways, which have yet to be pointed out. Limitation of Expenditure. — Saving. If the nature of supply is indirectly determined by the nature of demand, then our individual demand 1 The same cause is also in another way indirectly responsible for less necessaries being produced, since capital and labour are employed in the production not only of luxuries, but of spurious, adulterated, and partly useless commodities. This is more fully considered when dealing with Waste. Page 77 et seq. - Page 55 et seq. 6o LIMIT A TION OF EXPENDITURE. is all-important. By abstaining from purchasing articles we can do without, we add to our savings, and therefore to capital, and therefore to the demand for labour, and therefore to the labourer's wage, and therefore to the effective demand for necessaries. Capital will thus be diverted from the production of comparatively useless to that of substantially useful things ; so that even under the present system of profit-mongering more of the requisites of life will be produced, and will take the form most appropriate to the actual needs for the time being. But it should be remembered that if the additional capital should be lost by being devoted to speculative or risky enter- prises, or if the promise of higher profit should cause it to gravitate to the less desirable industries, the community will be deprived of the whole or some of the benefit which would otherwise accrue ; and it is, therefore, of importance that we should see our savings are employed to the greatest advantage by investing them in sound and useful undertakings. 1 One of the means, then, of increasing the produc- tion of necessaries consists in a diminution of ex- penditure on luxuries; but the consumption of luxuries will call for further examination when deal- ing with the means of preventing waste. 2 It ought, perhaps, to be here mentioned that we do 1 Municipal trusts, for example, might wisely be selected. The extension of the powers and functions of the municipal bodies would, of course, lead to their requiring more capital. Page 102. 2 Page 72 et seq. EFFECT OF FOREIGN TRADE. 61 not overlook the influence of Foreign trade. A large portion of our necessaries comes from abroad; and from the purely insular point of view it makes no difference what we produce in exchange, so long as we can obtain the desired imports. Poverty, how- ever, is not a local but an almost universal problem ; though there are some provinces, with boundless tracks of fertile land, where at present it need give little concern. But, even if we ignore the fact that the principles involved are of very wide application, and look only to their bearing upon ourselves, our deductions remain the same. It is quite true that, unless other countries made equal progress, it would not be essential to an increase in the supply of neces- saries that such a change should be made in our home industries as would be requisite if international trade did not exist — though some change would undoubtedly be called for. But this would not make the less beneficial a limitation of individual expenditure, and the wise investment of what is thereby saved. To the extent to which the consequent diminution in the demand for luxuries and increase in the demand for necessaries called for an alteration in the nature of our own production, it would certainly come about, for supply and demand always tend to an equilibrium ; but since foreign supply and foreign demand alike affect us, the adjustment would partly take place through the complicated mechanism of international exchange. To follow the operations of this, however, would be an elaborate task, and at the same time a work of supererogation so far as the present inquiry is concerned 62 THE POPULATION QUESTION. Control of Population. Yet another point. What we requireis not essentially an increased production, whether of all forms of wealth or only of necessaries, but simply an increased pro- duction/^ head. And there are of course two ways of enlarging a quotient — by adding to the dividend and by diminishing the divisor. That we can increase the dividend we have already seen ; can we not also lessen the divisor ? If we can control production, can we not control population ? There is an old saying that God never sends mouths but what He sends food. This confident assertion may be indicative of piety, but it certainly is not of perspi- cacity. To shift on to Providence man's responsibility is no doubt extremely comforting ; but, as has been remarked, there is an unfortunate tendency for the mouths to come to one door and the food to -another ; and it therefore becomes worthy of consideration whether (at any rate so long as the tendency exists) it would not be wise to have fewer mouths. There is no necessity to commit either suicide or murder — Father Time with his scythe is constantly mowing us down ; and it is merely a question affecting the birth- rate. With a smaller population we could undoubtedly obtain a larger product per head. Without dwelling on the "Law of a diminishing return" 1 (which is ad- 1 Principles of Political Economy, by J. S. Mill, book i., chap, xii., sec. 2, where the law is thus stated : "After a certain, and not very advanced, stage in the progress of agriculture, it is the EFFECT OF DIMINUTION OF NUMBERS. 63 mittedly more or less in operation in all old countries), we can discover this by recalling the fact of there being a large body of idlers, either from choice or necessity — men who will not work, or who are unable to obtain work, but who nevertheless possess mouths. In other words, our present produce is the result of the labour of a portion only of the population ; so that the same produce could be obtained although population declined. Therefore, until such time, at any rate, as we compel or enable all to work, a diminution of numbers would conduce to a larger production per head. And not only this — a greater proportion of the product would take the form of necessaries. For a reduction in the ranks of those competing for employ- ment would lead to a rise in wages, and thus increase the effective demand for the essentials of existence, the result of which demand we have already seen. 1 Again, it is unfortunately the poorest classes who are the most prolific — owing, as has been previously in- dicated, 2 to the very fact that they are poor, and law of production from the land that, in any given state of agricultural skill and knowledge, by increasing the labour, the produce is not increased in an equal degree." Professor Marshall states the law, provisionally in a short, and ultimately in an elaborate form, and qualifies it by a refer- ence to improvements in the arts of agriculture, notably "an increase in the skill of the individual cultivator." Principles oj Economics, vol. i., book iv., chap. iii. This qualification, how- ever, is practically synonymous with what Mill describes as the ncy in habitual antagonism to the law,'' and which he generalises under the description of "the progress of civilisa- tion." Principles of Political Economy, book i., chap, xii., sec. 3. 1 Page GO. - Page 42. (j 4 LLM1TA TION OF NUMBERS. therefore (not being able to sink lower) lack the prudence which actuates men who have a standard of comfort to maintain. And thus we are propagating from our weakest stem — though we endeavour to minimise this evil by killing off the children of the humbler classes at about three times the rate nature carries off those of the rich — and are once again con- fronted with less efficient labour, and consequently less production. So that over-population leads to a smaller product per head in two ways : the return to labour is less and there are more heads ; whilst of the wealth that is produced a smaller proportion takes the form of necessaries. We have, then, another remedy for insufficient pro- duction, particularly of necessaries, namely a prudential limitation of numbers. And this should especially be brought home to the unskilled labourers. It is easy to enlist their sympathies for those reforms which aim at curtailing for the good of the community the license of the privileged classes ; but we should not, in our sympathy for the oppressed, omit to point out that the} r themselves, under the existing conditions of in- dustrial organisation, to some extent intensify the evil ; and that, although when the evil is once removed, the mere fact of their then having a standard of com- fort to maintain will itself exercise a controlling: in- fiuence, whilst owing to their labour being more efficient there will be less need for the same control, they can in the meantime do something to increase the production of necessaries, and thus contribute to the diminution of their own poverty. PAUPER IMMIGRATION. 6^ Restriction on Pauper Immigration. At the same time, so largely does the necessity for collective action, operating through representative institutions, meet us at every stage of our industrial problems, that even in the control of population we may have to do more than appeal to individual prudence. Numbers can be inflated, not simply by multiplication at home, but also by importation from abroad ; and it is to be observed that the greater the reward which labour is able to command in England, the more will the labourers of other countries be attracted to our shores, unless equal progress be made in their own institutions. And whilst we deplore the condition of the poor in foreign lands not less than in our own, and welcome such signs of joint action as are manifested by International Labour Conferences, we cannot but see that each country must in the main work out its own salvation. Our colonies very pro- perly protested on moral grounds against being made a settlement for the refuse of our own population, and we on economic grounds may be driven to take measures to prevent the constant influx of pauper labour, gladly though we would lend a helping hand to all. Hence a Law of Aliens may become a political necessity. It would be a misfortune, and the measure should only be passed after the fullest consideration, and then with great caution ; for it would not tend to increase international amity; and to obtain from it the maximum of gain with the minimum of loss, it would 66 LA W OF ALIENS. have to be framed with more care than is bestowed on many of our Acts of Parliament. Needless to say, there must be no support of foreign tyranny by a refusal to grant an asylum to political refugees. And to the unfortunate paupers of other lands we must extend what aid we can, short of endeavouring to raise them by depressing our own workers. But if we cannot lift all from the gutters, it is suicidal to lie down by the side of those who remain. No doubt proposals of this character would be met with considerable opposition, and invocations to Liberty would not be lacking. The Factory Acts were resisted as a restriction of freedom ; a legal limitation of the hours of labour is regarded as a sapping of the manly independence of the worker; and a prohibition of pauper immigration might even be denounced as a return to Protection. Protection in a sense it undoubtedly would be, but not in the accepted economic connotation of the term. It would not be a diminution of the advantages of international barter; it would not be a taxation of the community for the benefit of the monopolists : on the contrary, it would be a simple extension of the principle of Free- trade ; namely an endeavour to obtain the greatest return from labour, and a recognition of the interests of the consumer as opposed to those of a section of favoured capitalists and landlords. Fortunately, however, the Labour movement is ad- vancing in many countries — in some more rapidly than in our own — and we may still indulge the hope that any grave necessity for action of the character referred to will not arise. But if the evil, from NON-PREVENTIBLE WASTE. 67 which we are already suffering, and which is especially- manifest in the East End of London, should with the accomplishment of further reforms at home threaten to deprive us of their fruits, we must face the fact and act accordingly. THE MEANS OF PKEVENTING WASTE. We pass now to the consideration of the method of dealing with the cause of poverty secondly referred to. The individual, the industrial community, and the nation collectively, are, we found, alike guilty of great waste ; of which numerous instances were given. How, then, is this waste to be prevented ? Before attempting to answer the question, one fact ought to be referred to. Non-preventible Waste. There is no doubt a certain class of waste for which man cannot be held responsible — waste which must be attributed to a " Vis major!" The blighting of crops and the devastation caused by tempest, for example, are due to natural as dis- tinguished from artificial causes ; and, although these can in some measure be combated, to the extent to which they cannot we must bow to the inevitable. Our only duty is to take what precautionary and remedial measures are open to us, and to philosophically bear, as one of the conditions of existence, the loss we cannot prevent. Then there are other cases where, although man is 68 EXTINCTION OF IDLE CONSUMPTION. not wholly free from blame, no severe stricture can be passed. Conflagrations, for instance, which often cause great loss, could in many cases be averted ; but they generally arise from thoughtlessness or careless- ness, rather than from culpable overt acts. So far, therefore, as it cannot be arrested, waste of this kind must also be regarded as one of the incidents in the lives of imperfect beings. At the same time there must be no excuses for nesr- lecting any means in our power. Every stride which science makes, whereby we obtain increased mastery over the forces of nature, and every growth in indi- vidual habits of foresight and prudence, tend to the diminution of this class of waste ; and if we utilize all our resources, the non-preventible loss of wealth will not be a matter for supreme anxiety. The Extinction of Idle Consumption, But the bulk of the enormous waste of wealth is preventible. And our first step towards prevention is to clearly and fully appreciate this. For so long as men are unconscious of the evil, or, realising it, con- sider it inevitable, they will naturally do nothing towards its removal. At present there is but a very limited apprehension of the facts. They scarcely ever enter the mind of the average man ; and when they do the impressions conveyed are of a very hazy description ; nay, in some instances, he even regards as benevolent the very conduct which conduces to the mischief. The purposely idle or semi-idle class appear not to POPULAR MISCONCEPTIONS. 69 have the slightest idea that the community would be better without them — that they are of less use than the rodents who play havoc with our grain, and are simply living embodiments oi' waste. Indeed, so curiously warped are their moral notions, that they even think they serve a most useful purpose ; and tell us that they give employment to labour, and are therefore the benefactors of the poor. Their idleness is so complete that they have not even taken the trouble to educate themselves. They know that they consume wealth, and that wealth is produced by labour ; but they imagine that labour is the end of (other people's) existence, and not the means, and conclude therefore that by rendering more work neces- sary they are conferring benefits upon the workers. Perhaps, in these circumstances, it is not surpris- ing that the bourgeois class and the proletariat should fall into the same error. Lavish expenditure is re- garded with satisfaction on the ground that it "makes money circulate," and is " good for trade " ; and the labourer, not unnaturally, welcomes any demand which seems the proximate cause of giving him em- ployment. The fact is that only one side of the phenomenon is seen. The immediate result, namely the transference of money, is perfectly apparent; but the total economic effect is not visible to the superficial observer. Yet a prolonged observation is not necessary to discover that it must be a loss, and not a gain, to the worker to yield a part of the produce to those who render nothing in return. He does so, because, at 70 FALLACY OF " MAKING WORK" present, owing to the monopoly of the instruments of production, be cannot otherwise produce at all ; and unless he produce, he starves. But the appropriation of wealth by others can never benefit him ; and so far as the community of labour is concerned, the fruits of industry might as advantageously be cast into the sea as consumed by an idle class. The fallacy in question is a very venerable one, and is the basis of the old argument for "making work;" the rcductio ad absurdum of which would be the de- struction of all property, that labour might be em- ployed to replace it ; and the incidental deification of war, tempest, fire, dynamite, et hoc genus omne. We need never be afraid of having a scarcity of work ; what we have to aim at is to diminish and not increase our toil. We simply work to obtain the means of satisfying our wants ; and we can very gratefully dispense with the services of those who are merely " patent digesters " of the products of our industry. Education, then, though not in itself a remedy for the evil, is necessary to its realisation. Men may sin against knowledge ; they must more or less err when ignorant ; and hence the importance of an in- creased diffusion of the truths of economic science. And next the moral sentiment must be appealed to ; and to " go gracefully idle in Mayfair " must be un- equivocally branded as a vice. It is not a crime, since the law sanctions it ; but men are daily sent to prison for offences which, are far less injurious to their fellows. But whilst we should spare no effort to subjectively TAXATION OF UNEARNED INCOMES. 71 reform the idle consumer, it is to be feared that the progress made in this direction will not, for some time at any rate, be phenomenal. We must therefore also adopt objective remedies; and the most effective of these will be a heavy Taxation of unearned incomes, to the lightening of the burdens imposed upon the workers ; and ultimately such a radical alteration in our industrial system as that every one shall be secured an approximate equivalent to the produce of his labour, by which means absolutely idle consumption by capable adults must necessarily cease. 1 With regard to the incidental waste due to the monopoly of the services of numerous other indi- viduals by the idle or comparatively idle, in order that they may be spared exertion or supplied with amusement, the remedies, of course, are of the same character, and the point therefore need not be elabor- ated. But it must not be forgotten that the loss to the community from this cause is very real and very extensive. The comparatively recent revelations of the manner in which the Heir to the Throne and his bosom friends dispose of some of their time are not of a very grati- fying character ; but it is illustrative of the vagaries of society morals that so much importance should have been attached to this item of fashionable in- telligence, whilst gambling in many other forms, and pleasures equally reprehensible, are openly recognised as the daily incidents of high life. It is a good thing to have a code of honour, but one must regret that it 1 Page 100 et seq. for a detailed consideration of these reforms. 72 TEMPERANCE REFORM. should have so limited an application ; and any pro- gress in public opinion which shall induce " our old no- bility " to give a wider interpretation to " noblesse oblige " will not only be conducive to morality, but also to the removal of poverty. The Diminution in the Consumption of Luxuries. Idle consumption, however, is not the only form of individual waste we discovered ; for the workers themselves are not guiltless in the matter. In fact there are very few who do not to some extent con- tribute to the evil. And we saw that the most glaring instance is the enormous expenditure on alcoholic beverages ; so that we must give Temperance Reform a prominent place in our programme. We make no comment here as to the moral cost of drink to the community ; we are merelj 7 dealing with the waste of labour and material wealth, and from this point of view alone the appropriation of about one-thirteenth of the in- adequate national income to a single form of luxury calls for grave condemnation. Of course a considerable portion of this is con- sumed by the idle rich ; and it is only the compara- tively wealthy who can indulge in the more costly beverages. But for a large portion the industrial classes must be held responsible ; and of this, it is to be observed, the greater part is chargeable to the respectable " moderate drinkers." Doubtless there is a tendency for the very poor to seek to drown their misery in drink ; but the actual amount of poverty MODERATE DRINKING. 73 traceable to intemperance on the part of the victims of poverty themselves is not so great as might be supposed. Mr. Charles Booth, as the result of his investigation of cases of extreme destitution already referred to, 1 only attributes fourteen per cent, to the combined causes of drink and thriftlessness. It is not the " habitual drunkards " but the habitual drinkers — men who do not exceed what is regarded as moderation — who are mainly responsible for this great waste. Hence, it is not merely against intemperance, but against so-called moderate drinking also (in which term, of course, we do not include the occasional employment of alcohol medicinally), that war must be declared. Temperance reformers are often rebuffed when they assume a high moral tone : possibly economic considerations may have more weight ; and when the question is reduced to one of waste and re- sultant poverty a new light may dawn upon the minds of some. In any case, however much the less cultured advocates of total abstinence may lack dis- cretion, they are really engaged in a noble work ; and whilst they sometimes give scope to an accusation of fanaticism, there is very often more fanaticism dis- played by those who make it — and displayed with less justification. Of course instances of individual waste misrht be multiplied almost ad infinitum ; but one illustration is as good as a dozen. Everyone can readily deter- mine for himself to what extent and in what wa}' he 1 Note p. 52. 74 ETHICS OF LUXURIES. must be regarded as an offender ; and sufficient has been said to show that it is our duty to carefully weigh our expenditure. We pass no sweeping condemnation on the indul- gence in luxuries. Many may be inclined to think that if they are to be deprived of everything which cannot be regarded as essential, life would not be worth living ; and it is difficult to muster up courage tc preach such asceticism as this — nor would it in fact be called for under an altered condition of industrial society. Yet, let us never forget that this life, which to us would not be worth living — nay, an infinitely more cheerless life — is one to which legions of our fellow- creatures are doomed ; and that they are so doomed partly on account of our own excessive indulgence. For this reason, therefore, rather than from the un- healthy sentiment that strict discipline and personal penance are good things in themselves, are we called upon to exercise some amount of self-abnegation. And though we may not be cast in such a heroic mould as to be able to take part in feeding the hungry and clothing the naked at the sacrifice of our cigars or our billiards, surely we need not be the less happy if we diminish vain display and wanton extra- vagance, and occasionally give a practical thought to the price which others pay for our pleasures. " Wil- ful waste makes woeful want " — the proverb is a true one, but seldom correctly applied. In a nation it is invariably exemplified ; but in the individual retribu- tion very often fails to overtake the offender ; and it is the innocent who suffer for the guilty. WASTE FROM CAPITALISM. 75 The Minimising of Loss of Capital. The remedies for industrial waste have next to be considered, commencing with that which is incident to the process of production. Instances were seen in the loss of capital embarked in enterprises of great risk, or in manufactures where the demand is of a variable and uncertain character; and in the cost of the maintenance of financiers and speculators, who frequently exercise an injurious in- fluence. Waste of this character is an inherent defect of our capitalistic system. It is part of the price we pay for allowing private profit to be the main object of pro- duction. It is not the full price ; for we have seen that inefficiency of labour 1 and an insufficient supply of necessaries 2 are traceable to the same cause ; and we shall hereafter see that to it other grave evils are also due. The temptation to make additional " profits " often induces even private merchants and firms to throw prudence to the winds ; and with regard to the in- vesting public generally, there are always large num- bers ready to be victimised by specious promises of high dividends. Sound securities only yield interest at the rate of from three to four per cent. : yet traders aim at quadrupling this ; 3 and prospectuses of 1 Page 52. 2 Page 58. 3 We are speaking of the " return to capital" and not of the remuneration for their time, for which, as " wages of superin- tendence," a fair sum must be charged before " net profits '' can be ascertained. 76 THE MACHINERY OF CAPITALISM. public companies are daily issued showing con- clusively (on paper) that six, eight, ten, and even twenty per cent, will be paid, and that the shares will inevitably rise in value. In some cases the prospects are more or less realised ; and faith or credulity is thereby prevented from waning. And so — bank- ruptcies and liquidations notwithstanding — the game goes merrily on, with the result that a large amount of wealth is annually lost by the expenditure of labour to which there is little or no return. Such is the spell worked by the magic word, " profit." And the process has called into existence various bodies of men who act as agents, or direct operations from behind the scenes, and some of whom contribute to the ultimate catastrophe. At times they indulge in speculation on their own account ; but they more often stand on the safer ground of carrying out or in- fluencing the speculations of others, with advantage to themselves in any event. Brokers and jobbers, " bulls and bears," company-promoters and under- writers, moneylenders and financial agents, although more or less engaged in legitimate occupations (not always, however, legitimately pursued), are simply part of the machinery of Capitalism. They are the out- come of the system to which private profit is the key ; and the loss of wealth which is traceable to their in- fluence, and a large portion of the cost they entail upon the community, is pure industrial waste. No doubt, under the most perfect form of production which men could devise, some loss of capital would be inevitable. Many necessaries are of a perishable THE ABOLITION OF CAPITALISM. 77 character ; and a twenty minutes' thunderstorm, for example, may upset the most sage calculations. But the bulk of the loss which now takes place could be prevented. Once make social gain instead of private profit the object of production, and the risk would immediately be minimised ; for the inducement to em- bark in hazardous enterprises and to satisfy varying capricious demands, and the motives for speculation and fraud would straightway disappear. The mini- mum requisites of healthy existence are to a large ex- tent of the same character in all cases ; and the de- mand for necessaries could therefore be foreseen with tolerable accuracy ; but the commercial barometer of to-day can seldom do more than feebly prognosticate the variation in those fanciful requirements which the private capitalist endeavours (often so unsuccessfully) to turn to his advantage. And with regard to the army of financiers of all types, substantially their occupation would be gone ; and they would be set free to join the rcvnks of useful producers. Hence our ultimate remedy must consist in the abolition of the system of Capitalism ; and we shall be gradually journeying towai'ds this goal by the inauguration of those political and industrial reforms already referred to, 1 and by others to be hereafter enumerated. 2 The Extermination of Shams and Adulteration. It is to this remedy also that we must look for the prevention of another form of waste incident to our system of production. 1 Page 55 et seq. 2 Page 105 et seq. 78 EXTERMINA TION OF COMMERCIAL ERA UD. Since capitalists will embark in any enterprise that promises to pay them, quite irrespective of its being adapted tc satisfy the real wants of the community, they produce, not only every form of luxury, but also, as has been indicated, articles which are practically useless for any purpose, and some of which are posi- tively deleterious — articles which none would know- ingly buy or consume. There is no demand for these things — the demand is for something else — but the unscrupulous respond to this latter demand by a supply of spurious commodities, and thus make greater profits for themselves. The tale of the razors made, not to cut, but to sell, embodies a profound truth. There are any number of wares that have either no utility whatever, or the utility of which is only fractional, but for which by sedulous puffing and chicanery purchasers are neverthe- less found. " Patent Medicines " afford an almost un- limited field for fraud of this character ; for everyone is liable to illness, and is inclined to try anything that promises relief. Similarly we have the adulteration of useful articles in order to enchance profits ; and here the process is often attended with more disastrous results, for not only does waste take place, but there is a positive injury to health. The man who does not hesitate to impose worthless or inferior goods upon the public is not over scrupulous as to the method em- ployed : if it is necessary to knock you down in order to pick your pocket, well — down you must go. And the waste, as we also indicated, does not stop here. In order to dispose of his spurious goods, the manufacturer or seller has not merely to cultivate MORALITY OF THE MARKET-PLACE. 79 " lying as a fine art," but has to insure that his artistic mendacity shall reach the purchasing public. Hence vast sums are expended in advertisements and other forms of puffing. Labour has to be employed, not simply in the manufacture of the wares, but in obtain- ing for them notoriety ; l and in this way the prime cost is often enhanced tenfold. And with some new joint-stock enterprises "blackmail," as it is termed, is levied, and enormous sums are paid in order to prevent adverse (and often justly adverse) criticism. All this labour is devoted in the main to inducing us to buy things we should be better without, and things which we certainly should not buy but for the deceit practised upon us. It is really criminal waste. Yet it is a significant fact that the imposition, unless exceptionally flagrant, is practically winked at. So accustomed are we to dishonesty in business trans- actions that we have really a separate commercial code of morality, under which candour would almost be regarded as a vice. Men who would scorn to deceive in private life unhesitatingly misrepresent the quality of their merchandise ; and although they would not think of " stealing " a sovereign, they have no scruple in robbing a customer of a shilling. " Tricks of the trade " are taken as a matter of course : with the seller caveat emptor is the maxim ; and the buyer, on discovering the imposition, generally calls himself a fool. When a system reaches this condition, the only cure 1 This class of waste also takes place in pushing the sale of articles which in themselves are unobjectionable. So REMEDY FOR COMMERCIAL FRAUD. is eradication. There is but one remedy for waste so flagrant — one which will continually confront us — namely the abolition of production for Private Profit. Men will make razors to sell and not to cut ; they will mix useless or deleterious compounds and boldly advertise them as panaceas, so long as it pays them to do so. Adulteration Acts and occasional pro- secutions in the grosser cases of deceit to some extent act as a check on the evil; but they also tend to develop additional astuteness in dishonesty. It is only by withdrawing the premium placed on fraud that we can hope to prevent the enormous loss and injury which, in this one direction alone, proflt-mongering entails upon the country. The Termination of the Conflict between Capital and Labour. There is still, as was briefly pointed out, another manifestation of the evil, as seen in the process of production. Capital and Labour have been compared to the blades of scissors — each of which is practically useless without the other. The simile holds good to a certain extent ; but like most similes it will not allow of too rigid an application. For the t} T pical scissors have an individual owner, who is desirous of cutting the cloth to the best advantage ; whereas each of the two blades of our symbolic scissors has generally a separate owner, who is anxious to cut the cloth to his advan- tage ; the result of the conflicting interests being that a zigzag course is often pursued, and much of the cloth LABOUR CONFLICTS. 81 is wasted. And there comes a time, sooner or later, when the capitalist or the labourer — but far more frequently the latter — finding that his share of the cloth is not so great as he thinks it should be, ab- solutely declines to give the use of his blade without a readjustment. The scissors remain idle, the cloth is uncut, and waste of a graver character is the result. " Strikes " are too often the only method by which labour can hope to check the avarice of capital ; and they sometimes lead to retaliation in the form of " lock-outs." Strikes do not always succeed : they may in some instances be very unwise ; and in others they may even be reprehensible. But whether or not they succeed, or are unwise, or are reprehensible, they always mean, not merely loss to the capitalist and privation to the labourer, but waste to the community at large. Industry is disorganised, production is diminished, and cost increased. " But these inconveniences," says Mr. Gladstone, " may be, and to a vast extent have been, the price paid for the avoidance of a greater evil, such as is de- priving the labourer of his just hire." 1 Quite true — but what a sad truth ! Why did it not suggest to the venerable and acute statesman some more practical reflection than to " bid the labourers God-speed, and heartily to wish that by their high standard of conduct, their wise choice of calling, and their equal and liberal respect for the rights of all men, or rather all human beings, the}' may be enabled progressively to consolidate the position they have gained, and, so 1 The Rights and Responsibilities of Labour. Lloyd's Nows, 4th May, 1800. F 82 REMEDY FOR LABOUR CONFLICTS. far as justice may recommend, to improve it ? " Why did it not suggest to him to inquire whether the price must be paid — whether the evil cannot be avoided without, what he mildly calls, " these inconveniences " ? The conflict is a species of civil war; but — and here once more is the important point — it is inherent in our system of production. Capital and labour ought to work harmoniously together ; their true interests are identical; but they will never work with uninter- rupted harmony, their immediate interests will never be regarded as identical, so long as capital is a monopoly, and private profit the object of production. No reform, short of the abolition of the system, can prevent this great waste. Schemes of co-operative industry and profit-sharing, to the extent to which they succeed, may diminish but cannot exterminate it. 1 They are beneficial to some; but what we require is that all the workers shall be capitalists. Monopoly must be extended until it shall cease to be monopoly by taking in the entire industrial army. Once again, then, we arrive at our now familiar remedy; a many-sided one, of which the feature to which we must here give prominence is the Collective ownership of Capital — the method of accomplishing which will be hereafter dealt with. 2 The Avoidance of Waste in Distribution. But commodities have not only to be produced ; they must be transferred from the manufacturer to 1 Co-operation is more fully considered at p. 147. 2 See p. 102. WASTE IN DISTRIBUTION. 83 the consumer ; and waste, we have seen, attends this process also. Distribution, it is perhaps unnecessary to say, is scarcely less important than production, and in many cases its cost is as great, in some even greater. Coal at the pit's mouth will not warm us ; some machinery is required whereby it can be made available for the domestic f.re. And obviously there is sometimes an economy of labour in conveying commodities through intermediate channels. The pit-owner could scarcely satisfactorily discharge the function of delivering the coal in separate tons to individual households; far less in the small quantities in which many are un- fortunately compelled to buy it, Much of the labour employed in distribution is, and under any circum- stances would be, valuable and even essential. On the other hand, it is a notorious fact that we have too many middlemen. Even raw material will often pass through several hands before it is manu- factured; and the process is repeated with the finished commodity. Each intermediary has to be remunerated for his labour, or in other words maintained ; and the cost of course falls upon the consumer — and with especial severity upon the poor. The well-to-do classes who can purchase their commodities in sub- stantial quantities of the large firms, buy at much lower prices than can the wife of the dock labourer who lays out her few shillings with the little shop- keeper in obtaining driblets of the necessaries of life. 1 Waste in distribution, therefore, can in part onlybe This is an illustration of poverty being a cause of poveity. 84 THE SOCIALISING OF DISTRIBUTION. prevented by the removal of poverty itself. The purchaser of half an ounce of tea must necessarily buy in a dearer market than the purchaser of a pound ; and the cost of the additional conduit-pipes is unavoidable. But the evil is also in part traceable to other causes. Distribution, like production, has the vice of Capitalism ; that is to say, the controlling principle is not the good of the community but private profit. Hence we have speculation, rashness, deceit, fraud, labour conflicts, and all the other forms of industrial waste attending on the one process as on the other. Combinations are effected to buy up goods, so that prices may be inflated and profits enhanced. In some instances — as for example in the case of agricul- tural produce — owing to the monopolies of markets, the middlemen occupy a far superior position to that either of the producer or of the retailer; whilst in other instances goods are bought and sold without ever being seen, the delivery being direct from the original vendor to the ultimate purchaser, although the transaction (with its contingent profit or " commission") is carried through by means of one or more agent or agents. Of late years there has undoubtedly been a growing tendency to make distribution more direct, and Co- operation has also been introduced with beneficial but necessarily limited results. But that portion of this class of waste which is due to the capitalistic system can only be prevented by the Socialising of Distri- bution. 1 When private profit is no longer the con- trolling power, it will be to the interest of all to make 1 See p. 103. WASTE OF PROFESSIONAL LABOUR. 85 the transfer of commodities to the consumer through the most direct channel possible. The Desuetude of many Professional Services. There is yet, as we saw, one other class of indus- trial waste, namely that represented by the labour of many of the professional classes. The fault is not theirs : under existing conditions they render un- doubted services ; and it is only when we see that these conditions could be altered with advantage to the community that we realise the nature of the waste. Some labour of this character would, however, always be requisite. We shall never, for instance, so far as we can foresee, be able to dispense with the aid of those who devote themselves to the noble work of alleviating physical pain and assisting in the restora- tion to health. But the professional classes are to a larsfe extent the outcome of that artificial condition of society which gives rise to so much waste. We referred in particular to lawyers, valuers, and auctioneers. An hereditary plutocracy and a mono- polistic system have called into existence a multitude of laws for the " protection of property," and an elaborate machinery for effecting its exchange. And these laws can practically only be interpreted and enforced, and this machinery set in motion, by means of specialists, who require a more or less expensive education, and are accordingly able to command a hi) House of Lords .. .. ..56,116 Housing of the People . . 3, 153 Huddersfield Town Council . . 54 Idle Consumption (see Consumption) Immigration . . . . . . 65, 141 Improvidence .. ..9,41,52,73 Income : Average . . . . 15, 21, 33-34 National 13-16,133 4 Tax .. 71,110,114,124,150,153 Individualism .. 104,129-138,152 Individualistic Remedy .. 135-138 Industrial Remuneration Conference 3 Inequality 126 (and see Unequal Distribution) Ingram, J. K. .. .. .. 53 Instruments of Production ( (see Pro- Insufficient Production \ duction) Interchangeable Parts, Era of .. 46 Interest : Amount of .. .. 34 Rate of 75, 102 Socialising of .. .. 112-118 International Trade (see Foreign) Intestates Estates Act .. .. 110 Invention .. .. 37,47,49,133-4 Investment 60, 102 Irish Land Act .. .. 112,143 PAGE Joint Stock Companies 26, 76, 117 Justices, Licensing 116 Knowledge, Taxes on . . . . 134 , , (and see Education) Labour ; Conferences .. .. 65,94 Conflicts .. .. 27,80,82,84 Exploitation of 34, 53, 69, 81, 87, 93 97, 101, 114, 118, 120, 132, 137 Female 118-121 Hours of .. .. 50, 54, 57, 119 Organisation of 49 51, 81, 104, 116, 145 Professional . . . . 28, 85-87 Remuneration of.. ..(see Wages) Skilled 39, 50, 103, 119, 121-123, 142 Source of Wealth . . 15, 42, 63 Supply of . . .. 36, 39, 65, 119 Laisser/aire .. .. .. 152 Land : Area of 13 Nationalisation of . . 103, 111-112 Potentiality of .. .. .. 14 Rent of .. .. .. (see Rent) Taxes on 107-110,150 Vacant 108 Law Courts .. .. .. ..85-86 ,, of Aliens .. .. .. 65 Lawyers 28, 85-?6 Leasehold Enfranchisement .. 144 Leases 112,143 Legacy Duty 108,115 Legislation, past .. 45, 99, 153-4 Levelling up . . .. .. .. 124 Levi, Professor . . . . . . 32 Liberalism .. .. .. ,. 128 Liberals 146,155 Liberty . . 53, 66, 105, 137, 152 Liquor Traffic .. ..25,72-3,116 Local Improvement Acts . . . . 153 Lock-outs 27, 81 London 3, 107, 140 „ County Council .. .. 54 Luxuries : Amount of .. .. .. 19 Consumption of 11, 24-25, 35, 72-74, 150 Defined 5,10,17 Ethics of 60, 74 Production of . . 10, 17, 58, 127 Machinery 36-38,45-47 Making Work 70 Margarine Act . . . . . . 154 Margin of Cultivation . . 40, 125 Marshall, Professor 6, 13, 15, 18, 24 40, 46, 48, 63, 127, 155 Match Girls 146 Merchandise Marks Act . . . . 154 Merchant Shipping Acts .. .. 154 Merit 92, 123 Metropolitan Asylums Board .. 140 ,, Endowments .. 125 Middlemen 28, 83-84 INDEX. »59 p • < : ", Mill, J. S. . . 24, 37, 47, 02. 63, 97 Militarism 31,90-94 Mining Act 153 „ Royalties .. .. .. 109 Moderate Drinking .. 72,73 Monopolies : Effect of .. ..33, 84, 95, 98, 123 Nature of .. 33, 36, 98, 111, 110. 121 13S. 143, 145, 146 Socialising of . . 82, 101-2, 114, 116 Morals .. .. . .{see Ethics) Mortality 3,4,44 ,, Infant .. .. .. 04 Mulhall's Dictionary of Statistics 2, 32 Municipal Corporation Act .. 153 MUSICIPALISATION OF INDUSTRY : Present .. .. 54,50,111,134 Prospective 56, 60, 112, 116, 143, 150 National Debt . . . . 30, 91 N avy 30 Necessaries, Defined . . . . 5, 6 {and see Insufficient Production ; Waste and Unequal Distribution) Noblesse oblige .. .. . . 72 Nostrums and Palliatives 138-149 Numbers, Limitation of .. ..64-07 Opportunities Over-crowding Over-population Over-worked, The . . Owen, Robert Palliatives Parliaments, Triennial Patent Medicines .. Peace Conferences . . Peasant Proprietorship Pensions Philanthropy 98, 123 3 9, 02-07 49-53, 55, 119 ..147 138-149 ..56 ..78 ..94 ..142-4 .. 31, 91, 140 5, 140-1, 151 Political Economy . . {see Economics) 1 \ 'litical Economy : Cairaes' 22 Fawcett's 15 Marshall's.. .. {see Marshall) .Mill's .. 24, 25, 37, 62, 0:5, 97 Politics .. 55, 92, 100, 118, 151 Poor Law .. 2,45,110,139-140,150 Population .. .. 15,42,02-07,10 Post-Oflice 30, 54 1 'otter, Beatrice 147-8 P<>\ kkty : 1 auses of .. . (see Contents, ii.J Continuance' of .. . . . . J Definition of . . .. .. 5 Depth of 1-4 Effects of .. .. 40,42,63,72,83 Problem of . .(see Content s, i. & Hi.) Private 1' roli t .. (see Production) Probate Duty .. L08, 109, 115 Problem Of Poverty.. (see Contents) Problems of Poverty. . 2, 40, 44, 50, 52 PAGE Production : Collective 54, 56, SO, 93, 101, 116, 148, Defined 22 Increase of . . .. .. 45-66 Instruments of 14, 33. 36, 19, 7m. 97 Insufficient .. 10,13-21,35,40,149 Luxuries, of .. 10,17,18,35 Private Profit, for 52. 59, 75, 77, 78 80, 82, 95, 102 Wrong .. .. 11,19,21,58 Professional Services 28, 85-87, 102, 122 Profit, Private .. {see Production) Proletariat . . . . 40, 69, 127 ,, ..{and see Wage-earners) Property : Episodes of .. .. £5,86,93 Communistic .. .. .. 131 Tax 110 United, Owners' Association .. 144 Protection .. .. .. .. 66 Publicans 116, 146 Public Libraries .. .. .. 125 Public Works 116 Puffing 27, 79 Quintessence of Socialism 105, 134 Rae, John, M.A 57 Recoupment .. .. ..Ill Reform Bills 154 Reforms {see Electoral and Fiscal) Rent :— Abilitv, of .. 34, 98, 121-120, 133 Amount of 34,114 Capital, of . . 34, 98, 103, 112-118, 122 Economic effect of .. ..9, 34 Land, of 9, 33, 98, 103, 107-112, 114 Monopoly of . . 33, 97, 113, 121 Nature of .. .. .. ..100 Rise in 38,113,154 Socialising of 100-101 , 107, 1 11 , 116, 153 Rents, the Three .. .. 33,114 Revolution, Industrial .. 44, 106, 153 Rights &* Responsibilit. cs of Labour 81 Risk, Business .. 26, 75-77, 122, 134 Rochdale Pioneers 117 Royal Commissions . . 3, 125, 146 Saving : Effect of 60 Under Socialism 104 Savings : Amount of 19,35 Nature of 20 Small 35, 149 Science .. .. 45, 48, 08, 104 Economic .. .. {see Econom.cs) Social 8, 99 Second Ballot 55 Self-bel] 9, 64, 148 Si rvtces: Arc Wealth 14 Monopolist d .. .. ..23,71 Professional . . 28, 85-87, 102, 122 i6o INDEX. PAGE PAGE Shame, Dr. A. 105,134 Unemployed .. 49-53,116-117 Shaftesbury, Lord .. . . 152-3 Unequal Distribution : Shams . . 27, 77-80 Cause of 41, 97 Sharpe v. Wakefield ..116 Effect of .. 12, 33-35, 40, 97, 14!) Skill . .. (see Labour Skilled) Extent of 32-33 Socialising : Increase of .. .. .. 39 Ability, of . . 103, 125, 133 Nature of 33 Capital, of .. 71, 77 , 82, 102, 116, 122 Remedies for . . . . 100-120 Industry, of 53, 59, 71, 84, 88, 93, 102 United Property Owners 144 116, 120 Utilities 14, 23, 29, 87, 102, 120, 122, 123 Land of 101, 111-112, 116 Socialism : Value : Democratic 100-105, 126, 150 Difficulties of . . 130-5 Effects of .. 87, 103, 105, 154 Ethics of . . 138, 150, 151 Valuers 28, ir5, 86 Liberty and 105, 137 Victoria . . . . . . . . 57 Nature of ., 101, 103, 131, 147, 150 Vis major .. .. .. .. 07 Pioneers of 147,153 Wage Earners 32-5, 50, 81, 119, 145 Speculation . . 26, 70 Wages : Strikes 27, 81 Amount of .. .. ..34 Succession Duty . . 109 How Determined . . . . 36-7, 39, 03 Suffrage Adult .. 55, 92, 150 Standard . . . . . . . . 145 ,, Female .. 92, 121 Subsistence .. .. 39, 52, 88 149-152 Superintendence, of . . 75, 115 Supply : Waste : Foreign 61,134 Cause of 41, 75, 81 Labour, of . . 36, 39, 65, 119-120 Effect of .. ..11, 31, 41, 74, 90 Luxuries, of . . 5S-59 Industrial 26-2S, 75-87 Necessaries, of 59, 63, Individual . . . . 22, 26, 68-74 Sweating System . . 119 Labour, of .. 11, 27, 51, 76. 79, S5. 90 National 29 31,87-94 Tax, the Single 113,114 Taxation : Prevention of .. .. 67-94,150 Income, of 71, 114-11, War 30, 90-': 4 Monopolies, of 101, 102, 107 Wealth : Kent, of 107-109, 150 Amount of .. .. 2,15,32 Taxes, Amount of .. .. 30 Defined 13 ,. on Kn nvledge ..154 Science of 126 Telegraph Services . . . . 30 (And see Production, Waste, and Un- Temperance 72, 116, 136, 13S equal Distribution) Tenants' Protection 143-144 Webb, Sidney, LL.B, . . £0, 57, 154 Tithe Rent Charge . . ..111 Women Workers .. .. 118-121 Tories 146, 155 Work . . 43, 96, 136 {and see Labour) Trades Unions 50, 145-6, 149 Wrong Production {see Production) Truck Acts .. .. 153 Youth .. .. 131,135,155 Unearned Incomes .. 71 , Increment .. 107, 112 Zeitgeist, The ... ., 152-155 SOCIAL SCIENCE SERIES. 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