LIBRARY UNIVERSITY OF CALIFORNIA. Received Accessions No. .U;E Impediments to Wealth-Creation Insecurity of Person and Property Superfluity of Unproductive Consumers Their Classification 65 CHAPTER VII. Government Functionaries The Professional Classes The Un- employed Poor T 1 CHAPTER VIII. Wars and International Rivalries Various Modes in which War is Injurious Annual Expenditure on Armaments in Time of Peace Vast Number of Unproductive Consumers. . . 92 CHAPTER IX. Annual Cost of the War-system in Time of Peace Annual Cost of the War-system in Time of War Economic Results of the Conversion of Soldiers, &c., into Producers . . . 105 CHAPTER X. National Debts Incurred for War Purposes Their Results and their Limits General Remarks on the Destructiveness of War 119 CHAPTER XI. The Alleged Necessity for War Advantages and Disadvantages of Territorial Extension Where the War Principle Leads when Fully Carried Out The Democratic Element . .134 CHAPTER XII. The Principle of Arbitration Possible Federation of European States for Settlement of International Disputes Suggested Council of the United States of Europe Hero-worship Pseudo-patriotism 147 CHAPTER XIII. Commercial Isolation Protectionist Fallacies Balances Due by One Country to Another are not Paid in Specie All Com- merce is Barter 164 CONTENTS. xt CHAPTER XIV. PAGE Excess of Imports mostly a Sign of Wealth Imports and Ex- ports (except those for Loans or Repayments) Balance each Other Protection Discourages Native Industry . . . 176 CHAPTER XV. Import Duties on Foreign Goods Fall on the Importers Free Trade Supplies Native Industry with Cheap Materials and Cheap Living 185 CHAPTER XVI. Wages Highest where most Wealth is Created Protection Frus- trates Division of Labour If Protected Nations Prosper, it is in Spite of, not Because of, Protection .... 197 CHAPTER XVII. As to Dependence on Foreigners Free Trade a Boon to a Nation, whether Others Adopt it or Not As Knowledge Spreads, so will Free Trade 205 CHAPTER XVIII. Why Free Trade is not yet Universally Adopted Ignorance and Immorality Their Connection with Poverty . . . .217 CHAPTER XIX. Utilisation of Female Labour Competition ; its Uses and Abuses Communism Waste on Intoxicants and Narcotics 227 CHAPTER XX. Gluts of Commodities and Labour National Antipathies Ten- dencies towards Confederation 240 CHAPTER XXI. Land Origin of Private Proprietorship The World's Supply of Land Its Gradual Absorption and Consequent Increasing Value 251 CHAPTER XXII. Contempt for Wealth-Producers The Poor would be largely Benefited by Increased Wealth-Creation . . . .265 Xll CONTENTS. CHAPTER XXIII. PAGE Raising the Poor to a Condition of Ease and Culture Are the Results af which we aim Chimerical? 276 CHAPTER XXIV. Expansibility of Man's Productive Power The Interests Advo- cated are not National, but Universal Conclusion . . 287 APPENDIX (the Council of the United States of Europe) . . 299 WEALTH -CREATION. CHAPTER I. Definition of Wea\\.hA\l Wealth is actually Distributed and Used The more Wealth there is Created, the more there is for Distribution Obstacles to the Creation of Wealth should be removed, and Aids to it adopted Money is not Wealth The Three Factors of Wealth are Land, Labour, and Capital. BY " wealth " we mean all such objects of human desire as are obtained or produced by human exertions. The amount of wealth, as above defined, that is at present produced by mankind falls short of satis- fying the needs, physical and mental, of all men. But would it not be possible for the production of wealth to be so increased as to suffice for that purpose ? And are the obstacles which have hitherto checked that increase insurmountable ? These are the problems to which we shall devote our attention in this work. It is intended to establish the following four propositions : 1. All the wealth that is obtained or produced by human exertions is actually distributed and used. 2. The more wealth there is created, the more B WEALTH-CREATION. there is for distribution, and the more " objects of desire " fall to the lot of each human being. 3. All obstacles to the creation of wealth are injurious, and ought, if possible, to be removed. All aids to the creation of wealth are beneficial, and ought, if possible, to be adopted. 4. Such obstacles and aids to wealth-creation should be identified, classed, and discussed, with a view to their respective removal or adoption. Before we proceed to examine these proposi- tions seriatim, let us say a few words as to the worth and importance of such inquiries. No development of man's intellect, or of his moral sense, can take place until his physical wants are satisfied. The latter is a "condition precedent" to the former. Whatever tends to impart to labour its maximum amount of productiveness, and to prevent needless waste of wealth, tends to procure to the labour-seller more of physical comforts and less of physical toil. It tends to emancipate him, not indeed from the wholesome and ennobling duty of working, but from the drudgery of doing no- thing else but work. All labour and capital, wasted by being directed to useless, unprofitable, or im- proper objects, are utterly thrown away, and by their misapplication the wealth remaining for dis- tribution is unjustifiably diminished. To obviate this wrong against humanity is the mission of the economist, and, involving, as it does, the material as well as the mental and moral welfare of the great bulk of mankind, it is as noble an object as any science can have in view. Those who, leading a life of refinement and ALL WEALTH IS DISTRIBUTED. 3 culture, affect to look with disdain on studies con- nected with the pursuit of wealth, should remember that they are themselves entirely dependent on its possession, either acquired or inherited, for the indulgence of their tastes. Few writers or painters refuse cheques for their works, and the most fas- tidious of them overlook for the nonce that, as labour-sellers and payment-receivers, they become parties to one of the most commonplace of mer- cantile transactions. We see no loss of real dignity on either side. Neither need sneer at the other. Let us now look at the first of the four proposi tions with which we have started. I. ALL THE WEALTH THAT IS OBTAINED OK PRODUCED BY HUMAN EXERTIONS IS ACTUALLY DISTRIBUTED AND USED. The exceptions to this statement are so few, and comparatively so insignifi- cant, that they prove the rule by showing how little it excludes. They chiefly arise from accidents that are more or less remediable. Let us enumerate the most notable instances in which wealth is annihilated without being distributed and used, (i) Destruction through shipwreck. (2) Destruc- tion by fires, inundations, earthquakes, and similar natural causes. (3) Decay while waiting consump- tion (decomposition of fruit, fish, meat, and other perishable articles). (4) Heating and spoiling of grain, cotton, and other cargoes during their con- veyance from one place to another. (5) Occasional over-production from want of market (grain rotting in some parts of roadless Russia ; maize-ears used as fuel in some parts of America, &c.). Besides these, a few still more trivial cases may be adduced ; B 2 4 WEALTH-CREATION. but all of them put together, when compared with the enormous volume of continuous production that results from the aggregate labour of all mankind, form so minute a fraction that the truth of our first proposition is thereby far less impugned than con- firmed. And it stands to reason that it should be so. Man does not labour to produce unless he derive some benefit from his labour. If, in exchange for what he produces in excess of his own wants, he can obtain from some other producer things that he feels a desire to possess, he will continue to produce in excess of his own wants ; but should no oppor- tunity exist for his making such exchanges, he will confine his production to his own personal require- ments. For he has no inducement, and why should he labour fruitlessly ? In short, unless wealth be distributed and used, it will cease to be produced. The practice of hoarding (which has greatly diminished and is gradually disappearing), and the unsold stocks of goods in dealers' hands, are causes which delay but do not prevent ulterior distribution. On this proposition, which many may regard as a mere truism, we lay great stress, because, simple as it may appear, it is pregnant with important inferences and conclusions. 2. THE MORE WEALTH THERE IS CREATED, THE MORE THERE IS FOR DISTRIBUTION, AND THE MORE "OBJECTS OF DESIRE" FALL TO THE LOT OF EACH HUMAN BEING. That the more wealth there is created, the more there is for distribution, is self-evident. As to possible im- BENEFITS OF INCREASED WEALTH. 5 provements in the mode, or in the proportions, of that distribution, such topics do not come within the scope of the present treatise. We are here dealing with things as they are ; and we assert that, even under the existing laws which regu- late distribution, imperfect as they may be, the more wealth there is created, the more there is distributed among all classes of the community. All receive more or less of additional benefit from the increased mass of wealth that is created. If much is produced, there is more for all ; if little is produced, there is less for all. In the former case nobody is pinched ; in the latter case, savings- holders (capitalists) get what they want, while labour-sellers get what they can. Abundance leaves a large, scarcity a small, overflow, after the requirements of the rich are satisfied. It is clearly the interest of all, especially of the non- capitalists, that man's productive powers should be exercised in the most efficient manner, so as to create the largest possible fund of wealth. For it is out of that fund that human wants are supplied, and the more there is for all, the more there ought to be for each. The smaller the fund for dis- tribution, the worse for the weak ; for, in the scramble, the strong prevail and the weak suffer. Our great aim, therefore, should be to secure an abundance of every object that can contribute to man's material, and consequently to his intellectual and moral, well-being. In articles of primary necessity distribution is not very unequal, except in cases of absolute destitution. A prince does not consume more food 6 WEALTH-CREATION. than a peasant, and the greater the quantity of food raised, the more (since what is produced is dis- tributed) falls to the lot of every man, rich or poor. Similarly, if all other articles, (i) of necessity, (2) of comfort, (3) of luxury, were produced in greater abundance than they now are, then in the proportion of such extra abundance the distribution would extend to a larger circle of consumers. There is no physical hindrance to those articles being pro- duced in such abundance as that the distribution should extend to every member in the community. The hindrance entirely lies in ignorance, bad government, and other remediable causes. The aggregate productive power of man, properly developed and directed, is almost boundless. Its present results are a mere fraction of what they might be were the science of wealth-creation generally understood, and its teachings generally adopted. Let us suppose a state of things in which, with the same number of people, the number of objects of desire created by their labour and capital were on the average multiplied tenfold. It is clear that, as all wealth produced is distributed, the additional enjoyments thus procured would, in a varying degree perhaps, but still in a positive degree, be felt and shared by all classes of the people. It may occur to some that such a multiplication of commodities might occasion a "glut" So it would, if all commodities were equally multiplied tenfold, without reference to the relative demand for each. It is for that reason that we used the words " on the average." Some articles would be ABUNDANCE WITHOUT "GLUTS." ? in excess if so multiplied, while others might be multiplied almost indefinitely without sating the desire to possess them. There cannot possibly be a general "glut" of all commodities. A "glut " is simply the over-production of one or more, as com- pared with all other articles ; or, which is the same thing, it is the under-production of other articles as compared with the one or more which are in excess. The moment the balance is restored, the glut ceases. As long as all commodities are produced in that proportion to each other which is indicated by the relative demand for them, there can be no glut. If you preserve that proportion, you may double, or decuple, or centuple the results of the same labour and capital, and there still can be no glut. Every article, however abundantly produced, is counterbalanced by, and is interchangeable with, a similar abundant production of other articles ; and the result is not a glut, but a general abundance of all articles. It is this general abundance which, overlapping the requirements of the rich and strong, overflows on to the wants of the poor and weak ; and it is this general abundance which it is the ob- ject of science to secure and apportion. Given that " the more wealth there is created," the more falls " to the lot of each human being," it follows as a necessary consequence that 3. ALL OBSTACLES TO THE CREATION OF WEALTH ARE INJURIOUS, AND OUGHT, IF POSSIBLE, TO BE REMOVED. ALL AIDS TO THE CREATION OF WEALTH ARE BENEFICIAL, AND OUGHT, IF POSSIBLE, TO BE ADOPTED. This seems a simple truism, and yet, while in the abstract it is 8 WEALTH- CREATION. recognised, in practice it is ignored. It has been left to individual exertion (based on the acquisi- tiveness inherent to men) to adopt such means of accumulating wealth as lay in the power or satisfied the cupidity of each. True that governments have occasionally interfered in the shape of bounties and prohibitions, monopolies and patents, restrictions and privileges ; but such assistance, while perhaps enriching a few, has only impoverished the com- munity, and paralysed its productive powers. Statesmen have taken no large views of the impor- tant bearings of wealth-creation and wealth-distribu- tion on the physical and moral welfare of the human race. Men cannot rise in the scale of being unless their material wants and spiritual aspirations are both ministered to. When we come to the enumeration of the obstacles and aids to wealth- creation, it will be seen how very many there remain of the former to be removed, and of the latter to be developed, before civilisation has exhausted all the means which are within its reach of benefiting mankind. Before going farther, it will be necessary to inquire (a) into the claims of money to be con- sidered as wealth ; and (b) into the sources from which wealtrris derived. (a) We have defined " wealth " as meaning " all such objects of human desire as are obtained or produced by human exertions." It is clear from this definition that wealth consists of a vast number of things that are not money. But we go farther, and assert that money (whether in the shape of specie or of paper notes) is not wealth. MONEY IS NOT WEALTH. 9 Suppose that all the money in the world of every sort were buried in the depths of the Atlantic Ocean, the wealth of the world would remain all but undiminished. The actual loss to, and deduc- tion from, the mass of the world's wealth would amount to a few tons of metallic substances of very little use except for ornamental purposes, and a few reams of paper. The real wealth, to which the defunct money merely represented the relative claimants, would remain intact. There would be left just as much of food, clothing, house- accommodation, articles of luxury, land, labour, machinery, &c. &c., as before. It is the distri- bution thereof that would alone be affected. On the holders of money such a catastrophe would inflict great injustice and hardship. They would lose the vouchers which entitled them to a defined share in the world's wealth. That wealth would remain as great, but, along with their money, their claim to a share of that wealth would vanish. They would get less, and others would get more, than their rightful proportion. The destruction which we have supposed of the precious metals would also, until some other standard of value were adopted, occasion enormous incon- venience, disturb the course of commercial inter- changes, and necessitate a temporary resort to barter. It would disorganise the trade of the world, and for a time obstruct many of the pro- cesses of wealth-production. But while readily allowing all these evil consequences of the sup- posed annihilation of money, the fact still remains that it would not, to any extent worth considering, 10 WEALTH-CREATION. diminish the aggregate amount of the world's wealth. It is clear, therefore, that money itself, as money, is not wealth, but that it merely represents the conventional and legal claim which the holder of money has to a certain share of those objects which do constitute wealth. If the holder of a guinea ticket to a public dinner loses his ticket, and in consequence loses his dinner, that does not diminish the quantity of the meat and drink provided. The loser of the ticket forfeits his share of the feast, but that share is not, therefore, lost. It is simply distributed in some other way than it would have been if the ticket had not been lost. Money is wealth only in the same figurative sense that the ticket is turtle- soup and venison. Both entitle the bearers to a certain quantity of what they represent ; but neither the destruction of the money nor the destruction of the ticket would diminish the stock of desirable objects, to a portion of which the money or the ticket gave the holders a claim. There is no law of nature appointing gold and silver to be standards of value, or privileging them to perform the functions of a circulating medium. It is simply a question of convenience. In some countries, cowrie shells or cakes of salt perform the same functions ; and, indeed, nearly everywhere, those functions are largely performed by bits of paper, with a few words written or printed on them, which have no intrinsic value at all. The adven- titious value of gold and silver arising from the universal consensus of mankind to use them as standards of value, is very great indeed as com- INTRINSIC METALLIC VALUE. II pared with that which they would intrinsically possess as metals, if they were deprived of that ex- ceptional privilege. Supposing other standards of value adopted in their stead, thus limiting their use chiefly to artistic and ornamental purposes, how much more would they be worth than nickel or aluminium ? The gold in a sovereign now exchanges for about thirty quartern loaves ; it may be questionable whether it would then be exchangeable for more than one, if for so much. But however small comparatively may be the in- trinsic value of gold and silver as mere metals, it is only to that extent that they constitute wealth. Beyond that value they are merely counters or tokens, which may be destroyed without destroying the wealth which they conventionally represent ; just as the guinea ticket to a dinner, if made of bronze, worth, say, twopence, would, supposing it dropped in the river, entail the destruction, not of the good cheer which it conventionally represented, but merely of the twopence which formed the intrinsic worth of the ticket. It may perhaps be suggested that money does come under our definition of wealth, as being (very decidedly) an " object of human desire." But it will be obvious, on reflection, that it is only the metals themselves, as metals, that are "obtained or produced by human exertions/' The same cannot be said of the conventional privileges superadded to them when used as money. These privileges are not a commodity "obtained or produced," and do not, therefore, come within our definition. Bank notes and bills 1 2 WEALTH-CREATION. of exchange are also " objects of human desire," but they do not constitute, they only represent, wealth. They are desired, not for the sake of the worthless bits of paper of which they consist, but because they are tickets entitling the holders to a certain defined share in the world's wealth. The destruction of these bits of paper might perhaps disturb the relative ownership, but would by no means annihilate the existence, of the wealth which they represented. We therefore arrive at this general theorem. Metallic money is not wealth, except to the extent of what the metal it consists of would be worth if it ceased to be used as money ; and paper money is not wealth at all, but merely represents a legal claim to it. (b) The three factors of all wealth are land, labour, and capital. All three are represented in every commodity " obtained or produced by human exertions." No such commodity ever existed, or could exist, without all these three elements, in varying proportions, concurring in its production. The surface of the globe which we inhabit that is, the land, water, and atmosphere, all of which we shall, throughout this work, include in the generic term " land " furnishes to scanty bands of savages .a precarious supply of fruit, game, and fish, ob- tainable by a minimum amount of labour and capital ; the labour being the acts of hunting or fishing, the capital being the rude implements and weapons which those acts require. In such cases labour and capital have contributed a very small, the land a very large, share. Let us take quite LAND, LABOUR, AND CAPITAL. 13 an opposite instance. In the case of a picture by Mr. Millais, the few materials furnished by the land for canvas, easel, pigments, &c., contribute the merest fraction to the value of the picture, while the skilled labour of the artist, and the capital expended on his education and studies, form, beyond comparison, the most influential elements. But in each of these extreme cases, all the three factors, though in different proportions, are present. They are, indeed, indispensable to each other, and no two of them can produce wealth without the aid of the third. That without land labour and capital would have nothing to work upon, and could not even exist, is self-evident. That land and capital would be useless without labour is almost as obvious. That land and labour without capital would be totally unproductive is equally true, since absence of capital implies the absence of all tools and implements, and also of food or other stores set apart beyond the consumption of the day. Whatever is produced by labour in excess of immediate requirements, and laid by for future use, is capital. The weapons and canoes of the savage quite as much constitute fixed capital as our foundries or steam-ships. Without such capital the miserable biped would have to exist on the berries he might chance to find and pick up during the day, and would contribute no element of wealth. On the other hand, the English labourer, earning three shillings a day and saving one out of them, becomes a capitalist to the extent of that saving, and may, by Mr. Fawcett's ad- mirable provisions, out of a single day's economy, 14 WEALTH-CREATION. twelve penny postage stamps, become a creditor of the State to that amount. Inference : Since wealth cannot exist without the combination of every one of these three factors viz., land, labour, and capital it follows that they are each of equal indispensability, and that all dis- quisitions as to their comparative importance in the production of wealth are idle and aimless, since their relative potency is indefinable. CHAPTER II. Classification of Obstacles and Aids to Wealth-CreationDivision of Labour Free Commercial Intercourse Loss Inflicted by the Opposite Policy. WE now come to the 4th proposition laid down at page 2, and we contend that ALL OBSTACLES AND AIDS TO WEALTH-CREA- TION SHOULD BE IDENTIFIED, CLASSED, AND DIS- CUSSED, WITH A VIEW TO THEIR RESPECTIVE REMOVAL OR ADOPTION. We fancy that this proposition will meet with ready assent. If it be true that the more of wealth there is created, the greater is the benefit to the human race, it necessarily follows that it is essen- tial to trace the causes that either promote or im- pede wealth-creation. We shall first proceed to consider the chief aids to the creation of wealth, which we may classify as follows : A i. Division of labour, A 2. Free commercial intercourse, DIVISION OF LABOUR. A 3. Capital intelligently employed, ^^s^7'y\* 3 vft A 4. Machinery and labour-saving proce*^- A 5. Facilities of inter-communication, A 6. Scientific discoveries, A 7. Education and morality. We shall then proceed to consider the chief im- pediments to wealth-creation, which may be clas- sified as follows : B i. Insecurity of person or property, B 2. Superfluity of unproductive consumers, B 3. Wars and international rivalries, B 4. Commercial isolation, B 5. Ignorance and immorality. On the peculiar position of land in regard to its limitation of extent and its immovability, as com- pared with the unlimitable growth and universal adaptation of labour and capital, we shall remark farther on. A I. DIVISION OF LABOUR. It is curious as well as instructive to compare the fecundity of a man's labour, when he is working in intelligent combina- tion with others, with- the sterility of the same man's labour when he is working isolatedly. A hive of men, harmoniously co-operating, can, with- out overstrain, produce indefinitely more than their joint requirements ; whereas, all the efforts of a solitary individual can scarcely supply his most pressing wants. To say that in the one case man is a giant, in the other case a child, is a feeble ex- pression of the relative power which the two posi- tions confer on him of producing wealth. It would be nearer the mark to say that in the one case man can do everything, and in the other nothing. 1 6 WEALTH-CREATION. What is the source of this enormous increase of the wealth-creating powers of men when acting in concert ? If this co-operation of man with man to effect a common purpose were confined to the mere combination of their physical forces, but little would be gained. A heavier weight might be lifted, or a more bulky obstacle might be removed, or the ferocity of wild animals might be more easily subdued results of no great importance. It is a far more subtle and potent influence that comes into play the reasoning faculty. Through its promptings, the work to be done is distributed into a variety of parts, each of which is assigned to a distinct set of labourers, whose labour is confined to that part. It is this distribution of certain work among certain workers this division of labour that renders human exertions a thousand-fold more productive than they otherwise would be. It operates in a multiplicity of ways : by perfecting, through early education and constant practice in one direction, the manual dexterity of each worker ; by training the worker to deftness in the rapid and effective handling of tools ; by stimulating the in- ventive faculty to devise special labour-saving machines ; by ensuring continuity of effort on one object, thus avoiding waste of time in passing from one task to another ; by concentrating the maxi- mum of attention and energy on each separate and subordinate process ; by affording the freest scope for the development of natural aptitudes ; and, generally, by making the efforts of each individual harmoniously subservient to the common benefit of all; so that Nature's peculiar gifts to each part DIVISION OF LABOUR. I/ shall be enjoyed by man in every part of the globe. Even that simplest of implements, a spade, is not the work of one man, but of some half-dozen distinct sets of workers. The lumberer furnishes the timber, the carpenter shapes it, the miner (perhaps hundreds of miles away) digs the ore, the iron-founder smelts it and beats the metal into shape, the nailer contributes the means of binding the iron to the wood, and the carrier conveys the materials or the articles to their destinations. During the time that it would take an isolated man to make a single spade (and if he could do it at all, it would be a very clumsy and imperfect specimen), one hundred men, by dividing their labour, would probably make one hundred thou- sand or more. But if such be the striking results of the division of labour in the production of so simple an article, imagine its marvellous potency in the case of a complex form of human industry. Let us take as an instance one of those magnificent steamers that act as movable bridges between New York and Liverpool. Here, instead of half-a- dozen sets of workers, the labour of building and equipping that steamer has been divided among, not scores, not hundreds, but thousands of distinct sets of producers. Such is the limitless variety of objects which the construction and outfit of this floating palace embrace, that there is hardly a sec- tion of human industry that has not been made available for, hardly a region of the globe which has not contributed to, and scarcely a science with- in human ken which has not been pressed into the c 1 8 WEALTH-CREATION. service of, that glorious creation of man's brains, labour, and capital. It is to the division of labour that we chiefly owe this wonderful achievement. Without it, man's constructive power would hardly go beyond the canoe or the coracle. It may be said that the world freely admits the advantages that flow from the division of labour, and that our advocacy is superfluous. We reply that it is not so. The principle of the divi- sion of labour is at present violated, and its benefits discarded by the fiscal ordinances of almost every civilised Government. Whenever the division of labour (whether assisted by other circumstances or not) produces an article more cheaply in one country than in others, the latter refuse to admit such article; and thus ignore and reject the benefits conferred by the division of labour. If its quicken- ing influence on the creation of wealth be " freely admitted," how is it that statesmen circumscribe its operation within the narrow limits of a single country, and forcibly repress its beneficial action by proscribing international division of labour ? Let us briefly examine into this. The amount of benefit derivable from the division of labour is in direct proportion to the magnitude of the area and the number of people over which its operations extend. The greater the diversity of the climate and soil, as well as of the aptitudes and personal peculiarities of the populations, the greater is the scope for the pro- fitable operation of the division of labour. In isolated and thinly populated regions, in which families live far apart from each other, and the DIVISION OF LAIJOUR IGXOKKI.). 19 means of communication are scanty, each house- hold provides for most of its own wants by its own labour ; and we are reminded of those old primitive times when men " delved " and women " span." Under such conditions, no organisation for the division of labour can take place. Isolation of the region itself from the rest of the world, and isolation of the members of the community from each other, form a double obstacle. It is obvious that the full development of the principle of division of labour can only be reached when there is no isolation, and when there is free and unrestricted intercourse and interchange between all men of all nations all the world over. Then does this great wealth-creating agent put forth its full power and efficacy. It has then the greatest possible diversity of elements to work upon, and these give it the greatest possible scope for its operations. Its completeness and perfection depend on its universality. Whatever is short of international that is, universal division of labour, cripples its action, and renders it partial, stunted, and propor- tionately feeble. And yet what is the policy adopted in regard to it by almost every country in the world ? A policy of commercial isolation directly opposed to the development of the division of labour. True that the latter principle is recognised and adopted by each country within the limits of its own territory, but, under the so-called protective system, it is ignored and scouted in its relations with the rest of the world. Instead of an international or universal, we have an intra-national or sectional 20 WEALTH-CREATION. scheme of division of labour. Instead of that prolific agency for maximising the productiveness of human toil being allowed a full sweep over the entire industrial world, the surface of the globe is cut up into patches of territory, larger or smaller, each of which is commercially isolated from the rest, and none of which will allow free ingress to the cheap productions of the others. Thus the cheapness achieved by the division of labour in one country is counteracted and rendered unavail- able to the rest by means of import duties, pro- hibitions, &c., enacted for the purpose of raising the cost or prohibiting the admission of cheap goods from foreign countries. Vainly indeed does the division of labour diminish the cost of production as long as statesmen proclaim that cheapness is an iniquity which has to be repressed by legislative enactments. Under what mistaken notions statesmen adopt that view, we shall take another opportunity of inquiring ; but meanwhile it must be clear to all that if the benefits which the division of labour confers are great and undeniable, it must be quite as great and undeniable an evil to counteract and nullify them. To intercept the beneficent operations of so powerful a factor in the creation of wealth as the division of labour, is an act as potent for evil as it would be to intercept the quickening action of the sun's rays on the soil, and so to create artificial sterility. It is fortunate that statesmen have not the same power to effect the latter as they have to effect the former purpose, as otherwise, no doubt, some pretexts of State FREE COMMERCIAL INTERCOURSE. 21 policy would be invented to justify both. To sum up, the division of labour promotes in an eminent degree the creation of wealth, but its operation is sadly checked and counteracted by the commercial isolation of one country from another. A 2. FREE COMMERCIAL INTERCOURSE is the second of those aids to wealth-creation which we pro- pose to review. We have just seen that this freedom of commerce is an indispensable condition in order to ensure the full development, and reap the full benefits, of the division of labour. It largely in- creases the wealth of the world by securing the rich results of well-applied labour and capital, instead of the poor results of misapplied capital and labour, and by obtaining for the use of each habitable zone the peculiar products which the diversity of climate, soil, geological formations, &c., make special to other habitable zones. It enable, all men in all countries to devote themselves to that particular work for which they have special opportunities or aptitudes. This they are, at pre- sent, prevented from doing. Governments, at an enormous expense to the community, compel producers to take their labour and capital away from the work which they are doing better than foreigners can, and to apply the labour and capital so diverted to work which foreigners can do better than they can. By this misdirection of power much of it is wasted. Instead of large results cheaply obtained, we have smaller results obtained at a greater cost. The wealth-creating power of the world is proportionately impaired. It loses the maximum productive force of labour and capital 22 WEALTH-CREATION. employed at their best, and in return only gets the feeble productive agency of the same labour and capital directed to objects for which they are less fitted, or under circumstances which tend to hamper their efforts. The immense difference between the results respectively obtained by these two opposite modes of applying labour and capital has not, we think, been carefully considered or adequately appreciated. If it be for the benefit of man that the greatest possible abundance of the objects of human desire be created, and, as a consequence, distributed, it must be essential to inquire into the reality and the extent of the " immense difference " referred to. The difficulty is to assess that difference. It would be easy enough in isolated cases. For instance, a carpenter and a bookbinder are both earning five shillings a day : what would be the market value of their labour, supposing that a paternal Government were to enact that they should exchange occupa- tions ? Would that value be even one-fourth of what it is now ? Under this supposition, the loss occasioned by the act of the " paternal Govern- ment " is obvious enough, and may be measured and computed. But the task is not so easy when it has for subject-matter all the complex conditions of an entire community. Let us make a rough and rude attempt. Given that combined labour and capital, under present conditions, are earning an average re- muneration both as to wages and profits, and are yielding an average volume of wealth-production, what would then be the effect of Government pro- IMPORTS AND EXPORTS BOTH CHECKED. 23 hibiting the admission of some article hitherto imported from abroad, and thus seducing a certain portion of labour and capital from their present employment into the service, more lucrative for a short time, of a native monopoly for that article ? What would follow ? (a) There can be no export without a corre- sponding value of import. Whatever be the amount which you cease importing from abroad, in conse- quence of producing the prohibited article at home, to that same amount will your exports be diminished of other articles. This prohibition is, therefore, " a heavy blow and great discouragement " to your staple industries. To the extent of that diminution of your exports, it throws native labour out of em- ployment and deprives capital of its remuneration. To that extent your foreign trade is cut off, and all the interests connected with it, whether it be work- ing men, manufacturers, merchants, or ship-owners, are proportionately injured. It was probably the intention of the paternal Government to benefit its native industries ; but a paternal Government sometimes make mistakes, and, in this instance, it has, by curtailing imports, curtailed to the same extent those sales to the foreigner by which native industries benefited, and has therefore inflicted on those industries positive and substantial injury. Now, what is there to set off against these evils ? It is merely that the labour and capital thus thrown out of employment are gradually, more or less, absorbed in the new establishments created to supply the prohibited article. The new industry is not a field for the investment of fresh labour and 24 WEALTH-CREATION. capital, but an inadequate refuge for the old labour and capital that have been displaced ; and the con- ditions under which that displacement has been effected are these. You have diverted labour and capital from the production of commodities at so cheap a cost that foreigners bought them of you, to the production of an article at so dear a cost that a prohibitory law is necessary to prevent your people from buying it of the foreigner. Is there much to boast of in this result ? (b) The higher wages and larger profits which had lured labour and capital away from their old channels into the new monopoly, would prove very transitory and short-lived. For, by the inevitable operation of internal competition, they would rapidly subside into their normal and average scale, while the evils which the change had entailed would prove permanent and cumulative. (c) Let us suppose that 40 per cent, be the rate of prohibitory import duty requisite to prevent imports from abroad of the article in question, and to give a monopoly of it to the native producers, then it follows, as a necessary consequence, that the consumers in that country will have to pay 40 per cent, more for that article than they paid before. Otherwise, why should a 40 per cent, duty be requisite to keep out the foreign goods ? Note that this estimated percentage is decidedly below the average, for in numerous instances those duties reach 100 per cent, and more. (d) This artificial dearness of even the single article in question banefully influences the cost of other productions. For instance, the dearness of EFFECT ON THE WORLD'S WEALTH. 25 iron cripples and checks ship-building, and largely increases railway fares. The dearness of clothing either presses heavily on the working man, or if his wages are raised in exact proportion, he is no better off than before, while the increased cost of labour enhances the cost of every production in the country. (e) To take a wider view of the subject, let us inquire what the result would be of such fiscal restrictions on the aggregate substantial wealth of the world. In respect to those articles in every country on which import duties are imposed for other than revenue purposes, whether those duties be prohibitory, or protective, or incidentally pro- tective, such duties afford a fair measure of the extra price which the consumers pay for those articles beyond what they would pay if such duties did not exist. Assuming that 40 per cent, ad valorem be the average of such duties (and that percentage is certainly below the reality), it follows that consumers of the protected articles pay 140 pieces of money (whether ,'s, or dollars, or francs, &c.) for the same quantity and quality as could be purchased elsewhere for 100. Under prohibitory duties, the whole of these additional 40 coins go to the native producers of these articles, and none to the revenue of the State. Under protective duties, some portion of the 40 coins goes, in the shape of customs' duties on imports, to the national revenue, and the rest to the native producers. When those duties are high, the State receives less, because the imports are smaller. The lower the duties, the larger is the portion which accrues to the State. 26 WEALTH-CREATION. The more effective the protection, the worse for the revenue, and the nearer protection approaches to prohibition. But whether foreign goods be wholly or par- tially excluded, the percentage of duties necessary to enforce such exclusion is evidently the measure of the extra price which consumers have to pay for such goods. If the native producers could pro- duce as cheaply as the foreigner, they would sell as cheaply, and no import duties would be requisite to keep foreign goods away. But taking at 40 per cent, the average duties necessary to effect that purpose, it clearly follows that the native pro- ducers must expend 140 coins' worth of labour, &c., to achieve what the foreign producers accom- plish by the expenditure of 100 coins' worth of labour, &c. The difference, which in the aggregate amounts to an enormous sum, is simply waste and misdirection of energy. It is a thriftless applica- tion of power to the wrong object, just as it would be to set a carpenter to make a coat, and a tailor to make a table. It is easy to infer the enormous loss which hence accrues to the wealth-producing power of the country and of the world at large. We shall, however, have occasion to recur to this subject when we come to consider commercial isolation as one of the impediments to wealth- creation ; and we therefore confine ourselves here to showing how largely free commercial intercourse contributes to the goodly work of promoting the creation, and consequently the distribution, of " all such objects of human desire as are obtained or produced by human exertions." CHAPTER III. Capital Intelligently Employed Capital and its Earnings go to the Payment of Labour Machinery and Labour-saving Processes Their Influence on the Production of Wealth and on the Welfare of the Labour-sellers. A 3. "CAPITAL INTELLIGENTLY APPLIED" is not merely an aid, but indeed a positive necessity, to wealth-creation. At p. 12 we have shown that the three factors of all wealth are land, labour, and capital. The two former land and labour are present in greater or smaller proportions, at all times and in all places, but the latter capital is the work of human hands, and owes its existence to man's industry, foresight, and self-denial. Let us frame a clear notion of what we mean by "capital," and then inquire into its functions and use. In the first place, we shall find that, although all capital is wealth, all wealth is not capital far from it. The wealth which human exertions have obtained or created is used by its possessors in a variety of ways, which we may classify under the following four divisions. Wealth may be devoted 1. To reproductive purposes; that is, to the creation of fresh wealth. 2. To purposes which are not reproductive, but are necessary or useful ; for instance, to social arrangements for the security of person and property, to the reasonable en- joyment of material comforts, to education, 28 WEALTH-CREATION. to intellectual and moral development, to recreation, &c. 3. To useless purposes, such as a redundancy of public servants and other non-productive consumers, or the indulgence in superfluous luxuries, ostentatious displays, &c. 4. To destructive and evil purposes, such as unnecessary wars the employment of brute force to crush liberty or perpetrate injustice, &c. It is that portion of the world's wealth which is devoted to the first of these four sets of purposes viz., to reproductive purposes which alone consti- tutes what we call capital. In the other three ways, wealth is absorbed and consumed ; whereas the wealth which is used as capital is not only not consumed, but continuously yields a large acces- sion of fresh wealth. It is like the seed-wheat that is saved for sowing, and that lays the foundation of future rich harvests. Capital, therefore, is that part of wealth which is devoted to reproductive purposes. It consists of the savings effected by means of an excess of production over consumption. The larger that ex- cess, the more rapid the accumulation of capital. Roughly speaking, then, " capital " and " savings " are convertible terms. The working man who puts by half-a-crown out of his weekly wages thereby becomes a capitalist, and not only benefits himself, but the world at large. He is a contri- butor to that reproductive fund by means of which fresh wealth is created. To the part which capital plays in the creation DEPENDENCE OF LABOUR ON CAPITAL. 29 of wealth we have already made some reference at p. 12. We have there shown that without capital labour must be sterile, and could engage in very little work beyond such as would each day provide food for that day. In order to apply labour to work requiring time to yield results, a stock must be previously laid up to provide subsistence during that time. Such stock is the earliest and simplest form of capital. In this shape we see capital sus- taining labour, while labour is engaged in creating fresh wealth. Under the complex conditions of old civilised communities, the same principle a principle on which is founded the mutual de- pendence of capital and labour on each other is carried out, but on a far larger scale, and in a less obvious form. The capitalist (that is, the savings- holder) supplies the labourer (that is, the wage- receiver) with the means of subsistence, &c., during the time that the latter is working for him. at a task let us say constructing a railroad which will not be completed for a year or two, and will yield no return till completed ; the contract be- tween them being that, in exchange for the wage, the work done shall belong to the wage-payer. Whether the savings thus used belonged to one person, or consisted of contributions made by many persons, is immaterial. Indeed, all the better if the savings of the labourer have, through the medium of banking accumulations, gone towards forming the capital. In such case the labourer is at once earning interest on his savings and wages by his labour. But it is not only subsistence, &c., in the form of wages that the capitalist advances. 30 WEALTH-CREATION. He also supplies taking a cotton factory as an instance the machinery with which, the raw ma- terials on which, and the costly building in which, the labourer performs his work. Not only is capital an indispensable element in the production of wealth, but we may go further, and say that the extent to which fresh wealth is producible depends on, and is strictly proportionate to, the swifter or slower growth of the world's capital. If the accumulation of capital be sus- pended, the productive power of man will be re- pressed in the same ratio. Of the three elements of wealth land, labour, and capital the two first have scarcely ever, unless locally and temporarily, been otherwise than superabundant ; whereas capital has, on the other hand, seldom reached the full limit of the requirements for it. It is the want ot capital, not the want of land or of labour, that has fixed the bounds of the world's productiveness. As more capital becomes available, more land will be utilised, more labour will be employed, and more wealth will be created. It is where and when population increases faster than capital that labour becomes redundant and wages fall. The remedy for the redundancy of labour, and for the consequent competition which depresses wages is therefore to accelerate the growth of capital. In the long-run, be it a little sooner or a little later, capital is sure to find some channel for employment. For it is useless and profitless to its possessors unless it is utilised, and it cannot be utilised without creating a demand for labour. Some one may be found to say that a sum of iVBESlT 1 DEPENDENCE OF CAPITAL OX , < money invested m land, or in consols, create a demand for labour ; but he overlooks that the money paid for land or consols by one person is received by another, and therefore still remains to be employed, directly or indirectly, in some form of labour. We therefore come to this conclusion viz., that as long as there re- mains on the globe cultivable land uncultivated, and available labour seeking employment, there can be no redundancy of capital ; and that the greater the abundance of the latter, the greater the amount of land and labour that will be utilised, and the more active will be the creation of wealth. But if, on the one hand, labour is dependent on capital for its employment, on the other, capital equally depends on labour for its utilisation. Unused capital gradually shrivels and wastes away : ships rot, mines get inundated, machinery rusts, &c. Labour is the vivifying principle which pre- serves capital from decay. Let us inquire in what shape capital (that part of wealth which is devoted to reproductive purposes) exists. We shall find it to consist chiefly of ships, roads, and railways ; of farm-buildings, factories, and foundries ; of imple- ments, machinery, and tools ; of horses, sheep, and other cattle ; of mines, docks, and harbours ; and of an infinite multitude of other forms of wealth. All these objects we find it convenient to class under the generic name of " fixed capital." A very small and insignificant portion of capital exists in the shape of money (not wealth of itself, but counters entitling the bearer to a definite 32 WEALTH-CREATION. quantum of wealth), and this portion is designated " floating capital." Without labour, neither of these two classes of capital are in the slightest degree available for the reproduction of wealth. Of the floating capital that is, the money every farthing of it goes, directly or indirectly, immediately or mediately, to payments for labour ; that is, to wages. Trace the course of a sum of money carefully, you will find that its eventual destination is the payment of wages. Supposing it placed on deposit in a bank, the bank may with it perhaps discount A's bill ; A may then with it pay his rent to B ; then B may perhaps use it to pay his tailor ; but ultimately, after a few transfers, it will, before long, find its way into the pocket of the labour-seller. It may, like a snow-flake, float a little while in the air, but finally it will drop and melt into wages. In the same way, the whole of the earnings of fixed capital are, directly or indirectly, appropriated to the remuneration of labour that is, to the pay- ment of wages. Take, for instance, a railroad. Of its receipts, a large proportion goes directly to the payment of the men in its service, another portion is appropriated to the purchase of coals, repairs to rolling stock, maintenance of permanent way, &c., of all which purposes wages form the main item of cost, and, on balance, a dividend (probably small) is distributed among the capitalists who have subscribed the money for its construction. But even that dividend itself goes (more or less directly) to the payment of wages in the way we have described above in the case of floating capital. CAPITAL AND LABOUR ARE JOINT PRODUCERS. 33 By no device can capital evade the inevitable law that, if it is utilised at all, it must be by the em- ployment of labour, and therefore by the payment of wages. Machinery cannot be used, ships cannot be navigated, mines cannot be worked, except by human hands ; in short, fixed capital is unavail- able and valueless, unless under the condition that it shall devote its earnings, more or less directly, to the hire of labour and the payment of wages. It is, we think, essential fully to develop and definitively to establish this principle, in order that it may be clearly seen how much the interests of the labour-sellers are benefited by promoting the growth and accumulation of capital. As yet, this is neither understood nor recognised by a large proportion of those who are most interested in the inquiry. The chief complaint of the labour-sellers is, that in the distribution of the wealth created by combined labour and capital, the capitalist receives an unduly large, and the labour-seller an unduly small, sfiare. That is a legitimate subject for in- vestigation. But many go much further, and a great number of honest and truth-seeking working men not only underrate capital as a factor in the creation of wealth, but omit it altogether, and proclaim them- selves the sole producers of all wealth. That this is a great mistake plainly appears, we think, from the foregoing considerations ; and we shall have done good service to the working men by removing this erroneous impression from their minds. All error is misleading, and it is a very grave one to ignore the joint action of capital in the production D 34 WEALTH-CREATION. of wealth. Both capital and labour are indis- pensable agents in the creation of wealth, and both are entitled to participate in the enjoyment of it. The question may arise, in what proportion respec- tively ? By what process, and under what law, is that apportionment to be determined ? We may probably in another work specially consider how far, and in what way, the present competitive system may be reformed, readjusted, or replaced by the co-operative principle. But, meanwhile, we shall proceed to point out how, under the existing com- petitive method, that apportionment does take place, and in what respects it is susceptible of considerable modification. The proportion in which the wealth obtained or produced by human exertions is divided between labour and capital or, in other words, the wage- rate depends, within certain limits, on, and varies with, the ever-varying relative supply of labour and capital. If labour is abundant in proportion to capital, the labour-sellers, eager to tufn their commodity, labour, to account, will compete with and underbid each other, and wages will fall. If, on the other hand, it is capital that is compara- tively abundant, there will be a pressing demand for labour, and wages will rise. There are there- fore two sets of conditions under which an enhance- ment in the market value of labour may occur. One is a diminution in the supply of labour, the other is an increase in the supply of capital. The same effect on the rate of wages is produced by either alternative. In the one case, the rate of increase in the population has to be retarded ; in CAPITAL CREATES A DEMAND FOR LABOUR. 35 the other, the rate at which capital is created has to be accelerated. The first process implies pru- dential restraint, late marriages, emigration, &c., and is at best an unpalatable remedy. The second is quite as efficacious, as we have shown, and entails no hardship on any one. Can there be a doubt as to which of the two courses is the more eligible ? It may be objected that, granting the benefits derivable from a more rapid accumulation of capital than now takes place, such rapidity of increase is practically unattainable. This we utterly deny. Indeed, the very aim and scope of this work is to show the contrary. We believe that there is hardly a limit to the possible creation of wealth ; and that there are so many aids to production which are foolishly neglected, and so many obstacles to pro- duction which are foolishly maintained, that the adoption of the former and the removal of the latter would almost indefinitely extend man's power to create wealth. It is clearly the interest of mankind, and espe- cially of that large class who live by the sale of their labour, that the largest possible portion of created wealth should be set aside as capital for reproductive purposes, so that the growth of capital should do more than merely keep pace with the increase of the population. Capital and labour act and re- act on each other, and alternately become cause and effect. The more there is of capital, the more labour will be employed ; the more there is of labour employed, the more wealth there will be created, and the more will be put by as capital ; and then, recommencing the cycle, the D 2 36 WEALTH-CREATION. more there is of capital, &c. &c. But if the portion of created wealth set aside as capital for repro- ductive purposes be small, and an undue proportion of that wealth be absorbed for the three consump- tive or evil purposes enumerated at p. 27, then the accumulation of capital becomes slow, the employment of labour is checked, and the amount of wealth created is curtailed. Meantime, the number of the labour-sellers still goes on increasing, while less is produced for distribution among them. We conclude, then, that capital is one of the most efficient aids to wealth-creation, and there- fore that all influences are evil which tend (a) to check its increase by devoting too large a propor- tion of wealth to mere consumptive purposes ; (b) to waste capital by using it unintelligently that is, by applying it to injudicious and unprofitable enterprises ; and (c) to discourage the local employ- ment of capital by rendering it insecure, or thwart- ing its operations, or minimising its returns, and thus driving it away into other channels. A 4. MACHINERY AND LABOUR-SAVING PRO- CESSES. It is so self-evident that the wealth- creating power of labour is enormously multiplied by the use of tools, implements, and machines, that proofs are superfluous. It may, however, be useful to advert to the impression that did once almost universally, and does still partially, prevail among working men that the introduction of machinery is injurious to their interests. That such an im- pression should have existed is perfectly natural. How, indeed, could it have been otherwise ? We will suppose that in some industrial enterprise, EFFECT OF MACHINERY ON LABOUR. 37 whether agricultural or manufacturing, a certain quantity of work which had required the labour of ten hands had suddenly come, by the use of a machine, to be performed by two, and that conse- quently eight men were thrown out of work. Could these eight men by any possibility view the machine that took the bread out of their mouths otherwise than as a curse ? They had worked, and were willing to work, to gain an honest livelihood by the sweat of their brow ; but here they were sup- planted, ousted, and turned adrift into poverty and despair by this substitution of wood and iron for human hands and human industry. What could they see as the end of it ? ultimate advantage to working men ? Certainly not. Nothing but (through no fault of theirs) destitute homes and starving children. The rioters who, in 1779, destroyed Arkwright's mill were men whom the rapid introduction of machinery into the manufacture of cotton goods at that stirring period had thrown out of work. To these men the labour-saving processes adopted had brought misery and starvation. Take it from their point of view, what more could they see than this: that the means of earning their daily bread was taken from them, and that the cause of this was the use of machinery ? Is it wonderful that they should have waged war against the machines to which they traced their sufferings ? That their views were erroneous, and that the introduction of machinery has proved an immense benefit to the working class, is now all but universally admitted. But even now, is the process of reasoning that ex- 38 WEALTH-CREATION. plains in what way that benefit accrues to the work- ing class obvious to everybody ? We doubt it very much ; and if our doubt be well founded, who shall blame the working man of a century ago for not seeing that which, even in the present day, is to many not obvious ? Of course, on the principles laid down in this work, the explanation is easy. f Machinery largely increases the production of wealth ; all that in- creased wealth is distributed and used ; the greater the accumulation of capital, the greater the demand for labour, and the better its remuneration/) But abstract considerations of this nature could not possibly enter the minds of the suffering men, and they were left to brood over their wrongs, and to seek redress in their own rough and lawless manner. Moreover, it must be noted that, signal and permanent as are the benefits which labour-sellers derive from the wealth-producing power of ma- chinery, it must necessarily, in the first instance, inflict some injury on a certain number of them for a short time. Some interval must elapse before those who are thrown out of work by the adoption of a new machine can dispose of their labour elsewhere, and the interim is necessarily a period of inconvenience, if not of suffering. True that the same amount is paid away in wages as before indeed more ; but the wages are no longer paid to the same la- bourers, or for the same kind of labour. The amount of wealth now produced by the labour of the ten men whom we suppose to have been en- gaged in a certain manufacture, and of whom eight were displaced by the adoption of a new machine, DISPLACEMENT OF LABOUR. 39 is considerably greater than it was before the change was made. For now, two produce as much as the ten did before, and all that the other eight produce, who now labour at other pursuits, is so much in addition. This increased wealth gives proportionately more for distribution among the producers of it. ( The only drawback from the universal benefit accruing from this enlarged amount of wealth created, is the temporary displacement of a certain number of workers, who have to transfer their labour to other employers perhaps to other occu- pations.^) But, ultimately, they, along with the rest of their class, largely profit by the increased demand for labour arising out of increased capital. A similar displacement, most frequently of capital as well as of labour, follows, or rather accompanies, every stage of scientific improvement or of social progress. In olden times, as in modern times, every step forward leaves some few persons be- hind, temporarily entangled in the old arrange- ments which have been departed from. Thousands of honest scribes, who, four centuries ago, gained a livelihood by copying and illuminating manu- scripts, were rudely displaced by the invention of printing, and had to seek other fields for their labours. When, less than a century ago, wigs were discarded for natural hair, thousands of wig- makers, thrown out of work, had to devote them- selves to other pursuits, and, meanwhile, suffered dire distress. So it was with the displacement of stage-coaches by railways, &c. &c. Indeed, there will occur to the reader innu- 4O WEALTH-CREATION. merable instances, constantly arising, of similar displacements of capital and labour occasioned by acknowledged improvements, accompanied by the same loss or inconvenience to a certain portion of the community. But whereas the advantages of such improvements are permanent and universal, while the evil thereof is only temporary and partial, our duty is to submit to and sympathise with the latter, but by no means to falter in our adoption of the former. To do so would be a grievous mis- take, and yet it is one frequently committed. Pro- tective import duties are only another form of the principle which would compel the population to wear wigs in order to save a few barbers from the inconvenience of shifting their labour into other channels. All labour-saving processes tend to the same end that is, to the production of a given quantity of wealth by means of the smallest possible ex- penditure of capital and labour. The application of the capital thus liberated, and of the labour thus saved, to other industries gives rise to a propor- tionate addition to the sum total of the world's wealth. There is in the aggregate no less labour employed, although less is needed for the produc- tion of a particular article, because the wage-fund is augmented thereby, not diminished, and the whole of it goes to the payment of wages that is, to the employment of labour. Some have argued that, since machinery supersedes and displaces a certain quantity of human labour, then, if the use of it were multi- plied in all departments of industrial produc- ENOUGH FOR ALL IS THE DESIDERATUM. 4! tion, and if its application were, by scientific processes, to become universal, and thus (ex- treme hypothesis!) human wants were supplied without the agency of human labour, a large pro- portion of the working population would be re- dundant, and the pressure of competition among them would be so severe as to reduce wages to the lowest limit compatible with bare existence. The fallacy of this deduction is obvious. The very terms of the supposition viz., that " human wants were supplied " argue ample sufficiency for all, which is incompatible with the inferred destitution of the majority. The supposed universal applica- tion of machinery to the production of wealth implies the creation of at least as much wealth as was before produced by human labour, and there- fore human wants would be supplied in at least the same abundance. The correct inference is that there would be sufficient supply for all, without sub- jecting, as now, the majority of mankind to the necessity of devoting a great portion of their existence to mere physical labour. Such a result would surely be beneficial, not injurious. In order to make out that the result of the sup- position would be detrimental to mankind, another assumption must be superadded, viz., that the wealth ample to supply human wants, thus created by machinery, would only be partially used for that purpose, and that the balance left, after supplying the wants of the minority, would, instead of being distributed among the majority, be either wilfully destroyed, or remain to rot undistributed ! The first supposition is paradoxical enough, but the 42 \VKALTH-CREATION. second assumption is utterly monstrous and in- conceivable. As we have before shown at p. 3, " all the wealth obtained or produced by human exertions is actually distributed and used." Machinery (using the term generically for all labour-saving processes) is then a powerful co- efficient to wealth-creation. All honour to those true benefactors of mankind whose scientific dis- coveries and mechanical inventions have supple- mented man's physical weakness, and have added immensely to his power over the material world who have pressed nature into the service of man, and have placed her forces as instruments in his hands ! CHAPTER IV. Facilities of Inter-communication Promote the Creation of Wealth Scientific Discoveries Lessen the Expenditure of Human Labour on the Production of Given Results, and Largely Increase the Ultimate Demand for Labour. A 5. FACILITIES OF INTER-COMMUNICATION. Until the progress of navigation had led to the discovery of America, the inhabitants of the Eastern and Western Hemispheres were as much cut off from all knowledge of and intercourse with each other as though they existed in two different planets. If it be admitted that Columbus has by his achievement benefited the world (though at the cost of partial cruelty and injustice), the admission is tantamount to asserting that the isola- tion of one part of the globe from the other is an FACILITIES OF INTER-COMMUNICATION, 43 evil. The opinion of mankind (excepting 1 , perhaps, of the Chinese and, until recently, the Japanese) has been in conformity with that conclusion, and the general principle may, without further discussion, be taken as conceded. Our business here, however, is specially to point out in what ways the creation of wealth is promoted by " facilities of inter-communication." One of the most efficient modes in which these facilities act towards that end is by fostering, assisting 1 , and extending the operations of that great contributor to wealth-creation, the division of labour. The full beneficial effects of those operations cannot be realised if the means of con- veying the cheaper and better productions of one country to be bartered for the cheaper and better productions of another country, be slow, cumbrous, and expensive. There will be nothing gained if the advantages of such barter be absorbed and neutralised by the difficulties or dearness of inter- communication. Were it not for rapid transit and low freights, cotton from America or wool from Australia could never have come to England to be wrought into fabrics by English labour and machinery, and to be re-exported in that shape to all parts of the world. The superior cheapness of the manufacture would be overborne and outweighed by the extra cost of dear conveyance. In coun- tries where there are no roads, or few and bad roads, intercourse is restricted, the benefits of divi- sion of labour are hardly felt, and general poverty prevails. The principle (subdivision of labour) works at its maximum rate in densely populated 44 WEALTH-CREATION. and freely accessible districts, and in large cities. It is there that the classification of labour into distinct tasks is carried farthest, that its organisa- tion is most complete, that competition most pressingly sharpens invention, that capital obtaining quick returns is satisfied with the smallest profits, and that copiously supplied markets furnish com- modities in every possible variety, and at prices nearest to cost of production. On the other hand, among a sparse and scat- tered population, with scanty means of inter-com- munication, the very contrary takes place. Labour instead of being subdivided is cumulated, and one man works clumsily at several trades ; there are no opportunities for organisation, so that each hamlet or family moves in its own little orbit ; there is very little competition and no invention, for who could utilise the invention, and where is the incentive ? In short, the working of division of labour is at its minimum. But introduce among this loose and isolated population facilities of inter- communication, and it will be like breathing life into so many marble statues. Give them the use of roads, canals, railways, ships, telegraphs, and telephones, and this torpid population will gradu- ally develop into action and vigour. The move- ment, slow at first, will acquire momentum. Emula- tion will be aroused, and will beget competition, which is the mother of energy and invention, skilled and special will be substituted for rude and miscellaneous labour ; or, in other words, the divi- sion of labour will again be at its beneficent work, and the whole aspect of things will be changed. MINNESOTA AND TAMBOFF. 45 What the inertness of solid ice is to running water, such is the quiescence of stagnant isolation to the activity of easy and rapid intercourse. In another and a more direct way do " facilities of inter-communication " also promote the creation of wealth they make those productions useful, and therefore of value, which, being otherwise out of the reach of consumers, would be unused, and therefore of no value. Let us, for an exemplifica- tion of this, take the case of Minnesota, one of the United States of America, in contrast with Tamboff, one of the most fertile provinces of Russia in Europe. Both are blessed with a soil and a climate exceptionally favourable to wheat- cultivation, viz., a deep alluvial mould and a clear sunny sky. In no other part of the world are cereals raised in greater luxuriance, and with a smaller expenditure of capital and labour. Both produce wheat in very great excess of home consumption ; and both are, unfortunately, situated at a very great distance from a shipping port on the sea- board, through which their surplus produce might find a vent in the outer world. But here the parallelism between the two ceases, The surplus produce of Minnesota is all utilised abroad, and therefore constitutes wealth. The sur- plus produce of Tamboff is not utilised abroad, but is wasted, and rots unconsumed at home, and there- fore becomes not wealth, but "simply matter in the wrong place." The reasons of this contrast are not far to seek. The paternal and autocratic Government of Russia discourages private enter- prise ; the fraternal and democratic Government of 46 WEALTH-CREATION. the United States gives it full scope. The energy and enterprise of free American citizens have extended their railway system to every part of their vast country where there are either passengers or goods to carry. By this time (1881) the total mileage over which their locomotives run is not far short of one hundred thousand miles. By means of these great " facilities of communication " the large surplus over home consumption of wheat grown in Minnesota is conveyed, rapidly and at a moderate cost, to a distant shipping port, and thus finds a remunerative market in Europe. Now let us look at the other side. The distance between Minnesota and the Atlantic sea-board is five times greater than that between Tamboff and the Sea of Azov ; but, nevertheless, the large sur- plus over home consumption of wheat grown in Tamboff is debarred from all access to a shipping port from want of communication, and can there- fore find no market whatever. There are not only- no railroads, but even no common roads that can be used for the conveyance of the grain ; and what would be a mass of wealth if it could be trans- ported to Taganrog, or any other port on the Sea of Azov, remains at home to be shovelled into a mound in the open field, for it is not worth even the expense of a shed. There the grain sprouts and decays, the upper stratum germinates into a sickly and ephe- meral vitality, and the whole soon decomposes into a mere heap of manure. We have referred to this waste at p. 3 as an exceptional instance of undistributed wealth. And the reason of its non- distribution is the absence of "facilities for inter- SCIENTIFIC DISCOVERIES. 47 communication." This absence of such facilities is again strikingly illustrated in the case of those local famines in India, of periodical recurrence, which have been known to co-exist with super- abundance of food in districts not very remote, but from which relief was debarred by the difficulties of inter-communication. But rapidity and cheapness of locomotion, whether for men or goods, are not the only means by which facilities of communication promote the creation of wealth. Infinite is the variety of ways in which the use of the electric telegraph and of the telephone conduces to a saving of time and labour, both of which, being thus liberated, may be utilised for other wealth-creating purposes. The production of a given result by the smallest possible expenditure of human energies, leaves the more of those energies available for the attain- ment of other beneficial results. A 6. SCIENTIFIC DISCOVERIES. Every stage in the progress of the exact sciences has contri- buted to furnish man with fresh appliances for utilising the resources of nature, and, as a con- sequence, to increase his capacity for creating wealth. Each fresh scientific discovery furnishes him either with new objects on which, or new agencies by means of which, he may exercise his skill and ingenuity. The additional power which he thus acquires enables him to abridge his work by the substitution of short, cheap, secure, or de- cisive, for long, expensive, dangerous, or uncertain processes, and in several other ways to effect a considerable saving of labour and capital. The 48 WEALTH-CREATION. inventors and improvers of machinery could have made but slow advance without the aid of scientific investigation and discovery. Indeed, in many cases the powers of discovery and of invention have been combined in the same individual. But even when they were not, their mission lay in the same direc- tion. Science discovered, and invention applied the discovery to practical purposes. Sometimes a long period elapses between the discovery and its application, as was the case, for instance, with elec- tricity. Franklin's reply to the question, " What is the use of electricity ? " was another question, " What is the use of a baby ? " And he was right ; the baby grew and matured into telegraphy. Although science has achieved so much, and has extended our knowledge of the laws of nature a long way beyond the bounds of what was once considered to be the " knowable," far from finding ourselves nearing such bounds, the horizon recedes as we advance, and our expectations of farther progress are livelier than ever. Each fresh dis- covery widens the field for investigation ; and the more we conquer of Nature's secrets, the more eagerly and hopefully do we aspire to fresh con- quests. There are still a vast number of things which we need to know, and of objects which we desire to accomplish ; and just as during the last half-century progress has been more rapid than at any former epoch, so do we hope and anticipate that the advance of scientific discovery during the next fifty years may be proportionately accelerated. Who is there bold enough to prescribe limits to the possibilities that may result from scientific MENTAL SCIENCE COMPARATIVELY STAGNANT. 49 investigations ? One thing is certain : that each step forward will increase man's power over ex- ternal nature, and will enable him to obtain larger results with smaller efforts. But it is the exact sciences only that have ex- hibited this immense activity of progression. The mental sciences (metaphysics, psychology, &c.) have remained nearly stagnant, and in these Herbert Spencer is only a short way in advance of Aristotle. In the moral sciences, among which religion and politics exercise by far the most powerful direct influence over the welfare and destinies of man, some slight improvement is visible, but it is in- finitesimal as compared with the rapid progressive movement of the exact sciences. In these, every step is a step forward one discovery serves as a fulcrum wherewith to elicit another and the ground once gained is never lost again. For instance, that electricity yields a powerful light with little heat is a fact so easily demonstrable, and so palpable to the senses of a common observer, that no one will be found to dispute it, an,d it will prove a recognised starting-point to other improvements, such as lighting mines with- out danger of explosion, &c. &c. But it is otherwise with the mental and moral sciences. There is hardly a proposition in con- nection with these that is not contested by some one or other. Writer after writer on the subject partially assents to some things, and totally objects to others to old he substitutes new definitions, which lead to fresh disputes and at last he finds, in the strictures of others upon his own propositions E 50 WEALTH'CREATION, a parallel to his own strictures upon the proposi- tions of his predecessors. Meanwhile, new and old propositions, new and old definitions, and new and old conclusions, all get mixed up in inextricable confusion, and the result is chaos and inconclusive- ness. All attempts to rear up a solid scientific structure must necessarily fail where there is dis- sension and discordance about the foundation- truths. The fact is that the mental and moral sciences have to deal with man and his ever- varying and erratic volition ; the exact sciences with matter and its fixed and constant properties. It is re- grettable that no universally acknowledged standard of truth in politics, morals, &c., has yet been reached by means of the former class of sciences, but we must accept things as they are, and all we can do is to use the direct material benefits which the exact sciences confer on us for the purpose of in- directly promoting the moral and intellectual wel- fare of our race. The operation of scientific discovery on the creation of wealth corresponds very nearly with that of machinery and other labour-saving pro- cesses. It similarly tends to increase the sum of human enjoyments, and, at the same time, to lessen the expenditure of human labour on the production of given results. By way of illustration, let us imagine that science should discover a cheap and easy method of supplying heat for the use of man, thus superseding the employment of coal, wood, and other fuel, and let us see what would follow. i. There would be a demand for labour and SUPPOSI-; TUT USE OK COAL SUPERSEDED. 51 capital to work the new discovery. This, having supposed it to be " cheap and easy," might require, in order to produce a given quantity of heat, one- tenth, let us say, of the labour required to produce the same quantity of heat through the agency of coal. 2. The demand for coal would cease, and the coal-miners would be thrown out of employment. 3. Out of every hundred thousand of these miners, ten thousand might probably be re-absorbed as labourers on the new discovery. The other 90,000 would gradually find employment in other industries, for, as we have explained at p. 38, the fund out of which wages are paid would, even at the outset, remain the same, and if less of it were spent on one class of labour, more of it would be spent on other classes. The general demand for labour would be at least as great, and nu- merically as many workers would be employed only, a little time would be required for the re- adjustment of the old supply to the new demand. 4. This displacement of workers from coal-mines to other fields of industry would no doubt be pro- ductive of inconvenience and even suffering to the 90,000 miners during the period of transition. But would the most zealous protectionist contend that the new discovery should be scouted, and its use pro- hibited, on account of the transient injury which its adoption would inflict on the coal-miners ? If, indeed, the 90,000 displaced miners were per- manently to remain without work and wages, and hence were left to perish in misery and starvation, that would be a catastrophe from which all men would recoil with horror. The erroneous impression E 2 2 WEALTH-CREATION. that such would truly be the result has led many honest and simple-minded persons to view with misgivings, if not with aversion and condemnation, most innovations and improvements ; they not seeing their way to the avoidance of the catastrophe aforesaid. Their misgivings, however, do more honour to their hearts than to their heads. We, with feeling certainly not less sympathetic towards our fellow-men, know that the evil is exceptional and transient, while the benefit is universal and permanent, and that it would be a miserable weak- ness, not to say an unpardonable crime, to reject the latter in order to avoid the former. It is per- fectly clear to all who reflect that the sum which would have been paid in wages to the 90,000 miners, and was not so paid, will, just the same, be expended in wages for labour in some other form ; and that the general demand for labour which will re-absorb the 90,000 miners, will at once be at least as great as before, and eventually be much greater than before, although it may be for labour of a different kind. The only evil, therefore, that can result from the new discovery is the partial and temporary displacement of labour and capital. 5. Let us now look at the benefits which it con- fers. Through this cheap heat-supplying discovery, the labour of 10,000 men supplies the world with the same quantity of heat which it required 100,000 men to supply before ; and, in addition, the world gains all the increased wealth which the labour of the 90,000 disengaged miners will now create by devoting that labour to the production of other commodities, This large addition to the store of DISPLACED LABOUR SOON RE-ABSORBED. 53 "such objects of human desire as are obtained or produced by human exertions" is all profit It is the difference between what the same aggregate quantity of labour produced before and what it produces now. It is a gratuitous boon to mankind. It may be objected by some that it is harsh and unjust to the working men to adopt processes that shall throw any of them out of work, that it is our duty to find them employment, not to deprive them of it, and that we ought thus to afford " protection to native industry." The fallacy which underlies this argument against all improvement is simply this. It is therein assumed that the labour-sellers, who, whether by novel mechanical appliances, or by fresh scientific discoveries, or by changes in fashion, or by the repeal of protective duties, are once thrown out of work, are condemned to remain permanently unemployed, to cease to earn a living, and to become unproductive consumers evermore, until they die off in misery and destitution. Now no such thing ever does occur. Both experience and reason show the absurdity of such an assump- tion. The stage-coachmen, stablemen, ostlers, &c., who were " disestablished " by the railway system, did not perish as paupers, but found other channels for honest employment. Year after year new processes to abridge labour are adopted in every branch of trade, which, pro- visionally, throw a certain number of men out of employment, but it is only for a short time that their labour is lost to themselves and to the community. It is soon shifted into another groove, and continues its contributions to the national store. 54 WEALTH-CREATION. We trust that we have succeeded in demonstrating that the ultimate and permanent issue of all labour- saving improvements is largely to increase the general demand for labour. As we showed at page 32, " the whole of the earnings of fixed capital are, directly or indirectly, appropriated to the remunera- tion of labour, that is, to the payment of wages." Whatever portion of the wage-fund might not be wanted for the payment of one kind of labour will be expended on some other kind of labour. All that portion of wealth which is created by the capital and labour set free in consequence of new discoveries or of improved processes is so much added to the world's previous wealth, so much to the good, so much more to distribute towards the supply of man's wants. Whenever masses of industrious workers have been permanently deprived of work, it has not been in consequence of improved processes creating the same amount of wealth with the employment of less labour. On the contrary, it has occurred when production, instead of being expanded, has been abridged, when mills, furnaces, and workshops stood idle, when capital, crippled by commercial failures, or paralysed by panic, had withdrawn from its co-operation with labour. Those are the cir- cumstances under which labour-sellers are exposed to prolonged suffering. On the other hand, the happy days of active production and of general prosperity have usually been those immediately following the vigorous impulse to trade given by the adoption of some important discovery tending to save labour, Even the most antiquated aclvo- EDUCATION AND MORALITY. 55 cate for " protection to native industry " would ridicule and ignore a discovery that tended not to save but to increase the labour requisite to pro- duce a given result ! The very men who went about in 1776 breaking up machinery lived to see that same machinery generally adopted, and joy- fully to find that four times as many men were employed at good wages on those machine-worked manufactures as when hand-labour alone was used. It must not be said that we dwell too per- sistently on this point. The erroneous assumption that, by labour-saving processes or by cheaper production in other ways, labour is not only dis- placed but destroyed that the labour-seller once thrown out of work remains for ever out of work, and ceases henceforth to be an agent of production, is at the root of many economic fallacies, and cannot be too forcibly exposed. To sum up, we must enrol scientific discoveries among the most powerful auxiliaries in the noble and beneficent work of wealth-creation. CHAPTER V. Education and Morality promote, and are promoted by, the Creation of Wealth Erroneous Notions concerning the Virtues of Industry and Frugality. A 7. EDUCATION AND MORALITY. It will hardly be required of us to do much more than simply enunciate the following proposition, viz. : The universal diffusion of sound knowledge tends to 56 WEALTH-CREATION. develop all those qualities in man which most efficiently promote the creation of wealth, and to correct and abate those social evils which notably impede it. The idle, the improvident, the intem- perate, and the lawless, are mainly recruited from among those whom no education has rescued from the baneful influence of bad surroundings, or from the mental torpidity of sheer ignorance. This is not the place for referring to the distinction be- tween the preparatory education that teaches the pupil hoiv to think, and leaves his mind open to future inquiries and convictions, and the dogmatic education that teaches the pupil what to think, and grafts on his mind convictions ready-made. We hail with a hearty welcome all work and all workers in the cause of education. Only let the thinking faculty that resides in every human breast be quickened into active life, it will soon find the food on which to grow, and may eventually ex- pand into a vigorous individuality. Education gives every man his chance, and that chance society is bound to afford to him. A notion once prevailed among many people, and may still be found lingering in sequestered nooks, that education would turn the heads of the working people and deprive the world of housemaids and cooks, of navigators and scaven- gers. The schoolmaster has been busy for some years, but no such result has occurred, and the more highly educated the people, the less likely we think it is to occur. On the contrary, the pre- vailing and very proper tendency is to recognise the dignity of all honest labour. No kind of useful THE DIGNITY OF HONEST LABOUR. 5/ work is ignoble, and its faithful performance confers honour, not discredit. Education, by raising the labourer in the social scale, raises the work at the same time to a higher level. Indeed, education may be said to sanctify labour and elevate it to the rank of a sacred duty. The superiority of one task over another can only depend on the greater or lesser amount of intellect, inventiveness or conscientious- ness which each task may respectively involve ; and the superiority of one worker over another can only depend on the greater or lesser thorough- ness and skill which each worker may respectively display. It is on these gradations that the hier- archy of work - performers will eventually be founded. In the word " education " we naturally include the idea of " morality," for the latter is always intended to be, and really is as a rule, the outcome of the former. There are, to be sure, many well- educated men who are immoral, many clever rogues, and some sensational Eugene Arams. But exceptions must not be construed into types. No one surely will contend that it was the pos- session of a certain amount of instruction that turned these persons into social pests, and that a departure from ignorance is tantamount to a de- parture from virtue. The softening, refining, and elevating influence of education none can gainsay, nor can any thorough training of the intellectual faculties take place without some corresponding development of the moral sense. Knowing what it is right to do is the first step towards doing what is right. 58 WEALTH-CREATION. The smallest part of a man's education is that which he receives when a boy from his schoolmaster. The latter only furnishes him with the tools by means of which the man is able, in his after-life, to seek for knowledge, provided he then have at his com- mand the time and the opportunities for so doing. Unless those two conditions are present, he will find it difficult to utilise the elementary knowledge which he gained at school. He may indeed be able to read newspapers and listen to speeches, if he has time, but these only convey to him second- hand impressions on local or ephemeral matters. From that higher scheme of true education which consists in weighing the thoughts of great thinkers on great things, and by reflection, comparison, rejection, and adoption, framing his own inde- pendent convictions on important topics, he will be debarred. And it is to the lack of those conditions and of the higher education which they alone render possible, that the immense majority of the labour- sellers throughout the world appears, under the present regime, condemned. Books and a certain amount of leisure are the requisites for intellectual development ; but books and leisure are inacces- sible to the many millions who now toil all day, and all their days, without any respite except that which is indispensable to recruit their strength for the toil of the morrow. Is the continuance of this state of things the irrevocable doom of mankind ? Is it the irremedi- able and inevitable outcome of our present social organisation ? Are there no means, no hope, no chance of escape from it ? Many have given up IS MANKIND DOOMED TO SUFFERING? 59 the problem in despair, and while they deplore the lamentable shortcomings of human institutions, they pronounce those shortcomings to be inherent and incurable. "All else," they say, "is Utopia. Blood and iron must still rule. Man is, by nature, a pugnacious animal, with great scientific aptitudes for destroying life in large masses. He must follow his destiny. There are no means of striking an average between those who have too much and those who have too little. The present grievous inequalities in the conditions of men are the doom of inexorable fate, and must be submitted to. We must go on in the same groove. All else is Utopia." Heaven forefend that it should be so ! If we assented to these doctrines, we should this instant, disheartened and disgusted, throw down our pen, and despair of the future of mankind. But, no ! We are thoroughly and deeply con- vinced that the holders of these doctrines are wrong. They are far too implicitly guided in their views of what may yet be, by the consideration of what has hitherto been. We contend that not only there might possibly, or may probably be, but that there ought to be, and that, some day, there will be, without any dislocation of the present frame of society, such a distribution of the products of human labour and capital as shall leave no deserv- ing person unprovided for. Indeed, whither other- wise is civilisation tending ? Is it to the physical, mental, and moral welfare of the totality or of only a small number ? If of the latter, then such a tendency is towards injustice and cruelty ; for it implies superior enjoyments to the few, and incvi- 6o WEALTH-CREATION. table privations to the many. If of the former, then let us proceed in the strenuous endeavour to extend all the advantages of civilisation to that totality ; and if we find this, in its literal sense, unattainable, let us approach to it as nearly as we possibly can. What we want is enough of physical comfort and of mental culture for all ; and these wants can easily be supplied, if human efforts, instead of being as they mostly now are, wasted or misapplied, were properly and intelligently directed. For that purpose we require such measures as will secure the largest possible pro- duction of wealth with the smallest possible ex- penditure of labour. Towards attaining this result the education and morality of the people play a very important part. Among the various virtues which are included in the generic term " morality," the two which perhaps have the most direct bearing on the crea- tion of wealth are industry and frugality. It is these virtues (which, duties at first, soon become habits) that mostly convert labour-sellers into capitalists, and that contribute powerfully to the welfare of both the individuals themselves and of the community at large. Yet neither have escaped some vulgar prejudices in regard to them. The converse of industry is idleness, and to be idle was long deemed the enviable prerogative of the rich and the great. Not to do anything that savoured of work constituted the "gentleman." The pursuit of mere amusement, the insolence of false pride, nay, even the indulgence in pleasant social vices (affording perhaps transient gratification but inflict- INDUSTRY AND FRUGALITY. 6l ing lasting pain) were overlooked and even con- doned because they indicated a " person of some consequence." These absurd notions are, however, rapidly passing away. People now look to the personal qualities of a " person of quality ; " and judge of him by a critical, not a conventional, standard. It is by no means so clear to the multi- tude as it formerly was, that industry is degrading and idleness a badge of superiority. In regard to frugality, the vulgar delusion assumed another shape. The easy, self-indulgent man, who freely spent what he had (or more than he had), was supposed to be a public benefactor, a liberal, large-souled man, who made money circu- late, and gave a patriotic impulse to trade. On the other hand, the prudent, frugal man was set down as a close-fisted, niggardly churl, whose money was hoarded instead of descending in golden showers on the people around him. This popular fallacy embodied the doctrine preached with such perverse ingenuity by Mandeville in his " Private Vices made Public Benefits." The truth of the matter is simply this. The money of -the spendthrift is cir- culated, and so is that saved by the economist. In that respect they both stand upon an exactly equal footing. But the former is absorbed waste- fully, and totally consumed ; the latter mostly becomes reproductive capital. In both cases the money finally goes to pay the wages of labour, but in the first case, the golden showers descend on the caterers of fugitive and barren luxuries ; and in the second, on productive enterprises or on borrowers for reproductive purposes. 62 WHALTH-CREATIOX. Let us take the instance of a miser who saves nineteen-twentieths of his income. The whole of that income goes into circulation just as much as though he spent it all. What he saves, he invests, or lends, or places with a bank on deposit, and it thus becomes capital. That is, it goes to increase that fund which permanently employs labour in the pro- duction of fresh wealth. If he had saved nothing, and, like the spendthrift, had wasted his whole income on personal enjoyment, it would no doubt have gone to pay labour for once ; but only for once, and then vanishing for ever. As an illustration, con- trast the result to a. landowner of his spending a given sum on horse-racing with that of his spending the same sum on the drainage of his land. In the former case the money is gone never to return, in the latter he secures a permanent increase of in- come. The miser does not destroy what he does not spend. Unless he digs a hole and buries his wealth in it, he must dispose of it in some way, and, whatever way that may be, it must of necessity be of more service to the world than if he had spent it in evanescent enjoyments. Frugality, even when it runs into excess and lapses into avarice, does not cease powerfully to promote wealth-creation. These two kindred virtues of industry and frugality exercise a very direct influence over the material progress of mankind. Capital is simply unconsumed production. Now, industry enlarges the boundaries of production, while thrift narrows the limits of consumption ; and through their joint operation, the balance, which is capital, receives proportionately greater amplitude. The small V XATIOXAL WEAT/ni FROM IXDIVIDTAI, THRIFT. 63 ^ o ^ ;n individual savings of the many fon accumulation of national savings in the aggregate, for the wealth of a community is made up of the combined wealth of its members. Thus, while industry and thrift bring comfort and independence to each household, they build up and aggrandise the national resources. Statesmen have of late years wisely recognised the private and public advantages of these accumulations of minute individual savings, and have encouraged and facilitated them by official banking institutions, in which the smallest deposits are admitted and accounted for. Among the labour-sellers in different countries, the relative development of industry and of thrift respectively varies according to race, temperament, education, climate, &c. Thus, we may note that, as a rule, among that mixed race which we call Anglo-Saxon there is more of industry and less of thrift. The men work hard and efficiently, but they lack self-control, and spend too much. With the Latin and Celtic peoples the tendency is the other way. The labour is not so productive, but more self-denial and thrift prevail, so that the balance of their savings is probably nearly as great. The equalising influence of education and free inter-communication will, no doubt, in time, level these differences and establish the proper mean between them. The general conclusion to be drawn from what precedes is, that, if education be essential to the full development of wealth-creation, the latter is no less indispensable to the universal spread of educa- 64 WEALTII-CREATIOX. tion in its higher form of intellectual and moral culture. These two factors mutually act and re-act on each other ; and whatever advance is made in either, it will be quickly followed, if not at once accompanied, by a corresponding advance in the other. We have now gone through the list of those aids to wealth-creation which we had, at p. 14, proposed to examine. That list, however, was far from an exhaustive one, and numerous other topics readily suggest themselves as tend ; ng in the same direction. But some are too general in their scope or too indirect and partial in their connection with the subject to justify, while others are either too obvious or too unimportant to require, a separate reference. It will be observed that of all those aids to wealth-creation of which we have treated, there is not one that it is not in the power of man to adopt and carry out with more or less of complete- ness. It is for him, after inquiry and reflection, to decide whether those are truly the best means of attaining the best ends. If deemed to be so, there is no intrinsic difficulty, nor should there be any avoidable delay, in manfully resorting to them. True, that in the way of this active advance towards universal well-being there intervene cer- tain obstacles, but we contend that, far from being insuperable, they can speedily be removed by the intelligent exercise of human volition. At a farther stage of this inquiry we shall advert to these obstacles, and measure their power of obstruction. CHAPTER VI. Impediments to Wealth-creation Insecurity of Person and Pro- perty Superfluity of Unproductive Consumers Their Classi- fication. HAVING now considered the chief aids, we shall proceed to consider the chief impediments to wealth-creation, as classified at p. 15. B i. INSECURITY OF PERSON AND PROPERTY. - To put it in other words, one of the most for- midable obstacles to wealth-creation is bad govern- ment. It is clear that capital will not be brought into existence, or will soon cease to exist, or will take unto itself wings and fly, unless it be secure from robbery or confiscation. Who would care to accumulate capital in a country where, or at a time when, it was liable to spoliation, through either the weakness or the wickedness of the government ? Under such baneful influences, not only there is no growth, but there is decadence ; not only the crea- tion of native capital is impossible, but the intro- duction of foreign capital is repelled. For instance, there exists a wide and promising field for the employment of capital and labour in the vast and fertile plains and in the latent mineral wealth of Asia Minor, but who would risk either capital or labour under the precarious protection of the feeble and loose-jointed Turkish Government against the red-handed swoop of greedy and un- scrupulous Turkish pashas ? On the other hand, observe the enormous amount of European capital F 66 WEALTH-CREATION. that has been attracted, by a sense of the security to person and property that there prevails, to North America, Anglo-India, and our Australian and other colonies, and the rapid creation of wealth that has resulted therefrom. Where capital goes, there also goes labour, which both feeds upon it and feeds it labour which consumes indeed, but which, intelligently applied, reproduces infinitely faster than it consumes. This happy combina- tion of capital and labour generates fresh masses of wealth, of which the unspent portion goes to form additional capital, and to sustain additional labour. Sometimes, however, lured into extra risks by the temptation of extra profits, capital gets en- tangled into dangerous operations. Among other forms of imprudence large loans have been granted at various times to governments and nations of doubtful solvency, mostly, however, on terms which implied a knowledge of the risk encountered. Through ignorance or dishonesty, mismanagement or misgovernment, the sums thus lent have frequently been misapplied or wasted. The wealth which, if used as reproductive capital, would have been a source of prosperity and improvement, was squan- dered on futile, or sometimes on evil, objects, and the borrowing governments soon became unable to pay either the interest or the principal of their debts. Thus the capitalists lost their money, and the improvident governments lost all the advan- tages which the proper use of that money would have conferred, had it been applied to developing the resources of their country. Made aware by SECURITY TO PERSON AND PROPERTY. 67 bitter experience of the insecurity of investments made in such countries and with such governments, foreign capitalists henceforward stand aloof from them. They consequently fall to the rear in the march of improvement, and lag languidly behind. Turkey and the South American republics are notable instances, among some others, of confidence so forfeited. With trifling exceptions, the only direct means by which a government can promote wealth-crea- tion is by affording complete security to person and property. Whenever it actively interferes, however plausible the motive, with the natural course of trade and industry, such interference is almost always mischievous. Left to themselves, buyers and sellers, producers and consumers, im- porters and exporters, capitalists and wage-re- ceivers, all find out, by long experience and by constant search after new modes of gain, the best conditions under which they can make those interchanges of which trade consists, and of which the individual profits constitute the aggregate profits of the community. Undoubtedly, it is within the province of government to prohibit adulterations, to punish frauds, and to enforce con- tracts. These, however, are mere police duties, indispensable to the security of person and pro- perty. These only define what shall not be done, but do not prescribe how wealth-creators shall do the work which they have to do. Of that, they themselves are the best judges. But a government goes beyond its province, and gets out of its depth, when by fiscal regula- F 2 68 WEALTH-CREATION. tions it ventures to destroy one class of industry in order to rear another on its ruins. By adopting the protective system, it takes on itself the re- sponsibility of directing the industry of the country into other than its natural channels. In effect, the following is the announcement of its policy : " You manufacturers of articles A and B, which are now exported in exchange for the foreign articles L and M, you must shut up your factories and throw your men out of work, for we are going to pro- hibit the import of the foreign articles L and M, and make them at home. Therefore your articles A and B will no longer be wanted in exchange for them." Is not this a great injustice to the capital and labour engaged in the production of articles A and B ? And all the more so as these latter were produced so cheaply that the foreigner bought them, while articles L and M are produced so dearly that a protective duty is necessary to compel the native consumers to buy them. Even from the most comprehensive point of view, this meddlesome interference of governments in such matters must be either inoperative or in- jurious. For if it produces no change in the dis- tribution of industries it is useless and aimless. If it does, it must be for evil, since it implies a dis- turbance of the natural arrangements into which commerce and industry had settled. Protection to an industry that requires protection necessitates the sacrifice of some other industry that requires no protection. All, therefore, that the producers and distributors of wealth really require at the hands of government is protection to person and SUPERFLUITY OF UNPRODUCTIVE CONSUMERS. 69 property. Most of what governments volunteer to contribute beyond that is pernicious. On the other hand, such security is indispensable to wealth- creation ; for without that, most of the induce- ments which move men to produce in excess of their daily requirements, and to accumulate capital, are wanting. B 2. SUPERFLUITY OF UNPRODUCTIVE CON- SUMERS. If all the adults of a community were (other circumstances being favourable) to contri- bute directly, by every means in their power, to the creation of wealth or, in other words, if there were no unproductive consumers it is self-evident that either the wealth thus created would far exceed the wants (amply supplied) of all, or else that the average number of working hours per diem would be reduced far below what they now are. Indeed, in the latter respect, some progress has already been made, and in some countries fewer hours of consecutive labour, and more frequent respites from that labour, now accrue to both physical and mental workers. We are less plodding, but quicker and sharper at our work than our an- cestors. Our facilities of locomotion and inter- communication are infinitely greater, and in England, with few exceptions such as railway pointsmen, members of Parliament, and fashionable milliners a somewhat larger proportion than for- merly of the twenty-four hours is devoted to rest, recreation, or refinement. But the general im- provement is very small, and, small as it is, it only reaches a certain number in a few countries, because the aids and impediments to wealth-crea-. 70 WEALTH-CREATION. tion have as yet been little considered from a politico-social point of view. While, however, it is impossible that all the adults of a community should, as is assumed in the foregoing hypothesis, become productive con- sumers, it is clearly in the interests of wealth-crea- tion that social arrangements should approach that desirable state of things as closely as possible, and that there should be in a state as few unproductive consumers as is consistent with other considera- tions. The greater the number ot those on whom the burden of production may collectively weigh, the smaller will be the strain on each. Let us now proceed to analyse and classify the various sections into which civilised societies are divided, and to inquire whether there do not exist among them an unnecessarily large number who consume without producing, and who are with- drawn, without adequate or justifiable cause, from the important work of wealth-creation. The following four categories will, we believe, embrace all classes of the community : 1. Those who produce and distribute wealth that is, who contribute land, capital, and labour. 2. Those who govern, and the various func- tionaries whom they employ. 3. Those who are engaged in the learned and other professions. 4. Those who are unemployed, or who have no legitimate means of earning a livelihood. The constituents of all civil societies are re- solvable into these four groups, and we shall PRODUCERS OF WEALTH. ?T examine each seriatim, with a view to inquire how far in each the relative number of productive and unproductive consumers might be advantageously modified. i. Those who produce and distribute wealth. This division primarily includes those persons who contribute to the three factors of all wealth, viz. land (of course including mines, &c.), capital, and labour. We have shown at p. 12 that all three are indispensable to production, and that no two of them could be efficient without the concurrence of the third. The land-owner, the capitalist, and the labour-seller are co-agents in the work, and s so equal in efficacy that neither of them can claim any superiority over the rest. Land and labour without capital are about as helpless as capital and land without labour. Since, then, the production of wealth is impossible without a combination of all three classes land-owners, capitalists and labour- sellers it follows that each class is entitled with equal justice to be designated a productive class. The claim often put forward on behalf of the labour-sellers that they are the sole creators of wealth is inadmissible. It is doing them a real service to remove that erroneous impression. Their true, and therefore their best, policy is to withdraw pretensions that cannot be sustained, and to rest their case on other and surer grounds. They may say, " Without us, the other two classes could do nothing." The answer is obvious, " Very true, but it is equally true that, without the other two, you yourselves could also do nothing. If, indeed, you possessed and contributed the land 72 WEALTH-CREATION. and the capital, as well as the labour, you would then, in your treble capacity, really be the pro- ducers of wealth ; but that very supposition rather confirms than invalidates our proposition that land, capital, and labour are all three necessary to the production of wealth." How the present possessors of land and capital became possessed of them is a question quite beside the present inquiry. As far as concerns the theorem which we propound as to the equal im- portance of all the three elements of production, it matters not in the least in whom, whether in indi- viduals, or in corporations, or in the state itself, the possession of the existing land and capital may be vested. If by a despotic exercise of power, the state could, without dislocating the frame of society, dispossess the present owners, and sub- stitute a fresh set, it would not alter the fact that land, capital, and labour are all three of equal necessity to wealth-creation. In not a few instances all three are now concentrated in the same individual. A labour- seller who, through a building society or other- wise, has secured a freehold cottage, and who has a small sum in a savings-bank, while still earn- ing weekly wages at a factory, combines the three qualifications. Lord Shaftesbury, a land-owner by inheritance, and no doubt a capitalist by excess of income over expenditure, is indefatigable, in and out of Parliament, in the noble work of promoting, according to his lights, the welfare of his fellow- men ; he also therefore combines the three qualifi- cations. The merchant or manufacturer who has DISTRIBUTORS OF WEALTH. 73 amassed a fortune and bought some land, but who continues to work early and late at his office, equally combines the three qualifications. But it is none the less true that even when each qualification is held singly, the owners of such single qualification are all of them co-ordinate agents of production. One man lives by the rent of his land, the second by the interest of his capital, and the third by the sale of his labour ; but all three are producers, as the land, the capital, and the labour are equally indispensable to the creation of wealth. All three contribute to that end in different ways, but each way subserves the common purpose in an equal degree. We have now, we think, adduced valid reasons for classing land-owners, capitalists, and labour- sellers as joint and co-equal producers of wealth. We now come to the classes. who distribute the wealth thus produced, and these embrace a very large constituency. They comprise merchants, bankers, brokers, shopkeepers, ship-owners, railway proprietors, and, generally, all persons who are en- gaged in the work of transferring the wealth that has been created into its multifarious channels of consumption. The number of these agents of dis- tribution, together with their assistants, clerks, porters, carters, sailors, and many other labour- sellers employed by them, is very considerable ; and their functions are of world-wide importance. Indeed, the main final cause of production is dis- tribution. Without the latter, the former would either not take place, or would soon be discontinued. Who would go on producing unless, by exchanges, 74 WEALTH-CREATION. he could reap some advantage from it ? Now, dis- tribution implies interchange of commodities ; for the goods which the agents of distribution convey from country A to country B, either have been paid for beforehand, in which case they go to ex- tinguish a debt and close a transaction, or they have to be paid for, in which case, till actually paid for, they go to create a debt and open a transaction. In either case, these transactions are finally balanced by the conveyance of commodities (of bullion in rare instances, and to an insignificant amount) from one country to another by the agents of distribu- tion. In this way does commerce resolve itself, directly or indirectly, into barter. Directly, when a merchant exports goods to a country, and in return imports other goods from the same country, so that the two operations about balance each other ; indirectly, when the exporting merchants receive payment, not in other goods, but in bills of exchange ; for these bills of exchange represent either recent purchases or old debts, for which the country on which the bills are drawn has to pay. This indirect barter through the medium of bills of exchange it is the special business of bankers to conduct. They each, within their respective range of operations, perform the same functions as does the bankers' clearing-house in London, by means of which hundreds of millions of debts owing to and owing by a multitude of persons clear each other off, without resorting to any but trifling payments backwards and forwards of coin or bullion. A labour-saving, time-saving, loss-saving device. DISTRIBUTION OBSTRUCTED. 75 Since, therefore, without the facilities for inter- change which the operations of distributors afford, nearly all incentives to wealth-creation would be wanting, the use of or indeed the absolute necessity for that class of workers must be readily admitted ; and they certainly cannot be deemed unproductive consumers. It must, however, be observed that their work would be much simplified and could be performed by a much smaller body of men were it not for the complications, uncertainties, and ob- stacles of many kinds, created by national jea- lousies and by state restrictions on free commercial intercourse. For instance, a large quantity of use- less labour (tantamount to digging and filling up unnecessary earth-holes) is now devoted to a com- pliance with the complex and obstructive forms and regulations enforced under the protective system that prevails in so many countries. All deviations from the natural and healthy simplicity of unrestricted interchange necessitate some extra and special organisation to meet an artificial state of things. Each additional obstacle requires the expenditure of some additional strain to overcome it, and thereby entails a certain amount of unproductive labour. On the whole, however, it is, of all classes of society, in the ranks of those who " produce and distribute wealth," that the fewest unproductive consumers are to be found. It may be said that the land-owner who spends his income in self-indulgence, and whose only task in life is amusement (a laborious task, too, very frequently), cannot be called a producer in the same sense as is a man who works ten hours a day. 76 WEALTH-CREATION. Very true. But neither can the ten hours' toiler be called a producer in the same sense as is the con- tributor of that essential element of production, land. What each contributes is different of its kind, but both are indispensable, and neither would be of use without the other. No one is under obliga- tion to furnish both elements. The labourer is not bound to contribute land ; neither is the land- owner bound to contribute labour. The soil must (unless we revert to a state of Nature, which is savagery) be owned by somebody ; and that somebody, whoever it may be, whether a person or a community, is through its cultivation, whether directly or by lessees, a contributor of one of the three indispensable factors of all wealth. Of course such land as is not devoted to productive purposes comes under a different category. Its owner does not contribute to the creation of wealth, and is therefore not a producer. We shall deal with this exceptional case in a subsequent chapter when we come to treat of the peculiar position of land in regard to its limited supply and its irremovability. On the other hand, the same persons who complain that the contributor of land does not contribute labour also, are those who frequently complain that the capitalist goes on working long after he has accumulated a fortune, and who say that he should retire and leave the field which has enriched him open to others. Between these two complaints there is a manifest inconsistency. If the land-owner ought to contribute both land and labour, so ought the capitalist to contribute both capital and labour. The truth is that such double GOVERNMENT FUNCTIONARIES; ?/ contribution is entirely optional. Its practice would, of course, subserve the interests of wealth- creation, but there is no obligation on any one either to act upon it or to abstain from it. CHAPTER VII. Government Functionaries The Professional Classes The Un- employed Poor. 2. Those who govern, and tJie functionaries wliom they employ. It is this class which furnishes by far the most numerous contingent of unproductive con- sumers, and in which the largest reforms are both necessary and possible. Let us at once start with the following proposition, viz. : That all those persons whose services are requisite for the due performance of those functions legislative or executive, civil or military through which the government of a community discharges the complex duty assigned to it of protecting the person and property of its members, are indispen- sable to the well-being of society, and cannot be spared from the important work to which they are appointed. It is only to those whose services are not requisite for the performance of such functions rightly understood, and who nevertheless are re- tained and paid by the state, that the designation of " unproductive consumers " is applicable. Of these, some have no doubt been appointed to their useless tasks by patronage or routine, but 78 WEALTH-CREATION. by far the greatest number consists of those whose barren labours are put in requisition by bad laws, mistaken policy, vicious institutions, or the passions and caprices of irresponsible rulers. It is not with the persons so employed that the blame lies. Their duty is to do the work entrusted t9 them, and the faithful performance of that duty generally forms a fair equivalent for what they receive from the community. It is the system that is responsible for the waste, and it is the rulers and statesmen who are responsible for the system. Let us examine the main features of the system. In all existing civilised states the money collected by the government, as revenue from all sources, is expended in various proportions, on the following departments, viz. : General expenses of Civil Government, collection of revenue, public works, salaries, pensions, &c. Administration of Law and Justice. Subventions for Education, Science, and Art. Interest on (and repayment of?) National Debt. Army and Navy. Whatever portion of the expenditure under these heads is in excess of what is needful is clearly an unnecessary and injurious drain on the resources of the country, and a direct impediment to wealth- creation. The persons who would otherwise be effective agents of production are wasting their energies and their time on inutilities or worse, and have meanwhile to be supported out of the earnings of the producing classes. It is, of course, in those departments which absorb the largest share of the CLASSIFICATION OF GOVERNMENT EXPENSES. 79 national expenditure that the waste (supposing it to exist) would be the greatest, and the retrench- ment (supposing it possible) would be the most efficient. It will be very useful, therefore, to ascertain which are the departments which are most costly, and to which the tax-payer most profusely contributes. No doubt the proportions differ in different countries, especially if the United States of America be included among them. The geographical position, the form of government, and the habits and traditions of that republic constitute it a somewhat exceptional case. But if we take European states only, the com- parative amounts paid under each head by the British Government during the year 1880 may afford us some clew to the proportions respectively absorbed in other countries by the various departments in question. The total expenditure of the British Government in 1880 was 84,439,000, which was apportioned as follows : To the general expenses of the Civil Government ... 14,637,000 To the administration of Law and Justice ... ... 6,372,000 To Educational purposes ... 3,995,ooo To the interest, &c., of the National Debt 28,763,000 To the Army and Navy ... 30,672,000 Total 84,439,000 Here then we have in round figures, out of our annual expenditure of 84 millions, no less than 59 millions consumed in expenses connected with war, 80 WEALTH-CREATION. viz., 29 millions to pay interest, &c., on the national debt contracted by our forefathers to carry on the wars of their time, and 30 millions to meet the expenses of military and naval establishments during a period of peace. The possible distention of these sums in case of a serious war may be more easily imagined than calculated. In contrast to these gigantic amounts, we find that all the other departments of government combined, although profusely paid, cost 25 millions a sum which, in comparison, seems a " fleabite." Roughly speaking, we may say that of England's annual expenditure more than one-third is spent in paying the penalty of former wars, more than- one- third is spent in keeping up warlike establishments during peace, and less than one-third is spent on all the combined functions of government in every other department. Not that we are worse off in this respect than most other European states, for some have indeed a more grievous military burden to bear than we have. However, as we shall in a subsequent chapter devote some attention and some space to a consideration of the pernicious influence of war and international rivalries on the creation of wealth, we shall here abstain from further comments on this branch of the subject. Reserving, therefore, war and its organs, the army and navy, for future discussion, let us take a glance at the other departments of government. The expenditure in England on these, including the administration of justice and educational pur- poses, amounts, within a trifle, to 2 5, 000,000, nearly all of which is paid away in salaries to the various SUPERFLUOUS PUBLIC FUNCTIONARIES. 8 1 functionaries who are (and in some cases who have been) employed in the performance of public duties. It has been calculated that the number of persons in the pay of the English Government, exclusive of the army and navy, is not far from 180,000. Neither does this include the numerous staff paid out of the proceeds of local taxation (county, borough, and parochial rates, &c.), which in 1878-9 amounted to about 30,000,000. Now, if out of the 180,000 functionaries, high and low, above re- ferred to, a certain number should have been superfluous and others overpaid, that waste, be it more or be it less, is so much positive loss to the community. In these elucidations we have taken the case of the English Government simply by way of illustra- tion, for as our theme is wealth-creation not in one country but in all countries, so should our conclu- sion be a general and not a special one. We must, therefore, word it thus, that if out of the civil func- tionaries, high and low, in the pay of all govern- ments, a certain number should be superfluous, and others overpaid, that waste is so much positive loss, and a subtraction to that extent from the world's wealth. There is hardly a country in the world of which it can be truly said that there is no such superfluity or overpayment of public functionaries. In some there is less, in others more, but it must be admitted that in all there is a wide field for retrenchment. We readily grant that the retrench- ment may be carried too far, and that it is a great mistake in a state to underpay, or irregularly pay, its servants. But this extreme, which is compara- G 82 WEALTH-CREATION. tively rare, is no justification of the opposite ex^ treme, which is common. In what way and to what extent the necessary retrenchment is to be effected it is not within the scope of this work to inquire. Our business is to point out how injuriously such waste of public money affects the creation and distribution of wealth and, thereby, the welfare of all men. It is for the practical politician to recognise the evil and apply the remedy. If out of the total number of persons now employed in the civil functions of the state (for we have reserved the army and navy for a separate discussion) by the whole of the civilised governments of the world, it should be found that 400,000 could be spared without detri- ment to the efficiency of administrative operations, then those 400,000 persons, being released (of course on equitable terms) from their useless labours, would be thrown on their own resources would be compelled to produce in order to live and would cease to be unproductive consumers. Now if, one with the other, we estimate the value of what they would each produce at an average of only 50 per annum, there would be ^"20,000,000 yearly added to the general stock of wealth of the world, besides saving what they now receive in excess of that yearly sum for superfluous and barren work. True that there may be no immediate prospect of so beneficial a reform being accomplished, but we shall certainly hasten the time when the world shall enact its practical adoption, by a forcible exposition of its necessity, by emphatically de- THE LEARNED AND OTHER PROFESSIONS. 83 nouncing the evils that it would remove, and by persistently keeping the subject open to public discussion, until its advantages be generally recog- nised and appreciated. Too often, in the history of the world, has the apparent remoteness of a desirable object been used as a dissuasive from even moving in its direction. Its being difficult of attainment has been construed into its being unattainable. The word "impossible" has been most obstructive to human progress. Many a laudable purpose, quite achievable, as subsequent achievement has shown, has been long delayed by being pooh-poohed as not being "within the bounds of the possible." The policy for the advo- cates of a rejected improvement to pursue is never to lose sight of it themselves, never to allow others to lose sight of it, and, above all, never to despair of it. 3. Those who are engaged in the learned and other prof essions. A very numerous and important class, which we may subdivide into two cate- gories : (a) Those who do not, by direct means, produce wealth, but who are indispensable by reason of the moral and physical shortcomings of man. To this category belong the clerical profession, whose pro- vince it is to combat our vices and passions ; the legal, to obviate fraud and repress injustice ; the medical, to heal our infirmities ; the political, to administer the affairs of the community ; the mili- tary, to protect the state against attack ; the scientific, to correct error and search for truth ; the scholastic, to remove ignorance, &c. G 2 84 WEALTH-CREATION. (b) Those whose mission it is, either to cultivate literature and philosophy, or to minister to the art- culture, the refinement, and the recreative enjoy- ments of the community. This last division includes poets and prose-writers of all kinds, journalists, lecturers, &c., as also painters, sculptors, architects, musicians, actors, &c. It is the professions comprised in the above two categories that have furnished most of the eminent men, whether as thinkers or doers, of all countries and in all ages. As a rule, these professions re- quire for their successful pursuit great natural abili- ties, developed by close study and reflection. Those who excel in them become the foremost of men, and almost all the illustrious benefactors of mankind have sprung from their ranks. Undoubtedly, of the many who have enlisted in these professions, there are not a few who are more or less unfit for the vocation, and who would be much more useful to their fellow-men (and in most cases to them- selves) by becoming producers, and contributing according to their powers to wealth-creation. But no interference with the free choice of a career is permissible, and the natural law of supply and demand must continue to regulate the number of those to whom the professions can afford a livelihood. Unfortunately, the dignity of produc- tive and distributive labour has not yet received due recognition. A prejudice, which had its birth in the rough feudal ages, still exists, though happily waning, which assigns to the professional a higher social rank than to the mercantile and manufacturing classes. The former are supposed REAL EQUALITY. 85 to be, in vulgar parlance, "more genteel." This feeling is, no doubt, in some measure founded on the fact that education is more general, because a necessity, with the former, and less general, because only optional, with the latter. But this distinction is also disappearing, and the diffusion of knowledge, which will gradually extend to all classes, will equalise their claims to social rank. As it now is, almost every profession is over- stocked. There are more to do the work than the work to be done requires ; while a sentimental preference foolishly induces many a man to starve on a profession rather than thrive on a trade. This false estimate of personal dignity chiefly prevails in old countries, and hardly exists among young communities. In the United States of America there is far more real equality than in the present French Republic, although " Egalite " figures as its central motto. Many an English gentleman, who at home would have shrunk from manual labour as a degradation, has emigrated to Australia, and worked as hard there as any common labourer here, and the more honour to him. Let us hope that this healthy tone as to the equal dignity of all honest labour may, sooner or later, pervade all civilised societies, and finally break down the barriers which now partition off European communities into distinct sections very analogous to the castes of the Hindoo nations. 4. Those who are unemployed, or zv/io have no legitimate means of earning a livelihood. All those persons to whom this description applies are un- productive consumers, and every effort should be 86 WEALTH-CREATION. made to reduce their number to the lowest possible point, for their existence is, for the most part, an unmitigated evil to the community. They are, however, divisible into two very distinct groups, viz. : (a) Labour-sellers temporarily out of work, who have saved nothing to live upon mean- while ; (b) Non-workers, viz., paupers, mendicants, tramps, &c., and criminals, both those who are at large, and those who are in custody. (a) As to the first group: labour-sellers are out of work either because they cannot find any em- ployment at all, or because they cannot find it on terms which they deem acceptable. The former are the victims of " gluts " (see p. 7), of changes in the channels of trade, or of other causes beyond their control. The latter are the outcome of trade disputes, leading to "strikes" and "lock-outs." In the former case the causes are largely (not wholly) preventible by free commercial intercourse, and by non-interference with the natural course of trade. In the latter case, trade disputes should be, and it is beginning to be understood that they can be, arranged by arbitration, or by sliding wage-scales graduated according to the rates of profit, or by other similar pacific devices. Almost anything is pre- ferable to the clumsy and costly brute-force sys- tem now in use of workmen trying to coerce the capitalists by ceasing to work, or of employers trying to coerce the workmen by ceasing to em- ploy. Under it both parties are heavy losers, the victors as well as the vanquished. It decides nothing as to the relative justice of the conflicting claims; it only adjudges which side is the strongest. "STRIKES" AND "LOCK-OUTS." 87 It simply becomes a trial as to which can afford to lose most money, and which can face impending ruin with the wildest recklessness. So might two men defy each other as to which would allow their blood to flow for the longest time from a vein opened in the arm of each. One might give way before the other, but both would be terribly ex- hausted and enfeebled. In such contests between capital and labour it is generally the longest purse that wins, and, ac- cordingly, they have mostly terminated in favour of the employers. A barren victory truly ! Just by one small degree better than a defeat ! In this species of civil war there is not only the loss of the wealth which would have been created by the labour of the men had they been at work ; there is also the loss occasioned by the disuse of the capital, plant, and machinery of the employers the loss occasioned by the non-execution of orders, and by turning away customers to deal elsewhere, and sometimes even the permanent loss to the district of the entire trade, which gets di- verted to other localities. By all this the labour- sellers are the chief sufferers, because every dimi- nution of capital is a diminution of the fund out of which the wages of labour are paid. But while the wealth - destroying effects ot " strikes " and " lock-outs " are undeniable, it is none the less true that properly constituted trades- unions are essential to the interests of the working- classes. Without such organisations there could be neither consultation nor concerted action be- tween them, and the fluctuations of the wage-rate 88 WEALTH-CREATION. in the chief labour-markets of the world, which it is most important for the labour-seller to trace, would hardly ever be known to him. The commo- dity in which he deals, labour, rises and falls in value like every other commodity, and he, the seller of it, should be able to watch and scrutinise the action of the buyer of it (the employer), or otherwise the fall in wages when trade was bad would be rapid and exaggerated, and the rise when trade was good would be tardy and insufficient. Trades-unions afford him the necessary knowledge and power to obviate this ; and he will be the more ready in bad times to submit to a fair decline, when he is assured that he will obtain a fair rise in good times. More- over trades-unions often afford great facilities for negotiation, in virtue of their representative cha- racter, which ensures to any agreement made the adhesion of the general body of men represented. But these considerations by no means invalidate our contention that strikes and lock-outs, from their adverse interference with wealth-creation, constitute a form of war that is equally injurious to both sides, and that it would be a disgrace to the human intellect to assume that such a conflict were the only and the inevitable solution to trade disputes. The avoidance of this irrational mode of ascertaining which is right and which is wrong, when differences arise between masters and men, would prevent those large occasional additions to the number of the unemployed which help to create a " superfluity of unproductive consumers." We may here observe in reference to trades- unions that all such of their regulations as tend PAUPERS AND CRIMINALS. 89 to restrict or diminish production are suicidal and most injurious to the labour-sellers themselves, by restricting and diminishing the fund out of which labour is paid. We allude to regulations tending to reduce the productive powers of the more industrious or skilful to the level of the in- ferior productive powers of the less industrious or skilful to interpose obstacles to the adaptation of labour to novel combinations or inventions adopted by the employers, and generally to impair the efficiency of labour in producing the largest results in a given time. It should be remembered that the less of capital there is created the less of labour there is employed. (b) We now come to the second group of un- productive consumers, consisting chiefly of those who, from various causes, are unable, or who, from perversity, are unwilling, to work for their livelihood ; in other words, of paupers or criminals. Among the paupers there are many able-bodied men who are not prevented from working by infirmity, but decline to work from deliberate choice. Some do indeed indulge in fitful and intermittent spurts of industry, but the greater number are sunk into irredeemable sloth and intemperance, and all of them are consuming non-workers. This descrip- tion applies also to a large proportion of the mendicants and tramps who infest the community, and these are unfortunately encouraged and main- tained by the pernicious practice of indiscriminate alms-giving on the part of well-meaning but, in reality, evil-doing persons. Let us hasten to say, however, that, in proper- 90 WEALTH-CREATION. tion to the discouragement which should be given to the drones and parasites which prey on society, in that proportion should abound the sympathy and tenderness due by the community to those persons who, from infirmity, either mental or bodily, whether natural or accidental, are really unable to contribute their quota to the general stock. These are entitled to receive, without stint and without reproach, their fair portion of the honey stored in the social hive. They are those members of the human family who, through the shortcomings of nature or the sudden wrench ot an accident, form the wounded and maimed in the battle of life, and, as such, become lawful pensioners on the resources of the rest. These are the " neighbours " whom we are taught to " love as ourselves." It is not to such that our strictures apply. On the contrary, we not only recognise their claims on their brother-men, but insist that these claims should be met in a hearty and ungrudging spirit. It is more than the bestowal of a favour it is the fulfil- ment of a duty. A churlish gift is of diminished value to the receiver and of no merit to the giver. There is no country which is not more or less burdened with both classes of unproductive con- sumers the pauper class and the criminal class. Legal and coercive repression checks, but is far from eradicating the evil. It lops the branches, but does not touch the roots of the upas tree. The existence of the evil is traceable partly to the pressure of temptation from hopeless poverty, and to the sway of passions uncontrolled at the first and uncontrollable in the end, but, in greater pro- CONSUMING NON-WORKERS. QI portion, to habits of evil and vice contracted in early youth and strengthened by evil and vicious asso- ciations in after-life. In other words, the mischief is mainly due to the early influence of evil example and evil precept, for which wise and good men are striving, by means of education, to substitute other influences that shall develop the good and curb the bad impulses of man's nature. In this they have already succeeded to some extent, and as they more and more succeed so shall the number of those who eat bread which they might, but do not, earn, or who, worse still, pillage the earnings of others, gradually dwindle down to the lowest point which human imperfection will allow. A consum- mation devoutly to be wished. Thus we have taken a review of the four classes into which all civilised communities may be divided, in relation to the superfluity of unproductive con- sumers which exist in each. Omitting the con- sideration of wars and international rivalries of which we shall next proceed to treat, we find that there are in all civilised communities a great number of persons who are doing no work at all, others who are doing useless and barren work, and some even who are doing evil work, and that all these are being supported at the expense of those who are doing productive work. We also find that such a state of things is by no means the necessary result of man's natural condition or inevitable destiny, but is quite remediable by the spread of knowledge and by practicable improvements in human institutions. It is useful to take stock of the obstacles that impede our progress, and en- 92 WEALTH-CREATION. couraging to find that they are by no means in- superable. It therefore behoves all men to lend a hand in the good work of overcoming them. CHAPTER VIII. Wars and International Rivalries Various Modes in which War is Injurious Annual Expenditure on Armaments in time of Peace Vast Number of Unproductive Consumers. B 3. WARS AND INTERNATIONAL RIVALRIES. Every one freely admits the destructiveness, the irrationality, and the wickedness of war ; but it is at the same time taken for granted that man is so constituted that war is a condition inseparable from his existence, whether in a state of barbarism or of civilisation. In other words, war is put forth as a deplorable but necessary evil. We readily admit the deplorableness of the evil, but we deny the necessity of its existence. Let us briefly glance at both aspects of the question, and inquire : (A) As to the extent of the evil ; and (B) As to its necessity. If we find the evil to be great and the necessity for it to be small, we shall at least know in what direction and with what hopes we may steer our course. A. The extent of the evil. The calamities of war form one of the most hackneyed of themes ; and every epithet of revilement has been heaped on the system, with but few attempts at practical reform. There is no man who does not shake his head in condemnation of the wickedness of war, and hardly one who does not at the same time EVILS OF WAR CLASSIFIED. 93 shrug his shoulders to signify his sad acquies- cence in its necessity. But while the world is almost unanimous in professing a general, sweeping, and speculative detestation and deprecation of war, few people have closely analysed the subject, or carefully considered : (a) the variety of modes in which it injures mankind ; (b) the constantly grow- ing increase of the evil ; and (c) the tendency of the modern military system in Europe to more and more extend the baneful effects of war over the period of peace. We shall call attention to each of these topics ; for a vague impression prevails that the evils of war mainly resolve themselves into the loss of life and the extra expenditure of money caused by actual hostilities. But it is not so. They inflict other fatal injuries, less intense perhaps individually, but far more wide-spread and permanent, and con- sequently more pernicious to mankind. (a) The variety of modes in which war is injurious. These may be classed under three heads, viz. : i. Destruction of life and property. 2. Conversion of productive labourers into unpro- ductive or destructive consumers. 3. Diversion of capital to unproductive or destructive purposes. On the first head, destruction of life and property, we need say very little, for of all the branches of the subject, this is the most obvious and trite. It is the favourite theme of poets and moralists, and it needs no effort on our part to convince our readers that bloodshed and devastation are atrocious crimes as well as unmitigated evils, unless justified by the sternest necessity. We will therefore pass on to the second head, which has 94 WEALTH-CREATION. received less attention, although deserving of at least as much. 2. Conversion of productive labourers into unproductive or destructive consumers. On this topic we shall have rather more to say. It is a fact too obvious to admit of dispute that every member of the naval and military services, whether officers or men, consumes without producing. This does not convey the slightest imputation on them. They are engaged by the state to perform certain duties, which, in most cases, are efficiently, and, in some cases are brilliantly, performed, while they are, in the majority of cases, rather under than over-paid. But it is nevertheless the fact, that those duties do not conduce to the creation of wealth. True that they may be necessary for the protection of the wealth-producers, as in the instance of defensive wars. But of the necessity of war we shall treat as a special topic ; at present we are only treating of its evils. And it is undoubtedly a flagrant evil (be it a necessary one or not) that a greater or lesser number of men, in the very prime of life, should be made to withdraw from the beneficent work of production, and 'to exist only as consumers, at the expense of those who do produce. In a loose, general way, these evils are freely admitted. . " It is no doubt very wasteful," people say, " but a soldier must consume, for he must live ; he cannot produce, for he has something else to do ; and he must destroy, for that is what he is paid for." But those who dismiss the subject in this cursory manner have not formed a definite concep- tion of the amount of the evil and loss involved. SMALL ARMIES OF FORMER TIMES. 95 Assuming that occasional wars, and continuous preparations for war, are matters of necessity, let us at least try to ascertain approximative^ what this "necessity" costs to the civilised communities of Europe. It must surely be a matter of both im- portance and interest to obtain some notion as to the price which civilised Europe has annually to pay for this assumed necessity, A man may deem it necessary to keep a carriage, but that is no reason why he should shut his eyes to the annual expense which it entails. We propose, therefore, to frame a rough estimate of the actual amount of wealth absorbed and consumed by the various nations of Europe in consequence of the necessity that is supposed to exist for large military establishments. Before, however, entering on these calculations, there are two considerations which deserve a few words of remark. In the first place, the armies which, in the present day, are deemed necessary for defence or attack, are infinitely larger than those which formerly decided the fate of nations. The drift of the prevailing system of military organi- sation is to arm the entire virile population of one country against the entire virile population of another. Governments previous to the nineteenth century pressed into military service only a moderate aliquot part of their people. The armies with which Turenne and Marlborough won their battles and their laurels would scarcely have been sufficient to form a secondary corps in a grand army of the present day. Armies then formed a very small, and now form a very large, percentage of the adult males of every country. 96 WEALTH-CREATION. And this tendency to a constant numerical increase of armed forces is being, every year, developed more and more. Each state is jealous of the other, and a contest arises between them as to which shall, even in time of peace, maintain in arms most soldiers in proportion to its population. This contest is a perennial struggle, little less savage in its intent and less costly in its ex- penditure, than actual war itself. Should this rivalry continue (as appears almost certain) there can be no limit to its development until all the male population in every country, between the ages of eighteen and fifty, shall become soldiers ; and even then it may assume other oppressive forms, till it breaks down under the weight of its own absurdity. In the second place, let us remember that formerly, when a war was terminated, the army was mostly disbanded, and the peace establishment of a country was on a comparatively small scale. But now the military organisation of a state even on the peace footing is on a scale greatly in excess of the war footing of the most bellicose country a century ago. And with the tendency just mentioned to still further increase, and, in great measure, to hold in readiness for action, the military power of each country, we are rapidly nearing the point when there will be little difference between the armaments of Europe in time of war and the same in time of peace. Already, we may almost say that European civilisation is in a perennial and normal state of warlike organisation, and, to a large extent, suffers all the evils of actual war except the secondary and transient ones of COMPOSITION OF MODERN ARMIES. 97 life destroyed and property devastated. For, the more wide-spread and durable evils of lives waste- fully spent, and of production wilfully arrested, be- come, under such a scheme, permanent institutions. We will now proceed to ascertain, as closely as we can, the number of men composing the army and navy of each European state, as also the annual expenditure of each on military and naval affairs. We may, however, premise that the military or- ganisation that now prevails throughout Europe, ex- cept in England and a few minor states, is founded on the principle that every man between the ages of eighteen and fifty is bound to form part of the national army for a certain number of years, and must be trained to arms accordingly. A given proportion of these are yearly drafted into the permanent standing army which is kept up during peace, and the rest are, under various names and regulations, formed into reserves liable, in time of war, or whenever the Government wills it, to be called into active service. The details vary in dif- ferent countries, but the general principle adopted is the universal liability to serve. Let us take France as an illustration. By a law passed in July, 1872, every Frenchman forms part (i) of the active army for five years ; (2) of the reserve to the active army for four years ; (3) of the territorial army for five years ; and (4) of the reserve to the territorial army for six years. So that the total duration of the military service, active and contingent, for every male adult Frenchman is twenty years. True, all are not called, but all are liable to be called. The data comprised in the following table are mostly derived from the " Almanach de Gotha " for H 98 WEALTH-CREATION. 1 88 1, corrected and supplemented from various other sources : Js g Equivalent i ^ sterling. ies <=* OOO O OOO OOOOO OOO M t>- \O <* ro O <* ro O O N H O * (N-<-fo ro-^-mrotn *$ 88 2" 38 888 8 8 000 O Q Q 0" abundantly those things which you can produce 3 best." Protection says, " Produce a little of every- ^ thing, whether they be things which you are most fitted, or things that you are least fitted, to pro- J} discover and promptly adopt those industries from ^j> duce." Left to themselves, capital and labour easily fc which they derive the most productive results, and q the diversity of industries which they thus naturally 10 attain furnishes them with ample remunerative 1 1 employment. On the other hand, Protection diverts PROTECTION VERSUS DIVISION OF LABOUR. 2O3 them, to a greater or lesser extent, from that profit- able employment, to other industries which can only flourish by the imposition of a tax on the community at large ; and to that extent, while the diversity of industries is enlarged, the wealth of the country is diminished. All diversification of industries which goes beyond its natural boundary, and which, instead of being the result of the regular course of things, is artificially extended by State ordinances, is an encroachment on the division of labour, and therefore an evil. To sum up, the truth is that PROTECTION FRUSTRATES THE DIVISION OF LABOUR BY ARTIFICIALLY LOCALISING THE GREATEST POSSIBLE DIVERSITY OF INDUSTRIES WITHIN LIMITED AREAS, WITHOUT REGARD TO THEIR NATURAL DISTRIBUTION. 10. Some protected nations are prosperous, there- fore Protection is a benefit. In this sentence, the word " therefore " is entirely out of place. It in- volves a non sequitur. It might just as well be said that whereas some ignorant persons are clever, therefore ignorance is a benefit. We hold, on the contrary, that those protected nations which are prosperous are prosperous not because of, but in spite of, Protection just as we hold that the ignorant persons who are clever, are clever not because of, but in spite of, their ignorance. No doubt, protected nations may and do attain a certain degree of prosperity in spite of Protection, for its evil influence only stunts without destroying their productive power. What we contend is, that they would be far more prosperous if they adopted Free Trade. We have never said that protected nations 204 WEALTH-CREATION. accumulate no wealth, but simply that they would accumulate it much faster if they abandoned the protective system. If a property being badly managed yields an income of ;i,ooo per annum, whereas under good management it would yield 1,500, it does not follow that the owner is utterly ruined by his bad management, but it does follow that, through it, his income is 500 per annum less than it might be. Neither does it follow that, because a badly-managed property yields a com- fortable income, " therefore bad management is a benefit." The owner is prosperous not because of, but in spite of, his bad management. By adopting a better system, he might add 50 per cent, to his income. The mere fact of a nation's comparative pros- perity is surely no bar to improvements that may render that nation more prosperous still. It will be time enough to scout improvements and arrest progress, when we have reached (if ever we shall reach) the extreme limits of human perfectibility. Till then it is irrational to say, " We are prospering, and we therefore decline entertaining any scheme for the increase of our prosperity." To allege that the Free Trade scheme will not conduce to such increase of prosperity, affords a fair and legitimate subject for discussion. We contend that it will, and have adduced our reasons for coming to that con- clusion. But to contend that Free Trade is an evil merely because a certain amount of prosperity has attended the opposite system, is an obviously incon- clusive inference, since it does not exclude the proba- bility that a much greater amount of prosperity IN SPITE OF, NOT P.KCAUSK OF, 2O5 might have attended the Free Trade system ; in which case, Free Trade would have been a benefit. No argument against Free Trade is deducible from such a style of reasoning. Nations progressed at a certain rate before the application of steam to loco- motion by sea or land, but after that improvement the rate of their progress was greatly accelerated. So do we say that nations may prosper to a certain extent before the application of Free Trade to their international relations, but that when so applied that prosperity will increase in a greatly accelerated ratio. The Protectionist proposition is a mere state- ment of opinion, unaccompanied by any proof, and therefore our contradiction of it must partake of similar vagueness. The truth or fallacy of either opinion must be reasoned out on other grounds. Indeed, the issues raised have been fully discussed by us in other shapes. Mere assertion can only be met by counter-assertion, and therefore, to sum up, the truth is that SOME PROTECTED NATIONS ARE PROSPEROUS ; BUT THEY WOULD BE FAR MORE PROSPEROUS STILL UNDER FREE TRADE ; THERE- FORE PROTECTION IS AN EVIL. CHAPTER XVII. II. As to dependence on foreigners 12. Free Trade a boon to a nation, whether others adopt it or not 13. As knowledge spreads so will Free Trade. II. Protection renders a country independent of foreigners. This is only another form of that principle of isolation which, if fully carried out, 206 WEALTH-CREATION. would convert the various nations of the world into so many hostile tribes. In what possible way could mankind be benefited if each country were really to be commercially independent of every other ? The evils and privations which all would suffer from such mutual estrangement are too obvious to require pointing out, but what would be the counter- balancing advantages ? We can see but this soli- tary one that, in case of war, the country that had no commercial intercourse with other countries would be free from any inconvenience that might be caused by hostile interference with such inter- course. This might, perhaps, have some weight if every nation were perpetually at war with every other nation. But such a state of things never did and never could exist. Even under the present very imperfect system of international relations, wars are only occasional, and are never universal. Where, then, is the wisdom of a nation voluntarily inflicting on itself for all time the evils and inconveniences of isolation merely to avoid their possible temporary infliction by an enemy in case of war at some future uncertain period ? It is thus that the coward commits suicide from fear of death. Is a man to deny himself all present enjoyments because he may some day or other be deprived of them by illness or misfortune ? Are you never to carry about you in the streets a watch, or a purse, or a handkerchief, because it is possible that, sooner or later, they may be purloined by a pickpocket ? If the mere fear of some future war is to divest us for ever of the benefits of commercial intercourse with other nations, it is one more to be added to the DEPENDENCE ON FOREIGNERS. 2O/ long train of evils which the war system inflicts on mankind. Moreover, it is to be noted that full and free commercial intercourse does not imply the depen- dence of one country on the rest it implies the mutual and equal interdependence upon each other of all countries. Interchanges presuppose benefit to both parties, or they would not be entered into. In the same way, the interruption which war would cause to such interchanges would prove equally injurious to both parties to one just as much as to the other. The stronger the ties of mutual in- terest and the more numerous the points of pleasant and profitable contact, the greater will be the inter- dependence of nations upon each other. But that mutual interdependence does not place any one of them at special disadvantage as compared with the rest. If there be any disadvantage when war supervenes, it will be common to all. They will occupy in this respect the same relative positions which they would have occupied if they all had, during the time that they were at peace, deprived themselves of the advantages of foreign trade. It is true that the more nations are knit together by the ties of mutual interest, the greater will be the reluctance to break through them, and the more they will each of them lose by substituting hostile collision for peaceful commerce. But the reluctance will be felt, and the loss will be shared alike by all of them. If there be a shade of difference between them, it may perhaps consist in this. The more largely and closely a nation is in connection with the rest 208 WEALTH-CREATION. of the world, the more independent will that nation be, supposing that its foreign commerce were partially disturbed by war with one or more other countries. That commerce would still con- tinue, and would be carried on partly through its old and partly through fresh channels. What articles it might no longer procure from its enemies would, through its organised intercourse with neutrals, be abundantly poured in by the latter. Either from them or through them its wants would be supplied ; and either by them or through them its productions would be taken in exchange. In reference to this subject, we may quote a speech delivered by Macaulay in 1842. In answer to the argument that England ought only casually to be dependent on other countries for food supply, he said that he " preferred constant to casual dependence, for constant dependence became mutual dependence. ... As to war inter- rupting our supplies, a striking instance of the fallacy of that assumption was furnished in 1810, during the height of the continental system, when all Europe was against us, directed by a chief who sought to destroy us through our trade and com- merce. In that year (1810) there were 1,600,000 quarters of corn imported, one-half of which came from France itself." Napoleon's Berlin decrees were far more oppressive and intolerable to the continental nations from which they nominally emanated than they were to England, against whom they were directed. Thus that "independence of foreigners," on which Protectionists lay such stress, is a privilege WHEN FREE TRADE IS A GENERAL BOON. 2CK) acquired at an immense sacrifice of annual wealth, and which, when war supervenes to test its value, is found to be worthless. To secure it we are, according to this doctrine, to do without foreign trade during peace in order to teach us to do without it during war. We are to forego it when we can reap its benefits in order to inure us to the privation when we cannot. To sum up, the truth is that INDEPENDENCE OF FOREIGNERS REALLY MEANS COMMERCIAL ISOLATION, WHICH NUL- LIFIES INTERNATIONAL DIVISION OF LABOUR, DISCOURAGES PRODUCTION, AND FOMENTS A HOSTILE SPIRIT AMONG NATIONS. 12. Free Trade would be a special boon to England if all nations adopted it ; but till then it is a disadvantage to that country. We maintain, on the contrary, (i) that if all nations adopted Free Trade it would be, not a special boon to England, but a general and equal boon to all mankind ; and (2) that meanwhile, till other nations adopt Free Trade, it is a special boon to England. Let us examine these propositions. (i) Free Trade simply means unrestricted, and therefore far more frequent and extensive, commer- cial interchanges than exist at present, between the various populations that tenant this globe of ours. Now, all such interchanges, whether they be few or many, are quite voluntary. None need either buy or sell unless he reaps, or hopes to reap, some benefit from the transaction. Self-interest guides both parties in every commercial dealing. Both expect and believe that they are gainers by it. To forbid, or to curtail, or to discourage com- O 2 1 WEALTH-CREATION. mercial interchanges is to deprive both the parties (not one of them only) of the advantages which they would, if let alone, reap from them. To remove all impediments to such interchanges between the people of all countries, and to leave to the parties dealing together full and free scope for their operations, is to allow both these parties (not one of them only) to reap the advantages which such operations afford. How, then, can this latter policy be said to be a special boon to any one country ? We know that such a notion does exist, but it is none the less an absurd, misleading, and pernicious error. England can only share with other nations, and not one jot more than other nations, the benefits which these extended inter- changes would confer. It may be said that, if Free Trade were universally adopted, England would export more goods to the world at large. Very true ; but the world at large would at the same time export more goods to England. For what could England take in return for her increased exports ? Gold ? Certainly not. It has been demonstrated over and over again that specie only migrates from country to country in homoeopathic quantities as compared with the amount of commercial dealings. It would be goods, then, that England would take in exchange. In that case the foreign producers, sellers, and exporters of those goods would reap at least as much profit from them as the English would from the goods for which they would be exchanged. Where is the special boon to Eng- land ? A policy by which all parties benefit WHEN FREE TRADE IS A SPECIAL BOON. 211 equally is a universal boon to all not a special boon to any one of them. (2) While other nations are debarring them- selves from the advantages of Free Trade, those advantages are being specially enjoyed by us Englishmen. From a number of such advantages thus accruing to us, we shall content ourselves with specifying three, (a) Cheapness of living to our people, who, while they earn higher wages than their continental comrades, have their wants sup- plied at a cheaper rate. (b) Cheapness of pro- duction ; for as all the materials which we work upon or work with come to us untaxed, we can undersell our rivals in neutral markets, and thus secure all but a monopoly in these, (c) Cheapness in naval construction and equipment, V which gives to us 'almost another monopoly of the lucrative ocean-carrying trade. Lack of space prevents us from detailing the numerous other direct and indirect advantages which we enjoy through our present monopoly of Free Trade. Indeed, some able men have argued that we derive greater advantages from being the only Free Trade country than we should enjoy if all other nations were also to become Free Traders. While dissenting from, this view, it is undeniable that, under the present system of Free Trade here and Protection everywhere else, we have secured an unexampled pre-eminence in international com- merce. Our foreign trade (combined imports and exports) now forms no less than one-fourth of the total foreign trade of the world at large. To sum up, the truth is that FREE TRADE WOULD BE A 2 212 WEALTH-CREATION. GENERAL BOON TO ALL NATIONS IF THEY DID ADOPT IT ; AND MEANWHILE IT IS A SPECIAL BOON TO ENGLAND, THAT HAS ADOPTED IT. 13. Other countries are too wise to follow the example of England, and adopt Free Trade. We submit that for the words "too wise/' we ought to substitute "not wise enough." But, indeed, " wisdom " has had little to do with the discussion of the subject abroad. The great bulk of the people composing civilised nations have never studied, never considered, and perhaps hardly ever heard the name of, Free Trade ; and yet it is the great bulk of the people who are most interested in it, and to whose welfare it would most conduce. Of the wealthier and more leisured classes, part are the capitalists who have embarked their fortunes in, and identified their interests with, the protected industries, and all their influence is directed against any change ; while the rest are, for the most part, indifferent to the subject, absorbed in other pursuits, and averse to trouble themselves with dry questions of political economy. As to the governing classes, they chiefly devote their attention to those topics which more imme- diately press on them such as party triumphs or defeats, foreign politics, financial devices, religious contentions, dynastic intrigues, and other matters of statecraft. As to whether the people they govern would prosper better under Free Trade than under Protection, why should they trouble themselves about that, since the people, who are the greatest sufferers, do not move in it ? Why should they lose votes, and perhaps power, to FREE TRADE PRINCIPLES ABROAD. 213 introduce changes which the many whom these changes would benefit do not ask for, and the few whom they would inconvenience loudly cry against ? Nevertheless, from all these various social strata there come forth in every nation a certain number of thoughtful, truth-seeking men who do study the subject, and whom that study has made Free Traders. These men, whose convictions are founded on research, are by no means inactive in promulgating the truth. But they are as yet comparatively few, and their voice only reaches a small part of the multitude whose earnings are being clipped and pared by protective taxes. Gradually and steadily, however, nations are becom- ing leavened by Free Trade doctrines. A small but increasing number of active politicians in every country are clustering into a compact Free Trade party, and their labours in the cause are entitled to our warmest appreciation and sympathy. They have up-hill work before them. In their endea- vours to benefit their countrymen they meet with obloquy on the part of those interested in the abuse which they wish to correct, with indifference on the part of the many whom that abuse injures, and with neglect on the part of the rulers whose policy they wish to influence. All honour to their glorious efforts! This passing tribute is amply due from us Englishmen, who have gone through the struggle, to our brother Free Traders in protective countries who are going through it. That they will succeed in breaking through the barriers of ignorant indifference and 2 14 WEALTH-CREATION. interested opposition, no one who sees how irre- sistibly the wave of progress is rolling onward throughout the world, can for a moment doubt. To sum up, the truth is that THE MOMENT THE MASS OF THE PEOPLE IN ALL COUNTRIES SHALL BECOME AWARE THAT PROTECTION TAXES THE MANY FOR THE BENEFIT OF THE FEW, FREE TRADE WILL BECOME UNIVERSAL. 14. England, which alone has adopted Free Trade, has not prospered under it, and is living on her former capital. Both statements are the reverse of true. As to the first, the marvellous expansion of England's prosperity and wealth within the last thirty years is so notorious, and has been so clearly, amply, and conclusively shown by statistical records, that it is mere waste of time to dwell upon it. The great wonder to us is that any man should be found so blind as not to recognise, or so bold as to deny, the fact. As to the second, the only ground on which the statement is based is the permanent excess of our imports over our exports a fact which, far from proving, effectually disproves the statement that England " is living on her former capital." For, as we have before put it, how can receiving a hundred millions per annum more from abroad than we send away be a cause of impoverishment ? Or, rather, how can it be other than a splendid and continuous accession to our wealth and capital ? It is said that this excess of imports has been partly paid for by the redemption of American Government bonds, and that consequently the in- debtedness of the world to England is to that THE WORLD'S INDEBTEDNESS TO ENGLAND. 215 extent less. Let us examine this assertion. It is quite true that the United States have paid off a portion of their national debt, some of which was held in England ; and all honour be to them for it ! But how can the creditable liquidation of their debts prove a source of impoverishment and dimi- nution of capital to us ? " They now owe us less," is your feeble moan. Why not ? How can it be a loss and a grievance to you that a high-minded debtor should take the earliest opportunity of repaying what he owes you ? If it be an injury to you to have solvent debtors, then long live the Turks and Egyptians ! As regards them, you will ever be free from the nuisance of having the world's indebtedness to you diminished. But how the repayment of a loan can injure a creditor passes conception. Because our Anglo-Saxon brethren in the other hemisphere have repaid a portion of their national debt, does it follow that the aggre- gate indebtedness of the world to you (on which you lay such stress) has diminished ? Not at all. Both in financial circles and on the Stock Ex- change (the best and indeed the only authorities on the subject) the verdict is (i) that a larger sum than has been repaid to us by the United States in one form has, during the same period, been invested by us in other American securities, and (2) that, in addition, England has been year by year making fresh loans to and large investments in other coun- tries (chiefly her own colonies). The result is and it will relieve the fears of our timorous friends to know it that the present indebtedness to England of the world at large is greater than it has ever 2 1 6 WEALTH-CREATION. been before. Paying us off is a very rare operation ; borrowing from us a very frequent one. There are also other proofs patent to every one who looks around him that, far from England's living on her capital, that capital is yearly in- creasing at a rapid rate ; for it is accumulating before his eyes. Every year the fixed capital of the country is, visibly and tangibly, receiving a vast accession by the construction of new dwelling- houses, new ships, new factories, new railways, new harbours, new docks, new warehouses, &c., &c., of which the aggregate value is enormous. Every year vast sums are invested in new commercial enterprises, both at home and abroad. Every year our population increases at the rate of about 1,000 a day ; while food, clothing, lodging, &c., are more easily and abundantly supplied to them than ever, for pauperism has decreased 19 per cent, since 1870. And it is in the face of these facts that we are told that England is living on her capital ! Out of what fund, then, if not from our annual savings (excess of income over expenditure), does the money come to provide these enormous annual additions to our national wealth ? To sum up, the truth is that UNDER FREE TRADE ENGLAND HAS ACCUMULATED WEALTH WITH UNPRECEDENTED RAPIDITY, AND IS YEARLY MAKING VERY LARGE ADDITIONS TO HER CAPITAL. We might indefinitely prolong this list of Protectionist fallacies, but we will rest content with those given as being the most important, the most plausible, and the most frequently used. These once clearly understood, refuted, and put on one "ERRORS FOR THE AVOIDANCE OF MANKIND." side, with the label " errors for the avoidance of mankind " affixed thereto, the remaining numerous but minute fry of Protectionist mistakes will lose their significance and wither away, as leaves do when the branch that bears them is lopped off. Truth alone is undecaying and eternal. CHAPTER XVIII. Why Free Trade is not yet universally adopted Ignorance and Immorality Their connection with Poverty. WE have now said enough to show how grievous an impediment to the process of wealth-creation is that " commercial isolation " which the theory of protection recommends, and which its practice enforces. We do not contend that, by such isolation, production is totally arrested, but only that it is seriously checked just as we do not contend that grain cannot be threshed by a flail, but only that it will be far more quickly and thoroughly threshed by a machine. But this check to production, arising as it does from the mis-direction (and therefore waste) of human energies, largely curtails the creation, and therefore the distribution among us all, of those "objects of human desire as are obtained or produced by human exertions" which we call wealth. Man's productive energies properly directed, or, what is the same thing, self-directed, achieve their maximum results ; whereas, when state-directed 2l8 WEALTH-CREATION. their natural aptitudes are ignored, they are set to state-supported, not self-supporting, tasks, and their efficiency is largely impaired. Hence a heavy deficiency in wealth-production, by which the people, and especially the labour-sellers, are the chief sufferers. How it is that this pernicious impediment to wealth-creation is still suffered to exist we have elsewhere explained, but the topic deserves a few further remarks. Why is a remov- able evil not removed ? The only country, so far, that has substituted Free Trade for Protection is England ; and as the experiment has there proved successful beyond all anticipation, it was natural to expect that other countries would follow her example. At present they have not. Why ? Certainly not because those men in every country who have studied the subject entertain the least doubt of the truth of Free Trade principles. There is universal con- sensus among the experts. There does not exist a single serious and argumentative work on the other side. Science is unanimous. Now and then there appear a few newspaper articles, speeches, and short, scanty pamphlets, in which political econo- mists are reviled but not refuted; but there is no systematic treatise in which the principles of Protection are explained and demonstrated. Why, then, this practical adherence to exploded errors ? Simply because the few protected producers object to have their monopolies disturbed, while the many injured consumers are not sufficiently alive to the fact that these monopolies are maintained at their expense, If the mass of the people did but PEOPLE TAXED TO TMAINTAIN A. B. AND CO. 219 know that each family in every protected country is paying a heavy tax to support a vicious system, both the system and the tax would speedily disap- pear together. Their continued existence depends on that ignorance, and consequent indifference, on the part of the public, which cannot last for ever ; and it is only until knowledge shall shed its full light on the subject that, meanwhile, Protectionism prevails. It is to enlightened democracy that we must look to make an effectual move in the matter. No effort must be spared to rouse the attention of the people in all countries to a subject which is of such material interest to them. If they were asked in an overt manner to hand over a certain portion of their weekly earnings, they would naturally wish to know for what purpose. And if told that it was to help to maintain A. B. and Co.'s silk factory situated ten miles off, because without such help it could not compete with C. D. and Co.'s silk factory situated a thousand miles off, is it likely that the demand would be voluntarily acceded to ? As it is, that same portion of their weekly earnings is taken from them for that same purpose, not only without their consent but without their knowledge. It is slily subducted from them in the shape of import duties which compel them to pay enhanced prices for their food, their clothes, and their lodging. Every mouthful they swallow, or every garment they wear, contributes its little driblet towards making up the sum total. Did they but know it, they would strongly object. They ought therefore be made to know it. It must be clearly 22O WEALTH-CREATION. shown to them that their money is taken to support A. B. and Co.'s silk factory. At present the system goes on because A. B. and Co. shriek loudly against any change, while the people, in their ignorance, remain silent. Naturally, governments pacify the shriekers and neglect the silent. It was ever thus. Those who, wanting a thing, do not ask for it must not be surprised if they do not get it. But the first step must be for the bulk of the people to know what it is that is wanted. In every country there is a certain number of thinking men who, having studied the subject, know the truth, and seek to promulgate it. Theirs is a noble task, but to overcome the vis inertia of ignorance and apathy requires vigorous and pro- longed efforts. We call on all thinkers in all countries to co-operate in these efforts. Every one can do something, either by his tongue or by his pen. Each pupil, when he is taught, may in his turn become a teacher, and thus, in the same way that many torches may be lighted at one torch, one mind may be the means of enlightening many ; and the truth received may be handed on to others. Meanwhile, the matter briefly stands thus. The protected class is active and clamorous ; the victimised classes (which form the bulk of the nation) are, through ignorance, inert and dumb; and the ruling class sides with the active and clamorous. And that is why the removable evil is not yet removed. We now proceed to consider the last of the five chief impediments to wealth-creation, of which we had proposed to treat, viz. : THE IGNORANCE AND IMMORALIwIJN ! 55P ^, IGNORANCE AND bracketing these two evils together, we by " no means intend to convey the notion that they are inseparable companions. Far from it. Of the ignorant, it is but a small proportion that are vicious, while, of the vicious, a considerable number are not ignorant. There is, however, a certain con- nection between them, inasmuch as ignorance is sometimes the cause, and, quite as frequently, the effect of immorality. But, whether combined or apart, they are very prejudicial to the true interests of mankind in various ways, and among others, by checking and impeding the creation of wealth. Ignorance neither discerns the right thing to do, nor the best way to do it. Vice may or may not discern the right thing to be done, but deliberately prefers to do the wrong thing. Both seek imme- diate fruition, at the expense of permanent future enjoyment the one not knowing, the other not caring how bad a bargain it really is. Those who do know and do care, owe that knowledge and dis- crimination to their having been educated, partly perhaps by direct tuition, and partly by attendant circumstances and surroundings. They certainly do not owe them to any innate superiority of intellect. Apart from some special tendencies due to blood or race, the children born to every class of society in a country, exhibit the same average con- formation of the brain the same average impressi- bility to the operation of external influences. The great mass of the peasantry and labour- sellers throughout Europe remain more or less plunged in ignorance, hence many of them are 222 WEALTH-CREATION. rough and vulgar, some of them are intemperate and addicted to low pursuits, and few of them are other than homely and unpolished in their address and manners. But you, Sir, who read these lines, elegant, refined, and cultured as you are, would doubtless have exhibited the same deficiency of ele- gance, refinement, and culture, had you been subject to the same depressing influences. And, on the other hand, most of those who have been kept down by poverty and ignorance, would doubtless, had they possessed your advantages of education, leisure, and pecuniary competence, have risen to your level. Is then the possession of these advantages irre- vocably confined to the favoured few, and by a fatal necessity, interdicted to the'great bulk of mankind ? Is it one of the conditions under which civilisation exists that its blessings shall be unequally distributed many of them to the few few of them to the many ? Is this all that civilisation can do for man ? Not only we do not think so, but we consider that there is a certain amount of moral cowardice in so readily yielding to the belief, and so tamely sitting down helpless under its influence. It is not the laws of nature, but the laws of man which are at fault. Let us vigorously set to work to amend them. The endowment of all men as equally as is practicable, with the advantages derivable from human progress, should be the aim and endeavour of every law-maker and of every book-writer. We believe this to be in a great degree practicable, chiefly by waging war against ignorance through extended education, and against poverty through extended wealth-creation. ABOLISH POVERTY, YOU ADMIT OF CULTURE. 223 It is true that the education supplied either gratuitously or cheaply by the State can only be elementary and introductory, and that without the leisure and opportunity to use it afterwards for continuous improvement, it loses its chief value, but it is precisely in order universally to provide that requisite leisure and opportunity that we so forcibly urge the adoption of all possible aids and the removal of all possible impediments to wealth- creation. For we are in these pages endeavouring to show that if all men were to contribute their fair quota to the production of wealth, if all this work were intelligently directed, through universal divi- sion of labour, to the attainment of the maximum results, and if no part of these results were wasted on useless or mischievous objects, then the burden of producing wealth enough for all would fall very lightly on each, and to each there would be afforded sufficient leisure and opportunity for mental deve- lopment and culture. If that end should be, in the fulness of its extent, immediately unattainable, yet every effort tending in its direction would bring us nearer to it. " Chimerical ! " will you say ? Not at all ; it is far more chimerical to fancy that the world will remain stagnant or move backwards a state of things that is quite inconceivable. No ! It does and must continue to move forward, and therefore in the direction to which we point. In all countries efforts have been made to some extent to lessen ignorance by more or less of popu- lar education, and to curb certain forms of immo- rality by legal repression. But these efforts have only been partially successful. The education 224 WEALTH-CREATION. afforded has been slight and superficial by no means generally diffused and from want of after- leisure it has remained unimproved and undeve- loped. As to immorality, prevention is a far more effectual corrective than repression. It must be attacked at its source, and the causes of it and the temptations to it must be removed by moral influ- ences. Penal repression does not interfere with it till its growth has reached a certain stage. Up to that point, it leaves it unchecked and uncurbed, and meanwhile it has become habitual and almost ineradicable. We have shown (see p. 63) that education and morality promote, and are at the same time pro- moted by, wealth-creation. The converse is equally true. Ignorance and immorality both counteract, and are counteracted by, the abundant production and consequent abundant distribution of wealth. This latter agency by dispelling abject poverty dispels ignorance, and removes from immorality its chief incentives and temptations. Thus does it subdue its two opponents : ignorance, which, even if industrious, does not direct its industry in the best way to the best ends, and immorality, of which the work is directed to evil. These instances are exemplifications of the mode in which moral progress comes to be the result of material well-being. School learning is not education ; it is only the ground-work and preparation for it. Education, in its truest and widest sense, is the formation of opinions and beliefs from study and experience, both which founts of instruction are inexhaustible, and hence POVERTY OBSTRUCTS ITS OWN CURE. 225 no man ever lived whose education was complete. All men, some passively and slowly, others dili- gently and fruitfully, continue, throughout their lives, collecting data affecting their opinions and beliefs. But the great bulk of the human race, from absence of leisure, and the pressure of inces- sant physical toil, have but few opportunities for useful study and suggestive observation. For want of books, and of time to read them, they are debarred from a full and correct knowledge of facts, and from the means of comparing the thoughts of deep thinkers with their own. Nor can they, from want of practice, acquire that habit of thinking logically which so copiously fructifies the teachings of personal experience. They are compelled to reason, and draw their conclusions, from incomplete and possibly erroneous data ; and their convictions are moulded, not on the high standard of the best thinkers, but on the low standard of those minds with which they habitually come into immediate contact. As long, therefore, as there is an insufficiency of the wealth requisite to meet the wants of all, whether it proceeds from causes that impede wealth-creation and distribution, or from the waste of wealth on useless or pernicious objects, so long must poverty continue to exist, and, as deplorable but necessary consequences, ignorance and the prevalence of those conditions which favour the growth of immorality. But while ample wealth- creation is the best cure for poverty, on the other hand, poverty repels that cure and prolongs its own existence by helping to impede the creation P 226 WEALTH-CREATION. of wealth. It does so in a variety of ways, of which we will only quote one as an example. The ignorance which poverty fosters prevents the bulk of the world's people (the labour-sellers) from appreciating, requiring, and insisting on, as they otherwise might and would, a system of free inter- changes for the produce of their labour. This submission to, and complicity with, a great economic fallacy costs them dear. The hands, brains, and capital of a state are compelled by the Government to cease producing what they can produce cheaply and abundantly, and to work instead at what they can only produce expensively and sparingly ; which destructive system is called the protective system. What is the consequence ? Far less is produced than might be produced by the same expenditure of capital and labour, and there is less to distribute among the same number of human beings. It is the poor who suffer from this deficiency. It is they and not the wealthy whose rations are curtailed, when the supplies run short. Thus do poverty and ignorance, by their silence, support and virtually promote, the very system by which their own existence is prolonged. In a similar manner the poverty-begotten ig- norance of the people allows the war system to tear them from their families and occupations from the plough and the loom in order to convert them into unproductive and sometimes destructive consumers. Were the people enlightened, the war system, which not only wastes wealth but arrests its creation, would soon come to be deemed, as the cognate practice of duelling is in England, absurd MAN'S INFLUENCE OVER HIS DESTINY. 22/ and illogical. Thus do poverty, ignorance, and immorality act and re-act on each other. They form an unholy alliance to which they staunchly adhere, and one is rarely found isolated from the others. Instances are no doubt to be met with of wealthy ignorance, of learned poverty, and of criminal wisdom and opulence, but they occur only as exceptions, which tend to prove how general the rule is. CHAPTER XIX. Utilisation of Female Labour. Competition ; its Uses and Abuses. Communism. Waste on Intoxicants and Narcotics. WE have now gone through the list which we had sketched out at p. 14 of the chief aids and impediments to wealth-creation, and have endea- voured to trace their influence, favourable or ad- verse, on the progress of human welfare. But that list only professes to embrace the most prominent of those influences, for, indeed, their number is infinite. There hardly lives a civilised man whose overt deeds and spoken thoughts have not some bearing, infinitesimal though it may be, directly or indirectly, by action, example, or precept, for good or for evil, on the course of human events ; and it is the sum total of these influences that finally determines the destinies of mankind. In free and comparatively enlightened communities, each in- dividual exercises more while under despotic governments each individual exercises less of this p 2 228 WEALTH-CREATION. individual action on the common weal. No force, whether physical or moral, is ever exercised totally in vain. However minute and feeble it may be, it has done its work such as it is. Whether it has helped, or has impeded, it has contributed its mite to the general aggregate of forces, just as each single, separate drop has its place and plays its part in the mighty rush of the Niagara waters. Who can pretend to enumerate, or to gauge the relative strength of, the multitudinous causes by which human progress is accelerated or retarded ? All that can be done is to take in hand and examine those of them which are most potent and universal in their operation. But in making a selection it is difficult to draw the line and to know where to stop. Hardly yielding in importance to the topics with which we have already dealt are a number of others, to a few of which, by way of sample, we shall briefly advert, leaving the rest as too secondary and too numerous to receive separate treatment in this work. We shall therefore proceed to notice I. The iitilisation of female labour. Every advance in scientific discovery tends to substitute the agency of nature's forces for human muscular exertion. In the earliest stages of his progress, man supplemented his own bodily strength by that of animals horses, oxen, camels, &c. Subse- quently, he to some extent emancipated himself from the necessity of using brute force by im- proved tools and mechanical appliances. And to-day, steam, electricity, and other natural forces supply most of the motive power requisite for UTILISATION OF FEMALE LABOUR. 22Q man's purposes. Hence human labour now in- volves less and less of mere physical exertion, and more and more of intellectual direction and dexterity of manipulation. This happy change opens a wide field for the utilisation of female labour. Over and above the discharge of those family and domestic duties which come within the special province of woman, a vast surplus remains to her of leisure, of capacity, and of desire for useful and remunerative work. There is no reason why that wasted leisure should not be employed that latent capacity should not be de- veloped and that laudable desire should not be indulged, by the more general co-operation of our sister-women with their brother-men in the noble work of wealth-creation. There now exist fifty channels to one of old in which that co-operation is possible without the unseemly exercise of muscular strain. Indeed, there are many tasks in which woman's efficiency is equal, and some in which it is superior, to that of man. From some of the tasks for which they are well fitted, women are at present debarred by sentimental conventionality as being undignified or unfeminine, or by the more real apprehension of contact with coarseness and vulgarity. But both these objections are gradually vanishing before the diffusion of knowledge, and the widening spread of education. Under the influence of general enlightenment, the innate dignity of all honest labour is being recognised, and workers are acquir- ing more self-respect and softness of manner. Year after year, we hope to welcome larger 230 WEALTH-CREATION. accessions of female labourers to the ranks of our wealth-producers ; so that all human faculties shall contribute according to their lights, to their oppor- tunities, and to their powers, to that general stock out of which human needs are supplied. In this way, we shall not only secure to the world a more ample store of "such objects of human desire as are obtained or produced by human exertions," but we shall also secure for women a fresh career of usefulness and of independence. Of course, some old-fashioned labour-seller of the male sex will here start up and object to an influx of female labour-sellers. " I want," he will say, " no interlopers in my trade. Wages are quite low enough, and if women are admitted to compete, not only wages will be lower, but some of us will be thrown out of work altogether." This is the old anti-competitive and anti-improvement cry. Every step in human progress has elicited it. The use of horses and oxen in ploughing displaced human labour, so did the use of tools and machinery, so did the introduction of steam-ships and railways, so does all division of labour, so do all engineering achievements and changes in the channels of trade, so would do the abolition of the war-system, so has done, is doing, and ever will do every scientific discovery, every improvement, and every advance which civilisation is making towards the greatest possible creation and dissemination of wealth. All progress involves some temporary displacement of labour and capital, but its per- manent effect is increased production and con- sequently a larger fund for the employment and COMPETITION; ITS USES. 231 payment of labour. In the present instance, the increased capital created through the work of women now unemployed, would enlarge the fund out of which labour is paid and stimulate the demand for that labour. That demand would not only speedily re-absorb any labour that might for a short time have been displaced by the innovation, but occasion a call for more. As we have before said and again repeat, the more of everything there is produced, the more there is for distribution among everybody. 2. Competition; its uses and abuses. From the nature and scope of the present work, our attention must be confined to the question of competition for wealth. It is only incidentally that some of our remarks may apply to competition for power, for rank, for fame, and generally for success in other fields for rivalry. We are here specially consider- ing the influence of competition on the production of wealth. Let us briefly glance (a} at its uses, (/?) at its cause and origin, and (c) at its abuses. (a) Its uses are obvious to all. Competition stimulates human efforts, sharpens the human intellect, and develops man's inventive powers to their utmost. In those communities where it is keenest, the most rapid advance is made in material progress. It is a race in which the idle and incompetent are left behind. The struggle for success, which constitutes competition, is only an intense form of emulation, one of the most deep- seated feelings in man's nature. Under its influence, he exercises his utmost powers of performance and endurance, of skill and contrivance, of ingenuity 232 WEALTH-CREATION. and industry. Every latent faculty is brought into play, and the effect is the maximum result which hands and brains can achieve. It is in this way that competition proves so powerful an agent of production and distribution : of production through agriculture and manufactures, of distribution through commerce. (b) The origin of the active competition for wealth is readily traceable to the institution of private proprietorship to the system of indi- vidualism in contradistinction to that of communism. When whatever a man earns becomes absolutely his own property, he has the strongest possible in- centive to earn as much as he can. The very different results of indolence or of activity of intelligence or of carelessness come strongly home to him, and, in the general scramble for wealth, he will use all the arts which emulation and self- interest can suggest to secure as large a share as, by industry and inventiveness, he can for himself. It is quite otherwise when, as under the com- munistic theory, the aggregate earnings of all are thrown into a common stock for common distribu- tion, and when each man gets, whether he toil much or little, intelligently or stolidly, successfully or fruitlessly, the same quota out of that common fund. In such a state of things, competition and its stimulus to industry, inventiveness, and thrift, altogether vanish. There is no special reward for special exertions. Indeed, as the allotments are equal while the contributions vary, the reward proves to be in inverse ratio to the value of the con- tributions. An equal share from the common stock COMMUNISM. 233 to him who brings much to it and to him who brings little to it, is equivalent to a bonus to the latter, and it would require stoic virtue and stern self-denial in the former not to feel a sense of injustice. Indeed, under the communistic system here discussed, unless men repressed every selfish feeling and voluntarily sacrificed themselves for the benefit of others, in other words, unless men changed their nature, each member of the community might, and probably would imbibe, and act upon, the notion that by throwing more work on others and less on himself, he was individually a gainer. In that case, the competition would be, not who should produce the most, but who should work the least, and such negative competition would act as a deterrent, not a stimulus, to wealth-creation. The communistic doctrine is thus summarised by Johann Jacoby, one of its ablest exponents, " Each for all this is the duty of man. All for each this is the right of man." But there exists this striking difference between the " duty " and the " right." The right is definite and compulsory, the duty is vague and voluntary. Each can exact the full measure of his right from all, but all cannot exact the full measure of his duty from each. The right is a certain, the duty an uncertain, quantity. That each man will take good care that he shares equally with the rest, we may be pretty sure ; but that all men will exert their powers of production to their utmost when not each but all in common are to reap the benefit of those exertions, we feel just as sure will not be the case. Strong motives of personal necessity and direct self-interest can alone 234 WEALTH-CREATION. overcome the natural love of ease and disinclination to effort which is inherent to man. In the case now before us, both would be absent. It is only under the system of private proprietorship that those motives can exist in their full vigour, and generate that active competition which furnishes so powerful a stimulus to the production of wealth. All institutions and practices that tend to re- move or avert competition tend in the same degree to slacken the work of wealth-creation. Thus it is notorious that monopolies conduct their operations more wastefully, are less progressive and inventive, and expend more labour and capital for the pro- duction of the same results than those enterprises which are exposed to the vivifying influence of competition. In a similar way, those industries which are sheltered by import duties from whole- some contact with foreign competition, become care- less and sluggish, are content to feed upon the country which subsidises them, and are hopelessly under- sold by their foreign unprotected rivals. An in- dustry which, not being self-supporting, receives national support, creates less than it consumes. As we have before shown, it produces 100 coins worth of commodities at the cost of 140 coins worth of capital and labour, and the country pays the difference. Thus far the advantages of competition stand out in strong relief. Let us now consider the evils to which it may lead, when carried to a vicious excess. (c) The abuses of the competition for wealth consist in resorting to illegitimate or dishonest COMPETITION; ITS ABUSES. 235 practices in order to undersell or supplant rivals. These practices assume one of two forms, viz. I. Cheating. 2. Selling below cost. Let us briefly analyse both. Cheating, in regard to the sale of goods, includes the adulteration of commodities, falsification of weights and measures, deceptive statements, and other forms of dishonesty which may be summed up as the fraudulent obtainment of a customer's money under false pretences. Now, beside the fact that many of these frauds and impostures are punishable, and frequently punished, by the law, it is equally a fact that, in the long run, the unfair competition that assumes this form is only successful for a short time. The frauds are detected, the rogues are unmasked, and the trade goes back to the honest trader. The great bulk of the world's commercial dealings rests on the basis of mutual confidence, and that confi- dence, once forfeited, is rarely restored. As to selling below cost for the purpose of supplanting a competitor, it is a shifty, spiteful, and short-sighted policy, entailing certain imme- diate loss, and, if persevered in, eventual ruin on those who adopt it. If, after a time, and for a time, a rival is ousted from the field, it is rare that the loss incurred is recouped, and the triumph, like that of Pyrrhus, has cost more than it is worth. Mean- time the consumers have benefited by the folly, and have enjoyed the advantage of buying below the cost of production. Let us not, however, be surprised at the occasional adoption of this suicidal policy by private persons ; since the wisdom of nations has, through bounties on exports, &c. 236 WEALTH-CREATION. frequently committed the same error. National bounties on a given article enable its producer, at the expense of his country, to sell it to foreigners below cost, and thus to undersell competitors. These bounties, therefore, possess this peculiarity that the better they succeed in effecting their object the greater is the national loss which they entail, and, consequently, the better they work the worse is the result to the community ! We thus see that the abuses to which compe- tition is liable are exceptional and transitory, and that they only arise from its being carried to excess. Even virtues become faults when strained beyond a certain point. And, on the whole, we may conclude that competition, by the impulse it gives to cheap and rapid production, and to the distributive operations of commerce, powerfully promotes the creation of wealth. 3. Waste of labour and capital on tJie production and consumption of intoxicants and narcotics. It would be a most useful and suggestive, were it a possible, task to assess the amount injuriously wasted every year, throughout the world, in the production and consumption of alcoholic drinks, opium, bhang, and other intoxicating and narcotic preparations. The inquirer would have to estimate i. The capital and labour diverted from other objects, in order to be devoted to their production and elaboration. 2. The extent of fertile land occupied in raising the plants from which they are extracted. 3. Their debilitating effects on the health and vigour, and, 4. Their demoralising effects on the minds, of those who consume them. INTOXICANTS AND NARCOTICS. 237 Real and great evils all, but difficult to assess. Confining ourselves, as we must do here, to the economic aspects of the subject, it would be very interesting to ascertain approximatively how much wealth is annually squandered that might be saved, and how much wealth that might be created is annually "barred and prevented, by the causes above enumerated. It is not in our power to frame an estimate, nor dare we even propound a guess. But, after making due allowance for the moderate quantities of stimulants and narcotics of which the use might be proper and justifiable, the abstraction from the world's wealth by this diver- sion of labour and capital from useful to noxious productions, must be equivalent to the abstraction of food, raiment, and shelter from hundreds of thousands of families to whose wants that capital and labour might otherwise have ministered. How can it be possible for destitution not to exist, when a vast amount of wealth is thus uselessly and wickedly sacrificed ? How can there be enough of the comforts of life for all, while so large a portion of what is produced is whether through the feverish delirium that gives a fatal charm to alcohol and opium or through the destructive- ness of the war-system or through the interdiction of free commercial intercourse and of the division of labour or through other pernicious practices wantonly destroyed, and the agents of production themselves diverted to mischievous objects ? From all these errors and wrongs, it is the lowly, the weak, the ignorant, and the oppressed who chiefly suffer ; and to redress the former would be to 238 WEALTH-CREATION. redeem the latter from their physical and moral prostration. There would be plenty for all if men so willed it, but, as it is, a large portion of that plenty is intercepted from the stomachs and backs of the many by intemperance as well as by the still more potent adverse influences to which we have, throughout this work, adverted. All honour is due to those conscientious men and women who are zealously, even if sometimes intemperately, advocating the cause of temperance. But we fear that neither moral suasion nor forcible repression are competent to radically cure the evil with which they try to cope. Moralists and legis- lators have vainly undertaken its extirpation, but its sources lie deeper than they can reach. It is not innate viciousness that leads to the habit of intemperance, or renders it inveterate. It is the habit that leads to the vice, and our inquiry must therefore be, what are the causes which engender the habit, and how are those causes to be elimi- nated ? Of these causes, by far the most potent and universal are poverty and ignorance. Some generations ago, habits of intoxication, begotten of barbarism, tradition, and routine, prevailed among the wealthier classes of many European countries. But with the spread of knowledge, art, and refine- ment, a sweeping reform has taken place. If instances among the wealthier classes of that degrading vice do still recur, they are viewed with disgust, and form dishonourable exceptions to the general rule. A similar improvement is perceptible among the respectable artisans and labour-sellers, and the TEMPTATIONS TO INTEMPERANCE. 239 scandal of overt and habitual drunkenness is now mainly confined to the poorest of the poor and the lowest of the low. It is most prevalent among the hopelessly poor, or among those of the easier classes who had contracted the habit when they were poor, or among the ignorant who are shut out from purifying and elevating influences, or among the destitute, the criminal, and the desperate. These are unhappily the fated victims of a vicious circle. Poverty and ignorance populate the gin- shop, and the gin-shop perpetuates poverty and ignorance. How is the charm to be broken ? Strong are the temptations, seductive the pleas, and specious the excuses by which abject poverty is beguiled into intemperance. It offers a brief sub- stitution of mental elevation for mental depression, of lethargy for physical pain, of indifference for hopelessness, of stupor for remorse, of oblivion for despair ! Is it then every man who, intensely suffering, can stoically put away from his lips the cup that offers relief, however transient? If we sternly demand the exercise of such self-control from our poor, weak, and afflicted brethren, what then shall we say to those who, rich, strong, and hearty, plunge into the vice out of sheer brute sensuality ? Let us, then, apply ourselves vigorously to the task of drying up the main source and fount of intemperance, which is hopeless poverty. We must work deep, not merely on the surface. A morass must be tapped from the bottom, not from the top. With the removal of hopeless poverty, the vice of drunkenness will gradually disappear, except per- 240 WEALTH-CREATION. haps among a small minority that may prove irre- claimable. And it is the object of this work to show how, if man but wills it, poverty may be removed by promoting all the aids, and sweeping away all the impediments, to the creation and distribution of wealth. CHAPTER XX. "Gluts" of Commodities and Labour National Antipathies. Tendencies towards Confederation. 4. Gluts, whether of commodities or of laboitr. And first, with respect to commodities. A " glut of commodities" is an over-supply of one or more commodities, as compared with the demand for them. It is corrected or remedied by a diminution or temporary cessation of its (or their) production until the superfluous quantity has found a vent, and until the demand and supply have re-adjusted themselves. As to a general glut of all commodities, that, as we have shown elsewhere, is totally im- possible. As long as industry is employed on the production of every desirable object in the same proportion as this desirability creates a demand for it, there can be no " glut," and the more rapidly universal production progresses in the proper relative quantities, the greater will be, without hitch or exception, the addition to the world's wealth. Each article produced would find its CAUSES OF "GLUTS." 241 counter-value in some other, and all would be ab- sorbed by mutual interchanges. Many causes, however, tend to disturb the natural equilibrium of supply and demand. Over- supply does not so often arise from the too rapid production of some articles, as it does from the diminished production of others. Indeed, it is by the short supply of some articles while the supply of the rest remains unaltered, that the relative or exchangeable values of various commodities are most frequently and most violently disturbed. Those industries in which capital and labour pro- duce normal and steady results are affected by the variable results of those which are fitful and fluctuating. Over-supply is speedily ascertained and soon checked ; but under-supply, while often traceable to human agency, is not infrequently the effect of influences beyond human control. Deficient harvests, whether of cereals or of other products 01 the soil, are powerful disturbing causes, and are mainly due to climatic causes. Shortness of supply in this large class of commodities is equivalent to, and produces the same effect as, an overplus or " glut " in other classes of commodities, of which the production had not varied in quantity. Five successive bad harvests in Western Europe (from 1877 to 1881) largely diminished the pur- chasing power of the agricultural classes, so that the commodities of which they were habitual con- sumers were found to be in over-supply, although there had been no over-production, and there ensued a wide-spread-depression in trade. To the same category of more or less unpre- Q 242 WEALTH-CREATION. ventible disturbing causes that includes bad harvests, belong other natural visitations, such as cattle plague, potato disease, phylloxera, silkworm dis- temper, &c., as also earthquakes, volcanic eruptions, typhoons, inundations, &c. All these affect the quantitative relation of commodities to each other, by making some deficient, and creating a relative redundancy in others. Thus there exists a liability to " gluts" from causes which man can neither foresee nor counteract, and all that we can attempt is some mitigation of the evil when it does occur. But " gluts" are also occasioned by human agency by scientific discoveries which turn the stream of demand into fresh channels, leaving the old ones dry ; by changes of fashion which take the demand off from old articles to throw it on to new ; by improved forms of machinery which com- paratively lessen the producing power of the old pro- cesses ; by speculative excitement which stimulates the excessive production of some articles as compared with the rest ; and, above all, by the artificial divi- sion of the globe's surface into a number of areas commercially isolated from each other, so that not only " gluts " are rendered more frequent, but their dispersion is rendered more tedious and expensive. With perfect freedom of commerce, in case of an over-supply of some commodities in some countries and of other commodities in other countries, the balance would soon and easily be redressed by the interchange of the respective superfluous produc- tions. The whole world would be open to facilitate and equalise their distribution. Innumerable mar- kets would present themselves to receive the com- OVER-SUPPLY OF LABOUR. 243 modities over-produced, or to fill up the vacuum of under-supply. The inequalities between supply and demand would be far less perceptible when spread over so vast an area ; just as the under- supply or over-supply of rain that make the mountain stream either a dry ravine or a devasta- ting torrent, produce but little effect on a broad lake.' As regards the " glut " of labour, it is the in- variable result of a " glut " of commodities, and is therefore, to that extent, due to the same causes. For an over-supply, whether it be positive or com- parative, of some kinds of commodities necessitates the temporary cessation or diminution of their production, and in the same proportion is the demand for labour lessened. But the normal demand for labour in relation to its supply depends upon more general and permanent agencies. As we have before shown, the three inseparable and indispensable factors in the production of wealth are land, labour, and capital. No one or two of these are of any avail without the third. Of land there is for the present no general dearth in one zone or another, but the relative proportions of labour and capital differ very much at different times and in different places. It may be laid down as a general law that when the reproductive capital of a country increases faster than its population, the demand for labour will be greater than its supply, and the rate of wages will be high. Where the reverse conditions exist, there will be a " glut " of labour, and wages will be low. Capital is the labour-sellers' chief Q2 244 WEALTH-CREATION. customer, and the wealthier the customer the better for the seller. Every obstacle which impedes the progress of wealth-creation, depresses the value of labour and is the labour-sellers' bitterest foe. Just as capital is useless without labour, and is therefore dependent on it, so is labour useless without capital, and their interdependence is mutual. Another important factor in the question of redundancy or scarcity of labour is the power of migration. The redundancy is relieved by emi- gration, while immigration remedies the scarcity. But both processes, fraught as they are with ad- vantages, are attended with some evil and dangers. Expatriation is a painful cure a cruel wrench to early associations and to the ties of kindred. Far better, where possible, to bring capital up to the level of the population than having to cut down population to the level of capital. Nor does the emigrant always better his condition. The task before him is still a laborious one. To succeed in his new career, he must possess all the qualities that entitled him to success in his native land. The chief advantage he has gained is the oppor- tunity of exercising them. On the other hand, immigration does not always supply the right quantity, or the right kind, of labour to the country into which it flows. There may be, and sometimes is, a glut of immigrants. Wherever there is a large or sudden influx of fresh hands exceeding the labour-absorbing power of the capital employed, the effect, for a time, is disas- trous. The land is there and the labour is there, but if the capital be deficient, the land must remain NATIONAL ANTIPATHIES. 245 untilled, and the labour must seek other fields for employment. There are numerous instances of new colonies or settlements which have failed, and ended in disaster, through the lack of that "staying power " which adequate capital can alone confer. To sum up, those "gluts" or disturbances in the relative supply and demand of commodities, which arise from natural and unpreventible fluctua- tions in the amount of produce raised from the soil, or from changes in men's tastes or habits, or from the invention of improved methods of pro- duction, are unavoidable ; but their injurious effects can be minimised by the adoption of a world-wide system of free interchanges. 5. National Antipathies, The existence of such feelings largely interferes with the progress of wealth-creation by fostering that estrangement between nation and nation from which mainly spring the destructive system of war and the anti- productive system of protection. Happily, these antipathies, originating in ignorance and prejudice, are gradually waning under the influence of wider knowledge and closer inter-communication, and their complete extinction will date from the advent of permanent peace and universal Free Trade. Primarily, groups of families clustered into tribes ; then groups of tribes clustered into larger com- munities, as they were impelled by some approach to identity of race, of interests, of language, and of religion. This tendency of men to agglomerate into larger social masses has still, with slight excep- tions and retrogressions, been going on. With the advance of wealth, knowledge, and civilisation, the 246 WEALTH- CREATION. tendency (sometimes impeded, sometimes hastened, by wars and conquests) has been towards the consolidation of two or more smaller states into a large one. A few centuries ago, England, France, and Spain consisted of a variety of small, inde- pendent states ; and the unification of Italy and Germany has taken place within quite a recent date. It is not yet a century since the United States of America coalesced to form the grandest confederation of states yet known, and only a few years have elapsed since the various provinces of British North America were welded into a confederacy under the title of Dominion of Canada. This tendency to the fusion of smaller into larger states, and to the incorporation of separate inde- pendent states into vast commonwealths or con- federations, is one of the most cheering results of past, and most promising signs of future, civilisation and progress. It is a recognition of the common solidarity of mankind. It is smoothing the way to universal peace and to freedom in all its shapes. It is gradually inaugurating the reign of majorities and abrogating that of brute force. This tendency is still in full activity and potency, and is far from having yet accomplished its mission. What is the next work which it is destined to perform ? In what shape will this centripetal force which has clustered communities into states and states into confederations, next exhibit its plastic power ? It is not easy to prefigure the new forms into which the development of new tendencies may eventuate, but among the possibilities which the not remote CONFEDERATION OF STATES. 247 future may have in store for us, we might instance the following combinations as the practical and not improbable results of 'the centralising tendency to which we have adverted. 1. A confederation for certain defined objects, none trenching on autonomy, of all the various states of Europe under the title of "The United States of Europe." We have already, at p. 150, treated at some length of the possibilities and benefits of this scheme, with a special view to the prevention of war. 2. A confederation of the numerous English- speaking peoples who have founded states in, and are rapidly tenanting, various parts of the globe. The junction of all these populations, unified as they already are by race, language, and habits, would form a vast Anglo-Saxon commonwealth, of which the central representation might be invested with certain imperial powers, without encroaching, beyond those narrow limits, on the self-government of the states of which it was composed. Even now, it would comprise a population of nearly 100,000,000 of which the United States of America would alone form about one-half. But powerful as such an Anglo-Saxon commonwealth might already be from its numbers, its energy, and its wealth, the unprecedented rapidity with which the English- speaking races are working out their destinies and multiplying their numbers, not only by their own fecundity but by the absorption and assimilation of immigrating races, would before long render such a commonwealth a wonder, an example, and a guide to the rest of the world. A child just born might 248 \VEALTH-CREATION. i live to see its population increased three-fold and its area spread over most of the fairest portions of the earth's surface. Ten years ago, a writer said of England, " We are the seminal people from which those nations will have sprung, which are probably to be the future arbiters of the world's destiny. Happy for us if we grow with them, coalesce with them, identify ourselves with them, and become part of the great cosmic system from which we may hope for that progress towards man's social well-being, which the old civilisation of Europe has so wofully failed in securing." 3. Another possible confederation might be that of the various states occupying the spacious semi-continent of South America. But although the great and improving empire of Brazil would present an excellent nucleus round which the other independent states of South America might rally for the purpose, we fear that, in this instance, a long period must elapse before the prevailing dense mass of ignorance can be cloven and broken up by impact with popular education, and before interna- tional jealousies succumb to the voice of reason. It is by means of such international combina- tions that mankind will eventually form a real brotherhood, and that unnatural and absurd national antipathies will finally die out. We are far from denying or under-rating the numerous obstacles and difficulties which lie in the way of such vast schemes of improvement. But obstacles and difficulties always appear more formidable in a distant mass than when they are closely examined and boldly confronted. It is not so long since the general INCREASING TENDENCIES TO CONFEDERATION. 249 adoption of a postal convention between the various nations of the world would have been treated as an Utopian dream. It is now an established fact, which largely contributes to the comfort and benefit of mankind. Neither do we assert that such contemplated confederations, which would knit together the interests of the foremost nations of the world, and give an immense stimulus to the production of wealth, are at all likely to spring at once into existence. But we do contend that, if the time for them has not yet come, it is certainly coming that the continuous and increasing tendency to the congregation of political bodies into large masses must result in further practical development and that distances are now so neutralised by rapidity of inter-communication, as to offer no impediment to the working of large or complex combinations. Nor would the diversity of languages prove any serious difficulty. Already the diplomatic language of the States of Europe is French ; the Anglo-Saxon nations have in common the language of Shake- speare ; and throughout the South American states the prevailing tongues are Spanish and Portuguese. We modestly offer these suggestions for what they may be worth. It is possible that improve- ments in our system of international polity may take place in a different form, and we shall hail them in any form. But meanwhile, we should not shrink from ourselves propounding remedies to evils merely because the adoption of those reme- dies appears beset with difficulties. All difficulties are surmountable. Even if our views should be 250 WEALTH-CREATION. branded as " impossibilities " we should not be much moved. Our reply would simply be that "Im- possible ! " is an objection which man, with his finite intelligence and undefined perfectibility, should be most chary of using. Dogmatically to draw the precise line of demarcation between the possible and the impossible, is an arrogant assump- tion of infallibleness. That boundary line has often been magisterially drawn ; and just as often, sub- sequent experience has shown it to have been drawn in the wrong place. The list of actually accomplished " impossibilities " is an endless one. That fact should prove a rebuke to dogmatic sceptics, and an encouragement to the advocates of progress. It may perhaps be said that the absorption of local and national interests into the wider and more general range of universal human interests will be destructive of patriotism. ' That depends on the meaning assigned to the word "patriotism." As long as it is, not the direct converse to, but a concentrated form of philanthropy, as long as it implies an intense desire for the special welfare of a man's native country, not as opposed to, but as connected with, the general welfare of mankind, no sentiment can be more in accord with the principles on which a friendly congress of nations would be founded. But if patriotism is meant to confine its sym- pathies to the exclusive welfare of a man's native country at the expense of, and in contradistinction to, the general welfare of mankind, it subsides into a narrow, provincial, and selfish prejudice, founded TRUE AND FALSE PATRIOTISM. 25! on the absurdly erroneous opinion that a country best prospers if, and when, other countries are un- prosperous. Patriotism so construed is the apo- theosis of a blunder. It is a defect wrongfully raised to the rank of a virtue. It is this fatuous feeling that inspired those wretched feuds which have marked the barbarism and hastened the decadence of contentious savage tribes. The same fatuous feeling gave rise to internecine and cruel wars between the petty towns of ancient Greece, and between the. petty states of mediaeval Italy. The ancient Lacedemonians specially called them- selves patriots, because they hated and despised everybody else ; but, in truth, they were (begging Plutarch's pardon) nothing but a petty, savage, egotistical, bigoted, and cruel race of slave- holders. CHAPTER XXI. Land Origin of Private Proprietorship The World's Supply of Land Its Gradual Absorption and Consequent Increasing Value. WE must forbear from prolonging the list of those influences from which wealth-creation receives either hindrance or encouragement. By the time that public opinion throughout the civilised world has received sufficient enlightenment to appreciate, and gained sufficient strength to enforce, the reforms ad- vocated in the preceding pages, the improvement in the condition of mankind will have become so mani- 252 WEALTH-CREATION. fest that the remaining minor reforms will rapidly follow, and prove but feeble obstructions. Before, however, we proceed to summarise and comment upon the general principles which constitute, and the facts and reasonings which support, the argu- ment propounded in this work, we must devote some share of attention to a few collateral issues, with which the main subject is more or less con- nected. Of these, one of the most important relates to the peculiar conditions under which land is placed as compared with the other two factors of all wealth, viz., capital and labour. In the first place, the supply of capital and labour is, originally, scanty it increases gradually and to that increase no limit is assignable. It is different with land. Barring geological phenomena, the supply of land is a fixed quantity. Hitherto, the aggre- gate quantity of land which the world affords for man's use has been far beyond man's requirements. But it cannot always be so. As cultivable land becomes worked up and utilised by the joint action of capital and labour, its present excess of supply will be gradually reduced, and must, at some period more or less remote, become exhausted. The more rapid the progress of mankind and the increase of the world's population, the sooner the time will arrive when we shall approach the limit of the world's land-supply. In densely populated countries the value of land has been continually rising, but, so far, the rise has been checked and rendered gradual and bearable by the influx of agricultural produce from CONTINUOUS RISE IN THE VALUE OF LAND. 253 regions where land was cheap and abundant. How will it be when those regions shall themselves become more densely populated, and the supply of surplus land shall further diminish? The result will no doubt be a general and growing enhancement in the value of land, eventually culminating, should the present laws relating to landed property remain in force, in conferring upon its possessors, the unlimited, because undefined, privileges of a monopoly. These are not merely vague and distant speculations. It is a fact that there is a limit to the supply of land it is a fact that the world's population is fast increasing and therefore using up that supply and it is a fact that, as the demand becomes greater while the supply remains the same, a proportionate rise in value must ensue. Reason how we may, and infer what we may, those facts have to be confronted. Is it wise to adjourn the consideration of the pinch till the pinch itself shall come ? In the second place, while capital and labour are migratory and can, when required, remove from one locality to another, land is fixed and irremov- able. Its products, indeed, are transportable, and may be conveyed to those places where labour is most efficient and capital most abundant ; but in order to create that agricultural produce, capital and labour must go to the land. From the two peculiarities which we have pointed out as distin- guishing land from its co-factors, capital and labour, various pregnant inferences are deducible, to which we may make some brief reference. It will be necessary to say a few words as to (a) 254 WEALTH-CREATION. the origin of proprietorship in land ; (b) the present distribution of the world's supply of land ; (c) the importance to mankind that land should be so treated as to extract from it the greatest possible amount of useful production ; and (d) the measures requisite to promote and ensure the most productive treatment of the land. (a) Proprietorship in land is a human institu- tion, not a natural ordinance. Whatever origin be assigned to man, whether special creation or gradual evolution, it is clear that at some period more or less remote, and for a period of greater or lesser duration, the land was as free to the common use of mankind as the air we breathe. Indeed, it is still so in several parts of the globe. As long as hunting, fishing, and a few wild fruits and berries supplied the wants of a sparse popula- tion, necessity prompted no change. But some primeval Triptolemus discovered that by cultiva- tion, that is by clearing the ground of useless, and substituting for them useful, plants, by loosening and turning over the land and so converting it into soil, by sowing it with cereals, &c., a very large quantity of human food could be raised from a given area which, in its state of nature, produced next to nothing. Who, however, would undertake the performance of work so arduous, in the expecta- tion of advantages so tardy and uncertain, unless assured that those advantages would undividedly accrue to themselves? But in order that those advantages should be exclusively assigned to them, the rest of the tribe or community must be debarred from the use of the area thus cultivated. PROPRIETORSHIP IN LAND. 255 Hence the specific appropriation to the cultivators, of that area which was before common to all. Thus, practically and in a broad sense, has arisen the substitution of private for public proprietorship of land. As a general proposition, viewed apart from the question of social expediency, such an abstraction of land from the common use of all, and its con- version to the separate use of individuals, was undoubtedly an injury to the commonalty from whom that extent of land was sequestrated. Their hunting or wild-fruit bearing grounds were by so much diminished in extent, and, pro tanto, the benefit to a few became a detriment to the many. It is in this sense that Proudhon's exaggerated dictum, La propricte cest le vol (" property is robbery "), has a certain degree of foundation in truth. What was everybody's became somebody's, and was everybody's no longer. It is in this sense that injustice has undoubtedly been done to the indigenous tribes of the American hemisphere who, having for untold centuries freely and in common, tenanted that vast continent, have been ousted, and themselves nearly extirpated, by the encroach- ments of civilised races. This process is still in operation wherever the land is held in common, and wherever communism in its completest form is the prevailing practice among the indigenes. The loose hold exercised over the land by the native tribes who use it in common, is everywhere giving way before the energy and intensity of individualism ; and in spite of the restraining influence of benevolent philanthropy, the aboriginal 256 WEALTH-CREATION. races, which can neither resist, nor co-exist with, civilisation, seem doomed to speedy extinction. But these evils, deplorable as they are, sink into insignificance when compared with the innumer- able advantages attendant on land-appropriation. Without separate and secure proprietorship (whe- ther individual or corporate), there could be no cultivation ; without cultivation there could be no abundance ; without abundance, no wealth ; and without more or less of wealth, there could be no progressive civilisation. The same area of land which under proprietorship and cultivation could maintain in comfort several millions of human beings, had, when unappropriated and uncultivated, afforded a bare and precarious maintenance to a few thousands. Reflection and experience led to identical conclusions, so that, finally, by the universal consensus of nations, the principle of land -proprietorship has been adopted, legalised, and enforced. Land is therefore held, not by any abstract or natural right, but by a conventional and legal right conferred by the will, as defined and upheld by the law, of the community. Might had, in many instances, conferred the land on the original appro- priator before society conferred on him the right to hold it. That right was conferred, not from a sense of fairness, since it involved unfairness to the aboriginal common occupants ; but from a~) sense of expediency, because the system presented many material advantages. In this brief review of the conversion and dis- tribution of unappropriated land into private or APPROPRIATION OF LAND. 257 corporate properties, we have necessarily confined ourselves to the broad and salient features of the subject. We have made no reference to those intermediate and transitional relations between land and its possessors that have existed at certain periods and in certain places, such as the various and complicated forms of feudal tenures, the ryot and zemindar system of India, the Russian mir, the nearly extinct village communities, &c.* These form interesting and suggestive topics for inquiry, but they have only an indirect bearing on the subject before us, which is simply the "origin of proprietorship in land." Our task has been to show that the division of the habitable surface of the globe (that general inheritance of all mankind) into private ownership is a social arrangement open to modification ; not a law of nature from which there is no appeal. (b) The present distribution of the world's supply of land. In newly-settled countries, and especially in those which have been colonised by the Anglo- Saxon races, the modes in which the present owners of land have become possessed of it are simple enough. In a few instances, the land has been bought for a nominal value from certain indigenes, whose power to sell and to give a title was exceed- ingly doubtful. In the majority of cases, however, the land has been, under various pretexts, taken from the natives by main force and appropriated by * Those who wish for information on these subjects should con- sult Mr. J. W. Probyn's excellent collection of the best treatises on the various systems of land tenure, published by Cassell Co. R 258 WEALTH- CREATION. the government of the new state. Thereupon naturally followed the gradual distribution of the land, by allotment or cheap sale, among immi- grating settlers. Much of it still remains undis- tributed in the hands of the various states, and its sale constitutes a large source of revenue. In most new countries land-ownership has thus arisen. In old countries, the existing distribution of land has been arrived at through many circuitous processes. Besides the original act (justifiable or not) of diverting land from the common use of all to the special use of a few, the transmission of the land from generation to generation has, many times and at many periods, been deflected from its legal course by conquest, confiscation, rapine, fraud, and violence of all kinds. The title to many a fair domain now peacefully enjoyed, may be traced back to the might to seize and the power to hold exercised in troublous times. But all land-owner- ship, whatever its origin, once defined and sanctioned by law, becomes sacred in the eye of the law, and is under its guardianship as long as that law remains in force. The firm maintenance of legal rights is es- sential to the very existence of social organisation. On the other hand, society has not abdicated its prerogative of modifying the law itself. The superior controlling power of the state is constantly being exemplified. In all cases of public improve- ments, such as roads, canals, railways, street alterations, harbours, &c., the legislature overrules proprietary objections, and decrees compulsory transfer of the necessary land on terms to be privately or juridically arranged. Even in the STATE INTERFERENCE WITH LAND. 259 disposal of personal property the state has some- times specially interposed. Thellusson, in 1797, left by his will ^"600,000 to trustees to be invested for accumulation (before distribution to the heirs) for a period of about a century, by which time it was calculated that the amount would have ex- panded to ,140,000,000. This singular devise induced Parliament, in 1799, to pass an Act to prevent testators from exercising any power over their personal property beyond twenty years after their decease. As it happened, Parliament under- went needless alarm, for litigation brought about a premature distribution of the Thellusson property in 1859, an d meanwhile the law expenses had devoured the accumulations, so that the amount distributed hardly exceeded the amount originally bequeathed. Still, the legislature herein exercised its privilege, and evinced its determination to inter- fere with proprietary rights when they were deemed incompatible with the public weal. The Irish Land Act of 1881 is the most striking as well as the most recent instance of legislative control over land-ownership. By fixing rents (though under exceptional circumstances), it inter- feres, to however limited an extent, with the free- dom of contract and with the natural relations of supply and demand. But the evil was a special one and required a special remedy. The evil was that in Ireland the article legislated upon, land, was in limited supply and in excessive demand. Hence exorbitant and impossible rents (at least in many cases) which legislative interference alone could reduce. The case is, no doubt, a special one, but it R 2 260 WEALTH-CREATION. may not long remain a solitary or even an ex- ceptional one. As the population of the world continues to increase while the supply of land throughout the world continues limited, the pro- blem which the Land Act was framed to solve in Ireland will, sooner or later, obtrude itself in other places, or in other forms. Land everywhere tends to increase in value, and that tendency is most rapid and pressing when and where the density of the population is greatest. Moreover, there are certain tacitly understood limitations to the rights conferred by society on land-proprietorship, and certain implied conditions to their exercise. It has become a common saying that " property has its duties as well as its rights." This doctrine, if it really means what it really says, is a very sweeping one, and raises questions which its author probably never intended. For, as the performance of the duties and the exercise of the rights are made correlative, it implies that where the duties are unperformed, the rights lapse. With- out going so far as that, it is undeniable that there are certain limits and conditions to the legal rights of land-owners which, without being specifically expressed, are practically annexed to them. These limits and conditions are intimately connected with the primary origin of the private ownership in land, which was, its necessity in order to extract from the land a larger yield of useful productions. That was the plea for, and the justification of, such ownership. Otherwise, what was the object of rescuing the land from the wild state in which it was common to all ? RAISING GAME INSTEAD OF WHEAT. 26l There are cases, however, in which the proposed result does not ensue. For instance, such an exer- cise of proprietary rights as should, on a large scale, leave the land as waste as it was before it was appropriated, would be an infringement of the very purpose which society had in view, in con- ferring those rights. Let us suppose that two or three millionaires clubbed together to purchase 100,000 acres of the fine wheat lands of Lincolnshire, in order to oust the farmers who now cultivate them, and to convert the whole into a game preserve ; what then ? There is nothing in the laws affecting land to prevent such a purchase, or to prohibit the conversion of the land to such uses. The effect would be that the production of wheat in this country would be diminished by 300,000 to 400,000 quarters annually, that food for nearly half a million of human beings would have to be im- ported instead of being grown, that the farmers and labourers who before raised the wheat on the land would have to find other employment or emigrate, that the increased competition for land in other parts of England would cause a general rise in rents, and that the area of England, as a food-producing country, would be smaller than before by 100,000 acres of her finest land. A scheme so rife with evils, so cynically selfish and devoid of all consideration for others, might indeed rouse the indignation and provoke the interference of the community, but in the present state of the law it would be quite feasible and strictly legal. Here, then, is an act which transgresses no law, and only violates the tacit limitations and condi- 262 WEALTH-CREATION. tions which attach to the law ; nevertheless, such an act would not be tolerated. Its very enor- mity would furnish its own corrective, and the legislature would amend the law to meet the case. It is true that such an act, on such a scale, and in its naked features, is not likely to be attempted. It must, however, be remembered that similar violations of the unwritten spirit of the law, on a reduced scale and in a less obtrusive fashion, are by no means uncommon in countries where the land is owned in large masses. The love of sport which impelled William the Conqueror to convert Hamp- shire into a deer forest still survives, and prompts miniature imitations (under cover of the law) of a deed that overrode all law. There are, in- deed, many practices with regard to land which are strictly within the letter of the law, but which thwart and frustrate its spirit. The existing relations between the land and its owners cannot, therefore, be regarded as final, and circumstances may arise which will subject them, in some places sooner, in others later, to revision and modification. (c) The primary importance of such a mode of treating land as shall secure from it the largest amount of useful production is too obvious to need much comment. If, as we have endeavoured throughout to show, it be a sin against wealth- creation to waste capital and labour because such waste lessens the common stock of useful things for distribution to the world, it must be a still greater sin to waste the productive powers of land, since its supply is a fixed quantity, whereas capital and labour are reproducible to an indefinite extent. LAND SHOULD YIELD ITS UTMOST. 263 The utmost amount of production is obtainable when all the three factors of wealth land, labour, and capital are combined in their requisite pro- portions. Land, when its co-factors are absent, is simply barren ; and when they are present, but in relatively insufficient supply, it produces less than it might and ought. Even when all three factors co-operate in due proportions, the result may be abundant production, but not necessarily useful production. For instance, the cultivation of poppies for the manufacture of opium ministers to a far lower class of human wants than the cultiva- tion of cereals for the purposes of food, or of cotton for the purposes of clothing. As long as extensive tracts of land exist in various parts of the globe fitted for, and waiting for, man's cultivation, the importance of making culti- vated land yield its utmost does not so impressively come home to us. But when it is borne in mind that man's reserve of cultivable land, though large, is yet of limited extent, and that each year we are encroaching on that reserve, it surely behoves us to take into consideration, boldly face, and gradually prepare for, a contingency which may be more or less remote, but to which the progress of civilisa- tion is irresistibly leading us. (d) As to the measures best adapted to secure such a treatment of the land as shall be the most productive, that is far too vast and complex a question to be discussed within the limits of the present work. Indeed it hardly comes within its scope, and lies mostly in the domain of politics and agriculture. It is sufficient here to point it out as 264 WEALTH-CREATION. a subject of pressing and growing importance that has attracted, and will yet more attract, the atten- tion of able thinkers. The land question in its full range involves many more problems than have as yet been broached. In densely populated countries the struggle for land is becoming intense, its value is rising, and it must continue to rise until it may reach such a height as shall prove intolerable, unnatural, and injurious to the common weal. The period must come when some corrective will have to be found to counteract that tendency to monopoly which is more or less inherent in land, from its limited supply, as compared with the unlimited growth of population and capital. We must here close these perfunctory remarks on a subject so vast and so important. It will before long occupy the minds and test the powers of the greatest statesmen and thinkers. The necessity for decisive action may not arise soon, nor everywhere at the same time. It may be postponed by palliative remedies. Indeed, in abstract theory, it might never arise at all, if science could devise means to raise food and raw materials in ever-increasing quantities out of the same area of land, so as to meet the ever-growing requirements of an ever-growing population. But in our present state of knowledge, and with our pre- sent command over the forces of nature, we have, or shall some day have, to confront the uncomfortable possibilities arising out of the contrast, between limit- less requirements for cultivable land and its limited supply. Meanwhile, we have no faith in the devices hitherto proposed to meet this eventual emergency. 26 5 CHAPTER XXII. Contempt for Wealth-Producers The Poor would be Largely Benefited by Increased Wealth- Creation. WHILE we have a firm trust in the future of civilised man, we fear that there are some races of men of whom, from their inaptitude for progress, we must despair. It is in the highest stages of civi- lisation that the art and practice of wealth-creation will attain the fullest recognition and the most ample development. The initial start must depend on the power to rise from a state of nature to a state of progress. True that the desire of possession being innate in man, it is as strong in the lowest savage as in the most cultured Caucasian ; but the former neither knows the true use and value of wealth, nor the most effectual modes of acquiring it. He snatches at the objects of his desire as the means of gratifying his immediate appetites, and has but elementary notions as to the multiplica- tion of those objects with a view to future fruition. Can he be taught to adopt the habits, join in the labours, and submit to the restraints of civilised life ? Some races have done so, although in only a limited degree, but, in their case, a certain advance having been made, a farther advance may be hoped for. But, on the other hand, there are other races, on whom the experiment has been tried in vain. The indigenous possessors of the soil in America and Australia on whom civilisation has encroached, 266 WEALTH-CREATION. have deteriorated, and almost perished, by contact with it. Every effort to induce them to join us in our social arrangements has been fruitless. All amalgamation has been found impossible, and we have either to retire from the work of turning barren wastes into cornfields and gardens, or to resign ourselves to view with pitying eyes and regretful hearts the gradual decay and final extinc- tion of those indigenous races. It may be asked how it is that the aptitude for civilisation is absent in some native races and exists in others ; and where the line between them is to be drawn. Our theory as to this is but a rough and ready one, and we give it for what it may be worth. We believe that it will be found that those races or tribes among whom the land remains unappro- priated, and exists in its primitive condition of being common to all, are the most untamable to the yoke of civilisation and will never live within its pale. Whether this preference for savage inde- pendence and dislike to settled habitations be the result of some peculiar physical conformation, or that habits indulged in, generation after generation, may have ripened into hereditary proclivities, certain it is that those indigenous tribes, among whom the land has remained unapportioned and uncultivated, are precisely those that have evinced the greatest incompatibility with, and aversion to, the arts of civilisation. On the other hand, those nations among which the institution of land-ownership exists, seem to have passed the line which separates the improvable from the non-improvable races, and to have taken HINDRANCES TO KNOWLEDGE AND CULTURE. 267 that first step which renders the rest possible. It is to these that progress, more or less rapid, becomes a destiny ; and it is of these that, after all, the great bulk of mankind is composed. We have now, to the best of our ability, urged the claims of wealth-creation to rank as the most efficient agent in promoting the physical, and, through the physical, the moral well-being of the totality of mankind. Without the physical, the mental and moral well-being is unattainable. It is illusory and deceptive to open the temple of know- ledge, culture, and refinement to the bulk of the population, to invite them to enter, and to blame them for not entering and at the same time to leave them oppressed by poverty, their leisure absorbed in toil, and their minds burdened with troubles and anxieties. It is the feast of the Barmecides. Practically, our cruel wars, our mistaken legislation, our wanton waste of wealth, close the entrance to the temple of knowledge to the many, be its portals ostensibly opened ever so wide. What is primarily wanted is a sufficient supply of material comforts and sufficient leisure for mental improvement, not for a small minority, but for the general body of mankind. At present, these requirements are amply furnished to the few rich, but fall far short of adequate supply to the many poor. This deficiency, however, does not, we contend, arise from the nature of things, but from defects in our institutions. The wealth necessary to provide for all the requirements of all human beings would be easily obtainable, if the creation of wealth had fair play, and its unnecessary waste 268 WEALTH-CREATION. were properly repressed. We have shown that whatever is produced is distributed, that the more there is produced, the more there must be for dis- tribution, that the articles composing this increased production would chiefly be articles of necessity, such as food, clothing, &c., and that of these, were industry and capital intelligently directed to the right objects, there would be a superabundance for all. And we have further shown that the causes which either prevent production or beget waste, are removable by the exercise of human volition, for they owe their existence to the imperfection of human institutions. The evil influences which man has created, man can annul. That multifarious objections will be started to our views we are quite aware. We anticipate that, among other things, it will be said: I. That we are appealing to the lowest springs of human action, viz., a selfish greed for wealth. 2. That the in- creased production of wealth which we hold out as an universal panacea will do no good to the poor man, but merely go to swell the stores of the rich. 3. That the poor and illiterate who form the bulk of the population throughout the world are mostly sunk too low in ignorance, coarseness, and bar- barism, ever to be raised to culture and refinement. 4. That in our enumeration of the means by which we propose to elevate the masses in the scale of being, we have omitted the powerful leverage of religious influences ; and, 5. That our scheme is Utopian, and that the results we look for are unattainable. Let us briefly pass under review these several allegations. GREED FOR WEALTH. 269 i. Greed for wealth is only a contumelious mode of defining the virtues of industry and frugality, which definition is readily adopted by those who are devoid of both. The assumption that the creation of wealth is an ignoble task, and that the creators of wealth are an inferior class, is tantamount to asserting that the mere posses- sion of wealth confers dignity, while its creation implies degradation ; and that those who use unearned wealth are, from that very fact, a supe- rior class to those who earn it. Is there, then, so much more merit in those who have inherited wealth than in those who have collected and bequeathed it ? A lucky accident, the chance of birth, transfers to the former the wealth which the latter may have acquired by labour or by talent. Is his luck to dignify the one who receives the wealth, and his labour and talent to disgrace the other who bestows it ? True, that the wealthy enjoy leisure and opportunities for mental culti- vation, of which many (by no means all) avail themselves, but that is a gratuitous privilege which fortune has conferred, not a merit ascribable to personal superiority. The foundation of the payments made to re- munerate the governing and professional classes is the very wealth so affectedly disparaged, which is created by the very producers who are so unaffectedly despised. Kings, statesmen, generals, judges, bishops, &c., down to policemen and beadles, are the paid servants of the "inferior class " by whom wealth is created. The difference between the many-palaced Emperor of Germany WEALTH-CREATION. and the shirtless King of the Ashantees arises mainly from the difference in the wealth-creating powers of their respective subjects. To condense it briefly, which class best deserves our admiration and sympathy those who enjoy wealth without creating it, or those who create wealth without enjoying it ? Is it for the former to tax the latter with being actuated by " greed for wealth " ? It is in another form, however, that the con- tention displays most plausibility. Wealth, once acquired, is allowed to be highly respectable. It is the act of earning it which, according to some, degrades the mind, lowers the dignity, and vitiates the taste of the wealth-getter. " How," say they, " can that man who devotes his energies to buying cheap and selling dear, to saving some trifle in the production of a commodity, to haggling with a workman about wages, and other trumpery matters, be considered the equal of another whose mind is occupied with lofty political or philoso- phical speculations, or with the aesthetic contem- plation of works of art, or with the inspirations of divine poetry, &c. ?" We humbly reply that, (a) These highly-cultured persons would never have been in a position to indulge their lofty flights if somebody had not endowed them with wealth ready-made to save them from the necessity of earning their daily bread, (b) The very object of the present work is to show how it may be rendered practicable for the same man for some hours of the day to take his fair share in the work of wealth- creation, and for some hours of the same day apply himself to that mental culture which we WHOM ABUNDANCE WOULD BENEFIT. 2/1 deem quite compatible with the performance of a man's duty as a bread-winner. There are innu- merable instances of the co-existence in the same man of useful hand-labour and valuable brain- labour. Indeed, the one forms a salutary balance to the other. It is certainly unwholesome, and we believe it to be quite unnatural, that man's efforts should be undeviatingly directed into one groove, (c) All honest and useful labour is of equal dignity. Indeed, the more useful it is the more estimable. Sowing an acre of ground with wheat is a more substantial contribution to human happiness than writing a mediocre poem, and it assuredly evinces more strength, both of mind and of body, to toil for hours, day after day, at some useful but laborious task than to recline on a soft couch or a sunny bank to dream of Arcadia and its theatrical shepherdesses. We cannot admit that the latter is the more dignified performance of the two. 2. That even if wealth were abundantly pro- duced and not uselessly wasted, its increased volume would, on distribution, do little or no good to the poor man, is a paradox of easy refutation. The increase of production and the cessation of waste must result in the supply of more food, more raiment, and more articles of necessity for the use of every class of the community, even to the very lowest. It is not articles of luxury for the rich that would be multiplied by the cessation of all impediments, and the adoption of all aids, to the creation of wealth. If you run your eye down the list of the chief articles that are either imported or 2/2 WEALTH-CREATION. exported, you will find nearly all of them to be such as minister to the wants of the millions, and of which the consumption is universal. These would be the commodities which would be so largely multiplied by promoting wealth-creation. For instance, it would be almost exclusively on such articles that the millions of able-bodied men, whose labour would be liberated and rendered available by the cessation of the European war-system, would employ their productive powers. The more abundant creation of wealth necessarily means the more abundant production of all such articles of universal consumption. Now let us see what would become of this large increase in the supply of the necessities and com- forts of life. Once brought into existence, they must, as we have shown at p. 3, be distributed. And among whom ? It is clear that it must be among the population at large ; that is, among the labour-selling and poorer classes. It cannot be among the opulent alone. The increased stock that has to be distributed consists chiefly of food, raiment, and other necessaries. How can the distribution possibly be confined to the wealthy ? They cannot eat all the extra food raised, or wear all the extra clothing produced. In fact, of neither class of commodities can they consume more than they formerly did, for they had an ample sufficiency before. What, then, becomes of the surplus stock ? If this extra food, raiment, and necessaries be distributed at all (and how they can fail being distributed we do not see), they must go to satisfy hunger that before went unsatisfied, to PLENTY BENEFITS THE POOR. 273 substitute good clothing for scanty rags, to provide the labour-seller with the necessaries of life without the same strain on him as before, and, generally, to eliminate poverty with all its attendant evils. This view of the subject seems to have escaped the attention which it deserves. It has been assumed far too lightly that it is the rich who chiefly benefit by the increase of the world's wealth. The contrary is nearer the truth. Abundance blesses both rich and poor, but the blessing to the rich forms a slight percentage over their previous resources, while the blessing to the poor forms an enormous percentage over their former small dole, and perhaps doubles or trebles their previous enjoyments. It is in times of dearness and scarcity that the position of the rich man becomes peculiarly invidious, and stands out in irritating contrast to that of the ill-paid toiler. In such times there is barely enough for all, and of course the pinch falls on the poor. To the rich such insufficiency means the curtailment of a few luxuries, to the poor it means the curtailment of the necessaries of life. In times of abundance and cheapness it is quite different. The increased supply of the necessaries of life scarcely touches the rich, who already had as much of them as they could consume, and therefore it is on the poor that the blessings of comparative plenty fall. How could the rich man prevent the distribution among the rest of mankind of the extra supply of good things which perfected wealth-creation without waste would provide for the purposes of consumption ? Let us consider, S 2/4 WEALTH-CREATION. To a large extent, that wrong is done, now, by means of the protective system, which interdicts the free interchange of the commodities produced in one country with those produced in another ; but we are at present supposing " perfected wealth- creation," which implies the abolition of the protective system. How, then, under " perfected wealth-creation " could the rich man keep back the articles of necessity, which he cannot himself con- sume, from being consumed by the poor ? What he might do if he were obstinately determined to deprive the poor of that benefit, would be to buy some cargoes of grain or a few thousand bales of cotton and woollen fabrics, and burn them. Or he might use every effort to get the protective system re- enacted. We see no other way in which he could effect his purpose. It may be said, " No ! the rich man will not adopt those courses. He will spend his share of the increased wealth in keeping more servants and maintaining a more expensive establishment, in building palatial mansions, and acquiring more artistic furniture and works of art." Readily granted ; but all this, far from interfering with the distribution among the labour-sellers of the increased wealth in question, merely explains the very processes through which that distribution would be effected. This increased expenditure of the rich goes to the increased employment of labour and to the payment of wages ; and the greater the demand for labour the higher will be its remune- ration. It is through this increased expenditure that the sellers of labour^ whether it be labour of WEALTH JS USED TO BUY LABOUR. 2/5 the brain or of the hand, get their share of the additional wealth that has been created. In short, the whole of that increment in the world's wealth which will result from " perfected wealth-creation without waste," will be distributed, and that dis- tribution will be effected by its exchange with the labour of those who have labour to sell. The more of it there will be to distribute in proportion to the quantity of labour in the market, the better for the labour-sellers, for the higher will be the rate of their remuneration. If, however, the rich, instead of expending their increased wealth on fresh luxuries, should prefer investing it in reproductive enterprises, so much the better for the labour-sellers. Not only he gets, as in the other case, an increased demand, and therefore an increased price, for his labour, but the wealth which his labour has helped to produce is not consumed once for all, as in the former instance, but becomes reproductive and is renewed again and again. Thus fresh additions are made to that capital out of which the wages of labour are paid. Clearly then, labour-sellers have a special interest in the amount of production being as large as possible, since that production must be distributed, and in that distribution they largely share. 2/6 CHAPTER XXIII. Raising the Poor to a Condition of Ease and Culture Are the Results we Aim at Chimerical ? 3. THAT the task of raising the poorer classes throughout the world to a condition of ease and culture is a hopeless one, we strenuously deny. That it may be a difficult one a tedious one that it can only be achieved slowly, gradually, partially, and with more or less of completeness yes. But that it is hopeless none will believe who will take the trouble to trace the course of the future by the bearings of the past, and who have faith that progress will lead us somewhere, instead of nowhere. To state it broadly, the dead wall that stands between the rude peasant and the finished gentleman is poverty with its disabilities. Remove but that, and there will potentially reside in the one all the elements and capabilities of culture possessed by the other. Nature distributes her favours of congenital strength, symmetry and beauty, both of body and mind, on quite different lines from those on which society is distributed into classes, and the average infant of the poor is not inferior to the average infant of the rich of the same race. What the respective destinies of these infants may be in regard to future happiness, education and sufficiency of means will doubtless decide. Not that the education need be more than sound for the poor child, while it may be brilliant for the rich ; or that the sufficiency of means need be more than a nega- DIFFUSION OF EASE AND CULTURE. 277 tion of poverty for the former, while it is affluence for the latter. The man who has enough is, in essentials, as well off as the man who has more than enough. Shakespeare is still Shakespeare whether he be read from a cheap copy or from a gorgeously bound edition. Life is rendered only a little more enjoyable by great wealth, while it is made barely endurable by excessive poverty. Of the two extremes of superfluity and destitution, the latter far more depresses man than the former raises him. To eliminate the latter is therefore a far more important object than to promote the former. A household, earning a sufficiency for physical comfort and for mental improvement, is placed under conditions highly favourable to the attainment of the utmost amount of human felicity. It has been alleged that a rise in the rate of wages generally leads the recipients either to increased intemperance or to increased idleness. This is only true in exceptional cases ; for instance, when the rise has been great and sudden, not gradual and enduring, or when it has occurred among the poorest and most ignorant of the labour- sellers ; and even then only for a time, until the excitement and novelty had worn off. The general and permanent effect of steadily high wages has been in every way most salutary. Emancipation from the miserable shifts and temptations of hope- less and abject poverty generates in the man a feeling of self-respect, whence there spring in due time, the habit of self-command, the wish to advance in the social scale, and, as a consequence, 2/8 WEALTH-CREATION. the desire for mental improvement. As a rule, it is the higher-paid artisans who swell the amount annually invested in savings-banks and thus become capitalists ; they are the men who frequent reading-rooms and lectures, and whom books and newspapers are educating to the proper exercise of the voting power. Compare the badly-paid English working man of two generations ago with the better-paid working man of the present day, and we shall find that in education, manners, temper- ance, and thrift, the latter is immeasurably superior. Why should not the same process be continued with the same effect ? The vast and compact mass of poverty and ignorance existing throughout the world may, at first sight, seem too huge and dense to be broken up by the advance of civilisation and progress, but it must be remembered that every individual who may be rescued and detached from it forms a step towards its disintegration. There is so much less left to be done, and as our attacks make larger breaches, so will the resistance to them become feebler. One of the mainsprings to human effort is emu- lation the desire to excel. Wherever it is not either latent or obliterated, it exerts a mighty in- fluence over the intensity of man's efforts, whether directed to the highest or the lowest objects. It is a force which exists for good or for evil, according to the purpose for which it is used. So powerful a lever should carefully be pressed into the service of the right and the true. "Onwards and upwards' is the motto of the poet who spiritualises life ; of the painter who idealises nature ; of the musician POTENCY OF EMULATION. 2/9 who fashions sounds into lovely shapes and mean- ings ; and of the orator who brands his words into the minds of his hearers. Each strives to do his best and his uttermost. And it is a similar craving for success which gives life and animation to the very lowest forms of competition. It inspires the jockeys, the pugilists, the athletes, down to the drunken miner who trains his bull-pup " to fight and to conquer" other dogs. All these, equally with the poet and orator, strain every nerve to triumph in their respective ways. " How different the aims ! " will you say ? Very true, but you must nevertheless recognise the force and energy with which, in each case, the main- spring, emulation, manifests its influence. As it exists in all human hearts, so our business should be to turn it to the best account and give it the right tendencies. The diversity of aims is the out- come of the diversity of education and surround- ings. These man's action can shape and modify, and therefore it is in his power to give a proper direction to those energies which, in some direction or the other, will ever result from the impetus of emulation. 4. That in our enumeration of the means by which the masses may be raised in the scale of being we have omitted the powerful leverage of religious influence we admit, and we justify the omission. In a mere economic work like this, such a consideration would be out of place. It is with man as a human being, and not with man as a spiritual being, that we have here to do. Our task is to work out man's material and through it his 280 WEALTH-CREATION. mental and moral well-being, by means of the natural and mundane elements at our disposal. Moreover, our subject is cosmopolitan ; we are addressing men, not of one, but of all religions. On which form of belief could our appeal to the religious element in man be grounded, without its being distasteful or, at least, unacceptable to the rest ? It is on the undisputable data which human experience furnishes, and not on the disputed data which theology puts forward, that economic science must rely for its progress. The modes of action which have been urged, have no special connection with, nor do they offer the smallest opposition to, any of the four or five great divisions into which the religious belief of the world has grouped itself. 5. That our scheme is Utopian, and that the results at which we aim are chimerical, are objec- tions to which we have already incidentally adverted. But we must be allowed a few more words on the subject, since we anticipate that this form of argument will again and again be addressed to us. " Utopian and chimerical ! " say you ? Well ! we accept the omen. Those are the very words which have invariably been applied to large schemes on the eve of their practical accomplishment. Those were the very words used by the learned Dr. Lardner when he pooh-poohed the idea of a steam- vessel ever crossing the Atlantic ; the very words used by consummate European politicians when apprised of the intention of General Washington, Mr. B. Franklin, and a few other private individuals, to organise the British colonists of North America into an independent federal republic ; the very words TRUTH AND ERROR. 28 1 used by the experienced Post Office functionaries when consulted on Rowland Hill's scheme of penny postage ; the very words used by eminent English engineers and statesmen in reference to the Suez Canal, projected by that energetic per- former of impossibilities, Ferdinand de Lesseps ; in short, the very words which always foreshadow the advent of some important practical improvement, which they are intended to denounce and deride, but which they rarely succeed even in delaying. They really convey no argument, but are the mere ejaculations of startled routine-lovers, and have been so often misapplied, that they have lost all force and significance. Those who use the cry of which we have just disposed, are actuated by a variety of divergent and even conflicting fallacies. These we may briefly summarise as follows : Ignorance of the truth, whence belief in the error ; indifference to the truth, whence tolerance of the error ; selfish interest in the error, whence aversion to the truth ; disbelief as to any remedy, whence meek acceptance of the evil ; fear of future disturbance, whence submission to present wrong ; unreasoning dread of all change, whence unreasonable antagonism to all improve- ment. On the whole, all these obstructions to the right current of thought resolve themselves into a de- sponding view of the future of the human race. They amount to this, that whatever has hitherto been the rule must ever continue to be the rule. History, so runs their argument, tells us that men have always been at overt, or covert, war with each 282 WEALTH-CREATION. other, therefore war is natural to man ; that every country has always been adverse to buying from other countries (though willing enough to sell to them, as if one were possible without the other), therefore commercial isolation is natural to man ; that among all nations the great bulk of the popu- lation has always been steeped in poverty and ignorance, therefore poverty and ignorance are natural to the bulk of mankind, and so on. They then proceed to argue that as the evils referred to are within the very conditions of man's nature, and as it is impossible to change man's nature, it is impos- sible for men to exist without wars, without hostile tariffs, without poverty, and without ignorance. All this would be very discouraging, were it not, fortunately, quite illogical. It does not at all follow because no remedy has hitherto been found for certain evils, that those evils are irremediable. Scientific discoveries, each of which supplied some deficiency, or remedied some evil, till then deemed inseparable from human weakness, have been, since the thirteenth century, strewed along the path of Time as thickly as stars to our vision along the milky way. Let us take one of the earliest, and one of the latest instances. In the olden time, it was very inconvenient to steer vessels at night by the stars, often obscured by cloud or fog ; but it was deemed irremediable, since it was the result of nature's laws. Nevertheless, the remedy came in the shape of the mariner's compass. Till quite recently, a man could not converse with a friend a few miles off without personal access to him an incon- venience which was deemed irremediable, since it WHITHER IS CIVILISATION LEADING US? 283 was the result of nature's laws. Nevertheless, a remedy came in the shape of the telephone. Oi intermediate instances, the list is innumerable. Who then dare come forward and assert that all those evils arc irremediable which have not yet been remedied ? Or, worse still, to pronounce it chimerical even to seek to remedy those evils, because they are, from their very nature, irreme- diable. It is moral cowardice, as well as bad logic, to believe so readily in the invincibility of evil. If the evils which at present attend our social condition be so inherent to it as to be inseparable from it, whither are our boasted civilisation and our restless advance in physical science bearing us ? Is their result to be merely to deepen the grooves in which society at present runs without altering their direction ? Will their effect be only to make wars more destructive, to render national jealousies more bitter, and to heighten the painful contrasts which already exist between the splendour of wealth and the squalor of poverty ? If that be all that civilisation and science are competent to effect for us, then well may we despair of the future of humanity. If the evils of which we complain are so ingrained in man's nature, and so beyond all cure, that even to seek for a cure is Utopian, then why strive further ? Why worry ourselves with useless efforts ? Let us sit down, fold our hands, and meekly moralise over the evils which, as we are told, we cannot prevent. As for ourselves, we earnestly repudiate this doctrine of despondency. We firmly believe that civilisation and science have a far higher mission 284 WEALTH-CREATION. than is assigned to them by that doctrine. We believe that their agency will largely promote the creation of wealth, will equalise its distribution, and will thus conduce to the physical and moral well- being of a larger and larger circle of human beings, ever increasing, till the great majority, if not the totality, of mankind shall be embraced within it. As the causes which retard this consummation are gradually removed, there is no reason why it should not finally become of universal application. A noble task ! to which we believe civilisation and the progress of science to be fully competent, and we look to them trustfully for its completion. It may be said that, granting the possibility of accomplishing the ends which we have in view, the means which we have suggested are not those best adapted for the purpose. It may be so. We have recommended those measures which, according to our lights, have appeared to us the fittest. But if other means, more conducive to the desired end, be proposed, we shall hail them with delight and eagerly adopt them in lieu of our own. All that we contend for, and strenuously insist on, is that the baneful causes to which we have referred, as obstructing man's advance in material and moral well-being, have not, as despondent sceptics main- tain, their source in man's very nature, are not inextricably interwoven into his destiny, but are remediable and removable at man's will. Let us, however, suppose that the full and com- plete attainment of all the objects which we have in view be morally impossible, that is no argument against using our best endeavours to move steadily ONE STEP FORWARD LEADS TO ANOTHER. 285 forward in the right direction, so as to attain as many of those objects as possible, as soon as possible, and as completely as possible. This is not a case of all or nothing. Every single step we take in the way of reform is accompanied by some corresponding improvement in the condition of humanity. We have never expected, or held out the expectation, that the reforms which we have advocated would or could be adopted all at once, or everywhere at once. But we are quite sure that as these reforms, or some of them, or instalments of some of them, shall be in process of adoption, the effect of such partial progress will be to facilitate and hasten the adoption of the rest. Every single impulse given to, every single obstacle removed from, the creation of wealth ; every item of waste that is avoided (whether of the power to produce, or of the wealth produced) ; every single human being redeemed from ignorance and poverty ; each of these is a step in advance, not only beneficial in itself, but preparing the way for a further advance. It is not a fair representation of our argument to exclaim, " Here is a visionary who thinks that ii we abolish war, establish free trade, educate the common people, and adopt a few other similar measures, we shall forthwith create an Elysium on earth." Our pretensions are far more modest. We simply look for a large alleviation of the present amount of human suffering through processes which will only be adopted slowly and after many strug- gles. We may not be able to make earth an Elysium, but we may prevent its being made a hell. It is true that the wealth necessary to man's 286 WEALTH-CREATION. well-being will not grow spontaneously, and must ever necessitate man's labour both of body and mind. But for that very reason, it is deplorable that war, which creates a large number of un- productive consumers, Protection which creates a far larger number of only half-productive producers, and ignorance which keeps the bulk of mankind toiling in a faint-hearted manner on unremunerative work with semi-starvation as the result, should enormously curtail and stunt the production, and consequently the distribution of wealth. As things now are, to take the world at large, the human race do not produce probably one hundredth part of what they might produce if their labour were properly and intelligently applied. Do away with the agencies that interfere with abundant production, and a largely multiplied amount of wealth will of necessity be created. What will be done with this surplus production ? It must either be destroyed or consumed. If to be consumed, it must be distributed, as the lesser amount now created is distributed ; but with this essential difference, that in the latter case many people run short, whereas in the former case there would, from the abundance of production, be plenty for all. This result may not be Elysium, but none will deny that it would be a vast improvement on the prevailing extremes of plethoric opulence and grim want. 28 7 CHAPTER XXIV. Expansibility of Man's Productive Power The Interests Advocated are not National, but Universal Conclusion. IN presenting wealth-creation as the great material desideratum necessary to produce a great moral improvement, we have only followed the natural order in which the moral is developed in man out of the physical. The corpus sanum is, as a rule, the best guarantee for the mens sana. An ill- balanced or unhealthy brain can hardly secrete a high order of thought. Even the soundest and most capacious brain becomes useless for good, and is often deflected to evil, under the influence, ere it is fully matured, of abject poverty or evil surroundings. There can be no mental develop- ment without a certain amount of ease, education, and leisure, which abundant wealth-creation alone can confer on the many. Of those men who can boast of a classical education, of cultured minds, of social, literary, or political success, how very few there are who do not owe their advantages to inherited competence ? Surely it is not for these to disparage the laborious pursuit and hard-earned acquisition of that wealth which has bestowed on them such privileges. But even among professed political economists we occasionally find men to whom " material interests " are objects of scorn with whom gold is dross, and money-making contamination. For instance, Louis Reybaud, in his " Economistes Modernes," talking of the advocates for peace, 288 WEALTH-CREATION. says, " Us fouillent dans les cceurs pour y reveiller ce qu'ils renferment d'instincts et de sentimens inferieurs. II y a un oubli du sens moral, centre lequel on ne saurait protester par des paroles trop severes. Ces appels constants a 1'inte'ret, a 1'interet seul, a un interet etroit, egoiste, exclusif, sont du plus detestable exemple, et s'ils etaient ecoutes, ils aboutiraient infalliblement a 1'abaissement des caracteres, et a la decadence des institutions." Frothy declamation, it is true ! But it represents the notions of a certain super-seraphic school which proclaims that every-day attention to material interests is utterly incompatible with the development of what they rather vaguely term "the highest instincts of man's nature." Are these, then, to be the exclusive apanage of the rich ? The expansion of man's mental faculties is intimately connected with the expansion and right direction of man's productive powers. The rapid and abundant creation of wealth would effect two objects, i. Its abundance would provide for the material wants of all ; 2. Its rapidity would leave leisure to all for mental cultivation. For, even under the present imperfect system which produces so very much less than might be produced, and wastes so very much more than need be wasted, enough wealth is produced to afford to the masses a scanty living in return for incessant toil. But under an improved system, which would promote the creation of wealth to its uttermost extent, by abolishing both the checks to it and the waste of it, not only would the wealth thus supplied for dis- PROBABLE INCREASE OF PRODUCTION. 289 tribution be almost indefinitely increased, but an ample sufficiency of it might be produced with the expenditure of one-half the human labour by which nearly the entire waking life of the workers is now absorbed. Men's ultimate productive capabilities, when developed to their utmost in all people in all countries, would, irrespectively of the impulse which they might receive from fresh scientific dis- coveries and inventions, result in an amount of wealth (that is, " of such objects of human desire as are obtained or produced by human exertions ") exceeding, to an incalculable degree, perhaps, in many instances, a hundred-fold or more, the amount now produced. Indeed, the only limits to its expansion would be the area of available land throughout the globe, and those unknown latent capabilities of the land which science might yet discover and develop. A large margin before pro- gress received a check ! But without discussing ultimate results, let us take some intermediate and comparatively not distant stage of improvement, when the present yield of man's exertions should be multiplied only fourfold. If, in such a state of things, the number of hours spent each day in the work of production were reduced by one-half, it is clear that even with this deduction of the labour applied, twice the quantity of wealth now produced would be left for distribution among the same number of people. Thus, by means of active wealth-creation, lei- sure for mental cultivation might be easily ob- tained for the many, precisely as, at present, by means of wealth, whether of direct creation T 2QO WEALTH-CREATION. or acquired by inheritance, leisure for mental culti- vation is the privilege of a few. No doubt such a desirable state of things offers so vast a contrast to the prevailing condition of mankind, that it may at first sight appear to some too good to be within man's power of attainment. This view, however, chiefly arises when the two extremes of present misery and possible happiness are both at once present to the mind, without re- ference to the many slow and gradual steps which form the connecting links between the two. The reforms requisite to lead mankind from the one stage to the other are, though not innumerable, very numerous, and of difficult, though by no means of impossible, accomplishment. When the effects of these contributary steps are severally as well as collectively considered, the wonder will cease. So, to a person who might be unacquainted with the means resorted to, it would appear incredible that the ideas of a man in London should be almost instantaneously conveyed to another man in New York, whereas the wonder would cease were he made to understand the intricate appliances, and the great amount of science and skill, of capital and labour, ex- pended on the construction of submarine tele- graphic cables. The supposed miracle would then shrink into a commonplace fact. We have all along granted that the complete realisation of the contemplated results may be distant, but that is only an additional reason why we should endeavour, by mooting the question, by dragging it into sight, by subjecting it to discus- NO ORGANIC CHANGES INVOLVED. 2QI sion, and by urging its consideration, to abridge the interval that separates us from those results. And, after all, that same space of time which " cuts a monstrous cantle out" of the life of a human being, is but a moment in the history of the world. The succession of events, as well as the events themselves, bear quite a different relation to living men than they do to the race of man. In the mighty current and rush of human progress each of us individually is a mere effaceable and replace- able unit, and whoever may live or whoever may die, the aggregate stream of life will pursue its course and achieve its destiny with no very sensible change of direction or diminution of impetus. We may venture further to remark that the reforms which we have submitted for consideration do not involve any organic changes in the frame- work of our social system, and that they are susceptible of partial and gradual adoption. They require no abrupt transition from one form of government to another. They are such as might be inaugurated by enlightened and beneficent rulers, under whatever denominations they may be known. It is by their works that political institutions must finally be judged, and not by their names. Some of the most arbitrary governments in the world have called themselves republics. It is, however, undeniable that the larger the infusion of the democratic element in the world's political institu- tions, the more rapid will be the advance and the more thorough the reforms. The welfare of the masses is the great business of the masses, and they must take their business in hand themselves T 2 2Q2 WEALTH-CREATION. if they want it done quickly and effectually. If they will not bestir themselves in their own cause, they are accomplices in their own abasement. For instance, it is on the masses that the evil effects of protection chiefly fall, while the masses mostly re- main inert, so that free trade for the present remains practically a middle-class contention, whereas it is essentially and vitally a poor man's question. But that the masses should "take their own business in hand " is very far from implying re- course to physical force. The sword is but a clumsy and cruel mode of solving social problems. It may cut, but it does not untie, the knot. By far the more effectual weapon is moral force. Let the units of which the masses are composed but think, speak, write, and vote according to their lights, and the result (for truth is the certain outcome of free discussion) will be such a power of public opinion as would soon become irresistible. The changes which it would enforce might not be sudden or sweeping, but even if only effected gradually and by instalments, they would be all the more secure, since, being founded on reflection and conviction, they would prove the more substan- tial and enduring. A bit-by-bit reform may seem a tedious process, but it is not of necessity so slow as, at first sight, it may appear. For, i. There is less resistance to its inception, and it therefore commences its work at an earlier date than would a complete measure of reform which provoked violent opposition. 2. One step in reform leads to another, slowly perhaps at first, but afterwards with accelerated speed, till, at the later stages, NO CLASHING OF CLASS INTERESTS. 293 the progress towards completeness is rapid and irre- sistible. 3. The improvements thus gradually effected are more durable and less reversible than those resulting from sudden or violent effort, which are generally followed by powerful and dangerous reaction. It will be observed that in these pages we have set the interests of no one class in opposition to the interests of any other. On the contrary, it has been shown how those interests are all interwoven and dovetailed into each other. We have endea- voured to point out how the poor could be made less poor without making the rich less rich. By promoting wealth-creation to its utmost extent, largely increased wealth is produced for distribu- tion among all, rich and poor. It is by directing labour and capital to their maximum productive results, and by reducing to a minimum the waste of those results, that we may look for ministering copiously to the wants of the poorer while in- creasing the enjoyments of the wealthier. Thus it is not by taking from one person to give to another that the removal of poverty is to be effected, but by expanding the general stock of wealth to that amplitude as shall fully suffice for the requirements of all. We beg to add that this book is not intended merely as an English work, addressed to the English people, and treating of English interests. It is written in the English language, because it is the language in which we can most clearly and most correctly express our ideas, but the topics of which it treats, the evils and abuses which it ex- 2Q4 WEALTH-CREATION. poses, and the reforms which it recommends, are matters of universal and cosmopolitan interest. It is the entire brotherhood of man, not merely our English fellow-countrymen, that we have had in view when writing these pages. Whatever truths they may contain are founded on general principles, and are of universal application. To say that this work is addressed to all men in all countries, is tantamount to saying that it is specially addressed to the labour-sellers of the world, since they form the great bulk of " all men in all countries." In the question of which we treat is involved the welfare, not of the people of any particular country, but of the great bulk of the human race every- where, without distinction of nationality, language, or religion. To them it is a question of happiness or misery almost of life and death. For if the prevailing extremes of poverty and wealth be the result of an inexorable law if they form a con- dition sine qua non of social organisation then countless millions must yield to despair ; they must continue, by incessant toil, to eke out a precarious and scanty subsistence ; their higher instincts must be repressed ; and that civilisation of which the only possible outcome is to deal out enjoyments to a small minority, and privations to a large majority, must be pronounced a failure. It may be said that there is nothing new in our teachings, for everybody was aware that war was an evil, and that abundance of wealth was a good. Be it so ; the point is not worth discussing. If the same argument in the same shape has been pre- viously set forth by others, by all means let them OUR ATMS ENTITLED TO SYMPATHY. 2Q5 have the merit. We do not care the flap of a fly's wing for the personal question. It is the cause itself, and that only, which we have at heart. It is important that it should make progress through whose efforts, it matters little. If, in its advocacy, we have been wanting in eloquence, we may at least lay claim to the fervour of earnestness ; and the words of an earnest man often have the power of awakening an echo in the breasts of other men. To the charge of occasional repetition and reite- ration, we plead guilty. When we have deemed it necessary in order to enforce a truth or to combat an error, we have not scrupled again to use a weapon which had done service before. The same truth may suffice to rebut several forms of error, and it has therefore to be reproduced when- ever those various forms of error present them- selves. Even from those who may differ from us as to the means which we have herein suggested, we claim sympathy with the objects which we have had in view. The feebleness of our performance may perhaps be pardoned in consideration of the noble ends at which we have aimed. A man can only put into his work as much as there is in him. If what we have put into this work be pronounced incomplete, inadequate, or unworthy of the great task undertaken, we are content to retire with the poor merit of good intentions, and to leave to abler men and more vigorous pens the substantial merit of effectively promoting the cause. Our task is finished. We now, humbly but hopefully, submit to the world our views on one of 296 WEALTH-CREATION. the most important themes that can engage men's attention. Humbly, because we are diffident of our own powers of analysis and exposition and hopefully, because time and its developments are in our favour. We have faith in the perfectibility of the human race not in the sense that it can ever attain actual perfection, but in the sense of its ever tending towards it ; just as the asymptotes of the hyberbole are ever approaching to, without ever actually reaching, absolute convergence. We have faith in the thought-stirring effects of dis- cussion and reflection, in the diffusion of know- ledge, and in the active co-operation of those, few or many, who may concur in our views. Nor shall we be at all dismayed or disheartened by opposition or criticism. On the contrary, not only we fully expect, but we cheerfully look forward to, them. For it is out of the conflicts of discussion that truth finally emerges triumphant. What we should chiefly regret and deprecate is neglect and indifference on the part of the great body of labour-sellers everywhere, in whose interest these pages were specially written. It is their battle that is being fought, and they ought not to stand aloof. Every argument which bears upon the subject, whether it be favourable or adverse, deserves the fullest consideration, for it is a more or less im- portant factor in the elucidation of truth. But there is one kind of influence that may be used, against which we must enter a decided protest. We mean the unsupported authority of great names. We may probably be told that such and CONCLUSION. 297 such profound thinkers who are dead, or that other profound thinkers who are alive, have pronounced our views to be untenable, our hopes to be chimerical, and our efforts to be futile and that we are bound implicitly to bow to such authorities. To this arbitrary verdict we utterly refuse to submit. If the reasons by which those profound thinkers were themselves swayed should be laid before us, we will examine them, and they may, or may not, sway us also. But a mere ipse dixit, unsupported by corroborative arguments, has no force whatever over reasoning minds. We wil- lingly yield to the weight of evidence, but refuse to be overborne by the weight of authority. We must be convinced, not silenced. We claim to retain our independence of thought, and cannot submit passively to the influence of great names. These have often and often led men astray. Indeed, experience teaches us that great names are frequently but splendid instances of human fallibility ! [For Appendix, see page 299. 299 APPENDIX. THE COUNCIL OF THE UNITED STATES OF EUROPE. THE subjoined sketch of the main provisions which might form the constitution and define the powers of the Council of the United States of Europe, is of necessity imperfect, tentative, and open to numberless alterations and additions. It is submitted only as a rough probationary plan, indicating the chief lines on which such a scheme might be built. Before being moulded into its final shape it would have to be impressed and modified by many minds and many interests, so as, in the end, to represent the average conclu- sions of European statesmen. CONSTITUTION AND POWERS OF THE COUNCIL OF THE UNITED STATES OF EUROPE. 1. The Council of the United States of Europe is instituted in accordance with the provisions and stipulations of a treaty entered into on between the following Sovereign States of Europe, viz., 2. The said Council shall be composed of the representatives appointed by each of those European States which are, or which may become, parties to the aforesaid treaty, on the basis of one representative for every ten millions of their European population. 300 WEALTH-CREATION. Thus the number of representatives in the Council which each State has the right to appoint is : One for States having a population of more than I million up to 10 millions, Two for States having a population of more than 10 millions up to 20 millions, Three for States having a population of more than 20 millions up to 30 millions, and so on in the same proportion. Only the population that is resident within the boundaries of Europe is to be taken into account. ( It is calculated that, as Europe is now constituted, the total number of representatives forming the Council would be forty.) 3. No person under the age of 45 is admissible as a representa- tive in the Council. 4. The chairmanship at each sitting of the Council devolves on each member successively, according to the alphabetical rotation of the members' names. 5. The Council has full power to examine into, collect evidence upon, and finally to decide, all disputes and differences which may exist, or arise, between two or more of the States that have become parties to the treaty under which the Council is formed. But their power does not extend to the settlement of disputes and differences between any of the said States parties to the treaty, and other States not parties thereunto. 6. Every decision of the Council, if carried by a majority of two or more, is final ; but a decision carried by a majority of only one requires to be confirmed at another sitting of the Council to be held within one week ; when, if again carried by a majority of either one or more, it becomes final. 7. The Council has the power to determine and assign the inter- pretation and true meaning and intent of the treaties subsisting between the various States that have become parties to the treaty under which the Council is formed ; which States shall be, through- out these articles, designated as the " Combined States." 8. The Council has the power to appoint secretaries and sub- committees, frame bye-laws, institute commissions of inquiry, and generally to adopt such measures as they may deem most conducive to the performance of the duties and the exercise of the powers entrusted to them. 9. The autonomy and self-government of each of the Com- bined States remains inviolate, and the Council has no power to interfere in their internal arrangements or policy. It is their APPENDIX. 301 international relations alone that come within the cognisance of the Council. 10. The members of the Council bind themselves implicitly to submit to, and loyally to abide by, the decision of the majority of votes. And the States represented by the minority pledge them- selves to co-operate in carrying out such decision as thoroughly and efficiently as though they formed part of the majority. 1 1 . No decision of the Council shall have any force or validity unless at least one-fourth of its members shall have been present at the sitting wherein such decision was arrived at. 12. In the case of any decision of the Council being disobeyed or disregarded, the Combined States agree and bind themselves to unite in enforcing it by such means and in such manner as the Council shall determine. 13. In case of there being an equality of votes on any question submitted for the decision of the Council, the Chairman at that sitting is to have the casting vote. 14. The representative, or representatives, appointed to the Council by each State shall retain his, or their, functions and powers for at least twelve months, unless in case of death. But at the ex- piration of twelve months (or sooner in case of death), each State may either appoint new, or re-appoint the old, member or members to represent it at the Council. 15. The Council shall be deemed constituted, and its operations shall commence, as soon as, and not before, the assent to the treaty authorising its formation shall have been given by such a number of European States as that their aggregate population shall amount to at least four-sevenths of the total population of Europe. 1 6. No State that has once become a party to the treaty under which the Council is formed shall be entitled or allowed to withdraw therefrom without the consent of the majority of the Council. 17. Any European State, with the requisite population, that may not have become a party to the treaty constituting the Council at the time of its constitution, may, at any subsequent period, become a party to it, and be represented in the Council, provided it gives its assent and sanction to the decisions at which the Council may meanwhile have arrived, or provided the majority of the Council may agree to waive that condition. 1 8. If any European State that has become a party to the treaty aforesaid should neglect or refuse to send representatives to the Council, the decisions of the Council shall be as binding on that State as though its representatives were, or had been, present. 3O2 WEALTH-CREATION. 19. The Council shall meet not less than twice a year, and for not less than ten days each term. The first meeting shall be held at , and, after that, at such place as the Council may appoint. But if the pressure of business or other circumstances render it necessary, the meetings shall be as frequent and prolonged as the Council shall deem fit. Special meetings may be convened by members, and of such meetings fourteen days' notice must be sent to every member of Council. 20. The expenses incidental to the meetings of the Council will be defrayed by pro raid subventions from each of the combined States, in proportion to the number of representatives which they are entitled to send to the Council. INDEX. Abundance benefits the Poor, 271 Aggrandisement, the Chief Ob- ject of War, 137. Aids to Wealth-Creation, easy of Adoption, 64. Appropriation of Land, 257. Arbitration as a Substitute for War, 147. , its Weak Point, 149. Armies, Composition of Modern, 97- continue Large in Time of Peace, 96. - of Former Times com- paratively Small, 95. Austria, Loss of Italy a Gain to, 140. Balances due by a Nation not paid in Specie, 170. Barter, All Commerce is, 172. , Direct or Indirect, 74. Boundaries should be finally fixed, 155. Bounties, National Subventions to Losing Trades, 236. British Government, Expenses of, in 1880, 79. -j Classification of its Ex- penses, 80. Buying is equivalent to selling, 177. Capital an Efficient Aid to Wealth-Creation, 36. - as a Factor of Wealth- Creation, 12, 71. , Definition of, 27. - diverted by War from Productive Purposes, 105. - goes to Payment of La- bour, 32. - is Unconsumed Produc- tion, 63. Capital lured into Dangerous En- terprises, 66. only utilisable through Labour, 31. Cheapness of Production and of Living the Result of Free Trade, 211. and Plenty benefit the Poor, 273. Civilisation Inaccessible to some Races, 265. , its Ends and Aims, 163, 222. , Whither it is leading us, 283. Civilised Societies divided into Four Sections, 70. Class Interests not opposed to each other, 293. Coal, its Use supposed super- seded, 50. Communication, Necessity for Easy Means of, 45. Communism would paralyse production, 232. Competition weakened by Mo- nopolies and Protection, 234. , its Abuses, 234. - , its Uses, 231. Confederation of English-speak- ing Peoples, 247. of European States, 299. of South American States, 248. of States, Tendency to, 246. Contrast between Present Misery and Possible Happiness, 290. Cosmopolitan, This Work not English, but, 293. Cost of European Armies tabu- lated, 98. 304 INDEX. Cost of European General War, ill. Council of the U.S. of Europe, Form and Constitution Pro- posed for, 299. Culture diffused by abolishing Poverty, 223. unattainable without Com- petent Means and Leisure, 270, 276, 287. Defensive Wars are Sacred, 137. Democracies, their Tendency to Peace, 146, 151. Democracy, Prevailing Ten- dency to, 144. Dependence on Foreigners is Mutual Inter-dependence, 207. Dignity of Honest Labour, 57. Displacement of Labour, whence arising, 39. from Supposed Disuse of Coal, 51. Disputes between Capital and Labour, 87. , International, Resolvable by the U.S. of Europe, 156, 299. Distribution obstructed by Pro- tection, 75. of Necessaries not very un- equal, 5, 271. of Increased Production, 1 3 1 of Land-Supply, 257. promoted by Cheap Con- veyance, 43. Distributors of Wealth, 73. Diversification of Industries ad- verse to Division of Labour, 201. Greatest in Back ward Coun- tries, 203. no Benefit, 199. Division of Labour ignored and scouted, 19. , its Benefits, 15. promoted by Cheap and Easy Inter-communication, 44- Duties and Freight paid by Im- porters, 191. Education gives Dignity to Labour, 57. , its Connection with Wealth- Creation, 56. requires Leisure and Op- portunities, 223. Small part of, gained at School, 5, 225. uproots Ignorance and Immorality, 223. Emigration relieves Redundancy of Labour, 244. Emulation, its Stimulus to En- ergy, 278. England is accumulating Wealth rapidly, 216. , Prosperity of, a Grievance to Protectionists, 214. , the World's Indebtedness to, 215. , this Work addressed to the World, not to England only, 293. Errors for the avoidance of Mankind, 217. Europe, a Final Map of, desira- ble, 155. Chief Seat of the War- system, 1 61. in a Perennial State of War-organisation, 96. European Armies, Table of their Cost, 98. Evil, Belief in its Invincibility,283 Evils unremedied, not irreme- diable, 282. Exports and Imports are cor- relative, 23. , Permanent Excess of, a Sign of Indebtedness, 178. Facilities of Inter-communica- tion, 42. Factorsof Wealth, Land, Labour, and Capital, 12, 71, Families in Europe, all mulcted by War, 130. INDEX. 305 Federation of European States, 150. Female Labour, Objections to, removed, 230. Utilisation of, 228. Feuds suppressed by merging Small into Large States, 154. Foreign Possessions, their Cost and Value, 101, 139. Foreigners considered Inborn Enemies, 165. Free Commercial Intercourse, 21. Free Imports cheapen Produc- tion, 196. Free Trade, Partial, a Special Boon, 211. , Universal, a General Boon, 210. , why not universally adopted, 212, 218. Free - Traders in Protective Countries, 213. Frugality under-rated as a Vir- tue, 61. Fund-holders affected by Rise or Fall in Prices, 126. are Annuitants, 122. Gluts of Commodities, 240. of Labour, 243. , none from Soldiers be- coming Labourers, 117. , their Causes, 7, 241. Gold Production, Effects of, on National Debts, 124. Government Expenditure Classi- fied, 78. Functionaries, 77. Governments, How they assist Wealth-Creation, 67. How, impede it, 68. Great Names, Protest against, 297. Greed for Wealth, 269. Hampshire made a Deer Forest, 262. Hereditary Thraldom to Na- tional Creditors, 123. U Hero-worship deifies Success, 157. Horrors of War, 114. Horses used in War earn Nothing, 1 06. Hours of Labour, Reduction in, 69- Ignorance and Immorality, 221. Immorality better prevented than repressed, 224. Import Duties fell on Im- porters, 185. , no Part paid by Foreign- ers, 195. Percentage of, to exclude Foreign Goods, 24. Three Kinds of, 192. Importers pay both Small and Large Duties, 193. Importing more means export- ing more, 183, Imports and Exports correla- tive, 23. Permanent Excess of, a Sign of Wealth, 177. Impossibility a Vague Term, 83, 250. Improvement assumed to be impossible, 281. Independence of Foreigners is Isolation, 206. Indigenes, Inaptitude of some, for Civilisation, 266. Indigenous Tribes, Injustice to, 2 55- Industrial Establishments reared on Subventions, 169. Industry under-rated as a Virtue, 60. Inequality of Wealth and of Education, 222. Insecurity of Person and Pro- perty, 65. Insolvency of Nations, 12 1. Intemperance from Poverty and Ignorance, 238. Temptations to, 239. Interchanges without Specie- displacement, 175. 306 INDEX. Intoxicants and Narcotics, Effects of, 236. Invention applies and utilises Discoveries, 48. Irish Land Act of 1881, 259. Isolation, Complete, not At- tained, 1 66. - Evils of Commercial, 160, 164, 217. Jacoby, his Communistic Theory, 233. Labour as a Factor of Wealth- Creation, 12, 71. -- Displacement of, by Changes, 40. -- soon re-absorbed, 53. - , its Dependence on Capital, 29. - Increased Wealth causes Increased Demand for, 274. --- not swamped by disband- ing Soldiers, 116. -- Saved by Easy Inter-com- munication, 47. -- Utilisation of Female, 228. -- When Demand for, lan- guishes, 54, 243. Labour-saving Processes soon increase the Demand for Labour, 40, 54. Lacedemonians, their Egotism, 251. Land, Advantages of Proprietor- ship in, 256. - as a Factor of Wealth- Creation, 12, 71. , its Continuous Rise in Value, 253. -- , its Peculiar Conditions, 252 -- , Limited Supply of, 252, 263. not held by any Natural Right, 256. , Oriin of igin of Proprietorship in, 254. State Interference with, 258 -- , Tendency to become a Monopoly, 264. Land, Utmost Amount of Pro- duction from, 262. Land -owners, Limits to their Rights, 260. - contribute to Creation of Wealth, 75. Language, Diversity of, no Bar to Federation, 249. Leisure for Culture obtainable for all, 289. Lesseps, Ferdinand de, 281. Little Wars, their frequency, 101 Macaulay on Food Supplies in War-time, 208. Machinery at first supplants Labour, 37. soon increases Demand for it, 38. , Suppose, carried to an Extreme, 41. , Wealth -Creation largely promoted by, 42. Man, his Influence over his own Destiny, 227. , not doomed by Fate to Social Misery, 58. Measures, the fittest to accelerate Progress, 284. Mental Sciences comparatively Stagnant, 49. Military Establishments, Table of, 98. Preparations not conducive to Peace, 108. - Virtues, Recognition of, 132. Minnesota, Productions of, widely distributed, 45. Miser, of more Utility than the Spendthrift, 62. Money is not Wealth, 8. , its intrinsic Metallic Value, II. Moral Force more Effectual than the Sword, 292. Well-being, its Connection with Physical, 267. Morality promoted by Wealth - Creation, 57. INDEX. 307 National Antipathies, Evils of, 245- National Debts, Causes of, 119. , Contracted on Usurious Terms, 128. , Financial Strain of, 121. , their Dividends create Non-Producers, 127. , their Tendency to increase, 1 20. Navies and Armies, their Ex- penses Tabulated, 98. Patriotism, True and False, 157, 250. Paupers, unable or unwilling to Work, 89. Peace, Cost of War in Time of, 107. or War, decided by the Few, 145. Peoples do not war against Peoples, 135. Well-being versus Nation's Greatness, 140. Perfectibility of the Human Race, 296. Poor are benefited by Increased Production, 131, 271. , Brunt of War falls on the, US- , Just Claims of the Infirm, 90. Population, Capital should grow faster than, 35. Sparse, adverse to Divi- sion of Labour, 44. Possessions, Cost and Value of Foreign, 101, 139. Poverty, connection of, with Ignorance, 224. , Necessary Result of Waste, 237. obstructs its own Cure, 225. removable through Wealth-Creation, 5. , the Obstacle to Culture, 276. Prices, their Rise or Fall as affecting National Debts, 125. Producers of Wealth, Who are the, 71. have to maintain Non- Producers, 1 1 8. Production, Loss of, by Soldier- ing, 104. susceptible of Vast In- crease, 286, 289. Professions, Learned and other, 83- preferred to Industries, 85. Profit, Goods not sent Abroad without, 189. Promulgation of Truth, 213, 220. Proprietorship in Land, a Human Institution, 254. Prosperity in spite of Protection, 204. of a Country hateful to Rivals, 159. of one Country is that of all, 158. Protectionism discourages Native Industry, 181. Aggregate Loss it inflicts, 167. Reduction achievable in Stand- ing Armies, 102. Religious Influences not ad- verted to, 279. Reybaud decries the Pursuit of Peace, 288. Right of Might, what is its Limit? 143. Saving by abolition of War- system, 103. of Time, &c., by Electric Telegraph, 47. Savings, Capital formed of, 62. Scientific Discoveries, probable Progress in, 48. , Effects of, 47. Selling below Cost for Competi- tion's Sake, 234. is equivalent to buying, 177. Social System, no Organic Changes proposed in our, 291 308 INDEX. Soldiers, Recognition of their Merits, 132. turned into Producers, 116. Standing Armies, Cost of, during Peace, 106. State Glory versus People's Pros- perity, 153. States, Small merged into Large, 153, 246. Steps leading in the Right Direc- tion, 285. Strikes and Lock-outs, Remarks on, 86. Sufficiency obtainable for all, 267, 284. Superfluity of Public Function- aries, 81. Sympathy, Our Aims entitled to, 295- Table of European Armies and Navies, 98. Tamboff, Products of, find no Market, 46. Taxing Foreign Industry im- possible, 187. Many for the Benefit of Few, 214, 219. Territorial Extension, Value of, 139. 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