Labour and the popular welfare

LABOUR AND THE

POPULAR WELFARE

GROWTH OF THE INCOME
OF THE UNITED KINGDOM

W. H. MALL OCR

LABOUR

AND THE

POPULAR WELFARE

LABOUE

AND THE

POPULAK WELFAEE

BY

W. H. MALLOCK

"V. ,

AUTHOR OF 'IS LIFE WORTH LIVING, SOCIAL PROBLEMS, ETC.

LONDON

ADAM AND CHARLES BLACK
1893

PREFACE

NEARLY all the general truths of Economic
Science are, directly or indirectly, truths about
the character or the actions of human beings.
It is, consequently, always well to warn the
readers of economic works, that in Political
Economy, more than in any other science,
every general rule is fringed with exceptions
and modifications ; and that instances are
never far to seek which seem to prove the
reverse of what the general rule states, or to
make the statement of it appear inaccurate.
But such general rules need be none the less
true for this ; nor for practical purposes any
the less safe to reason from. They resemble,
in fact, these general truths with regard to

vi LABOUR AND THE POPULAR WELFARE

the seasons, which we do and must reason
from, even in so uncertain a climate as our
own. It is, for instance, a truth from which
we all reason, that summer is dryer and
warmer than winter ; and yet there is a
frequent occurrence of individual days, which,
taken by themselves, contradict it. So,
too, those economic definitions, the subjects
of which are human actions or faculties,
can be entirely accurate only in the majority
of cases to which they apply ; and these
cases will be fringed always by a margin
of doubtful ones. But the definitions, for all
that, need be none the less practically true.
Day and night are fringed with doubtful
hours of twilight; but our clear knowledge
of how midnight differs from noon is not made
less clear by our doubts as to whether a certain
hour at sunrise ought to be called an hour
of night or morning.

It is especially desirable to prefix this

PREFACE vii

warning to a work as short as the present.
In larger and more elaborate works, the writer
can particularise the more important excep-
tions and modifications to which his rules and
definitions are subject. But in a short work
this task must be left to the common sense
of the reader. For popular purposes, however,
brevity of statement has one great advantage,
namely, that of clearness ; and, as the signifi-
cance of the exceptions cannot be understood
without the rules, it is almost essential- first
to state the rules without obscuring them by
the exceptions. There are few readers prob-
ably who will not see that the general proposi-
tions and principles laid down in the following
pages, require, in order to fit them to certain
cases, various additions and qualifications. It
is necessary only for the reader to bear in mind
that these propositions need be none the less
broadly and vitally true, because any succinct
statement of them is unavoidably incomplete.

CONTENTS

BOOK I

THE DIVISIBLE WEALTH OF THE UNITED KINGDOM

CHAP. PAGE

I. The Welfare of the Home, as the Logical End of

Government ...... 3

II. The Conditions involved in the idea of a Legis-
lative Kedistribution of Wealth ; and the
Necessary Limitations of the Eesults . .- 14

III. The Pecuniary Results to the Individual of an

Equal Division, first of the National Income,

and secondly of certain parts of it . . 27

IV. The Nature of the National Wealth: first, of

the National Capital ; second, of the National
Income. Neither of these is susceptible of
Arbitrary Division . . * . .49

BOOK II

THE CHIEF FACTOR IN THE PRODUCTION OF THE
NATIONAL INCOME

I. Of the various Factors in Production, and how

to distinguish the Amount produced by each . 83

x LABOUR AND THE POPULAR WELFARE

CHAP. PAGE

II. How the Product of Land is to be distinguished

from the Product of Human Exertion . . 92

III. Of the Products of Machinery or Fixed Capital,

as distinguished from the Products of Human
Exertion 108

IV. Of the Products of Circulating Capital, or Wage

Capital, as distinguished from the Products of
Human Exertion . . . . . .122

V. That the Chief Productive Agent in the modern
world is not Labour, but Ability, or the
Faculty which directs Labour . . .138

VI. Of the Addition made during the last Hundred
Years by Ability to the Product of the
National Labour. This Increment the Product
of Ability .156

BOOK III

AN EXPOSURE OF THE CONFUSIONS IMPLIED IN SOCIALISTIC
THOUGHT AS TO THE MAIN AGENT IN MODERN PRO-
DUCTION.

I. The Confusion of Thought involved in the Social-
istic Conception of Labour . . . ' . 171

II. That the Ability which at any given period is a
Producing Agent, is a Faculty residing in and
belonging to living Men . . . .188

III. That Ability is a natural Monopoly, due to the
congenital Peculiarities of a Minority. The
Fallacies of other Views exposed . . .202

CONTENTS xi

CHAP. PAGE

IV. The Conclusion arrived at in the preceding Book
restated. The Annual Amount produced by
Ability in the United Kingdom . . .228

BOOK IV

THE REASONABLE HOPES OF LABOUR — THEIR MAGNITUDE,
AND THEIR BASIS

I. How the Future and Hopes of the Labouring
Classes are bound up with the Prosperity of
the Classes who exercise Ability . . .237

II. Of the Ownership of Capital, as distinct from its

Employment by Ability . . . . 253

III. Of the Causes owing to which, and the Means by

which Labour participates in the Growing Pro-
ducts of Ability 273

IV. Of Socialism and Trade Unionism — the Extent

and Limitation of their Power in increasing the
Income of Labour . . . . .291

V. Of the enormous Encouragement to be derived
by Labour from a true View of the Situation ;
and of the Connection between the Interests of
the Labourer and Imperial Politics . . 315

BOOK I

THE DIVISIBLE WEALTH OF THE
UNITED KINGDOM

CHAPTER I

The Welfare of the Home, as the Logical End of
Government.

I WISH this book to be something which, when The subject
the subject of it is considered, the reader book, but
perhaps will think it cannot possibly be. For to do°withS
its subject — to describe it in the vague politics.
language of the day — is the labour question,
the social question, the social claims of the
masses ; and it is these claims and questions
as connected with practical politics. Their
connection with politics is close at the present
moment ; in the immediate future it is certain
to become much closer ; and yet my endeavour
will be to treat them in such a way that men
of the most opposite parties — the most pro-
gressive Radical and the most old-fashioned
Tory — may find this book equally in harmony

4 A GROUND OF AGREEMENT

BOOK i. with their sympathies, and equally useful and
acceptable from their respective points of
view.

But if the reader will consider the matter

CH I

of facts it further, he will see that my endeavour is not

deals with. ., . . , , . ,

necessarily so impracticable as it seems to be.
A very little reflection must be enough to
show anybody that many of the political
problems about which men differ most widely
are concerned with an order of truths which,
when once they have been examined properly,
are the same for all of us ; and that a pre-
liminary agreement with regard to them is
the only possible basis for any rational dis-
agreement. I will give one example — the
land-question. About no political problem is
x there more disagreement than about this ; and
yet there are many points in it, about which
men may indeed be ignorant, but about which,
except for ignorance, there cannot be any
controversy. Such for instance is the acreage
of the United Kingdom, the number of men
by whom the acres are owned, the respective
numbers of large and of small properties,
together with their respective rentals, and the
proportion which the national rent bears to

FOR ALL PARTIES 5

the national income. The truth about all BOOKI.
these points is very easily ascertained ; and
yet not one man in a hundred of those by as these not
whom the land-question is discussed, appears known;7

to possess the smallest accurate knowledge
of it. A curious instance of this ignorance
is to be found in the popular reception ac- f^ aume
corded some years ago to the theories of Mr. Parties:
Henry George. If Mr. George's reasonings
were correct as applied to this country, the
rental of our titled and untitled aristocracy
would be now about eight hundred millions :
and few of his admirers quarrelled with this
inference. But if they had only consulted
official records, and made themselves masters
of the real facts of the case, they would have
seen at once that this false and ludicrous
estimate was wrong by no less a sum than
seven hundred and seventy millions ; that the
eight hundred millions of Mr. George's fancy
were in reality not more than thirty ; and that
the rent, which according to him was two-thirds
of the national income, was not in reality more
than two and a quarter per cent of it. Now
here is a fact most damaging to the authority
of a certain theorist with whom many Radicals

6 FACTS AND PRINCIPLES

BOOK i. are no doubt in sympathy ; but it none the

CH. I.

less is a fact which any honest Radical is as
much concerned to know as is any honest
Tory, and which may easily supply the one
with as many arguments as the other. The
Tory may use it against the Radical rhetorician
who denounces the landlords as appropriating
the whole wealth of the country. The Radical
And it is may use it against the Tory who is defending
the advan- the House of Peers, and may ask why a class
pities to whose collective wealth is so small, should be
specially privileged to represent the interests
of property : whilst those who oppose protec-
tion may use it with equal force as showing
how the diffusion of property has been affected
by free trade.

Here is a fair sample, so far as particular
facts are concerned, of the order of truths with
which I propose to deal : and if I can deal
with them in the way they ought to be dealt
with, they will be as interesting — and many
will be as amusing — as they are practically
useful. It may indeed be said, without the
smallest exaggeration, that the salient facts
which underlie our social problems of to-day,
would, if properly presented, be to the general

WHICH ARE THE SAME FOR EVERYBODY 7

reader as stimulating and fresh as any novel BOOK r.
or book of travels, besides being as little open
to any mere party criticism.

But there are other truths, besides par- Besides
ticular facts, which I propose to urge on the this book8'
reader's attention also. There are general generaT
truths, general considerations, and principles : principles,
and these too, like the facts, will be found to dependent
have this same characteristic — that though ofparty-
many of them are not generally realised,
though many of them are often forgotten, and
though some of them are supposed to be the
possession of this or that party only, they do
but require to be fairly and clearly stated, to
command the assent of every reflecting mind,
and to show themselves as common points
from which, like diverging lines, all rational
politicians, whatever may be their differences,
must start.

The very first principle to which I must The pro-
call attention, and which forms a key to my with which
object throughout this entire book, will at menSrts
once be recognised by the reader as being of esXamPie of
this kind. The Eadical perhaps may regard
it as a mere truism ; but the most bigoted
Tory, on reflection, will not deny that it is

8 THE INCOME OF THE INDIVIDUAL

BOOK i. true. The great truth or principle of which

I speak is as follows.

The condi- The ultimate end of Government is to secure
private or provide for the greatest possible number, not
aVTthTend indeed happiness, as is often inaccurately said,
emmeniT Dut the external conditions that make happi-
ness possible. As for happiness, that must
come from ourselves, or at all events from
sources beyond the control of Governments.
But though no external conditions are sufficient
to make it come, there are many which are
sufficient to drive it or to keep it permanently
away ; and it is the end of all Government to
minimise conditions such as these. Now these
conditions, though their details vary in various
cases, are essentially alike in all. They are a
want of the necessaries, or a want of the
decencies of life, or an excessive difficulty in
obtaining them, or a recurring impossibility of
These con- doing so. They are conditions in fact which

ditions are

principally principally, though not entirely, result from

a question . .

of private an uncertain or an insufficient income. I he

ultimate duty of a Government is therefore

towards the incomes of the governed ; and the

The end of three chief tests of whether a Government is

mentis good or bad, are first the number of families

AS THE AIM AND TEST OF GOVERNMENT g

in receipt of sufficient incomes, secondly the BOOKI.

CH. I.

security with which the receipt of such — —
incomes can be counted on, and lastly the to secure
quality of the things which such incomes will fncomw^or

i the greatest

command. posssibie

Some people however — perhaps even some ™

view

Radicals — may be tempted to say that this is
putting the case too strongly, and is caricatur- nejria,jn_tlc'
ing the truth rather than fairly stating it. Patnotlc:
They may say that it excludes or degrades to
subordinate positions all the loftier ends both
of individual and of national life, such as
moral and mental culture, and the power and
greatness of the country : but in reality it does
nothing of the kind.

In the first place, with regard to moral and For income

-. . _ , ...... is necessary

mental culture, it these are realJy desired by for mental
the individual citizen, they will be included physical
amongst the things which his income will help
him to obtain : and an insufficient income
certainly tends to deprive him of them. If
he wishes to have books, he must have money
to buy books : and if he wishes his children to
be educated, there must be money to pay for
teaching them. In the second place, with
regard to the power and greatness of the

io PRIVATE INCOME AND THE EMPIRE

BOOK i. country, though for many reasons we are apt
— to forget the fact, it is the material welfare of

And the c

complete the home, or the maintenance of the domestic
the citizens income, that really gives to them the whole of
gives mean- their fundamental meaning. Our Empire and
patriotism, our power of defending it have a positive
money value, which affects the prosperity of
every class in the country : and though this
may not be the only ground on which our
Empire can be justified, it is the only ground
on which, considering what it costs, its main-
tenance can be justified in the eyes of a critical
democracy. Supposing it could be shown to
demonstration that the loss of our Empire and
our influence would do no injury to our trade,
or make one British household poorer, it is
impossible to suppose that the democracy of
Great Britain would continue for long, from
mere motives of sentiment, to sanction the ex-
pense, or submit to the anxiety and the danger,
which the maintenance of an Empire like our
own constantly and necessarily involves.
Further, But let us waive this argument, and admit

patriotism , . ,

will only that a sense of our country s greatness, quite

a country apart from any thought of our own material

advantage, enlarges and elevates the mind as

PA TRIO TISM A ND THE HOME 1 1

nothing else can — that to be proud of our BOOKI.
country and proud of ourselves as belonging — —
to it, to feel ourselves partners in the majesty its citizens
of the great battle-ship, in the menace of tions of a
Gibraltar stored with its sleeping thunders, or
the boastful challenge of the flag that floats in
a thousand climates, is a privilege which it is
easier to underrate than exaggerate. Let us
admit all this. But these large and ennobling
sentiments are all of them dependent on the
welfare of the home in this way : — they are
hardly possible for those whose home con-
ditions are miserable. Give a man comfort
in even the humblest cottage, and the glow of
patriotism may, and probably will, give an
added warmth to that which shines on him
from his fireside. But if his children are
crying for food, and he is shivering by a cold
chimney, he will not find much to excite him
in the knowledge that we govern India.
Thus, from whatever point of view we regard
the matter, the welfare of the home as secured
by a sufficient income is seen to be at once
the test and the end of Government ; and it
ceases to be the end of patriotism only when
it becomes the foundation of it.

12 CUPIDITY AS A MOTIVE IN POLITICS

BOOK i. Here, then, is the principle which I assume

CH I

throughout this volume. And now, I think

Cupidity, , , i • i • i T • i

therefore, that, having explained it thus, 1 may, without
desire for offence to either Tory or Kadical, venture to
incomers a condemn, as strongly as its stupidity deserves,
b^isToV the way in which politicians are at present so
KtereJt in often attacked for appealing to what is called
cs ' the cupidity of the poorer classes. Cupidity is
in itself the most general and legitimate desire
to which any politician or political party can
appeal. It is illegitimate only when it is
excited by illegitimate methods : and these
methods are of two obvious kinds. One is an
exaggeration of the advantages which are put
before the people as obtainable : the other is
the advocacy of a class of measures as means
to them, by which not even a part of them
could be, in reality, obtained. Everybody
must see that a cupidity which is excited
thus is one of the most dangerous elements
by which the prosperity of a country can
be threatened. But a cupidity which is
excited in the right way, which is con-
trolled by a knowledge of what wealth
really exists, and of the fundamental condi-
tions on which its distribution depends — is

THE RIGHT EDUCATION OF CUPIDITY 13

merely another name for spirit, energy, and BOOKI.

n • ^H° I<

intelligence.

. The aim of

My one aim then, in writing this book, is this book
to educate the cupidity of voters, no matter educate
what their party, by popularising knowledge
of this non-controversial kind. And such
knowledge will be found, as I have said
already, to be composed partly of particular
facts, and partly of general truths. We will
begin with the consideration of certain par-
ticular facts, which must, however, be prefaced
by a few general observations.

CHAPTER II

The Conditions involved in the idea of a Legislative
Redistribution of Wealth ; and the Necessary
Limitations of the Results.

AH men LET me then repeat that we start with assum-

ask of a. i /• -i •

Govern- ing cupidity as not only the general foundation,
either the but also as the inevitable, the natural, and
the mam- the right foundation, of the interest which
ordinary men of all classes take in politics.
We assume that where the ordinary man, of
whatever class or party, votes for a member of
Parliament, or supports any political measure,
he is primarily actuated by one of two hopes,
or both of them — the first being the hope of
securing the continuance of his present income,
the second being the hope of increasing it.
Now, to secure what they have already got is
the hope of all classes ; but to increase it by
legislation is the hope of the poorer only. It

CUPIDITY AND THE POORER CLASSES 15

is of course perfectly true that the rich as well BOOK i.

, . CH. II.

as the poor are anxious, as a rule, to increase
their incomes when they can ; but they expect
to do so by their own ability and enterprise, and
they look to legislation for merely such nega-
tive help as may be given by affording their
abilities fair play.

But with the poorer classes the case is The poor
entirely different. They look to legislation
for help of a direct and positive kind, which
may tend to increase their incomes, without
any new effort of their own : and not only do
they do this themselves, but the richer classes
sympathise with the desire that makes them do
so. It is, for instance, by no means amongst
the poorer classes only that the idea of
seizing on the land, without compensating the
owners, has found favour as a remedy for
distress and poverty generally. Owners of
every kind of property, except land, have been
found to advocate it ; whilst as to such vaguer
and less startling proposals, as the " restora-
tion of the labourer to the soil," the limitation
of the hours of labour, or the gradual acquire-
ment by the State of many of our larger
industries — the persistent way in which these

1 6 THE LIMITS OF SANE CUPIDITY

BOOK i. are being kept before the public, is due quite

CH. II. , -

— as much to men ol means as to poor men. It
The cupici- is then with the cupidity of the poorer classes
tMs^book that we are chiefly concerned to deal ; and the
deaisywith great question before us may briefly be put
cupidity of thus : By what sort of social legislation may
classes?" the incomes of the poorer classes — or, in other
words, the incomes of the great mass of the
community — be, in the first place, made more
constant ; and, in the second place, increased ?
The first But before proceeding to this inquiry,
there is a preliminary question to be disposed
°£ What is the maximum increase which
any conceivable legislation could conceivably

theoretic- secure f°r them out of the existing resources of
sibKr ^ie country ? Not only unscrupulous agitators,
them to j^t many conscientious reformers, speak of the

obtain ? *

For this is results to be hoped for from a better distribu-

much ex-

aggerated. tion of riches, in terms so exaggerated as to
have no relation to facts ; and ideas of the
wildest kind are very widely diffused as to the
degree of opulence which it would be possible
to secure for all. The consequence is that at
the present moment popular cupidity has no
rational standard. It will therefore be well,
before we go further, to reduce these ideas — I

amount by
circum-
stances.

AS FIXED BY THE TOTAL PRODUCTION 17

do not say to the limits which facts will BOOKI.

CH IT

warrant — but to the limits which facts set on
what is theoretically and conceivably pos-
sible.

Let me then call attention to the self- An ascer-
evident truth, that the largest income which
could possibly be secured for everybody, could foa
not be more than an equal share of the Circum-
actual gross income enjoyed by the entire
nation. Now it happens that we know with
substantial accuracy what the gross amount of
the income of the nation now is, and I will
presently show what is the utmost which each
individual could hope for from the most
successful attempt at a redistribution of
everything. But the mere pecuniary results And this

f i • r> i • i • i i i amount

ol a revolution 01 this kind are not the only would be
results of which we must take account. There Oniy under
are others which it will be well to glance at conditions,
before proceeding to our figures.

Though an equal division of wealth would, One of

which

as we soon shall see, bring a large addition would
to the income of a considerable majority of change the
the nation, the advantages which the re- character
cipients would gain from this addition, would °
be very different from the advantages which

1 8 UNFORESEEN RESULTS OF

BOOK i. an individual would gain now, from the same

annual sum coming to him from invested

capital. In other words, if wealth were

equally distributed, it would, from the very

necessity of the case, lose half the qualities

for which it is at present most coveted.

Were At present wealth suggests before all things

equally dis- what is commonly called "an independence"

nobody' — something on which a man can live inde-

pendently of his own exertions. But the
moment a whole nation possessed it in equal
quantities this power of giving an independence
would go from it suddenly and for ever. If
a workman who at present makes seventy
pounds a year, would receive, by an equal
division, an additional forty pounds, it is
indeed true that no additional work could be
entailed on him. The work which at present
gets him seventy pounds, would in that case
get him a hundred and ten. But he would
never be able, if he preferred leisure to wealth,
to forego the seventy pounds and live in idle-
ness on the forty pounds ; as he would be able
to do now if the additional forty pounds
were the interest of a legacy left him by his
maiden aunt. Unless he continued to work,

AN EQUAL DIVISION OF WEALTH 19

as he had worked hitherto, he would lose not BOOK i.
only the first sum, but the second.

This is self-evident, when we consider what
is the essence of such a situation, namely
that the position of everybody is identical.
For if everybody preferred to be idle, no wealth
could be produced at all. However great
nominally might be the value of our national
property, it is perfectly clear that everybody
could not live at leisure in it : and from the
very nature of the case, in a nation where all
are equal, what cannot be done by all, could
not be done by anybody. If, therefore, we Everyone
estimate the income possible for each in- to work as
dividual as an equal fraction of the present does
income of the nation, it must be remembered
that, to produce the total out of which these
fractions are to come, everybody would have
to work as hard as he does now. And more
than that, it would be the concern of all to see
that his share of work was not being shirked
by anybody. This is at present the concern
of the employer only : but under the con-
ditions we are now considering, everybody
would be directly interested in becoming his
neighbour's taskmaster.

now ;

20 CONTEMPORA RY A GIT A TOR ON SLA VER Y
BOOK i. These last considerations lead us to another

CH. II.

aspect of the subject, with which every in-
telligent voter should make himself thoroughly
familiar, and which every honest speaker would
force on the attention of his hearers. A large
number of agitators, who are either ignorant
or entirely reckless, but who nevertheless
possess considerable gifts of oratory, are
And be constantly endeavouring to associate, in the
umiert^e popular mind, the legitimate hope of obtaining
of theem- an increased income, with an insane hostility
hl°fsenowT to conditions which alone make such an
increase possible. These men l are accustomed
to declaim against the slavery of the working
classes, quite as much as against their in-
adequate rate of payment. By slavery they
mean what they call "enslavement to capital."
Capital means the implements and necessaries
of production. These, they argue, are no
longer owned by the workmen as they were in
former times : and thus the workers are no
longer their own masters. They must work

i Writers also from whom better things might have been
expected make use of the same foolish language. " The
proletarian, in accepting the highest bid, sells himself openly
into bondage " (Fabian Essays, p. 12).

WORKMEN AS THEIR OWN MASTERS 21

under the direction of those who can give them BOOK i.
the means of working; and this, they are — — '
urged to believe, reduces them to the condi-
tion of slaves.

Of course, in these representations there is a
certain amount of truth : but it is difficult to
conceive of anything more stupidly and more
wantonly misleading, than the actual meaning
which they are employed by the agitators to
convey. For that meaning is nothing else
than this — that under improved conditions, Nor could
when wealth is better distributed, the so-called hope to
slavery will disappear, the workers will be struments

their own masters again, and will each own,
as formerly, the implements and the materials y
of his work. But, as no one knows better than
the extreme socialists, and as any intelligent
man can see easily for himself, such a course
of events is not only not possible, but is the
exact reverse of that on which the progress
of the workers must depend. The wildest seif-con-
agitator admits, and the most ignorant agitator ofagitators,
knows, that the wealth of the modern world, that Sa
on the growth of which they insist, and mSna
which, for the very reason that its growth and that
has been so enormous, is declared by them s<

22 OWNERSHIP OF THE MEANS OF LABOUR

BOOK i. to offer so rich a prize to the workers,

CH. II.

— mainly owes its existence to improved con-

would J

make the ditions of production. Such persons know

w ork cr

free. also that of these conditions the chief have
been the development of machinery, the in-
creased subdivision of employments, and the
perfected co-operation of the workers. But
the development of machinery necessarily
means this — the transformation of (say) each
thousand old-fashioned implements into a
single vast modern one of a hundred times
their aggregate power : and it means that at
this single implement a thousand men shall
work. The increased subdivision of labour
means that no man shall make an entire thing,
but merely some small part of it; and
perfected co-operation is another name for
perfected discipline. It will be thus seen that
the conditions which the agitator calls those of
slavery are essential to the production of the
wealth which is to constitute the workers'
Theindus- heritage. It will be seen that the workers'
SpUne o"f n°Pe OI* bettering their own position is so far
woufdat( from depending on a recovery of any former
becmuchily freedom, that it involves yet further elabora-
harderfhan tion Q£ industrial discipline ; and puts the old

IMPOSSIBLE FOR MODERN WORKMAN 23

ownership of his own tools by the individual BOOK i.
further and further away into the region of CH' "'
dreams and impossibilities : and that no re- ^ate the
distribution of wealth would even tend to emPloyer-
bring it back again. The weaver of the last
century was the owner of his own loom : and
a great cotton -mill may now be owned by
one capitalist. But a co-operative cotton-mill
that was owned by all the workers, in the old
sense of the word would not be owned by any-
body. Could any one of these thousand or
more men say that any part of the mill was
his own personal property? Could he treat
a single bolt, or a brick, or a wheel, or a door-
nail, as he might have treated a loom left to
him in his cottage by his father ? Obviously
not. No part of the mill would be his own
private property, any more than a train start-
ing from Euston Station is the property of
any shareholder in the London and North-
Western Railway. His ownership would mean
merely that he was entitled to a share of the
profits, and that he had one vote out of a
thousand in electing the managers. But how-
ever the managers were elected, he would have
to obey their orders ; and their discipline

24 EQUALITY POSSIBLE ONLY UNDER
BOOK i. would be probably stricter than that of any

CH. II. J

private owner. Much more would this be the
case if the dream of the Socialist were fulfilled,
and if instead of each factory or business being
owned by its own workers, all the workers of
the country collectively owned all the busi-
nesses— all the machinery, all the raw materials,
and all the capital reserved for and spent in
wages. For though the capital of the country
would be owned by the workers nominally,
their use of it would have to be regulated by
a controlling body, namely the State. The
managers and the taskmasters would all be
State officials, and be armed with the powers
of the State to enforce discipline. The indi-
vidual under such an arrangement, might
gain in point of income ; but if he is foolish
enough to adopt the view of the agitator, and
regard himself as the slave to capital now, he
would be no less a slave to it were all capitals
amalgamated, and out of so many million
shares he himself were to own one.
For it must It is particularly desirable in this particular

always be _ . . . .

remem- place to nx the readers attention on this
the idea of aspect of the question, because it is inseparably
d?sterfbu- associated with the point we are preparing to

A UNIVERSAL WAGE-SYSTEM 25

consider — namely, the pecuniary position in BOOKI.
which the individual would be placed by an H'"'
equal division, were such possible, of the wealth
entire national income. For we must bear in
mind that not even in thought or theory is an
equal division of the national income possible,
unless all the products of the labour of every caPltallst-
citizen are in the first place taken by the State
as sole employer and capitalist, and are then
distributed as wages in equal portions. Under
no other conditions could equality be more
than momentary. If each worker himself sold
his own products to the consumer, — which he
could not do, because no one produces the
whole of anything, — the strong and industrious
would soon be richer than the idle ; and
the man with no children richer than the
man with ten. Inequality would have begun
again as soon as one day's work was over.
Equality demands, as the Socialists are well
aware, that all incomes shall be wages paid by
the State ; and it implies further, as we shall
presently have occasion to observe — that equal
wages shall be paid to all individuals, not
because they are equally productive, but be-
cause they are all equally human. When

26 EQUALITY AND UNIVERSAL LABOUR

BOOK i. therefore I speak, as I shall do presently, of
what each individual would receive, if wealth
were divided equally, I must be understood
as meaning that he would receive so much
from the State.
A redistri- Let us remember then that a redistribution

bution of- 11 ill •

wealth, if oi wealth would have in itself no tendency to
the incomes alter the existing conditions of the workers in
would ' any respect except that of wages only. It
labour of6 would not tend to relieve any man of a single
10 y' hour of labour, to give him any more freedom
The next in choosing the nature of his work or the

chapter

contains an method of it, or make him less liable to fines

examina-

tion of the or other punishments for disobedience or un-

income punctuality. His only gain, if any, would be

would a simple gain in money. Let us now proceed

ally reroit to deal with the pounds, shillings, and pence ;

eq°vmiadis- an(l see what is the utmost that this gain

SIT could come to.

country.

CHAPTER III

The Pecuniary Results to the Individual of an Equal
Division, first of the National Income, and secondly
of certain parts of it.

THE gross income of the United Kingdom — T

0 income of

the aggregate yearly amount received by the the united

, . . / Kingdom.

entire population — is computed to be in
round numbers some thirteen hundred million
pounds. But though this estimate may be
accepted as true under existing circumstances,
we should find it misleading as an estimate
of the amount available for distribution. So
far as it relates to the income of the poorer
classes, it would be indeed still trustworthy ;
but the income of the richer — which is the
total charged with income-tax — we should
find to be seriously exaggerated, as consider-
able sums are included in it which are
counted twice over. For instance, the fee

28 THE INCOME OF GREAT BRITAIN
BOOK i. of a great London doctor for attending a

pTT TJ*

patient in the South of France would be

The whole 7 7 T

Amount about twelve hundred pounds. Let us sup-
attributed . 1 -11 • 1

to the rich pose this to be paid by a patient whose
be available income is twelve thousand pounds. The
button. n~ doctor pays income-tax on his fee; the
patient pays income-tax on his entire in-
come ; and thus the whole sum charged with
income-tax is thirteen thousand two hundred
pounds. But if we came to distribute it, we
should find that there was twelve thousand
pounds only. And there are many other
cases of a precisely similar nature. According
to the calculations of Professor Leone Levi,
the total amount which was counted twice
over thus, amounted ten years ago to more
than a hundred million pounds.1 In order,
therefore, to arrive at the sum which we may
assume to be susceptible of distribution, it will
be necessary, therefore, to deduct at least as

1 According to Professor Leone Levi, the actual sum
would be one hundred and thirteen million pounds : but in
dealing with estimates such as these, in which absolute
accuracy is impossible, it is better, as well as more con-
venient, to use round numbers. More than nine-tenths of
this sum belongs to the income of the classes that pay income-
tax. Of the working-class income, not more than two per
cent is counted twice over, according to Professor Leone Levi.

DIVISION OF THE NATIONAL INCOME 29

i -, . /. i i • i • BOOK I.

much as this irom the sum which was just now CH. m.
mentioned of thirteen hundred million pounds.1 A certain
Accordingly the income of the country, if we "
estimate it with a view to dividing it, is in round
numbers, twelve hundred million pounds. estimated

And now let us glance at our problem in t(
its crudest and most rudimentary form, and This,
see what would be the share coming to each amongst
individual, if these millions were divided '™1

equally amongst the entire population. The
entire population of the United Kingdom head:
numbers a little over thirty-eight millions ;
so our division sum is simple. The share
of each individual would be about thirty-
two pounds. But this sort of equality in
distribution would satisfy nobody. It is not
worth talking about. For a quarter of the
population are children under ten years of
age,2 and nearly two-fifths are under fifteen :
and it would be absurd to assign to a baby
seeking a pap-bottle, or even to a boy — vora-

1 There is a general agreement amongst statisticians with
regard to these figures. Cf. Messrs Giffen, Mulhall, and
Leone Levi passim.

2 Out of any thousand inhabitants, two hundred and fifty-
eight are under ten years of age ; and three hundred and sixty-
six out of every thousand are under fifteen.

30 HOW TO DIVIDE THE INCOME EQUALLY

CH?HI.' ci°us as boys' appetites are — the same sum

But~differ- *^at would ^e assigned to a full-grown man

amiTes or woman- In OI"der to give our distribution

would even the semblance of rationality, the shares

require » '

different must be graduated according to the require-

amounts,

ments of age and sex. The sort of proportion

to each other which these graduated shares

should bear might possibly be open to some

unimportant dispute : but we cannot go far

wrong if we take for our guide the amount

of food which scientific authorities tell us is

required respectively by men, women, and

children ; together with the average proportion

which actually obtains at present, both between

their respective wages and the respective

The pro- costs of their maintenance. The result which

whfch^r^ we arrive at from these sources of information

ascertain- ^s substantially as follows, and every fresh

inquiry confirms it. For every pound which

is required or received by a man, fifteen

shillings does or should go to a woman, ten

shillings to a boy, nine shillings to a girl, and

four and sixpence to an infant.1

1 Statistics in support of the above result might be
indefinitely multiplied, both from European countries and
America. So far as food is concerned, scientific authorities

SHARES OF MEN, WOMEN, AND CHILDREN 31

So much, then, being admitted, we shall
make our calculations best by starting with
the family as our unit, and coming to the
individual afterwards. The average family
consists of four and a half persons ; and the
families in the United Kingdom number eight unit :
and a half millions. Tivelve hundred millions
— the sum we have to divide — would give each
family an income of a hundred and forty
pounds. From this, however, we should have
to deduct taxes ; and, since if all classes were
equal, all would have to be taxed equally, —
the amount due from each family would be
considerable. Public expenditure, if the State
directed everything, would of necessity be
larger than it is at present ; but even if we
assume that it would remain at its present
figure, each family would have to contribute
at least sixteen pounds.1 Therefore sixteen

tell us that if twenty represents the amount required by a man,
a woman will require fifteen, and a child eleven ; but the total
expenditures necessary are somewhat different in proportion.
1 The total imperial taxation in the United Kingdom is
about two pounds eight shillings per head ; and the total local
taxation is about one pound four shillings. Thus the two
together come to three pounds twelve shillings per head, which
for every family of four and a half persons gives a total of
sixteen pounds four shillings.

BOOK I.
CH. III.

32 THE MAXIMUM INCOME OF A BACHELOR
BOOK i. pounds must be deducted from the hundred

CH III

and forty pounds. Accordingly we have for
four and a half persons a net income of a
hundred and twenty-six pounds. Now these
persons would be found to consist on an
average of a man and his wife, a youth, a girl,
and a half of a baby, — for when we deal with
averages we must execute many judgments
like Solomon's, — and if we distribute the
income among them in the proportion I just
now indicated, the result we shall arrive at
And then will, in round numbers, be this. The man
arrive at will have fifty pounds, the woman thirty -six

the share 71 n ., 71^-1

of each pounds, the youth twenty-jive pounds, the girl
twenty-four pounds, and the half of the infant
five pounds. And now let us scrutinise the
result a little further, and see how it looks in
various familiar lights. An equal distribution
of the whole wealth of the country would give
every adult male about nineteen shillings
and sixpence a week, and every adult female
about fourteen shillings. These sums would,
however, be free of taxes; so in order to
compare them with the wages paid at present,
we must add to them two shillings and six-
pence and two shillings respectively, which will

SMALLNESS OF THE RESULT 33

raise them respectively to twenty-two shillings, BOOK i.
and to sixteen shillings : but a bachelor who is

, T P . T The niaxi-

earnmg the tormer sum now, or an unmarried mum
woman who is now earning the latter, would Ln°equai *
neither of them, under any scheme of equal
distribution conceivable, come in for a penny
of the plunder taken from the rich. They
already are receiving all that, on principles of
equality, they could claim.

The smallness of this result is likely to
startle anybody ; but none the less is it true :
and it is well to consider it carefully, because
the reason why it startles us requires to be
particularly noticed. Of the female population
of the country that is above fifteen years old,
the portion that works for wages is not so much
as a half ; * and of the married women that do
so, the portion is much smaller. The remainder
work, no doubt, quite as hard as the rest ; but
they work as wives and mothers ; and what-
ever money they have comes to them through
their husbands. Thus when the ordinary man
considers the question of income, he regards

1 The number of females over fifteen years of age is
about twelve millions. Those who work for wages number
less than five millions.

3

34 MAXIMUM INCOME OF

BOOK i. income as something which belongs exclusively
to the man, his wife and his children being
things which the man maintains as he pleases.
But the moment the principle of equality of
distribution is accepted, all such ideas as these
have to be rudely changed : for if all of us
have a claim to an equal share of wealth, just
as the common man's claim is as good as that
of the uncommon man, so the woman's claim
is as good as the claim of either ; and what-
ever her income might be under such con-
ditions, it would be hers in her own right,
not in that of anybody else. Accordingly it
happens that an equal distribution of wealth,
though it would increase the present income
of the ordinary working man's family, might
actually, so far as the head of the family was
concerned, have the paradoxical result of
making him feel that personally he was poorer
than before — not richer.1

1 Mr. Giffen's latest estimates show that not more than
twenty-three per cent of the wage-earners in this country earn
less than twenty shillings a week ; whilst seventy-seven per
cent earn this sum and upwards. Thirty-five per cent earn
from twenty shillings to twenty-jive shillings ; and forty-one
per cent earn more than twenty-five shillings. See evidence
given by Mr. Giffen before the Labour Commission, 7th
December 1892.

A MARRIED COUPLE 35

The man's personal share, then, would be BOOKI.
twenty-two shillings a week, and the woman's - — '
sixteen shillings; and they could increase est possible

. T . . •, . standard of

their income in no way except by marrying, living
As many of their expenses would be greatly repre-
diminished by being shared, they would by ^man '
this arrangement both be substantial gainers : ^th^t6
but if the principle of equality were properly chlldren-
carried out, they would gain very little further
by the appearance of children; for though
we must assume that a certain suitable sum
would be paid them by the State for the
maintenance of each child, that would have
to be spent for the child's benefit. We may,
therefore, say that the utmost results which
could possibly be secured to the individual
by a general confiscation and a general re-
distribution of wealth, would be represented
by the condition of a childless man and wife,
with thirty - eight shillings a week, which
they could spend entirely on themselves :
for all the wealth of the nation that was
not absorbed in supplying such incomes to
men and women who were childless, would
be absorbed in supporting the children of
those who had them ; thus merely equalising

CH. III.

36 PRACTICAL ABSURDITY OF AN

BOOK i. the conditions of large and of small families,
and enabling the couple with ten or a dozen
children to be personally as well off as the
couple with none. Could such a condition of
wellbeing be made universal, many of the
darkest evils of civilisation would no doubt
disappear : but it is well for a man who
imagines that the masses of this country are
kept by unjust laws out of the possession of
some enormous heritage, to see how limited
would be the result, if the laws were to give
them everything ; and to reflect that the
largest income that would thus be assigned to
any woman, would be less than the income
enjoyed at the present moment by multitudes
of unmarried girls who work in our Midland
mills — girls whose wages amount to seventeen
shillings a week, who pay their parents a
shilling a day for board, and who spend
the remainder, with a most charming taste,
on dress.

He will have to reflect also that such a
result as has been just described could be
produced only by an equality that would be
absolutely grotesque in its completeness — by
every male being treated as equal to every

EQUAL DIVISION OF INCOME 37

•

other male of the same age, and by every BOOKI.
female being treated similarly. The prime - — '
minister, the commander -in -chief, the most
important State official, would thus, if they
were unmarried, be poorer than many a factory-
girl is at present ; whilst if they were married,
they and their wives together would have but
four shillings a week more than is at present
earned by a mason, and six shillings a week
less than is earned by an overlooker in a
cotton-mill.

But an equality of this kind, from a practi- Absolute
cal point of view, is worth considering only as
a means of reducing it to an absurdity. Even
were it established to-morrow, it could not be
maintained for a month, owing to the diffi-
culty that would arise in connection with the
question of children : as unless a State official
checked the weekly bills of every parent,
parents inevitably would save out of their
children's allowances ; and those with many
children would be very soon founding fortunes.
And again it is obvious that different kinds of
occupation require from those engaged in them
unequal expenditures ; so that the inevitable
inequality of needs would make pecuniary

38 A COMPLETE RED1 'VISION OF PROPERTY

BOOK i. equality impossible. Indeed every practical
CH* Hi* . 1*1

— man in our own country owns this, however

AS the extreme his views ; as is evidenced by the

salaries .

asked for amounts which have been suggested by the

Members of

Parliament leaders of the Labour Party as a fit salary for
Labour a paid Member of Parliament. These amounts

Party

how. vary from three hundred pounds a year to
four hundred pounds ; so that the unmarried
Member of Parliament, in the opinion of
our most thoroughgoing democrats, deserves
an income from six to eight times as great
as the utmost income possible for the ordin-
ary unmarried man. And there are many
occupations which will, if this be admitted,
deserve to be paid on the same or on even a
higher scale. We may therefore take it for
granted that the most levelling politicians in
the country, with whom it is worth while to
reason as practical and influential men, would
spare those incomes not exceeding four hundred
pounds a year, and would probably increase the
number of those between that amount and a
hundred and fifty pounds. Now the total
amount of the incomes between these limits
is not far from two hundred million pounds :
so if this be deducted from the twelve hundred

ADVOCA TED B Y NOBOD Y 39

million pounds which we just now took as the BOOKI.
sum to be divided equally, the incomes of the - — '
people at large will be less by sixteen per cent
than the sums at which they were just now
estimated ; and the standard of average com-
fort will be represented by a childless man and
wife having thirty-one shillings and eightpence
instead of thirty-eight shillings a week.

We need not, however, dwell upon such General

redistribu-

details longer : lor there are tew people who tion, then,
conceive even a redistribution like this to be thought
possible ; and there would probably be fewer anySEng- y
still who would run the risk of attempting it,
if they realised how limited would be the
utmost results of it to themselves. My only
reason for dealing with these schemes at all
is that, whilst they are felt to be impossible as But it is
soon as they are considered closely, they are structiveto
yet the schemes which invariably suggest the theo-
themselves to the mind when first the idea of
any great social change is presented to it ; and
a knowledge of their theoretical results, though
it offers no indication of what may actually be
attainable, will sober our thoughts, and at the
same time stimulate them, by putting a distinct
and business-like limit to what is conceivable.

40 THE ATTACK ON

BOOK i. And for this reason, before I proceed

further, I shall ask the reader to consider a

are certain few more theoretical estimates. The popular

national " agitator, and those whose opinions are influ-

income the 111-1

- enccd by him, do not propose to seize upon

has all property ; they content themselves with
actually proposing to appropriate certain parts of it.
parts generally fixed upon are as follows :

if ffiand* — First and foremost comes the landed rental l
terestof the °^ ^e Countr7 — *ne incomes of the iniquitous
National landlords. Second comes the interest on the

Debt ;

(3) the National Debt; third, the profits of the railway

sums spent

on the companies ; and last, the sum that goes to

Monarchy.

support the Monarchy. All these annual sums
have been proposed as subjects of confiscation,
though the process may generally be disguised

1 The reader must observe that I speak of the rent of the
land, not of the land itself, as the subject of the above
calculation. I forbear to touch the question of any mere
change in the occupancy or administration of the knd, or
even of any scheme of nationalising the land by purchasing
it at its market price from the owners ; for by none of these
would the present owners be robbed pecuniarily, nor would
the nation pecuniarily gain, except in so far as new condi-
tions of tenure made agriculture more productive. All such
schemes are subjects of legitimate controversy, or, in other
words, are party questions ; and I therefore abstain from
touching them. I deal in the text with facts about which
there can be no controversy.

LANDED PROPERTY 41

under other names. Let us take each of these BOOK i.

CH. III.

separately, and see what the community at
large would gain by the appropriation of each, consider
And we will begin with the income of the land- nation
lords ; for not only is this the property which byconfts-n
is most frequently attacked, but it is the one above.*
from the division of which the largest results

0 Absurd

are expected. It is indeed part of the creed ideas as to

. . • » i *^e amount

of a certain type of politician that, if the of the
income of the landlords could be only divided rental

of the

amongst the people, all poverty would be country.
abolished, and the great problem solved.

In the minds of most of our extreme

reformers, excepting a few Socialists, the tkm°ofthe
income of the landlords figures as something the larger
limitless ; and the landlords themselves as the
representatives of all luxury. It is not difficult
to account for this. To any one who studies
the aspect of any of our rural landscapes, with
a mind at all occupied with the problem of the
redistribution of wealth, the things that will
strike his eye most and remain uppermost in
his mind, are the houses and parks and woods
belonging to the large landlords. Small
houses and cottages, though he might see a
hundred of them in a three-miles' drive, he

42 POPULAR IGNORANCE AS TO

BOOK i. would hardly notice ; but if in going from

CH. ni.

— York to London he caught glimpses of twelve
large castles, he would think that the whole of
the Great Northern Kailway was lined with
them. And from impressions derived thus
two beliefs have arisen — first that the word
" landlord " is synonymous with " large land-
lord " ; and secondly that large landlords own
most of the wealth of the kingdom. But ideas
like these, when we come to test them by
facts, are found to be ludicrous in their false-
hood. If we take the entire rental derived
from land, and compare it with the profits
derived from trade and capital, we shall find
that, so far as mere money is concerned, the
land offers the most insignificant, instead of
the most important question1 that could
engage us. Of the income of the nation, the
entire rental of the land does not amount to
more than one-thirteenth ; and during the last

1 It is also every year becoming more unimportant, in
diametrical contradiction of the theories of Mr. H. George.
This was pointed out some twelve years ago by Professor
Leone Levi, who showed that whereas in 1814 the incomes
of the landlord and farmer were fifty-six per cent of the total
assessed to income-tax, in 1851 they were thirty-seven per
cent, and in 1880 only twenty-four per cent. They are now
only sixteen per cent.

THE REAL RENTAL OF THE LANDLORDS 43

ten years it has fallen about thirteen -per

CH III

cent. The community could not possibly get
more than all of it ; and if all of it were
divided in the proportions we have already
contemplated, it would give each man about
twopence a day and each woman about three
half-pence.1

But the more important part of the matter The landed

-. , „,, , aristocracy

still remains to be noticed. Ihe popular idea are not the
is, as I just now said, that we should, in con- receivers.
fiscating the rental of the kingdom, be merely
robbing a handful of rich men, who would be
probably a deserving, and certainly an easy
prey. The facts of the case are, however,
singularly different. It is true, indeed, if we
reckon the land by area, that the large land-
lords own a preponderating part of it : but if
we reckon the land by value, the whole case
is reversed ; and we find that classes of men A muiti-

i •

who are supposed by the ordinary agitator to small pro-

i /-. T . . • i M prietors re-

have no fixed interest in the national soil at ceive twice
all, really draw from it a rental twice as great rent as the
as that of the class which is supposed to absorb landed
the whole. I will give the actual figures;2 a

1 See Local Government Board valuation of 1878.

2 Recent falls in rent make it impossible to give the

44 THE LANDED ARISTOCRACY

BOOK i. based upon official returns ; and in order that

CH. III.

the reader may know my exact meaning, let me
define the term that I have just used — namely
" large landlords " — as meaning owners of more
than a thousand acres. No one, according to
popular usage, would be called a large landlord,
who was not the owner of at least as much as
this ; indeed the large landlord, as denounced
by the ordinary agitator, is generally supposed
to be the owner of much more. Out of the
aggregate rental, then — that total sum which
would, if divided, give each man twopence a
day — what goes to the large landlords is now
considerably less than twenty -nine million
pounds. By far the larger part — namely
something like seventy million pounds — is
divided amongst nine hundred and fifty thou-
sand owners, of whose stake in the country

figures with actual precision ; but the returns in the New
Doomsday Book, taken together with subsequent official in-
formation, enable us to arrive at the substantial facts of the
case. In 1878 the rental of the owners of more than a
thousand acres was twenty-nine million pounds. The rental
of the rural owners of smaller estates was thirty-two million
pounds ; and the rental of small urban and suburban owners
was thirty -six million pounds. The suburban properties
averaged three and a half acres, the average rent being thirteen
pounds per acre.

MULTITUDE OF SMALL LANDOWNERS 45

the agitator seems totally unaware ; and in BOOK i.
order to give to each man the above daily
dividend, it would be necessary to rob all this
immense multitude whose rentals are, on an
average, seventy-six pounds a year.1 Suppos-
ing, then, this nation of smaller landlords to

1 According to the Local Government Report of 1878,
the rental of all the properties over five hundred acres averaged
thirty-six shillings an acre ; that of properties between fifty
and a hundred acres, forty-eight shillings an acre ; and that of
properties between ten and fifty acres, a hundred and sixteen
shillings an acre. In Scotland, the rental of properties over
five hundred acres averaged nine shillings an acre : that of
properties between ten and fifty acres, four hundred and thirteen
shillings. With regard to the value of properties under ten
acres, the following Scotch statistics are interesting. Four-
fifths of the ground rental of Edinburgh is taken by owners
of less than one acre, the rental of such owners being on an
average ninety -nine pounds. Three-fourths of the ground
rental of Glasgow is taken by owners of similar plots of
ground ; only there the rental of such owners is a hundred
and seventy-one pounds. In the municipal borough of Kil-
marnock, land owned in plots of less than an acre lets per
acre at thirty-two pounds. The land of the few men who own
larger plots lets for not more than twenty pounds. Each one
of the eleven thousand men who own collectively four-fifths
of Edinburgh, has in point of money as nmch stake in the
soil as though he were the owner in Sutherland of tico
thousand acres : and each one of the ten thousand men who
own collectively three-fourths of Glasgow, has as much stake
in the soil as though he were the owner in Sutherland of
three thousand four hundred acres.

46 OWNERS OF RAILWAY SHARES & CONSOLS

BOOK i. be spared, and our robbery confined to peers
CH. m.

and to country gentlemen, the sum to be dealt

The entire i i i i •

rental of with would DQ less than twenty-nine million
aristocracy pounds ; and out of the ruin of every park,
that its manor, and castle in the country, each adult
tlon would male would receive less than three -farthings

benefit no j -i

one. daily.

were the And now let us turn to the National Debt

Debt°and and to the railways. The entire interest of

the one and the entire profits of the other,
would, if divided equally amongst the popula-
te*6" tion> give results a little, but only a little,
larger than the rental of the large landlords.
But here again, if the poorer classes were spared,
and the richer investors alone were singled out
for attack, the small dividend of perhaps one
penny for each man daily, would be diminished
to a sum yet more insignificant. How true
this is may be seen from the following figures
relating to the National Debt. Out of the
two hundred and thirty-six thousand persons
who held consols in 1880, two hundred and
sixteen thousand, or more than nine-tenths of
the whole, derived from their investments less
than ninety pounds a year ; whilst nearly half
of the whole derived less than fifteen pounds.

INAPPRECIABLE COST OF THE MONARCHY 47

And lastly, let us consider the Monarchy, BOOKI.

. . . CH. III.

with all its pomp and circumstance, the —

-,,.,. The Mon-

mamtenance of which is constantly represented archy costs

•1 • 1 1 1 T

as a burden seriously pressing on the shoulders sum, that
of the working-class. I am not arguing that would be
in itself a Monarchy is better than a Eepublic. for its
I am considering nothing but its cost in a
money to the nation. Let us see then what
its maintenance actually costs each of us, and
how much each of us might conceivably gain
by its abolition. The total cost of the Mon-
archy is about six hundred thousand pounds
a year ; but ingenious Radicals have not
infrequently argued that virtually, though in-
directly, it costs as much as a million pounds.
Let us take then this latter sum, and divide
it amongst thirty-eight million people. What
does it come to a head ? It comes to some-
thing less than sixpence halfpenny a year.
It costs each individual less to maintain the
Queen than it would cost him to drink her
health in a couple of pots of porter. The
price of these pots is the utmost he could
gain by the abolition of the Monarchy.
But does any one think that the individual
would gain so much — or indeed, gain any-

48 FORCIBLE REDISTRIBUTION IMPOSSIBLE

BOOK i. thing ? If he does, he is singularly sanguine.

CH. m.

— Let him turn to countries that are under a
Eepublican government ; and he will find that
elected Presidents are apt to cost more than
Queens.

AH such All these schemes, then, for attacking

property as it exists, for confiscating and re-
distributing by some forcible process of legis-

accountyo°fn ^ion the whole or any part of the existing
national income, are either obviously impracti-

raStf cable, or their result would be insignificant.
Their utmost result indeed would not place
any of the workers in so good a position as is
at present occupied by many of them. This
is evident from what has been seen already.

But also on But there is another reason which renders such

account of -, .-,, />

a far deeper schemes illusory — a . iar more important one
whtch'the than any I have yet touched upon, and of a
problem far more fundamental kind. We will consider

depends. ^-g JQ ^g nex£ cnapter ; and we shall find,
when we have done so, that it has brought us
to the real heart of the question.

CHAPTER IV

The Nature of the National Wealth : first, of the
National Capital ; second, of the National Income.
Neither of these is susceptible of Arbitrary
Division.

WE have just seen how disappointing, to those Aiegisia-
even who would gain most by it, would be the sion of the

, , . . . /> i -i national in-

results of an equal division of the national come is not
income of this country, and how intolerable to appointing
all would be the general conditions involved in reticai re-
it. In doing this, we have of course adopted, practically

_£• ,•> -i , • i • i impossible,

lor arguments sake, an assumption which
underlies all popular ideas of such a process ;
namely, that if a Government were only strong
enough and possessed the requisite will, it could
deal with the national income in any way that
might be desired ; or, in other words, that the
national income is something that could be
divided and distributed, as an enormous heap

4

50 DIFFERENCE BETWEEN

BOOK i. of sovereigns could, according to the will of

CH IV

any one who had them under his fingers. I am
now going to show that this assumption is
entirely false, and that even were it desirable
theoretically that the national income should
be redivided, it is not susceptible of any such
arbitrary division.

AS win To those who are unaccustomed to reflecting

m this on economic problems, and who more or less

consciously associate the qualities of wealth

with those of the money in whose terms its

amount is stated, I cannot introduce this

important subject better than by calling their

attention to the few following facts, which,

simple and accessible as they are, are not

generally known.

wealth is The capital value of the wealth of the

utterly un- 7 , . .

like money United Kingdom is estimated at something
divisible like ten thousand million pounds; but the

qualities. . .

entire amount ol sovereigns and shillings in
the country does not exceed a hundred and
forty -four million pounds, nor that of the
uncoined bullion, a hundred and twenty -two
million pounds. That is to say, for every
nominal ten thousand sovereigns there does
not exist in reality more than two hundred

WEAL TH AND MONE Y 5 1

and twenty -six. Were this sum divided BOOKI.

CH TV

amongst the population equally, it would give
every one a share of exactly seven pounds.
Again, this country produces every year
wealth which we express by calling it thirteen
hundred million pounds. The amount of The money
gold and silver produced annually by the united

whole world is hardly so much as thirty-eight
million pounds. If the whole of this were fraction of
appropriated by the United Kingdom, it its wealth<
would give annually to each inhabitant only
ten new shillings and a single new half-
sovereign. The United Kingdom, however,
gets annually but a tenth of the world's
money, so its annual share in reality is not
so much as four million pounds. Accordingly,
that vast volume of wealth which we express
by calling it thirteen hundred million pounds,
has but four million pounds of fresh money
year by year to correspond to it. That is
to say, there is only one new sovereign for
every new nominal sum of three hundred
and twenty-Jive.

Wealth as a whole, therefore, is something The nature
so totally distinct from money that there is no
ground for presuming it to be divisible in the

52 WEALTH AS A WHOLE

BOOK i. same way. What is wealth, then, in a country
like our own ? To some people this will seem

ccivcd by

most a superfluous question. They will say that
every one knows what wealth is by experience
— by the experience of possessing it, or by the
experience of wanting it. And in a certain
sense this is true, but not in any sense that
concerns us here. In precisely the same sense
every one knows what health is ; but that is
very different from knowing on what health
depends ; and to know the effects of wealth on
our own existence is very different from know-
ing the nature of the thing that causes them.
Indeed, as a matter of fact, what wealth really
consists of is a thing which very few people are
ever at the trouble to realise ; and nothing
shows that such is the case more clearly than
the false and misleading images which are
AS we see commonly used to represent it. The most
metaphors familiar of these are : "a treasure," " a store,"
describe it "a hoard," or, as the Americans say, "a pile."
Now any one of these images is not only not
literally true, but embodies and expresses a
mischievous and misleading falsehood. It
represents wealth as something which could be
carried off and divided — as a kind of plunder

NOT DIVISIBLE LIKE MONEY 53

which might be seized by a conquering army. BOOK i.
But the truth is, that the amount of existing
wealth which can be accurately described, or
could be possibly treated in this way, is, in a
country like ours, a very insignificant portion ;
and, were social conditions revolutionised to
any serious degree, much of that portion
would lose its value and cease to be wealth
at all.

Let us take, for instance, some palatial house Many kinds
in London, which catches the public gaze as a thaTare

n -I.-, 111 i considered

monument 01 wealth and splendour ; and we typical

will suppose that a mob of five hundred people

are incited to plunder it by a leader who valueless if

informs them that its contents are worth d™lded:

two hundred thousand pounds. Assuming
that estimate to be correct, would it mean and lts

contents.

that of these five hundred people each would
get a portion to him worth four hundred
pounds? Let us see what would really
happen. They would find enough wine,
perhaps, to keep them all drunk for a
week ; enough food to feed thirty of them
for a day ; and sheets and blankets for
possibly thirty beds. But this would not
account for many thousands out of the

54 MORE LUXURIOUS FORMS OF WEALTH
BOOK i. two hundred thousand pounds. The bulk of

CH IV

that sum would be made up — how ? A
hundred thousand pounds would be probably
represented by some hundred and fifty pictures,
and the rest by rare furniture, china, and
works of art. Now all these things to the
pillagers would be absolutely devoid of value ;
for if such pillage were general there would
be nobody left to buy them ; and they would
in themselves give the pillagers no pleasure.
One can imagine the feelings of a man who,
expecting four hundred pounds, found himself
presented with an unsaleable Sevres broth-
basin, or a picture of a Dutch burgomaster ; or
of five such men if for their share they were
given a buhl cabinet between them. We may
be quite certain that the broth-basin would be
at once broken in anger ; the cabinet would
be tossed up for, and probably used as a
rabbit-hutch ; and the men as a body would
endeavour to make up for their disappoint-
ment by ducking or lynching the leader
who had managed to make such fools of
them.

wealth, as And now let us consider the wealth of the
even less kingdom as a whole. Much as the bulk of it

INCAPABLE OF DIVISION 55

differs from the contents of a house of this BOOK i.

CH. IV.

kind, it would, if seized on in any forcible

. .. susceptible

way, prove even more disappointing and of division.
elusive.

We may consider it under two aspects, wealth, as

a whole,

We may consider it as so much annual income, has two

• aspects :

or else as so much capital. In the last chapter that of

. . . capital, and

we were considering it as so much income, that of
and presently we shall be doing so again.
But as capital may possibly strike the imagin-
ation of many as something more tangible
and easily seized, and likely to yield, if re-
distributed, more satisfactory results, we will wewiii
see first of what items the estimated capital of Sider the
this country is composed. To do so will not capital
only be instructive : it will also be curious
and amusing.

As I said just now, its value, expressed in This capital
money, is according to the latest authorities not of
about ten thousand 'million pounds.'1 As E
actual money, however, forms so minute a
portion of this, — the reader will see that it is
hardly more than one -fortieth, — we may, for

1 This is Mr. Giffen's estimate. Mr. Mulhall, who has
made independent calculations, does not differ from Mr.
Giffen by more than five per cent.

56 THE WEALTH OF GREAT BRITAIN

BOOK i. our present purpose, pass it entirely over ;

and our concern will be solely with the things

for which our millions are a mere expression.

But of three It will be found that these things divide

things': °the themselves into three classes. The first

comprising consists of things which, from their very

susceptible nature, are not susceptible of any forcible

division ; division at ajj . ^he second consists of things

which are susceptible of division only by a
process of physically destroying them and
pulling them into pieces ; and each of these
two classes, in point of value, represents,
roughly speaking, nearly a quarter of the total.
The third class alone, which represents little
more than a half, consists of things which,
even theoretically, could be divided without
being destroyed.
The third We will consider this third class first, which

class com- „ • - . ...

prising aii represents in the estimates of statisticians
things that five thousand seven hundred million pounds.
divided The principal things comprised in it are land,
destroying houses, furniture, works of art, clothing,
forming"" merchandise, provisions, and live-stock ; and
ofthe total. sucn commodities in general as change hands
over the shopman's counter, or in the market.1

1 General merchandise is estimated by Mr. Mulhall at

CONSIDERED AS CAPITAL 57

Of these items, by far the largest is houses, BOOKI.
which make up a quarter of the capital value
of the country, or two thousand Jive hundred
million pounds. But more than half this
sum stands for houses which are much
above the average in size, and which do
not form more than an eighth part of the
whole ; and were they apportioned to a new
class of occupants, they would lose at least
three-fourths of their present estimated value.
So too with regard to furniture and works of
art, a large part of their estimated value
would, as we have seen already, disappear in
distribution likewise : and their estimated
value is about a tenth of the whole we are
now considering. Land, of course, can, at all
events in theory, be divided with far greater

three hundred and forty -three million pounds. For every
hundred inhabitants in the year 1877 there were five horses,
twenty-eight cows, seventy -six sheep, and ten pigs. In 1881
there were in Great Britain five million four hundred and
seventy-five thousand houses. The rent of eighty -seven per
cent of these was under thirty pounds a year, and the rental
of more than a half averaged only ten pounds. The total
house -rental of Great Britain in that year was one hundred
and fourteen million pounds; and the aggregate total of
houses over thirty pounds annual value was sixty million
pounds ; though in point of numher these houses were only
thirteen per cent of the whole.

58 THE ELEMENTS WHICH COMPOSE

BOOK i. advantage ; and counts in the estimates as
fifteen hundred million pounds — or some-
thing under a sixth of the whole. Merchan-
dise, provisions, and movable goods in general
can be divided yet more readily ; and so one
would think could live-stock, though this is
hardly so in reality : but of the whole these
three last items form little more than a
twentieth.
The results And now, supposing all these divisible

of dividing , n . . ..

these things to be divided, let us see what the
ridiculous, capital would look like which would be allotted
to each individual. Each individual would
find himself possessed of a lodging of some
sort, together with clothes and furniture worth
about eight pounds. He would have about
eight pounds' worth of provisions and miscel-
laneous movables, and a ring, a pin, or a
brooch, worth about three pounds ten shillings.
He would also be the proprietor of one acre
of land, which would necessarily in many
cases be miles away from his dwelling,
whilst as to stocking his acre, he would be
met by the following difficulty. He would
find himself entitled to the twentieth part
of a horse, to two -thirds of a sheep, the

THE NATIONAL CAPITAL 59

fourth part of a cow, and the tenth part of BOOK i.

CH. IV.

a pig.

Such then would be the result to the in-
dividual of dividing the whole of our capital
that could be divided without destroying it.

This is, as we said, a little more than half The second

c^ass °^
of the total ; and now let us turn to the things,

-, , . . . , , comprising

two other quarters ; beginning with the the
things which could be indeed divided, but capital,
which would obviously be destroyed in the be divided
process. Their estimated value is more than destroying
two thousand million pounds: half of which t]
sum is represented by the railways and ship-
ping of the kingdom ; six hundred million
pounds, by gasworks and the machinery in
our factories ; and the rest, by roads and
streets and public works and buildings. These, The

i •TIC T • • remaining

it is obvious, are not suitable tor division ; class of

and still less divisible are the things in the
class that still remains. For of their total ataii!1
value, which amounts to some two thousand
Jive hundred million pounds, more than a
thousand million pounds, according to Mr.
Giffen, represent the good -will of various
professions of business ; and the whole of the
remainder — nearly fifteen hundred million

60 L UDICRO US RES UL TS

BOOK i. pounds — represents nothing that is in the
United Kingdom at all, but merely legal
claims on the part of particular British
subjects to a share in the proceeds of enter-
prise in other countries.

This last class consists of things which are
merely rights and advantages secured by law,
and dependent on existing social conditions ;
and it can be easily understood how they
would disappear under any attempt to seize
them. But the remaining three quarters of
our capital consists of material things; and
what we have seen with regard to them may
strike many people as incredible ; for the
moment we imagine them violently seized
and distributed, they seem to dwindle and
shrivel up ; and the share of each individual
suggests to one's mind nothing but a series of
ludicrous pictures — pictures of men whose
heritage in all this unimaginable wealth is an
acre of ground, two wheels of a steam-engine,
a bedroom, a pearl pin, and the tenth part of
a pig.

Capital has The explanation, however, of this result is
pt to be found in the recognition of an exceed-
; mgty simple fact : that the capital of a country

OF AN EQUAL DIVISION OF CAPITAL 61

is of hardly any value at all, and is, as capital, BOOK i.
of no value at all, when regarded merely as — '
an aggregate of material things, and not as
material things made living by their connec-
tion with life. The land, which is worth
fifteen hundred million pounds, depends for
its value on the application of human labour
to it, and the profitable application of labour
depends on skill and intelligence. The value
of the houses depends on our means of living
in them — depends not on themselves, but on
the way in which they are inhabited. What
are railways or steamships, regarded as dead
matter, or all the machinery belonging to
all the manufacturing companies ? Nothing.
They are no more wealth than a decomposing
corpse is a man. They become wealth only
when life fills them with movement by a
power which, like all vital processes, is one of in-
finite complexity : when multitudes are massed
in this or in that spot, or diffused sparsely
over this or that district ; when trains move at
appropriate seasons, and coal finds its way from
the mine to the engine-furnace. The only parts
of the capital in existence at any given moment,
which deserve the name of capital as mere

62 DIVISION OF INCOME, NOT OF CAPITAL
BOOK i. material things, are the stores of food, fuel,

CH. IV. -ill- ... , ,

— and clothing existing in granaries, shops, and
elsewhere ; and not only is the value of these
proportionately small, but, if not renewed
constantly, they would in a few weeks be
exhausted.

And it It is plain then that, under the complicated

system of production to which the wealth of
3 the modern world is due, an equal division of

tnbuted. .^ cap^ai Of a country like our own is not
the way to secure an equal division of wealth.
The only thing that could conceivably be

income is divided is income. If, however, it is true that

all that . , -i ' -i • , • . . ,

could con- capital is, as we nave seen it is, in its very

nature living, and ceases to be itself the
led' moment that life goes out of it, still more
emphatically must the same thing be said of
income, for the sake of producing which
capital is alone accumulated. Agitators talk
of the national income as if it were a dead
tree which a statesman like Mr. Gladstone
could cut into chips and distribute. It is not
like a dead tree ; it is like the living column of
a fountain, of which every particle is in con-
stant movement, and of which the substance is
never for two minutes the same.

ALONE WORTH CONSIDERING 63

Let us examine the details of this income, BOOK *•

CH. IV.

and the truth of what has been said will be —

The

apparent. The total amount, as we have national

7 7 -77 • income

seen, is estimated at thirteen hundred million consists of
pounds ; it is not, however, made up of sove- more than

f ,-,, f , . i . thenational

reigns, but 01 things ol which sovereigns are capital
nothing more than the measure. The true Itco'nsistg
income of the nation and the true income of of other

things, or

the individual consist alike of things which rishts to

other

are actually consumed or enjoyed; or of legal things;
rights to such things which are accumulated
for future exercise. Of these last, which, in
other words, are savings, and are estimated
to amount to a hundred and thirty million
pounds annually, we need not speak here, except
to deduct them from the total spent. The total
is thus reduced to eleven hundred and seventy
million pounds — or to things actually con-
sumed or enjoyed, which are valued at that
figure. Now what are these things ? That is Namely, of
our present question. By far the larger part goods,
of them comes under the following heads : goods, Ind
Food, Clothing, Lodging, Fuel and Lighting, s<
the attendance of Servants, the Defence of the
Country and Empire, and the Maintenance of
Law and Order. These together represent

CH. IV.

64 ELEMENTS WHICH COMPOSE

BOOK i. about eight hundred million pounds. Of the
remaining three hundred and seventy million
pounds, about a third is represented by the
transport of goods and travelling ; and not
much more than a quarter of the total income,
or about two hundred and seventy million
pounds, by new furniture, pictures, books,
plate, and other miscellaneous articles. The
furniture produced annually counts for some-
thing like forty million pounds; and the
new plate for not more than Jive hundred
thousand pounds.

And now let us examine these things from
certain different points of view, and see how in
each case they group themselves into different
classes.

In the first place, they may be classified
thus : into things that are wealth because
they are consumed, things that are wealth
because they are owned, and things that are
wealth because they are used or occupied.
Under the first heading come food, clothing,
lighting, and fuel ; under the second, movable
chattels ; and under the third, the occupation
of houses,1 the services of domestics, the

1 This classification of houses may perhaps be objected to ;

THE NATIONAL INCOME 65

carrying of letters by the Post Office, transport BOOK i.

CH IV

and travelling, and the defences and adminis-
tration of the country. In other words,
the first class consists of new perishable
goods, the second of new durable goods,
and the third not of goods at all, but of
services and uses. The relative amounts
of value of the three will be shown with
sufficient accuracy by the following rough
estimates.

Of a total of eleven hundred and seventy
million pounds, perishable goods count for
jive hundred and twenty million pounds,
durable goods and chattels for two hundred

but from the above point of view it is correct. Houses
represent an annual income of one hundred and thirty-five
million pounds. Not more than thirty-five million pounds are
spent annually in building new houses ; whilst the whole
are counted as representing a new one hundred million
pounds every year. It is plain, therefore, that if we
estimate the entire annual value as above, the sum in question
stands not for the houses, but for the use of them. Even more
clearly does the same reasoning apply to railways and
shipping. Whether we send goods by these or are conveyed
by them ourselves, all that we get from them is the mere
service of transport. On transport and travelling by railway
about seventy million pounds are spent annually : by ship
about thirty million pounds; by trams about two million
pounds.

5

66 MATERIAL GOODS AND SERVICES

BOOK i. and fifty million pounds, and services and
uses for four hundred million pounds. Thus,
less than a quarter of what we call the national
income consists of material things which we
can keep and collect about us ; little less than
half consists of material things which are only
produced to perish, and perish almost as fast
as they are made ; and more than a third
consists of actions and services which are
not material at all, and pass away and renew
themselves even faster than food and fuel.
A large This is how the national income appears,

part of the „ . , „ T

nationai: as seen from one point of view. Let us change

consists our ground, and see how it appears to us from

that arf another. We shall see the uses and the

ted' services; — to the value of four hundred million

pounds — still grouped apart as before. But

the remaining elements, representing nearly

eight hundred million pounds, and consisting

of durable and perishable material things,

we shall see dividing itself in an entirely

new way — into material things made at

home, and material things imported. We

shall see that the imported things come to

very nearly half ; * and we shall see further that

1 The total annual imports are about four hundred and

HOME-MADE GOODS AND IMPORTS 67

amongst these imported things food forms BOOK i.
incomparably the largest item. But the sig-
nificance of this fact is not fully apparent till
we consider what is the total amount of food
consumed by us ; and when we do that, we
shall see that, exclusive of alcoholic drinks,
actually more than half come to us from other
countries.1 The reader perhaps may think
that this imported portion consists largely of
luxuries, which, on occasion, we could do
without. If he does think so, let him con-
fine his attention to those articles which
are most necessary, and most universally
consumed — namely bread, meat, tea, coffee, and
sugar — and he will see that our imports are to Most of
our home produce as ninety to seventy-three, imported.
If we strike out the last three, our position
is still more startling ; 2 and most startling if

twenty million pounds. The amount retained for home
consumption is about three hundred and sixty-five million
pounds.

1 The approximate value of the food consumed annually
in the United Kingdom (exclusive of alcoholic drinks) is
two hundred and ninety million pounds. The total value of
food imported is over one hundred and fifty million pounds.

2 The number of persons fed on home-grown meat was
twenty-three millions one hundred thousand. The number fed
on imported meat was fourteen millions seven hundred thousand.

68 TWO-THIRDS OF THE POPULATION

BOOK i. we confine ourselves to the prime necessary—

CH IV

bread. The imported wheat is to the home-
grown wheat as twenty-six to twelve : that is
to say, of the population of this kingdom
twenty-six millions subsist on wheat that is
imported, and only twelve millions on wheat
that is grown at home ; or, to put the matter
in a slightly different way, we all subsist on
imported wheat for eight months of the year.
Thus the And now let the reader reflect on what
comers i" all this means. It means that of the
Infinite*0 material part of the national income half
consists, not of goods which we ourselves
produce, but of foreign goods which are
exchanged for them ; and are exchanged for
them only because, by means of the most
far-reaching knowledge, and the most delicate
adaptation of skill, we are able to produce
goods fitted to the wants and tastes of distant
nations and communities, many of which are
to most of us hardly even known by name.
On every workman's breakfast-table is a meet-
ing of all the continents and of all the zones ;

In other words, the number of persons who subsist on im-
ported meat now is about equal to the entire population of
the United Kingdom in 1801.

DEPENDENT ON IMPORTED FOOD 69

and they are united there by a thousand BOOKI.

CH. IV.

processes that never pause for a moment, —
and thoughts and energies that never for a
moment sleep.

A consideration of these facts will be its amount

also varies

enough to bring home to anybody the accuracy owing to

f ' 'I t I.' 1, T J '

oi the simile ol which 1 made use just now, com-

i 11- r- plicated

when 1 compared the income ol the nation to causes,
the column thrown up by a fountain. He
will see how, like such a column, it is a
constant stream of particles, taking its motion
from a variety of complicated forces, and how
it is a phenomenon of force quite as much as a
phenomenon of matter. He will see that it is
a living thing, not a dead thing : and that it
can no more be distributed by any mechanical
division of it, than the labour of a man can be
distributed by cutting his limbs to pieces.

This simile of the fountain, though accurate,
is, like most similes, incomplete. It will, how-
ever, serve to introduce us to one peculiarity
more by which our national income is dis-
tinguished, and which has an even greater
significance than any we have yet dealt with.

In figuring the national income as the water
thrown up by a fountain, we of course suppose

70 VARIATION OF THE NATIONAL INCOME
BOOK i. its estimated amount or value to be represented

CH rv

by the volume of the water and the height to
which it is thrown. What I am anxious now
to impress on the attention of the reader is
that the height and volume of our national
fountain of riches are never quite the same
from one year to another ; whilst we need not
extend our view beyond the limits of one
generation to see that they have varied in the
most astonishing manner. The height and
volume of the fountain are now very nearly
double what they were when Mr. Gladstone
was in Lord Aberdeen's Ministry.1
which are Some readers will perhaps be tempted to
pendent of say that in this there is nothing wonderful, for
of popuia- it is due to the increase of population. But
the increase of population has nothing to do
with the matter. It cannot have anything to
do with what I am now stating. For when I
say that within a certain period the income of
the nation has doubled itself, I mean that it
has doubled itself in proportion to the popula-
tion ; so that, no matter how many more

1 From the year 1843 to 1851, the annual income of the
nation averaged jive hundred and fifteen million pounds,
according to the calculations of Messrs. Leone Levi, Dudley
Baxter, Mulhall, and Giffen.

RELA TIVEL Y TO THE POPULA TION 7 i

millions of people there may be in the country BOOK i.
now than there were at the beginning of the
period in question, there is annually produced
for each million of people now nearly twice
the income that was produced for each million
of people then. Or in other words, an equal
division now would give each man nearly
double the amount that it would have given
him when Mr. Gladstone was beginning to be
middle-aged.

But we must not be content with comparing AS we may
our national income with itself. Let us com-
pare it also with the incomes of other countries ;
and let it in all cases be understood that the ^ ^com
comparison is between the income as related to °
the respective populations, and not between
the absolute totals. We will begin with
France. It is estimated that, within the last
hundred and ten years, the income of France
has, relatively to the population, increased more
than fourfold. A division of the income in
1780 would have given six pounds a head to
everybody : a similar division now would give
everybody twenty -seven pounds. And yet the
income of France, after all this rapid growth,
is to-day twenty-one per cent less than that

72 INCOMES OF OTHER COUNTRIES

BOOK i. of the United Kingdom. Other comparisons

CH. IV.

— we shall find even more striking. Relatively
to the respective populations, the income of
the United Kingdom exceeds that of Norway
in the proportion of thirty -four to twenty;
that of Switzerland, in the proportion of thirty*
four to nineteen; that of Italy, in the pro-
portion of thirty -four to twelve ; and that of
Russia, in the proportion of thirty-four to
eleven. The comparison with Italy and Russia
brings to light a remarkable fact. Were all
the property of the upper classes in those
countries confiscated, and the entire incomes
distributed in equal shares, the share of each
Russian would be fifty per cent less, and of
each Italian forty per cent less than what each
inhabitant of the United Kingdom would
receive from a division of the income of its
wage-earning classes only.

We find, therefore, that if we take equal
populations of men, — populations, let us say,
of a million men each, — either belonging to the
same nation at different dates, or to different
civilised nations at the same date, that the in-
comes produced by no two of them reach to
the same amount ; but that, on the contrary,

COMPARED WITH THAT OF OUR OWN 73

the differences between the largest income and BOOK i.

CH. IV.

the others range from twenty to two hundred
per cent.

Now what is the reason of this ? Perhaps The causes
it will be said that differences of race are the differences
reason. That may explain a little, but it will an not
not explain much ; for these differences between Of race,
the incomes produced by equal bodies of men
are not observable only when men are of
different races ; but the most striking examples,
— namely, those afforded by our own country
and France — are differences between the in-
comes produced by the same race during
different decades — by the same race, and by
many of the same individuals.

Perhaps then it will be said that they are Nor of sou

rr- f -IT T» or climate,

due to differences of soil and climate. But
again, that will not explain the differences, at
various dates, between the incomes of the same
countries ; and though it may explain a little,
it will not explain much, of the differences at
the same date between the incomes of different
countries. The soil and climate, for instance,
of the United Kingdom, are not in themselves
more suited for agriculture than the soil and
climate of France and Belgium ; and yet for

74 PROD UCTIVITY OF IND US TR Y

BOOK i. each individual actually engaged in agriculture,
this country produces in value twenty-five per
cent more than France, and forty per cent
more than Belgium. I may add that it pro-
duces forty-six per cent more than Germany,
sixty-six per cent more than Austria, and
sixty per cent more than Italy.1

Nor of Perhaps then a third explanation will be

labour, suggested. These differences will be said to
be due to differences in the hours of labour.
But a moment's consideration will show that
that has nothing to do with the problem ; for
when a million people in this country produced
half what they produce to-day, they had fewer
holidays, and they worked longer hours. Now
that they have doubled the annual produce,
they take practically four weeks less in
producing it.2 Again, the hours of labour for
the manufacturing classes are in Switzerland

1 The actual figures are as follows : — In 1887 the estimates
of the value of agricultural products per each individual actually
engaged in agriculture were : United Kingdom, ninety-eight
pounds ; France, seventy - one pounds ; Belgium, fifty - six
pounds ; Germany, fifty - two pounds ; Austria, thirty - one
pounds ; Italy, thirty-seven pounds.

2 It is understating the case to say that the British
operative to-day works one hundred and eighty-nine hours
less annually than his predecessor of forty or fifty years ago,

NOT DETERMINED BY TIME 75

twenty-six per cent longer at the present time BOOK i.

, . , . , CH. IV.

than in this country ; and yet the annual pro- —
duct, in proportion to the number of operatives,
is twenty-eight per cent less.1

Agriculture gives us examples of the same
discrepancy between the labour expended and
the value of the result obtained. In France,
the agricultural population is three times
what it is in this country, but the value of
the agricultural produce is not so much as
double.2

Plainly, therefore, the growth of a nation's
income, under modern conditions, does not
depend on an increased expenditure of labour.
There might, indeed, seem some ground for
leaping to the contrary conclusion — that it
grows in proportion as the hours of labour are
limited : but whatever incidental truth there

and one hundred and eighty -nine hours = three weeks of
nine hours a day. To this must be added at least a week
of additional holidays.

1 The hours of labour in Switzerland are, on an average,
sixty-six a week.

2 The agricultural population in France is about
eighteen millions ; in this country, about six millions. The
produce of France is worth about four hundred and fourteen
million pounds ; of this country, two hundred and twenty-six
million pounds.

76 UNPERCEIVED INCREASE OF THE
BOOK i. may be in that contention, it does not explain

CH TV

the main facts we are dealing with ; for some
of the most rapid changes in the incomes of
nations we find have occurred during periods
when the hours of labour remained unaltered ;
and we find at the present moment that
countries in which the hours of labour are
the same, differ even more, in point of income,
from one another than they differ from countries
in which the hours of labour are different.
But are Whatever, therefore, the causes of such dif-

causes of 1 • i i

some other Terences may be, they are not simple and

kind which „ . , , . ,

lie below superficial causes like these.

I have alluded to the incomes of foreign
countries only for the sake of throwing
more light on the income of our own. Let
us again turn to that. Half of that in-
come, as we have seen, consists to-day of
an annual product new since the time when
men still in their prime were children ;
and this mysterious addition to our wealth
has rapidly and silently developed itself,
without one person in a thousand being
aware of its extent, or realising the operation
of any new forces that might account for
it. Let people of middle age look back to

INCOME OF THE UNITED KINGDOM 77

their own childhood ; and the England of BOOK i.

CH TV

that time, in aspects and modes of life, will
not seem to them very different from what it
seems now. Let them turn over a book of
John Leech's sketches, which appeared in
Punch about the time of the first Exhibition ;
and, putting aside a few changes in feminine
fashion, they will see a faithful representation
of the life that still surrounds them. The
street, the drawing-room, the hunting-field,
the railway-station — nothing will be obsolete,
nothing out-of-date. Nothing will suggest
that since these sketches were made any per-
ceptible change has come over the conditions
of our civilisation. And yet, somehow or
other, some changes have taken place, owing
to which our income has nearly doubled itself.
In other words, the existence of one-half of And which
our wealth is due to causes, the nature, the

-i ,-t , . e i - ^ searched

presence, and the operation ol which, are for.
hidden so completely beneath the surface of
life as to escape altogether the eye of ordinary
observation, and reveal themselves only to
careful and deliberate search.

The practical moral of all this is obvious : For, unless
that just as our income has doubled itself stand the

78 IMMENSE POSSIBLE SHRINKAGE

BOOK i. without our being aware of the causes, and

almost without our being aware of the fact,

which have so unless we learn what the causes are, and

national m- are consequently able to secure for them fair

by play, or, at all events, to avoid interfering
with SK with their operation, we may lose what we
iSy,°make nave gained even more quickly than we have
decrease?6 gained it, and annihilate the larger part of
what we are desirous to distribute. We have
seen that the national income is a living thing ;
and, as is the case with other living things,
the principles of its growth reside in parts
of the body which are themselves not sensitive
to pain, but which may for the moment be
deranged and injured with impunity, and will
betray their injury only by results which arise
afterwards, and which may not be perceived
till it is too late to remedy them.
And this is Here lies the danger of reckless social legis-
of reckiE lation, and even of the reckless formation of
iation.le' ; vague public opinion ; for public opinion, in a
democratic country like ours, is legislation in
its nebular stage : and hence the only way to
avert this danger is, first to do what we have
just now been doing, — to consider the amount
and character of the wealth with which we

79

have to deal, — and secondly, to examine BOOK i.

1-11 • /. , . CH. IV.

the causes to which the production oi this —
wealth has been due, and on which the
maintenance of its continued production must
depend.

Let the social reformer lay the following we win
reflections to his heart. Some of the more m the r
ardent and hopeful of the leaders of the
labour-party to-day imagine that considerable
changes in the distribution of the national

O

income may be brought about by the close of
the present century. In other words, they
prophesy that the Government will seven
years hence do certain things with that year's
national income. But the national income of
that year is not yet in existence ; and what
grounds have those sanguine persons for
thinking that when it is produced it will be
as large, or even half as large, as the national
income is to-day ? What grounds have they
for believing that, if the working-classes then
take everything, they will be as rich as they
are now when they take only a part ? The
only ground on which such a belief can be
justified is the implied belief that the same
conditions and forces which have swelled the

CH. IV.

80 THE GREAT PROBLEM

BOOK i. national income to its present vast amount,
will still continue in undisturbed opera-
tion.

We will now proceed to consider what
these conditions and forces are.

BOOK II

THE CHIEF FACTOE IN THE PKODUCTION
OF THE NATIONAL INCOME

Of the, various Factors in Production, and how to
distinguish the Amount produced ~by each.

THE inquiry on which we are entering really
comprises two. I will explain how.

Although, as we have seen, of the yearly
income of the nation a part only consists of
material things, yet the remainder depends
upon these, and its amount is necessarily in
proportion to them. Accordingly, when we are
dealing with the question of how the income
is produced, we may represent the whole of it
as a great heap of commodities, which every
year disappears, and is every year replaced by
a new one. Here then we have a heap of
commodities on one side, and on the other the
subjects of our inquiry — namely, the conditions
and forces which produce that heap.

Now, as to what these conditions and forces

BOOK II.
CH. I.

Land,
Capital,
and
Human
Exertion
are the
three
factors in
produc-
tion ; but
at present
we may
omit
Capital.

The first
point we
notice is
that the
exertion
of the
same num-
ber of men
applied to

84 THE CAUSE OF PRODUCTION GENERALLY

are, there is a familiar answer ready for us —
Land, Labour, and Capital ; and, with a certain
reservation, we may take this to be true. But
as Capital is itself the result of Land and
Labour, we need not, for the moment, treat
Capital separately ; but we may say that the
heap is produced by Land and Labour simply.
I use this formula, however, only for the
purpose of amending it. It will be better, for
reasons with which I shall deal presently, in-
stead of the term Labour to use the term
Human Exertion. And further, we must
remember this — the heap of commodities we
have in view is no mere abstraction, but repre-
sents the income of this country at some definite
date ; so that when we are talking of the
forces and conditions that have produced it, we
mean not only Human Exertion and Land, but
Human Exertion of a certain definite amount
applied to Land of a definite extent and quality.
Now, as I pointed out in the last Book, one
of the most remarkable things about our
national production of commodities, is that the
yearly exertion of the same number of men,
applied to land of the same extent and quality,
has been far from producing always a heap of

THE PRODUCTION OF GIVEN QUANTITIES 85

the same size. On the contrary, the heap BOOKH.

CH. I.

which it produces to-day is twice as large as —

. 11*11 t- the same

that which it produced in the days 01 our land does
fathers ; and nearly three times as large as prod^78
that which it produced in the days of our amount of
grandfathers. Here then is the reason why w
the inquiry that is before us is twofold. For
we have at first to take some one of such
heaps singly — on several accounts it will be
convenient to take the smallest, namely that
produced about a hundred years ago — and to
analyse the parts which Land and Human
Exertion played respectively in the production
of it. Then, having seen how Land and Human
Exertion produced in the days of our grand-
fathers a heap of this special size, we must
proceed to inquire why three generations
later the same land and the exertions of a
similar number of men produce a heap which
is nearly three times as large. For the differ-
ence of result cannot be due to nothing. It
must be due to some difference in one of the This must

i , -i . /.be due to

two causes — to the presence in this cause 01 some vary-
some varying element : and it is precisely here
— here in this varying element — that the main
interest of our inquiry centres. For if it is (iuestlon-

86 PRODUCTION A CENTURY AGO

BOOK IT. owing to a variation in this element that our

CH. I.

productive powers have nearly trebled them-
selves in the course of three generations, nearly
two-thirds of the income which the nation
enjoys at present depends on the present
condition of this element being maintained,
and not being suffered — as it very easily might
be — to again become what it was three
Let us generations back. Let us begin then with

compare . .

production taking the amount 01 commodities produced in

country this country at the end of the last century,

ago with" which is at once the most convenient and the

now.UC 1 most natural period to select ; for production

was then entering on its present stage of

development, and its course from then till

now is more or less familiar to us all.

We will start therefore with the fact that,
about a hundred years ago, our national income,
if divided equally amongst the inhabitants of
the kingdom, would have yielded to each
inhabitant a share of about fourteen pounds ;
so that if we confine ourselves to Great Britain,
the population of which was then about ten
millions, we have a national income of a
hundred and forty million pounds, or a heap of
commodities produced every year to an amount

AMOUNT OF CAPITAL EMPLOYED IN IT 87
that is indicated by that money value. Let us BOOK n.

CH T

take then any one of the closing years of the — '
last century, and consider for a moment the
causes at work in this island to which the pro-
duction of such a heap of commodities was due.
In general language, these causes have been
described already as Human Exertion of a
certain definite amount applied to Land of a
certain definite extent and quality ; but it will
now be well to restore to its traditional place
the accumulated result of past exertion —
namely Capital, and to think of it as a separate
cause, according to the usual practice. For
everybody knows that at the close of the last
century, many sorts of machinery, and stores
of all sorts of necessaries, were made and
accumulated to assist and maintain Labour ;
and it is of such things that Capital principally
consists. The Capital of Great Britain was
at that time about sixteen hundred million
pounds.1 We will accordingly say that about
a hundred years ago, the Land of this island,
the Capital of this island, and the Exertions of

1 According to Eden it was about seventeen hundred million
pounds at the beginning of the present century. Twenty-
five years previously it was, according to Young's estimate,
eleven hundred million pounds.

88 LAND, CAPITAL, AND HUMAN EXERTION
BOOK ii. a population of tan million people produced

t M , I*

— together, every twelve months, a heap of com-
modities worth a hundred and forty million
pounds. We need not, however, dwell, till
later, on these details. For the present our
national production at this particular period
may be taken to represent the production of
wealth generally.

HOW much Now the question, let it be remembered,
case^a with which we are concerned ultimately, is
capital, now wealth, as produced in the modern world,
may be distributed. Accordingly, since the
B' distribution of it presupposes its production,
and since we are agreed generally as to what
the causes of its production are, — namely, Land,
Capital, and Human Exertion, — our next great
step is to inquire what proportion of the pro-
duct is to be set down as due to each of these
causes separately ; for it is by this means only
that we can see how and to what extent our
social arrangements may be changed, without
our production being diminished. And I
cannot introduce the subject in a better way
than by quoting the following passage from
John Stuart Mill, in which he declares such
an inquiry to be both meaningless and

HO W MUCH PROD UCED BY EACH 89

impossible to answer; for that it can be BOOKH.
answered, and that it is full of meaning, and
that to ask and answer it is a practical and
fundamental necessity, will be made all the
plainer by the absurdity of Mill's denial.

" Some writers," he says, " have raised the Mm de-
question whether Nature (or, in the language question to

2 T , x . be mean-

ol economics, Land) gives more assistance to
Labour in one kind of industry or another, and
have said that in some occupations Labour
does most ; in others, Nature most. In this,
however, there seems much confusion of ideas.
The part which Nature has in any work of
man is indefinite and immeasurable. It is
impossible to decide that in any one thing
Nature does more than in any other. One
cannot even say that Labour does less. Less
Labour may be required ; but if that which is
required is absolutely indispensable, the result
is just as much the product of Labour as of
Nature. When two conditions are equally
necessary for producing the effect at all, it is
unmeaning to say that so much of it is pro-
duced by one and so much by the other. It
is like attempting to decide which half of a
pair of scissors has most to do with the act of

90 THE CHIEF PRACTICAL PROBLEM

BOOK n. cutting ; or, which of the factors — five or six

CH I

— has most to do with the production of
thirty." So writes Mill in the first chapter
of his Principles of Political Economy ;
and if what he says is true with regard to
Land and Labour (or, as we are calling it,
Human Exertion), it is equally true with re-
gard to Human Exertion and Capital ; for with-
out Human Exertion, Capital could produce
nothing, and without Capital modern industry
would be impossible : and thus, according to
Mill's argument, we cannot assign to either of
them a specific portion of the product. But
But MS Mill's argument is altogether unsound ; and
mentis the actual facts of life, and a large part of
and is re- Mill's own book, little as he perceived that it
by practi- was so, are virtually a complete refutation of it.
ty hise own To understand this, the reader need only
lgs' reflect on those three principal and familiar
parts into which the annual income of every
civilised nation is divided, not only in actual
practice, but theoretically by Mill himself —
namely Rent, Interest, and Wages.1 For

1 I have not mentioned Profits. They consist, says Mill,
of Interest, or Capital, and Wages, or Superintendence ; to
which he adds compensation for risk — a most important
item, but not requiring to be included here.

IN CONTEMPORARY ECONOMICS 91

these — what are they ? The answer is very
simple. They are portions of the income
which correspond, at all events in theory, to
the amounts produced respectively by Land,
Capital, and Human Exertion ; and which are
on that account distributed amongst three
sets of men — those who own the Land, those
who own the Capital, and those who have
contributed the Exertion. There are many
causes which in practice may prevent the
correspondence being complete ; but that the
general way in which the income is actually
distributed is based on the amount produced
by these three things respectively, — Land,
Capital, and Human Exertion, — is a fact which
no one can doubt who has once taken the
trouble to consider it. It is thus perfectly
clear that, contrary to what Mill says, though
two or more agencies may be equally indis-
pensable to the production of any wealth at
all, it is not only not " unmeaning to say
that so much is produced by one and so
much by the other," but it is possible to make
the calculation with practical certainty and
precision ; and I will now proceed to explain
the principles on which it is made.

BOOK II.
CH. I.

CHAPTER II

How the Product of Land is to be distinguished from
the Product of Human Exertion.

THE question before us will be most easily
understood if we begin with once again
waiving any consideration of Capital, and if
we deal only with what Mill, in the passage
just quoted, calls " Nature and Labour " — or, in
other words, with Land and Human Exertion.
We will also, for simplicity's sake, confine
ourselves to one use of land — its primary and
most important use, namely its use in agri-
culture or food-production.

Rent is the Now a British tenant-farmer who lives
Kertl( * solely by his farming obviously derives his
produced whole income from the produce of the soil he
occupies ; but the whole of this produce does
no* S° t° himself. Part is paid away in the
Land itself; form of renfc to njs landlord, and part in the

RENT THE PRODUCT OF LAND 93

form of wages to his labourers. We may BOOKH.

. ' . . CH. n.

however suppose, without altering the situa- —
tion, that he has no labourers under him —
that he is his own labourer as well as his own
manager, and that the whole of the produce
that is not set aside as rent goes to himself
as the wages of his own exertion. The point
on which I am going to insist is this — that
whilst the exertion has produced the product
that is taken as wages, the soil — or to speak
more accurately — a certain quality in the soil
has just as truly produced the produce that
goes in rent — in fact that " Nature and Labour,
though equally necessary for producing the
effect at all," each produce respectively a
certain definite part of it.

In order to prove this it will be enough to AS mil be
make really clear to the reader the explana-
tion of rent which is given by all economists
—an explanation in which men of the most
opposite schools agree — men like Bicardo, and
men like Mr. Henry George ; and of which Rent-
Mill himself is one of the most illustrious
exponents. I shall myself attempt to add
nothing new to it, except a greater simplicity
of statement and illustration, and a special

94 THE ACCEPTED THEORY OF RENT

BOOK ii. stress on a certain part of its meaning, the
importance of which has been hitherto disre-
garded.

Now, as we are going to take the industry
of agriculture for our example, we shall mean
by rent a portion of the agricultural products
derived from Human Exertion applied to a
given tract of soil. Of such products let us
take corn, and use it, for simplicity's sake,
as representing all the rest ; and that being
settled, let us go yet a step further ; and,
for simplicity's sake also, let us represent corn
by bread; and imagine that loaves develop
themselves in the soil like potatoes, and, when
the ground is properly tilled, are dug up
ready for consumption. We shall figure rent
therefore as a certain number of loaves that
are dug up from a given tract of soil. Now
everybody knows that all soils are not equally
good. That there is good land and that there
is poor land is a fact quite familiar even to
people who have never spent a single day in
the country. And this means, if we continue
the above supposition, that different fields of
precisely the same size, cultivated by similar
men and with the same expenditure of exer-

ILLUSTRA TED B Y AN EXAMPLE 95

tion, will yield to their respective cultivators
different numbers of loaves.

Let us take an example. Tom, Dick, and we win
Harry, we will say, are three brothers, who this by the
have each inherited a field of twelve acres. three°men

They are all equally strong, and equally
industrious : we may suppose, in fact, that
they all came into the world together, and are
as like one another as three Enfield rifles.
Each works in his field for the same time every
day, digs up as many loaves as he can, and
every evening brings them home in a basket.
But when they come to compare the number
that has been dug up by each, Tom always
finds that he has fifteen loaves, Dick that he
has twelve, and Harry that he has only nine ;
the reason being that in the field owned by
Harry fewer loaves develop themselves than
in the fields owned by Tom and Dick. Harry
digs up fewer, because there are fewer to dig up.
Let us consider Harry's case first.

Each of the loaves is, we will say, worth Labour
fourpence ; therefore Harry, with his nine held to6
loaves, makes three shillings a day, or eighteen much as 1°
shillings a week. This is just enough to necessary7
support him, according to the ideas and habits

96 THE PRODUCT OF AGRICULTURAL LABOUR

BOOK n. of his class. If his field were such that it
yielded him fewer loaves, or if he had to give
even one of the loaves away, the field would be
useless ; it would not be cultivated at all,
either by him, or by anybody, nor could it be ;
for the entire produce, which would then go to
the cultivator, would not be enough to induce,
or perhaps even to make him able, to cultivate
it. But, as matters stand, so long as the entire
produce does go to him, and to no one else, we
must take it for granted that his exertion and
his field between them yield him a livelihood
which, according to his habits, is sufficient ; for
otherwise, as I have said, this field neither would
nor could be cultivated. And it will be well
here to make the general observation that
whenever we find a class of men cultivating
the utmost area of land which their strength
permits, and taking for themselves the entire
produce, their condition offers the highest
standard of living that can possibly be
general amongst peasant cultivators : from
which it follows that, unless no land is
cultivated except the best, the general
standard of living must necessarily require
less than the entire produce which the

CH. II.

THE PRODUCT OF LAND 97

best land will yield. We assume then that BOOKH.
Harry, with his nine loaves a day, represents
the highest standard of living that is, or that
can be, general amongst his class.

And now let us turn from Harry's case to
the case of Tom and Dick. They have been
accustomed to precisely the same standard of
living as he has been ; and they require for
their support precisely the same amount of
produce. But each day, after they have all
of them fared alike, each taking the same
quantity from his own particular basket, the
baskets of Tom and Dick present a different
appearance to that of Harry. There is in each
of the two first a something which is not to be
found in his. There is a surplus. In Dick's
basket there are three extra loaves remaining ;
and in Tom's basket there are six. To what
then is the production of these extra loaves
due ? Is it due to land, or is it due to the
exertions of Tom and Dick ? Mill, as we have
seen, would tell us that this was an unmeaning
question ; but we shall soon see that it is not so.

It is perfectly true that it would be an
unmeaning question if we had to do with one
of the brothers only — say with Harry, and

7

98 MAXIMUM PRODUCE OF LABOUR

BOOK n. only with Harry's field. Then, no doubt, it

CH II

would be impossible to say which produced
most — Harry or the furrows tilled by him, —
whether Harry produced two loaves and the
furrows seven, or Harry seven and the furrows
two. And to Harry's case more must be said
than this. Such a calculation with regard to
it would be not only impossible, but useless ;
for even if we convinced ourselves that the
land produced seven loaves, and Harry's
exertion only two, all the loaves would still of
necessity go to Harry. In a case like this,
therefore, it is quite sufficient to take account
of Human Exertion only. Agricultural labour,
in fact, must be held to produce whatever
product is necessary for the customary
But what- maintenance of the labourer. But if this is
yoncUhfo" the entire product obtained from the worst soil
duct6not° cultivated, it cannot be the entire product
butof °ur> obtained from the best soil ; and the moment
we have to deal with a second field, — a field
which is of a different quality, and which,
although it is of exactly the same size, and is
cultivated every day with precisely similar
labour, yields to that labour a larger number
of loaves, — twelve loaves, or fifteen loaves,

S URPL US PROD UCED BY LAND 99

instead of nine, — then our position altogether BOOK H.

CH II

changes. We are not only able, but obliged
to consider Land as well as Labour, and to dis-
criminate between their respective products.
A calculation which was before as unmeaning
as Mill declares it to be, not only becomes
intelligible, but is forced on us.

For if we start with the generalisation AS we shall
derived from Harry's case, or any other case

in which the land is of a similar quality that man tilling

one man's labour produces nine loaves daily,
and then find that Tom and Dick, for the same ^n tilling
amount of labour, are rewarded respectively by the worst-
fifteen loaves or by twelve, we have six extra
loaves in one case, and three in the other,
which cannot have been produced by Labour,
and which yet must have been produced by
something. They cannot have been produced
by Labour ; for the very assumption with which
we start is that the Labour is the same in the
last two cases as in the first ; and according
to all common-sense and all logical reasoning,
the same cause cannot produce two different
results. When results differ, the cause of the
difference must be sought in some cause that
varies, not a cause that remains the same ;

loo LAND A PRODUCING AGENT

BOOK ii. and the only cause that here varies is the Land.

CH. n. t . .

— Accordingly, just as in Harrys case we are
neither able nor concerned to credit the Land
with any special part, or indeed any part, of
the product, but say that all the nine loaves
are produced by Harry's Labour, so too in the
case of Tom and Dick we credit Labour with a
precisely similar number ; but all loaves
beyond that number we credit not to their
Labour, but to their Land — or, to speak more
accurately, to certain qualities which their
Land possesses, and which are not possessed
by Harry's. In Dick's case these superior
qualities produce three loaves ; in Harry's case,
they produce six.

If any one doubts that such is the case, let

him imagine our three brothers beginning to

quarrel amongst themselves, and Tom and

Dick boasting that they were better men than

Harry, on the ground that they always brought

home more loaves than he. Every one can see

what Harry's retort would be, and see also that

The men it is unanswerable. Of course he would say,

would be " I am as good a man as either of you, and my

the first to i -i -, ., i T

understand labour produces quite as much as yours. Let
us only change fields, and you will see that

AS DISTINCT FROM LABOUR 101

soon enough. Let Tom take mine, and let me BOOK n.

CH II

take his, and I then will bring home fifteen '
loaves ; and he, work as he may, will only

bring home nine. It is your b y land that

produces more than mine, not you that produce
more than I ; and if you deny it, stand out

you s and I'll fight you." We may

also appeal to one of the commonest of our
common phrases, in which Harry's supposed
contention is every day reiterated. If a
farmer is transferred from a bad farm to a good
one, and the product of his farming is thereby
increased, as it will be, everybody will say,
" The good farm makes all the difference."

o

This is merely another way of saying, the
superior qualities in the soil produce all the
increase, or — to continue our illustration — the
increased number of loaves.

And all the world is not only asserting this
truth every day, but is also acting on it ; for
these extra loaves, produced by the qualities
peculiar to superior soils, are neither more
nor less than Bent. Rent is the amount of
produce which a given amount of exertion
obtains from rich land, beyond what it obtains
from poor land. Such is the account of rent

102 7Vy.fi: EXISTENCE OF RENT

BOOK H. in which all economists agree ; indeed, when

CH II

once it is understood, the truth of it is self-
evident. Mr. Henry George's entire doctrines
are built on it ; whilst Mill calls it the
pons asinorum of economics. I have added
nothing in the above statement of it to what
is stated by all economists, except weight and
emphasis to a truth which they do not so much
state as imply, and whose importance they
seem to have overlooked. This truth is like
a note on a piano, which they have all of them
sounded lightly amongst other notes. I have
sounded it by itself, and have emphasised it
with the loud pedal — the truth that rent is for
all practical purposes not the product of Land
and Human Exertion combined, but the pro-
duct of Land solely, as separate from Human
Exertion and distinct from it.

The above And here let me pause for a moment to

itant boot point out a fact which, though it illustrates

doctrine S the above truth further, I should not mention

hoid°trne ^ere i^ ^ were not for the following reason.

fati* state1" Kent forms the subject of so much social and

STny as Party prejudice that what I have just been

urging may be received by certain readers

with suspicion, and regarded as some special

NOT AFFECTED BY SOCIALISM 103

pleading on behalf of landlords. I wish there- BOOK n.

CH. II.

fore to point out clearly that the existence —
of rent and the payment of rent is not
peculiar to our existing system of landlordism.
Rent must arise, under any social arrange-
ment, from all soils which are better than the
poorest soil cultivated : it must be necessarily
paid to somebody ; and that somebody must
necessarily be the owner. If a peer or a
squire is the owner, it is paid to the peer or
squire ; if the cultivator is the owner, the
cultivator pays it to himself; if the land were
nationalised and the State were to become the
owner, the cultivator would have to pay it
away to the State.

In order that the reader may fully realise it is easy

1-1 i i -i 11 ,, to see how

this, let us go back to our three brothers, 01 Rent arises,
whom the only two who paid rent at all, paid conditions,
it, according to our supposition, to themselves ; superior
and let us imagine that Harry — the brother sc
who pays no rent to anybody, because his
field produces none, has a sweetheart who
lives close to Tom's field, or who sits and
sucks blackberries all day in its hedge; and
that Harry is thus anxious to exchange fields
with Tom, in order that he may be cheered at

104 RENT NECESSARILY THE PROPERTY

BOOK n. his work by the smiles of the beloved object.
Now if Tom were to assent to Harry's wishes
without making any conditions, he would be
not only humouring the desire of Harry's
heart, but he would be making him a present
of six loaves daily ; and this, we may assume,
he certainly would not do ; nor would Harry,
if he knew anything of human nature, expect
or even ask him to do so. If Tom, however,
were on good terms with his brother, he
might quite conceivably be willing to meet
his wishes, could it be but arranged that he
should be no loser by doing so ; and this
could be accomplished in one way only —
namely, by arranging that, since Harry would
gain six loaves each day by the exchange, and
Tom would lose them, Harry should send
these six loaves every day to Tom ; and thus,
whilst Harry was a gainer from a sentimental
point of view, the material circumstances of
both of them would remain what they were
before. Or we may put the arrangement in
more familiar terms. The loaves in question
we have supposed to be worth fourpence each ;
so we may assume that instead of actually
sending the loaves, Harry sends his brother

CH. II.

OF WHOEVER OWNS THE LAND 105

two shillings a day, or twelve shillings a week, BOOK n.
or thirty pounds a year. Tom's field, as we
have said, is twelve acres ; therefore, Harry
pays him a rent of fifty shillings an acre.
And Tom's case is the case of every landlord,
no matter whether the landlord is a private
person or the State — a peer who lets his land,
a peasant like Tom who cultivates it, or a
State which allows the individual to occupy
but not to own it. Rent represents an advan-
tage which is naturally inherent in certain
soils; and whoever owns this advantage —
either the State or the private person — must
of necessity either take the rent, or else make
a present of it to certain favoured individuals.
It should further be pointed out that this
doctrine of Rent, though putting so strict a
limit on the product that can be assigned to
Labour, interferes with no view that the most
ardent Socialist or Radical may entertain with
regard to the moral rights of the labourer.
If any one contends that the men who labour
on the land, and who pay away part of the
produce as rent to other persons, ought by
rights to retain the whole produce for them-
selves, he is perfectly at liberty to do so, for

106 THE ARGUMENT OF THIS VOLUME
BOOK ii. anything that has been urged here. For the

CH. II. _ . _ , , _

— real meaning 01 such a contention is, not that
the- labourers do not already keep everything
that is produced by their labour, but that
they ought to own their land instead of hiring
it, and so keep everything that is produced by
the land as well.

This doctrine of Kent, then, which I have

tried to make absolutely clear, involves no

special pleading on behalf either of landlord

or tenant, of rich or poor. It can be used

with equal effect by Tory, Radical, or Socialist,

and it would be as true of a Socialistic State

as it is of any other. I have insisted on it

The doc- here for one reason only. It illustrates, and

Rent is the is the fundamental example of, the following

fundamen- . . 1 . . . . TT

tai example great principle — that in all cases where Human
reasoning Exertion is applied to Land which yields only
each agent° enough wealth to maintain the man exerting
Son™ u himself, practical logic compels us to attribute
portion of the entire product to his exertion, and to

take the assumption that his exertion produces
attributed, tkis much as our starting - point. But in all
other cases — that is to say in all cases where
the same exertion results in an increased pro-
duct, we attribute the increase — we attribute

EMBOEKKQ IN THE CASE OF RENT 107

the added product — not to. Human Exertion, BOOK "•

CH. II.

which is present equally in both cases, hut to
some cause which is present in the second
case, and was not present in the first : that is
to say, to some superior quality in the soil.

And now let us put this in a more general
form. When two or more causes produce a
given amount of wealth, and when the same
causes with some other cause added to them
produce a greater amount, the excess of the
last amount over the first is produced by the
added cause ; or conversely, the added cause
produces precisely that proportion of the total
by which the total would be diminished if the
added cause were withdrawn.

It is on this principle that the whole
reasoning in the present book is based ; and
having seen how it enables us to discriminate
between the amounts of wealth produced re-
spectively by Human Exertion and Land, let
us go on to see how it will enable us likewise
to discriminate what is produced by Capital.

CHAPTER III

Of the Products of Machinery or Fixed Capital, as dis-
tinguished from the Products of Human Exertion.

TO under- LAND, which in economics means everything

stand how , . . _ _ . „

much of that the earth produces and the areas it oners
product is for habitation, is of course in a sense at the
bottom of every industry. But if we wish
to to understand the case of Capital, it will be
well to *urn fr°m agriculture to industry of
another kind ; the reason being that the part
which Capital plays in agriculture is not only,
comparatively speaking, small, but is also a
part which, when we are first approaching the
subject, is comparatively ill fitted for purposes
AS capital Of illustration. What is best fitted for the

plays in

manufac- purpose of illustration is Capital applied to

t M 1VS Si

more manufactures ; and it is best at first not to

obvious

part. consider all such Capital, but to confine our
attention to one particular part of it. I must
explain to the reader exactly what I mean.

CAPITAL OF TWO KINDS 109

People constantly speak of Capital as being BOOK n.
a sensitive thing — a movable thing — a thing

. ., , . , Capital,

that is easily driven away — that can be when

actually

transferred from one place to another by a employed,

/> i -rr-r IIP 1 IS Of tWO

mere stroke ot the pen. We all ot us know kinds:
the phrases. But though they express a truth,
it is partial truth only. Capital before it is
employed, when it is lying, let us say, in a
bank, to the credit of a Company that has not
yet begun operations — Capital, under such
circumstances, is no doubt altogether mov-
able ; for before it is employed it exists as
credit only. But the moment it is employed Fixed

. ~ . Capital,

in manufacture, a very considerable part ot it such as

-,.-,. -, f. /> plant and

is converted into things that are very far from machinery;
movable — -into such things as buildings and capital.
heavy machinery ; and only a part remains
movable — namely that reserved for wages.
For example, M'Culloch estimates that the
average cost of a factory is about one hundred
pounds for every operative to be employed in
it ; whilst the yearly wages of each adult male
would now on the average, be about sixty
pounds. Thus, if a factory is started which
will employ one thousand men, and if the
wages of all of them have to be paid out of

no THE PART OF THE PRODUCT PRODUCED

BOOK n. Capital for a year, the amount reserved for
wages will be sixty thousand pounds, whilst
a hundred thousand pounds will have been
converted into plant and buildings. Most
people are familiar with the names given
by economists to distinguish the two forms
into which employed capital divides itself.
The part which is reserved for, and paid in
wages, is called "Circulating Capital"; that
which is embodied in buildings and machinery
is called " Fixed Capital." Of Circulating
Capital — or, as we may call it, "Wage Capital
— we will speak presently. We will speak at
The Capital first of Fixed Capital only ; and of this we will

embodied .

in machin- take the most essential part, namely machinery ;
for our ' and for convenience sake we will omit the
jrarpoUwe accidental part, namely buildings, which
Consider! render merely the passive service of shelter.

Now in any operation of manufacturing
raw material, or — what means the same thing
—conveying raw material, say water or coal
or fish, to the places where they are to be
consumed, certain machines or appliances are
necessary to enable the operation to take
place well. Thus fish or coal could hardly be
carried without a basket, whilst water could

BY MACHINERY OR FIXED CAPITAL in

certainly not be carried without some vessel, BOOK n.

. . CH- In-

nor in many places raised from its source —

without a rope and pail. For all purposes
therefore of practical argument and calcula-
tion, appliances of these most simple and in-
dispensable kinds are merged in Human Exer-
tion, just as is the case with the poorest kind
of Land, and are not credited separately with
any portion of the result. We do not say
the man raised so much water, and the rope
and the pail so much. We say the man
raised the whole. But the moment we have we shall
to deal with appliances of an improved kind, machinery
by which the result is increased, whilst the product of6
labour remains the same, the case of the ap- the same1

pliances becomes analogous to that of superior
soils ; and a portion of the result can be assigned JfJt .
to them, distinct from the result of Labour.

Let us suppose, for instance, that a village AS a cer-
gets all its water from a cistern, to keep instance^ e
which replenished takes the labour of ten w
men, constantly raising the water by means
of pails and ropes, and then carrying it to
the cistern, up a steep wearisome hill. These
men, we will say, receive each one pound a
week, the village thus paying for its water jive

1 1 2 EX A MPLE OF PROD UCT OF MA CH1NER Y

BOOK ii. hundred pounds a year, the whole of which sum

( H III

— — ' goes in the remuneration of labour. We will
suppose, further, that the amount of water
thus obtained is a thousand gallons daily,
each man raising and carrying a hundred
gallons ; and that this supply, though suffi-
cient for the necessities of the villagers, is
not sufficient for their comfort. They would
gladly have twice that amount ; but they
are not able to pay for it. Such is the situa-
tion with which we start. We have a
thousand gallons of water supplied daily by
the exertion of ten men, or a hundred gallons
by the exertion of each of them.

And now let us suppose that the village is
suddenly presented with a pumping-engine,
having a handle or handles at which five of
these men can work simultaneously, and by
means of which they, working no harder than
formerly, can raise twice the amount of
water that was formerly raised by ten men —
namely two thousand gallons daily, instead
of one thousand. The villagers, therefore,
have now a thousand gallons daily which
they did not have before ; and to what is the
supply of this extra quantity due ? It is not

AS DISTINCT FROM THAT OF LABOUR 113

due to Labour. The Labour involved can BOOKH.

i c 1 • i i • CH- In>

produce no more than iormerly ; indeed it
must produce less ; for its quality is unchanged,
and it is halved in quantity. Obviously, then,
the extra thousand gallons are due to the pump-
ing-engine, and this not in a mere theoretical
sense, but in the most practical sense possible ;
for this extra supply appears in the cistern as
soon as the engine is present, and would cease
to appear if the engine were taken away.

And here let me pause for a moment, as I it may be

,.,, T , . . ,-, . also ob-

did when 1 was discussing land, to point out served that
a fact which at the present stage of argument product
has no logical place, but which should be the cmner
realised by the reader, in order to avoid mis- machine,
conception : namely, the fact that the extra goes to the
water-supply which is due to the pumping-
engine, will necessarily be the property of
whoever owns the engine, just as rent will be
the property of whoever owns the land that
yields it. We supposed just now that the
owner of the engine was the village. We
supposed that the engine was presented to it.
Consequently the village owned the whole
extra thousand gallons. It had not to pay for
them. But let us suppose instead that the

114 THE PRODUCTS OF A MACHINE

BOOK n. engine was the property of some stranger.

- ' Just as necessarily in that case the gallons

would belong to him ; and he could command
payment for them, just as if he had carried
them to the cistern himself. We supposed
that the village was able to ^y five hundred
pounds for its water ; and that it really wanted,
for its convenience, twice as much as it could
obtain for that sum. expended on human labour.
The owner of the pumping-engine, by allow-
ing the village to use it, doubles the water-
supply, and halves the labour bill. The ex-
penditure on labour sinks from Jive hundred
pounds to two hundred and fifty pounds ; and
the owner of the pumping-engine can, it is
needless to say, command the two hundred and
fifty pounds which is saved to the village by its
use. In actual life, no doubt, the bargain would
be less simple ; because in actual life there
would be a number of rival pumping-engines,
whose owners would reduce, by competition,
the price of the extra water ; but whatever
the price might be, the principle would remain
the same. The price or the value of the
water would go to the owner of the engine ;
and it would fail to do so only if one thing

NECESSARIL Y THE PROPERTY OF O WNER 1 1 5

happened — if the owner refused to receive it, BOOK n.
and, for some reason or other, made the
village a free gift of what the village would
be perfectly willing to buy. In this truth
there is nothing that makes for or against
Socialism. The real contention of the
Socialist is simply this — not that labour
makes what is actually made by machinery ;
but that labourers ought to own the machinery,
and for that reason appropriate what is made
by it. A machine or engine, in fact, which
is used to assist labour is, in its quality of
a producing agent, just as separate from the
labour with which it co-operates, as a donkey,
in its quality of a carrying agent, is distinct
from its master, if the master is walking along
carrying one sack of corn, and guiding the
donkey who walks carrying seven.

And this brings us back into the line of A machine,

, i ... then, as a

our mam argument; the comparison just productive
made being a very apt and helpful illustration 3f£ct8 *
of it. Every machine may be looked on as

a kind of domestic animal, and each new

machine as an animal of some new species ;
which animals co-operate with men in the
production of certain products : and the point

efforts an
ammal-

n6 THE COTTON INDUSTRY

BOOK ii. I am urging on the reader may accordingly
be put thus. When a man, or a number of
men, without one of these animals to assist
them, produce a certain amount of some parti-
cular product, and with the assistance of one of
these animals produce a much larger amount,
the added quantity is produced not by the men,
but by the animal — or, to drop back again into
the language of fact, by the machine.
The history I have taken an imaginary case of drawing
cotton in- and pumping water, because the operation is of
remarkable an exceedingly simple kind. We will now turn
of this? lcn from the imaginary world to the real, and clench
what has been said by an illustration from the
history of our own country — and from that
period which at present we specially have in
view — namely the close of the last century.

From the year 1795 to the year 1800,
the amount of cotton manufactured in this
country was on the average about thirty-seven
million pounds weight annually : ten years
before it was only ten million pounds; ten
years before that, only four million pounds ;
and during the previous fifty years it had been
less than two and a half million pounds.
The amount manufactured, up to the end of

IN THE LAST CENTURY 117

this last-named period, was limited by the BOOK n.

P CH. IU.

fact that spinning was a much slower process —
than weaving. It was performed by means
of an apparatus known as "the one- thread
wheel." No other spinning-machine existed ;
and it was the opinion of experts, about the
year 1770, that it would hardly be possible in
the course of the next thirty years, by collect-
ing and training to the spinning trade every
hand that could be secured for such a purpose,
to raise the annual total to so much as Jive
million pounds. As a matter of fact, however,
Jive million pounds were spun in the year 1776.
In six years' time, the original product had
been doubled. In ten years, it had been more
than quadrupled ; in twenty years, it had
increased nearly elevenfold ; and in five and
twenty years, it had increased fifteenfold.1

To what, then, was this extraordinary For every

TOT i i • pound of

increase due ? It was due to the invention cottonspun
and introduction of new spinning machinery Ark-

wright's

1 From 1716 to 1770 the cotton manufactured in this machinery
country annually averaged under two and a half million pounds tgen
weight. From 1771 to 1775 it was four million seven hundred pounds.
thousand pounds. From 1781 to 1785 it was eleven million
pounds. From 1791 to 1795 it was twenty-six million pounds ;
and from 1795 to 1800 it was thirty -seven million pounds.

CH III

Il8 ARKWRIGHTS MACHINERY

BOOK ii — especially to the machines invented by
Hargraves and Arkwright, and the successive
application of horse -power, water-power,
and lastly of steam-power, to driving them.
Previous to the year 1770, such a thing as a
cotton -mill was unknown. During the ten
following years, about forty were erected in
Great Britain ; in the six years following
there were erected a hundred more ; and from
that time forward their number increased
rapidly, till they first absorbed, and then
more than absorbed, the whole population
that had previously conducted the industry
in their own homes. As we follow the
history of the manufacture into the present
century, a large part of the increasing gross
produce is to be set down to the increase in
the employed population ; but during the
twenty -five years with which we have just
been dealing, the number of hands employed
in spinning had not more than doubled,1
whilst the amount of cotton manufactured
had increased by fifteen hundred per cent.

1 Pitt estimated that the hands employed in spinning
increased from forty thousand to eighty thousand between
the years 1760 and 1790.

THE IRON INDUSTRY OF GREAT BRITAIN 119

It is therefore evident that the increase BOOKH.

n • i • -i CH- m-

during this period is due almost entirely, not —

to human exertion, but to machinery.1

And next, with more brevity, let us The manu-
consider the manufacture of iron. By and iron offers
by we shall come back to the subject ; so it example.
will be enough here to mention a single fact
connected with it. From about the year
1740, when a careful and comprehensive
inquiry into the matter was made, up to the
year 1780, the average produce of each
smelting furnace in the country was two hun-
dred and ninety-four tons of iron annually.
Towards the close of this period machinery
had been invented by which a blast was
produced of a strength that had been un-
known previously; and in the year 1788, the
average product of each of these same furnaces

1 Were any confirmation of this conclusion needed, it is
afforded us by the fact that in 1786 a spinner received ten
shillings a pound for spinning cotton of a certain quality : in
1795 he had received only eightpence, or a fifteenth part of
ten shillings ; and yet in the course of a similar day's labour,
he made more money than he had been able to do under the
former scale of payment. The price of spinning No. 100
was ten shillings per pound in 1786 ; in 1793, two shillings
and sixpence. The subsequent drop to eightpence coincided
with the application of machinery to the working of the mule.

120 MACHINERY AND PRODUCTION OF IRON

BOOK n. was five hundred and ninety-five tons, or very

CH. III. J J J J

nearly double what it had been previously.
An extra two hundred and fifty tons was
produced from each furnace annually : and if
we attribute the whole of the former product
to human exertion, two hundred and fifty
tons at all events was the product of the new
machinery ; since if that had been destroyed,
the product, in proportion to the expenditure
of exertion, would at once have sunk back to
what it had been forty-eight years earlier.
The pro- Here, then, we have before us the two

ducts, then, , - „ . .

of capital principal manufactures of this country, as
- they were during the closing years of the last

century ; and we have seen that in each a
definite portion of the product was due to a
ducteof certain kind of capital, as distinct from human
Labour. exertion — distinct from human exertion in pre-
cisely the same way, as we have already seen
land to be, when we find it producing rent ;
and we have seen further that the products
both of this kind of Capital and of Land,
are to be distinguished from those of Human
Exertion on precisely similar principles.1

1 Were this work a treatise on political economy, rather
than a work on practical politics, in which only the simplest

MACHINERY AND WAGE CAPITAL 121

Machinery, however, — or fixed capital, of BOOKH.
which we have taken machinery as the type, —

f n • t •

is only a part 01 Capital considered as a whole, chapter we
We have still to deal with the part that is

reserved for and spent in wages ; and this
will introduce us to an entirely new subject
— a subject which as yet I have not so much
as hinted at — namely human exertion con-
sidered in an entirely new light.

and most fundamental economic principles are insisted on,
I should have here introduced a chapter on the special and
peculiar part which fixed capital, other than machinery,
plays in agriculture. I have not done so, however, for fear
of interrupting the thread of the main argument ; but it
will be useful to call the reader's attention to the subject in
a note.

It was explained in the last chapter that rent (to speak
with strict accuracy) is not to be described as the product of
superior soils, but rather as the product of the qualities
which make such soils superior — qualities which are present
in them and which in poorer soils are absent. Now in
speaking of rent, we assumed these superior qualities to be
natural. As a matter of fact, however, in highly cultivated
countries, many of them are artificial. They have been
added to the soil by human exertion — for instance by the
process of draining ; or they have been actually placed in
the soil, as by the process of manuring. In this way land
and capital merge and melt into one another, and illustrate
each other's functions as productive agents. It is im-
possible to imagine a more complete and beautiful example
of the relation between the two. At this point the rent of
Capital and the rent of Land become indistinguishable.

CHAPTER IV

Of the Products of Circulating Capital, or Wage
Capital, as distinguished from the Products of
Human Exertion.

wage CIRCULATING Capital, or, as it is better to call
abies men" it, Wage Capital, is practically a store of those
take work things which wages are used to buy — that is

which will ,i £ i • ,

not support t° sav the common necessaries ot subsistence.

And the primary function — the simplest and
haseiapsed. most obvious function — which such Capital
performs is this : it enables men, by supplying
them with the means of living, to undertake
long operations, which when completed will
produce much or be of much use, but which
until they are completed will produce nothing
and be of no use, and will consequently
supply nothing themselves to the men whilst
actually engaged in them.

Let us imagine, for instance, a tunnel which

SIMPLEST FUNCTION OF WAGE CAPITAL 123

pierces a range of mountains, and facilitates BOOKH.

communication between two populous cities. J '

Five hundred navvies, we will say, have to is aUgood
work five years to make it. Now if two yards
of tunnel were made every day, and if each
yard could be used as soon as made, the tolls
of passengers would at once yield a daily
revenue which would provide the navvies with
subsistence, as their work proceeded. But as
a matter of fact until the last day's work is
done, and the end of the fifth year sees the
piercing of the mountain completed, the tunnel
is as useless as it was when it was only just
begun, and when it was nothing more than a
shallow cavity in a rock. Five years must
elapse before a single toll is paid, and before
the tunnel itself supplies a single human being
with the means of providing bread for even a
single day. The possibility then of the tunnel
being made at all, depends on the existence of
a five-years' supply of necessaries, for which
indirectly the tunnel will pay hereafter, but in
producing or providing which, it has had no
share whatever.

Wage Capital, in fact, imparts to industry
the power of waiting for its own results. This

124 DISTINGUISHING FUNCTION

BOOK ii. is its simplest, its most obvious, and its

CH. IV. t

— primeval function. It has been the function

But the

above- of such capital from the days of the earliest

mentioned ...... ,...,,. p n

function of civilisations ; and it is, indeed, its fundamental

\V"fl.£T6

capital is function still : but in the modern world it is
principal far from being its principal function. I call

its principal functions in the modern world
the functions by which during the past
century and a quarter it has produced results
so incomparably, and so increasingly greater,
than were ever produced by it in the whole
course of preceding ages.

itsprind- What this function is must be explained
tion now is very clearly and carefully. It is not to enable
fewemeneoaf labourers to wait for the results of their
powJnto*1 labours. It is to enable the exceptional know-
Si*!1'7 ledge, ingenuity, enterprise, and productive
exertions16 genius °f a ^ew men so *° animate, to organise,
of the an(j direct the average physical exertions of

ordinary o -r J

labourers, ^g many, as to improve, to multiply, or to
hasten the results of that exertion without
increasing its quantity. All civilisations,
ancient as well as modern, have involved, in a
certain sense, the direction by the few of the
many. The temples and palaces of early
Egypt and Assyria, which excite the wonder

OF MODERN WAGE CAPITAL 125

of modern engineers and architects by the BOOK n.
size of the blocks of stone used in their — — '
astounding structure, are monuments of a
control, absolute and unlimited and masterly,
exercised by a few human minds over millions
of human bodies. But in that control, as
exercised in the ancient world, one element
was wanting which is the essence of modern
industry. When the masters of ancient labour
wished to multiply commodities, or to secure an
increase of power for accomplishing some single
work, the sole means known to them was to in-
crease the number of labourers ; and when one
thousand slaves were insufficient, to reinforce
them with (let us say) four thousand more.
The masters of modern labour pursue a new
and essentially opposite course. Instead of
seeking in such a case to secure four thousand
new labourers, they seek to endow one
thousand with the industrial power of five.
If Nebuchadnezzar had set himself to tunnel The

T .. modern

a mountain, he could nave hastened the work employer
only by flogging more slaves to it. The respect
modern contractor, in co-operation with the from the
modern inventor, instead of flogging labour, ai
would assist it with tram-lines, trucks, and

126 WAGE CAPITAL MAINLY PRODUCTIVE
BOOK n. boring engines. In other words, whereas in

CH. IV.

former ages the aim of the employing class
was simply to secure the service of an in-
creasing quantity of labour, the aim of the
employing class in the present age is to
increase the productive power of the same
quantity. The employing class in former ages
merely forced the employed to exert their own
industrial faculties, and appropriated what
those faculties produced. The employing class
of the present age not only commands the
employed, but it co-operates with them by
lending them faculties which they do not
wage themselves possess. It applies to the guidance

Capital in

the modern of the muscles oi the most ordinary worker
means by the profoundest knowledge of science, all the
strength of will, all the spirit of enterprise,

and the exceptional aptitude for affairs, that
distinguish the most gifted and the vigorous
characters of the day. And it is the peculiar
modern function of Capital, as spent in Wages,
to enable this result to take place.
Wage capi- Let us consider how it does so. Socialists tell
this in a us that Capitalism in the modern world means

merely the appropriation by the few of all the
Son of6 l l "materials of production, so that the many

AS A MEANS OF DIRECTING LABOUR 127

must either work as the few bid them, or must BOOK n.

CH. IV.

starve. But this is a very small part of what

r* • t Capital

modern Capitalism means, and it is not the altogether
essential part, nor does it even suggest the
essential part. The majority of men must
always work or starve. Nature, not modern
Capitalism , is responsible for that necessity. The
essential difference which modern Capitalism
has introduced into the situation is this — and
it is an enormous difference — that whereas in
former ages the livelihood of a man was con-
tingent on his working in the best way that
the average man knew, modern Capitalism has
made his livelihood contingent on his working
in the best way that exceptional men know.
Now this best way, as we shall see more
clearly presently, does not involve the forcing
of each man to work harder, or the exacting
from him any more difficult effort. It involves
merely the supplying him with a constant
external guide for even his minutest actions —
a guide for every movement of arm and hand,
or a pattern of each of the objects which are
the direct result of these movements; and
consequently the one thing which before all
others it requires is constant obedience or

128 SLAVES AND FREE LABOURERS

BOOK ii. conformity to such guides and patterns. The
entire industrial progress of the modern world
has depended, and depends altogether on this
constant obedience being secured ; and the
possession of Wage Capital by the employing
class is the sole means which is possible in
the modern world of securing it. In the
ancient world the case would no doubt have
been different. The lash of the taskmaster,
the fear of prison, of death, of torture, were
then available for the stimulation and organ-
isation of Labour. But they are available no
longer. The masses of civilised humanity
have taken this great step — they have risen
from the level on which they could be driven
to industrial obedience, to the level on which
they must be induced to it. Obedience of
some sort is a social necessity now as ever, and
always must be : but social necessity spoke
merely to the fear of the slave ; it speaks to
the will and the reason of the free labourer.
The free labourer may be, and must be, in one
or other of two positions. He may work for
himself, consuming or selling his own produce ;
or he may work for an employer, who pays
him wages, and exacts in return for them not

WAGE CAPITAL AND PROGRESS 129

work only, but work performed in a certain BOOKU.
prescribed way. The first position is that of
the peasant proprietor or the hand - loom
weaver. The second is that of the employee
in a mill or factory. In both cases, the voice
of social necessity, or of society, speaks to the
man's reason, informing him of the homely
fact that he cannot live unless he labours :
but in the first case, the voice of society cries
to him out of the ground, " You will get no
food unless you labour in some way " ; and in
the second case it cries to him from the mouths
of the wisest and strongest men, " You will
get no food unless you consent to labour in the
best way." l

In other words, Wage Capital in the modern Wage
world promotes that growth of wealth by which 23J&
the modern world is distinguished, simply JJJJ-Jj
because Wage Capital is the vehicle by which JJ^"0"
the exceptional qualities of the few com- ^taa

Labour ;

municate themselves to the whole industrial
community. The real principle of progress
and production is not in the Capital, but in the

1 In a state where the employing class were physically
the masters of the employed, Wage Capital would be un-
necessary for the employer. A system of forced labour
might take its place.

9

130 WAGE CAPITAL AS RELATED TO
BOOK ii. qualities of the men who control it ; just as

CH. IV. . 1 • 1

— the vital force which goes to make a great

picture is not in the brush, but in the great

painter's hand ; or as the skill which pilots a

coach and four through London is not in the

reins, but in the hand of the expert coachman.

AS we can This can easily be seen by turning our

following attention once again to machinery, and

the steps .

by which a supposing that a company is floated for the
would in- improved manufacture of something by means
some new of some new invention. The directors must
of course begin with securing a site for the
factory ; but with this exception their entire
initial expenditure will directly or indirectly
consist in the payment of wages — in purchas-
ing the services of a certain number of men
by whose exertions certain masses of raw
material are to be produced and fashioned
into certain definite forms — that is to say, into
the new machinery and a suitable building to
protect it.

The whole Now, the powers of these men resemble
° a mass of fluid metal which is capable of
being run into any variety of mould. If
the directors were bound by no articles of
used in the associati0n, and if, at their first board

THE PRODUCTION OF NEW INVENTIONS 131

meeting, before they had entered into any BOOKH.

CH. IV.

contract for the machinery, some other —

/. , expendi-

invention for the manufacture of some other ture of the

commodity were suddenly brought to their capital.
notice, and happened to take their fancy, the
men they were on the point of employing to
produce one kind of machinery might, with
equal ease, be employed to produce another.
We will assume that the machinery which
the men are set to produce actually is a
great improvement on anything of the kind
used hitherto, and ends in adding greatly to
the productive powers of the nation ; but, so
far as the men are concerned whose exertions
are paid for out of the capital of the company,
the machinery might just as well have been
absolutely valueless — a mere aggregation of
wheels and axles, as meaningless as a mad-
man's dream. What makes their exertions
not only useful instead of useless, but more
useful than any exertion similarly applied
had ever been hitherto, is, firstly, the in-
genuity of the inventor of the new machine ;
secondly, the judgment of the promoters and
directors of the company ; and lastly, the
confidence in their judgment felt by the

132 CAPITAL THE TOOL OF KNOWLEDGE

BOOK ii. subscribing public. Or, we may suppose the
inventor to have himself supplied the Capital,
and to unite in himself the parts of the direc-
tors and the shareholders. In that case the
exertions of the men employed derive their
value entirely from the talent of this one man.
The men employed by him, we will say, num-
ber a thousand, and the Wage Capital he owns
and administers aids and increases production
only because it is the means by which the one
man induces the thousand to accept him as
the steersman of their exertions, and to allow
him to direct their course towards new and
remote results which for them lie hidden be-
hind the horizon of contemporary habit or
ignorance.

The case of Let us take an actual case — the case of
Arkwright's spinning-frame. This invention,

s- which was destined to influence the prosperity
of so many millions, was in great danger of
being altogether lost, simply on account of the
difficulty experienced by the inventor in secur-
ing sufficient capital to construct and perfect
his machine, and, what was equally necessary,
to exhibit it in actual use. After many rebuffs
and disappointments, a sum was at last

WAGE CAPITAL AND ARKWRIGHT 133

advanced him by a certain firm of bankers — BOOK n.
the Messrs. Wright of Nottingham ; but before - —
the preliminary experiments had advanced far
their courage failed them, they repented of
what they had done, and they passed the
inventor on to two other capitalists whose
insight was fortunately keener, and whose
characters were more courageous. These
gentlemen, Mr. Need and Mr. Strutt of Derby,
took Arkwright into partnership, and by means
of the Capital which they placed at his disposal,
his machine, which till now had existed only in
his own brain and in a few unfinished models,
was before long in operation, and a new indus-
trial era was inaugurated. Now, to the accom-
plishment of this result Wage Capital was
essential; but it was essential only as the
means of giving effect to the genius and strong
character of certain specially gifted persons —
Arkwright with his marvellous inventive
genius, Messrs. Need and Strutt with their
sagacity and spirit and enterprise. If it had
not been for the qualities of these three men,
the wages paid to the labourers who made the
machine of Arkwright would have probably
been paid indeed to the very same labourers,

134 WAGE CAPITAL AS

BOOK ii. but their exertions would have been directed

CH IV

to producing some different product — some
product which added nothing to the existing
powers of the community.
NOW ma- Machinery, therefore, or Fixed Capital,

cninery is

necessarily though it differs as soon as it is made from

Wage ,°

Capital Capital employed in wages, is the result of the

congealed ;

use of such Capital, and is indeed but another
form of it. And now comes the point on which
I am concerned to insist here : that conversely
Wage Capital, when employed so as to increase
the productivity of labour, — in other words
when employed by men with the requisite
capacity, — is in its essence but another form
of machinery. Machinery may be called con-
gealed Wage Capital. Wage Capital may be
called fluid machinery. For the function of
both — namely, to increase wealth — is the
same, and they fulfil this function by means of
the same virtue residing in them. It is easy
to see the truth of this. The increase of wealth
means the improvement and multiplication of
commodities which reward the exertions of the
same number of men. The number and quality
of these commodities are increased by applica-
tion of Capital, because Capital enables persons

135
who are exceptionally gifted to control and BOOKH.

CH IV

direct the exertions of the majority; and Capital,
as embodied in machinery, differs from Capital
continuously employed in wages, only because
the former gives us machinery which is in-
animate, and the latter, machinery which is
living. For a thousand men so organised as
to produce some given product or result, and
to produce it with the greatest precision or in
the least possible time, are to all intents and
purposes as much an invention and a machine
as a thousand wheels or rollers adjusted for a
similar purpose. , .

All Capital, therefore, in all its distinctively And there-
modern applications — all those applications capital,
which have caused what is called industrial with wage

progress — is virtually this, and this only : it
is the exceptional capacities of one set of men
applied to the average capacities of another
set. We may accordingly include all Capital
— fixed and circulating — under one head, and Exertion

over

say of it as a whole what in the last chapter
was said of machinery : that when by its
application to the exertions of a given number
of men a larger product results than resulted
from them before it was applied, Capital is to

CH. IV.

136 HO W TO DISCRIMINATE THE AMOUNT

BOOK n. be credited with producing the amount of
the increase ; or — to put the same thing in
another way — with the amount of the de-
crease which would result if its application
were withdrawn.

How this is the case with machinery I
have already illustrated by examples. It is
less easy to illustrate by examples, but equally
easy to see how it is the case with Capital
continuously employed as wages. It is less
easy to select illustrations, because the whole
of modern progress is itself one great, though
infinitely complex example of it ; and it will
be enough here as we shall recur to the subject
presently, to consider one obvious and very
familiar fact. Many new commodities, and
many new methods of production, depend on
the invention not of new machines, but of
new processes. The Capital employed in
working a new process is mainly employed as
wages, by the administration of which the
actions of the workmen are guided, controlled,
and organised. Thus if fifty men, working
independently and selling their own produce,
produce a hundred articles of a certain sort
weekly, and another fifty men, working for a

PRODUCED BY WAGE CAPITAL 137

wage-paying employer, produce, owing to the BOOK u.
way in which their labour is guided and — — '
organised, just double the number of such This aspect

. . in °f tne

articles in the same time, we shall say that question
the hundred extra articles are the product of considered
Wage Capital, just as we should say, if the the next
increased production had been due to the c
introduction of a machine, that these extra
hundred articles were the product of Fixed
Capital. And in both cases we should mean,
as I am now going to insist more particularly,
that they were really the product of the
capacities which each kind of Capital , repre-
sents. This brings us to the heart of the
whole problem.

CHAPTER V

That the Chief Productive Agent in tlu modern world
is not Labour, but Ability, or the Faculty which
directs Labour.

what was I SAID in the last chapter that machinery or
last chap- Fixed Capital was congealed Wage Capital. But
tint pro- as Wage Capital is metamorphosed into machin-

only owing to the fact that it is at once
ofXtwo°n s the instrument and the guide of Human Exer-
doesSnoTd tion, machinery may be called congealed exertion
o? whau? also- Tbis description of it is but half original ;
Labcmrby ^or Socialistic writers have for a long time called
it " congealed Labour." But between the two
phrases there is a great and fundamental differ-
ence, and I now bring them thus together to
show what the difference is. The first includes
the whole meaning of the second, whereas the
second includes only a part of the meaning of
the first. Let us take the finest bronze statue
that was ever made, and also the worst, the

THE BEST LABOUR SOMETIMES USELESS 139

feeblest, the most ridiculous. Both can with BOOK n.

CH V

equal accuracy be called congealed Labour ; but
to call them this is just as useless a truism as instances
to call them congealed bronze. It describes Ts.
the point in which the two statues resemble
each other ; it tells us nothing of what is far
more important — the points in which the two
statues differ. They differ because, whilst both
are congealed Labour, the one is also congealed
imagination of the highest order, the other is
also congealed imagination of the lowest. The
excellence of the metal and of the casting may
be the same in both cases. Or again,, let us
take a vessel like the City of Paris, and let
us take also the vessel that was known as the
Bessemer Steamer. The Bessemer Steamer
was fitted with a sort of rocking saloon; which,
when the vessel rolled, was expected to remain
level. The contrivance was a complete failure.
The hundreds of thousands of pounds spent on
it were practically thrown away, and the struc-
ture ended by being sold as old iron. Now
these two vessels were equally congealed Labour,
and congealed Labour of precisely the same
quality ; for the workmen employed on the
Bessemer Steamer were as skilful as those

140 LABOUR NOT THE SAME FACULTY AS

BOOK H. employed on the City of Paris. And yet the
Labour in the one case was congealed into a
piece of lumber, and in the other case it was
congealed into one of the most perfect of those
living links by which the lives of two worlds
are united. To call both the vessels, then,
congealed Labour, only tells us how success
resembles failure, not how it differs from it.
The City of Paris differs from the Bessemer
Steamer because the City of Paris was con-
gealed judgment, and the Bessemer Steamer
was congealed misjudgment.

It is therefore evident that in using
Capital so as to make Labour more efficacious,
as distinct from wasting Capital so as to make
Labour nugatory, some other human faculties
are involved distinct from the faculty of
Labour ; and I have employed, except when it
would have been mere pedantry to do so, the
term " Human Exertion " instead of the term
" Labour," because the former includes those
other faculties, and the latter does not ; or, if
it includes them, it entirely fails to distinguish
them, and merely confounds them with faculties
from which they fundamentally differ. Thus,
when I pointed out in the last chapter that

THE FACULTY WHICH DIRECTS LABOUR 141

Capital, in so far as it increased the productivity BOOK JL
of Labour, was mental and moral energy as ap-
plied to muscular energy, I might have said with
equal propriety, had my argument advanced
far enough, that it was one kind of Human
Exertion guiding and controlling another
kind. Here we come to the great central fact
which forms the key to the whole economic
problem : the fact that in the production of
wealth two kinds of Human Exertion are in-
volved, and not, as economists have hitherto
told us, one — two kinds of exertion absolutely
distinct, and, as we shall see presently, follow-
ing different laws.

Economic writers, like the world in general, Economic

. . . . f* writers

do indeed recognise, in an unscientific way, vaguely

-i • i • i • • i f» i recognise

that productive exertion exhibits itseli under tins tact,
many various forms ; but their admissions and never
statements with regard to this point are entirely expressed
confused and stultified by the almost ludicrous It a<part«rf
persistence with which they classify all these systems.
forms under the single heading of Labour.
Mill, for instance, says that a large part of
profits are really wages of the labour of super-
intendence. He speaks of " the labour of the
invention of industrial processes," " the labour

142 EXTRA ORD1NA R Y CONTUSION IN

BOOK n. of Watt in contriving the steam-engine, " and

CH. V.

— even of " the labour of the savant and the
They cou- speculative thinker." He employs the same
productive word to describe the effort that invented Ark-
together wright's spinning-frame, and the commonest
heading of muscular movement of any one of the mechanics
Labour- wno assisted with hammer or screwdriver to
construct it under Arkwright's direction. He
employs the same word to describe the power
that perfected the electric telegraph, and the
power that hangs the wires from pole to pole,
like clothes-lines. He confuses under one
heading the functions of the employer and the
employed — of the men who lead in industry,
and of the men who follow. He calls them all
labourers, and he calls their work Labour.

Now were the question merely one of liter-
ary or philosophical propriety, this inclusive
use of the word Labour might be defensible ;
but we have nothing to do here with the
niceties of such trivial criticism. We are con-
cerned not with what a word might be made
to mean, but what it practically does mean ;
and if we appeal to the ordinary use of language,
— not only its use by the mass of ordinary
men, but its most frequent use by economic

CURRENT ECONOMIC LANGUAGE 143

writers also, — we shall find that the word Labour BOOK n.
has a meaning which is practically settled ;
and we shall find that this meaning is not an
inclusive one, but exclusive. We shall find But prac-
that Labour practically means muscular Labour,
or at all events some form of exertion of which
men — common men — are as universally capable, exertion?1
and that it not only never naturally includes
any other idea, but distinctly and emphatically
excludes it. For instance, when Mill in his
Principles of Political Economy devotes one
of his chapters to the future of the " Labouring
Classes," he instinctively uses the phrase as
meaning manual labourers. When, as not
unfrequently happens, some opulent politician
says to a popular audience, " I, too, am a
labouring man/' he is either understood to be
saying something which is only true meta-
phorically, or is jeered at as saying something
which is not true at all. Probably no two
men in the United Kingdom have worked
harder or for longer hours than Mr. Gladstone
and Lord Salisbury ; yet no one could call Mr.
Gladstone a labour member, or say that Lord
Salisbury was an instance of a labouring man
being a peer. The Watts, the Stevensons, the

144 LABOUR A LESSER PRODUCTIVE AGENT

BOOK u. Whitworths, the Bessemers, the Armstrongs,

CH V

— the Brasseys, are, according to the formal
definition of the economists, one and all of
them labourers. But what man is there who,
if, in speaking of a strike, he were to say that
he supported or opposed the claims of Labour,
would be understood as meaning the claims of
employers and millionaires like these ? It is
evident that no one would understand him in
such a sense ; and if he used the word Labour
thus, he would be merely trifling with language.
The word, for all practical purposes, has its
meaning unequivocally fixed. It does not
mean all Human Exertion ; it emphatically
means a part of it only. It means muscular
and manual exertion, or exertion of which the
ordinary man is capable, as distinct from in-
dustrial exertion of any other kind ; and not
only as distinct from it, but as actively opposed
to and struggling with it. Since, then, we
have to deal with distinct and opposing things,
it is idle to attempt to discuss them under one
Mental and and the same name. To do so would be like
tion, as describing the Franco-Prussian War with only
production, one name for both armies — the soldiers ; or
Sre be er like attempting to explain the composition of

ABILITY A GREATER PRODUCTIVE AGENT 145

water, with only one name for oxygen and BOOKH.

CH. V.

hydrogen — the gas. Accordingly, for the in-
dustrial exertion — exertion moral and mental another
— which is distinct from Labour and opposed
to it, we must find some separate and some
distinctive name; and the name which I propose
to use for this purpose is Ability.

Human Exertion then, as applied to the in this
production of wealth, is of two distinct kinds :
Ability and Labour — the former being essentially
moral or mental exertion, and only incidentally
muscular ; the latter being mainly muscular,
and only moral or mental in a comparatively
unimportant sense. This difference between
them, however, though accidentally it is always
present, and is what at first strikes the observa- ^^ igj
tion, is not the fundamental difference. The J™eevrer' a
fundamental difference is of quite another kind.
It lies in the following fact : That Labour is a
kind of exertion on the part of the individual, [act of one

x being

which begins and ends with each separate mental and

the other

task it is employed upon, whilst Ability is a muscular,
kind of exertion on the part of the individual
which is capable of affecting simultaneously
the labour of an indefinite number of indi-
viduals, and thus hastening or perfecting the

10

one°man°f

146 THE VITAL DISTINCTION

BOOK ii. accomplishment of an indefinite number of

CH. V.

— tasks.

The vital This vital distinction, hitherto so entirely
neglected, should be written in letters of fire
on the mind of everybody who wishes to
understand, to improve, or even to discuss
intelligibly, the economic conditions of a
country such as ours. Unless it is recognised,

ite number. anj terms are found to express it, it is impos-
sible to think clearly about the question ;
much more is it impossible to argue clearly
about it : for men's thoughts, even if for
moments they are correct and clear, will be
presently tripped up and entangled in the
language they are obliged to use. Thus, we
constantly find that when men have declared
all wealth to be due to Labour, more or less
consciously including Ability in the term,
they go on to speak of Labour and the labour-
ing classes, more or less consciously excluding
it ; and we can hardly open a review or a
newspaper, or listen to a speech on any
economic problem, without finding the labour-
ing classes spoken of as " the producers," to the
obvious and intentional exclusion of the classes
who exercise Ability ; whereas it can be de-

BETWEEN ABILITY AND LABOUR 147

monstrated, as we shall see in another chapter, BOOK n.

CH. V.

that of the wealth enjoyed by this country —
to-day, Labour produces little more than a
third.

Let us go back then to the definitions I
have just now given, and insist on them and
enlarge them and explain them, so as to
make them absolutely clear.

Labour, I said, is a kind of exertion on
the part of the individual, which begins and
ends with each separate task it is employed
upon ; whilst Ability is a kind of exertion on
the part of the individual which is capable of
affecting simultaneously the labour of an in-
definite number of individuals. Here are Familiar

, n . . n examples

some examples. An Jinglisn navvy, it is said, win show
will do more work in a day than a French of this,
navvy ; he will dig or wheel away more barrow-
loads of earth ; but the greater power of the
one, if the two work together, has no tendency
to communicate itself to the other. The one,
let us say, will wheel twelve barrow-loads,
whilst the other will wheel ten. "We will
imagine, then, a gang of ten French navvies,
who in a given time wheel a hundred barrow-
loads. One of them dies, and his place is

148 ABILITY NOT A FORM

BOOKH. taken by an Englishman. The Englishman
c.f!_I' wheels twelve loads instead of ten ; but the
rest of the gang continue to wheel ten only.
Let us suppose, however, that the Englishman,
instead of being a navvy, is a little cripple who
has this kind of ability — that he can show
the navvies how to attack with their picks
each separate ton of earth in the most effica-
cious way, and how to run their barrows
along the easiest tracks or gradients. He
might quite conceivably enable the nine
Frenchmen to wheel fifteen barrow-loads in
the time that they formerly consumed in
wheeling ten ; and thus, though the gang
contained one labourer less than formerly,
yet owing to the presence of one man of
ability, the efficacy of its exertions would be
increased by fifty per cent. Or again, let
us take the case of some machine, whose
efficiency is in proportion to the niceness with
which certain of its parts are finished. The
skilled workman whose labour finishes such
parts contributes by doing so to the efficiency
of that one machine only ; he does nothing
to influence the labour of any other workman,
or facilitate the production of any other

OF SKILLED LABOUR 149

machine similar to it. But the man who, BOOKH.

CH. V.

by his inventive ability, makes the machine
simpler, or introduces into it some new
principle, so that, without requiring so much
or such skilled labour to construct it, it will,
when constructed, be twice as efficient as
before, may, by his ability, affect individual
machines without number, and increase the
efficiency of the labour of many millions of
workmen. Such a case as this is specially
worth considering, because it exposes an error
to which I shall again refer hereafter — the
error often made by economic writers, of
treating Ability as a species of Skilled Labour.
For Skilled Labour is itself so far from being
the same thing as Ability, that it is in some
respects more distinct from it than Labour of
more common kinds ; for the secret of it is
less capable of being communicated to other
labourers. For instance, one of the most
perfect chronometers ever made — namely, that
invented by Mudge in the last century —
required for its construction Labour of such
unusual nicety, that though two specimens,
made under the direct supervision of the
inventor, went with an accuracy that has

ISO CAPITAL APPLIED SUCCESSFULLY
BOOK n. not since been surpassed, the difficulty of

CH. V. . 1-11-

— reproducing them rendered the invention
valueless. But the great example of this
particular truth is to be found in a certain
fact connected with the history of the steam-
engine — a fact which is little known, whose
significance has never been realised, and which
I shall mention a little later on. It may thus
be said with regard to the production of
wealth generally, that it will be limited in
proportion to the exceptionally skilled labour
it requires, whilst it will be increased in pro-
portion to the exceptional ability that is
applied to it.

We shall The difference, then, between Ability and
tode^criS5 Labour must be now abundantly clear. As
Stately a general rule> there is the broad difference on
contaSf *ke surface> that the one is mainly mental
Labour. an(j ^he Other mainly muscular ; but to this
rule there are many exceptions, and the differ-
ence in question is accidental and superficial.
The essential, the fundamental difference from
a practical point of view is, that whilst
Labour is the exertion of a single man applied
to a single task, Ability is the exertion of a
single man applied to an indefinite number

THE SAME THING AS ABILITY 151

of tasks, and an indefinite number of in- BOOKH.
dividuals.

And now let us go back to the subject of it is, of

r* • i T i -11 n • i • 1-1 course>

Capital. 1 nave said that Capital is one kind understood
of Human Exertion guiding and controlling definition
another kind. We can at last express this onT/to
with more brevity, and say that Capital is used'

so as

Ability guiding and controlling Labour. This Sf7 to
is no mere rhetorical or metaphorical state-
ment. It is the accurate expression of what
is at once a theoretical truth and an historical
fact ; and to show the reader that it is so,
let me remove certain objections which may
very possibly suggest themselves. In the
first place, it may be said that Capital belongs
constantly to idle and foolish persons, or
even indeed to idiots, to all of whom it yields
a revenue. This is true ; but such an objec-
tion altogether ignores the fact that though
such persons own the Capital, they do not
administer it. An idiot inherits shares in a
great commercial house ; but the men who

o

manage the business are not idiots. They
only pay the idiot a certain sum for allowing
his Capital to be made use of by their Ability.
It may, however, be said further that many

152 OBVIOUS EXCEPTIONS

BOOK n. men, neither idle nor idiotic, had administered

CH V

Capital themselves, and had succeeded merely
in wasting it. This again is true ; but where
Capital is wasted the productive powers of
the nation are not increased by it. It is,
however, a broad historical fact that, by the
application of Capital the productive powers
of the nation have been increasing continually
for more than a hundred years, and are in-
creasing still ; and this is the fact, or the
phenomenon, which we are engaged in study-
ing. Capital for us, then, means Capital
applied successfully ; and when I say that
Capital is Ability guiding and controlling
Labour, it is of Capital applied successfully,
and not of Capital wasted, that I must in
every case be understood to be speaking ; just
as if it were said that a battle was won by
British bayonets, the bayonets meant would
be those that the combatants used, not those
that deserters happened to throw away. The
fact, indeed, that in certain hands so much
Capital is thrown away and wasted, is nothing
but a proof of what I say, that as a produc-
tive agent Capital represents, and practically
is, Ability.

ABILITY THE BRAIN OF CAPITAL 153

It may, however, be said — and the objec- BOOKIL

J J CH. V.

tion is worth noticing — that Capital is a
material thing, and Ability a mental thing;
and it may be asked how, except metaphor-
ically, the one can be said to be the other?
An answer may be given by the analogy of capital is
the mind and brain. So long as the mind something
inhabits and directs a human body, mind aw brain
and matter are two sides of the same thing.
It is only through the brain that mind has
power over the muscles ; and the brain is
powerful only because it is the organ of the
mind. Now Ability is to Capital what mind
is to the brain ; and, like mind and brain,
the two terms may be used interchangeably.
Capital is that through which the Ability of
one set of men acts on the muscles — that is
to say, the Labour — of another set, whether by
setting Labour to produce machinery, or by so
organising various multitudes of labourers
that each multitude becomes a single machine
in itself, or by settling or devising the uses to
which these machines shall be put.

And it will be well, in case any Socialist
should happen to read these pages, to point
out that my insisting on this fact is no

154 ABILITY AS THE FORCE BEHIND CAPITAL

BOOK ii. piece of special pleading on behalf of the
private capitalist. The whole of the above

And this

would be argument would apply to Capital, no matter
Capital in a who owned it : individuals, or the community

Socialistic i i -n i i -i

state as in as a whole. Jb or no matter who owned it,
or who divided the proceeds of it, the entire
control of it would have to be in the hands of
Ability. In what, or how many, individuals
Ability may be held to reside ; how such indi-
viduals are best found, tested, and brought
forward ; and how their power over Capital
may be best attained by them — whether as
owners, or as borrowers, or as State officials, —
is a totally different question, and is in this
place beside the point.

At present, it will be enough to sum up
what we have seen thus far. The causes of
wealth are not, as is commonly said, three :
Land, Labour, and Capital. This analysis
omits the most important cause altogether,
and makes it impossible to explain, or even
reason about, the phenomenon of industrial
progress. The causes of wealth are four — Land,
Labour, Capital, and Ability : the two first
being the indispensable elements in the pro-
duction of any wealth whatsoever ; the fourth

CH. V.

THE CAUSE OF ALL PROGRESS 155

being the cause of all progress in production ; BOOK n.
and the third, as it now exists, being the
creation of the fourth, and the means through
which it operates. These two last, as we shall
see presently, may, except for special purposes,
be treated as only one, and will be best included
under the one term Ability.

And now let us turn back to the condition
of this country at the close of the last century,
and the reader will see why, at the outset of
the above inquiry, I fixed his attention on
that particular period.

CHAPTER VI

Of the Addition made during the last Hundred Years
by Ability to the Product of the National Labour.
This Increment the Product of Ability.

Let us now I HAVE already said something — but in very

turn to the J

history of general terms — of what, at the close of the

production .

in this last century, the wealth of this country was.

country • -\ -\ • T

during the Let us now consider the subject a little more
dred years; in detail, though we need not trouble ourselves
with a great many facts and figures. The
comparatively backward state of Ireland makes
it easier to deal with Great Britain only ; and
the income of Great Britain was then, as I have
said already, about a hundred and forty million
pounds annually. This amount was, as has been
said already, also produced by Land, Capital,
and Human Exertion, or, as we are now able to

*

put it, by Land, Labour, Capital, and Ability ;

PRODUCTION IN THE LAST CENTURY 157

and according to the principles which I have BOOK n.
already carefully explained, had the statistics
of industry been recorded as fully as they are
now, we should be able to assign to each cause
a definite proportion of the product. Of what
the Land produced, as distinct from the three
other causes, we are indeed able to speak with
sufficient accuracy as it is. It was practically
the amount taken in rent ; and the amount taken
in rent was about twenty-jive, million pounds, or
something between a fifth and sixth of the
total. But the proportion produced respect-
ively by Labour, Capital, and Ability can,not be
determined with the same ease or exactness.
There are, however, connected with this
question, a number of well-known and highly
significant facts, to a few of which I will call
the reader's attention.

Between the years 1750 and 1800, the And con-
population of Great Britain increased by barely

so much as twenty-five per cent. It rose from
about eight millions to about ten. Now during turaiUpro-
that period the number of hands employed d Lon>
in manufactures increased proportionally far
faster than the total population. The cotton-
spinners, for instance, increased from forty to

158 GRO WTH OF A GRICUL TURAL PROD UCTS

BOOK n. eighty thousand.^ Such being the case, it
is of course evident that the increase of
agricultural labourers cannot have been very
great. It can hardly have been, at the utmost,
so much as eighteen per cent.2 And now let
us glance at the history of agricultural pro-
ducts, as indicated by a few typical facts. In
the year 1688, the number of sheep in Great
Britain was estimated at twelve millions. In
the year 1774, the number was estimated at
almost the same figure ; but between the years
1774 and 1800, this twelve millions had risen-
to twenty millions. During the same twenty-
six years, the number of cattle had increased
in almost the same proportion. That is to say,
live-stock had increased by seventy-five per
cent. Between the years 1750 and 1780 there
was an average annual increase in agricultural
capital of seven million three hundred thousand
pounds. But from the years 1780 and 1800
there was an average annual increase of twenty-
six million pounds ; whilst between the years

1 This was Pitt's computation. See Lecky, History of
England during the Eighteenth Century, vol. vi. chap, xxiii.

2 The amount of land, formerly waste, that was added to
the cultivable area during the last century, was in England
and Wales not more than sixteen per cent of the total

GRO WTH OF PROD UCTION OF IRON 1 59

1750 and 1800 the farmer's income had very BOOKU.

Cfl. VI.

nearly doubled,1 and the total products of
agriculture had increased sixty per cent.

And now let us turn to manufactures. And in
These, as a whole, had advanced more slowly ; tures,
but the advance of certain of them had been
yet more rapid and striking. It will be
enough to mention two : the manufacture of
cotton, to which 1 have called attention
already ; and an industry yet more important —
the manufacture of iron. The amount of pig-
iron produced annually in Great Britain during That had
the earlier part of the last century was not more taken place
than twenty thousand tons ; 2 at the close of the of the lasf
century it was more than a hundred and eighty c<
thousand. "What may have been the increase
in the amount of labour employed, cannot be
said with certainty ; but it cannot have been
comparable to the increase of the product, which
was, as we have just seen, eight hundred percent;

1 The rental of Great Britain in 1750 was about
thirteen million five hundred thousand pounds, and in 1 800 about
twenty-nine million six hundred thousand pounds. According
to the estimates of Arthur Young, the farmer's income some-
what more. The wages of Agricultural Labour had not risen
proportionately.

2 See Encyclopcedia Britannica, first and earlier editions.

160 ABILITY AND AGRICULTURE

BOOK H. an(j it may be mentioned that one single set of

CH. VI. '

— inventions, in the course of eight years, nearly
doubled the product of each individual smelt-
ing furnace.1 As to the cotton industry, our
information is more complete. The amount
of labour was doubled in forty years. The pro-
duct was increased fifteen-fold in twenty-five.
We shall My present aim, however, is to make no
obviously exact calculation respecting the extent to
*eastofaihis which production, taken as a whole, had during
the Pei'iO(l m question outstripped the increase
°^ Labour ; but merely to show the reader that
Capital. the extent was very large ; and that, according
to the principles explained already, it was due
altogether to the operation of Capital and
Ability — or, to speak more exactly, of Ability
operating through Capital. The truth of this
statement with regard to the increase of
manufactures has been showTn and illustrated
by the instance of Arkwright and the cotton
industry. It will be well to mention at this
point several analogous instances taken from

1 See Encyclopedia Britannica, first and earlier editions.
The product of each smelting furnace in use in 1780 was two
hundred and ninety-four tons annually. In 1788, these same
furnaces were producing, by the aid of new inventions, Jive
hundred and ninety-four tons.

77V THE LAST CENTURY 161

the history of agriculture. Elkington, who BOOKH.
inaugurated a new system of drainage, will
supply us with one. One still more remarkable Labour
is supplied by Bakewell, who may be said to Jeaiiy have
have played in practical life a part resembling fhedwhoie.
that which Darwin has played in speculation.
He discovered the method of improving the
breeds of sheep and cattle by a system of
selection and crossing that was not before
known ; and it was owing to the ability of
this one man that "the breed of animals in
England," as Mr. Lecky points out, " was
probably more improved in the course of a
single fifty years than in all the recorded
centuries that preceded it." The close con-
nection of such improvements with Capital is
the constant theme of Arthur Young, though
he was not consciously anything of a political
economist, nor did he attempt to express his
opinion in scientific language. But a still
more effective witness is a distinguished
modern Radical, Professor Thorold Rogers, who,
though always ready, and, as many people
would say, eager to espouse the side of Labour
as against Capital and Ability, — especially
when the two last belonged to the landed class

11

162 THE MAXIMUM PRODUCT

BOOK n. —is yet compelled to assert as emphatically
as Young himself, that the Ability and the
Capital of this very class were in the last cen-
tury " the pioneers of agricultural progress " —
a progress which he illustrates by these
picturesque examples : that it raised the
average weight of the fatted ox from 400 Ibs.
to 1200 Ibs., and increased the weight of the
average fleece fourfold.

Therefore It will therefore be apparent to every
that La-m reader, that of the income of Great Britain at
uothlve11 the close of the last century, Ability and
thT whole Capital, as distinct from Labour, created a
national considerable part, though we need not de-

termine what part. Accordingly, since the
mcome of Great Britain, with a population of
argument's fen mmions was at that time about a hundred

sake we

™l\ tiT'tit anc^ forty mitti°n pounds, or fourteen pounds
produced per head,1 it is evident that the Labour of a

the whole. *

1 According to Arthur Young's estimates, the earnings
of an agricultural family, consisting of seven persons all
capable of work, would be about fifty-one pounds annually.
This gives a little over seven pounds a head ; but when the
children and others not capable of work are taken into
account the average is considerably lower. The wages,
however, of the artisan class being higher, the average amount
per head taken by the whole working population would be
about seven pounds.

THAT CAN BE DUE TO LABOUR ALONE 163

population of ten millions was quite incapable, BOOK n.
a hundred years ago, of producing by itself as
much as fourteen pounds per head.1 I will,
however, merely for the sake of argument, and
of keeping a calculation I am about to make
far within the limits which strict truth would
warrant, make a preposterous concession to any
possible objector. I will concede that Labour
by itself produced the entire value in question,
and that Ability, as distinct from Labour, had
nothing at all to do with it. I will concede
that the faculties which produced the machines
of Arkwright, which had already turned steam
into an infant Hercules of industry, and was
pouring into this island the wealth of the
farthest Indies, were faculties of the same order
as those which were possessed by any waggoner
who had driven the same waggon along the
same ruts for a lifetime. And I will now
proceed to the calculation I spoke of. I shall
state it first, and establish its truth afterwards.

It will be seen, from what has just been The whole

income of

1 About £l : 12s. per head would have to be set down to
land, were the land question being dealt with. But for the
purpose of the above discxission, land may be ignored, as it
does not affect the problem.

1 64 PRESENT ANNUAL PRODUCT OF
BOOK ii. said, that a hundred years ago the utmost

CH VI

that Labour could produce in the most
tahiatthat advanced country of Europe was a hundred
<x>nd forty million pounds annually for a
population of ten millions, or — let me repeat
—fourteen pounds per head. The production
per head is now thirty -Jive pounds ; or, for each
*en miHi°ns OI* population, three hundred and
fifty m^ons- The point on which presently I
the next snall insist at length is this : that if Labour is

Book, we

get an ^o be credited with producing the whole of the

indication

of the ut- smaller sum, the entire difference between the

most that

Labour smaller sum and the larger is to be credited

alone can . p

produce, to Ability operating on industry through
population Capital. That is to say, for every three
minions hundred and fifty millions of our present
produces national income, Labour produces only a

hundred and forty millions whilst Ability
and Capital produce two hundred and ten.
But the fact may be put yet more clearly
than this. Of our present national income
of thirteen hundred millions, Labour pro-
duces about five hundred, whilst Ability and
Capital produce about eight hundred. It
could indeed be shown, as I just now
indicated, that Labour in reality produces

ABILITY IN THE UNITED KINGDOM 165
less than this, and Ability and Capital more ; BOOK n.

CH VI

but for argument's sake we will let the
calculation stand thus, in order that Labour
shall be at all events credited with not less
than its due.

And now as to Capital and Ability, and the And it win

•77 77 '77 • T HI i i accordingly

eight hundred millions produced by them, what be shown

, " . , . , , . , in the next

has just been said can be put in a simpler way. Book that
Capital is not only the material means through Of ethl

which Ability acts on and assists Labour, but
it is a material means which Ability has a^d notby
itself created. So long as Labour alone was Labour-
the principal productive agent, those ,vast
accumulations which are distinctive of the
modern world were unknown and impossible.
Professor Thorold Rogers has pointed out
how small was the Capital of this country at
so late a date as the close of the seventeenth
century. Labour alone was unable to supply
a surplus from any such accumulation as
we now call Capital. These became possible
only by the increasing action of Ability.
They were taken from the products which
Ability added to the products of Labour.
Capital therefore is Ability in a double sense
— not only in the sense that as a productive

166 THE PRODUCT OF CAPITAL VIRTUALLY

BOOK n. agent it represents Ability, but in the sense
that Ability has created it. We may therefore
for the present leave Capital entirely out of
our discussion, regarding it as comprehended
under the term and the idea of Ability ;
although when we come to consider the
question of distribution, we shall have to
take account of the distinction between the
two. But for the present we are concerned
with the problem of production only ; and
in dealing with that part of it which alone
is now before us, we have to do only with
two, and not three forces — not with Labour,
Ability, and Capital, but with Labour and
Ability only.

The calculation, therefore, which was put
forward just now may be expressed in yet
simpler terms. Of our present national in-
come of thirteen hundred millions, Labour pro-
duces five hundred millions and Ability eight
hundred. And now comes another point which
yet remains to be mentioned. When we speak
of Labour, we mean not an abstract quality :
what we mean is labouring men. Similarly,
when we talk of Ability, we do not mean an
abstract quality either : we mean men who

PRODUCT OF THE ABILITY OF THE FEW 167

possess and exercise it. But whereas when we BOOK u.

CH« VI.

talk of Labour we mean an immense number
of men, when we talk of Ability — as I shall
show presently — we mean a number that by
comparison is extremely small. The real
fact then on which I am here insisting, and
which I shall now proceed to substantiate
and explain further, is that, whilst the
immense majority of the population of this
country produce little more than one-third of
the income, a body of men who are compara-
tively a mere handful actually produce little
less than two-thirds of it.

BOOK III

AN EXPOSURE OF THE CONFUSIONS IM-
PLIED IN SOCIALISTIC THOUGHT AS
TO THE MAIN AGENT IN MODERN
PRODUCTION.

CHAPTER I

The Confusion of Thought involved in the Socialistic
Conception of Labour.

THERE is one point which now must be quite After what

• T 1 ' ^aS n°W

plain to every reader, and on which there is been said,

GV6rV OH6

no need to insist further ; namely, that Ability win admit
is as truly a productive agent as Labour, and Ability, as
that if Labour produces any part of contem- fr0m
porary wealth, Ability just as truly produces M truly a

another part. This proposition, when put in
a general way, will, after what has been said, Lab<
not be disputed by anybody ; but there are
various arguments which readers of socialistic
sympathies will probably invoke as disproving
it in the particular form just given to it.
Certain of these arguments require to be
discussed at length ; but the rest can be
disposed off quickly, and we will get them
out of the way first. They are, indeed, not

172 A CONFUSING SOCIALISTIC FORMULA
BOOK in. go much arguments as confusions of thought,

CH. I.

— due largely to an inaccurate use of language.

But Social-

ists, even Ihesc confusions are practically all compre-

admit this hended in the common socialistic formula which

their in- declares all production, under modern condi-

thought6 tions, to be what Socialists call " socialised."

Language By this is meant that the whole wealth of the

theCmean- community is produced by the joint action of

f°ftof all the classes of men and of all the faculties

employed in its production ; and the formula

thus includes, as Socialists will be careful to

tell us, all those faculties which are here

described as Ability. Now such a doctrine, if

we consider its superficial sense merely, is so

far from being untrue that it is a truism. But

if we consider what it implies, if we consider

the only meaning which gives it force as a

socialistic argument, or indeed invests it with

the character of any argument at all, we shall

find it to be a collection of fallacies for which

the truism is only a cloak. For the implied

meaning is not the mere barren statement that

the exertions of all contribute to the joint result,

but that the exertions of all contribute to it in

an equal degree ; the further implication being

that all therefore should share alike in it.

A PLAUSIBLE ARGUMENT 173

This is really Mill's argument with respect BOOK m.

CH« I*

to Land and Labour, put into different language

i TT TT n A i • T T • Making use

and applied to Labour and Ability. It says in of the same
effect precisely what was said by Mill, that that of ^
when two causes are both necessary to produc- has been 1
ing a given result, it is absurd to say that the criticised,
one produces more or less of it than the other :
only here the argument can be used with
greater apparent force. For the Socialists may
say that if the principle which has been ex-
plained in this book is admitted, and if Ability
is held to produce all that part of the product
which is over and above what Labour could
produce by itself, Labour, by the same reasoning,
could be proved to produce the whole of the
product, since, without the assistance of Labour,
Ability could produce nothing. Accordingly,
they will go on to say, this conclusion being
absurd, the reasoning which leads to it must
be false, and we must fall back again on the
principle set forth by Mill. Labour and
Ability are both necessary to the result, and
being equally necessary must be held to con-
tribute equally to producing it.

This argument, as I have said, has great
apparent force ; but again we have a plausi-

174 A PLAUSIBLE ARGUMENT ANALYSED
BOOK m. bility which is altogether upon the surface. If

CH I

Labour and Ability were here conceived of as
faculties, without regard to the number of men
possessing them, the argument would, what-
ever its logical value, coincide broadly with
one great practical fact, to which by and by I
shall call the reader's attention ; namely, that
Labour and Ability do in this country divide
between them the joint product in nearly
equal portions. But those who make use of
the socialistic formula use it with a meaning
very different from the above. When they
say that Ability and Labour contribute equally
to producing a given amount of wealth, they
mean not that the men who exercise one
faculty produce collectively as much as the men
who exercise the other ; for that might mean
that Jive hundred men of Ability produced as
much Sisjtve hundred thousand labourers ; and
that is the very position which the Socialists de-
sire to combat. They mean something which is
the exact reverse of this : not that one faculty
produces as much as the other faculty, but that
one man produces as much as, and no more than
another man, no matter which faculty he exer-
cises in the producing process. They mean not

ITS IMPLIED MEANING CONSIDERED 175

that the faculty of Labour which an ordinary BOOK m.
ploughman represents, produces as much as the '
faculty represented by an Arkwright or by a
Stevenson, but that the individual ploughman,
by the single task which he himself performs,
adds as much to his country's wealth as the crea-
tors of the spinning-frame and the locomotive.

As soon as we realise that this is what the Their
argument means, its apparent plausibility turns ^d™ only
into a sort of absurdity which common sense re- clearly
jects, even before seeing why it does so. We t^show its
will not, however, be content with dismissing absurdlty-
the argument as absurd : there is an idea at
the back of it which requires and deserves to
be examined. It is an idea which rests upon
the fact already alluded to, that though Ability
can make nothing without Labour, Labour can
make something without Ability ; and that
thus the labourers who work under the direc-
tion of an able man each contribute a kind of
exertion more essential to the result than he
does. Each can say to him, " I am something
without you. You, on the contrary, are nothing
without me." Thus there arises a more or less
conscious idea of Labour as a force which, if only
properly organised, will be able at any moment,

176 THE REAL TASKMASTER OF LABOUR

BOOK in. by refusing to exert itself, to render Ability
helpless, and so bring it to terms and become
its master, instead of being, as now, its servant.

But m it But this idea, which is suggested, and seems

there is,

indeed, a to be supported, by the modern development of

plausible , . . 1-1 n •

view as to labour-organisation and strikes, really ignores
which must the most fundamental facts of the case. In
not oni" ' the first place, it may be observed that though
According Ability, regarded as a faculty, is no doubt help-
^abour'ciTn less unless there is Labour for it to act upon,
Sing8 Ability, if we take it to mean the men possess-
*ne faculty, is, whatever happens, in as

g°0(l a position as Labour ; for the average man
of ability can always become a labourer. But
the principal point to realise is far more
important than this. We are perfectly right
in saying, as was said just now, that if Labour
should refuse to exert itself, Ability could pro-
duce nothing ; but it seems completely to
escape the notice of those who use this argu-
ment that to refuse to exert itself is what
Labour can never do, except for very short
times, and to a quite unimportant extent ; and
it can only do thus much when Ability indirectly
helps it. The ideas of the power of Labour
which are suggested by the phenomenon of the

NOT AN EMPLOYING CLASS, BUT NATURE 177

strike are, as I shall by and by show more BOOKHI.

CH T

fully, curiously fallacious. Men can strike —

, , , , , But Labour

that is to say, cease to labour — only when cannot
they have some store on which to live when exert it
they are idle ; and such a store is nothing but and

so much Capital. A strike, therefore, repre-
sents the power not of Labour, but of Capital.1 capital.
The Capital which is available in the present
day for supporting strikes would never have
been in existence but for the past action of
Ability ; and what is still more important, a
widespread strike would very quickly exhaust
it. Further, a strike, no matter what Capital
were at the back of it, could never be more
than partial for even a single day ; for there
are many kinds of Labour, such as transport
and distribution of food, the constant per-
formance of which is required by even the
humblest lives. But it is not necessary to
dwell on such small matters as these. It is
enough to point to the fact, which does not
require proving — the broad fact that men, taken
as a whole, can no more refuse to labour than
they can refuse to breathe. What compels them

1 This fact has been commented on with, much force by Mr.
Gourlay in a paper contributed by him to the National Review.

12

i;8 DIFFERENT POSITION OF ABILITY

BOOK in. to labour is not the employing class, but Nature.
- The employing class — the men of ability —

Nature,not 1° . . .

the men of merely compel them to labour in a special way.
forcesythe But Ability itself stands on an entirely
meiiTc/0 different footing. Whereas Labour, as a
whole, cannot cease to exert itself, Ability can.
Indeed, for long periods of history it has hardly
exerted itself at all ; whilst its full industrial
power, as we know it now, only began to be
felt a century and a half ago. Labour, in
other words, represents a necessary kind of
exertion, which can always be counted on as
we count on some force of Nature : Ability
represents a voluntary kind of exertion, which
can only be induced to manifest itself under
certain special circumstances. Accordingly,
But Nature whilst Labour can make no terms with Nature,
on^toexert Ability in the long run can always make terms
therefore with Labour. It will thus be seen that the set
inthe718' of arguments founded on the conception of
long run, La^our as stronger than Ability, because more
necessary, are arguments founded on a complete

Labour misconception of facts. I speak of them as
arguments ; but they hardly deserve the name.
Rather they are vague ideas that float in the
minds of many people, and suggest beliefs or

THE ORGANIST AND BELLOWS-BLOWER 179

opinions to which they can give no logical BOOKIU.
basis. At all events, after what has been said,
we may dismiss them from our thoughts, and
turn to another fallacy that lurks in the social-
istic formula.

I said of that formula that, the moment its Let us now
meaning was realised, it struck the mind as an socialistic
absurdity, even before the mind knew why. examples:
Let us now apply it to two simple cases, which
will show its absurdity in a yet more striking
manner. There is an old story commonly told By the case
of Handel. The great composer had been organist

-, . n , n and the

playing some magnmcent piece of music on man who
the organ ; and as soon as the last vibration of 6

inspired sound had subsided, he was greeted
by the voice of the man who blew the bellows,
saying, " I think that we two played that beau-
tifully." " We!" exclaimed Handel. "What
had you to do with it ? " He turned again to
the keys, and struck them, but not a note came.
" Ha ! " said the bellows-blower, " what have I
to do with it ? Admit that I have as much to
do with it as you have, or I will not give you
the power to sound a single chord." The
whole point of this story lies in the fact that
the argument of the bellows-blower, though

i8o THE PICTURE AND THE CANVAS

BOOK in. possessed of a certain plausibility, is at the

CH I

same time obviously absurd. But according
to the principles of the Socialists, it is absolutely
and entirely true. It exhibits those principles
Or of a applied in the most perfect way. With just
painter and the same force, it may be said about a great
^ii0ma picture by the man who has woven the canvas,
or tacked it to its wooden frame. This man
may, according to the socialistic theory of pro-
duction, call the picture the socialised product
of the great painter and himself, and, though
no more able to draw than a child of four years
old, may put himself on a level with a Millais
or an Alma Tadema. To the production of the
result the canvas is as necessary as the painter.
The nature of the fallacy which leads us
to such conclusions as these is revealed
almost instantly by the light such conclusions
throw on it. It consists in ignoring the fact
that whilst anybody, not a cripple or idiot,
can blow the bellows of an organ, or stretch
the canvas for a picture, only one man in a
million can make music like Handel, or cover
the canvas with pictures like Millais or Alma
Tadema. The nature of the situation will be
understood most accurately if we imagine the

THE QUALIFYING FACTOR 181

bellows-blower at the key-board of the organ, BOOK m.
and the canvas-stretcher with the painter's — '
brushes. The one, no doubt, could elicit a
large volume of sound ; the other could cover
the canvas with daubs of unmeaning colour.
These men, then, when they work for the
artists of whom we speak, may very properly
be credited with a share in as much of the
result as would have been produced if they had
been in the artists' places. That is to say, to
the production of mere sound the bellows-
blower may be held to contribute as much as
the great musician ; and the canvas-stretcher
as much as the painter to the mere laying on
of colour. But all the difference between an
unmeaning discord and music, all the difference
between an unmeaning daub and a picture, is
due to qualities that are possessed by no one
except the musician and the painter.1 The

1 The matter may also be put in this way. There are
ninety-nine labourers engaged on a certain work at which
there is room for a hundred. The ninety-nine men produce
every week value to the amount of ninety - nine pounds.
There are two candidates for the hundredth place : one
a labourer, John ; and one, a man of ability, James. If
John takes the vacant place, we have a hundred men pro-
ducing a hundred pounds. If James takes the vacant place,
the productivity of labour by his action is (we will say)

1 82 DO ALL MEN POSSESS ABILITY

BOOK in. socialistic theory of production would be true

CH. I.

only on the supposition that the faculties

The social- . . ,

view employed in production were all equally com-
mon, and that everybody is equally capable of
exertion of every grade. Now is this supposi-
fact of life tion true, or is it not true ? A moment ago I
different to spoke of it, assuming it to be obviously false ;
; 1S< and many people will think it is hardly worth
discussion. That, however, is far from being
the case. It is a supposition which, as we
have seen, lies at the very root of Socialism :
the question it involves is a broad question of
fact ; and it is necessary, by an appeal to fact, to
show that it is as false as I have assumed it to be.
The great Let me once again, then, state the great
proposition which I am anxious to put beyond
the reach of all denial or misconception. A
e given number of people, a hundred years ago,
- produced yearly in this country a hundred

ber of men.

doubled, and we have a hundred men producing a hundred

and ninety-eight pounds. No amount of theory based on the fact
that James could do nothing without the ninety-nine labourers
can obscure or do away with the practical truth and import-
ance of the fact that the exertion of James will produce ninety-
eight pounds more than the exertion of John ; and any
person with whom the decision rested, which of these two men
should take the hundredth place, would base their decision
on this fact.

LABOUR ITSELF NON-PROGRESSIVE 183

and forty million pounds. The same number BOOK m.

CH I

of people to-day produce two and a half times
as much. Labour, a hundred years ago, could
not have produced more than the total product
of the community — that is to say, a hundred
and forty million pounds ; and, if it produced
that then, it produces no more now. The
whole added product is produced by the action
of Ability. The proposition is a double one.
Let us take the two parts in order.

I have already here and there pointed out History

-. . -11 • shows us

in passing now certain special advances m that
the productive powers of the community were not pro-

due demonstrably to Ability, not to Labour ;
but I have waited till our argument had
arrived at its present stage to insist on the
general truth that, except within very narrow
limits, Labour is, in its very nature, not pro-
gressive at all. If we cast our eyes backwards ^ ^ of
as far into the remote past as any records or century-
relics of human existence will carry us, we
can indeed discern three steps in industrial
progress, which we may, if we please, attribute
to the self-development of Labour — the use of
stone, the use of bronze, and the use of iron.
But these steps followed each other slowly,

184 ANCIENT LABOUR EQUAL TO MODERN

and at immeasurable intervals; and though
the last was taken in the early morning of
history, yet Labour even then had, in certain
respects, reached for thousands of years an
efficiency which it has never since surpassed.
In the lake- dwellings of Switzerland, which
belong to the age of stone, objects have been
found which bear witness to a manual skill
equal to that of the most dexterous workmen
of to-day. No labour, again, is more delicate
than that of engraving gems ; and yet the
work of the finest modern gem-engravers is
outdone by that of the ancient Greeks and
Romans. It was even found, when the
unburied ship of a Viking was being repro-
duced for the International Exhibition at
Chicago, that in point of mere workmanship,
with all our modern appliances, it was impos-
sible to make the copy any better than the
original ; whilst, if we institute a comparison
with times nearer our own — especially if we
come to the close of the last century — it is
hardly necessary to say that in every opera-
tion which depended on training of eye and
hand, the great-grandfathers of the present gen-
eration were the equals of their great-grandsons.

A REMARKABLE ILLUSTRATION 185

We will therefore content ourselves with BOOKHI.

CH. I.

comparing the labourers of to-day with the —

„ „ -~. . Let us then

labourers of the days of Pitt ; and with regard compare

the work-
to those two sets of men, we may saiely say ers of that

, . , . . , , period with

this, that in whatever respect the latter seem their great-
able to do more than the former, their seem-
ingly increased power can be definitely and
distinctly traced to some source outside them-
selves, from which it has been taken and
lent to them — in other words, to the ability
of some one able man, or else to the joint
action of a body of able men. A single
illustration is sufficient to prove this. It
consists of a fact to which I have alluded in
general terms already. It is as follows : —

When Watt had perfected his steam-engine
in structure, design, and principle, and was
able to make a model which was triumphantly
successful in its working, he encountered an
obstacle of which few people are aware, and
which, had it not been overcome, would have
made the development of steam-power, as
we know it now, an utter impossibility. It
was indeed, in the opinion of the engineer
Smeaton, fatal to the success of Watt's steam-
engine altogether. This obstacle was the

1 86 LABOUR AS TRAINED BY WATT

BOOK in. difficulty of making cylinders, of any useful
size, sufficiently true to keep the pistons
steam-tight. Watt, with indomitable per-
severance, endeavoured to train men to the
degree of accuracy required, by setting them
to work at cylinders, and at nothing else ; and
by inducing fathers to bring up their sons
with them in the workshop, and thus from
their earliest youth habituate them to this
single task. By this means, in time, a band
of labourers was secured in whom skill was
raised to the highest point of which it is

We shall capable. But not even all the skill of those

see that in . •iii

Labour carefully- trained men — men trained by the

itself there 1-1 • r t T

has been greatest mechanical genius oi the modern
world — was equal to making cylinders ap-
proaching the standard of accuracy which was

been the T , i

sole pro- necessary to render the steam-engine, as we now
know it, a possibility. But what the Labour
of the cleverest labourer could never be
brought to accomplish, was instantly and with
ease accomplished by the action of Ability.
Henry Maudsley, by introducing the slide-rest,
did at a single stroke for all the mechanics in
the country what Watt, after years of effort,
was unable to do for any of them. The

LABOUR AS ASSISTED BY MAUDSLEY 187

Ability of Maudsley, congealed in this beauti- BOOK m.
ful instrument, took the tool out of the hands
of Labour at the turning-lathe, and held it to
the surface of the cylinder, whilst Labour
looked on and watched. With this iron " mate "
lent to him, — this child of an alien brain, — the
average mechanic was enabled to accomplish
wonders which no mechanic in the world by
his own skill could approach. The power of
one man descended at once on a thousand
workshops, and sat on each of the labourers
like the fire of an industrial Pentecost ; and
their own personal efficiency, which was the
slowly-matured product of centuries, was, by
a power acting outside themselves, increased a
hundredfold in the course of a few years.

Illustrations of this kind might be multi- There is,
plied without limit ; but nothing could add plausible
to the force of the one just given, or show tothVview
more clearly how the productivity of Labour must con-
is fixed, and the power of Ability, and of S1
Ability alone, is progressive. There is, how-
ever, a very important argument which ob-
jectors may use here with so much apparent
force that, although it is entirely fallacious, it
requires to be considered carefully.

CHAPTER II

That the Ability which at any given period is a
Producing Agent, is a Faculty residing in and
belonging to living Men.

IT may amuse the reader to hear this argu-
ment stated — forcibly, if not very fully — by
an American Socialist, in an anonymous letter
to myself. I had published an article in
The North American Review, giving a short
summary of what I have said in the preceding
chapters with regard to the part played by
Ability in production ; and the letter which
I will now give was sent me as a criticism
on this :

The objec- Sir — Your article in the current number of

put by an The North American Review on " Who are the

sSiS" Chief Wealth Producers ? " in my judgment is the

that it is crowning absurdity of the various effusions that

absurd to

say that parade under the self -assumed title of political

A SOCIALISTIC CRITICISM 189

economy. In the vulgar parlance of some news- BOOK in.
papers, it is hog-wash. It is utterly senseless, and '
wholly absurd and worthless. You propose to
publish a book in which you will elaborate your such as the

inventor of

theory. Well, if the book has a large sale, it will the plough,
not be because the author has any ability as a writer producing
on economical subjects, but rather that the buyers ^.th by

are either dupes or fools. All the increase in wealth ability ;

and if

that has resulted by reason of men using ploughs absurd in

was produced by the man who invented the plough
— eh ? The total amount of the wealth produced by cases>
men by reason of their using certain appliances in
the form of tools or machines is produced by the
man who invented the tool or machine — eh ? perhaps
some one in Egypt thousands of years ago ? Such
stuff is not only worthless hog- wash : it is nauseating,
is worthy of the inmate of Bedlam.

Now the argument implied in this charming
letter, so far as it goes, is sound ; and I will
put it presently in a more comprehensive form.
Its fault is that it goes a very little way,
and does not even approach the position it
is adduced to combat. To say that if one
man who lived thousands of years ago could
be shown to be the sole and only inventor of
the plough, then all the increase of wealth
that has since been produced by ploughing

190 PRIMAEVAL PROGRESS AND LABOUR

BOOK m. ought to be credited to the Ability of this one

CH. II.

man, is practically no doubt as absurd l as the
writer of the letter thinks it ; and were such
the result of the reasoning in this volume, it
would reduce that reasoning to an absurdity.
TO this That reasoning, however, leads to no result

there are . .

two oi the kind ; and it is necessary to explain

The first is to the reader exactly why it fails to do so.
simpler It fails to do so because ploughs, and other

inventions • i 11 • i ' • IP

areprob- implements equally simple, instead oi repre-
notytoUe> senting those conditions of production to

which alone the reasoning in this volume
applies, represent conditions which are alto-
tPheeriavereagfe gether opposed to them. The plough, or at
man ; least such a plough as was in use in ancient
Egypt, is the very type and embodiment
of the non- progressive nature of Labour, as
opposed to, and contrasted with, the progres-
sive nature of Ability. The plough, indeed,
in its simplest form, was probably not the
result of Ability at all, but rather of the
experience of multitudes of common men,
acting on the intelligence which common

1 I say practically as absurd, meaning absurd and
practically meaningless in an economic argument. There
are many points of view from which it would be philoso-
phically true.

R UDIMENTAR Y ABILITY 1 9 1

men possess ; just as, even more obviously, BOOK m.

was the use of a stick to walk with, or of -^— '
a flail for thrashing corn. It will perhaps,
however, be said that in that case, according

7 ' O

to the definition given by me, the plough
would be the result of Ability all the same,
only that it would prove Ability to be a
faculty almost as universal as Labour. And
no doubt it would prove this of Ability of
a low kind ; indeed, we may admit that it
does prove it. Everybody has a little Ability
in him, just as everybody has a little poetry ;
but in cases of this kind everything is a
question of degree ; and for practical purposes
we are compelled to classify men not accord-
ing to faculties which, strictly speaking, they
possess, but according to the degree in which
they possess them. Cold, strictly speaking,
is merely a low degree of heat ; but for all
practical purposes winter is opposed to summer.
Similarly, a man who has just enough poetry
in him to be able — as most men can — to
scribble a verse of doggerel, is for all practical
purposes opposed to a Shakespeare or a Dante ;
and similarly also the man who has just
enough Ability in him to discover the use of

192 PRIMAEVAL AND MODERN INVENTIONS

BOOK in. a stick, a flail, or a plough, is for all practical

CH IT

purposes opposed to the men who are capable

of inventing implements of a higher and

more complicated order. Nor is the line

which we thus draw drawn arbitrarily. It

is a line drawn for us by the whole industrial

And, like history of mankind ; and never was there

«u; they a division more striking and more persistent.

remained For the simpler implements in question, from

unchanged ^ firgt dayg when ^^ ^^ invented,-

cenuimes " thousands of years ago," as my American
correspondent says, — remained what they then
were up to the beginning of the modern
epoch ; and in many countries, such as India,
they remain the same to-day. The simpler
industrial arts, then, and the simpler imple-
ments of industry are sharply marked off
from the higher and more complicated by
the fact that, whilst the latter are demon-
strably due to individuals, have flourished
only within the area of their influence, and
have constituted a sudden and distinct
advance on the former, the former have
apparently been due to the average faculties
of mankind, and have remained practically
unchanged from the days of their first dis-

A MORE IMPORTANT POINT 193

covery. Accordingly, the distinction between BOOK m.
the two being so marked and enormous, the
faculties to which they are respectively
due, even if differing only in degree, yet
differ in degree so much that they are for
practical purposes different faculties, and
must be called by different names. The
simple inventions, then, to which my corre- But even if
spondent refers, together with the wealth by Ability,
produced by them, are to be credited to gtai attri-
Labour, the non-progressive character of which Weaithnow

they embody and represent, and have nothing b™them to
to do with that Ability which is the cause of Labour ;
industrial progress.

My correspondent's letter, however, whether
he saw it himself or not, really raises a point
far more important than this. For even if the
invention of the plough had been the work of
one man only, if it had involved as much
knowledge and genius as the invention of the
steam-engine, and if, but for this one man,
ploughs would never have existed, yet to at-
tribute to the Ability of this one man all the
wealth that has been subsequently produced
by ploughing would still be practically as ab-
surd as my correspondent implies it would be.

13

194 THE NECESSITY FOR MANAGING ABILITY

BOOK m. Now why is this ? The reason why is

CH. II. J

as follows. Although, according to such an

Because

the com- hypothesis, if a plough had not been made

monest .

labourer, by this one able man, no ploughs would ever
he has seen have been made by anybody, yet when such
make and a simple implement has once been made and

use them. n 1111 • , i

used, anybody who has seen it can make
and use others like it ; so that the Ability of
the inventor of the plough increases the pro-
ductivity of every labourer who uses it, not by
co-operating with him, but by actually passing
into him. Thus, so far as this particular
operation is concerned, the simplest labourer
becomes endowed with all the powers of the
inventor ; and the inventor thenceforward is,
in no practical sense, the producer of the
increased product of what he has enabled the
labourer to produce, any more than a father is
the producer of what is produced by his son.

And if the productivity of Labour were
increased by inventions alone, and if all
inventions were as simple as the primaeval
plough — if, when once seen, anybody were
able to make them, and, having once made
them, to use them to the utmost advantage —
then, though Ability might still be the sole

INCREASED BY INVENTIVE ABILITY 195

cause of every fresh addition to the productive BOOK m.

CH IT

powers of exertion, these added powers would
be all made over to Labour, and be absorbed
and appropriated by it, just as Lear's kingdom
was made over to his daughters ; and what-
ever increased wealth might be produced
thenceforward through their agency would
be the true product of Labour, which had in
itself become more effective. But, as a matter But the
of fact, this is not the case ; and it is not so by which
for two reasons. In the first place, such themoder

implements as the primaeval plough differ increased8
from the implements on which modern in-
dustry depends, in the complexity alike of
their structure, and of the principles involved
in it ; so that without the guidance of Ability
of many kinds, Labour alone would be power-

» A much

less to reproduce them : and, in the second Ability to

* use them

place, as these implements multiply, not only to the best

is Ability more and more necessary for their as they re-

quired to

manufacture, but is more and more necessary makethem,
also for the use of them when manufactured.
One of the principal results of the modern
development of machinery, or of the use, by
new processes, of newly discovered powers
of Nature, is the increasing division and sub-

ig6 THE MAIN RESULTS OF PAST ABILITY

BOOK in. division of Labour ; so that the labourers, as
— ' I have said before, by the introduction of this
mass of machinery, become themselves the
most complicated machine of all, each labourer
being a single minute wheel, and Ability
being the framework which alone keeps them
in their places. It may be said, therefore,
that each modern invention or discovery by
which the productivity of human exertion is
increased has upon Labour an effect exactly
opposite to that which was produced on it
by such inventions as the primaeval plough.
Instead of making Labour more efficacious
in itself, they make it less and less efficacious,
unless it is assisted by Ability.

They do And here we have the answer to the

come, as is real argument which lies at the bottom of my

saidfco^- American correspondent's letter — an argument

™ertypr° which, in some such words as the following,

ian^to6" is to be found repeated in every Socialistic

canSLeh° treatise : " When once an invention is made,

it becomes common property." So it does

in a certain theoretical sense ; but only in

the sense in which a knowledge of Chinese

becomes common property in England on

the publication of a Chinese grammar. For

INHERITED BY LIVING ABILITY 197

all practical purposes, such a statement is BOOKHI.

CH. II.

about as true as to say that because anybody —
can buy a book on military tactics, everybody and more
is possessed of the genius of the Duke of
Wellington. The real truth is, that to utilise mai

1 • , • i , • , • , i and use the

modern inventions, and to maintain the con- powers left
ditions of industry which these inventions ^Abmty
subserve, as much Ability is required as was Ol
required to invent them ; though, as I shall
have occasion to point out later on, the
Ability is of a different kind.

These considerations bring us to another
important point, which must indeed from
the beginning have been more or less obvious,
but which must now be stated explicitly.
That point is, that when we speak of Ability we must,

-i . . . T i then, here

as producing at any given time such and note that

such a portion of the national income, as
distinguished from the portion which is
produced by Labour, we are speaking of *J JJ"ch
Ability possessed by living men, who pos-
sess it either in the form of their own
superior faculties, assimilating, utilising, and
adding to the inventions and discoveries alive at the

time,

of their predecessors ; or in the form of
inherited Capital, which those predecessors

198 PRODUCTIVE ABILITY

BOOK in. have produced and left to them. Thus,

CH. II.

though dead men like Arkwright, or "Watt,
or Stevenson may, in a certain theoretical
sense, be considered as continuing to pro-
duce wealth still, they cannot be considered
to do so in any sense that is practical ; be-
cause they cannot as individuals put forward
any practical claims, or influence the situation
any further by their actions. For all practical
purposes, then, their Ability as a productive
force exists only in those living men who
inherit or give effect to its results. Now,
of the externalised or congealed Ability which
is inherited in the form of Capital, as dis-
tinguished from the personal Ability by which
Capital is utilised, we need not speak here,
though we shall have to do so presently. For
this inherited Capital would not only be useless
in production, but would actually disappear
and evaporate like a lump of camphor, if it
were not constantly used, and, in being used,
renewed, by that personal Ability which in-
herits it, and is inseparable from the living
individual ; and, though it will be necessary
to consider Capital apart from this when we
come to deal with the problem of distribution,

THE ABILITY OF LIVING MEN 199

all that we need consider when we are BOOKHL

CH II

dealing with the problem of production is
this personal Ability, which alone makes
Capital live.

So far, then, as modern production is con- who are
cerned, all the results of past Ability, instead theCmono-y

/. i . -i r> T i polists not

ot becoming the common property ot Labour, only of
become on the whole, with allowance for
many exceptions, more and more strictly the
monopoly of living Ability ; because these
results becoming more and more complicated,
Ability becomes more and more essential to decessors-
the power of mastering and of using them.
As, however, I shall point out by and by,
in more than one connection, the Ability that
masters and uses them differs much in kind
from the Ability that originally produced
them : one difference being that, whereas to
invent and perfect some new machine requires
Ability of the highest class in, let us say,
one man, and Ability of the second class in
a few other men, his partners ; to use this
machine to the best advantage, and control
and maintain the industry which its use has
inaugurated or developed, may require perhaps
Ability of only the second class in one man,

200 FRESH DEMONSTRATION OF

BOOK m. but will require Ability of the third and

CH. II.

fourth class in a large number of men.
And the Ability therefore — the Ability of living

mouoply .

of Ability men — constantly tends, as the income oi the

grows . .

stricter at nation grows, to play a larger part in its
stage of production, or to produce a larger part of it ;
whilst Labour, though without it no income
could be produced at all, tends to produce a
part which is both relatively and absolutely
smaller. We assume, for instance, that the
Labour of this country a hundred years ago
was capable of producing the whole of what
was the national income then. If it could
by itself, without any Ability to guide it,
have succeeded then, when production was
so much simpler, in just producing the yearly
amount in question, — which, as a matter of
fact, it could not have done even then, — the
same amount of Labour, without any Ability
to guide it, could certainly not succeed in
producing so much now, when all the condi-
tions of production have become so much
more complicated, and when elaborate organis-

Thus the . . ~,

argument ation is necessary to make almost any enort

above ~. .

quoted enective.

cfaims of * Thus the argument, which was fermenting

THE PRODUCTIVITY OF ABILITY 201

in my American correspondent's mind, and BOOK m.
which he regarded as reducing the claims of
Ability to "hog- wash/' really affords the means, when ex-
if examined carefully and minutely, of estab- only
lishing yet more firmly the position it was additional
invoked to shatter, and of making the claims their °"
of Ability not only clearer but more extensive.

CHAPTER III

That Ability is a natural Monopoly, due to the con-
genital Peculiarities of a Minority. The Fallacies
of other Views exposed.

But the BUT the socialistic theorist will not even yet

Socialists .. .,,,. .,

have yet nave been silenced. Jjjven it he is constrained

fallacy to admit the truth of all that has just been

they will said, we shall find that he still possesses in his

neutralise0 arsenal of error another set of arguments by

whauias0 which he will endeavour to do away with its

said. £ force. These are generally presented to us

in mere loose rhetorical forms ; but however

loosely they may be expressed, they contain a

distinct meaning, which I will endeavour to

state as completely and as clearly as is possible.

They will Put shortly, it is as follows. Though Ability and

Ability is Labour may both be productive faculties, and

tionCofa though it may be allowed that the one is more

opportuu- productive than the other, it is on the whole

ity, and a mere matter of social accident — a matter

AN ERROR OF MR. HERBERT SPENCER'S 203

depending on station, fortune, and education — - BOOK m.

CH. III.

which faculty is exercised by this or that in-
dividual. Thus, though it may be allowed that body at

. . . , birth is

a great painter and the man who stretches potentially
his canvas, or an inventor like Watt and the man.
average mechanic who works for him, do, by
the time that both are mature men, differ
enormously in the comparative efficacy of
their faculties, yet the difference is mainly due
to circumstances posterior to their birth ; that
the circumstances which developed the higher
faculties in one man might equally well have
developed them in the other ; and that the
circumstances in question, even if only a few
can profit by them, are really created by the
joint action of the many.

The above contention contains several dif-
ferent propositions, which we will presently
examine one by one. We will, however, take
its general meaning first. One of the chief
exponents of this, strange as the fact may seem,
is that vehement anti-Socialist, Mr. Herbert
Spencer. Mr. Spencer disposes of the claims
of the man of ability as a force distinct from
the generation at large to which he belongs,
by saying that " Before the great man can

204 A PHILOSOPHIC TRUTH

BOOK in. remake his society, his society must make

CH. III. . „

— him. Thus, to take an example from art, the

This is

sometimes genius of a man like Shakespeare is explained

expressed , f . . .,. ,

in saying by reference to the condition of the civilised
great man world, and of England more especially, during

is made by •, . „ ,~ ..-., . . , ._..

his age," the reign of Queen Elizabeth. The temper
opportunu of the human mind caused by centuries of
have° 3 Catholicism, the stir of the human mind
securec r s]lown jn fa^ Reformation or the Eenaissance,
and the sense of the new world then being
conquered in America, are all dwelt on as
general or social causes which produced in an
individual poet a greatness which has been
But this, since unequalled. Now this reasoning, if used
to combat a certain psychological error, no
doubt expresses a very important truth ; but
fa ° if it ig transferred to the sphere of economics
sphere^ i^s wn°le meaning vanishes. It was originally
economics. use(j ^ OppOSition to the now obsolete theory
according to which a genius was a kind of
spiritual aerolite, fallen from heaven, and
related in no calculable way to its environment.
It was used, for instance, to prove with regard
to Shakespeare that had he lived in another age
he would have thought and written differently,
and that he might have been a worse poet

BUT AN ECONOMIC FALSEHOOD 205

under circumstances less exciting to the imag- BOOK m.
ination. But when we leave the psychological
side of the case, and look at its practical side,
a set of facts is forced on us which are of
quite a different order. We are forced to
reflect that though Shakespeare's mind may
have been what it was because the age acted
on it, the age was acting on all Shakespeare's
contemporaries, and yet it produced one
Shakespeare only. If Queen Elizabeth had
been told that it was the age which pro-
duced Shakespeare, and in consequence had
ordered that three or four more Shakespeares
should be brought to her, her courtiers, do
what they would, would have been unable to
find them ; and the reason is plain. The age
acts on, or sets its stamp on, the character of
every single mind that belongs to it ; but the
effect in each case depends on the mind acted
on ; and it is only one mind amongst ordinary
minds innumerable, that this universal action
can fashion into a great poet. And what is
true of poetic genius is true of industrial
Ability. The great director of Labour is
as rare as a great poet is ; and though
Ability of lower degrees is far commoner than

206 WHOLE BODY OF S UCCESSFUL IN VENTORS

BOOK in. Ability of the highest, yet the fact that it is
the age which elicits and conditions its activi-
ties does nothing to make it commoner than
it would be otherwise, nor affects the fact that
its possessors are relatively a small minority.
For the psychologist, the action of the age is an
all-important consideration ; for the economist,
it is a consideration of no importance at all.

But it is by no means my intention to dis-
miss the Socialistic argument with this simple
demonstration of the irrelevance of its general
meaning. I am going to call the attention of
the reader to the particular meanings that are
attached to it, and show how absolutely false
these are, by comparing them with historical
facts.

Again, In the first place, then, the claims of the

uTgTthat age, or of society as a whole, to be the author
fected'in- of industrial progress, in opposition to the
thfwork1 claims of a minority, are supported by many
man Tut6 writers on the ground that no invention or
men hITe7 discovery is in reality the work of any single
? eStedto man- ^uck write1*8 delight to multiply — and
produce it. they can do so without difficulty — instances of
how the most important machines or processes
have been perfected only after a long lapse of

A VERY SMALL MINORITY 207

time, by the efforts of many men following or BOOK m.

CH. ni.

co-operating with one another. Thus the elec-
tric telegraph, and the use of gas for lighting,
were not the discoveries of those who first
introduced them to the public ; and Stevenson
described the locomotive as the "invention of
no one man, but of a race of mechanical
engineers." Further, it is frequently urged
that the same discoveries and inventions are
arrived at in different places, by different minds,
simultaneously ; and this fact is put forward
as a conclusive proof and illustration of how
society, not the individual, is the true discoverer
and inventor. But these arguments leave out This is
of sight entirely the fact that, in the first place, the class
the whole body of individuals spoken of — such referred to

as the race of engineers who produced the
locomotive, or the astronomers in different
countries who are discovering the same new
star — form a body which is infinitesimally

small itself ; and secondly, that even the body community
of persons they represent, — namely, all of those inseneral-
who are engaged in the same pursuits, and have
even so much as attempted any step in indus-
trial progress, — though numerous in comparison
with those who have actually succeeded in

208 ABILITY AND OPPORTUNITY

BOOK in. taking one, are merely a handful when com-

CH. III.

— pared with society as a whole, and instead of
representing society, offer the strongest contrast
to it. The nature of the assistance which
Ability gives to Ability is an interesting ques-
tion, but it is nothing to the point here. To
prove that progress is the joint product of
Ability and Ability, does not form a proof,
but on the contrary a disproof of the proposi-
tion, that it is the joint product of Ability and
Labour — or, in other words, that it is the pro-
duct of the age, or the entire community.

socialistic theorist, however, even if he

Further

socialists admits the above answer, will by no means

contend •

that Abn- admit that it is fatal to his own position. He

ity is the *

product of win still take refuge in the proposition already

education,

and that an alluded to, that the Ability of individuals is

equal

education the child of opportunity, and that Ability is

would J.

equalise rarer than Labour, and able men are a minority,

faculties. . .

only because, under existing social circum-
stances, the opportunities which enable it to
develop itself are comparatively few. And if
he is pressed to say what these opportunities
are, he will say that they may be described gener-
ally by the one word education. This argu-
ment can be answered in one way only, namely,

CH. m.

ABILITY NOT PRODUCED BY OPPORTUNITY '209

an appeal to facts ; and it is hard to conceive BOOK m.
of anything which facts more conclusively dis-
prove. Indeed, of much industrial Ability, it
can not only be shown to be false, but it is
also, on the very surface of it, absurd. It is
plausible as applied to Ability of one kind
only, namely, that of the inventor or the dis-
coverer ; but this, as we shall see presently,
is so far from being Ability as a whole, that it
is not even the most important part of it.
Let us, however, suppose it to be the whole
for a moment, and ask how far the actual facts
of life warrant us in regarding it as the child
of opportunity and education. Let us first
refer to that general kind of experience which
is recorded in the memory of everybody who
has ever been at a school or college, and
which, in the lives of tutors and masters, is
repeated every day. Let a hundred individuals
from childhood be brought up in the same
school, let them all be devoted to the study of
the same branch of knowledge, let them enjoy
to the fullest what is called " equality of oppor-
tunity," and it will be found that not only is
there no equality in the amount of knowledge
they acquire, but that there is hardly any

14

210 ABILITY THE MAKER

BOOK m. resemblance in the uses to which they will be

CH TTT

able to put it. Two youths may have worked
together in one laboratory. One will never do
more than understand the discoveries of others.
The other will discover, like Columbus, some
But this new world of mysteries. Indeed, equality of
wild theory Opp0rtunity, as all experience shows, instead
t° make the power of all men equal,

of the
world.

to the does but serve to exhibit the extent to which

most

notorious they Differ.

facts ; J

AS may be But particular facts are more forcible than
giance^t general facts. Let us consider the men who,
some oTthe as a matter of history, have achieved by their
Anguished Ability the greatest discoveries and inventions,
and let us see if it can be said of these men,
on the whole, that their Ability has been due
to any exceptional education or opportunity.
Speaking generally, the very reverse is the case.
If education means education in the branch
of work or knowledge in which the Ability of
the able man is manifested, the greatest in-
ventors of the present century have had no
advantages of educational opportunity at all.
Dr. Smiles observes that our greatest mechanical
inventors did not even have the advantage of
being brought up as engineers. " Watt," he

OF ITS O WN OPPORTUNITIES 2 1 1

writes, " was a mathematical instrument-maker; BOOK m.
Arkwright was a barber ; Cartwright, the in-
ventor of the power-loom, was a clergyman ;
Bell, who afterwards invented the reaping-
machine, was a Scotch minister ; Armstrong,
the inventor of the hydraulic engine, was a
solicitor ; and Wheatstone, inventor of the
electric telegraph, was a maker of musical
instruments." That knowledge is necessary
to mechanical invention is of course a self-
evident truth ; and the acquistion of knowledge,
however acquired, is education : education,
therefore, was necessary to the exercise of the
Ability of all these men. But the point to
observe is, that they had none of them any
special educational opportunity ; they were
placed at no advantage as compared with any
of their fellows ; many of them, indeed, were
at a very marked disadvantage ; and though.
when opportunity is present, Ability will no
doubt profit by it, the above examples show,
and the whole course of industrial history
shows,1 that Ability is so far from being the

1

The examples given above might be multiplied indefin-
itely. Maudsley was brought up as a "powder-boy" at
Woolwich. The inventors of the planing machine, Clements

212 ABILITY AS A MATTER OF CHARACTER
BOOK in. creature of opportunity, that it is, on the

CH. III. . _ _ ,

— contrary, in most cases the creator of it.
The theory The mental power, however, which is exer-
further cised by the inventor and discoverer, as I
theUfactby have said, is but one kind of industrial Ability
AbamtyTsala out of man7- Ability— or the faculty by
character wnicn one nian assists the Labour of an
and tem- indefinite number of men — consists in what

perament,

may ^6 ca^e(^ exceptional gifts of character,
intellect, quite as much as in exceptional gifts of intel-
lect. A sagacity, an instinctive quickness in
recognising the intellect of others, a strength
of will that sometimes is almost brutal, and
will force a way for a new idea, like a pugilist
forcing himself through a crowd, these are
faculties quite as necessary as intellect for
giving effect to what intellect discovers or
creates ; and they do not always, or even
generally, reside in the same individuals.
The genius which is capable of grappling with
ideas and principles, and in the domain of
thought will display the sublimest daring,

and Fox, were brought up, the one as a slater, the other as a
domestic servant. Neilson, the inventor of the hot-blast, was
a millwright. Roberts, the inventor of the self-acting mule
and the slotting-machine, was a quarryman. The illustrious
Bramah began life as a common farm-boy.

FUNCTION OF SUCH ABILITY 213

often goes with a temperament of such social BOOK m.

. -, . r> f CH. in.

timidity as to unfit its possessor lor facing
and dealing with the world. It is one thing
to perfect some new machine or process, it
is another to secure Capital which may put
it into practical operation ; and again, if we
put the difficulty of securing Capital out of
the question by supposing the inventor to be
a large capitalist himself, there is another
difficulty to be considered, more important
far than this — the difficulty dealt with in the
last chapter — namely, the conduct of the
business when once started. Here we come
to a number of complicated tasks, in which
the faculty of invention or discovery offers
no assistance whatsoever. We come to tasks
which have to do, not with natural principles,
but with men — the thousand tasks of daily
and of hourly management. A machine or
process is invented by intellect — there is one
step. It is put into practical operation with
the aid of Capital — there is another. When
these two steps are taken, they do not require
to be repeated, but the tasks of management
are tasks which never cease ; on the contrary,
as has been said already, they tend rather

2 1 4 CHA RA CTERS NO T EQ U A US ED
BOOK in. to become ever more numerous and compli-

CH III*

— cated. Nor do they consist only of the mere
started by management of labourers, the selection of
intellect^ foremen and inspectors, and the minutiae of
industrial discipline. They consist also of
what may be called the policy of the whole
business — the quick comprehension of the
fluctuating wants of the consumer, the extent
to which these may be led, the extent to
which they must be followed, the constant
power of adjusting the supply of a commodity
to the demand. On the importance of these
faculties there is a great deal to be said ;
but I will only observe here that it is
embodied and exemplified in the fact that
successful inventors and discoverers are nearly
always to be found in partnership with men
who are not inventors, but who are critics
of inventions, who understand how to manage
and use them, and who supplement the Ability
that consists of gifts of intellect by that
other kind of Ability that consists of gifts
of character.

Now if, as we have seen, it is entirely
contrary to experience to suppose that inven-
tive Ability is produced by educational oppor-

CH. III.

BY EDUCATION OR OPPORTUNITY 215

tunity, much more is it contrary to experience BOOK m.

. .

— it is contrary even to common sense — to
suppose that Ability of character can be
produced in the same way. Education, as

applied to the rousing and the training of equalising
the intellect, is like a polishing process applied
to various stones, which may give to all of
them a certain kind of smoothness, but brings
to light their differences far more than their
similarity. Education may make all of us
write equally good grammar, but it will not
make all of us write equally good poetry,
any more than cutting and polishing will
turn a pebble into an emerald. And if this
is true of education applied to intellect, of
education applied to character it is truer
still. Character consists of such qualities as
temperament, strength of will, imagination, per-
severance, courage ; and it is as absurd to expect Ability,
that the same course of education will make a natural
hundred boys equally brave or imaginative, because y
as it is to expect that it will make them arlborn e
equally tall or heavy, or decorate all of them w
with hair of the same colour.

Ability, then, is rare as compared with
Labour, not because the opportunities are

216 PROGRESS DUE SOLELY TO THE FEW
BOOK m. rare which are favourable or necessary to its

CH. III. • i -i

— development, but because the minds and

And now .. . .

let us again characters are rare which can turn opportunity

compare its . , ,

action with to account. And now let us turn again to

mass of e the more general form of the Socialistic

rounding fallacy — the general proposition that the Age,

or Society, or the Human Race is the true

inventor, and let us test this by a new order

of facts.

I have already alluded to the stress laid
by Socialists on the fact that different indi-
viduals in different parts of the world often
make the same discoveries at almost the
same time ; and I pointed out that whatever
this might teach us, applied only to a small
minority of persons, and had no reference
whatever to the great mass of the race. But
Socialists very frequently put their view in
a form even more exaggerated than that
which I thus criticised. They use language
which implies that the whole mass of society
moves forward together at the same intel-
lectual pace ; and that discoverers and in-
ventors merely occupy the position of persons
who chance to be walking a few paces in
advance of the crowd, and who thus light

PROGRESS IN THE IRON INDUSTRY 217

upon new processes or machines like so many BOOK m.

n n CH> In<

nuggets lying and glittering on the ground, —
which those who follow would have presently men m any
discovered for themselves ; or, again, they present the

n T ! tendencies

are represented as persons who are merely and mtei-
the first to utter some word or exclamation tS°aver-
which is already on the lips of everybody,
Let us, then, take the three great elements
which go to make up the industrial prosperity to
of this country — the manufacture of iron, the
manufacture of cotton, and the development Jjj
of the steam-engine, and see how far the ofth!s

country :

history of each of these lends any support to W the iron

* *. ' mamifac-

the theory iust mentioned. ture> (2)

* J _ the cotton

We will begin with the manufacture of manufac-
ture, (3)
iron. Ever since man was acquainted with the steam-

engine.

the use of this metal till a time removed from
our own by a few generations only, its pro-
duction from the ore was dependent entirely
upon wood, which alone of all fuels — so far The
as knowledge then went — had the chemical
qualities necessary for the process of smelting,
The iron industry in this country was there-
fore, till very recently, confined to wooded piacc°aofin
districts, such as parts of Sussex and Shrop- wood>
shire ; and so large, during the seventeenth

2 1 8 EARLY AP PLICA TIONS OF ABILITY
BOOK in. century, was the consumption of trees and

CH III.

brushwood, that the smelting furnace came
to be considered by many statesmen as the
destroyer of wood, rather than as the pro-
The dis- ducer of metal. This view, indeed, can hardly
be called exaggerated ; for by the beginning

this pur- °f the century following the wood available
i- f°r the furnaces was becoming so fast ex-
hausted that the industry had begun to
Dwindle ; and but for one great discovery it
wou^ have soon been altogether extinguished.

opposed by ^his was the method of smelting iron with

all who

them °f C0a^' Now to what cause was this discovery
chief due ? The answer can be given with the

amongst

these were utmost completeness and precision. It was
due to the Ability of a few isolated individuals,
whose relation to their contemporaries and to
their age we will now briefly glance at.

Dud The first of these was a certain Dud

Dudley, who procured a patent in the year
1620 for smelting iron ore "with coal, in
furnaces with bellows " ; and his process was
so far successful, that at length from a single
furnace he produced for a time seven tons of
iron weekly. For reasons, however, which will
be mentioned presently, Dudley's invention

TO BRITISH IRON PRODUCTION 219

died with himself; and for fifty years after BOOKHI.
his death the application of coal to smelting
was as much a lost art as it would have been
had he never lived. Between the years 1718
and 1735 it was again discovered by a father
and son-; — the Darbys of Coalbrookdale. A The two
further step, and one of almost equal import-
ance, was achieved by two of their foremen —
brothers of the name of Cranege — assisted Reynolds
by Reynolds, who had married the younger craneges7°
Darby's daughter, and this was the application a
of coal to the process which succeeds smelting,
namely, the conversion of crude iron into
bar-iron, or iron that is malleable. Other
inventors might be mentioned by whom these
men were assisted, but it will be quite enough
to consider the case of these. As related to
the age, as related to the society round him,
the one thing most striking in the life of
each of them is not that he represented that
society, but that he was in opposition to it,
and had to fight a way for his inventions
through neglect, ridicule, and persecution. The
nation at large was absolutely ignorant of the
very nature of the objects which these men
had in view ; whilst the ironmasters of the

220 ABILITY OPPOSED BY THE AGE

BOOK in. day, as a body, though not equally ignorant,

J ' disbelieved that the objects were practicable

until they were actually accomplished. It is
true that these great inventors were not alone
in their efforts ; for where they succeeded,
others attempted and failed : but these failures
do but show in a stronger light how rare and
how great were the faculties which success
demanded.
The details Let us take each case separately. Dudley's

of whose , . /, . -,

several me as an ironmaster was one long succession
si^amius- of persecution at the hands of his brothers in
what°has0 the trade. They petitioned the king to put a
Jsatd.b€ stop t° his manufacture ; they incited mobs to
destroy his bellows and his furnaces ; they
harrassed him with law-suits, ruined him with
legal expenses ; they succeeded at last in having
him imprisoned for debt ; and by thus crippling
the inventor, they at last killed his invention.
It is true that meanwhile a few men — a very
few — believed in his ideas, and attempted to
work them out independently ; and amongst
these was Oliver Cromwell himself. He and
certain partners protected themselves with a
patent for the purpose, and actually bought up
the works of the ruined Dudley ; but all their

INSTEAD OF REPRESENTING IT 221

attempts ended in utter failure. Two more BOOKIU

CH. Ill,

adventurers, named Copley and Proger, were —
successively granted patents during the reign
of Charles II. for this same purpose, and like-
wise failed ignominiously. One man alone in
the whole nation had proved himself capable
of accomplishing this new conquest for in-
dustry ; whilst the nation as a whole, and the
masters of the iron trade in particular, remained
as they were — stationary in their old invincible
ignorance. The two Darbys, the two Craneges,
and Reynolds, though not encountering, as
Dudley did, the hostility of their contempor-
aries, yet achieved their work without the
slightest encouragement or assistance from
them. The younger Darby, solitary as Colum-
bus on his quarter-deck, watched all night by
his furnace as he was bringing his process to
perfection. His workmen, like the sailors of
Columbus, obeyed their orders blindly ; and in
hardly a brain but his own did there exist
the smallest consciousness that one man was
laying, in secret, the foundation of his country's
greatness. With regard to Reynolds and the
Craneges, who imitated, though they did not
perfect, the further use of coal for the produc-

222 ISOLATED ACTION OF ABILITY
BOOK m. tion of iron that is malleable, we have similar

CH in

- — evidence that is yet more circumstantial. Rey-
nolds distinctly declares in a letter written to a
friend that the conception of this process was so
entirely original with the Craneges that it had
never for a moment occurred to himself as being
possible, and that they had had to convince
him that it was so, against his own judgment.
But when once his conversion was completed,
he united his Ability with theirs ; and within a
very short time the second great step in our
iron industry had been taken triumphantly by
these three unaided men.

Were it necessary, and would space permit
of it, we might extend this history further.
We might cite the inventions of Huntsman, of
Onions, of Cort, and Neilson, and show how
each of these was conceived, was perfected,
and was brought into practical use, whilst the
nation as a whole remained inert, passive,
and ignorant, and the experts of the trade
were hostile, and sometimes equally ignorant.
Huntsman perfected his process in a secrecy
as carefully guarded as that of a mediaeval
necromancer hiding himself from the vigilance
of the Church ; whilst James Neilson, the

ARK WRIGHT AND HIS ASSOCIATES 223

inventor of the hot -blast, had at first to BOOKIH.

CH III

encounter the united ridicule and hostility of
all the shrewdest and most experienced iron-
masters in the kingdom.

The history of the cotton manufacture offers TheWstory
precisely similar evidence. Almost every one cotton
of those great improvements made in it, by tuw'does
which Ability has multiplied the power of equal force;
Labour, had to be forced by the able men on
the acceptance of adverse contemporaries. Hay
was driven from the country ; Hargreaves from
his native town; Arkwright's mill, near Chorley,
was burnt down by a mob ; Peel, who used
Arkwright's machinery, was at one time in
danger of his life. Nor was it only the hostility
of the ignorant that the inventors had to
encounter. They had to conquer Capital before
they could conquer Labour ; for the Capitalists
at the beginning were hardly more friendly to
them than the labourers. The first Capitalists
who assisted Arkwright, and had Ability
enough to discover some promise in his inven-
tion, had not enough Ability to see their way
through certain difficulties, and withdrew their
help from him at the most critical moment.
The enterprising men who at last became his

224 THE VALUE OF WATTS PATENT

BOOK in. partners, and with the aid of whose Capital his

CH. III. *

invention became successful, represented their
age just as little as Arkwright did. He and
they, indeed, had the same opportunities as
the society round them ; but they stand con-
trasted to the society by the different use they
made of them.

Also the And now, lastly, let us come to the history
the steam- of the steam-engine. We need not go over
avery * ground we have already trodden, and prove
aneTcbte once more that in this case, as in the others, the
age, in the sense of the majority of the com-
munity, had as little to do with the work of
the great inventors as Hannibal had to do with
the beheading of Charles I. It will be enough
to insist on the fact that the scientific minority
amongst whom the inventors lived, and who
wTere busied with the same pursuits, were, as a
body, concerned in it just as little. The whole
forward movement, the step after step of dis-
covery by which the power of steam has become
what it now is, was due to individuals — to a
minority of a minority ; and this smaller
minority was so far from representing the
larger, or from merely marching a few steps
ahead of it, that the large minority always

AS ESTIMA TED B Y HIS CONTEMPORARIES 225

hung back incredulous, till, in spite of itself, it BOOK m.
was converted by the accomplished miracle.
One example is enough to illustrate this.
Watt, when he was perfecting his steam-engine,
was in partnership with Dr. Roebuck, who
advanced the money required to patent the
invention, and whose energy and encouragement
helped him over many practical difficulties.
When the engine was almost brought to
completion, Roebuck found himself so much
embarrassed for money, on account of expense
incurred by him in an entirely different enter-
prise, that he was forced to sell a large part of
his property ; and amongst other things with
which he parted was his interest in Watt's
patent. This he transferred to the celebrated
engineer Boulton ; and the patent for that
invention which has since revolutionised the
world was valued by Roebuck's creditors at
only one farthing.

These facts speak plainly enough for them- The aver-
selves ; and the conscience of most men will add if cross-'
its own witness to what they teach us — which is at the Day
this. So far as industrial progress is concerned, ment, g
the majority of mankind are passive. They fb°cedto
labour as the conditions into which they are

15

226 INDUSTRIAL PROGRESS

BOOK ni. born compel them to labour ; but they do
CH. in. . . .. .

— nothing, from their cradle to their grave, so to

effect. alter these conditions that their own labour,
or Labour generally, shall produce larger or
improved results. The most progressive race
in the world — or in other words the English
race — has progressed as it has done only be-
cause it has produced the largest minority of
men fitted to lead, and has been quickest in
obeying their orders ; but apart from these
men it has had no appreciable tendency to
move. Let the average Englishman ask him-
self if this is not absolutely true. Let him
imagine himself arraigned before the Deity at
the Day of Judgment, and the Deity saying
this to him : " You found when you entered
the world that a man's labour on the average
produced each year such and such an amount
of wealth. Have you done anything to make
the product of the same labour greater ? Have
you discovered or applied any new principle
to any branch of industry ? Have you guided
industry into any new direction ? Have the
exertions of any other human being been made
more efficacious owing to your powers of inven-
tion, of enterprise, or of management ? " There

THE WORK OF THE FEW ONLY 227

is not one man in a hundred who, if thus ques- BOOK in.

CH. IIL

tioned at the Judgment-seat, would be able,
on examining every thought and deed of his
life, to give the Judge any answer but, "No.
So far as I am concerned, the powers of Labour
are as I found them."

CHAPTER IV

The Conclusion arrived at in the preceding Book
restated. The Annual Amount produced by Ability
in the United Kingdom.

The more. IN spite, then, of the arguments which Socialists
we examine have borrowed from psychology, and with
ttavth* which, by transferring them to the sphere of
clearly do economics, and so depriving them of all prac-
magnitude tical meaning, they have contrived to confuse
perform!? tne problem of industrial progress, the facts of

case> when examined from a practical point
of view, stand out hard and clear and unam-
biguous. Industrial progress is the work not
of society as a whole but of a small part of it,
to the entire exclusion of the larger part ; the
reason of this being that the faculties to which
this progress is due — the faculties which I
have included under the name of Industrial
Ability — are found to exist only in a small

GRADES OF ABILITY 229

percentage of individuals, and are practi- BOOKHI.
cally absent from the minds, characters, and
temperaments of the majority of the human
race. Ability is, in fact, a narrow natural
monopoly.

Ability, however, is of different kinds and But it must
grades, some kinds being far commoner than posed that
others ; and before summing up what has been rarer than
said in this chapter, it will be well to give the 1
reader some more or less definite idea of the
numerical proportion which, judging by general
evidence, the men of Ability bear to the mass
of labourers. Such evidence, not indeed very
exact, but still corresponding broadly to the
underlying facts of the case, is to be found in
the number of men paying income-tax on busi-
ness incomes, as compared with the number of
wage-earners whose incomes escape that tax ;
in the number of men, that is, who earn more
than one hundred and fifty pounds a year, as
compared with the number of men who do
not earn so much. It may seem at first sight
that this division is purely arbitrary ; but we
shall see, on consideration, that it is not so.
We shall find that, allowing for very numerous
exceptions, men in this country do as a rule

230 PROPORTION OF ABLE MEN TO LABOURERS

BOOK m. receive less than one hundred and fifty pounds
a year for Labour, and that when they receive

A rough r i •

indication for their exertions a larger income than this

of the num- , ..,,,... . ., T ,

berofabie they receive it tor the direction ot Labour, or
countiy i"S for the exercise of some sort of Ability. Now
if we *ake the males who are over sixteen years.

^ age> an(l wno are actually engaged in some
wlgeJo?86 industrial occupation, we shall find that those
Labour. w^0 earn more than one hundred and fifty
pounds a year form of the entire number
something like six per cent. We may there-
fore say that out of every thousand men
there are, on an average, sixty who are dis-
tinctly superior to their fellows, who each
add more to the gross amount of the pro-
duct by directing Labour, than any one man
does by labouring, and who possesses Ability
to a greater or less extent. The commoner

very rare, kinds of Ability, however, depend as a rule

grades of on the higher kinds, and are efficacious only

below the as working under their direction ; and if we

there!* continue our estimate on the basis we have

plentiful just adopted, and accept the amount that a

supply- man makes in industry as being on the whole

an evidence of the amount of his Ability, we

consider that, all allowance being made for

A ROUGH CALCULATION 231

mere luck or speculation, a business income of BOOK m.
fifty thousand pounds means, as a rule, Ability -^— '
of the first class, of fifteen thousand pounds
Ability of the second, and five thousand
pounds Ability of the third, we shall find that
men possessing these higher degrees of the
faculty are, in comparison to the mass of
employed males, very few indeed. We shall
find that Ability of the third class is possessed
by but one man out of two thousand ; of the
second class by but one man out of four thou-
sand ; and of the first class by but one man
out of a hundred thousand. This is, as I have
said, a very rough method of calculation, but
it is not a random one ; and there is reason to
believe that it affords us an approximation to
truth. At all events, taking it as a whole, it
does not err by making Ability too rare ; and
we shall be certainly within the mark if, taking
Ability as a whole, and waiving the question of
its various classes and their rarity, we say
that of the men in this country actively engaged
in production, the men of Ability constitute
one-sixteenth.

And now we are in a position to repeat
with more precision and confidence the conclu-

232 MORE THAN HALF OUR NATIONAL INCOME
BOOK in. sion which we reached at the end of the last

CH. IV.

chapter. It was there pointed out that of

We may . .

now repeat our present national income, consisting as
elusions it does of about thirteen hundred million
in the last pounds, Labour demonstrably produced not
Abmty * more than^ve hundred million pounds, whilst

t- eight hundred million pounds at least was
e-s demonstrably the product of Ability. In the
present chapter, I have substantiated that pro-
andUtry ' position : I have exposed the confusions and
fallacies which have been used to obscure its
truth ; I have shown that Ability and Labour
are two distinct forces, in the sense that whilst
the latter represents a faculty common to all
men, the possession of the former is the natural
monopoly of the few ; that the labourer and
the man of Ability play such different parts in
production that a given amount of wealth is no
more their joint product than a picture is the
joint product of a great painter and a canvas-
stretcher; and I have now pointed to some
rough indication of the respective numbers of
the men of Ability and of the labourers. In-
stead, therefore, of contenting ourselves with
the general statement that Ability makes so
much of the national income, and Labour so

PRODUCED BY A SMALL MINORITY 233

much, we may say that ninety-six per cent of BOOK m.
the producing classes produce little more than a —
third of our present national income, and that
a minority, consisting of one-sixteenth of these
classes, produces little less than two-thirds
of it.

BOOK IV

THE REASONABLE HOPES OF LABOUE
- THEIE MAGNITUDE, AND THEIR
BASIS.

CHAPTER I

How the Future and Hopes of the Labouring Classes
are bound up with the Prosperity of the Classes
who exercise Ability.

THE conclusion just arrived at is not yet com-
pletely stated ; for there are certain further
facts to be considered in connection with it complete
which have indeed already come under our S^see
view, but which, in order to simplify the course
of our argument, have been put out of sight
in the two preceding chapters. I shall return stands>
to these facts presently ; but it will be well,
before doing so, to take the conclusion as it
stands in this simple and broad form, and see,
by reference to those principles which were ex-
plained at starting, and in which all classes and
parties agree, what is the broad lesson which
it forces on us, underlying all party differences.
I started with pointing out that, so far

238 SHORT SUMMARY

BOOK iv. as politics are concerned, the aim of all classes

CH. I. - . ... ,

is to maintain their existing incomes ; and
up aii that that the aim of the most numerous class is

not only to maintain, but to increase them.
seem at™7 I pointed out further that the income of the
that itS ll individual is necessarily limited by the amount
nothing °f the income of the nation ; and that there-
negative f°re tne increase, or at all events the mainten-

ance> °f tne existing income of the nation is

jet Ability implied in all hopes of social and economic

have its

own way progress, and forms the foundation on which

unchecked. •"• °

all such hopes are based. I then examined
the causes to which the existing income of
the nation is due ; and I showed that very
nearly two-thirds of it is due to the exertions
of a small body of men who contribute thus
to the productive powers of the community,
not primarily because they possess Capital,
but because they possess Ability, of which
Capital is merely the instrument ; that it is
owing to the exercise of Ability only that
this larger part of the income has gradually
made its appearance during the past hundred
years ; and that were the exercise of Ability
interfered with, the increment would at once
dwindle, and before long disappear.

OF THE PRECEDING ARGUMENTS 239

Thus the two chief factors in the production BOOK iv.
of the national income — in the production — 1-'
of that wealth which must be produced before
it can be distributed — are not Labour and
Capital, which terms, as commonly used, mean
living labourers on the one hand, and dead
material on the other ; but they are two
distinct bodies of living men — labourers on
the one hand, and on the other men of
Ability. The great practical truth, then,
which is to be drawn from the foregoing
arguments is this — and it is to be drawn from
them in the interest of all classes alike — that
the action of Ability should never be checked
or hampered in such a way as to diminish its
productive efficacy, either by so interfering
with its control of Capital, or by so diminish-
ing its rewards, as to diminish the vigour
with which it exerts itself; but that, on the
contrary, all these social conditions should be
jealously maintained and guarded which tend
to stimulate it most, by the nature of the
rewards they offer it, and which secure for
it also the most favourable conditions for its
exercise. By such means, and by such means
only, is there any possibility of the national

240 THE PRECEDING ARGUMENTS

BOOK iv. wealth being increased, or even preserved

CH. I.

from disastrous and rapid diminution.
But tins is This, however, is but one half of the case ;

very far _ . . . . _ .

from being and, taken by itself, it may seem to have no
lesson connection with the problem which forms the
indeed'the main subject of this volume, namely, the
Ont.par social hopes and interests, not of Ability, but
of Labour. For, taken by itself, the con-
clusion which has just been stated may strike
the reader at first sight as amounting merely
to this : that the sum total of the national
income will be largest when the most numer-
ous minority of able men produce the largest
possible incomes, — incomes which they them-
selves consume ; and that, unless they are
allowed to consume them, they will soon
cease to produce them. From the labourer's
point of view, such a conclusion would indeed
be a barren one. It might show him that
he could not better himself by attacking the
fortunes of the minority ; but it would, on
the other hand, fail to show him that he
was much interested in their maintenance,
since, if Ability consumes the whole of the
annual wealth which it adds to the wealth
annually produced by Labour, the total might

FROM THE LABOURER'S POINT OF VIEW 241

be diminished by the whole of the added BOOK iv.

CH I

portion, and Labour itself be no worse off
than formerly. But when I said just now
that it was to the interest of all classes alike
not to diminish the rewards which Ability
may hope for by exerting itself, this was
said with a special qualification. I did not
say that it was to the interest of the labourers
to allow Ability to retain the whole of what
it produced, or to abstain themselves from
appropriating a certain portion of it ; but
what I did say was that any portion appro-
priated thus should not be so large, nor
appropriated in such a way, as to make what
remains an object of less desire, or the hope
of possessing it less powerful as a stimulus
to producing it. This qualification, as the
reader will see presently, gives to the con-
clusion in question a very different meaning
from that which at first he may very naturally
have attributed to it.

For the precise point to which I have ThecMef

i-ii' f .1 • c lesson to

been leading up, from the opening page of be leamt
the present volume to this, is that a con- whilst'
siderable portion of the wealth produced by the1 chief"
Ability may be taken from it and handed of wealth,

16

242 THE SHARE OF LABOUR

BOOK iv. over to Labour, without the vigour of Ability

CH. I

being in the least diminished by the loss ;

may appro- that such being the case, the one great aim

?argeCshare of Labour is to constantly take from Ability

ducts.prc a certain part of its product ; and that this

is the sole process by which, so far as money

is concerned, Labour has improved its position

during the past hundred years, or by which

it can ever hope to improve it further in the

future.

Theques- The practical question, therefore, for the

tionis,How .

much may great mass oi the population resolves itself

priSe™ into this : What is the extent to which

paralysing Ability can be mulcted of its products, with-

wMchprJ out diminishing its efficacy as a productive

agent ? An able man's hopes of securing

nine hundred thousand pounds for himself

would probably stimulate his Ability as much

as his hopes of securing a million. Indeed

the fact that, before he could secure a million

pounds for himself, he had to produce a

hundred thousand for other people, might

tend to increase his efforts rather than to relax

them. But, on the other hand, if, before he

could secure a hundred thousand pounds for

himself, he had to produce a million for other

IN THE GROWING PRODUCTS OF ABILITY 243

people, it is doubtful whether either sum BOOKIV.

CH. I.

would ever be produced at all. There must —
therefore be, under any given set of circum-
stances, some point somewhere between
these two extremes up to which Labour can
appropriate the products of Ability with per-
manent advantage to itself, but beyond which
it cannot carry the process, without checking
the production of what it desires to appro-
priate. But how are we to ascertain where
that precise point is ?

To this question it is altogether impossible This is a

, . . question

to give any answer based upon a priori which
reasoning. The very idea of such a thing answered
is ridiculous ; and to attempt it could, at the experience;
best, result in nothing better than some piece have the
of academic ingenuity, having no practical
meaning for man, woman, or child. But
what reasoning will not do, industrial history
will. Industrial history will provide us with
an answer of the most striking kind — general,
indeed, in its character ; but not, for that
reason, any the less decided, or less full of
instruction. For industrial history, in a
way which few people realise, will show us
how, during the past hundred years, Labour

244 THE AMOUNT PRODUCED BY LABOUR

BOOK iv. has actually succeeded in accomplishing the
feat we are considering ; how, without checking
the development and the power of Ability,
it has been able to appropriate year by year
a certain share of what Ability produces.
When the reader comes to consider this, —
which is the great industrial object lesson
of modern times, — when he sees what the
share is which Labour has appropriated so
triumphantly, he will see how the conclusions
we have here arrived at, with regard to the
causes of production, afford a foundation for
the hopes and claims of Labour, as broad and
solid as that by which they support the rights
of Ability.

Let us turn, then, once more to the fact
which I have already so often dwelt upon,
that during the closing years of the last
century the population of Great Britain was
about ten millions, and the national income
about a hundred and forty million pounds.
It has been shown that to reach and maintain
that rate of production required the exertion
of an immense amount of Ability, and the
use of an immense Capital which Ability had
recently created. But let me repeat what I

CH. I.

THE AMOUNT TAKEN BY LABOUR 245

have said already : that we will, for the BOOK iv.
purpose of the present argument, attribute
the production of the whole to average human
Labour. It is obvious that Labour did not
produce more, for no more was produced ;
and it is also obvious that if, since that time,
it had never been assisted and never controlled
by Ability, the same amount of Labour would
produce no more now. We are therefore,
let me repeat, plainly understating the case
if we say that British Labour by itself — in
other words, Labour shut out from, and un-
assisted by the industrial Ability of the past
ninety years — can, at the utmost, produce
annually a hundred and forty million pounds
for every ten millions of the population.

And now let us turn from what Labour
produces to what the labouring classes l have

1 By labouring classes is meant all those families having
incomes of less than a hundred and fifty pounds a year. The
substantial accuracy of this rough classification has already
been pointed out. No doubt they include many persons
who are not manual labourers ; but against this must be set
the fact that, according to the latest evidence, there are at
least a hundred and eighty thousand skilled manual labourers
who earn more than a hundred and fifty pounds. And, at all
events, whether the classes in question are manual labourers
or not, they are, with very manifest exceptions, wage-earners

246 CONTINUOUS RECENT GROWTH

BOOK iv. received at different dates within the ninety

CH. I.

— or hundred years in question. At the time

In 1860 . .

Labour of which we have just been speaking, they
least received about half of what we assume Labour
per cent ve to have produced. A labouring population of ten
It produced million people received annually about seventy
ofSthe°u million pounds.1 Two generations later, the
of°Abiiity ; same number of people received in return for

their labour about a hundred and sixty million
percent6 p<>unds.z They were twenty -five per cent

— that is to say, for whatever money they receive they give
work which is estimated at at least the same money value.
A schoolmaster, for instance, who receives a hundred and
forty pounds a year gives in return teaching which is valued
at the same sum. School teaching is wealth just .as much
as a schoolhouse ; it figures in all estimates as part of the
national income ; and therefore the schoolmaster is a pro-
ducer just as much as the school builder.

1 This corresponds with Arthur Young's estimate of
wages for about the same period.

2 Statisticians estimate that in 1860 the working classes
of the United Kingdom received in wages four hundred million
pounds ; the population then being about twice what it was
at the close of the last century. In order to arrive at the
receipts of British Labour, the receipts of Irish Labour must
be deducted from this total. The latter are proportionately
much lower than the former, and could not have reached the
sum of eighty million pounds. But assuming them to have
reached that, and deducting eighty million pounds from four
hundred million pounds, there is left for British Labour
three hundred and twenty million pounds, to be divided,

OF THE RECEIPTS OF LABOUR 247

richer than they possibly could have been if, BOOK iv.

CH. I.

in 1795, they had seized on all the property
in the kingdom and divided it amongst them-
selves. In other words, Labour in 1860,
instead of receiving, as it did two generations
previously, half of what we assume it to have
produced, received twenty-five per cent more
than it produced. If we turn from the year
1860 to the present time, we find that the
gains of Labour have gone on increasing ;
and that each ten millions of the labouring
classes to-day receives in return for its labour
two hundred million pounds, or over forty
per cent more than it produces. And all
these calculations are based, the reader must
remember, on the ridiculously exaggerated
assumption which was made for the sake
of argument, that in the days of Watt and
Arkwright, Capital, Genius, and Ability had
no share in production ; and that all the
wealth of the country, till the beginning of
the present century, was due to the spontane-
ous efforts of common Labour alone.

And now let us look at the matter from a

roughly speaking, amongst twenty million people ; which for
each ten millions yields a hundred and sixty million pounds.

248 GROWTH OF THE RECEIPTS OF LABOUR
BOOK iv. point of view slightly different, and compare

CH I

-^— the receipts of Labour not with what we
of Labour assume it to have itself produced, but with
the total product of the community at a
certain very recent date.

In 1843, when Queen Victoria had been
Labour °f ^ or seven years on the throne, the gross
toS the income of the nation was in round numbers
orthT five hundred and fifteen million pounds. Of
country \jh{$ two hundred and thirty -five million

fifty years y *

as°- pounds went to the labouring classes, and the
remainder, two hundred and eighty million
pounds, to the classes that paid income-tax.
Only fifty years have elapsed since that time,
and, according to the best authorities, the
income of the labouring classes now is cer-
tainly not less than six hundred and sixty
million pounds.1 That is to say, it exceeds,
by a hundred and forty-five million pounds,
the entire income of the nation fifty years ago.
An allowance, however, must be made for
the increase in the number of the labourers.
That is of course obvious, and we will at once
proceed to make it. But when it is made,

1 According to the latest estimates, it exceeds seventeen
hundred million pounds.

CH. I.

DURING QUEEN VICTORIA'S REIGN 249

the case is hardly less wonderful. The labour- BOOK iv.
ing classes in 1843 numbered twenty -six
millions; at the present time they number
thirty -three millions.1 That is to say, they
have increased by seven million persons.
Now assuming, as we have done, that Labour
by itself produces as much as fourteen pounds
per head of the population, this addition of
seven million persons will account for an
addition of ninety -eight million pounds to
the Jive hundred and fifteen million pounds
which was the amount of the national income
fifty years ago. We must therefore, to make
our comparisons accurate, deduct ninety-eight
million pounds from the hundred and forty-
five million pounds just mentioned, which
will leave us an addition of forty-seven million
pounds. We may now say, without any
reservation, that the labouring classes of this
country, in proportion to their number, receive
to-day forty-seven million pounds a year more

1 The entire population has risen from about twenty-seven
million five hundred thousand to thirty-eight millions. But a
large part of this increase has taken place amongst the
classes who pay income-tax, and are expressly excluded from
the above calculations. These classes have risen from one
million five hundred thousand to five millions.

250 ACTUAL GAINS OF LABOUR

BOOK iv. than the entire income of the country at the

beginning of the reign of Queen Victoria.
labourer To any labourer anxious for his own welfare,

anxious for ,. . . £ , . , ,

his own to any voter or politician of any kind, who
should6 realises that the welfare of the labourers is

production of national stability, and who
seeks to discover by what conditions that
welfare can be best secured and promoted,
this fact which I have just stated is one that
cannot be considered too closely, too seriously,
or too constantly.

Let the reader reflect on what it means.

Dreams of some possible social revolution,

dreams of some division of property by which

most of the riches of the rich should be

abstracted from them and divided amongst

the poor — these were not wanting fifty years

They show ag°- But even tne most sanguine of the

thTexist- dreamers hardly ventured to hope that the

ing system then riches of the rich could be taken away

has done, J

doiniSfor ^rom them completely ; that a sum equal to
Mm far the rent of the whole landed aristocracy, all

more than

any Social- the interest on Capital, all the profits of our

ist ever

promised, commerce and manufactures, could be added
to what was then the income of the labouring
classes. No forces of revolution were thought

CH. I.

BEYOND THE DREAMS OF SOCIALISM 251

equal to such a change as that. But what BOOKIV.
have the facts been ? What has happened
really ? Within fifty years the miracle has
taken place, or, indeed, one greater than that.
The same number of labourers and their
families as then formed the whole labouring
population of the country now possess among
them every penny of the amount that then
formed the income of the entire nation. They
have gained every penny that they possibly
could have gained if every rich man of that
period — if duke, and cotton lord, and railway
king, followed by all the host of minor pluto-
crats, had been forced to cast all they had
into the treasury of Labour, and give their
very last farthing to swell the labourer's
wages. The labourers have gained this ; but
that is not all. They have gained an annual
sum of forty '-seven million pounds more. And
they have done all this, not only without
revolution, but without any attack on the
fundamental principles of property. On the
contrary, the circumstances which have enabled
Labour to gain most from the proceeds of
Ability, have been the circumstances which
have enabled Ability to produce most itself.

252 TWO POINTS TO BE CONSIDERED

BOOK iv. Before, however, we pursue these considera-

CH. I.

tions further, it is necessary that we should

But before . . .

proceeding deal with two important points which have

with this -i-in 111 i

argument, perhaps already suggested themselves to the

two side reader as essential to the problem before us.

dispose of. They are not new points. They have been

discussed in previous chapters; but the time

has now arrived to turn to them once again.

CHAPTER II

Of the Ownership of Capital, as distinct from its
Employment by Ability.

THE first of the points I have alluded to can
be disposed of very quickly. It relates to
Land. In analysing the causes to which our
national income is due, I began with showing
that Land produced a certain definite part
of it. For the sake, however, of simplicity, in
in the calculation which I went on to make, I

-IT i i j_i r j? •.!_ "L • all mention

ignored Land, and the tact 01 its being a pro- of Land
ductive agent ; and treated the whole income omitted?

as if produced by Labour, Capital, and Ability.
I wish, therefore, now to point out to the sake>
reader that this procedure has had little
practical effect on the calculation in question,
and that any error introduced by it can be
easily rectified in a moment. The entire
landed rental of this country is, as I have

ance.

254 LAND AND ITS OWNERS

BOOK iv. already shown, not so much as one thirteenth

CH II

of the income ; whilst that of the larger landed

But rent, . .

especially proprietors is not so much as one thirty-ninth.
the iarge° Now my sole object in dealing with the
soTmaii" national income at all is to show how far it
national * is susceptible of redistribution ; and it is per-
that'the fectly certain that no existing political party
fooTnoT would attempt, or even desire, to redistribute
Sport-*1 the rents °f anJ c^ass except the large pro-
prietors only. The smaller proprietors, — nine
hundred and fifty thousand in number, — who
take between them two-thirds of the rental,
are in little immediate danger of having their
rights attacked. The only rental therefore —
namely, that of the larger proprietors — which
can be looked on, even in theory, as the
subject of redistribution, is too insignificant,
being less than thirty million pounds, to
appreciably affect our calculations when we
are dealing with thirteen hundred millions.
The theory of Land as an independent pro-
ductive agent, and of rent as representing
its independent product, is essential to an
understanding of the theory of production
generally ; but in this country the actual
product of the Laud is so small, as compared

PASSIVE OWNERSHIP OF CAPITAL 255

with the products of Labour, Capital, and BOOKIV.

CH II

Ability, that for purposes like the present
it is hardly worth considering. Its being
redistributed, or not redistributed, would,
as we have seen already, make to each in-
dividual but a difference of three farthings
a day.

The second point I alluded to must be capital,
considered at greater length. In dealing with fronTthe0
Capital and Ability, 1 first treated them that uses it,
separately. I then showed that, regarded as omitted1
a productive agent, Capital is Ability, and also<
must be treated as identical with it. But it
is necessary, now that we are dealing with
distribution, to disunite them for a moment,
and treat them separately once more. For wemust
even though it be admitted that Ability, coiTsidfrTt

1 • •> £ n m I. i i iQ connec-

working by means oi Capital, produces, as tion with
it has been shown to do, nearly two-thirds which*188
of the national income, and though it be themselves
admitted further that a large portion of this
product should go to those able men who
are actively engaged in producing it, — the of i<;>
men whose Ability animates and vivifies
Capital, — it may yet be urged that a portion
of it which is very large indeed goes, as a

256 THE CLASS THAT LIVES ON INTEREST

BOOK iv. fact, to men who do not exert themselves at

CH. II.

all, or who, at any rate, do not exert them-
selves in the production of wealth. These
men, it will be said, live not on the products
of Ability, but on the interest of Capital
which they have come accidentally to possess ;
what place and it will be asked on what grounds Labour
ciasses^oid is interested in forbearing to touch the posses-
productive sions of those who produce nothing ? If it
has added to its income, as it has done, during
the past hundred years, why should it not
now add to it much more rapidly, by appro-
priating what goes to this wholly non-produc-
tive class ?

To this question there are several answers.
One is that a leisured class — a class whose
exertions have no commercial value, or no
value commensurate with the cost of its
maintenance — is essential to the development
of culture, of knowledge, of art, and of mental
civilisation generally. But this is an answer
which we need not dwell on here ; for, what-
ever its force, it is foreign to our present
purpose. We will confine ourselves solely to
the material interests that are involved, and
consider solely how the plunder of a class

THE HOPE OF INTEREST AS A MOTIVE 257

living on the interest of Capital would BOOKIV.

CH. II.

tend to affect the actual production of
wealth.

It would affect the production of wealth
in just the same way as would a similar
treatment of that class on whose active
Ability production is directly dependent ;
and it would do this for the following
reasons.

The greater part of the Capital that has They are
been accumulated in the modern world is the of Ability,

creation of active Ability, as I have pointed
out already. It has been saved not from the Be8Bi<m<ait
product of Labour, but from the product which
Ability has added to this. It is Ability con-
gealed, or Ability stored up. And the main
motive that has prompted the men of Ability created-
to create it has not consisted only of the desire
of enjoying the income which they are enabled
to produce by its means, when actually em-
ploying it themselves, but the desire also of
enjoying some portion of the income which
will be produced by its means if it is employed
by the Ability of others. In a word, the men
who create and add to our Capital are motived
to do so by expectation that the Capital shall

17

258 CAPITAL CREATED AND SAVED
BOOK iv. be their own property ; that it shall, when they

CH. n. • i • • 1 1 i •• i i

— wish it, yield them a certain income independent
is created of any further exertions of their own. Were
in order this expectation rendered impossible, were

Capital by any means prevented from yielding
interest either to the persons who made and
seif°created saved it, or those to whom the makers might
and saved ][)equea^i1 ft} the principal motive for making
or saving it would be gone. If a man, for
instance, makes one thousand pounds he can,
as matters stand, do three things with it, any
one of which will gratify him. He can spend
it as income, and enjoy the whole of it in that
way ; he can use it himself as Capital, and so
enjoy the profits ; or he can let others use it
as Capital, and so enjoy the interest. But if
he were by any means precluded from receiving
interest for it, and desired for any reason to
retire from active business, he could do with
his thousand pounds one of two things only —
he could spend it as income, in which case it
would be destroyed ; or let others use it as
Capital, in which case he himself could derive
no benefit whatever from it, and would, in
effect, be giving it or throwing it away. Were
the first course pursued, no Capital would be

MAINL Y FOR THE SAKE OF INTEREST 259

saved ; were the second course obligatory, no BOOK iv.
Capital would be created.1

1 These considerations are so obvious, and have been so
constantly dwelt upon by all economic writers, other than
avowed Socialists, that it is quite unnecessary here to insist
on these further. Even the Socialists themselves have recog-
nised how much force there is in them, and have consequently
been at pains to meet them by the following curious doctrine.
They maintain that a man who makes or inherits a certain
sum has a perfect right to possess it, to hoard it, or squander
it on himself ; but no right to any payment for the use
made of it by others. They argue that if he puts it into a
business he is simply having it preserved for him ; for the
larger part of the Capital at any time existing would dwindle
and disappear if it were not renewed by being used. Let
him put it into a business, say the Socialists, and draw it
out as he wants it. Few things can show more clearly than
this suggested arrangement the visionary character of the
Socialistic mind ; for it needs but little thought to show that
such an arrangement would defeat its own objects and be
altogether impracticable. The sole ground on which the
Socialists recommend it, in preference to the arrangement
which prevails at present, is that the interest which the
owners of the Capital are forbidden to receive themselves
would by some means or other be taken by the State instead
and distributed amongst the labourers as an addition to their
wages, and would thus be the means of supplying them with
extra comforts. Now the interest if so applied would, it is
needless to say, be not saved but consumed. But the owners
of the Capital, who are thus deprived of their interest, are
to have the privilege, according to the arrangement we are
considering, of consuming their Capital in lieu of the interest
that has been taken from them. Accordingly, whereas the
interest is all that is consumed now, under this arrangement

260 FAMILY FEELING

BOOK iv. I have spoken thus far as though in creating

CH IT

-1— Capital a man's motive were the hope of en-
secondiy, joying the interest of it himself. But there is
family another motive almost equally powerful — in
immediate some cases more powerful — and that is the
hope of transferring or transmitting it to his
The bulk family or to his children. Now four-fifths of
capital the Capital of the United Kingdom has been
bynthose°w created within the last eighty years. The
employ it total Capital in 1812 amounted to about two

thousand millions ; now it amounts to almost
frometheir ten thousand millions. Therefore eight hun-
dred thousand millions of the Capital of this
country nas been created by the Ability of the
parents and of the grandparents of those who
now possess it, supplemented by the Ability
of many who now possess it themselves. The
most rapid increase in it took place between
1840 and 1875. If we regard men of fifty as

the Capital would be consumed as well. The tendency, in
fact, of the arrangement would be neither more nor less than
this : to increase the consumption of the nation at the expense
of its savings, until at last all the savings had disappeared.
It would be impracticable also for many other reasons, to
discuss which here would simply be waste of time. It is
enough to observe that the fact of its having been suggested
is only a tribute to the insuperable nature of the difficulty it
was designed to meet.

THE BEQUEST OF CAPITAL 261

representing the present generation of those BOOKIV.

. CH. II.

actively engaged in business, we may say that —

their grandfathers made ten thousand millions history of
of our existing Capital, their parents four of Capital

thousand millions, and themselves two thou-
sand millions. It will thus be easily realised shows7
how those persons who own Capital which they
leave others to employ, and which personally
they have had no hand in making, are for the
most part relatives or representatives of the
very persons who made it, and who made
it actuated by the hope that their relations
or representatives should succeed to it. All A man's
history shows us that one of the most import- leave
ant and unalterable factors in human action is
a certain solidarity of interest between men —
even selfish men — and those nearly connected
with them ; and just as parents are, by an
almost universal instinct, prompted to rear
their children, so are they prompted to be-
queath to them — or, at all events, to one of
them — the greater part of their possessions.
We might as well try to legislate against the
instincts of maternity, as against the instinct
of bequest. Therefore, that the ownership of
much of the Capital of the country should be

262 INTEREST A NECESSARY INCIDENT

BOOK iv. separated from the actual employment of it, is
— ' a necessary result of the forces by which it
was called into existence ; and in proportion
as such a result was made impossible in the
future, the continued operation of these forces
would be checked.

Further, it But interest depends also on a reason that is

sibiT t<T yet stronger and more simple than these. The

Stores* owner of Capital receives interest for the use of

oSd^ it, because it is, in the very nature of things,

theeuse°of impossible to prevent its being offered him, and

Capital, impossible to prevent his taking it. If a man

who possesses one, hundred thousand pounds,

by using it as Capital makes ten thousand

pounds a year, and could, if he had the use of

another one hundred thousand pounds, add

another ten thousand pounds to his income,

no Government could prevent his making a

bargain with a man who happened to possess

the sum required, by which the latter, in

return for lending him that sum, would obtain

a part of the income which the use of it would

enable him to produce.

The most practical aspect of the matter,
however, yet remains to be considered. I
have spoken of interest as of a thing with

AS THE PRICE OF THE USE OF CAPITAL 263

whose nature we are all familiar. But let us BOOK iv.
pause and ask, What is it? It is merely a —
part of the product which active Ability is
enabled to produce by means of its tool, Capital.
It is the part given by the man who uses the
tool to the man who owns it. But the tool,
or Capital, is, as we have seen already, itself
the product of the Ability of some man in the
past ; so that the payment of interest, whether
theoretically just or no, is a question which
concerns theoretically two parties only : the
possessor of living Ability, and the possessor
of the results of past Ability. Thus, whatever
view we may happen to take about it, Labour,
in so far as theoretical justice goes, has no
concern in the matter, one way or the other.
For if interest is robbery, it is Ability that is
robbed, not Labour.

It is important to take notice of this truth ; And
for a knowledge of what is theoretically just, interest be
though it can never control classes so far as to it at°aiin0'

, i • • i , , -i events re-

prevent their seizing on whatever they can presentsno
obtain and keep, exercises none the less a very Labour.6 1
strong influence on their views as to how much
of the wealth of other classes is obtainable,
and also on the temper in which, and the

264 A PART OF THE INTEREST OF CAPITAL

BOOK iv. entire procedure by which, they will endeavour

CH II

to obtain it. For this reason it is impossible

For it will . , , _

modify, to insist too strongly on the fact that, as a
extinguish, matter of theoretical justice, Labour, as such,
toeapPro-re lias no claim whatever on any of the interest
iSof* paid f°r the use of Capital ; and that if it
pidUs8 succeeds in obtaining any part of this interest,
est it will be obtaining what has been made by
others, not what has been made by itself. It
is not that such arguments as these will extin-
guish the desire of Labour to increase its own
wages at the expense of interest, if possible ;
for might — the might that can sustain itself,
not the brute force of the moment — will always
form in the long run the practical rule of right ;
but they will disseminate a dispassionate view
of what the limits of possibility are, and on
what these limits depend.

History And now let us turn to the facts of in-

thatthey dustrial history, and see what light they

doing SB throw on what has just been said. I have

ia y' pointed out that if Capital is to be made or

used at all, it must necessarily, for many

reasons, be allowed to yield interest to its

owners ; but the amount of interest it yields

has varied at various times ; and, although to

CONSTANTLY APPROPRIATED BY LABOUR 265

abolish it altogether would be impossible, or,. BOOKIV.

CH II

if possible, fatal to production, it is capable,
under certain circumstances, of being reduced
to a minimum, without production being in
any degree checked ; and every pound which
the man who employs Capital is thus relieved
from paying to the man who owns it con-
stitutes, other things being equal, a fund
which may be appropriated by Labour. To
say this is to make no barren theoretical
statement. The fund in question not only
may, under certain circumstances, be appro-
priated by Labour ; but these circumstances
are the natural result of our existing industrial
system ; and the fund, as I will now show,
has been appropriated by Labour already, and
forms a considerable part of that additional
income which Labour, as we have seen, has
secured from the income created by Ability.

In days preceding the rise of the modern to an

... . ., . increasing

industrial system, the average rate ot interest extent.
was as high as ten per cent. As the modern
system developed itself, as Ability more and
more was diverted from war, and concentrated
on commerce and industry, and produced by
the use of Capital a larger and more certain

266 INTEREST NOT TO BE CONFUSED

BOOK iv. product, the price it paid for the use of
— Capital fell, till by the middle of this century

Interest

now forms it was not more than five per cent. During

but a small . _ . .

part of the the past forty years it has continued to sink
the nation, still further, and can hardly be said now to

average much more than three,
in spite of This fact is sufficiently well known to

appear-
ances to the investors ; but there are other facts known

equally well which tend to confuse popular
thought on the subject, and which accordingly,
in a practical work like this, it is very neces-
sary to place in their true light. For, in
spite of what has been said of the fall in the
rate of interest from ten to six, and to five,
and from five to three per cent, it is notorious
that companies, when successful, often pay
to-day dividends of from ten to twenty per
cent, or even more ; and founders' shares in
companies are constantly much sought after,
which are merely shares in such profits as
result over and above a return of at least ten
per cent on the capital.

But the explanation of this apparent con-
As much tradiction is simple. Large profits must not
vulgarly be confounded with high interest. Large

considered ^ . . . /, . -, . •. .

interest is pronts are a mixture 01 three things, as was

WITH LARGE PROFITS 267

pointed out by Mill, though he did not name BOOK iv.
two of them happily. He said that profits
consisted of wages of superintendence, com- quite
pensation for risk, and interest on Capital.
If, instead of wages of superintendence, we
say the product of Ability, and instead of
compensation for risk, we say the reward of
sagacity, which is itself a form of Ability, we
shall have an accurate statement of the case.
A large amount of the Capital in the kingdom
is managed by the men who own it ; and
when they manage it successfully, the returns
are large. Sometimes a man with a Capital
of a hundred thousand pounds will make as
much as fifteen thousand pounds a year ;
but that does not mean that his Capital yields
fifteen per cent of interest. Let such a man
be left another hundred thousand pounds,
which he determines not to put into his own
business, but invests in some security held
to be absolutely safe, and he will find that
interest on Capital means not more than three
and a half per cent. If he is determined
to get a large return on his Capital, and if he
does this by investing it in some new and
speculative enterprise, this result, unless it be

268 INTEREST NOT TO BE CONFUSED

BOOK iv. the mere good luck of a gambler, is mainly the
result of his own knowledge and judgment,
as the following facts clearly enough show.

Between the years 1862 and 1885 there
were registered in the United Kingdom about
twenty -Jive thousand joint stock companies,
with an aggregate Capital of about two thou-
sand nine hundred million pounds. Of these
companies, by the year 1885, more than
fifteen thousand had failed, and less than ten
thousand were still existing. During the
following four years the proportion of failures
was smaller; but a return published in 1889
shows that of all the companies formed during
the past twenty - seven years, considerably
more than half had been wound up judicially.
Therefore a man who secures a large return on
money invested in a business not under his own
control, does so by an exercise of sagacity not
only beneficial to himself, but in a still higher
degree beneficial to the country generally ; for
he has helped to direct human exertion into a
profitable and useful channel, whereas those who
are less sagacious do but help it to waste itself.1

1 The part played in. national progress by the mere
business sagacity of investors, amounts practically to a con-

CH. n.

WITH THE PROFITS OF SAGACITY 269

Of large returns on Capital, then, only a BOOKIV.
part is interest ; the larger part being merely
another name for what we have shown to
be the actual creation of Ability — either the
Ability with which the Capital has been
employed in directing Labour, or the Ability
with which some new method of directing
Labour has been selected. There is accord-
ingly no contradiction in the two statements
that Capital may often bring more than
fifteen per cent to the original investors ; and
yet that interest on Capital in the present
day is not more than three or three and a
half per cent. Here is the explanation of
shares rising in value. A man who at the
starting of a business takes a hundred one
pound shares in it, and, when it is well estab-
lished, gets twenty pounds a year as a dividend,
will be able to sell his shares for something like
six hundred pounds ; which means that little
more than three per cent is the interest which
will be received by the purchaser.

Interest, then, or the sum which those who

stant criticism of inventions, discoveries, schemes, and enter-
prises of all kinds, and the selection of those that are valuable
from amongst a mass of what is valueless and chimerical

270 ENORMOUS GAINS OF LABOUR

BOOK iv. use Capital pay to those who own it, having
— decreased, as we have seen it has done, with

Interest, . .

then, has the development of our industrial system, it
and the ' remains to show the reader where the sum
thus saved thus saved has gone. It must have gone
to^be""5 to one or other of two classes of people :
das°se"ng to the men of Ability, or to the labourers.
If it had gone to the former, — that is, to the
employers of Labour, — their gains now would
be greater, in proportion to the Capital em-
ployed by them, than they were fifty years
ago ; but if their gains have not become
greater, then the sum in question must
obviously have found its way to the labourers.
And that such is the case will be made
sufficiently evident by the fact that Mr.
Giffen has demonstrated in the most con-
clusive way that, if rent and the interest
taken by the classes that pay income-tax
had increased as fast as the sum actually
taken by Labour, the sum assessed to income-
tax would be four hundred million pounds
greater than it is, and the sum taken by
Labour four hundred million pounds less.1

1 See Mr. Giffen's Inaugural Address of the Fiftieth Ses-
sion of the Statistical Society.

AT THE EXPENSE OF ABILITY 271

In this case the wealthier classes would be BOOK iv.
now taking one thousand and sixty million
pounds, instead of the six hundred million
pounds which they actually do take ; l and
the labouring classes, instead of taking, as
they do, six hundred and sixty million
pounds, or, as Mr. Giffen maintains, more,
would be taking only two hundred and sixty
million pounds.'2' In fact, as Mr. Giffen de-
clares, " It would not be far short of the mark
to say that the whole of the great improve-
ment of the last fifty years has gone to the
masses." And the accuracy of this statement
is demonstrated in a very striking way by
the fact that had the whole improvement,
according to the contrary hypothesis, gone

1 The gross amount assessed to income-tax in 1891 was
nearly seven hundred million pounds; now more than a
hundred million pounds was exempt, as belonging to persons
with incomes of less than a hundred and fifty pounds a year.
Mr. Giffen maintains (see his evidence given before the Royal
Commission on Labour, 7th December 1892) that there is
an immense middle-class income not included amongst the
wages of the labouring class. This, according to the classifica-
tion adopted above, which divides the population into those
with incomes above, and those with incomes below a hundred
and fifty pounds, would raise the collective incomes of the
latter to over seven hundred million pounds.

2 See Mr. Giifen's Address, as above.

272 LABOUR AND THE EXISTING SYSTEM
BOOK iv. not to the labourers, but to the classes that

CH. II. -11

— pay income-tax, the remainder, namely, two
hundred and sixty million pounds, would
correspond, almost exactly, allowing for the
increase of their numbers, with what the
labouring classes received at the close of the
last century.

what the What, then, the social reformer, what the
reformer labourer, and the friend of Labour, ought to
study is study with a view to improving the condition
dreams of of the labouring classes, is not the theories
but'th?8' and dreams of those who imagine that the
!ifyeatactl improvement is to be made only by some
through reorganisation of society, but the progress,
Labour has an(^ *ke causes °f the progress, that these
ala^aediyand classes have actually been making, not only
ssgainihg lin(^er existing institutions, but through them,
because of them, by means of them.

CHAPTER III

Of the Causes owing to which, and the Means Tyy
which Labour participates in the growing Pro-
ducts of Ability.

LET me repeat in other words what I have
just said. The labouring classes, under the
existing condition of things, have acquired
more wealth in a given time than the most
sanguine Socialist of fifty years ago could
have promised them ; and this increased
wealth has found its way into their pockets
owing to causes that are in actual operation
round us. These causes, therefore, should be
studied for two reasons : firstly, in order that
we may avoid hindering their operation ;
secondly, in order that we may, if possible,
accelerate it ; and I shall presently point out,
as briefly, but as clearly as I can, what the
general character of these causes is.

18

274 A MISERABLE CLASS

BOOK iv. But before doing this, — before considering

CH. III.

— the cause of this progress, — I must for a

It is true in ->

that there moment longer dwell and insist upon the

ous facts reality of it; because unhappily there are

certain notorious facts which constantly obtrude
or excitable themselves on the observation of everybody,
and which tend to make many people deny, or
at least doubt it. These facts are as follows.
progress Speaking in round numbers, there exists in

this country to-day a population consisting of
about seven hundred thousand families, or
three million persons, whose means of subsist-
ence are either insufficient, or barely sufficient,
or precarious, and the conditions of whose life
generally are either hard or degrading, or both.
A considerable portion of them may, without
any sentimental exaggeration, be called miser-
able ; and all of them may be called more or
less unfortunate. There is, further, this obser-
vation to be made. People who are in wrant of
the bare necessaries of life can hardly be worse
off absolutely at one period than another ; but
if, whilst their own poverty remains the same,
the riches of other classes increase, they do, in
a certain sense, become worse off relatively.
The common statement, therefore, that the

CO-EXISTING WITH GENERAL PROGRESS 275

poor are getting constantly poorer is, in this BOOK iv.
relative sense, true of a certain part of the
population ; and that part is now nearly equal
in numbers to the entire population of the
country at the time of the Norman Conquest.
Such being the case, it is of course obvious
that persons who, for purposes of either bene-
volence or agitation, are concerned to discover
want, misfortune, and misery, find it easier
to do so now than at any former period.
London alone possesses an unfortunate class
which is probably as large as the whole
population of Glasgow ; and an endless pro-
cession of rags and tatters might be marched
into Hyde Park to demonstrate every Sunday.
But if the unfortunate class in London is as
large as the whole population of Glasgow, we
must not forget that the population of London
is greater by nearly a million than the popula-
tion of all Scotland ; and the truth is that, But when

,,,- - ni ..... these facts

although the uniortunate class has, with the —viz. facts

,, i . . , . i relating to

increase 01 population, increased in numbers the very
absolutely, yet relatively, for at least two
centuries, it has continued steadily to decrease,
In illustration of this fact, it may be mentioned t] ms'
that, whereas in 1850 there were nine paupers

276 RELATIVE DECREASE OF POVERTY

BOOK iv. to every two hundred inhabitants, in 1882
° there were only Jive; whilst, to turn for a

moment to a remoter period, so as to compare
the new industrial system with the old, in
the year 1615, a survey of Sheffield, already
a manufacturing centre, showed that the
" begging poor," who " could not live without
the charity of their neighbours," actually
amounted to one -third of the population, or
seven hundred and twenty -jive households
out of two thousand two hundred and seven.
Further, although, as I observed just now,
it is in a certain sense true to say that,
relatively to other classes, the unfortunate
class has been getting poorer, the real tend-
ency of events is expressed in a much truer
way by saying that all other classes have been
getting more and more removed from poverty.
we shall What the presence, then, and the persist-
theyhave encc of this class really shows us is not that
signifi- the progress of the labouring classes as a whole

been less rapid and less remarkable than
thewtfa- ^ nas Just been sa^ to ke, but that a certain
°ro"reslof fraction of the population, for some reason or
the vast Other, has always remained hitherto outside

majority. »

this general progress ; and the one practical

TWO CAUSES OF POPULAR PROGRESS 277

lesson which its existence ought to force on us BOOK iv.
is not to doubt the main movement, still less
to interfere with it, but to find some means of
drawing these outsiders into it. This great what then
and grave problem, however, requires to be ^Lee of
treated by itself, and does not come within the progress ?
scope of the present volume. Our business is
not with the causes which have shut out one-
tenth of the poorer classes from the growing
national wealth, but with those which have so
signally operated in making nine-tenths of
them sharers in it.

We will accordingly return to these, and
consider what they are. We shall find them They are of

. ,, ... n i -i t • i • two kinds :

to be oi two kinds : firstly, those which consist spon-
of the natural actions of men, each pursuing tendencies,
his own individual interest; and secondly, deliberate
their concerted actions, which represent some concerted
general principle, and are deliberately under-
taken for the advantage not of an individual
but of a class. We will begin with consider-
ing the former ; as not only are they the
most important, but they also altogether
determine and condition the latter, and the
latter, indeed, can do little more than assist
them.

278 THE RICHES OF A MINORITY

BOOK iv. The natural causes that tend to distribute

CH III

- — amongst Labour a large portion of the wealth

We will

begin with produced by Ability will be best understood
if we first consider for a moment the two

tendencies -i , i n • i • i

— Le. the ways — and the two only ways — in which a
actions of minority can become wealthy. What these

are can ^e easily realised thus. Let us imagine
hisowng a community of eight labouring men, who
est> make each of them fifty pounds a year, and
who represent Labour ; and let us imagine a
ninth man, — a man of Ability, — who represents
There are the minority. The ninth man might, if he

two ways

of getting were strong enough, rob each of the eight men
abstracting of twenty-five pounds, compelling them each

from an , . ., j • -i p

existing to live on twenty-jive pounds instead 01 on
or (2) by fifty pounds, and appropriate to himself an
ft. ^he0 annual two hundred pounds. Or he might
"/the a& reach the same result in a totally different way.
He might so direct and assist the Labour of
tne eight men, that without any extra effort
second tbe to themselves they each, instead of fifty pounds
produced seventy-five pounds, and if, under
these circumstances, he took twenty-five pounds
from each, he would gain the same sum as
before, namely two hundred pounds, but, as
I said, in a totally different way. It would

CH in

HOW THEY ARE PRODUCED 279

represent what he had added to the original BOOK
product of the labourers, instead of representing
anything he had taken from it. Now whatever
may have been true of rich classes in former
times and under other social conditions, the
riches now enjoyed by the rich class in this
country have, with exceptions which are utterly
unimportant, been acquired by the latter of
these two methods, not by the former. They
represent an addition to the product of Labour,
not an abstraction from it. This is, of course,
clear from what has been said already ; but it
is necessary here to specially bear it in mind.

Let us then take a community of eight Let us
labourers, each producing commodities worth the nature
fifty pounds a year, and each consuming — as he process,
easily might — the whole of them. These men
represent the productive power of Labour ;
and now let us suppose the advent of Ability By first
in the person of the ninth man, by whose ing Labour

. ,. , . . , . , . -, and Ability

assistance this productive power is multiplied, in their

and consider more particularly what the ninth
man does. There is one thing which it is Ability, or
quite plain he does not do. He does not
multiply the power of Labour for the sake of
merely increasing the output of those actual

280 THE RICH MAN'S PROGRESS

BOOK iv. products which he finds the labourers origin-
ally producing and consuming, and of appro-
priating the added quantity ; for the things he
would thus acquire would be of no possible
good to him. He would have more boots and
trousers than he could wear, more bread and
cheese than he could eat, and spades and imple-
ments which he did not want to use. He would
not want them himself, and the labourers are
already supplied with them. They would be
no good to anybody. He does not therefore
employ his Ability thus, so as to increase the
output of the products that have been produced
hitherto ; but he enables first, we will say,
four men, then three, then two, and lastly one,
to produce the same products that were origin-
ally produced by eight ; and he thus liberates
a continually increasing number, whom he sets
to produce products of new and quite different
kinds.

Let .us see how he does this. The eight
labourers, when he finds them, make each fifty
pounds a year, or four hundred pounds in the
aggregate ; and this represents the normal
necessaries of their existence. He, by the
assistance which his Ability renders Labour,

THE RICH MAN'S PROGRESS 281

enables at last, after many stages of progress, BOOK iv.
these same necessaries to be produced by one
single man, who, instead of producing, as for-
merly, goods worth fifty pounds, finds himself,
with the assistance of Ability, producing goods
worth four hundred pounds. There is thus
an increase of three hundred and fifty pounds,
and this increment the man of Ability takes.

Meanwhile, seven men are left idle, and with
them the man of Ability makes the following
bargain. Out of the three hundred and fifty
pounds worth of necessaries which he possesses,
he offers each of them fifty pounds worth —
the amount which originally they each made
for themselves, on condition that they will
make other things for him, or put their time at
his disposal. They accordingly make luxuries
for him, or become his personal servants. For
the three hundred and fifty pounds he pays
them in the shape of necessaries, they return
him another three hundred and fifty pounds in
the shape of commodities or of service ; and this
new wealth constitutes the able man's income.

Such, reduced to its simplest elements, is
the process on which the riches of the rich in
the modern world depend. It will be seen,

282 THE RIVALRY OF THE RICH

BOOK iv. however, that in the case we have just supposed,

CH. III. . .

— the labourers, by the process in question, gain

case, there absolutely nothing. Each of them originally

competi- made fifty pounds a year. He now receives

employers, the same sum in wages. But the total product

™0 has increased by three hundred and fifty

pounds, and of this the labourers acquire no
increasing6 share whatever. Nor, supposing them to be
amragst inexperienced in the art of combination, is there
the labour- anv means by which they could ever do so.
And if our imaginary community were a com-
plete representation of reality, the same would
be the case with the labourers in real life.
But let us But it must now be pointed out that in
second man one important respect, as a representation of

of Ability ,. ...

competing reality, our community is incomplete, it re-
first, and presents the main process by which the riches
of distribu- °f the rich are produced ; but it offers no
increased6 parallel to one factor in the real situation,

owing to which the labourers inevitably acquire
ra begins" a snare ^ them. In that community the rich
at once. classes are represented by a single person, who
has no conflicting interests analogous to his
own to contend against. But in actual life,
so far as this point is concerned, the condition
of the rich is different altogether. As looked

CH. III.

THE GAIN OF LABOUR 283

at from without, they are, indeed, a single BOOKIV.
body, which may with accuracy be represented
as one man ; but as looked at from within, they
are a multitude of different bodies, whose
interests, within certain limits, are diametric-
ally opposed to each other. In order, there-
fore, to make our illustration complete, instead
of one man of Ability we must imagine two.
The first, whose fortunes we have just followed,
and whom, for the sake of distinctness, we will
christen John, has already brought production
to the state that has been just described. He
has managed to get seven men out of eight to
produce luxuries for himself, — luxuries, we will
say, such as wine, cigars, and butter, — paying
these seven men with the surplus necessaries
which, with his assistance, are produced by
the eighth man. But of these luxuries the
seven men keep none ; nor can they give any
of them to the eighth man, their fellow. John
takes all. But now let us suppose that a
second man of Ability, whom we will christen
James, appears upon the scene, just as anxious
as John to direct Labour by his Ability, and
just as capable of making Labour productive.
But all the labourers are at present in the pay

284 POPULAR PROGRESS

BOOK iv. of John. James therefore must set himself to

CH. III.

detach them from John's service ; and he accord-
ingly engages that if they will work for him
they shall not only each receive the necessaries
that John gives them, but a share of the other
things that they produce — of the butter, of the
cigars, and of the wine — as well. The moment
this occurs, John has to make a similar offer ;
and thus the wages of Labour at once begin to
rise. When they have been forced up to a
certain point, James and John cease to bid
against one another, and each employs a
certain number of labourers, till one or other
of them makes some new discovery which
enables the same amount of some commodity
— we will say cigars — as has hitherto been
produced by two men, to be produced by one ;
and thus a new labourer is set free, and is
available for some new employment. We
must assume that James and John could both
employ this man profitably — that is, that they
could set him to produce some new object of
desire — let us say strawberries ; and, this being
so, there is again a competition for his labour.
He is offered by both employers as much as
he has received hitherto, and as the other

AND GROWTH OF POPULATION 285

labourers receive ; and he is offered besides a BOOK iv.
certain number of strawberries. Whichever
employer ultimately secures his services, the
man has secured some further addition to his
income. He has some share in the increasing
wealth of the community ; and, as John and
James continue to compete in increasing the
production of all other commodities, some
share of each increase will in time go to all
the labourers.

One thing only could interfere with this And

O J AT •

nothing

process ; and that has been excluded from our can stop

. this process

supposed commumty : namely, an increase in except an
its numbers. And a mere increase in the population

numbers would in itself not be enough. It

must be an increase which outstrips the dis- productive

f • -i • -i 1 i i powers of

covery of new ways in which labour may be Ability.
employed profitably. Let us suppose that to
our original eight labourers, eight new labourers
are added, who if left to themselves could do
just what the first eight could do, namely,
produce annual subsistence for themselves to
the value of fifty pounds each. If, under the
management of James or John, the productivity
of these men could be multiplied eight-fold, as
was the case with the first eight, James and

286 THE GAIN OF LABOUR

BOOK iv. John would be soon competing for their services,

J ' and the second eight, like the first eight, would

share in the increased product. But if, owing
to all the best land being occupied, and few
improvements having been discovered in the
methods of any new industries, the productivity
of the new men could be increased not eight-
fold, but only by one-eighth — that is to say, if
what each man produces by his unaided Labour
could be raised by Ability from fifty pounds,
not to four hundred pounds, but to no more
than fifty-six pounds ten shillings, — -fifty-six
pounds ten shillings would be the utmost these
men would get, even if the Ability of James
or John got no remuneration whatever.
Meanwhile, however, the first set of workmen
are, as we have seen, receiving much more than
this. They are receiving each, we will say,
one hundred pounds. The second set, there-
fore, naturally envy them their situations, and
endeavour to secure these for themselves by
offering their Labour at a considerably lower
price. They offer it at ninety pounds, at
seventy pounds, or even at sixty pounds ; for
they would be bettering their present situation
by accepting even this last sum. This being

LIMITED BY THE POWER OF ABILITY 287

the case, the original eight labourers have BOOK iv.

CH III

necessarily to offer their Labour at reduced
terms also ; and thus the wages of Labour are
diminished all round.

Such is the inevitable result under such
circumstances, if each man — employer and
employed alike — follows his own interest
at the bidding of common sense. One man
is not more selfish than another ; indeed, in
a bad sense, nobody is selfish at all ; and for
the result nobody is to blame. The average
wages of Labour are diminished for this simple
reason, and for no other — that the average
product is diminished which each labourer
assists in producing. The community is richer
absolutely; but it is poorer in proportion to
its numbers.1 Let us see how this works out.
The original product of the first eight labourers
was fifty pounds a head, or four hundred
pounds in the aggregate. This was raised by
the co-operation of Ability to four hundred
pounds a head, or three thousand two hundred

1 If the number of employers does not increase, it is true
that they, unlike the employed, will be richer in proportion
to their numbers ; but they will be poorer in proportion to
the number of men employed by them.

288 THE NATURAL GAIN OF LABOUR

BOOK iv. pounds in the aggregate. But the second set
— — of labourers, whatever Ability may do for them,
cannot be made to produce more than fifty -six
pounds ten shillings a head, or an aggregate
of four hundred and twenty -five pounds;
and thus, whereas eight labourers produced
three thousand two hundred pounds, sixteen
labourers produce only three thousand six
hundred and fifty -two pounds, and the aver-
age product is lowered from four hundred
pounds to two hundred and twenty -eight
pounds.^-

1 Thus the old theory of the wage-fund, which has so
often heen attacked of late, has after all this great residuary
truth, namely, that the amount of wealth that is spent and
taken in wages is limited by the total amount of wealth pro-
duced in proportion to the number of labourers who assist in
its production. That theory, however, as commonly under-
stood, is no doubt erroneous, though not for the reasons com-
monly advanced by its critics. The theory of a wage-fund
as commonly understood means this — that if there were eight
labourers and a capital of four hundred pounds, which would
be spent in wages and replaced within a year, and if this
were distributed in equal shares of fifty pounds, it would be
impossible to increase the share of one labourer without
diminishing that of the others ; or to employ more labourers
without doing the same thing. But the truth is that if
means were discovered by which the productivity of any one
labourer could be doubled during the first six months, the
whole fifty pounds destined for his whole year's subsistence

ITS RELATION TO POLITICS 289

Wages naturally decline then, owing to an BOOK iv.

CH. III.

increase of population, when relatively to the —

• . This

population wealth declines also ; but only then, natural
On the other hand, — and this is the important however,
point to consider, — so long as a country, under regulated
the existing system of production, continues, atye action'"
like our own, to grow richer in proportion to
the number of labourers, of every fresh increase '
in riches the labourers will obtain a share,
without any political action or corporate
struggle on their part, merely by means of a
natural and spontaneous process. And we
have now seen in a broad and general way
what the character of this process is. It may
seem, however, to many people that a study of
it and of its results can teach no lesson but the
lesson of laisser faire, which practically means
that the labourers have no interest in politics

might be paid to him during the first six months, and the
fund would meanwhile have been created with which to pay
him a similar sum for the next six months — the employer
gaining in the same proportion as the labourer. So, too,
with regard to an additional number of labourers — if ability
could employ their labour to sufficient advantage, part of the
sum destined to support the original labourer for the second
six months of the year might be advanced to them, and
before the second six months' wages became due there might
be enough to pay an increased wage to all.

19

HI.

2QO SELF-HELP AND STATE HELP

BOOK iv. at all, and that all social legislation and cor-

. . . ,

porate action of their own is no better than a
waste of trouble, and is very possibly worse.
But to think this is to completely misconceive
the matter. Even a study of this process of
natural distribution by itself would be fruitful
of suggestions of a highly practical kind ; but
if we would understand the actual forces to
which distribution is due, it must, as I have
said already, not be studied by itself, but taken
in connection with others by which its opera-
tion has been accelerated. I spoke of these as
consisting of deliberate and concerted actions
in contradistinction to individual and spon-
taneous actions ; and these, speaking broadly,

takes two have been of two kinds — the one represented

by the organisation of Labour in Trade Unions,
com'bina- the other by certain legislative measures, which,
amongst ^ a vague and misleading way, are popularly
!i«e.lawer" described as "Socialistic." Let us proceed to

will discuss Pnriqirlpr

both in the consiaer

next
chapter.

CHAPTER IV

Of Socialism and Trade Unionism — the Extent and
Limitation of their Power in increasing the Income
of Labour.

I WILL speak first of the kind of legislation, Legislation
popularly called Socialistic, which certain just ai-

T -I • , i 11 i luded to is

people now regard with so much hope, and commonly
others with corresponding dread ; and I shall socialistic :
show that both of these extreme views rest
on a complete misconception of what this so-
called Socialism is. For what is popularly
called Socialism in this country, so far as it
has ever been advocated by any political
party, or has been embodied in any measure
passed or even proposed in Parliament, does
not embody what is really the distinctive
principle of Socialism. Socialism, regarded But this
as a reasoned body of doctrine, rests altogether describing
on a peculiar theory of production, to which jn^Curate;

CH. IV.

292 SO-CALLED SOCIALISM IN ENGLAND

BOOK iv. already I have made frequent reference — a
theory according to which the faculties of men
are so equal that one man produces as much
wealth as another ; or, if any man produces
more, he is so entirely indifferent as to
whether he enjoys what he produces or no,
that he would go on producing it just the
same, if he knew that the larger part would
at once be taken away from him. Hence
Socialists argue that the existing rewards of
Ability are altogether superfluous, and that
the existing system of production, which rests
on their supposed necessity, can be completely
revolutionised and made equally efficacious
without them.

But whatever may be the opinions of a
few dreamers or theorists, or however in the
future these opinions may spread, the funda-
mental principle of Socialism, up to the
present time, has never been embodied in
any measure or proposal which has been
advocated in this country by any practical
party. On the contrary, the proposals and
measures which are most frequently denounced
as Socialistic — even one so extreme as that
of free meals for children at Board Schools

DIFFERENT FROM FORMAL SOCIALISM 293

— all presuppose the system of production BOOK iv.

CH rv

which is existing, and thus rest on the very
foundation which professed Socialists would so-caiied
destroy.1 They merely represent so many legislation
ways — wise or unwise — of distributing a public country

rests on
the very
1 This is true even of productive or distributive industries system of

carried out by the State. The real Socialistic principle of
production has never been applied by the State, or by any professed
municipal authority ; nor has any practical party so much Socialists
as suggested that it should be. The manager of a State destroying.
factory has just the same motive to save that an ordinary
employer has : he can invest his money, and get interest on
it. A State or a municipal business differs only from a
private Capitalist's business either in making no profits, as
is the case in the building of ships of war ; or of securing the
services of Ability at a somewhat cheaper rate, and, in con-
sequence, generally diminishing its efficacy. Of State business
carried on at a profit, the Post Office offers the best example ;
and it is the example universally fixed on by contemporary
English Socialists. It is an example, however, which dis-
proves everything that they think it proves ; and shows the
necessary limitations of the principle involved, instead of the
possibility of its extension. For, in the first place, the
object aimed at — i.e. the delivery of letters — is one of excep-
tional simplicity. In the second place, all practical men
agree that, could the postal service be carried out by private
and competing firms, it would (at all events in towns) be
carried out much better ; only the advantages gained in this
special and exceptional case from the entire service being
under a single management, outweigh the disadvantages.
And lastly, the business, as it stands, is a State business in
the most superficial sense only. The railways and the

294 AN ELEMENT OF SOCIALISM

BOOK iv. revenue, which consists almost entirely of

CH. IV.

taxes on an income produced by the forces
of Individualism.

Now, so far as the matter is a mere ques-
tion of words, we may call such proposals or
measures Socialistic if we like. On grounds
of etymology we should be perfectly right in
doing so ; but we shall see that in that case,
with exactly the same propriety, we may
apply the word to the institution of Govern-
ment itself. The Army, the Navy, and more
obviously still the Police Force, are all Social-
istic in this sense of the word ; nor can any-
thing be more completely Socialistic than a
public road or a street. In each case a certain
something is supported by a common fund
for the use of all ; and every one is entitled
to an equal advantage from it, irrespective of

steamers that carry the letters are all the creations of private
enterprise, in which the principle of competition, and the
motive force of the natural rewards of Ability, have had
free play. Indeed the Post Office, as we now know it, if
we can call it Socialistic at all, represents only a superficial
layer of State Socialism resting on individualism, and only
made possible by its developments. Real State Socialism
would be merely the Capitalistic system minus the rewards
of that Ability by which alone Capital is made productive.

NECESSARY TO EVERY STATE 295

his own deserts, or the amount he has con- BOOKIV.

CH IV

tributed to its support.

If, then, we agree to call those measures what is
Socialistic to which the word is popularly socialism
applied at present, Socialism, instead of being country I* a
opposed to Individualism, is its necessary
complement, as we may see at once by con-
sidering the necessity of public roads and a
police force ; for the first of these shows us
that private property would be inaccessible
without the existence of social property ; and
the second that it would be insecure without
the existence of social servants. The good
or evil, then, that will result from Socialism,
as understood thus, depends altogether on
questions of degree and detail. There is no
question as to whether we shall be Socialistic
or no. We must be Socialistic ; and we And the
always have been, though perhaps without may pro
knowing it, as M. Jourdain talked prose. The LtLded

only question is as to the precise limits to
which the Socialistic principle can be pushed pushed
with advantage to the greatest number.

What these limits may be it is impossible
to discuss here. Any general discussion of
such a point would be meaningless. Each

296 THE SOCIALISTIC QUESTION

BOOK iv. case or measure must be discussed on its own

t'H. IV. . .... ., ,

— merits. But, though it is impossible to state
what the limits are, it is exceedingly easy to
show on what they depend. They depend on
two analogous and all-important facts, one of
which I have already explained and dwelt upon,
and which forms, indeed, one of the principal
themes of this volume. This is the fact, that
the most powerful of our productive agents,
namely Ability, cannot be robbed, without
diminishing its productivity, of more than a
certain proportion of the annual wealth pro-
duced by it; and, as it is from this wealth
that most of the Socialistic fund must be
appropriated, Socialistic distribution is limited
by the limits of possible appropriation. The
other fact — the counterpart of this — is as
follows. Just as Ability is paralysed by
robbing it of more than a certain portion of
its products, Labour may equally be paralysed
by an unwise distribution of them ; and thus
their continued production be at last rendered
That it can impossible. For instance, quite apart from

easily be . . . , ,.,3-. , . . . , ' . .

pushed too any initial difficulty in raising the requisite

obvious, fund from the wealthier class of tax-payers,

the providing of free meals for children in

ENTIRELY A QUESTION OF DEGREE 297

Board Schools is open to criticism, on account BOOK iv.

of the effect which it might conceivably have - '

upon parents, of diminishing their industry
by diminishing the necessity for its exercise.
Whether such would be the effect really in
this particular case, it is beside my purpose
to consider ; but few people will doubt that
if such a provision were extended, and if,
even for so short a time as a single six
months, free meals were provided for the
parents also, half the Labour of the country
would be for the time annihilated. Labour,
however, is as necessary to production as is
Ability, even though, under modern conditions,
it does not produce so much ; and it is there-
fore perfectly evident that there is a limit
somewhere, beyond which to relieve the in-
dividual labourer of his responsibilities by
paying his expenses out of a public fund will
be, until human nature is entirely changed,
to dry up the sources from which that fund
is derived.

As I have said already, it is impossible, in
any general way, to give any indication of
what this limit is ; but the industrial history
of this country supplies a most instructive

298 SOCIALISM NOT DIRECTL Y OPERA TIVE

BOOK iv. instance in which it was notoriously over-
en. IV. , .. , in

— passed, and what was meant as a benefit to
Labour, under circumstances of exceptional
difficulty, ended by endangering the prosperity
of the whole community. I refer to our Poor
Law at the beginning of this century, the
effects of which form one of the most remark-
able object-lessons by which experience has
ever illustrated a special point in economics.
The sort of That Poor Law, as Professor Marshall well
limit that observes, " arranged that part of the wages
it/bene- ° [of the labourers] should be given in the form
of poor relief ; and that this should be distri-
of buted amongst them in the inverse proportion
to their industry, thrift, and forethought.
The traditions and instincts," he adds, " which
were fostered by that evil experience are even
now a great hindrance to the progress of the
working classes." 1 Now that particular evil
on which Professor Marshall comments, —
namely, that the part of the wages coming
through this Socialistic channel were in the
inverse proportion to what had really been
produced by the labourer — is inherent in all

1 Principles of Economics, by Alfred Marshall, book iv.
chap. vii.

IN INCREASING THE INCOME OF LABOUR 299

Socialistic measures, the principal object of BOOKIV

1 • 1 • • -. . CH. IV.

which is to raise or supplement wages ; as is —
clearly enough confessed by the Socialistic
motto, " To every man according to his needs."
It may accordingly be said that, absolutely such
necessary as the Socialistic principle is, and whatever
much as may be hoped from its extension in m°ay do,
many directions, it neither has been in the
past, nor can possibly be in the future,

efficacious to any great extent in increasing money

* O o wages.

the actual income of the labourer. l

1 Though I have aimed at excluding from this volume
all controversial matter, I may here hazard the opinion that
the Socialistic principle is most properly applied to providing
the labourers, not with things that they would huy if they
were able to do so, but things that naturally they would not
buy. Things procurable by money may be divided into
three classes — things that are necessary, things that are
superfluous, and things that are beneficial. Clothing is an
example of the first class, finery of the second, and education
of the third. If a man receives food from the State, other-
wise than as a reward for a given amount of labour, his
motive to labour will be lessened. If a factory girl, irre-
spective of her industry, was supplied by the State with
fashionable hats and jackets, her motive to labour would be
lessened also ; for clothing and finery are amongst the special
objects to procure which labour is undertaken. But desire
to be able to pay for education does not constitute, for most
men and women, a strong motive to labour ; and therefore
education may be supplied by the State, without the efficacy
of their labour being interfered with.

300 TRADE UNIONISM

BOOK iv. Such being the case, then, let us now

CH. IV. . n

— turn our attention to another principle 01 an
unionism entirely different kind, which, so far as regards
can do Sy this object, is incalculably more important,
wTwiii and which has constantly operated in the past,
how, and an(l may operate in the future, to increase
fn^haf11 the labourer's income, without any correspond-
ing disadvantages. I mean that principle of
organisation amongst the labourers themselves
which is commonly called Trade Unionism ;
and which directly or indirectly represents
the principal means by which Labour is
attempting, throughout the civilised world,
to accelerate and regulate the natural distri-
bution of wealth. I will first, in the light of
the conclusions we have already arrived at,
point out to the reader what, speaking gener-
ally, is the way in which Trade Unionism
strengthens the hands of Labour; and then
consider what is the utmost extent to which
the strength which Labour now derives from
it may be developed.

The opera- If tne reader has not already forgotten our
JjJJ£j°f imaginary community, — our eight labourers
i^rauSg W^k John and James directing them, — our
wages can easiesf; course will be to turn again to that.

HOW IT STRENGTHENS LABOUR 301

We saw that when the labourers were employed BOOK iv.
by John only, — John who found them each
making fifty pounds a year, and enabled them seen at a
by his Ability each to make four hundred reference to
pounds — we saw that the whole of this communtty
increase, in the natural course of things, would

be kept by John himself, by whose Ability chapter**
it was practically created ; for it would not be
to John's advantage to part with any of it,
and the labourers, so long as they all acted
separately, would have no means of extracting
any of it from him. It would be useless for
one of them at a time to strike for higher
wages. The striker and the employer would
meet on wholly unequal terms ; because
the striker, whilst the strike lasted, would
be sacrificing the whole of his income, whilst
depriving the employer of only an eighth
part of his. But let us alter the supposition.
Let us suppose that the labourers combine
together, and that the whole eight strike for
higher wages simultaneously. The situation
is now completely changed ; and the loss that
the struggle will entail on both parties is
equal. The employer, like the labourer, will
for a time lose all his income. It is true

302 HOW THE POWER OF STRIKING

BOOK iv. that if the employer has a reserve fund on which
he can support himself whilst production is
suspended, and if the labourer has no such fund,
the employer may still be sure of an immediate
victory, should he be resolved at all costs to
resist the labourers' demand. But, in any
case, the cost of resisting it will be appreciable :
it is a loss which the labourers will be able to
inflict on him repeatedly ; and he may see
that they would be able, by their strikes, to
make him ultimately lose more than he would
by assenting to their demands, or, at all events,
making some concessions to them. It is there-
fore obvious that the labourers, in such a case,
will be able to extract extra wages in the
inverse proportion to the loss which the em-
ployer will sustain if he concedes them, and
in direct proportion to the loss which would
threaten him should he refuse to do so.1

1 In our imaginary community we have at first eight
labourers, who produce fifty pounds a year a-piece =four
hundred pounds. Then we have eight labourers + one able
man, who produce four hundred pounds a year for each
labourer = three thousand two hundred pounds. Of this the
able man takes two thousand eight hundred pounds. Now,
suppose the labourers strike for double wages, and succeed
in getting them, their total wages are eight hundred pounds a
year instead of four hundred pounds ; and the employer's income

GROWS WITH THE GROWTH OF WAGES 303
There is, however, much more to be said. BOOKIV.

CH. IV,

With each increase of their wages which the
labourers succeed in gaining, they will be
better equipping themselves for any fresh
struggle in the future ; for they will be able
to set aside a larger and larger fund on which
to support themselves without working, and
thus be in a position to make the struggle
longer, or, in other words, to inflict still greater
injury on the employer. And if such will be

is two thousand four hundred pounds instead of two thousand
eight hundred pounds. The labourers gain a hundred per cent;
the employer loses little more than fourteen per cent. The
labourers therefore have a stronger motive in demanding than
the employer has in resisting. But let us suppose that, the
total income of the community remaining unchanged, the
labourers have succeeded in obtaining one thousand eight
hundred pounds, thus leaving the employer one thousand four
hundred pounds. The situation will now be changed. The
labourers could not possibly now gain an increase of a hundred
per cent, for the entire income available would not supply
this ; but let us suppose they strike for an increase of two
hundred pounds. If they gained that, their income would be
two thousand pounds, and that of the employer one thousand
two hundred pounds; but the former situation would be
reversed. The employer now would lose more than the
labourer would gain. The labourers would gain, in round
numbers, only eleven per cent ; and the employer would
lose fourteen per cent. Therefore the employer would
have a stronger motive in resisting than the labourers in
demanding.

304 NATURAL LIMITS OF THE POWERS

BOOK iv. the case when there is one employer only,

CH. iv. r J J '

much more will it be the case when there are

Combina-

tion two — when John and James, as we have seen,

amongst .,

labourers are forced by the necessities 01 competition to
at an ad- grant part of the labourers' demands, even
Igainftea before they are formulated. It might thus
employers, seem that there is hardly any limit to the
power which a perfected system of Trade
Unionism may one day confer upon the
labourers. There are, however, two which we
™^ consider now, in addition to others at
which we will glance presently. One is the
limit with which we are already familiar, and
of which in this connection I shall again speak,
namely, the limit of the minimum reward
requisite as a stimulus to Ability. The other
is a limit closely connected with this, which
is constituted by the fact that if the demands
of Labour are pushed beyond a certain point
against disunited employers, the employers
will combine against Labour, as Labour has
combined against them, and all further conces-
sions will be, at all costs, unanimously refused.
The Now a situation like this is the ultimate

ultimate

tendency situation which all Trade Unionism tends to

of Trade ,.'•", T -, -, .

Unionism bring about. It tends, by turning the labourers

OF TRADE UNIONISM 305

into a single body on the one hand, and the BOOK iv.

i • -111 11 CH- IV-

employers into a single body on the other, to —

i -, . ,., -, is to make

make the dispute like one between two mdi- any
viduals ; and though for many reasons this between
result can never be entirely realised,1 the limits Pi0yer and

employed
like a

1 The possibility of such a result would depend upon two conflict
assumptions, which are not in accordance with reality, and t^indi-
for which allowance must be made. The first is the assump- viduals.
tion that the labouring population is stationary ; the second
is that Ability can increase the productivity of Labour equally
in all industries. In reality, however, as was noticed in the
last chapter, the number of labourers increases constantly,
and the improvements in different industries are very un-
equal ; and, owing to these two causes, it often happens
that the total value produced in some industries by Labour
and Ability together is not so great as is the share that is
taken by Labour in others. Thus the labourers employed
in the inferior industries could by no possibility raise their
wages to the amount received by the labourers employed
in the superior ones. Their effort accordingly would be to
obtain employment in the latter, and to do so by accepting
wages higher indeed than what they receive at present, but
lower than those received by the men whose positions they
wish to take. Thus, under such circumstances, a union of
industrial interests ceases to be any longer possible. By an
irresistible and automatic process, there is produced an
antagonism between them ; and the labourers who enjoy the
higher wages will do what is actually done by our Trade
Unions : they will form a separate combination to protect
their own interests, not only against the employers, but
even more directly against other labourers. At a certain
stage of their demands, the labourers may be able to combine

20

306 LABOUR AND ABILITY

BOOK iv. of the power of Trade Unionism can be best seen

CH. IV. ....

by imagining it. What, then, is the picture we
have before us ? We have Labour and Ability
in the character of two men confronting each
other, each determined to secure for himself
the largest possible portion of a certain aggre-
gate amount of wealth which they produce
together. Now we will assume, though this is
far from being the case, that neither of them
would shrink, for the sake of gaining their
object, from inflicting on the other the utmost
injury possible ; and we shall see also, if we
make our picture accurate, that Labour is
physically the bigger man of the two. It
happens, however, that the very existence of
the wealth for the possession of which they
are prepared to fight is entirely dependent on
their peacefully co-operating to produce it ; so
that if in the struggle either disabled the other,
he would be destroying the prize which it is
the object of his struggle to secure. Thus the
dispute between them, however hostile may be

more readily and more closely than the employers ; but when
a certain stage has been passed, the case will be the reverse.
The employers will be forced more and more into unanimous
action, whilst the labourers, by their diverging interests, are
divided into groups whose action is mutually hostile.

HIGGLING ON EQUAL TERMS 307

their temper, must necessarily be of the nature BOOK iv.

CH. IV.

not of a fight, but of a bargain ; and will be

111 -ill • i i* ^ie ^m't

settled, like other bargains, by the process of to which it

, . , oi'i n i can raise

compromise which Adam bmith calls the wages is
higgling of the market." When such a bargain minimum e
is struck, there will be a limit on both sides : suffices to
a maximum limit to what Ability will consent Ability
to give, and a minimum limit to what Labour oper
will consent to receive. There will be a certain
minimum which Ability must concede in the
long run ; because if it did not give so much,
it would indirectly lose more : and conversely
there is a certain maximum more than which
Labour will never permanently obtain; because
if it did so the stimulus to Ability would be
weakened, and the total product would in conse-
quence be diminished, out of which alone the in-
creased share which Labour demands can come.

Thus the extent to which Trade Unionism Thus the

possible

can assist in raising wages, no matter how power of
wide and how complete its development, is far unionism

, . . , , , , in raising

more limited than appearances lead many wages is

1 T-» 1 1 1 far m°re

people to suppose, .bor the labourers, not limited
only in this country, but all over the world,
are growing yearly more expert in the art of
effective combination, and are increasing their

3o8 THE POWER REPRESENTED BY STRIKES

BOOK iv. strength by a vast network of alliances ; and

CH IV

from time to time the whole civilised world

hastily by is startled at the powers of resistance and

tnde of destruction which they show themselves to have

Labour acquired, and which they have called into

tions"and operation with a view to enforcing their

towhkfc1* demands. The gas-strikes and the dock- strikes

terrorise in London, and the great railway-strikes, and

munSy. *ne ^rike at Homestead in America, are cases

in point, and are enough to illustrate my

meaning. They impress the imagination with

a sense that Labour is becoming omnipotent.

But in all these Labour movements there is

one unchanging feature, which seems never to

be realised either by those who take part in

them or by observers, but on which really

their entire character depends, and which

makes their actual character entirely different

from what it seems to be. That this feature

should have so completely escaped popular

notice is one of the most singular facts in the

history of political blindness, and can be

accounted for only by the crude and imperfect

state in which the analysis of the causes of

production has been left hitherto by economists.

The feature I allude to is as follows.

3°9

These great developments of Trade Union- BOOK iv.

CH. IV.

ism which are commonly called Labour move-

,, . The imper-

ments do not really, in any accurate sense, feet state of

economic

represent Labour at all. All that they repre- science has
sent in themselves is a power to abstain from a totally
labouring. In other words, the increased to be

command of the labourers over the machinery

of combination, and even their increased com- '

mand of the tactics of industrial warfare,

represents no increased command over the The force

• i which it

smallest 01 industrial processes, nor puts them represents
in a better position, without the aid of Ability, Labour at
to maintain — still less to increase by the power" of*

smallest fraction — the production of that
wealth in which they are anxious to share frosraam
farther. A strike therefore, however great or labour<
however admirably organised, no more repre-
sents any part of the power of Labour than
the mutiny organised amongst the crew of
Columbus, with a view to making him give up
his enterprise, represented the power which
achieved the discovery of America. And this
is not true of the average labourers only ; it is
yet more strikingly true of the superior men
who lead them. From the ranks of the
labourers, men are constantly rising whose

CH. IV.

310 LEADERS OF LABOURING MEN

BOOK iv. abilities for organising resistance are remark-
able, and indeed admirable ; but it is probably
not too much to say that no leader who has
devoted himself to organising the labourers for
resistance has ever been a man capable, to any
appreciable degree, of giving them help by
rendering their labour more productive. Those
who have been most successful in urging their
fellows to ask for more, have been quite incom-
petent to help them to make more. Thus
these so-called Labour leaders, no matter how
considerable may be many of their intellectual
and moral qualities, are indeed leaders of
labourers ; but they are no more leaders of
Labour than a sergeant who drilled a volunteer
corps of art students could be called the leader
of a rising school of painting ; and a strike is
no more the expression of the power of Labour
than Byron's swimming across the Hellespont
was an expression of the power of poetry, or
than Burns's poetry was an expression of the
power of ploughing. A strike is merely an
expression of the fact that the labourers, for
good or ill, can acquire, under certain circum-
stances, the power to cease from labouring, and
can use this as a weapon not of production, but of

RA REL Y LEADERS OF LABOUR 311

warfare. The utmost that the power embodied BOOK iv.

CH IV

in Trade Unionism could accomplish would be

, . , MI • i i And even

to bring about a strike that was universal ; and this power
although no doubt it might do this theoretically, never be

it could never do so much as this practically,
for the simple reason that, as I have already
pointed out, Labour could not be entirely sus- depends on
pended for even a single day. Further, the Capltal-
more general the suspension was, the shorter
would be the time for which it could be main-
tained ; and to mention yet another point to
which I have referred already, it could be
maintained only, for no matter how short a
time, by the assistance of the very thing
against which strikes are ostensibly directed,
namely Capital ; and not even Capital could
make that time long. Nature, who is the arch-
taskmaster, and who knows no mercy, woiild
soon smash like matchwood a Trade Union of
all the world, and force the labourers to go
back to their work, even if no such body as an
employing class existed.

All the ideas, then, derived from the recent
developments of Trade Unionism, that Labour,
through its means, will acquire any greatly
increasing power of commanding an increasing

312 THE POWER OF TRADE UNIONISM

BOOK iv. share of the total income of the community,

CH. IV. . .

rests on a total misconception 01 the power
that Trade Unionism represents, and a total
failure to see the conditions and things that
limit it. It is limited firstly by Nature, who
makes a general strike impossible ; secondly
by Capital, without which any strike is
impossible ; and lastly by the fact that the
labourers of the present day already draw part
of their wages from the wealth produced by
Ability ; that any further increase they must
draw from this source entirely ; and that, being
thus dependent on the assistance of Ability
now, Trade Unionism, as we have seen, has
not the slightest tendency to make them any
the less dependent on it in the future.

When the reader takes into account all that
has just been said, he will be hardly disposed
to quarrel with the following conclusions of
Professor Marshall, who derives them from
history quite as much as from theory, and who
expresses himself with regard to Trade Unions
thus : " Their importance," he says, " is cer-
tainly great, and grows rapidly ; but it is apt to
be exaggerated : for indeed many of them are
little more than eddies such as have always

IMPOR TANT THO UGH LIMITED 3 1 3

fluttered over the surface of progress. And BOOKIV.

CH. rv,

though they are now on a larger and more
imposing scale in this age than before, yet
much as ever the main body of the movement
depends on the deep, silent, strong stream of
the tendencies of Normal Distribution and
Exchange."

But in the case of Trade Unionism, just as Trade
in that of Socialism, because the extent is
limited to which it can raise the labourers'
income, it does not follow that within these
limits its action may not be of great and in-
creasing benefit. Thus Mill, whose general
view of the subject coincides broadly with that to other

J • causes.

of Professor Marshall, points out that though a
Union will never be able permanently to raise But none
wages above the point to which in time they mayiSof
would rise naturally, nor permanently to keep |J6
them above a point to which they would
naturally fall, it can hasten the rise, which
might otherwise be long delayed, and retard
the fall, which might otherwise be premature ;
and the gain to Labour may thus in the lone; reinoved>

<* ° and could

run be enormous. Unions have done this for not remove

by itself.

Labour in the past ; and with improved and
extended organisation, they may be able to do

314 CERTAIN REMAINING POINTS

BOOK iv. it yet more effectively in the future ; and they
have done, and may continue to do many other
things besides — to do them, and to add to their
number. It is beyond my purpose to speak of
these things in detail. In the next chapter, I
shall briefly indicate some of them ; but the
main points on which I am concerned to insist
are simpler ; and the next chapter — the last-
will be devoted principally to these.

CHAPTER V

Of the enormous Encouragement to be derived by
Labour from a true View of the Situation ; and
of the Connection between the Interests of the
Labourer and Imperial Politics.

THE obiect of this work, as I explained in the Let me

. . .. again

opening chapter, is to point out to the great remind the

body of the people — that is to say, to the the object

• i i °f ^is

multitude ot average men and women, whose book.

incomes consist of the wages of ordinary
Labour — the conditions which determine the
possibility of these incomes being increased,
and so to enable them to distinguish the true
means from the false, which they may them-
selves adopt with a view to obtaining this
result. And in order to show them how their it is to
present incomes may be increased, I have that the
devoted myself to showing the reader how
their present incomes have been obtained. I

ncome

316 A RECAPITULATION

BOOK iv. have done this by fixing his attention on the

CH. V.

— fact that their present incomes obviously

production depend upon two sets of causes : first, the

secondly" forces that produce the aggregate income of the

dTstribT- ° country ; and secondly, the forces that distribute

a certain portion of this amongst the labourers.

And these last I have examined from two points

of view ; first exhibiting their results, and then

indicating their nature. Let me briefly re-

capitulate what I have said about both subjects.

i have just I have shown that, contrary to the opinion

the normal which is too commonly held, and which is

- sedulously fostered by the ignorance alike of

* the agitator and the sentimentalist, the forces
labonm, of distribution which are actually at work

around us, which have been at work for the
matter! tU Past hundred years, and which are part and
parcel of our modern industrial system, have
been and are constantly securing for Labour
a share of every fresh addition to the total
income of the nation ; and have, for at all
events the past fifty years, made the average
income of the labouring man grow faster than
the incomes of any other members of the
community. They have, in fact, been doing
the very thing which the agitator declared

THE PRACTICAL MORAL 317

could be done only by resisting them ; and BOOK iv.
they have not only given Labour all that
the agitator has promised it, but they have
actually given it more than the wildest agitator
ever suggested to it. I have shown the
reader this ; and I have shown him also that
the forces in question are primarily the spon-
taneous forces — " deep, strong, and silent," as
Professor Marshall calls them — "of normal
distribution and exchange"; how that these
have been, and are seconded by the deliberate
action of men : by extended application of what
is called the Socialistic principle, and to a far
greater extent by combinations of the labourers
amongst themselves.

The practical moral of all this is obvious.
As to the normal and spontaneous forces of
distribution, what a study of them inculcates
on the labourer is not any principle of political
action, but a general temper of mind towards
the whole existing system. It inculcates
general acquiescence, instead of general revolt.
Now temper of mind, being that from which
policies spring, is quite as important as the
details of any of the policies themselves. Still
it must be admitted that were the normal

318 THE TRUE FUNCTIONS

BOOK iv. forces of distribution the only forces that had

CH. V.

been at work for the labourer's benefit, the
principal lesson they would teach him would
be the lesson of laisser oiler. But though
these forces have been the primary, they have
not been the only forces ; and the deliberate
policies by which men have controlled their
operation, and have applied them, have been
equally necessary in producing the desired
results. The normal forces of distribution
may be compared to the waters of the Nile,
which would indeed, as the river rises, natur-
ally fertilise the whole of the adjacent country,
but which would do as much harm as good, and
do but half the good they might do, if it were
not for the irrigation works devised by human
ingenuity. And what these works are to the
Nile, deliberate measures have been to the
normal forces of distribution. The growing
volume of wealth, which is spreading itself
over the fields of Labour, even yet has failed
to reach an unhappy fraction of the com-
munity ; the tides and currents flow with
intermittent force, which is often destructive,
still more often wasted, rarely husbanded and
applied to the best advantage. Had it not

OF TRADE UNIONISM AND SOCIALISM 319

been for the deliberate action of men, — for BOOKIV.

CH. V.

legislation in favour of the labourers, and
their own combinations amongst themselves,
— these evils which have accompanied their
general progress would have been greater.
Wise action in the future will undoubtedly This should

, ,, , , ,, , ., . encourage,

make them less ; and may, though it is and not

• n f • - ' 11 discourage,

idle to hope tor Utopias in this world, cause political

ii 111 r» i T action on

the larger and darker part ol them to dis- behalf

of the
appear. labourers.

The lesson, then, to be drawn from what
I have urged in the preceding chapter is,
taken as a whole, no lesson of laisser faire.
Though neither Socialism nor Trade Unionism
may have much, or perhaps any, efficacy in
raising the maximum of the labourer's actual
income, — though this must depend on forces
which are wholly different, — yet Trade Union-
ism, and the principle which is called Socialism,
may be of incalculable service in bringing
about conditions under which that income
may be earned with greater certainty, and
under improved circumstances, and, above all,
be able to command more comforts, conven-
iences, and enjoyments. Thus many of these
measures which I have called Socialistic under

320 THE NATURAL PROGRESS OF LABOUR

BOOK iv. protest, may be regarded as an interception
of a portion of the labourer's income, and an
expenditure of it on his account by the State
in a way from which he derives far more
benefit than he would, or could have secured
if he had had the spending of it himself;
whilst Trade Unionism, though it cannot per-
manently raise his wages beyond a maximum
determined by other causes, may, as has been
said before, raise them to this earlier than
they would have risen otherwise, and prevent
what might otherwise occur — a fall in them
Much is to before it was imperative. Trade Unionism,
beyond the however, has many other functions besides

mere . -. . . /» -r , • ->

raising the raising 01 wages. It aims — and aims
labourers' successfully — at diminishing the pain and
' "** friction caused amongst the labourers by the

unionism vicissitudes alike Of industry and of life. It

Socialism nas ^one much in this direction already ; and

vary much. 'm tke future it may do more.

The fact then that the normal forces of
distribution must, if things continue their
present course, increase the income of the
labourer, even without any action on their
own part, though it is calculated to change
the temper in which the labourers approach

A STIMULUS TO EFFORT 321

politics, is, instead of being calculated to damp BOOK iv.
their political activity, calculated to animate '
it with far more hope and interest than the
wild denunciations and theories of the con-
temporary agitator, which those who applaud
them do but half believe. It will to the
labourer be far more encouraging to feel that
the problem before him is not how to under-
mine a vast system which is hostile to him,
and which, though often attacked, has never
yet been subverted, but merely to accom-
modate more completely to his needs a system
which has been, and is, constantly working in
his favour.

Let him consider the situation well. Let whilst as
him realise what that system has already wages, if

the

done for him. In spite of the sufferings labourers
which, owing to various causes, were inflicted of aw* §
on the labouring classes during the earlier neaT future
years of the century, — many of them of a kind
whose recurrence improved policy may obviate,
— the income of Labour has, on the aggregate,
continued to rise steadily. Let him consider

how much. I have stated this once, let me ™ildest

dreams

state it now again. During the first sixty hitherto.
years of this century the income of the

21

322 THE FUTURE OF LABOUR

BOOK iv. labouring classes rose to such an extent that

CH. V.

in the year 1860 it was equal (all deductions
for the increase of population being made) to
the income of all classes in the year 1800.
But there is another fact, far more extra-
ordinary, to follow ; and that is, that a result
precisely similar has been accomplished since
in one-half of the time. In 1880 the income
of the labouring classes was (all deductions
for the increase of population being made)
more than equal to the income of all classes
in the year 1850. Thus the labouring classes
in 1860 were in precisely the same pecuniary
position as the working classes in 1800 would
have been had the entire wealth of the king-
dom been in their hands ; and the working
classes of to-day are in a better pecuniary
position than their fathers would have been
could they have plundered and divided be-
tween them the wealth of every rich and
middle-class man at the time of the building
of the first Great Exhibition. I repeat what
I have said before — that this represents a
progress, which the wildest Socialist would
never have dreamed of promising.

And now comes what is practically the

JUDGED FROM ITS PAST PROGRESS 323

important deduction from these facts. What BOOK nr.

CH. V.

has happened in the near past, will, other
things being equal, happen in the near future.
If the same forces that have been at work
since the year 1850 continue to be at work,
and if, although regulated, they are not
checked, the labourers of this country will in
another thirty years have nearly doubled the
income which they enjoy at present. Their
income will have risen from something under
seven hundred millions to something over
thirteen hundred millions. The labourers, in
fact, will, so far as money goes, be in precisely
the same position as they would be to-day if,
by some unheard-of miracle, the entire present
income of the country were suddenly made
over to them in the form of wages, and the
whole of the richer classes were left starving
and penniless. This is no fanciful calculation.
It is simply a plain statement of what m'ust
happen, and will happen, if only the forces of
production continue to operate for another
thirty years as they have been operating
steadily for the past hundred. Is not this
enough to stimulate the labourer's hopes, and
convince him that for him the true industrial

324 THE ONE THING ON WHICH

BOOK iv. policy is one that will adjust his own relations
with the existing system better, and regulate
better the flow of the wealth which it promises
to bring him, rather than a policy whose aim
is to subvert that system altogether, and in
especial to paralyse the force from which it
derives its efficacy ?

But the And this brings me back to that main,

to remem- that fundamental truth which it is the special
an their object of this volume to elucidate. The force
depS y which has been at the bottom of all the
continued labourers' progress during the past, and on
tne continued action of which depends all
i- tnese hopes for their future — that force is not
Labour but Ability ; it is a force possessed

•Deration an(^ exercised not by the many but by the
few. The income which Labour receives
already is largely in excess of what Labour
itself produces. Were Ability crippled, or
discouraged from exerting itself, the entire
income of the nation would dwindle down to
an amount which would not yield Labour so
much as it takes now ; whilst any advance,
no matter how small, on what Labour takes
now must come from an increasing product,
which Ability only can produce.

THE HOPES OF LABOUR DEPEND 325

Hitherto this truth, though more or less BOOKIV.

CH> v<
apparent to economic writers and thoughtful -

TI i i i Labour

persons generally, has been apparent to them must
only by fits and starts, and has never been that
assigned any definite or logical place in their a living18

j_i • i? i j_ • -i i force which

theories 01 production, or has ever been ex- cannot

pressed clearly ; and, owing to this cause, not
only has it been entirely absent from the theories
of the public generally, but its place has been
usurped by a meaningless and absurd false-
hood. In place of the living force Ability, Pitiated-
residing in living men, popular thought, misled
by a singular oversight of the economists, has
substituted Capital — a thing which, apart from
Ability, assists production as little as a dead
or unborn donkey ; and hence has arisen that
dangerous and ridiculous illusion — sometimes
plainly expressed, often only half-conscious —
to the effect that if the labourers could only
seize upon Capital they would be masters of
the entire productive power of the country,
The defenders of the existing system have
been as guilty of this error as its antagonists ;
and the attack and defence have been con-
ducted on equally false grounds. Thus in a
recent strike, the final threat of the employers

326 THE REAL BARGAIN OF LABOUR

BOOK iv. — men who had created almost the whole of
— their enormous business — was that, if the
strikers insisted upon certain demands, the
Capital involved in the business would be
removed to another country; and a well-
known journal, professing to be devoted to
the interest of Labour, conceived that it had
disposed of this threat triumphantly by saying
that, of the Capital a large part was not
portable, and that the employers might go if
they chose, and leave this behind. A great
musician, who conceived himself to have been
ill-treated in London, might just as well have
threatened that he would remove his concert-
room to St. Petersburg, when the principal
meaning of his threat would be that he would
remove himself; and the journal referred to
might just as well have said, had the business
in question been the production of a great
picture, " The painter may go if he likes —
what matter? We can keep his brushes."

The real parties, then, to the industrial
disputes of the modern world are not active
labourers on one side, and idle, perhaps idiotic
owners of so much dead material on the
other side : but they are, on the one side,

NOT WITH CAPITAL BUT ABILITY 327

the vast majority of men, possessed of average BOOK iv
powers of production, and able to produce by —
them a comparatively small amount ; and, on
the other, a minority whose powers of pro-
duction are exceptional, who, if we take the
product of the average labourer as a unit, are
able to multiply this to an almost indefinite
extent, and who thus create an increasing
store of Capital to be used by themselves, or
transmitted to their representatives, and an
increasing income to be divided between these
and the labourers. In other words, the dis-
pute is between the many who desire to
increase their incomes, and the few by whose
exceptional powers it is alone possible to
increase them. Such has been the situation
hitherto ; it is such at the present moment ;
and the whole tendency of industrial progress
is not to change, but to accentuate it. As the
productivity of Human Exertion increases,
the part played by Ability becomes more
and more important. More and more do the
average men become dependent on the excep-
tional men. So long as the nation at large
remembers this, no reforms need be dreaded.
If the nation forgets this, it will be in danger

328 SUBORDINATION TO ABILITY

BOOK iv. every day of increasing, by its reforms, the

CH V

— — ' very evils it wishes to obviate, and postponing
or making impossible the advantages it wishes
to secure,
in this And now let me pause to point out to the

view there . i i i •

is nothing reader that to insist thus on the subordinate
to Labour, position of Labour as a productive agent is to
insist on nothing that need wound the self-love
of the labourers. In asserting that a man who
can produce wealth only by Labour is inferior
to a man who can produce ten times the
amount by Ability, we assert his inferiority in
the business of production only. In other
respects he may be the better, even the greater
man of the two. Shakespeare or Turner or
Beethoven, if employed as producers of com-
modities, would probably have been no better
than the ordinary hands in a factory, and far
inferior to many a vulgar manufacturer. Again,
— and it is still more important to notice this,—
if we confine our attention to single commodi-
ties, many commodities produced by Labour1

1 The reader must always bear in mind the definition
given of Labour, as that kind of industrial exertion which is
applied to one task at a time only, and while so applied
begins and ends with that task ; as distinguished from Ability,
which influences simultaneously an indefinite number of tasks.

NO INDIGNITY TO LABOUR 329

alone are better and more beautiful than any BOOK
similar ones produced by Labour under the

Ability

direction of Ability. Of some the reverse is does not
true — notably those whose utility depends on products of
their mechanical precision; but of others, in butnmiti-
which beauty or even durability is of import- p
ance, such as fine stuffs or carpets, fine paper
and printing, carved furniture, and many kinds
of metal work, it is universally admitted that
the handicraftsman, working under his own
direction, was long ago able to produce results
which Labour, directed by Ability, has never
been able to improve upon, and is rarely able
to equal. What Ability does is not to improve
such commodities, but to multiply them, and
thus convert them from rare luxuries into
generally accessible comforts. A paraffin lamp,
for instance, cast or stamped in metal, and
manufactured by the thousand, might not be
able to compare for beauty with a lamp of
wrought iron, made by the skill and taste of
some single unaided craftsman ; but whereas
the latter would probably cost several guineas,
and be in reach only of the more opulent
classes, the former would probably cost about
half a crown, and, giving precisely as much

330 THE MORAL DEBT

BOOK rv. light as the other, would find its way into every
— ' cottage home, and take the place of a tallow
dip or of darkness. Now since what the
labouring classes demand in order to improve
their position is not better commodities than
can be produced by hand, but more commodi-
ties than can be produced by hand, Ability
is a more important factor in the case than
Labour; but none the less, from an artistic
and moral point of view, the highest kind of
Labour may stand higher than many of the
most productive kinds of Ability.
Ability, in Nor, again, do we ascribe to Labour any
part of its undignified position in insisting that much of

proceeds to . . -. . , , .

Labour, is its present income, and any possible increase
a'mora? °g of it, is and must be taken from the wealth
produced by Ability. For even were there
nothing more to be said than this, Labour is
in a position, or we assume it will be, to com-
mand from Ability whatever sum may be in
question, and can be neither despised nor
blamed for making the best bargain for itself
that is possible. But its position can be justi-
fied on far higher grounds than these. In the
first place, Labour, by submitting itself to the
guidance of Ability, — no matter whether the

OF ABILITY TO LABOUR 331

submission was voluntary, which it was not, BOOKIV.

CH V

or gradual, unconscious, and involuntary, which
it was, — surrendered many conditions of life
which were in themselves desirable, and has a
moral claim on Ability to be compensated for
having done so ; whilst Ability, for its part,
owes a moral debt to Labour, not upon this
ground only, but on another also — one which
thus far has never been recognised nor insisted
on, but out of which arises a yet deeper and
stronger obligation. I have shown that of the
present annual wealth of the nation Ability
creates very nearly two-thirds. But it may
truly be said to have created far more than
this. It may be said to have created not only
two-thirds of the income, but also to have
created two- thirds of the inhabitants. If the
minority of this country, in pursuit of their own
advantage, had not exercised their Ability and
increased production as they have done, it is
not too much to say that of our country's pre-
sent inhabitants twenty -four millions would
never have been in existence. Those, then, who
either contributed to this result themselves,
or inherit the Capital produced by those who
did so, are burdened by the responsibility of

332 LABOUR, NATURE, AND ABILITY
BOOK iv. having called these multitudes into life ; and

CH. V.

— thus when the wages of Labour are augmented
out of the proceeds of Ability, Ability is not
robbed, nor does Labour accept a largess, but
a duty is discharged which, if recognised for
what it is, and performed in the spirit proper
to it, will have the effect of really uniting
classes, instead of that which is now so often
aimed at — of confusing them.

But Labour The labourers, on the other hand, must
forgetThat remember this : that having been called into
existence, no matter by what means, and pre-
sumably wishing to live rather than be starved
to death, they do not labour because the men
of Ability make them, but — as I have before
pointed out — because imperious Nature makes
them ; and that the tendency of Ability is in
And that the long run to stand as a mediator between
win grow them and Nature, and whilst increasing the

products of their Labour, to diminish its
wealth?1 duration and severity.

There are two further points which yet
remain to be noticed.

I have hitherto spoken of the increase of
wealth and wages, as if that were the main
object on which the labourers should concen-

CH. V.

THE HOME AND FOREIGN FOOD 333

trate their attention, and which bound up BOOKIV.
their interests so indissolubly with those of
Ability. But it must also be pointed out that
were Ability unduly hampered, and its efficacy
enfeebled either by a diminution of its rewards,
or by interference with its action, the question
would soon arise, not of how to increase wages,
but of how to prevent their falling. This
point I have indeed alluded to already ; but I
wish now to exhibit it in a new lio;ht. As I

O

mentioned in an earlier chapter, of the inhabit-
ants of this country, who are something like
thirty -eight millions in number, twenty -six
millions live on imported corn, and about
thirteen millions live on imported meat ; or,
to put it in another way, we all of us — the
whole population — live on imported meat for
nearly Jive months of the year, and on imported
corn for eight months ; and were these foreign
food supplies interfered with, there are possi-
bilities in this country of suffering, of famine,
and of horror for all classes of society, to which
the entire history of mankind offers us no
parallel. This country, more than any country
in the world, is an artificial fabric that has
been built up by Ability, half of its present

334 IMPERIAL POLITICS

BOOK iv. wealth being, — let me repeat once more, — the
marvellous product of the past fifty years ;
and the constant action of Ability is just as
necessary to prevent this from dwindling as it
is to achieve its increase. But in order that
Ability may exert itself, something more is
needed than mere freedom from industrial
interference, or security for its natural rewards ;
and that is the maintenance of the national or
international position which this country has
secured for itself amongst the other countries
of the world.

And this And this brings us to that class of questions
roumit^ which, in ordinary language, are called ques-
commoniy tions of policy, and amongst which foreign
StL ; policy holds a chief place. Successful foreign
hav?aa policy means the maintenance or the achieve-
Sn show ment °f those conditions that are most favour-

closer a^^e t° ti16 industries of our own nation ; and
interest ^jg means the conditions that are most

for the

labourer favourable to the homes of our own people.

than is •*• A

commonly ft js too commonly supposed that the greatness
and the ascendancy of our Empire minister to
nothing but a certain natural pride ; and
natural pride, in its turn, is supposed by some
to be an immoral and inhuman sentiment

AND THE NATIONAL INCOME 335

peculiar to the upper classes. No one will be BOOK iv.

CH. V.

quicker to resent this last ludicrous supposition
than the great masses of the British people ;
but, all the same, they are apt to think the
former supposition correct, — to regard the mere
glory of the country as the principal result of
our Empire ; and such being the case, they
are, on occasion, apt to be persuaded that glory
can be bought at too dear a price, in money,
struggle, or merely international friction. At
all events, they are constantly tempted to
regard foreign politics as something entirely
disconnected with their own immediate, their
domestic, their personal, their daily interests.

I am going to enter here on no debatable
matter, nor discuss the value of this or that
special possession, or this or that policy. It is
enough to point out that, to a very great
extent, on the political future of this country
depends the magnitude of its income, and on
the magnitude of its income depends the income
of the working classes — the warmth of the
hearth, the supply of food on the breakfast-
table, of every labourer's home, — and that when
popular support is asked for some foreign war,
the sole immediate aim of which seems the

CH. V.

336 THE LABOURERS HOME

BOOK iv. defence of some remote frontier, or the main-
tenance of British prestige, it may well be that
our soldiers will be really fighting for the safety
and welfare of their children and wives at
home — fighting to keep away from British and
Irish doors not the foreign plunderer and the
ravisher, but enemies still more pitiless — the
want, the hunger, and the cold that spare
neither age nor sex, and against which all
prayers are unavailing.

THE END

Printed ty R. 4 R. CLARK, Edinburgh.

PRINCIPLES OF

POLITICAL ECONOMY

By J. SHIELD NICHOLSON, M.A., D.Sc.

PROFESSOR OF POLITICAL ECONOMY IN THE UNIVERSITY OF EDINBURGH,

SOMETIME EXAMINER IN THE UNIVERSITIES OF CAMBRIDGE,

LONDON, AND VICTORIA

In 2 Vols. demy 8vo.
Vol. I. price 1 55.

ALSO BY THE SAME AUTHOR

MONEY AND ESSAYS ON PRESENT
MONETARY PROBLEMS

Second Edition, Revised and Enlarged.
In crown 8vo, price 7s. 6d.

HISTORY OF POLITICAL ECONOMY

ANCIENT, MEDIEVAL, AND MODERN SCHOOLS
By J. KELLS INGRAM, LL.D.

FELLOW OF TRINITY COLLEGE, DUBLIN

In post 8vo, price 6s.

LONDON : A. & C. BLACK, SOHO SQUARE.

MANUALS OF

PRACTICAL LAW

In crown 8w, price $s. each.

" It is better for a layman to go to a law-book than to go to law." —
Scotsman.

The Volumes noun published in
this Series are : —

Banking and Negoti-
able Instruments.

By FRANK TILLYARD.

Bankruptcy.

By CHARLES F. MORRELL.

Copyright and Patents.

By WYNDHAM ANSTIS
BEWES, LL. B.

Education.

By JAMES WILLIAMS,
B.C.L., M.A.

Insurance.

By CHARLES F. MORRELL.

Partnership and Com-
panies.

By PERCY F. WHEELER.

Wills and Intestate
Succession.

By JAMES WILLIAMS, B.C.L.,
M.A.

PRESS NOTICES.

" Well arranged." — St. James's

Gazette.

"The series as a whole must
prove of immense service to the
classes mentioned, as well as
to accountants, trustees, factors,
agents, and others." — Glasgow
Herald.

"Deservedly popular." —

Eastern Morning News.

" Excellent." — Observer.

"Admirable five - shilling

series. " — Freeman 's Journal.

"A well-arranged series at a
uniform price, and possessing cer-
tain distinct advantages in regard
to method of treatment and style."
— Liverpool Mercury.

"We wish Messrs. Black's
admirable little series well." —
Law Notes.

" A series whose issues so far
are undoubtedly of great value to
the financial, commercial, and
trading communities. " — Liverpool
Post.

" The manuals, if used as they
are intended to be, ought certainly
to be found of great assistance. " —
Whitehall Review.

LONDON : A. & C. BLACK, SOHO SQUARE.

A

HISTORY OF SOCIALISM

BY

THOMAS KIRKUP
In crown 8vo, 300 pages, price 6s.

" So fair, so learned, and so well written, that we have nothing but
. praise for its author." — Athenaeum.

" No better book for the purpose has come under our notice than
Mr. Kirkup's new work, 'A History of Socialism.' " — The World.

"This bold and luminous outline displays an uncommon grasp of
the underlying principles of a movement which is rapidly beginning to
play a great part in modern society." — Standard.

" A very valuable and useful epitome." — Glasgow Herald.

"It is a work of true value and present importance." — Evening
News and Post.

"Well written, clear, tolerant, intelligible to all cultivated people."
— Daily Chronicle.

" Should be on the shelves of every public library and every working-
men's club." — Pall Mall Gazette.

" The tone of this able and opportune volume is at once sympathetic,
independent, and fearless. " — Leeds Mercury.

" Well worthy to remain the standard text-book on Socialism." —
British Weekly.

" Marked by great candour and much independence of thought, as
well as by a wide knowledge of his subject." — Newcastle Leader.

" Practically indispensable to any one who wishes to acquire an
adequate grasp of the leading phases of historic socialism." — Freeman's
Journal.

" Sound, original work." — Aberdeen Free Press.

"Nothing could be more timely than Mr. Kirkup's very able and
lucid though concise 'History of Socialism.' " — Literary World.

"Apropos of Socialism, I do not know where you will find a more
brilliant account or a more lucid criticism of this on-coming movement
than in Mr. Thomas Kirkup's ' History of Socialism.' " — Truth.

LONDON : A. & C. BLACK, SOHO SQUARE.

THE PROCESS OF ARGUMENT

A CONTRIBUTION TO LOGIC

In crown $v0, price $s.

MARRIAGE & FAMILY RELATIONS

By NEVILL GEARY.
In large crown 8vo, price \ 2s. 6d.

HISTORICAL INTRODUCTION TO THE
PRIVATE LAW OF ROME

By PROF. JAMES MUIRHEAD, LL.D.

In demy 8vo, price 2 is.

LONDON : A. & C. BLACK, SOHO SQUARE.

THE LIBRARY
UNIVERSITY OF CALIFORNIA

Santa Barbara

THIS BOOK IS DUE ON THE LAST DATE
STAMPED BELOW.