CHAPTER II WHAT IS WEALTH? WHERE DOES IT COME FROM? WHO CREATES IT?
Those who have read anything about political economy or Socialism must often have found such thoughts as these rise up in their minds—
How is it some are rich and others poor? How is it some who are able and willing to work can get no work to do? How is it that some who work very hard are so poorly paid? How is it that others who do not work at all have more money than they need? Why is one man born to pay rent and another to spend it?
Let us first face the question of why there is so much poverty.
This question has been answered in many strange ways.
It has been said that poverty is due to drink. But that is not true, for we find many sober people poor, and we find awful poverty in countries where drunkenness is almost unknown.
Drink does not cause the poverty of the sober Hindoos. Drink does not cause the poverty of our English women workers.
It has been said that poverty is due to "over-production," and it has been said that it is due to "under-consumption." Let us see what these phrases mean.
First, over-production. Poverty is due to over-production—of what? Of wealth. So we are to believe that the people are poor because they make too much wealth, that they are hungry because they produce too much food, naked because they make too many clothes, cold because they get too much coal, homeless because they build too many houses!
Next, under-consumption. We are told that poverty is due to under-consumption—under-consumption of what? Of wealth. The people are poor because they do not destroy enough wealth. The way for them to grow rich is by consuming riches. They are to make their cake larger by eating it.
Alas! the trouble is that they can get no cake to eat; they can get no wealth to consume.
But I think the economists mean that the poor will grow richer if the rich consume more wealth.
A rich man has two slaves. The slaves grow corn and make bread. The rich man takes half the bread and eats it. The slaves have only one man's share between two.
Will it mend matters here if the rich man "consumes more"? Will it be better for the two slaves if the master takes half the bread left to them, and eats that as well as the bread he has already taken?
See what a pretty mess the economists have led us into. The rich have too much and the poor too little. The economist says, let the poor produce less and the rich consume more, and all will be well!
Wonderful! But if the poor produce less, there will be less to eat; and if the rich eat more, the share of the poor will be smaller than ever.
Let us try another way. Suppose the poor produce more and the rich consume less! Does it not seem likely that then the share of the poor would be bigger?
Well, then, we must turn the wisdom of the economists the other way up. We must say over-production of wealth cannot make poverty, for that means that the more of a thing is produced the less of that thing there is; and we must say that under-consumption cannot cause poverty, for that means that the more of a loaf you eat the more you will have left.
Such rubbish as that may do for statesmen and editors, but it is of no use to sensible men and women. Let us see if we cannot think a little better for ourselves than these very superior persons have thought for us. I think that we, without being at all clever or learned, may get nearer to the truth than some of those who pass for great men.
Now, what is it we have to find out? We want to know how the British people may make the best of their country and themselves.
We know they are not making the best of either at present.
There must, therefore, be something wrong. Our business is to find out what is wrong, and how it may be righted.
We will begin by asking ourselves three questions, and by trying to answer them.
These questions are—
1. What is wealth?
2. Where does wealth come from?
3. Where does wealth go to?
First, then, what is wealth? There is no need to go into long and confusing explanations; there is no use in splitting hairs. We want an answer that is short and simple, and at the same time good enough for the purpose.
I should say, then, that wealth is all those things which we use.
Mr. Ruskin uses two words, "wealth" and "illth." He divides the things which it is good for us to have from the things which it is not good for us to have, and he calls the good things "wealth" and the bad things "illth"—or ill things.
Thus opium prepared for smoking is illth, because it does harm or works "ill" to all who smoke it; but opium prepared as medicine is wealth, because it saves life or stays pain.
A dynamite bomb is "illth," for it is used to destroy life, but a dynamite cartridge is wealth, for it is used in getting slate or coal.
Mr. Ruskin is right, and if we are to make the best of our country and of ourselves, we ought clearly to give up producing bad things, or "illth," and produce more good things, or wealth.
But, for our purpose, it will be simpler and shorter to call all things we use wealth.
Thus a good book is wealth and a bad book "illth"; but as it is not easy to agree as to which books are good, which bad, and which indifferent, we had better call all books wealth.
By this word wealth, then, when we use it in this book, we shall mean all the things we use.
Thus we shall put down as wealth all such things as food, clothing, fuel, houses, ornaments, musical instruments, arms, tools, machinery, books, horses, dogs, medicines, toys, ships, trains, coaches, tobacco, churches, hospitals, lighthouses, theatres, shops, and all other things that we use.
Now comes our second question: Where does wealth come from?
This question we must make into two questions—
1. Where does wealth come from?
2. Who produces wealth?
Because the question, "Where does wealth come from?" really means, "How is wealth produced?"
All wealth comes from the land.
All food comes from the land—all flesh is grass. Vegetable food comes directly from the land; animal food comes indirectly from the land, all animals being fed on the land.
So the stuff of which we make our clothing, our houses, our fuel, our tools, arms, ships, engines, toys, ornaments, is all got from the land. For the land yields timber, metals, vegetables, and the food on which feed the animals from which we get feathers, fur, meat, milk, leather, ivory, bone, glue, and many other things.
Even in the case of the things that come from the sea, as sealskin, whale oil, fish, iodine, shells, pearls, and other things, we are to remember that we need boats, or nets, or tools to get them with, and that boats, nets, and tools are made from minerals and vegetables got from the land.
We may say, then, that all wealth comes from the land.
This brings us to the second part of our question: "Who produces wealth?" or "How is wealth produced?"
Wealth is produced by human beings. It is the people of a country who produce the wealth of that country.
Wealth is produced by labour. Wealth cannot be produced by any other means or in any other way. All wealth is produced from the Land by human Labour.
A coal seam is not wealth; but a coalmine is wealth. Coal is not wealth while it is in the bowels of the earth; but coal is wealth as soon as it is brought up out of the pit and made available for use.
A whale or a seal is not wealth until it is caught.
In a country without inhabitants there would be no wealth.
Land is not wealth. To produce wealth you must have land and human beings.
There can be no wealth without labour.
And now we come to the first error of the economists. There are some economists who tell us that wealth is not produced by labour, but by "capital."
There is neither truth nor reason in this assertion.
What is "capital"?
"Capital" is only another word for stores. Adam Smith calls capital "stock." Capital is any tools, machinery, or other stores used in producing wealth. Capital is any food, fuel, shelter, clothing supplied to those engaged in producing wealth.
The hunter, before he can shoot game, needs weapons. His weapons are "capital." The farmer has to wait for his wheat and potatoes to ripen before he can use them as food. The stock of food and the tools he uses to produce the wheat or potatoes, and to live on while they ripen, are "capital."
Robinson Crusoe's capital was the arms, food, and tools he saved from the wreck. On these he lived until he had planted corn, and tamed goats and built a hut, and made skin clothing and vessels of wood and clay.
Capital, then, is stores. Now, where do the stores come from? Stores are wealth. Stores, whether they be food or tools, come from the land, and are made or produced by human labour.
There is not an atom of capital in the world that has not been produced by labour.
Every spade, every plough, every hammer, every loom, every cart, barrow, loaf, bottle, ham, haddock, pot of tea, barrel of ale, pair of boots, gold or silver coin, railway sleeper or rail, boat, road, canal, every kind of tools and stores has been produced by labour from the land.
It is evident, then, that if there were no labour there would be no capital. Labour is before capital, for labour makes capital.
Now, what folly it is to say that capital produces wealth. Capital is used by labour in the production of wealth, but capital itself is incapable of motion and can produce nothing.
A spade is "capital." Is it true, then, to say that it is not the navvy but the spade that makes the trench?
A plough is capital. Is it true to say that not the ploughman but the plough makes the furrow?
A loom is capital. Is it true to say that the loom makes the cloth? It is the weaver who weaves the cloth. He uses the loom, and the loom was made by the miner, the smith, the joiner, and the engineer.
There are wood and iron and brass in the loom. But you would not say that the cloth was produced by the iron-mine and the forest! It is produced by miners, engineers, sheep farmers, wool-combers, sailors, spinners, weavers, and other workers. It is produced entirely by labour, and could not be produced in any other way.
How can capital produce wealth? Take a steam plough, a patent harrow, a sack of wheat, a bankbook, a dozen horses, enough food and clothing to last a hundred men a year; put all that capital down in a forty-acre field, and it will not produce a single ear of corn in fifty years unless you send a man to labour.
But give a boy a forked stick, a rood of soil, and a bag of seed, and he will raise a crop for you.
If he is a smart boy, and has the run of the woods and streams, he will also contrive to find food to live on till the crop is ready.
We find, then, that all wealth is produced from the land by labour, and that capital is only a part of wealth, that it has been produced by labour, stored by labour, and is finally used by labour in the production of more wealth.
Our third question asks, "What becomes of the wealth?"
This is not easy to answer. But we may say that the wealth is divided into three parts—not equal parts—called Rent, Interest, and Wages.
Rent is wealth paid to the landlords for the use of the land. Interest is wealth paid to the capitalists (the owners of tools and stores) for the use of the "capital."
Wages is wealth paid to the workers for their labour in producing all the wealth.
There are but a few landlords, but they take a large share of the wealth.
There are but a few capitalists, but they take a large share of the wealth.
There are very many workers, but they do not get much more than a third share of the wealth they produce.
The landlord produces nothing. He takes part of the wealth for allowing the workers to use the land.
The capitalist produces nothing. He takes part of the wealth for allowing the workers to use the capital.
The workers produce all the wealth, and are obliged to give a great deal of it to the landlords and capitalists who produce nothing.
Socialists claim that the landlord is useless under any form of society, that the capitalist is not needed in a properly ordered society, and that the people should become their own landlords and their own capitalists.
If the people were their own landlords and capitalists, all the wealth would belong to the workers by whom it is all produced.
Now, a word of caution. We say that all wealth is produced by labour. What is labour?
Labour is work. Work is said to be of two kinds: hand work and brain work. But really work is of one kind—the labour of hand and brain together; for there is hardly any head work wherein the hand has no share, and there is no hand work wherein the head has no share.
The hand is really a part of the brain, and can do nothing without the brain's direction.
So when we say that all wealth is produced by labour, we mean by the labour of hand and brain.
I want to make this quite plain, because you will find, if you come to deal with the economists, that attempts have been made to use the word labour as meaning chiefly hand labour.
When we say labour produces all wealth, we do not mean that all wealth is produced by farm labourers, mechanics, and navvies, but that it is all produced by workers—that is, by thinkers as well as doers; by inventors and directors as well as by the man with the hammer, the file, or the spade.