FOOTNOTES
[1] 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).
[2] 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 convenient, 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.
[3] There is a general agreement amongst statisticians with regard to these figures. Cf. Messrs Giffen, Mulhall, and Leone Levi passim.
[4] 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.
[5] 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 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.
[6] 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.
[7] The number of females over fifteen years of age is about twelve millions. Those who work for wages number less than five millions.
[8] 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-five 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.
[9] 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 land, 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 conditions 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.
[10] 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.
[11] See Local Government Board valuation of 1878.
[12] Recent falls in rent make it impossible to give the figures with actual precision; but the returns in the New Doomsday Book, taken together with subsequent official information, 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.
[13] 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 Kilmarnock, 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 much stake in the soil as though he were the owner in Sutherland of two 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.
[14] 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.
[15] General merchandise is estimated by Mr. Mulhall at 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 number these houses were only thirteen per cent of the whole.
[16] This classification of houses may perhaps be objected to; 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.
[17] The total annual imports are about four hundred and twenty million pounds. The amount retained for home consumption is about three hundred and sixty-five million pounds.
[18] 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.
[19] 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. In other words, the number of persons who subsist on imported meat now is about equal to the entire population of the United Kingdom in 1801.
[20] From the year 1843 to 1851, the annual income of the nation averaged five hundred and fifteen million pounds, according to the calculations of Messrs. Leone Levi, Dudley Baxter, Mulhall, and Giffen.
[21] 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.
[22] 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, 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.
[23] The hours of labour in Switzerland are, on an average, sixty-six a week.
[24] 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.
[25] 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.
[26] I have not mentioned Profits. They consist, says Mill, of Interest on Capital and Wages of Superintendence; to which he adds compensation for risk—a most important item, but not requiring to be included here.
[27] From 1716 to 1770 the cotton manufactured in this country annually averaged under two and a half million pounds weight. From 1771 to 1775 it was four million seven hundred 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.
[28] Pitt estimated that the hands employed in spinning increased from forty thousand to eighty thousand between the years 1760 and 1790.
[29] 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.
[30] Were this work a treatise on political economy, rather than a work on practical politics, in which only the simplest 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 impossible 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.
[31] In a state where the employing class were physically the masters of the employed, Wage Capital would be unnecessary for the employer. A system of forced labour might take its place.
[32] This was Pitt’s computation. See Lecky, History of England during the Eighteenth Century, vol. vi. chap. xxiii.
[33] 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.
[34] The rental of Great Britain in 1750 was about thirteen million five hundred thousand pounds, and in 1800 about twenty-nine million six hundred thousand pounds. According to the estimates of Arthur Young, the farmer’s income somewhat more. The wages of Agricultural Labour had not risen proportionately.
[35] See Encyclopædia Britannica, first and earlier editions.
[36] See Encyclopædia 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, five hundred and ninety-four tons.
[37] 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.
[38] About £1 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 discussion, land may be ignored, as it does not affect the problem.
[39] This fact has been commented on with much force by Mr. Gourlay in a paper contributed by him to the National Review.
[40] 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 producing a hundred pounds. If James takes the vacant place, the productivity of labour by his action is (we will say) 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 importance 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.
[41] 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 philosophically true.
[42] The examples given above might be multiplied indefinitely. Maudslay was brought up as a “powder-boy” at Woolwich. The inventors of the planing machine, Clements 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.
[43] 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—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 producer just as much as the school builder.
[44] This corresponds with Arthur Young’s estimate of wages for about the same period.
[45] 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, roughly speaking, amongst twenty million people; which for each ten millions yields a hundred and sixty million pounds.
[46] According to the latest estimates, it exceeds seven hundred million pounds.
[47] 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.
[48] 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 recognised 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 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.
[49] The part played in national progress by the mere business sagacity of investors, amounts practically to a constant criticism of inventions, discoveries, schemes, and enterprises of all kinds, and the selection of those that are valuable from amongst a mass of what is valueless and chimerical.
[50] See Mr. Giffen’s Inaugural Address of the Fiftieth Session of the Statistical Society.
[51] 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 classification 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.
[52] See Mr. Giffen’s Address, as above.
[53] 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.
[54] Thus the old theory of the wage-fund, which has so often been 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 produced in proportion to the number of labourers who assist in its production. That theory, however, as commonly understood, is no doubt erroneous, though not for the reasons commonly 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 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.
[55] This is true even of productive or distributive industries carried out by the State. The real Socialistic principle of production has never been applied by the State, or by any municipal authority; nor has any practical party so much as suggested that it should be. The manager of a State 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 consequence, 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 disproves 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 exceptional 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 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.
[56] Principles of Economics, by Alfred Marshall, book iv. chap. vii.
[57] 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 buy 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, otherwise than as a reward for a given amount of labour, his motive to labour will be lessened. If a factory girl, irrespective 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.
[58] 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 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.
[59] The possibility of such a result would depend upon two assumptions, which are not in accordance with reality, and for which allowance must be made. The first is the assumption 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 unequal; 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 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.
[60] 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.
[61] Mr. Shaw, for instance, is at much pains to point out that Ability is not one definite thing, as the power of jumping is, and makes himself merry by asking if Wellington’s Ability could be compared with Cobden’s, or Napoleon’s with Beethoven’s. This is all beside the mark. I have been careful to define the sense in which I used the word Ability—to define it with the utmost exactness. I have said that I use it as meaning productive Ability—industrial Ability. That is to say, those faculties by which men, not labouring themselves, are capable of directing to the best advantage the labour of others, with a view to the production of economic commodities. In the Middle Ages I said that another kind of Ability was more important—i.e. Military Ability, instead of Economic; and the historical importance of this fact, which Mr. Shaw says I discovered only after I had written my first article on Fabian Economics, I insisted on, at much greater length, years ago, when criticising Karl Marx’s “Theory of Value,” in this [the Fortnightly] Review. Again, let Mr. Shaw turn to Labour and the Popular Welfare, p. 328, and he will find what he says put more clearly by myself than by him.
[62] It is interesting to see the analysis which Mr. Shaw gives of the elements which make up the five hundred million pounds (see page 482 of his article). It shows a curious want of sense of proportion, and reads much like a statement that a young man’s bankruptcy was due to the one hundred thousand pounds he has spent on the turf, the fifty thousand pounds he had spent on building a house, the fifty pounds he has spent on a fur coat, and the sixpence he gave last Saturday to the porter at Paddington Station. But there is in it a more serious error than this. Mr. Shaw says, and rightly, that a large part of the millions to which he alludes consists of payments to artists and other professional men (e.g. doctors), by very rich commonplace people competing for their services. But he entirely mistakes the meaning of this fact. I have pointed it out carefully in Labour and the Popular Welfare (Book I. chap. iii.) and have illustrated it by one of the exact cases Mr. Shaw has in view, viz. that of a doctor who gets a fee of one thousand two hundred pounds from “a very rich commonplace person.” I pointed out that in the estimates, from which Mr. Shaw gets his figures of five hundred million pounds, all such payments are counted twice over. The “very rich commonplace person” and the doctor both pay income-tax on and are regarded as possessing the same one thousand two hundred pounds. As matters stand this is right enough, for the patient receives either in good or fancied good an equivalent for his fee in the doctor’s services; but if the sum in question were to be divided up and distributed, there would for distribution be one one thousand two hundred pounds only. By reference to calculations of Professor Leone Levi, with whom I corresponded on these matters, I drew the conclusion that the sum thus counted twice over was about one hundred million pounds annually ten years ago. This would knock off twenty per cent at once from Mr. Shaw’s five hundred million pounds; and I may again mention Mr. Giffen’s emphatic warning that, if we are thinking of any general redistribution, another two hundred million pounds would have to be deducted from the sums which persons like Mr. Shaw imagine await their seizure.
[63] The case may also be put in another way. Interest is the product of capital quâ capital, as opposed to the product of ability as distinct from capital. But the bulk of modern capital is historically the creation of ability, which has miraculously multiplied the few loaves and fishes existing at the close of the last century. Interest may therefore be called the secondary or indirect product of ability, whilst earnings and profits may be called the direct product of ability. Any one who is living on interest at the present moment is almost sure to be living, not on his own ability, but on the products of the ability of some member of his own family who has added to the national wealth within the past two generations. Suppose a man who died in 1830 left a fortune of two hundred thousand pounds, which he made, as Salt did, by the invention and production of some new textile fabric; and suppose that this fortune is now in the hands of a foolish and feeble grandson, who enjoys eight thousand pounds a year. This is evidently not the product of the grandson’s ability; but it is the product of the ability of the grandfather. The truth of this may be easily seen by altering the supposition thus—by supposing that the original maker of the fortune, instead of dying in 1830, is alive now, but as imbecile as we supposed his grandson to be. He has, we will say, long retired from business, and lives on the interest of the capital he made when his faculties were in their vigour. Would any one say that he is not living on his own ability? The only difference is—and it is a difference which, from many points of view, is of the greatest importance—that formerly he was living on the direct product of his ability, and he is now living on its indirect product.
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“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.
Transcriber’s Note (continued)
Minor typographical errors have been corrected in this transcription. Other errors and unusual or variable spelling and hyphenation have been left unchanged except as noted below.
The four references to (Henry) Maudsley have the surname corrected to Maudslay.
Page 79 — “labour-party” changed to “Labour Party” (leaders of the Labour Party to-day)
Page 118 — “Hargraves” changed to “Hargreaves” (Hargreaves and Arkwright)
Page 200 — “monoply” changed to “monopoly” (the monopoly of Ability)
Page 337 — “originially” changed to “originally” (which was originally published)
Page 243 — “transction” changed to “transaction” (party in the transaction)
Page 344 — “Leoni” changed to “Leone” in footnote (Professor Leone Levi)
Footnotes have been re-indexed using numbers and placed after the Appendix.