A single glance at these tables will show that the aggregate wages of the country constitutes a slightly better proportion of its aggregate annual income at present than in 1800, and a decidedly better proportion than in 1688. But if we look, not to the aggregate income of the class, but to the average income of the individual families it contains, the result is in nowise more favourable to Mr. George's assumption. The following table will show that:—

(3) Average Income of Families:—
A.D. 1688. A.D. 1800. A.D. 1883.
Whole Nation£37£129£189
Working Class146996

The average working-class income was thus 37 per cent. of the average income of the country in 1688; 53 per cent. of it in 1800; and 51 per cent. of it in 1883. The difference between the last two epochs is so indecisive that we may count them practically identical. The real position of affairs then as to the proportion of wages to national produce is this, that wages enjoy a considerably larger share of that produce now than they did at the end of the seventeenth century, and about the same proportion as they enjoyed at the end of the eighteenth. If, accordingly, Mr. George resolves to stick by the point of proportion, he would therefore have no more solid ground to stand on than on the point of quantity. Rent, as a proportion of the entire wealth of the country, has enormously declined, and even as a proportion, of agricultural wealth has not increased. Wages as a proportion have not declined, but rather risen.

These, among other things, are indications that we have been concluding too hastily that concentration of wealth is the characteristic tendency of the time, and ignoring the existence of many minor and less conspicuous forces which have been working in the contrary direction. The real prospect at present is towards diffusion. The enormous accumulations that have marked the last hundred and fifty years have owed their existence largely to causes that cannot be expected to endure; in the case of land, to vicious laws directly favouring aggregations; and in the case of trade, to the unparalleled rapidity of the transformations and extensions industry has undergone during the period. Great inequalities are natural to such a time. Huge fortunes are made by pioneers, and will not be easily made by their successors. Railway contracting will never produce again a millionaire like Mr. Brassey, but it will continue to furnish the means of many moderate fortunes and competencies. So with every other new branch of industry, or new field of investment. The lucky person who is the first to occupy it may rise to great riches, but his successors will divide the custom, and instead of one large fortune, there will be a considerable number of small ones. Mr. George himself admits that the opportunities of making large fortunes are growing more limited, but oddly enough he considers the fact to be a signal evidence of "the march of concentration." In his "Social Problems" (p. 59) he writes: "An English friend, a wealthy retired Manchester manufacturer, once told me the story of his life. How he went to work at eight years of age, helping to make twine, when twine was made entirely by hand. How, when a young man, he walked to Manchester, and having got credit for a bale of flax, made it into twine and sold it. How, building up a little trade, he got others to work for him. How, when machinery began to be invented, and steam was introduced, he took advantage of them, until he had a big factory and made a fortune, when he withdrew to spend the rest of his days at ease, leaving his business to his son. 'Supposing you were a young man now,' said I, 'could you walk into Manchester and do that again?' 'No,' replied he, 'no one could. I couldn't with fifty thousand pounds in place of my five shillings.'" The true moral of this little story is of course that it is more difficult to amass a huge fortune in that particular line now than when machinery was young, and that a man with £50,000 to start with must now content himself with a much poorer figure than Mr. George's lucky friend made out of nothing. Would Mr. George compute what limit could be set to the sum his friend might have amassed, had he started in those golden days with £50,000 instead of five shillings? Even as things stood, his solitary success did not distribute the wealth of Manchester any the better among his fellow-spinners who were not fortunate enough to get credit for a bale of flax, or pushing enough to ask for it, and were not in a position to take advantage of the first introduction of a new power, and rise with it to great wealth. That the stream of things is now making for more moderate fortunes, and more of them, is confirmed by the testamentary statistics of the previous ten years published some time ago by the Spectator newspaper. These figures show that the number of fortunes of the first rank left during that period has been very much less than it was in the preceding ten years, but that the number of moderate fortunes has been very much larger.

What the future may hide in it I shall not venture to divine. It will no doubt bring upon industry fresh transformations, but we can hardly expect them to be so numerous or so rapid as in the brilliant era of industrial progress and colonial development we have passed through, and some at least of the changes that are in store for us point, as I have shown in the introductory chapter of this book, to a greater diffusion rather than a greater concentration in the future. Mr. George says: "All the currents of the time run to concentration. To successfully resist it we must throttle steam and discharge electricity from human service" (p. 232). Now steam has undoubtedly been a great concentrator, but electricity, which is likely to take its place in the future, will to all appearance be as great a distributor. Mr. George is equally mistaken regarding the real effect of the other "currents of the time." "That concentration is the order of development," says he, "there can be no mistaking—the concentration of people in large cities, the concentration of handicrafts in large factories, the concentration of transportation by railroad and steamship lines, and of agricultural operations in large fields. The most trivial businesses are being concentrated in the same way—errands are run and carpet sacks are carried by corporations" (p. 232). The concentration of people in cities is not the same thing as the concentration of the wealth of those cities in the hands of a few individuals. The centralization of labour in cities has assisted the birth of the trade union and the co-operative society, which are among the best agencies for diffusing wealth; and the growth of joint-stock companies is a strange proof of a tendency to greater concentration of wealth, for the joint-stock company is really an instrument of the small capital, enabling it by combination to compete successfully with the larger; and as to agriculture, the real tendency, in this country at any rate, seems to be to lesser holdings. When we complain of the inequalities of our time—and I am far from desiring to underrate their extent or to palliate their mischievousness—we are apt to forget how largely the real and natural process of evolution is after all one of distribution, how much the most conspicuous of the inequalities have been incidental to a transition period, and due to causes of a temporary nature, and how many indications we possess that they are not unlikely to be corrected and moderated in the future course of social development. Some of the official returns made in connection with the income tax show that the immense increase of wealth of the last thirty years has been far from being reaped by any single class, but has been shared pretty evenly by all the classes included in those returns. We possess detailed accounts of the number of persons paying income tax in each grade of income under Schedule D, from the year 1849, and if we compare the figures of that year with those of 1879, we shall obtain a fair index to the movement of distribution during those thirty years. Schedule D, it is true, includes only incomes derived from trades and professions, but these incomes may fairly enough be taken as sufficiently characteristic to afford a trustworthy indication of the general movement. While population increased in the thirty years by 22 per cent., the number of incomes liable to income-tax increased by 161 per cent., and of these, the incomes that have increased in much the largest proportion are precisely those middling or lower middling incomes which I have before shown to have unfortunately declined since 1688. While the number of incomes over £1,000 a year has increased by 165 per cent., the number of incomes between £150 and £400 a year has increased by 256 per cent. Mr. Goschen, in his inaugural address as President of the Royal Statistical Society in December, 1887, produced later evidence showing the continuance, and even growth of the same tendency. He showed from the Income Tax Returns that, in spite of the increase of population between 1877 and 1886, the number of incomes over £1,000 a year had decreased by 2.40 per cent., and the number of incomes between £500 and £1,000 had remained the same, while the number of incomes between £150 and £500 had increased 21.4 per cent. He showed from the statistics of certain selected public companies, that in the ten years from 1876 to 1886 the number of their shareholders had increased by 72 per cent., while the average capital per shareholder had decreased from £443 to £323. He drew similar conclusions from the probate and inhabited house duty figures, and from several other sources. (See Journal of Statistical Society, December, 1887.) These figures prove that the tendency of things, so far as it concerns the classes above the labourers, is not to further and exclusive concentration, but rather towards a wider and beneficial diffusion; and in regard to the labouring classes, it is admitted by all—even by the extremest social pessimists—that the upper and middle strata of them have participated in the progress of wealth equally with their neighbours. There remains only the lowest class of all, and their emancipation is the serious task of social reform in the immediate future; but that class is even now not increasing in the ratio of population; its misery comes from many causes, most of them moral and physical rather than economic; and though it presents difficult and trying problems, there is no reason for renouncing the hope which alone can sustain social reformers to success.

II. Mr. George's Explanation.

If there is any force in the foregoing observations, it is plain that there is no such problem as Mr. George has undertaken to explain, and we are therefore exempted from all necessity of examining his explanation. But to Mr. George's own mind his explanation of the appearance that troubled him really constitutes the demonstration of it; at any rate, he offers no other. The question of the increase of poverty is of course a question of fact, that cannot be settled by a priori deduction alone; but Mr. George seems to think otherwise. He is too bent on proving it to be necessary to think of asking whether it is actual, and even a man of science like Mr. A. R. Wallace, while regretting that Mr. George had not chosen to build his proposals on ground of fact, declares that he adopted an equally legitimate method in deducing his results "from the admitted principles and data of political economy." ("Land Nationalization," p. 19.) Moreover, most of the social pessimism of the present time draws its chief support, exactly like Mr. George's, from the supposed bearing of certain received economic doctrines; and our task would therefore be incomplete if we did not follow Mr. George on this "high priori road" on which he so boldly fares forth, and performs, as will presently be seen, many a remarkable feat.

Before beginning his explanation, he throws the problem itself into what he conceives to be a more suitable scientific form. "The cause," says he, "which produces poverty in the midst of advancing wealth is evidently the cause which exhibits itself in the tendency everywhere recognised of wages to a minimum. Let us therefore put our inquiry into this compact form: Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living?" (p. 10). The problem, as thus restated, is clearly, be it observed, one of quantity, not of proportion. A bare living is not a relative share, but a definite amount, of produce. But the tendency in wages to such a minimum, which he asserts to be everywhere recognised, is really not recognised at all. In alleging that it is so, Mr. George evidently alludes to the doctrine of wages taught by Ricardo and his school; but what they recognised in wages was a tendency, not to a minimum that would give but a bare living, but to a minimum that would give a customary living; in other words, that would sustain the labourers in the standard of comfort customary among their own class. The economic minimum is not the absolute minimum of a bare living; it is, as Mr. George himself elsewhere puts it, "the lowest amount on which labourers will consent to live and reproduce,"—that is, not the lowest amount on which any individual labourer will do so, but the lowest amount which labouring people in general consider it necessary to earn before they will undertake the responsibility of marriage. If they were to get less than this, it was contended, they would refrain from marrying to an extent that would tell sufficiently on the supply of labour to force wages up again to their old level. This level was the minimum to which wages constantly tended, but then it was always higher than a bare living; it was determined by the standard of requirements current among the labouring class at the time; and it was recognised to be capable of rising if that standard rose. True, Ricardo and the economists of his generation entertained very poor hopes of any such rise, because the working classes of their time, being without the intelligence, the ideas of comfort, the higher wants that are powerfully operative among the working classes of our day, were generally seen to "take out" their better wages when they chanced to get them in nothing but earlier marriages, which in the end brought their wages down again. We have happily now to do with a more aspiring and a less uniformly composed working class. It is perhaps more aspiring in some measure because it is less uniformly composed. It contains many ranks and inequalities and standards of social refinement and comfort, and the presence of these side by side develops a more active tendency upward, which, by supplying a stronger check than before on improvident marriages, will enable the labourers, class after class of them, to appropriate securely more and more of the common domain of advancing civilization. We have had abundant experience of a rise in the standard of life, and a rise in the rate of wages, both remaining as permanent possessions of sections of the labouring class. But if Ricardo and his school had less faith than they reasonably might have had in the possibility of a permanent upward tendency in wages, they certainly never dreamt of believing in any permanent downward tendency. According to their doctrine the rate of wages moved up and down within certain limits, but always tended to come back to a particular figure—the amount necessary to give the labourer the living customary among his class. This figure was really no more a minimum than it was a maximum; wages were supposed to fall sometimes below it, as they were supposed to rise sometimes above it; and to speak of it as a minimum that would give but a bare living is completely to misrepresent its nature.

The assumption from which Mr. George starts is thus in no wise an admitted principle of political economy, and would therefore not answer the test of legitimacy laid down by Mr. Wallace. It has no ground outside of Mr. George's own imagination. Economists would solve his problem, "why in spite of increased productive power wages tend to a minimum that will give but a bare living?" by simply denying his fact, and having done with it. But Mr. George persuades himself that they would answer it otherwise, and devotes the next section of his book to an elaborate confutation of the false answers he supposes they would return to it. They would either explain it, he thinks, by their theory of the wages fund, or they would explain it by their theory of population; and so before confiding to us his own explanation, he considers it necessary to stop and clear these two venerable theories out of his way. I am not concerned to defend these theories; their truth would not make Mr. George's own view any the falser, nor their falsehood make it any the truer. One of them indeed was dead and buried before Mr. George attacked it, though I am bound to say it would never have fallen before the particular line of attack he directs against it. The wages fund doctrine, which played a considerable rôle both in its original form as taught by Senior, and in its subsequent form as modified by M'Culloch, was refuted by Mr. Thornton in 1869, was almost instantly abandoned by the candid mind of Mr. Mill, and is now rarely met with as a living economic doctrine. The wages fund is still regarded of course as having its limit in capital, and in the conditions which generate capital, but since these conditions include among other things the number and efficiency of the labourers, the amount of the wages fund is no longer represented as at any given moment a fixed and predetermined quantity susceptible of no possible alteration to meet the exigencies of the labour market, and when once this characteristic was given up, the wages fund doctrine was seen to have degenerated into little more than a stately truism. The Malthusian theory of population is not in the same way discredited, but it likewise is now generally stated with some reserve. It has become well understood that the earlier economists assigned it too absolute and universal a validity, and that it is not, as they thought, a law for all ages, and especially and happily not a law for our own. It is true of an era of progressive population and diminishing return from agriculture, but for our day it has been robbed of its terrors by free trade and steam navigation, which have connected our markets with continents of virgin soil, and carried us virtually into an era of increasing return of indefinite duration. The population question was one of serious practical import for our fathers, and as they saw people marrying and giving in marriage, while every fresh bushel of food was extracted with increasing difficulty from an exhaustible soil, they looked with a reasonable dread to the future, and saw no way of hope except in the practice of a heroic continence. But we live in another time. We find population increasing and yet bread cheapening, simply because the locomotive which alarmed Mr. George by taking the tramp to California has brought back plenty to the rest of the world. It is due to the material progress he preaches against that we are the first generation who can afford to make light of the population question, and leave our remote posterity to deal with the peril when it shall actually arrive.