[From "The Daily Telegraph," August 10, 1868.]
RAILWAY ECONOMY.
To the Editor of "The Daily Telegraph."
Sir: I had not intended again to trespass on your space until I could obtain a general idea of the views of your correspondents on the questions you permitted me to lay before them in my letters of the 31st July and 5th inst.; but I must ask you to allow me to correct an impression likely to be created by your reference to that second letter in your interesting article on the Great Eastern Railway, and to reply briefly to the question of your correspondent "S." on the same subject.[74]
You say that I mistook the charge against the railway companies in taunting my unfortunate neighbors at Sydenham[75] with their complaints against the operation of the law of supply and demand, and that it was because the companies neglected that law that they suffered.
But, Sir, the law of supply and demand, as believed in by the British public under the guidance of their economists, is a natural law regulating prices, which it is not at all in their option to "neglect." And it is precisely because I have always declared that there is no such natural law, but that prices can be, and ought to be, regulated by laws of expediency and justice, that political economists have thought I did not understand their science, and you now say I laugh at it. No, Sir, I laughed only at what was clearly no science, but vain endeavor to allege as irresistible natural law, what is indeed a too easily resisted prudential law, rewarding and chastising us according to our obedience. So far from despising true political economy, based on such prudential law, I have for years been chiefly occupied in defending its conclusions, having given this definition of it in 1862. "Political Economy is neither an art nor a science; but a system of conduct and legislature founded on the sciences, including the arts, and impossible except under certain conditions of moral culture."[76]
And, Sir, nothing could better show the evil of competition as opposed to the equitable regulation of prices than the instance to which you refer your correspondent "Fair Play"—the agitation in Brighton for a second railway. True prudential law would make one railway serve it thoroughly, and fix the fares necessary to pay for thorough service. Competition will make two railways (sinking twice the capital really required); then, if the two companies combine, they can oppress the public as effectively as one could; if they do not, they will keep the said public in dirty carriages and in danger of its life, by lowering the working expenses to a minimum in their antagonism.
Next, to the question of your correspondent "S.," "what I expect the capitalist to do with his money," so far as it is asked in good faith I gladly reply, that no one's "expectations" are in this matter of the slightest consequence; but that the moral laws which properly regulate the disposition of revenue, and the physical laws which determine returns proportioned to the wisdom of its employment, are of the greatest consequence; and these may be briefly stated as follows:
1. All capital is justly and rationally invested which supports productive labor (that is to say, labor directly producing or distributing good food, clothes, lodging, or fuel); so long as it renders to the possessor of the capital, and to those whom he employs, only such gain as shall justly remunerate the superintendence and labor given to the business, and maintain both master and operative happily in the positions of life involved by their several functions. And it is highly advantageous for the nation that wise superintendence and honest labor should both be highly rewarded. But all rates of interest or modes of profit on capital, which render possible the rapid accumulation of fortunes, are simply forms of taxation, by individuals, on labor, purchase, or transport; and are highly detrimental to the national interests, being, indeed, no means of national gain, but only the abstraction of small gains from many to form the large gain of one. For, though inequality of fortune is not in itself an evil, but in many respects desirable, it is always an evil when unjustly or stealthily obtained, since the men who desire to make fortunes by large interest are precisely those who will make the worst use of their wealth.