Riches and Poverty (1910)

by L. G. Chiozza Money

Year by year, as regularly as the seasons, properties pass at death in the United Kingdom, free of all debts, absolutely net, to the value of, in round figures, £300,000,000. Of this £300,000,000, the aggregate of approximately 80,000 separate estates, as much as £200,000,000, or thereabouts, is left by about FOUR THOUSAND (4000) PERSONS.

I repeat that these figures are not my estimates, but the official figures ascertained and published by the Inland Revenue Commissioners. They can be verified by any reader of this book by reference to the latest Official Report of the Commissioners of His Majesty's Inland Revenue (Cd. 4868. Price 1s. 7d.).

Those who are acquainted with the facts know, as Mr Balfour recognized in reply to me in a debate in the House of Commons on September 13th, 1909, that the official figures I have quoted would be larger but for the passing of property inter vivos in avoidance of the death duties. But, to take the figures as they are, an under statement of the wealth of the rich, I put this question to those who come to consider the estimates I have made:

If, in the United Kingdom, out of £300,000,000 a year passing at death, as much as £200,000,000, or two-thirds of the whole, is left by only 4000 persons, does it not follow, as the night the day, that the distribution of the national income must necessarily proceed on some such lines as those estimated in the frontispiece to this volume?

And with that question I once more issue these pages to the public.

L. G. CHIOZZA MONEY

Chaldon, Surrey

October 1910

CONTENTS

	PAGE
BOOK I THE ERROR OF DISTRIBUTION
CHAPTER I Thoughts arising out of a Great Controversy
The false assumption that customs duties can determine prosperity	[3]
Evidences of riches and poverty as "arguments"	[4]
"Thirty per cent. of our population underfed"	[5]
A question of distribution	[7]
CHAPTER II The National Income
The total product consists of goods and services	[8]
The exchanged product can be measured	[9]
Income Tax assessments; my 1905 estimate confirmed	[11]
The income eluding taxation	[13]
Income from abroad	[15]
Aggregate of incomes exceeding £160 per annum	[16]
Growth of Income Tax income in five years	[17]
Aggregate of small incomes lying between Income Tax payers and wage-earning classes	[20]
Aggregate of incomes of manual workers	[29]
Aggregate of the national income	[31]
The Income Tax exemption limit bisects the total product	[31]
CHAPTER III Distribution of the National Income
The average family income	[32]
Investigation of number of Income Tax payers	[33]
Number of incomes under £700	[39]
Number of incomes over £700 measured by number of large houses	[43]
Approximate number of Income Tax payers	[44]
Persons with respectively more and less than £160 per annum	[47]
One-half of entire product taken by 12 per cent. of the population	[47]
One-third of entire product taken by one-thirtieth of population	[48]
A poor people thinly veneered by the well-to-do	[49]
The movement in 1903-1908	[50]
CHAPTER IV The Estates of Rich and Poor
The graduated Estate Duty of Sir William Harcourt	[51]
Deaths per annum in the United Kingdom	[54]
Numbers and values of estates passing at death in recent years	[55]
Savings of the poor	[57]
Rich and poor estates in an average year	[59]
CHAPTER V The National Accumulation
Estimate of the accumulated wealth of the United Kingdom	[62]
Public property, Imperial and local	[65]
The national and local debts private mortgages upon public assets	[67]
British wealth in private hands	[68]
Foreign wealth in British hands	[71]
Average wealth per head	[71]
CHAPTER VI The Monopoly of Capital
Living property owners estimated from Death Duty records	[73]
Growing avoidance of Death Duties	[77]
120,000 persons own two-thirds of the national capital	[79]
The alleged "capital" of the working classes	[80]
Those rule who own	[80]
CHAPTER VII The Area of the United Kingdom
Area the fundamental attribute of land	[81]
Almost the entire area in private hands	[82]
One-half the area owned by 2,500 persons	[83]
The number of landlords	[84]
Estimate of land rents	[86]
Why the aggregate of land rents is relatively small	[87]
The cheapening of food	[87]
The small areas of the town	[88]
The rent-charge formed by local rates	[90]
CHAPTER VIII Those who Work and whose who Wait
Effect of congestion of capital upon distribution	[93]
Practical examples of the distributive process	[94]
Capital largely divorced from business ability	[99]
Schedule D profits compared with paid-up capitals	[100]
Effect of appreciation of securities upon position of the wage-earners	[101]
Railway profits and railway wages	[102]
Calculating the labour factor	[103]
Capital takes the lion's share	[106]
CHAPTER IX Profits, Bad Trade and Unemployment
Growth of profits in recent years	[107]
Rise and fall of wages in recent years	[108]
Growth of profits compared with rise and fall in wages	[110]
Labour bears the brunt of depression	[115]
Records of unemployment of Trade Union members	[116]
The Trade Union unemployment rate probably representative	[119]
How Trade Unions keep the tools sharpened	[121]
The great majority of the British people lack security of tenure of employment	[122]
"Remedies" for unemployment	[123]
Insurance against unemployment	[123]
Labour Exchanges no remedy	[124]
CHAPTER X Part of their Wages
Accident and disease concomitants of wages	[125]
Laxity of factory inspection	[127]
Accidents in factories and workshops	[127]
Diseases of occupations in factories and workshops	[129]
Accidents in mines and quarries	[130]
Accidents on railways	[136]
Accidents on ships	[137]
Accidents in certain engineering works	[137]
Aggregate of reported accidents and cases of industrial disease	[138]
Phthisis as an industrial disease	[139]
Physical deterioration not an accident	[140]
CHAPTER XI Consequences
The governance of the rich	[141]
The direction of life and labour through expenditure	[143]
The cotton trade and the fate of its products	[144]
The demand for woollens	[145]
The call for boots	[147]
The waste of labour of nominally useful workmen	[149]
The parable of the temporary supper-room	[149]
The parable of the Ascot frock	[151]
Mr Rowntree's primary poverty line	[153]
The possible call for commodities by the poor	[154]
The agricultural labourer's call	[155]
The boot employee as a customer for the textile employee	[156]
The Error of Distribution connotes the misdirection and degradation of labour	[156]
CHAPTER XII The Waste of Capital
The national accumulations small in relation to the national income	[159]
More evidences of poverty than of wealth	[159]
The moral of oversea investments	[160]
Six thousand millions of capital wasted in forty years	[163]
The demand for luxuries misdirects capital	[164]
The waste of capital in the game of competition	[166]
The waste of capital in weak and bogus company promotion	[166]
BOOK II TOWARDS ORGANIZATION
CHAPTER XIII The Golden Key
More trade and a better distribution	[171]
The social problem must be discussed with reference to the Error of Distribution	[172]
CHAPTER XIV The Nation's Children
The renewal of the race	[173]
The verdict of anthropology	[173]
Injustice before birth and after	[176]
The innocence of the Factory Act	[178]
The Physical Deterioration Committee on reasonable care of the infant	[180]
The mothers of the future	[181]
The mothers of the present	[181]
Women health inspectors	[182]
The public medical service	[183]
The small cost of a public maternity fund	[184]
A Jewish example	[185]
The birth of a child a matter of national moment	[187]
Neglectful parents must be punished	[187]
The segregation of the unfit	[187]
Twenty-five million births in twenty years	[189]
CHAPTER XV The School
The Error of Distribution and the heritage of the child	[191]
The nation loses the bulk of its intelligence and genius	[191]
The school must be a preparation for life	[192]
The doctor in the school	[193]
The school children of Bradford	[194]
"The child has got to be fed"	[196]
Observation and expression	[199]
The study of systematized knowledge	[202]
The teaching of hygiene and temperance	[204]
Compulsory continuation schools for both boys and girls	[204]
Can we afford to make our schools what we desire them to be?	[207]
CHAPTER XVI The Home
An increasing population in a diminishing number of centres	[209]
Our many poorhouses	[210]
The years taken from the lives of the poor	[211]
Crowding and overcrowding	[212]
Tenement statistics	[212]
Overcrowding on area has increased	[213]
Not only death and disease but ugliness to be fought	[215]
Where further building should be prevented	[217]
The housing question as a land question and as a capital question	[218]
The community should be landlord	[218]
The taxation of land on its selling value would assist in municipalizing area	[219]
The small area needed to rehouse our city populations	[220]
The municipality must plan its extensions in advance	[221]
Some examples from Germany	[222]
An example in the United Kingdom	[223]
How land and capital enter into the housing problem	[229]
National housing loans needed	[231]
CHAPTER XVII The Empty Country
The migration from the country to the towns	[234]
The decrease in agricultural employment and its causes	[240]
Agriculture must be an increasingly limited field for employment	[240]
The cheap land outside the towns	[243]
Is control of area worth half a year's income?	[243]
The community can acquire cheap land and make it valuable	[244]
Rising food prices	[247]
Neglected afforestation	[248]
Imperial questions must be treated on an Imperial scale	[249]
CHAPTER XVIII Organization
An insufficient production of ponderable commodities	[250]
The small stream of ponderable things is made the subject of unnecessary services	[251]
Present production is wasteful	[252]
The waste of labour in competition	[252]
The waste of labour in distribution, etc	[253]
So called "natural" monopolies	[255]
Monopoly necessary if labour is to be fully economized	[256]
Power distribution and public control	[256]
The problem of monopoly illustrated by the milk trade	[259]
The milk trade typical of many other services	[262]
Municipal and joint-stock direction contrasted	[263]
The management of our railway companies	[263]
The prevalence of nepotism in private enterprise	[264]
The Belgian State railways	[265]
Coal production and distribution	[267]
The private trust the only alternative to public ownership	[269]
Public ownership of capital the only remedy for unemployment	[270]
Those govern who employ	[271]
CHAPTER XIX The Aged Poor
Two million persons over 65 years of age and most of them poor	[272]
Mr Thomas Burt's return of aged paupers	[273]
Mr Ritchie's return of number of paupers relieved during a year	[275]
Of the population aged 65 and over, one in three is a pauper	[277]
Probable number of aged paupers	[278]
Length of the working life	[280]
The Charity Organization Society and cost	[283]
Mr Asquith's Old Age Pension Act	[284]
First year's working of Old Age Pensions	[285]
Old Age Pensions at 65	[286]
	[286]
CHAPTER XX Adam Smith's First Maxim of Taxation
The famous first maxim self-contradictory	[287]
Taxation in relation to the Error of Distribution	[288]
The doctrine of equality of sacrifice	[288]
An unanswerable case for repeal of all food duties	[289]
The duties on liquors and tobacco should remain	[289]
CHAPTER XXI The Main Instrument of Taxation
Through an Income Tax taxation can be applied according to "ability"	[291]
The British Income Tax an ancient impost	[291]
The so-called "Land" Tax of 1692 was an income tax	[292]
The "Land" Tax of 1692 and the present Income Tax compared	[295]
A graduated Income Tax taxes unearned increment	[296]
The Income Tax in 1905 described	[297]
The "Abatements"	[297]
Schedule A described	[298]
Schedule B described	[299]
Schedule C described	[300]
Schedule D described	[300]
Schedule E described	[302]
The Inhabited House Duty a second Income Tax	[302]
The Finance Act of 1907 introduced differentiation between earned and unearned income	[303]
The Finance Act of 1909. Mr Lloyd George's reform of the Income Tax	[303]
Mr Asquith's differentiation illustrated	[304]
The Super-Tax	[305]
The Super-Tax as it really is	[305]
The Income Tax summarized	[306]
The Income Tax in effect	[307]
The Inhabited House Duty should be abolished	[308]
Simplification needed	[308]
Without a Census of Income the Income Tax cannot be properly enforced	[310]
Masters compelled to reveal employees' incomes	[311]
Taxation at the source might remain	[312]
The family man's allowance	[314]
Is an annual Budget debate necessary?	[315]
Mill and Bentham on Ethics of Taxation	[317]
A Plain Bill for the citizens' subscription to the National Club	[318]
CHAPTER XXII The Death Duties
The Death Duty Reforms of 1907-9	[320]
My suggestions of 1905 now law	[321]
The plain justice of the Lloyd George Scale	[322]
The alleged burden of the Death Duties	[323]
Do our Death Duties waste the national capital?	[323]
Gifts inter vivos	[324]
President Taft on the dangers of wealth monopoly	[324]
CHAPTER XXIII Of Revenue without Taxation
A source of revenue not necessarily a source of taxation	[326]
A State without revenue	[327]
Socialism and revenue and taxation	[327]
The German Governments rich are Governments	[328]
Half the revenue of Prussia is derived from Socialism	[328]
Yield of Prussian State Railways	[329]
CHAPTER XXIV Conclusion
Progress in 40 years	[330]
Some items in material progress, 1867-1903	[332]
What Dudley Baxter wrote in 1867	[333]
The poor within our borders to-day are as large in number as the entire population in 1867	[338]
The employer the effective schoolmaster	[340]
A poor government is a weak government	[341]
Sir Robert Giffen on taxation	[341]
We must have regard to both palliatives and remedies	[342]
Public ownership of capital must replace private ownership	[343]
The substitution of the public shareholder for the private shareholder not difficult	[344]
The uplifting of work through the reduction of toil	[345]
The statesman must take up the tools of the scientist	[346]
The appeal to the few	[348]
The appeal to the people	[348]
Index	[351]