[37] "Poverty," a Study of Town Life, by B. Seebohm Rowntree (Macmillan).
CHAPTER XII
THE WASTE OF CAPITAL
IT has been observed by Professor Marshall that "perhaps £100,000,000 annually are spent even by the working classes, and £400,000,000 by the rest of the population of England in ways that do little or nothing towards making life nobler or truly happier."[38] In view of the fact that the "working classes" are the bulk of the nation, and the "rest of the population" a relative handful, this estimate points to a little waste by the many, and much waste by the few. The fact is, of course, that if the working classes, after prolonged study of dietetics and hygiene, spent their incomes in the most economical way possible, and refrained entirely from alcoholic liquor and tobacco, they would still be unable, save in exceptional cases, to command the means of a noble and truly happy life. As for the "rest of the population," if we consider the 5,000,000 persons who enjoy an income of £909,000,000 per annum, we see very clearly that their superfluity is so great that they could easily add to the fixed capital of the nation at the rate of £500,000,000 per annum, and still have left incomes sufficient, if wisely expended, to command a very considerable degree of comfort. As things are, an enormous amount of wealth is wasted every year upon current expenditure of an ignoble character, even while every city and every industry needs the application of more capital.
Nothing is more striking in the estimate of capital which we formed in Chapter 5 than the small proportions of the total when considered in relation to the extent of the national income. For the total, it should be remembered, includes the value of the land of the United Kingdom. Subtracting it, we see that the wealth which has been added to the land is worth not more than about £8,000,000,000, whereas the national income amounts to £1,840,000,000. Thus, in the United Kingdom we have accumulated stock, apart from the market price of the land, only to the extent of about four years' income.
The facts which correspond to these figures are that, in every county and in every township, there are more ugly and uncomfortable houses than beautiful and convenient ones, more inefficient plants than well-equipped businesses, more badly clothed than well-clothed people, more evidences of poverty than of wealth. On every hand we see the need of capital, but while its application is so sorely needed, the few rich who command so much of the national income pour it out in wanton extravagance. The growth of luxury has been accompanied by an increasing want of enterprise in industry and commerce. Even in London the most fruitful opportunities lie neglected. The port is inefficient; the Thames highway has been neglected; north and south Londoners remain strangers because of lack of transit facilities; street traffic is archaic; the important railway termini are dirty, inconvenient and unconnected. All these and many less important things cry aloud for the application of capital. In London and in every other town there is a housing problem, and the housing problem is a problem of capital. If the income of the last 20 years had been patriotically expended there would be no housing problem to-day, and the fixed capital of the country would be very much greater than it is.
Another significant fact is the very considerable investment of British capital abroad, probably amounting, as we have seen, to about £2,600,000,000. These investments are often spoken of as "our foreign investments." There is a grim irony in the phrase. For what in essence are these investments? They left our shores, originally, in the form of exported manufactures, the product of British labour. We had no gold to lend, but some amongst us could command and lend the fruit of our work. These exported products were sent away from our shores by a mere handful of rich persons who saw in foreign or Colonial loans or enterprises the opportunity of gaining a higher rate of interest than at home. Year by year there is returned to those who made the investments, or to their successors in title, a tribute of foreign and Colonial commodities which goes to swell our imports. In 1908 this yearly tribute of imports, for which no present exports have to be exchanged, amounts to about £130,000,000 or £140,000,000. Whether the nation as a whole gains by this tribute depends entirely upon the wisdom and patriotism of those who receive it. If we could ensure its wise use as capital for the promotion of the general welfare, then the United Kingdom would gain materially by the lien which a few of its people possess upon foreign and Colonial activities. But we have no guarantee as to the manner of its use, and too often it but serves to bring to this country commodities which in no way make life "nobler or truly happier." I do not mean that articles of luxury are necessarily imported in payment of the interest on "our" oversea investments, but certain it is that the limited class which owns them are the chief consumers of luxuries. It should never be forgotten that, as has already been pointed out in these pages, the most ordinary raw material may become a vehicle of luxury, and the commonest forms of labour its servants. Certain imports, e.g. motor cars or Steinway grand pianos, can be ear-marked as luxuries, but potatoes from Jersey wasted in a long dinner or Douglas pine from Canada built into a racing pavilion are "luxuries" more to be deplored than the importation of Valenciennes lace or Sèvres porcelain by persons of refinement.
It may be well to remark, in passing, that to place a heavy customs duty upon imported luxuries would in no way benefit the nation at large. It would merely stimulate the production of luxuries in the United Kingdom, and so increase the already considerable number of persons engaged in the trades of luxury.
That we have incidentally gained by acting as a world money-lender is indisputable. The case of Argentina is a familiar one. British exports have been largely lent to that country for the construction of railways. Those railways have cheapened Argentine transport, and so placed at our disposal cheap bread and meat. But this benefit has been incidental and, moreover, shared by the world at large. Against such incidental gains we have to place the criminal neglect of our own country. While capital has gone overseas in a never-ending stream, the people whose united activities produced the commodities embodied in that capital have remained poor for lack of the proper investment of capital at home. Large sections of the British people have unconsciously worked for the benefit of the foreigner and of the British Colonist, never realizing that their own country sorely needed all the capital that their labour could create.[39]
We cannot even lay the flattering unction to our souls that the British capital which has been sent abroad has gone entirely to build foreign or Colonial railways, or to develop other useful industries, nor, in so far as it has been usefully employed, can we claim much credit for the fact. The sole motive which has influenced the individuals who have thus disposed of the products of British labour has been individual gain. That gain they have sought without regard to any consideration of patriotism. Foreign nations have had our capital indifferently for war or for peace, for building railways or for constructing warships. A generation ago we wickedly poured our capital into Turkey. A generation ago were born hundreds of thousands of British children who, for lack of the full employment of British capital on British soil, are to-day creatures of the abyss.