According to these figures over two-thirds of the persons—heads of families or single adults—had only one-third of the income, while 3½ per cent had another third. Another striking fact shown by the table is the large proportion of persons receiving incomes of less than $214 a year, the minimum taxable income. It shows the poverty of the mass of the people as well as the concentration of wealth among the few rich. In the United States, where the natural resources have been so much richer than in Germany, a similar table would probably show a much smaller proportion under the Prussian minimum, but on the other hand it would probably show a greater concentration of income in the hands of a few. Europe has as yet no billionaire. The great fortunes of the United States have been made possible by the unrivaled opportunities for the exploitation of rich natural resources, the appropriation of natural monopolies, and to special privileges and opportunities in manufactures and transportation. The importance of monopoly privileges in the distribution of wealth is well shown by the results of an investigation made in 1892 by the New York Tribune into the sources of the fortunes of millionaires. It was undertaken to show that protection was not the main cause; but while it proved this, it showed clearly that most of them were built up on monopoly. “Of the 4,047 millionaires reported, only 1,125, or 28 per cent, obtained their fortunes in protected industries.... About 78 per cent of the fortunes were derived from permanent monopoly privileges, and only 22 per cent from competitive industries unaided by natural and artificial monopolies.... Furthermore, if the size of fortunes is taken into account it will be found that perhaps 95 per cent of the total values represented by these millionaire fortunes is
due to those investments classed as land values and natural monopolies, and to competitive industries aided by such monopolies.”[43] It is essential to the stability of our democratic institutions that all special privileges be absolutely prohibited, and that monopoly be brought under strict government control and regulation. Improper methods of wealth accumulation should certainly be prevented.
The opposite question of poverty has already been discussed and some of the causes of poverty pointed out. It will be sufficient here to try to answer the question which has often been asked: Are the rich growing richer and the poor poorer? Though the first part of the question has just been affirmed, the second part may be denied. The nineteenth century has witnessed a vast improvement in the condition of the laboring man, who has shared in the increasing wealth which he has helped to produce. Wages have steadily increased, the hours of labor have been reduced, and the material well-being of the wage-earner is greater today than it has ever been before. It has more than once been pointed out by writers on this subject that with an equal distribution of wealth no one would be well-to-do, while many others insist that inequality in itself is a desirable thing. Greater diffusion of wealth can come about only by very slow processes, and permanent plenty can be secured only by a great increase in the accumulations of capital and the efficiency of each worker. Any suggested reform, therefore, that would weaken the motives to thrift and industry must be rejected.
XIV. SAVING AND SPENDING.
The goal and purpose of all economic activities is the satisfaction of human wants. The object of production is consumption. We work because we desire and need various things which we can get only if we produce them or earn the money to buy them. In this section we take
up some of the problems connected with the rational use or consumption of the wealth which is continually being produced. We have seen something of the conditions under which it is produced, and the manner in which it is distributed; we must now study the not less important subject of its application to human needs and desires. The great question is, how can we get the largest and most rational return for a given expenditure? Before trying to answer this question, it will be helpful to present a summary statement of actual expenditures in different places:
Expenditures for Different Purposes.
| Items | United States 1903 | New York City | Great Britain | Prussia | Average |
| Food | 43.1 | 43.4 | 51.4 | 55.0 | 48.2 |
| Clothing | 13.0 | 10.6 | 18.1 | 18.0 | 14.9 |
| Rent | 18.1 | 19.4 | 13.5 | 12.0 | 15.8 |
| Fuel and light | 5.7 | 5.1 | 3.5 | 5.0 | 4.8 |
| Miscellaneous | 20.1 | 21.5 | 13.5 | 10.0 | 16.3 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
| Items | United States 1903 | New York City | Great Britain |
| Food | 43.1 | 43.4 | 51.4 |
| Clothing | 13.0 | 10.6 | 18.1 |
| Rent | 18.1 | 19.4 | 13.5 |
| Fuel and light | 5.7 | 5.1 | 3.5 |
| Miscellaneous | 20.1 | 21.5 | 13.5 |
| Total | 100.0 | 100.0 | 100.0 |
| Items | Prussia | Average |
| Food | 55.0 | 48.2 |
| Clothing | 18.0 | 14.9 |
| Rent | 12.0 | 15.8 |
| Fuel and light | 5.0 | 4.8 |
| Miscellaneous | 10.0 | 16.3 |
| Total | 100.0 | 100.0 |