Labour and the Popular Welfare

by W. H. Mallock

Precisely the same thing is to be said with regard to the figures given as to the growth of the national income and the capitalised value of the country. The estimates of various statisticians will be found to differ from one another by something like ten per cent; but these differences do not in the least affect the essential character and meaning of the great facts in question. Let us take, for instance, two facts stated in this volume—that the capital of the country during the past century has increased in the proportion of two to ten; and the income per head of the country in the proportion of fourteen to thirty-four or thirty-five. We will suppose some critic to prove that these proportions should be three to eleven, or twelve to thirty-three. Now, large as the error thus detected might be from some points of view, it would be absolutely immaterial to the large and general question in connection with which the figures are quoted in this volume.

The enormous increase in our national income and our national capital is doubted or denied by no one. Now let us express the increase in income as a supposed increase in the average height of the rooms inhabited by the population. According, then, to the figures given by me, we might say in this case that at the beginning of the century the average house was seven feet high—only high enough for tall men to stand up in; and that now houses have been so improved that the average height of a living-room is seventeen feet. If any one, dwelling on the fact of such a change as this, were inquiring into its causes, and were basing arguments on its assumed reality, what difference would it make if some opponent were to prove triumphantly that the height of the average room now was not seventeen feet, but sixteen feet six inches, and that four generations ago it had been six feet instead of seven? The difference in the estimates of our national income during the past ninety or a hundred years are not more important for the purpose of any general argument than the difference just supposed with regard to the height of two living-rooms; and readers may rest assured that the round numbers given by me with regard to the growth of the national income and the national capital are so near the admitted and indisputable truth of things, that no possible correction of them would substantially alter any one of the arguments which they are here quoted to illustrate.

September 1894.

PREFACE TO FIRST EDITION

Nearly all the general truths of Economic Science are, directly or indirectly, truths about the character or the actions of human beings. It is, consequently, always well to warn the readers of economic works, that in Political Economy, more than in any other science, every general rule is fringed with exceptions and modifications; and that instances are never far to seek which seem to prove the reverse of what the general rule states, or to make the statement of it appear inaccurate. But such general rules need be none the less true for this; nor for practical purposes any the less safe to reason from. They resemble, in fact, these general truths with regard to the seasons, which we do and must reason from, even in so uncertain a climate as our own. It is, for instance, a truth from which we all reason, that summer is dryer and warmer than winter; and yet there is a frequent occurrence of individual days, which, taken by themselves, contradict it. So, too, those economic definitions, the subjects of which are human actions or faculties, can be entirely accurate only in the majority of cases to which they apply; and these cases will be fringed always by a margin of doubtful ones. But the definitions, for all that, need be none the less practically true. Day and night are fringed with doubtful hours of twilight; but our clear knowledge of how midnight differs from noon is not made less clear by our doubts as to whether a certain hour at sunrise ought to be called an hour of night or morning.

It is especially desirable to prefix this warning to a work as short as the present. In larger and more elaborate works, the writer can particularise the more important exceptions and modifications to which his rules and definitions are subject. But in a short work this task must be left to the common sense of the reader. For popular purposes, however, brevity of statement has one great advantage, namely, that of clearness; and, as the significance of the exceptions cannot be understood without the rules, it is almost essential first to state the rules without obscuring them by the exceptions. There are few readers probably who will not see that the general propositions and principles laid down in the following pages, require, in order to fit them to certain cases, various additions and qualifications. It is necessary only for the reader to bear in mind that these propositions need be none the less broadly and vitally true, because any succinct statement of them is unavoidably incomplete.

CONTENTS

BOOK I
THE DIVISIBLE WEALTH OF THE UNITED KINGDOM
CHAP.		PAGE
I.	The Welfare of the Home, as the Logical End of Government—
	A Ground of Agreement for all Parties	[3]
	Facts and Principles which are the same for everybody	[6]
	The Income of the Individual as the Aim and Test of Government	[8]
	Private Income and the Empire	[10]
	Patriotism and the Home	[11]
	Cupidity as a motive in Politics	[12]
	The right Education of Cupidity	[13]
II.	The Conditions involved in the idea of a Legislative Redistribution of Wealth; and the Necessary Limitations of the Results—
	Cupidity and the Poorer Classes	[14]
	The Limits of Sane Cupidity as fixed by the Total Production	[16]
	Unforeseen Results of an Equal Division of Wealth	[18]
	Contemporary Agitator on Slavery	[20]
	Workmen as their own Masters	[21]
	Ownership of the Means of Labour impossible for Modern Workman	[22]
	Equality possible only under a Universal Wage-System	[24]
	Equality and Universal Labour	[26]
III.	The Pecuniary Results to the Individual of an Equal Division, first of the National Income, and secondly of certain parts of it—
	The Income of Great Britain	[27]
	Division of the National Income	[29]
	How to divide the Income equally	[30]
	Shares of Men, Women, and Children	[31]
	The Maximum Income of a Bachelor	[32]
	Smallness of the result	[33]
	Maximum Income of a Married Couple	[34]
	Practical absurdity of an Equal Division of Income	[36]
	A complete Redivision of Property advocated by nobody	[38]
	The attack on Landed Property	[40]
	Popular ignorance as to the Real Rental of the Landlords	[42]
	The Landed Aristocracy	[44]
	Multitude of Small Landowners	[45]
	Owners of Railway Shares and Consols	[46]
	Inappreciable cost of the Monarchy	[47]
	Forcible Redistribution impossible	[48]
IV.	The Nature of the National Wealth: first, of the National Capital; second, of the National Income. Neither of these is susceptible of Arbitrary Division—
	Difference between Wealth and Money	[49]
	Wealth as a whole not divisible like Money	[52]
	More luxurious forms of Wealth incapable of division	[54]
	The Wealth of Great Britain considered as Capital	[56]
	The elements which compose the National Capital	[58]
	Ludicrous results of an Equal Division of Capital	[60]
	Division of Income, not of Capital, alone worth considering	[62]
	Elements which compose the National Income	[64]
	Material Goods and Services	[66]
	Home-made Goods and Imports	[67]
	Two-thirds of the Population dependent on Imported Food	[68]
	Variation of the National Income relatively to the Population	[70]
	Incomes of other countries compared with that of our own	[72]
	Productivity of Industry not determined by Time	[74]
	Unperceived increase of the Income of the United Kingdom	[76]
	Immense Possible Shrinkage in our National Income	[78]
	The Great Problem	[80]
BOOK II
THE CHIEF FACTOR IN THE PRODUCTION OF THE NATIONAL INCOME
I.	Of the various Factors in Production, and how to distinguish the Amount produced by each—
	The Cause of Production generally	[84]
	The Production of Given Quantities	[85]
	Production a Century Ago	[86]
	Amount of Capital employed in it	[87]
	Land, Capital, and Human Exertion	[88]
	How much produced by each	[89]
	The chief Practical Problem in Contemporary Economics	[90]
II.	How the Product of Land is to be distinguished from the Product of Human Exertion—
	Rent the Product of Land	[93]
	The Accepted Theory of Rent illustrated by an Example	[94]
	The Product of Agricultural Labour	[96]
	The Product of Land	[97]
	Maximum Produce of Labour	[98]
	Surplus produced by Land	[99]
	Land a Producing Agent as distinct from Labour	[100]
	The Existence of Rent not affected by Socialism	[102]
	Rent necessarily the Property of whoever owns the Land	[104]
	The Argument of this Volume embodied in the case of Rent	[106]
III.	Of the Products of Machinery or Fixed Capital, as distinguished from the Products of Human Exertion—
	Capital of Two Kinds	[108]
	The part of the Product produced by Machinery or Fixed Capital	[110]
	Example of Product of Machinery as distinct from that of Labour	[112]
	The Products of a Machine necessarily the Property of Owner	[114]
	The Cotton Industry in the Last Century	[116]
	Arkwright’s Machinery	[118]
	The Iron Industry of Great Britain	[119]
	Machinery and Production of Iron	[120]
	Machinery and Wage Capital	[121]
IV.	Of the Products of Circulating Capital, or Wage Capital, as distinguished from the Products of Human Exertion—
	Simplest Function of Wage Capital	[122]
	Distinguishing Function of Modern Wage Capital	[124]
	Wage Capital mainly productive as a means of directing Labour	[126]
	Slaves and Free Labourers	[128]
	Wage Capital and Progress	[129]
	Wage Capital as related to the production of New Inventions	[130]
	Capital the Tool of Knowledge	[132]
	Wage Capital and Arkwright	[133]
	Wage Capital as Potential Machinery	[134]
	How to discriminate the amount produced by Wage Capital	[136]
V.	That the Chief Productive Agent in the modern world is not Labour, but Ability, or the Faculty which directs Labour—
	The best Labour sometimes useless	[138]
	Labour not the same faculty as the faculty which directs Labour	[140]
	Extraordinary confusion in current Economic Language	[142]
	Labour a Lesser Productive Agent	[144]
	Ability a Greater Productive Agent	[145]
	The Vital Distinction between Ability and Labour	[146]
	Ability not a form of Skilled Labour	[148]
	Capital applied successfully the same thing as Ability	[150]
	Obvious Exceptions	[152]
	Ability the Brain of Capital	[153]
	Ability as the Force behind Capital the Cause of all Progress	[154]
VI.	Of the Addition made during the last Hundred Years by Ability to the Product of the National Labour. This Increment the Product of Ability—
	Production in the Last Century	[156]
	Growth of Agricultural Products	[158]
	Growth of Production of Iron	[159]
	Ability and Agriculture in the Last Century	[160]
	The Maximum Product that can be due to Labour alone	[162]
	Present Annual Product of Ability in the United Kingdom	[164]
	The Product of Capital virtually Product of the Ability of the Few	[166]
BOOK III
AN EXPOSURE OF THE CONFUSIONS IMPLIED IN SOCIALISTIC THOUGHT AS TO THE MAIN AGENT IN MODERN PRODUCTION.
I.	The Confusion of Thought involved in the Socialistic Conception of Labour—
	A confusing Socialistic Formula	[171]
	A Plausible Argument	[173]
	A Plausible Argument analysed	[174]
	Its implied meaning considered	[175]
	The real Taskmaster of Labour not an Employing Class, but Nature	[176]
	Different position of Ability	[178]
	The Organist and Bellows-blower	[179]
	The Picture and the Canvas	[180]
	The Qualifying Factor	[181]
	Do all men possess Ability	[182]
	Labour itself non-progressive	[183]
	Ancient Labour equal to Modern	[184]
	A Remarkable Illustration	[185]
	Labour as trained by Watt	[186]
	Labour as assisted by Maudslay	[187]
II.	That the Ability which at any given period is a Producing Agent, is a Faculty residing in and belonging to living Men—
	A Socialistic Criticism	[188]
	Primæval Progress and Labour	[190]
	Rudimentary Ability	[191]
	Primæval and Modern Inventions	[192]
	A more Important Point	[193]
	The necessity for Managing Ability increased by Inventive Ability	[194]
	The main results of Past Ability inherited by Living Ability	[196]
	Productive Ability the Ability of Living Men	[198]
	Fresh demonstration of the Productivity of Ability	[200]
III.	That Ability is a natural Monopoly, due to the congenital Peculiarities of a Minority. The Fallacies of other Views exposed—
	An Error of Mr. Herbert Spencer’s	[202]
	A Philosophic Truth, but an Economic Falsehood	[204]
	Whole body of Successful Inventors a very small Minority	[206]
	Ability and Opportunity	[208]
	Ability not produced by Opportunity	[209]
	Ability the Maker of its own Opportunities	[210]
	Ability as a matter of Character	[212]
	Function of such Ability	[213]
	Characters not equalised by Education or Opportunity	[214]
	Progress due solely to the Few	[216]
	Progress in the Iron Industry	[217]
	Early Applications of Ability to British Iron Production	[218]
	Ability opposed by the Age instead of representing it	[220]
	Isolated Action of Ability	[222]
	Arkwright and his associates	[223]
	The Value of Watt’s Patent as estimated by his Contemporaries	[224]
	Industrial Progress the work of the Few only	[226]
IV.	The Conclusion arrived at in the preceding Book restated. The Annual Amount produced by Ability in the United Kingdom—
	Grades of Ability	[228]
	Proportion of Able Men to Labourers	[230]
	A Rough Calculation	[231]
	More than half our National Income produced by a Small Minority	[232]
BOOK IV
THE REASONABLE HOPES OF LABOUR—THEIR MAGNITUDE, AND THEIR BASIS
I.	How the Future and Hopes of the Labouring Classes are bound up with the Prosperity of the Classes who exercise Ability—
	Short Summary of the preceding Arguments	[237]
	The preceding Arguments from the Labourer’s Point of View	[240]
	The Share of Labour in the growing Products of Ability	[242]
	The amount produced by Labour	[244]
	The amount taken by Labour	[245]
	Continuous Recent Growth of the Receipts of Labour	[246]
	Growth of the Receipts of Labour during Queen Victoria’s Reign	[248]
	Actual Gains of Labour beyond the Dreams of Socialism	[250]
	Two Points to be considered	[252]
II.	Of the Ownership of Capital, as distinct from its Employment by Ability—
	Land and its Owners	[253]
	Passive Ownership of Capital	[255]
	The Class that Lives on Interest	[256]
	The Hope of Interest as a Motive	[257]
	Capital created and saved mainly for the sake of Interest	[258]
	Family Feeling	[260]
	The Bequest of Capital	[261]
	Interest a Necessary Incident as the Price of the Use of Capital	[262]
	A Part of the Interest of Capital constantly appropriated by Labour	[264]
	Interest not to be confused with Large Profits	[266]
	Interest not to be confused with the Profits of Sagacity	[268]
	Enormous gains of Labour at the expense of Ability	[270]
	Labour and the Existing System	[272]
III.	Of the Causes owing to which, and the Means by which Labour participates in the Growing Products of Ability—
	A Miserable Class co-existing with General Progress	[273]
	Relative Decrease of Poverty	[276]
	Two Causes of Popular Progress	[277]
	The Riches of a Minority	[278]
	How they are produced	[279]
	The Rich Man’s Progress	[280]
	The Rivalry of the Rich	[282]
	The Gain of Labour	[283]
	Popular Progress and Growth of Population	[284]
	The Gain of Labour limited by the Power of Ability	[286]
	The Natural Gain of Labour	[288]
	Its relation to Politics	[289]
	Self-Help and State Help	[290]
IV.	Of Socialism and Trade Unionism—the Extent and Limitation of their Power in increasing the Income of Labour—
	So-called Socialism in England different from Formal Socialism	[291]
	An Element of Socialism necessary to every State	[294]
	The Socialistic question entirely a question of degree	[296]
	Socialism not directly operative in increasing the Income of Labour	[298]
	Trade Unionism	[300]
	How it strengthens Labour	[301]
	How the power of striking grows with the growth of Wages	[302]
	Natural Limits of the Powers of Trade Unionism	[304]
	Labour and Ability	[306]
	Higgling on Equal Terms	[307]
	The Power represented by Strikes not Labour, but Labouring Men	[308]
	Leaders of Labouring Men rarely Leaders of Labour	[310]
	The Power of Trade Unionism important, though limited	[312]
	Certain remaining points	[314]
V.	Of the enormous Encouragement to be derived by Labour from a true View of the Situation; and of the Connection between the Interests of the Labourer and Imperial Politics—
	A Recapitulation	[315]
	The Practical Moral	[317]
	The True Functions of Trade Unionism and Socialism	[318]
	The Natural Progress of Labour a Stimulus to Effort	[320]
	The Future of Labour judged from its Past Progress	[322]
	The one thing on which the Hopes of Labour depend	[324]
	The Real Bargain of Labour not with Capital but Ability	[326]
	Subordination to Ability no Indignity to Labour	[328]
	The Moral Debt of Ability to Labour	[330]
	Labour, Nature, and Ability	[332]
	The Home and Foreign Food	[333]
	Imperial Politics and the National Income	[334]
	The Labourer’s home	[336]

BOOK I

THE DIVISIBLE WEALTH OF THE
UNITED KINGDOM