The Common Sense of Political Economy
Summary.—Unearned revenues of some kinds may be appropriated to public purposes, and exceptionally high private revenue of all kinds may be taxed, to a degree that cannot be theoretically determined beforehand, without detriment to the springs of industrial efficiency. A man's share in such public revenue may be independent of his economic worth. So far men may be required to give according to their means, and may receive according to their needs. But the economic forces tend to give every man what he is worth to others, neither less nor more. The economic problem of poverty, therefore, regarded as a part of the social problem, but not the whole of it, is the problem of making the "underpaid" worth more so that they will receive more under the pressure of the economic forces. This may be attempted by developing their powers, physical and mental, and by impartially securing access to opportunities. The consequent abolition or reduction of privilege may cut down many of the mighty from their seats, and exalt the humble. Preparing for the Kingdom.
In a brief concluding chapter we may attempt to draw together the conclusions that are warranted by the whole course of our inquiry, so far as they bear upon the question of securing a less uneven distribution of wealth. Every one is shocked by the co-existence of luxurious wealth and hopeless poverty side by side. The time is gone for a fatalistic acquiescence. The warning that if we try to mend things we shall only make them worse is losing its terror. On the other hand the heyday of Utopias, in which both the conditions of life and human nature itself were to be completely revolutionised, seems to be passed. Few people are now either so certain that they will succeed or as much afraid of trying as they were even a few years ago. Increased intellectual caution and increased practical boldness seem to characterise the present in contrast with a very recent past. But theory may still be useful, partly in pointing out the most hopeful lines for experiment and yet more in enabling us to understand and profit by its results. It is true that an appalling sense of helplessness must often overwhelm the student as he contemplates the magnitude of the problems and the uncertainty and feebleness of the methods by which the attempt is being made to solve them; but a note of hopefulness can generally be heard from those who are most closely engaged in the actual battle, and who, one would think, have best reason to despair. To us, too, in all social matters hope is a "paramount duty," but so is a determination not to feed ourselves and others on illusions.
Setting aside more ambitious and revolutionary schemes, and taking it that the economic pressures, which urge every man to place himself under the conditions in which he will be useful to others, will remain the great moving forces of the industrial world, we ask how the general level of success in gaining a steady foothold in that industrial world may be raised, and how failure, rising from lack of opportunity, lack of capacity, or accident, may be robbed of its sting. The successful have always acknowledged some kind of obligation to the unsuccessful. Theoretically, no man need starve in our country, but until lately the public as distinct from the private provision for the defeated and unsuccessful has been consciously and intentionally grudging and reprobating. It has been thought that, dread of want being the great stimulus to effort, the natural or social penalties of failure may indeed be mitigated to some extent, but must not be allowed to become other than terrible. A marked change is coming over our feelings in this respect. It is already difficult to recover the attitude of mind in which it was seriously believed that the prospect of a workhouse, little short of penal in its regulations would create an energy and thrift which the prospect of an old age pension would hamstring.
But in what sense need there be any failures at all? What proportion of the failures are due to lack of opportunity? And how far need the success of one be accompanied not only by the relative but by the absolute failure of another? This is the problem to which we are now addressing ourselves, and there is a widely spread and still spreading conviction that the actual human material that comes into existence year by year is capable of indefinitely better development than it now receives, with indefinitely better results. We have seen reason to believe that some of the contemplated methods of amelioration are illusory, but the awakened spirit of humanity will not accept defeat. If our investigations have been in any degree enlightening, they will be forgiven for being sobering.
The central thesis of this book is that, so far as the economic forces work without friction, they secure to every one the equivalent of his industrial significance at the point of the industrial organism at which he is placed. The full and comprehending acceptance of this principle would at once dispel a number of hopes and banish a number of fears and scruples. It used to be maintained, for instance, that if the workers of the country had allotments, or if cheap baths and wash-houses were provided for them at the expense of the municipality, or if in any other way their condition were improved, their wages would automatically fall. Naturally it is true that if such improved conditions were extended to persons within a certain area, and were not available elsewhere, there would be a tendency to migrate to that area, and so to overstock the local markets of labour and reduce the wages there; but this would not be because the workers were better off, but because there were more of them without proportional increase in the other factors of industry. Again, we may set aside at a stroke the fear that old age pensions, for example, will lower the rate of wages by creating a set of persons who "can afford to work cheap." If men get what they are worth, and if the worth of a man who has 5s. a week safe is as high as that of one who has nothing, then he will receive as much. It may of course be true that he was receiving more than he earned because the payment was not wholly economic, and that when the obligation to keep the man's head above water is assumed by the State it is dropped by the individual. But that is another matter. And so far as any friction caused by imperfect markets and imperfect mobility has to be overcome, the man who has something to fall back upon will be better able to exact the payment for his full economic worth than the man who has nothing.
On the other hand the idea that life can be improved by a simple decree that higher wages shall be paid, in other words the hope of social regeneration by the enactment of a minimum wage, appears to be illusory. We have noted again and again that you cannot make a man worth so much a week by saying that he shall receive it, and that the economic forces will never induce any one to give a man more for his work than that work is worth to the giver. The only circumstances under which the enforcement of a minimum wage can be theoretically defended are when there is reason to believe that the economic conditions really justify a higher wage, but that friction and lethargy prevent the economic forces acting; or when the creation of a certain amount of unemployment is deliberately contemplated under the idea that it will be easier to deal with than a mass of employment at starvation wages. We start, then, from the thesis that if there are great bodies of persons in every country receiving starvation wages, it must be either because the economic forces cannot overcome certain frictions, or because the persons in question, under existing circumstances, are not industrially worth any more than they are receiving. If so, it is no use denouncing some one else for not giving them more than they are worth. We must either overcome the industrial frictions, or make them worth more where they are, or place them somewhere where they will be worth more. The steady tendency of present movements is to concentrate on the attempt to make them worth more. The cry for feeding school children, which defies all the wisdom of our fathers, justifies itself by pleading that ill-nourished children will be worth nothing, and, therefore, will get nothing, in the industrial world. This is only carrying a step further the principle that was acknowledged long ago in the State aid of education, and finally in the full acceptance of the national responsibility for the education of the people. But many are bitterly disappointed with the results of compulsory education and sceptical as to the value of our present methods, and are trying to conceive of a system of true education, at once industrial and human, that shall be a great instrument for training, sorting, and directing the faculties and developing the characters of the community, so as to make every talent available for the highest and most urgently needed function which it is capable of performing, and making every normally efficient man and woman worth enough at the margin to be able to command the means of a human life.
The "population question" in the old sense no longer troubles us. We have no fear of "population overtaking the means of subsistence" in the abstract. But it may well be that labour exchanges and emigration offices may have to be organised on an international scale to secure the due balance and distribution of efforts; and the growing belief that it is our collective duty to take charge in some way or other both of the children and of the unemployed directs many minds to speculate on the possible rise of the stupendous problem of the regulation of population in the not distant future. Only experience, however, can decide whether better conditions of life and a fuller sharing by the State of the responsibilities of the parent will really tend to stimulate, in any unmanageable degree, the multiplication of a helpless population. There are many reasons, to say the least, for gravely questioning it.
Meanwhile, we can already trace in the Allotments and Small Holdings Acts the feeble beginnings of a movement to open fresh opportunities, and to force, against the obstruction of prejudice or class jealousy, fresh channels through which the economic forces may beneficently flow.
The means for all these developments must be secured by a frank recognition of the claims of the unsuccessful and unfortunate upon the successful and the fortunate. The tax on "unearned increment" is an initial claim of the community on the unearned income which is perpetually flowing into private hands. And the super tax even on earned incomes, if they are sufficiently high, is an acknowledgment of the principle that success, as such, has its special duties. Our general principle will not incline us to fear that if success is "robbed of its reward," to a certain extent, it will cease to be attractive, and men will be too much discouraged to care to exert themselves. On the contrary, we have seen reason to believe*90 that the more highly a man is paid, the less work he is likely to wish to do for pay, so that in theory cumulative taxation should make men of exceptional ability and success more rather than less industrious. And surely we may hope (or at the very least we may "dream a dream of good" and be the better for it) that the time will come when a rich and successful man takes a pride in thinking that his direct public usefulness automatically increases with his growing command of resources for his private purposes.
We have already spoken of the fund, let us hope the growing fund, of public spirit which devotes administrative talent to the communal service.
But we, the privileged, must remember that if we are in earnest we are endeavouring to curtail or to abolish privilege. We are throwing open the preserves, and in proportion as we succeed in our endeavours, we and our children will have to take chances in a world that has no special care for us. We can contemplate the prospect without dismay if we believe that the lowest places in a regenerated industrial society will be places that can be filled with dignity and satisfaction, and will yield the conditions of a truly human life. So and only so can we accept without either terror or self-reproach a competitive system. We can only regard the highest success as an object of honourable ambition, if the failure to attain success does not involve the exclusion from all that makes life worth living.
And, finally, how are we individually to "prepare for the Kingdom"? By learning to find our chief delights in the things which all may share and which are the solace, not of our class, but of our humanity. By learning to rejoice in the common weal, and to respect and enjoy the communal property. By learning to feel that "keeping up appearances" is a sorry substitute for grasping realities which would cost the same sum. And above all by understanding that the relatively wealthy and successful man, by unconsciously shewing what the things for which he most cares really are, directs the ambitions and moulds the aspirations of those who have less power of realising their ideals than he has himself.
As the wealthy are called upon to bear more and more of the public burdens, as the privileged see their preserves invaded, as equality of opportunities more and more prevails, and men rank according to their worth, not according to their antecedents, there will be bitterness and indignation wherever the value of humanity has not come to be felt as higher than that of position. The triumph of a material democracy, without the corresponding spread of the democratic spirit, would cause acute distress and sense of wrong in the face of phenomena which would be hailed with heartfelt thankfulness were the democratic spirit penetratingly present.
Notes for this chapter
See page 77.
End of Notes
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