The Economics of Welfare

Part I, Chapter X

THE NATIONAL DIVIDEND AND THE QUALITY OF THE PEOPLE

§ 1. THE general conclusions of Chapters VII.-VIII. might, until quite recently, have been stated as they are there stated, without evoking quarrel or dispute. But of late years a great advance has occurred in biological knowledge. In former times economists had, indeed, to take some account of the reactions of economic causes upon the quantity of the population, and upon its quality so far as that was determined by environment: but questions about the reaction of economic causes upon the quality of the population, as determined by fundamental biological attributes, were not raised. Now, the situation is different. Biometricians and Mendelians alike have turned their attention to sociology, and are insisting upon the fundamental importance for our science of a proper understanding of the laws of heredity. Economists, it is said, in discussing, as I have done, the direct effect of the state of the national dividend upon welfare, are wasting their energies. The direct effect is of no significance; it is only the indirect effect on the size of the families of good and bad stocks respectively that really matters. For every form of welfare depends ultimately on something much more fundamental than economic arrangements, namely, the general forces governing biological selection. I have intentionally stated these claims in a somewhat indefinite form, because I am anxious to investigate the problem thus raised in a constructive rather than in a critical spirit. I shall endeavour, in the following sections, to indicate, as precisely as possible, how far the recent advance in biological knowledge really affects our science.
To this end, I shall distinguish, first, certain results of that knowledge, which, though of great value, are not strictly relevant to economics; secondly, the general claim that the method of economic study indicated in the preceding chapters is rendered by the new knowledge trivial and unimportant; and, thirdly, certain points, in respect of which the new knowledge comes directly into contact with the problems I have undertaken to investigate, and makes it necessary to qualify the conclusions that have been reached.

§ 2. By far the most important contribution of modern biological study to sociology is the assurance, which it affords, of the definite heritable character of certain inborn defects. Whatever view be taken of the physiological mechanism of inheritance, the practical result is the same. We know that persons with congenital defects are likely, if they marry, to hand down a defective organisation to some of their children. We do not possess this definite knowledge with regard to general desirable qualities, particularly on the mental side. Bateson issued a wise caution when he wrote: “Whereas our experience of what constitutes the extremes of unfitness is fairly reliable and definite, we have little to guide us in estimating the qualities for which society has or may have a use, or the numerical proportions in which they may be required…. There is as yet nothing in the descent of the higher mental qualities to suggest that they follow any simple system of transmission. It is likely that both they and the more marked developments of physical powers result rather from the coincidence of numerous factors than from the possession of any one genetic element.”
*119 Again, Mr. and Mrs. Whetham rightly observe that desirable qualities, such as ability, moral character, good health, physical strength and grace, beauty and charm, “are, from the point of view of heredity, essentially different from some of the bad qualities hitherto considered, in that they depend on the conjunction of a great many factors. Such a conjunction must be very hard to trace in the hereditary process, where possibly each character may descend independently, or different characters
may be linked together, or be incompatible, in far more complicated ways than we have traced in the qualities of plants and auimals. Our present knowledge is quite insufficient to enable us to predict how a complex combination of factors, making up the personality of an able or charming man or woman, will reappear in their offspring.”
*120 We are, in fact, in this region, surrounded by so much ignorance that the utmost caution is essential. Doncaster well observed: “In this direction empirical rules and common sense must still be followed, until the time shall come when science can speak with no uncertain voice.”
*121 More recently, the late Sir Francis Galton lent the weight of his authority to this opinion: “Enough is already known to those who have studied the question to leave no doubt in their minds about the general results, but not enough is quantitatively known to justify legislative or other action, except in extreme cases.”
*122 It is well not to forget that Beethoven’s father was an habitual drunkard and that his mother died of consumption.
*123 About definite defects our ignorance is much less profound. These
are the extreme cases of which Galton was thinking. Not a few medical men have long been urging that authoritatively to prevent propagation among those afflicted with imbecility, idiocy, syphilis, or tuberculosis would mean cutting off at its source a long stream of defective humanity. This matter is especially urgent among the mentally defective, on account of the exceptionally high rate at which, if left to themselves, they tend to produce children. Thus, before the Royal Commission on the Feeble-Minded, “Dr. Tredgold, an especially experienced witness, pointed out that the average number of children in the families which now use the public elementary schools is about four; whereas, in the degenerate families, whose children are passed over to the special schools, there is an average of 7.3 children, not including those still-born.”
*124 Furthermore,
feeble-minded women often begin child-bearing at an exceptionally early age; and it must be remembered that, even if the size of families is unaffected, early marriage is not a matter of indifference; for, when the normal age of marriage in any group is reduced, “generations succeed one another with greater rapidity,” so that the proportion of the whole population embraced among the descendants of the original members of that group is increased.
*125 The mentally defective are not, however, the only class among which propagation might with advantage be restrained. Some writers suggest that certain forms of criminality and certain qualities conducive to pauperism might be eradicated from the race in the same way. Professor Karl Pearson makes a suggestion, which, if correct, strengthens considerably the probability that this sort of policy would reach its goal. He thinks that imperfections of quite different kinds are correlated, and that “there is something akin to germinal degeneracy, which may show itself in different defects of the same organ or in defects of different organs.”
*126 Bateson, to the same practical, though not to the same theoretical, effect, speaks of the existence of “indications that, in the extreme cases, unfitness is comparatively definite in its genetic causation, and can, not unfrequently, be recognised as due to the presence of a simple genetic factor.”
*127 In sum, as the last-quoted writer states, there is little doubt that “some serious physical and mental defects, almost certainly also some morbid diatheses, and some of the forms of vice and criminality could be eradicated if society so determined.”
*128 This is a conclusion of extreme importance. It is one, too,
that seems
prima facie susceptible, without great difficulty, of some measure of practical application. Occasions frequently arise when tainted persons, whether on account of crime or of dementia, are compulsorily passed into governmental institutions. When this happens, propagation might be prevented, after careful inquiry had been made, either by permanent segregation, or possibly, as is authorised by law in certain American States, by surgical means.
*129 The knowledge we possess seems clearly sufficient to warrant us in taking some cautious steps in this direction. There can be no doubt that such a policy would redound both to the general and to the economic welfare of the community. For this conclusion, and for the great step forward which it is hoped may follow from it, we are indebted to modern biology. The conclusion, however, is outside the sphere of economics, and does not in any way disturb the results that were attained in the preceding chapters.

§ 3. I pass, therefore, to something of whose relevance at all events there can be no doubt, the view, namely, that biological science proves all such inquiries as we are pursuing here to be trivial and misdirected. Put broadly, the charge is this. Economic changes, such as alterations in the size, composition, or distribution of the national dividend, affect environment only; and environment is of no importance, because improvements in it cannot react on the quality of the children born to those who enjoy the improvements. This view was crystallised by Professor Punnett, when he declared that hygiene, education and so on are but “fleeting palliatives at best, which, in postponing, but augment the difficulties they profess to solve…. Permanent progress is a question of breeding rather than of pedagogics; a matter of gametes, not of training.”
*130 Mr. Lock
*131 is even more emphatic in the same sense. The opinions of these writers on the practical side are substantially in agreement with those of Professor Karl Pearson.

The scientific foundation on which all such views rest is,
of course, the thesis that acquired characters, which arise out of the influence of environment, are not inherited. It is held, at least as regards the more complicated multicellular organisms, that the germ-cells, which will ultimately form the offspring of a living being, are distinct at the outset from those which will form the body of that being. Thus, Mr. Wilson writes: “It is a reversal of the true point of view to regard inheritance as taking place from the body of the parent to that of the child. The child inherits from the parent
germ-cell, not from the parent body, and the germ-cell owes its characteristics, not to the body which bears it, but to its descent from a pre-existing germ-cell of the same kind. Thus, the body is, as it were, an offshoot from the germ-cell. As far as inheritance is concerned, the body is merely the carrier of the germ-cells, which are held in trust for coming generations.”
*132 Doncaster takes up substantially the same position: “In the earlier theories of heredity it was assumed that the germ-cells were produced by the body, and that they must, therefore, be supposed either to contain samples of all parts of it, or at least some kind of units derived from those parts and able to cause their development in the next generation. Gradually, as the study of heredity and of the actual origin of the germ-cells has progressed, biologists have given up this view in favour of a belief in germinal continuity, that is, that the germ-substance is derived from previous germ-substance, the body being a kind of offshoot from it. The child is, thus, like its parent, not because it is produced from the parent, but because both child and parent are produced from the same stock of germ-plasm.”
*133 If this view be sound, it follows that those definite characteristics of an organism, whose appearance is determined by the presence of definite structures or substances in the germ-cells, cannot be directly affected by any quality “acquired” by an ancestor. It is only characteristics of an indefinite quantitative kind, such as may be supposed to arise from the intercommunication of the germ-cells with the other cells of
the body and the reception of fluid or easily soluble substances from them, that can be affected in this way. The characteristics thus reserved are not, of course, wholly without significance. The question whether the submission of germ-cells to a poisonous environment reacts permanently upon the descendants of those cells does not seem to be a closed one. Professor J. A. Thomson writes: “There is a great difference between a poisoning of the germ-cells along with the body and the influencing them in a manner so specific that they can, when they develop, reproduce the particular parental modification.”
*134 The germ-cells do not lead “a charmed life, uninfluenced by auy of the accidents or incidents of the daily life of the body which is their bearer.”
*135 On the coutrary, there is some evidence that, not only direct poisons like alcohol, but even injuries to the parent, may, by reacting on the nutrition of the germ-cells, cause general weakness and resultant bad properties in the offspring, though how far
the offspring of their offspring would be affected is doubtful. But the general opinion among biologists appears to be that the effect of the acquired characteristics of one generation upon the quality of the succeeding generation is, at all events, very small compared with the effect of the inborn characteristics of the one generation.
*136 “Education is to man what manure is to the pea. The educated are in themselves the better for it, but their experience will alter not one jot the irrevocable nature of their offspring.”
*137 In like manner “neglect, poverty, and parental ignorance, serious as their results are, (do not) possess auy marked hereditary effect.”
*138

This biological thesis, which, since it is dominant among experts, an outsider has no title to dispute, is, as I have said, the scientific foundation of the view that economic circumstances, because they are environmental, are not, from a long-period standpoint, of any real importance. The
biological premise I accept. To the sociological conclusion, however, I demur. Mr. Sidney Webb has uttered a genial protest against a too exclusive attention to the biological aspect of social problems. “After all,” he writes, “it would not be of much use to have all babies born from good stocks, if, generation after generation, they were made to grow up into bad men and women. A world of well-born but physically and morally perverted adults is not attractive.”
*139 My criticism, however, goes deeper than this. Professor Punnett and his fellow – workers would accept Mr. Webb’s plea. They freely grant that environing circumstances can affect the persons immediately subjected to them, but they, nevertheless, hold that these circumstances are unimportant, because, not being able to influence the inborn quality of succeeding generations, they cannot produce any lasting result. My reply is that the environment of one generation
can produce a lasting result, because it can affect the environment of future generations. Environments, in short, as well as people, have children. Though education and so forth cannot influence new births in the physical world, they can influence them in the world of ideas;
*140 and ideas, once
produced or once accepted by a particular generation, whether or not they can be materialised into mechanical inventions, may not only remodel from its very base the environment which succeeding generations enjoy,
*141 but may also pave the way for further advance. For, whereas each new man must begin where his last ancestor began, each new invention begins where its last aucestor left off.
*142 In this way a permanent or, rather, a progressive change of environment is brought about, and, since environment is admittedly able to exert an important influence on persons actually subjected to it, such a change may produce enduring consequences. Among animals, indeed, and among the primitive races of men this point is not important. For there what the members of one generation have wrought in the field of ideas is not easily communicated to their successors. “The human race, when widely scattered and incapable of intercommunication, makes the same discovery a hundred times. Its efforts and its triumphs are annihilated with the death of the individual, or of the last member of the family in which the invention has been passed on by oral tradition.”
*143 But among civilised men the arts of writing and of printing have rendered thought viable through time, and have thus extended to each generation power to mould and remodel the ideal environment of its successors. Tarde grasped
this point when he wrote: “To facilitate further production is the principal virtue of capital, as that term ought to be understood. But in what is it inherent? In commodities or in particular kinds of commodities? Nay, rather in those fortunate experiments of which the memory has been preserved. Capital is tradition or social memory. It is to societies what heredity or vital memory,—enigmatical term,—is to living beings. As for the products that have been saved and stored up to facilitate the construction of new copies of the models conceived by inventors, they are to these models, which are the true social germs, what the cotyledon, a mere store of food, is to the embryo.”
*144 Bacon had already exclaimed: “The introduction of new inventions seemeth to be the very chief of all human actions. The benefits of new inventions may extend to all mankind universally, but the good of political activities can respect but some particular country of men: these latter do not perdure above a few ages, the former for ever.” Marshall writes in the same spirit: “The world’s material wealth would quickly be replaced if it were destroyed, but the ideas by which it was made were retained. If, however, the ideas were lost, but not the material wealth, then that would dwindle and the world would go back to poverty. And most of our knowledge of mere facts could quickly be recovered if it were lost, but the constructive ideas of thought remained; while, if the ideas perished, the world would enter again on the Dark Ages.”
*145 Nor is even this a full account of the matter. As Marshall observes in another place: “Any change that awards to the workers of one generation better earnings, together with better opportunities of developing their best qualities, will increase the material and moral advantages which they have the power to offer to their children; while, by increasing their own intelligence, wisdom and forethought, such a change will also, to some extent, increase their willingness to sacrifice their own pleasures for the well-being of their children.”
*146 Those children, in turn, being themselves rendered
stronger and more intelligent, will be able, when they grow up, to offer a better environment—and under the term environment I include the physical circumstances of the mother before, and immediately after, child-birth
*147—to their children, and so on. The effect goes on piling itself up. Changes in ancestral environment start forces, which modify continuously and cumulatively the conditions of succeeding environments, and, through them, the human qualities for which current environment is in part responsible. Hence, Professor Punnett’s assertion is unduly sweeping.
*148 Progress, not merely permanent but growing,
can be brought about by causes with which breeding and gametes have nothing to do. Nor, indeed, must we rest content with the word
can. There is strong reason for holding that the enormous development in the
mental function of mankind, which has taken place during historic times, has not been associated with any significant germinal change. With growing density of population the machinery of thought has been developed through contact and co-operation among persons of not substantially greater germinal endowment than was possessed by earlier generations. “This is the paradox of the population problem. Change among species in a state of nature is based upon germinal change alone; change among our pre-human ancestors was equally a matter of change in the quality of population; but the explanation of the most outstanding fact in recent history broadly viewed (
i.e. the great acceleration of progress in knowledge and power) is to be sought in a change in quantity, rather than in quality, of population.”
*149 We conclude, then, that there is no fundamental difference of the kind sometimes supposed between causes operating on acquired, and causes operating on inborn, qualities. The two are of co-ordinate importance; and the students of neither have a right to belittle the work of those who study the other.

§ 5. The danger to national strength that results from a growth of wealth in general has been emphasised by many writers. In a softened environment children of feeble constitution, who, in harder circumstances, would have died, are enabled to survive and themselves to have children.
*150 It has even been suggested that in this fact may lie the secret of the eventual decay of nations and of aristocracies which have attained great wealth. There are, indeed, mitigating circumstances, which may be urged in extenuation of this view. First, according to the most recent biological opinion, the survival of weakly children, if their weakness is, as it were, accidental, and not due to inherited defect, is not ultimately harmful to the stock, because the children of the weakly children are quite likely to be strong. Secondly,
weakness in infancy is not necessarily a good index of essential inborn weakness; and Mr. Yule, after reviewing the available statistics by mathematical methods, is led to suggest that, perhaps, “the mortality of infancy is selective only as regards the special dangers of infancy, and its influence scarcely extends beyond the second year of life, whilst the weakening effect of a sickly infancy is of greater duration.”
*151 These mitigating circumstances somewhat limit, though they may well fail to overthrow, the thesis that growth in wealth, unaccompanied by any safeguard, is likely to deteriorate the inherent quality of the race. There is also available a further mitigating circumstance, which is less fundamental, though not less important. For, even if the inherent quality of the race is somewhat injured, it does not follow that the finished products, which contain, of course, at once inherent and environmental qualities, are so injured. If increased wealth removes influences that make for the elimination of the unfit, it also removes influences that make for the weakening of the fit. The total effect of this twofold action may well be beneficial rather than injurious. That this is in fact so is suggested by an important report published by the Local Government Board on the relation of infantile mortality to general mortality. In that report Dr. Newsholme directly combats the view that improvements making for a reduction of infant mortality, by enabling more weaklings to survive, must be inimical to the average health of the population. He finds, on the contrary, “that the counties having high infant mortalities continue, in general, to suffer somewhat excessively throughout the first twenty years of human life, and that counties having low infantile mortalities continue to have relatively low death-rates in the first twenty years of life, though the superiority is not so great at the later as at the earlier ages…. It is fair to assume, in accordance with general experience, that the amount of sickness varies approximately with the number of deaths; and there can be no reasonable doubt that, in the counties having a high infant death-rate, there is—apart from migration—more sickness and a lower
standard of health in youth and in adult life than in counties in which the toll of infant mortality is less.”
*152 Dr. Newsholme’s argument is, indeed, open to the reply that ascertained differences between the several counties in infantile death-rate and later death-rate may
both be due to differences in the quality of the inhabitants of the several counties. The argument, therefore, fails to prove that the direct beneficial effect of better environments due to greater wealth outweighs the indirect injurious effect of the impediment they place in the way of natural selection. It may be that the injurious effect is really the stronger, but that it is masked in the statistics because it is exercised upon persons who are
ab initio of better physique—as is, indeed, suggested by their ability to earn more and so to live in better conditions—than the average. This criticism lessens the force of Dr. Newsholme’s statistical argument.
*153 Still the directly observed fact that good environment removes influences tending to weaken the fit remains. In company with the considerations set out earlier in this section, that fact militates against the view that a growing dividend and the improvements that naturally accompany it carry seeds of future weakness, and so ultimately make against, rather than in favour of, economic welfare. In any event, the danger that they may have this effect can be readily and completely counteracted, if the policy of segregating the unfit, advocated in the second section, is adopted. As Professor Thomson points out, no biological evil can result from the preservation of weaklings, provided that they are not allowed to have children.
*154 There is, therefore, no need to surrender our conclusion that causes, which make for an expansion of the dividend, in general make for economic and, through economic, for aggregate, welfare.

§ 6. The danger to national strength and efficiency through an improvement in the distribution of the dividend
might seem
a priori to be very important. For improved distribution is likely to modify the proportion in which future generations are born from the richer and poorer classes respectively. If, therefore, the poorer classes comprise less efficient stocks than the richer classes—if, in fact, economic status is anything of an index of inborn quality—improved distribution must modify the general level of inborn quality, and so, in the long run, must react with cumulative force upon the magnitude of the national dividend. Now I do not agree with those who hold that poverty and inborn inefficiency are obviously and certainly correlated. Extreme poverty is, no doubt, often the result of feckless character, physical infirmity, and other “bad” qualities of finished persons. But these themselves are generally correlated with bad environment; and it is ridiculous to treat as unworthy of argument the suggestion that the “bad” qualities are mainly the result, not of bad original properties, but of bad original environment.
*155 Nevertheless, though it is not self-evident, it is, I think, probable, that a considerable measure of correlation exists between poverty and “bad” original properties. For among the relatively rich there are always a number of persons who have risen from a poor environment, which their fellows, who have remained poor, shared with them in childhood; and this sort of movement is probably becoming more marked, as opportunities of education and so forth are being brought more within the reach of the poorer classes. In like manner, of course, among the poor are some persons who have fallen from a
superior environment. Among the original properties of
these relatively rich there are presumably qualities making for efficiency, which account for their rise; while, among the original properties of
these relatively poor, there are, presumably, qualities of an opposite kind.
*156 Hence, it is probably true that causes affecting the comparative rate of child-bearing among the relatively rich and the relatively poor respectively affect the comparative rate among those with “better” and “worse” original properties (from the point of view of efficiency) in the same direction. If it were true that increased prosperity in a poor class involved a higher rate of reproduction, it would follow that an improved distribution of the dividend would increase the number and, therewith, the proportion, of children born from parents of stock other than the best. Since, however, as is notorious, propagation among the lowest class of all is practically untrammelled by economic considerations, an increase in fortune to the poor as a whole could only increase the number of children born to sections of the poorer classes other than the worst. It would not, therefore, necessarily follow that the average quality of the population as a whole would be lowered. It is not, however, necessary to stop at this point. Professor Brentano’s investigations, which were previously noticed, have suggested that increased prosperity in a class tends, on the whole, to diminish rather than to increase the reproduction rate of that class, and reason has been shown for believing that this tendency is not fully offset by accompanying improvements in the mortality rate.
*157 Hence, it would seem, an improvement in the distribution of the dividend may be expected actually to diminish the proportion of children born from inferior stocks. In
short, this biological consideration, so far from reversing the conclusion of Chapter VIII., that improved distribution makes for economic and general welfare, lends, in present conditions, some support to that conclusion. The results of that chapter, along with those of Chapter VII., therefore, remain intact.