Contemporary Socialism

CHAPTER XII. THE AGRARIAN SOCIALISM OF HENRY GEORGE.

Mr. George sent his "Progress and Poverty" into the world with the remarkable prediction that it would find not only readers but apostles. "Whatever be its fate," he says, "it will be read by some who in their heart of hearts have taken the cross of a new crusade.... The truth I have tried to make clear will not find easy acceptance. If that could be, it would have been accepted long ago. If that could be, it would never have been obscured. But it will find friends—those who will toil for it, suffer for it: if need be, die for it. This is the power of the truth" (p. 393). Mr. George's prediction is not more remarkable than its fulfilment. His work has had an unusually extensive sale; a hundred editions in America, and an edition of 60,000 copies in this country are sufficient evidences of that; but the most striking feature in its reception is precisely that which its author foretold; it created an army of apostles, and was enthusiastically circulated, like the testament of a new dispensation. Societies were formed, journals were devised to propagate its saving doctrines, and little companies of the faithful held stated meetings for its reading and exposition. It was carried as a message of consolation to the homes of labour. The author was hailed as a new and better Adam Smith, as at once a reformer of science and a renovator of society. Smith unfolded "The Nature and Causes of the Wealth of Nations," but to Mr. George, we were told, was reserved the greater part of unravelling "the nature and causes of the poverty of nations," and if the obsolete science of wealth had served to make England rich, the young science of poverty was at length to make her people happy with the money. Justice and Liberty were to begin their reign, and our eyes were to see—to quote Mr. George's own words—"the City of God on earth, with its walls of jasper and its gates of pearl" (p. 392).

The fervour of this first reception may—as was perhaps only natural—have suffered some abatement since, but it affords a striking proof how largely modern society is disquieted by the results of our vaunted industrial civilization. Even those amongst us who are most unwilling to disparage the improvement that has really taken place during the last hundred years in the circumstances of the people, still cannot help feeling that the improvement has fallen far short of what might have been reasonably expected from the contemporaneous growth of resources and productive power. But numbers of people will not allow that any improvement has occurred at all, and deliver themselves to an unhappy and unwarranted pessimism on the whole subject. Because industrial progress has not extinguished poverty, they conclude that it has not even lessened it; that it has no power to lessen it; nay, that its real tendency is to aggravate it, that it increases wealth with the one hand, but increases want with the other, so that civilization has developed into a purely upper-class feast, where the rich are grossly overfilled with good things, and the poor are sent always emptier and emptier away. Invention, they tell us, has followed invention; machinery has multiplied the labourer's productivity at least tenfold; new colonies have been founded, new markets and channels of commerce opened in every quarter of the globe; gold-fields have been discovered, free trade has been introduced, railways and ocean steamers have shortened time and space themselves in our service. Each and all of these things have excited hopes of introducing an era of popular improvement, and each and all of them have left these hopes unfulfilled. They think, therefore, they now do well to despair, and they fortify themselves in their gloom by citing the opinion of Mr. Mill, that "it is questionable whether all the mechanical inventions yet made have lightened the day's toil of any human being," without observing that Mr. Mill immediately follows up that opinion by expressing the confident assurance that it was "in the nature and the futurity" of these inventions to effect that improvement. These gloomy views have in France received the name of Sisyphism, because they represent the working class under the present industrial system as being struck with a curse like that of Sisyphus, always encouraged by fresh technical advantages to renewed expectations, and always doomed to see their expectations perish for ever.

Now, it was upon these despondent and burdened souls that Mr. George counted so confidently, and, as time has shown, so correctly, for his apostles and martyrs; and he counted so confidently upon them because he had himself borne their sorrows, and drunk of their despair, and because he now believed most entirely that his discoveries would bring "inexpressible cheer" to their minds, as, in the same circumstances, they had already brought inexpressible cheer to his own. "When I first realized," he says, "the squalid misery of a great city"—that is, of the latest and most characteristic product of industrial development—"it appalled and tormented me, and would not let me rest for thinking of what caused it and how it could be cured" (p. 395). Poverty seemed to him to be most abounding and most intense in precisely the most advanced countries in the world. "Where the conditions to which material progress everywhere tends are most fully realized—that is to say, where population is densest, wealth greatest, and the machinery of production and exchange most highly developed—we find the deepest poverty, the sharpest struggle for existence, and the most enforced idleness" (p. 4). Nay, poverty, he thought, seemed "to take a darker aspect" in every community at the very moment when it might be reasonably expected to brighten—at the moment when the community made a distinct advance in material civilization, when "closer settlements and a more intimate connection with the rest of the world and greater utilization of labour-saving machinery make possible greater economies in production and exchange, and wealth increases in consequence, not merely in the aggregate, but in proportion to population" (p. 4). This process of impoverishment might, he says, escape observation in an old country, because such a country has generally contained from time immemorial a completely impoverished class, who could not be further impoverished without going out of existence altogether, but in a new settlement like California, where he resided, poverty might be seen almost in the act of being produced by progress before one's very eyes. While the colony had nothing better than log cabins or cloth shanties, "there was no destitution," though there might be no luxury. But "the tramp comes with the locomotive, and alm-houses and prisons are as surely the marks of 'material progress' as are costly dwellings, rich warehouses, and magnificent churches" (p. 4). "In the United States it is clear that squalor and misery, and the vices and crimes that spring from them everywhere, increase as the village grows to the city, and the march of development brings the advantages of improved methods of production and exchange. It is in the older and richer sections of the Union that pauperism and distress are becoming most painfully apparent. If there is less deep poverty in San Francisco than in New York, it is not because San Francisco is yet behind New York in all that both cities are striving for? When San Francisco reaches the point where New York now is, who can doubt that there will also be ragged and barefooted children in her streets?" (p. 6). The prospect alarmed and agitated him profoundly. It deprived him, as it has deprived so many of the continental socialists, of all religious belief, for if the real order of things make an ever-deepening poverty to be the only destiny of the mass of mankind, it seemed vain to dream of a controlling Providence or an immortal life. "It is difficult," says he, "to reconcile the idea of human immortality with the idea that nature wastes men by constantly bringing them into being where there is no room for them. It is impossible to reconcile the idea of an intelligent and beneficent Creator with the belief that the wretchedness and degradation, which are the lot of such a large proportion of human kind, result from His enactments; while the idea that man mentally and physically is the result of slow modifications perpetuated by heredity, irresistibly suggests the idea that it is the race life, not the individual life, which is the object of human existence. Thus has vanished with many of us, and is still vanishing with more of us, that belief which in the battles and ills of life affords the strongest support and deepest consolation" (p. 396).

The inquiry Mr. George undertook was consequently one of the most vital personal concern to himself, and we are glad to think that it has been the means of restoring to him the faith and hope he prizes so much. "Out of this inquiry," he tells us, "has come to me something I did not think to find, and a faith that was dead revives" (p. 395).

It may be ungracious to disturb a peace won so sorely and offered so sincerely to others, but the truth is, Mr. George has simply lost his faith by one illusion and recovered it again by another. He first tormented his brain with imaginary facts, and has then restored it with erroneous theories. His argument is really little better than a prolonged and, we will own, athletic beating of the air; but since both the imaginary facts and the erroneous theories of which it is composed have obtained considerable vogue, it is well to subject it to a critical examination. I shall therefore take up successively, first, his problem; second, his scientific explanation; and third, his practical remedy.

I. Mr. George's Problem.

He states his problem thus:—"I propose to seek the law which associates poverty with progress and increases want with advancing wealth" (p. 8). The first rule of scientific investigation is to prove one's fact before proceeding to explain it. "There are more false facts than false theories in the world," and a short examination whether a phenomenon actually exists may often relieve us from a long search after its law. Mr. George, however, does not observe this rule. He seeks for the law of a phenomenon without first verifying the phenomenon itself—nay, apparently without so much as suspecting that it ought to be verified. He assumes a particular view of the social situation to be correct, because he assumes it. But his assumption is a purely subjective and, as will presently be shown, delusive impression. We imagine our train to be going back when a parallel train is going faster forward, and we are apt to take the general condition of mankind to be retrograding when we fix our eyes exclusively on the rapid and remarkable enrichment of the fortunate few. What Mr. George calls "the great enigma of our time" is just the enigma of the apparently receding train, and he proceeds to solve it by coiling himself in a corner and working out an elaborate explanation from his own inner consciousness "by the methods of political economy," instead of taking the simple and obvious precaution of looking out of the opposite carriage-window and testing, by hard facts, whether his impression was correct. Had he taken this precaution, had he resorted to an examination of the actual state of the facts, he would have found good reason to change his impression; he would have found that on the whole poverty is not increasing, that in proportion to population it is considerably less in the more advanced industrial countries than in the less advanced ones, and that he had simply mistaken unequal rates of progress for simultaneous movements of progress and decline. His impression, it must be admitted, is a prejudice of considerable currency; there are many who tell us, as he does, that want is growing pari passu with wealth, and even gaining on it; that if the rich are getting richer, the poor are at the same time getting poorer; but it is a question of fact, and yet no one has ever seriously tried to prove the assertion by an appeal to fact. That Mr. George should have neglected to submit it to such a test is the more remarkable, because he was, as he has told us, "tormented" in mind by it, and because he acknowledges that it is a "paradox"—i.e., against the reason of the case, and that it is also, to some extent at least, against appearances. He owns, for example, that "the average of comfort, leisure, and refinement has been raised," and that though the lowest class may not share in these gains, yet even they have in some ways improved. "I do not mean," he says, "that the condition of the lowest class has nowhere nor in anything been improved, but that there is nowhere any improvement which can be credited to increased productive power. I mean that the tendency of what we call material progress is in no wise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is to still further depress the condition of the lowest class. The new forces, elevating in their nature though they be, do not act upon the social fabric from underneath, as was for a long time hoped and believed, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down" (p. 5). From this passage it would appear that, according to Mr. George, the condition of all except the lowest class has improved in consequence of material progress, and that the condition of the lowest class has improved in spite of it. He does not undertake, it seems, to affirm of any class that it has, as a matter of actual fact, become impoverished in the course of social development, but only that there is a tendency in the increase of productive power—in "the new productive forces"—in "material progress"—to impoverish the lower strata of society. But then he contends that these forces are practising exactly the same tendency on some of the highest strata, on classes that we know have been growing richer and richer every day. For he tells us that these new forces, entering our social system like a wedge, depress all who happen to be on the wrong side; and we shall presently discover that this unhappy company on the wrong side of the wedge embraces many groups of persons who will be excessively astonished to learn that they are there. It includes, not only the poor labourers who live on wages, but the great capitalists who live on profits; the great cotton spinners, ironmasters, brewers, bankers, contractors; the very men, in short, of all the world, whom the new productive forces have most conspicuously and enormously enriched. I shall revert to this preposterous conclusion later on, but at present it is enough to say that a tide, which so many have swum against and swum to fortune, cannot be very formidable, and at all events can furnish no clue whatever to the possible condition of those who are exposed to it. For that we have only one resort. It is a plain question of fact—is poverty really increasing? Are the poor really getting poorer? And this can only be competently decided by the ordinary inductive evidence of facts. The data of this kind which we possess for settling the question may not be so exact as would be desirable, but there is no higher tribunal to which we can appeal. The question must be answered by them, or not answered at all.

Now any data we have all conduct to the conclusion that poverty is not increasing. If poverty were increasing with the increase of wealth, it would show itself either in an increase of pauperism, or in a decline in the general standard of living among the labouring classes, or in a fall in the average duration of life, and these symptoms would be most acute in the countries that are most wealthy and progressive. Now, let us take England as a crucial case of a country in a very advanced stage of industrial development. Is English pauperism greater now than it was before the "new productive forces" entered the country? Is the general standard of living among the labouring classes lower? Is the average duration of life less? Are poverty and the various symptoms of poverty more acute in England than in more backward countries?

In a foot-note to the passage last quoted from his book, Mr. George explains that the improvement he recognises in the lot of the lowest class does not consist in greater ability to obtain the necessaries of life. Does he mean, because more things are now reckoned among the necessaries of life? If so, we fear there is no chance of that difficulty being removed, nor indeed is there any reason for desiring it to be so. Men's wants will always increase with their incomes, and the struggle to make both ends meet may in that case indefinitely continue. But the fact remains that they have more wants satisfied than before, that they realize a higher standard of life, and that is the mark, and indeed the substance, of a more diffused comfort and civilization. It is true that as the general standard of living rises, people feel the pinch of poverty at a higher level than before, and become pauperized for the want of comforts that are now necessary, but which formerly few ever dreamt of possessing. To have no shoes is a mark of extreme indigence to-day; it was the common lot a century ago. People may be growing in general comfort, and yet their ability to obtain necessaries remain stationary, because their customary circle of necessaries may be always widening. The real sign of an advancing poverty is when the circle of recognised necessaries is getting narrow, and yet men have more difficulty in obtaining them than before; in other words, 1st, when the average scale of living falls; and 2nd, when a larger proportion of the people are unable to obtain it, reduced though it be. Now, in England, the contrary has happened; the general standard of living has risen, and the proportion of those who are unable to obtain it has declined.

In a preceding chapter I adduced evidence to show how greatly improved the working-class standard of living now is from what it was two hundred years ago, in the good old times socialist writers like to sing of, when men had not yet sought out many inventions and the world was not oppressed by the large system of production. But let us tap the line between then and now at what point we may, and we find the same result; the tendency is always to a better style of living. Mr. Giffen, for example, in his address, as President of the Statistical Society, on 20th November, 1883, compares the condition of the working classes to-day with their condition half a century since, and concludes from official returns that while the sovereign goes as far as it did then in the purchase of commodities, money wages have increased from 30 to 100 per cent., and, at the same time, the hours of labour have been reduced some 20 per cent. Except butcher-meat and house-rent, every other element of the working man's expenditure is cheaper, and butcher-meat was fifty years ago hardly an element of his expenditure at all, and the kind of house he then occupied was much inferior, as a rule, to what he occupies now, bad as the latter may in many cases be.

But while the general standard of comfort has been rising, the proportion of the population who are unable to obtain it has been diminishing. I have already stated that King estimated the number of persons in receipt of relief in England and Wales in 1688 at 900,000. Now in 1882 the average number in receipt of relief at one and the same time was, according to official returns, 803,719; and if we are right in doubling that figure to find the whole number of paupers relieved in the course of the year (that being the proportion borne in Scotland), then we may conclude that there are some 1,600,000 paupers in England and Wales at the present day. That is to say, with nearly five times the population, we have less than twice the pauperism. The result is far from being entirely gratifying; a million and a half of paupers (with more than half as many again in Ireland and Scotland) constitute a very grave problem, or rather ganglion of problems; but the fact supplies a decisive enough refutation of the pessimist idea that the actual movement of pauperism has been one of increase instead of one of decrease.

During these two hundred years there is no period in which wealth and productive power multiplied more rapidly than the last thirty years, and, therefore, if Mr. George's ideas were correct, there is no period that should show such a marked increase of pauperism. What do we find? We find that pauperism has steadily declined in England during that period. The decrease has been gradual and attended with no such striking interruptions as were frequently exhibited in former times. But the most remarkable feature about it is that the number of able-bodied paupers has diminished by nearly a half; from 201,644 in 1849 to 106,280 in 1882. That is the very class of paupers whom Mr. George represents it to be the special effect of increasing productive power to multiply, and yet, though wealth and productive power have made almost unexampled progress, and though the population has also considerably risen in the interval, we have not more than half as many of this class of paupers now as we had thirty years ago. No doubt this result is due in part to a better system of administering relief, just as it is due in part to the growth of trade unions and friendly societies, to the extension of savings banks, and to other agencies. But if Mr. George's principle is true, could such a result have taken place at all? If "material progress" has a tendency to multiply "tramps" or able-bodied paupers, the tendency must be weak, indeed, when a little judicious management on the part of public bodies, or of working men themselves, would not only counteract it, but turn the current so strongly the other way. But the truth is that the "tramp" has never been so little of a care in this country as at the present hour, and that it is to material progress we owe his disappearance. He was a very serious problem to our ancestors for centuries and centuries. The whole history of our social legislation is a history of ineffectual attempts to deal with vagrants and sturdy beggars, and we are less troubled with them now mainly because industrial progress has given them immensely more opportunities of making an honest and regular living. Industrial progress has all along been creating work and annihilating tramps, but it has all along been followed by absurd and perverse complaints like Mr. George's, that it was only creating tramps and annihilating opportunities of work. Mr. George says the tramp comes with the locomotive, but a writer in 1673 (quoted by Sir F. Eden, "State of the Poor," I., 190) declared that he came with the stage-coach. He pictures the happy age before stage-coaches, when (as Mr. George says of California) there might be no luxury, but there was no destitution, when every man kept one horse for himself and another for his groom. But with the introduction of the stage-coach the scene was changed. People got anywhere for a few shillings, and ceased to keep horses. They were so much the richer themselves, but their grooms were ruined and thrown upon the world without horse or home. Now class privations like these are incidental to industrial transformations, and in an age of unusual industrial transitions like ours, they may be expected to be unusually numerous. But the effect of material progress on the whole is to prevent such privations rather than cause them. It multiplies temporary redundancies of labour, but it multiplies still more the opportunities for permanently relieving them. Why are we now free from the old scourges of famine and famine prices? Partly because of free trade, but mainly because of improved communications, because of the steamer and the locomotive. Even commercial crises are getting less severe in their effects. The distress among our labouring classes during the American Civil War was nothing compared with the suffering under the complete paralysis of industry that followed the close of the great continental war in 1815. Miss Martineau tells us of that time:—"The poor abandoned their residences, whole parishes were deserted, and crowds of paupers, increasing in numbers as they went from parish to parish, spread wider and wider this awful desolation." (History of England, I. 39.) No such severe redundancy of labour has taken place since then, and the redundancies that attend changes of fashion or of mechanical agency, though they undoubtedly constitute a serious difficulty, are yet lightened and not aggravated by the various and complex ramifications of modern industry. Except a new colony, there is no place where new-comers are so easily taken on as in a highly developed industrial country. There are more poor in Norway than in England, and they are increasing; yet in Norway there is no rent and no great cities. Mr. George may say, and in fact he does say, that in old countries the number of paupers is reduced by simple starvation; but if that were so, the death-rate would be increasing. But in England the death-rate is really diminishing. Let us again quote from Mr. Giffen's address:—"Mr. Humphreys, in his able paper on 'The Recent Decline in the English Death-Rate,' showed conclusively that the decline in the death-rate in the last five years, 1876-80, as compared with the rates on which Dr. Farr's English Life Table was based—rates obtained in the years 1841-45—amounted to from 28 to 32 per cent. in males at each quinquennial of the 20 years, 5-25, and in females at each quinquennial from 5-25, to between 24 and 35 per cent.; and that the effect of this decline in the death-rate was to raise the mean duration of life among males from 39.9 to 41.9 years, a gain of two years in the average duration of life. Mr. Humphreys also showed that by far the larger proportion of the increased duration of human life in England was lived at useful ages, and not at the dependent ages of either childhood or old age. No such change could have taken place without a great increase in the vitality of the people. Not only had fewer died, but the masses who had lived must have been healthier and suffered less from sickness than they did. From the nature of the figures also the improvement must also have been among the masses, and not among a select class whose figures threw up the average. The improvement, too, actually recorded obviously related to a transition stage. Many of the improvements in the condition of the working classes had only taken place quite recently. They had not, therefore, affected all through their existence any but the youngest lives. When the improvements had been in existence for a longer period, so that the lives of all who are living had been affected from birth by the changed conditions, we might infer that even a greater gain in the mean duration of life will be shown. As it was the gain was enormous. Whether it was due to better and more abundant food and clothing, to better sanitation, to better knowledge of medicine, or to these and other causes combined, improvement had beyond all question occurred." The decline of pauperism in this country then is not due to any increasing mortality in the classes from which the majority of the paupers come; but it is one among many other proofs that these classes have profited, like their neighbours, by the course of material progress. They may not have profited in the same degree as some others, or in the degree we think desirable and believe to be yet possible for themselves. But they have profited. The situation is really, as we have said, one of unequal rates of progress, and not one of simultaneous progress and decline.

And this Mr. George seems, at a later stage of his argument, freely to admit. For when he comes to state "the law which associates poverty with progress and increases want with advancing wealth," he explains that he does not contend that poverty is associated with progress at all, but only that a lessening proportion of the gross produce of society falls to some classes; that want may possibly not in the least increase with advancing wealth; that all classes may be the wealthier for the growth of wealth; and practically, that the only evidence of the poverty of the poor is the greater richness of the rich. It seems he is not explaining in any wise why the poor are getting poorer, but only why they are not getting rich so fast as some of their neighbours. We must quote chapter and verse for this extraordinary vacillation about the very problem he wants to solve. "Perhaps," he says, in the last paragraph of Book III., chapter vi. (p. 154), "it may be well to remind the reader, before closing this chapter, of what has been before stated—that I am using the word wages, not in the sense of a quantity, but in the sense of a proportion. When I say that wages fall as rent rises, I do not mean that the quantity of wealth obtained by labourers as wages is necessarily less, but that the proportion which it bears to the whole produce is necessarily less. The proportion may diminish while the quantity remains the same, or even increases. If the margin of cultivation descends from the productive point, which we will call twenty-five, to the productive point we will call twenty, the rent of all lands that before paid rent will increase by this difference, and the proportion of the whole produce which goes to labourers as wages will to the same extent diminish; but if in the meantime the advance of the arts or economies that become possible with greater population have so increased the productive power of labour that at twenty the same exertion will produce as much wealth as before at twenty-five, labourers will get as wages as great a quantity as before, and the relative fall of wages will not be noticeable in any diminution of the necessaries or comforts of the labourer, but only in the increased value of land and the greater comforts and more lavish expenditure of the rent-receiving class." It thus turns out that the alleged impoverishment of the labouring classes through the increasing wealth of society—the sad and desolating spectacle that "tormented" Mr. George, "so that he could not rest"—the cruel mystery that robbed him even of his religious faith, and moved him to write his powerful but inconclusive book—this was no real impoverishment at all, but only an apparent one. It is not so much as "noticeable" in "any diminution of the necessaries or comforts of the labourer"; it is noticeable only in "the greater comforts and more lavish expenditure of the rent-receiving class." The poverty of the labourer consists in the greater wealth of the landlord. The poor are not poorer; they only seem poorer, because certain of the rich have got so much richer. The problem is thus, on Mr. George's own showing, just the mock problem of the apparently receding train.

But let us take up this new issue. Mr. George's assertion now is that wages are a less proportion of the gross produce of the country than they were, because rent absorbs a correspondingly larger proportion than it did. Is that so? Mr. George does not think of showing that it is: he assumes it, without apparently having the smallest pretence of fact for his assertion. His assumption is entirely wrong. Rent is a much smaller proportion of the gross produce of the country than it was, and wages are not only in their aggregate a larger proportion of the aggregate produce of the country, but in their average a larger proportion of the per capita production. There is no need to rest in random assumptions on the matter. The gross annual produce of the United Kingdom is reckoned at present at twelve hundred millions sterling, and the rent of the land at less than seventy millions, or about one seventeenth of the whole. In the time of King and Davenant, 200 years ago or so, the annual produce of England and Wales was forty-three millions, and the rent of land ten millions—little less than one-fourth. (Davenant's Works, iv., 71.) It is hardly worth while, however, making a formal assertion of so self-evident a proposition as that rent constitutes a much smaller fraction of the national income now that wealth is invested so vastly in trade and manufactures, than it did when agriculture was the one great business of life: but it is perhaps better worth showing that rent does not absorb a greater proportion even of the agricultural produce of the country than it used to do. Rent has risen nearly 200 per cent. in the course of the last hundred years, but it does not take one whit a larger share of the gross produce of the land than it took then.

According to the calculations of Davenant and King, the gross produce of agriculture amounted, at the time of the Revolution, to four rents, or, allowing for tithes, to three rents; but this was only on the arable. The produce of other land, natural pasture and forest land and the like, came to less than two rents; so that while the rent of arable was not more than a third of the produce (or, to state it exactly, 27 per cent.), the rent of land generally was more nearly a half. The figures are—

(Davenant's Works, iv., 70.) Arthur Young, a century later, declares that the doctrine of three rents was already exploded, and that farmers had begun to expend so much on high cultivation that they would be very ill content if they produced no more than three rents. In fact, he declares that even in former times rent could never have amounted to a third of the produce, except on lands of the very first quality, and that a fourth was more probably the average proportion. In his "Political Arithmetic," published in 1779 (Part II., pp. 27, 31), he estimated the gross agricultural produce of England (exclusive of Wales) at £72,826,827, and the gross agricultural rental at £19,200,000, or 26 per cent.,—very nearly one-fourth of the produce. To come down nearer our own time, M'Culloch estimated the gross agricultural produce of England and Wales in 1842-3 to have been £141,606,857, and the gross agricultural rental £37,795,906, or 26 per cent. of the produce. ("Statistical Account of the British Empire," 3rd Edition, p. 553.) The gross, agricultural produce of the United Kingdom is now 270 millions sterling, and the gross agricultural rental 70 millions. Mr. Mulhall, indeed, estimates it at only 58 millions; but at 70 millions it would be, as nearly as possible, 26 per cent.,—curiously enough the same figure exactly as in 1843 and in 1779, and almost the same as in 1689.

So far of rent; now as to wages. I have already, in a former chapter (p. 301), produced some evidence to show that the average labourer's wages bears a higher proportion to the average income of the country than it did in former times, or, in other words, that the labourer enjoys a higher per capita share of the gross annual produce of the country as measured in money, and I need not repeat that evidence here. Mr. Mulhall has made some calculations which confirm the conclusions there drawn. ("Dictionary of Statistics," p. 246.) He compares the income of the people of the United Kingdom at the three epochs of 1688, 1800, and 1883. He divides the people into classes and numbers them by families, stating the total income of each class and the total number of families among whom it was divided. I select the two columns containing the results for the whole population and the results for the working class.

A single glance at these tables will show that the aggregate wages of the country constitutes a slightly better proportion of its aggregate annual income at present than in 1800, and a decidedly better proportion than in 1688. But if we look, not to the aggregate income of the class, but to the average income of the individual families it contains, the result is in nowise more favourable to Mr. George's assumption. The following table will show that:—

The average working-class income was thus 37 per cent. of the average income of the country in 1688; 53 per cent. of it in 1800; and 51 per cent. of it in 1883. The difference between the last two epochs is so indecisive that we may count them practically identical. The real position of affairs then as to the proportion of wages to national produce is this, that wages enjoy a considerably larger share of that produce now than they did at the end of the seventeenth century, and about the same proportion as they enjoyed at the end of the eighteenth. If, accordingly, Mr. George resolves to stick by the point of proportion, he would therefore have no more solid ground to stand on than on the point of quantity. Rent, as a proportion of the entire wealth of the country, has enormously declined, and even as a proportion, of agricultural wealth has not increased. Wages as a proportion have not declined, but rather risen.

These, among other things, are indications that we have been concluding too hastily that concentration of wealth is the characteristic tendency of the time, and ignoring the existence of many minor and less conspicuous forces which have been working in the contrary direction. The real prospect at present is towards diffusion. The enormous accumulations that have marked the last hundred and fifty years have owed their existence largely to causes that cannot be expected to endure; in the case of land, to vicious laws directly favouring aggregations; and in the case of trade, to the unparalleled rapidity of the transformations and extensions industry has undergone during the period. Great inequalities are natural to such a time. Huge fortunes are made by pioneers, and will not be easily made by their successors. Railway contracting will never produce again a millionaire like Mr. Brassey, but it will continue to furnish the means of many moderate fortunes and competencies. So with every other new branch of industry, or new field of investment. The lucky person who is the first to occupy it may rise to great riches, but his successors will divide the custom, and instead of one large fortune, there will be a considerable number of small ones. Mr. George himself admits that the opportunities of making large fortunes are growing more limited, but oddly enough he considers the fact to be a signal evidence of "the march of concentration." In his "Social Problems" (p. 59) he writes: "An English friend, a wealthy retired Manchester manufacturer, once told me the story of his life. How he went to work at eight years of age, helping to make twine, when twine was made entirely by hand. How, when a young man, he walked to Manchester, and having got credit for a bale of flax, made it into twine and sold it. How, building up a little trade, he got others to work for him. How, when machinery began to be invented, and steam was introduced, he took advantage of them, until he had a big factory and made a fortune, when he withdrew to spend the rest of his days at ease, leaving his business to his son. 'Supposing you were a young man now,' said I, 'could you walk into Manchester and do that again?' 'No,' replied he, 'no one could. I couldn't with fifty thousand pounds in place of my five shillings.'" The true moral of this little story is of course that it is more difficult to amass a huge fortune in that particular line now than when machinery was young, and that a man with £50,000 to start with must now content himself with a much poorer figure than Mr. George's lucky friend made out of nothing. Would Mr. George compute what limit could be set to the sum his friend might have amassed, had he started in those golden days with £50,000 instead of five shillings? Even as things stood, his solitary success did not distribute the wealth of Manchester any the better among his fellow-spinners who were not fortunate enough to get credit for a bale of flax, or pushing enough to ask for it, and were not in a position to take advantage of the first introduction of a new power, and rise with it to great wealth. That the stream of things is now making for more moderate fortunes, and more of them, is confirmed by the testamentary statistics of the previous ten years published some time ago by the Spectator newspaper. These figures show that the number of fortunes of the first rank left during that period has been very much less than it was in the preceding ten years, but that the number of moderate fortunes has been very much larger.

What the future may hide in it I shall not venture to divine. It will no doubt bring upon industry fresh transformations, but we can hardly expect them to be so numerous or so rapid as in the brilliant era of industrial progress and colonial development we have passed through, and some at least of the changes that are in store for us point, as I have shown in the introductory chapter of this book, to a greater diffusion rather than a greater concentration in the future. Mr. George says: "All the currents of the time run to concentration. To successfully resist it we must throttle steam and discharge electricity from human service" (p. 232). Now steam has undoubtedly been a great concentrator, but electricity, which is likely to take its place in the future, will to all appearance be as great a distributor. Mr. George is equally mistaken regarding the real effect of the other "currents of the time." "That concentration is the order of development," says he, "there can be no mistaking—the concentration of people in large cities, the concentration of handicrafts in large factories, the concentration of transportation by railroad and steamship lines, and of agricultural operations in large fields. The most trivial businesses are being concentrated in the same way—errands are run and carpet sacks are carried by corporations" (p. 232). The concentration of people in cities is not the same thing as the concentration of the wealth of those cities in the hands of a few individuals. The centralization of labour in cities has assisted the birth of the trade union and the co-operative society, which are among the best agencies for diffusing wealth; and the growth of joint-stock companies is a strange proof of a tendency to greater concentration of wealth, for the joint-stock company is really an instrument of the small capital, enabling it by combination to compete successfully with the larger; and as to agriculture, the real tendency, in this country at any rate, seems to be to lesser holdings. When we complain of the inequalities of our time—and I am far from desiring to underrate their extent or to palliate their mischievousness—we are apt to forget how largely the real and natural process of evolution is after all one of distribution, how much the most conspicuous of the inequalities have been incidental to a transition period, and due to causes of a temporary nature, and how many indications we possess that they are not unlikely to be corrected and moderated in the future course of social development. Some of the official returns made in connection with the income tax show that the immense increase of wealth of the last thirty years has been far from being reaped by any single class, but has been shared pretty evenly by all the classes included in those returns. We possess detailed accounts of the number of persons paying income tax in each grade of income under Schedule D, from the year 1849, and if we compare the figures of that year with those of 1879, we shall obtain a fair index to the movement of distribution during those thirty years. Schedule D, it is true, includes only incomes derived from trades and professions, but these incomes may fairly enough be taken as sufficiently characteristic to afford a trustworthy indication of the general movement. While population increased in the thirty years by 22 per cent., the number of incomes liable to income-tax increased by 161 per cent., and of these, the incomes that have increased in much the largest proportion are precisely those middling or lower middling incomes which I have before shown to have unfortunately declined since 1688. While the number of incomes over £1,000 a year has increased by 165 per cent., the number of incomes between £150 and £400 a year has increased by 256 per cent. Mr. Goschen, in his inaugural address as President of the Royal Statistical Society in December, 1887, produced later evidence showing the continuance, and even growth of the same tendency. He showed from the Income Tax Returns that, in spite of the increase of population between 1877 and 1886, the number of incomes over £1,000 a year had decreased by 2.40 per cent., and the number of incomes between £500 and £1,000 had remained the same, while the number of incomes between £150 and £500 had increased 21.4 per cent. He showed from the statistics of certain selected public companies, that in the ten years from 1876 to 1886 the number of their shareholders had increased by 72 per cent., while the average capital per shareholder had decreased from £443 to £323. He drew similar conclusions from the probate and inhabited house duty figures, and from several other sources. (See Journal of Statistical Society, December, 1887.) These figures prove that the tendency of things, so far as it concerns the classes above the labourers, is not to further and exclusive concentration, but rather towards a wider and beneficial diffusion; and in regard to the labouring classes, it is admitted by all—even by the extremest social pessimists—that the upper and middle strata of them have participated in the progress of wealth equally with their neighbours. There remains only the lowest class of all, and their emancipation is the serious task of social reform in the immediate future; but that class is even now not increasing in the ratio of population; its misery comes from many causes, most of them moral and physical rather than economic; and though it presents difficult and trying problems, there is no reason for renouncing the hope which alone can sustain social reformers to success.

II. Mr. George's Explanation.

If there is any force in the foregoing observations, it is plain that there is no such problem as Mr. George has undertaken to explain, and we are therefore exempted from all necessity of examining his explanation. But to Mr. George's own mind his explanation of the appearance that troubled him really constitutes the demonstration of it; at any rate, he offers no other. The question of the increase of poverty is of course a question of fact, that cannot be settled by a priori deduction alone; but Mr. George seems to think otherwise. He is too bent on proving it to be necessary to think of asking whether it is actual, and even a man of science like Mr. A. R. Wallace, while regretting that Mr. George had not chosen to build his proposals on ground of fact, declares that he adopted an equally legitimate method in deducing his results "from the admitted principles and data of political economy." ("Land Nationalization," p. 19.) Moreover, most of the social pessimism of the present time draws its chief support, exactly like Mr. George's, from the supposed bearing of certain received economic doctrines; and our task would therefore be incomplete if we did not follow Mr. George on this "high priori road" on which he so boldly fares forth, and performs, as will presently be seen, many a remarkable feat.

Before beginning his explanation, he throws the problem itself into what he conceives to be a more suitable scientific form. "The cause," says he, "which produces poverty in the midst of advancing wealth is evidently the cause which exhibits itself in the tendency everywhere recognised of wages to a minimum. Let us therefore put our inquiry into this compact form: Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living?" (p. 10). The problem, as thus restated, is clearly, be it observed, one of quantity, not of proportion. A bare living is not a relative share, but a definite amount, of produce. But the tendency in wages to such a minimum, which he asserts to be everywhere recognised, is really not recognised at all. In alleging that it is so, Mr. George evidently alludes to the doctrine of wages taught by Ricardo and his school; but what they recognised in wages was a tendency, not to a minimum that would give but a bare living, but to a minimum that would give a customary living; in other words, that would sustain the labourers in the standard of comfort customary among their own class. The economic minimum is not the absolute minimum of a bare living; it is, as Mr. George himself elsewhere puts it, "the lowest amount on which labourers will consent to live and reproduce,"—that is, not the lowest amount on which any individual labourer will do so, but the lowest amount which labouring people in general consider it necessary to earn before they will undertake the responsibility of marriage. If they were to get less than this, it was contended, they would refrain from marrying to an extent that would tell sufficiently on the supply of labour to force wages up again to their old level. This level was the minimum to which wages constantly tended, but then it was always higher than a bare living; it was determined by the standard of requirements current among the labouring class at the time; and it was recognised to be capable of rising if that standard rose. True, Ricardo and the economists of his generation entertained very poor hopes of any such rise, because the working classes of their time, being without the intelligence, the ideas of comfort, the higher wants that are powerfully operative among the working classes of our day, were generally seen to "take out" their better wages when they chanced to get them in nothing but earlier marriages, which in the end brought their wages down again. We have happily now to do with a more aspiring and a less uniformly composed working class. It is perhaps more aspiring in some measure because it is less uniformly composed. It contains many ranks and inequalities and standards of social refinement and comfort, and the presence of these side by side develops a more active tendency upward, which, by supplying a stronger check than before on improvident marriages, will enable the labourers, class after class of them, to appropriate securely more and more of the common domain of advancing civilization. We have had abundant experience of a rise in the standard of life, and a rise in the rate of wages, both remaining as permanent possessions of sections of the labouring class. But if Ricardo and his school had less faith than they reasonably might have had in the possibility of a permanent upward tendency in wages, they certainly never dreamt of believing in any permanent downward tendency. According to their doctrine the rate of wages moved up and down within certain limits, but always tended to come back to a particular figure—the amount necessary to give the labourer the living customary among his class. This figure was really no more a minimum than it was a maximum; wages were supposed to fall sometimes below it, as they were supposed to rise sometimes above it; and to speak of it as a minimum that would give but a bare living is completely to misrepresent its nature.

The assumption from which Mr. George starts is thus in no wise an admitted principle of political economy, and would therefore not answer the test of legitimacy laid down by Mr. Wallace. It has no ground outside of Mr. George's own imagination. Economists would solve his problem, "why in spite of increased productive power wages tend to a minimum that will give but a bare living?" by simply denying his fact, and having done with it. But Mr. George persuades himself that they would answer it otherwise, and devotes the next section of his book to an elaborate confutation of the false answers he supposes they would return to it. They would either explain it, he thinks, by their theory of the wages fund, or they would explain it by their theory of population; and so before confiding to us his own explanation, he considers it necessary to stop and clear these two venerable theories out of his way. I am not concerned to defend these theories; their truth would not make Mr. George's own view any the falser, nor their falsehood make it any the truer. One of them indeed was dead and buried before Mr. George attacked it, though I am bound to say it would never have fallen before the particular line of attack he directs against it. The wages fund doctrine, which played a considerable rôle both in its original form as taught by Senior, and in its subsequent form as modified by M'Culloch, was refuted by Mr. Thornton in 1869, was almost instantly abandoned by the candid mind of Mr. Mill, and is now rarely met with as a living economic doctrine. The wages fund is still regarded of course as having its limit in capital, and in the conditions which generate capital, but since these conditions include among other things the number and efficiency of the labourers, the amount of the wages fund is no longer represented as at any given moment a fixed and predetermined quantity susceptible of no possible alteration to meet the exigencies of the labour market, and when once this characteristic was given up, the wages fund doctrine was seen to have degenerated into little more than a stately truism. The Malthusian theory of population is not in the same way discredited, but it likewise is now generally stated with some reserve. It has become well understood that the earlier economists assigned it too absolute and universal a validity, and that it is not, as they thought, a law for all ages, and especially and happily not a law for our own. It is true of an era of progressive population and diminishing return from agriculture, but for our day it has been robbed of its terrors by free trade and steam navigation, which have connected our markets with continents of virgin soil, and carried us virtually into an era of increasing return of indefinite duration. The population question was one of serious practical import for our fathers, and as they saw people marrying and giving in marriage, while every fresh bushel of food was extracted with increasing difficulty from an exhaustible soil, they looked with a reasonable dread to the future, and saw no way of hope except in the practice of a heroic continence. But we live in another time. We find population increasing and yet bread cheapening, simply because the locomotive which alarmed Mr. George by taking the tramp to California has brought back plenty to the rest of the world. It is due to the material progress he preaches against that we are the first generation who can afford to make light of the population question, and leave our remote posterity to deal with the peril when it shall actually arrive.

Mr. George, however, is not content with disputing these doctrines; he insists on replacing them with others exactly opposite to them in purport, and for which he claims a like universal validity. He propounds a new population theory, and a new wages fund theory of his own. The more population abounds, the more will subsistence superabound, is his comfortable counter-proposition to Malthusianism. "I assert," says he, "that in any given state of civilization a greater number of people can collectively be better provided for than a smaller.... I assert that the new mouths which an increasing population calls into existence, require no more food than the old ones, while the hands they bring with them can in the natural order of things produce more. I assert that, other things being equal, the greater the population, the greater the comfort which an equitable distribution of wealth would give to each individual" (p. 99). In a word, his teaching is that "other things being equal" over-population is a ridiculous impossibility. What may be all concealed under the reservation, "other things being equal," he does not enlighten us, but it avowedly contains at least one presupposition of decisive importance to the question, the presupposition of the unlimited productiveness of the soil. Mr. George denies the law of diminishing return. We shall presently find him, in his doctrine about rent, basing his whole book on the operation of this law. But here in his doctrine about population it suits him to deny it, and he does so on singularly fantastical grounds (p. 93). He denies it on the ground that "matter is eternal, and force must for ever continue to act," as if the indestructibility of matter was the same thing as its infinite productiveness. "As the water that we take from the ocean must again return to the ocean, so the food we take from the reservoirs of nature is, from the moment we take it, on its way back to those reservoirs. What we draw from a limited extent of land may temporarily reduce the productiveness of that land, because the return may be to other land or may be divided between that land and other land, or perhaps all land; but this possibility lessens with increasing area, and ceases when the whole globe is considered. That the earth could maintain a thousand billions of people as easily as a thousand millions is a necessary deduction from the manifest truths that at least, as far as our agency is concerned, matter is eternal and force must for ever continue to act.... And from this it follows that the limit to the population of the globe can only be the limit of space. Now this limitation of space—this danger that the human race may increase beyond the possibility of finding elbow-room—is so far off as to have for us no more practical interest than the recurrence of the glacial period or the final extinguishment of the sun" (p. 94-5). If this passage means anything, it means that the race may go on multiplying as long as it finds room to stand on, and that even when that limit is reached it can only be squeezed to death and not starved. It can in no case apparently be starved. Subsistence cannot possibly run short, for the inherent powers of the soil are not permanently destructible. But he might as well argue that man must be omnipotent because he is immortal. The question is not one of the durability of the productive powers of the earth—it is one of their limited or unlimited productive capacity. Up to a certain point they may yield the same return at the same cost year after year in sæcula sæculorum, but will they yield more? Manifestly not. Every bushel they give after that is got at continuously increasing cost. Now of course wherever population increases so much, compared with the land at its disposal, that this increasing cost must be incurred in order to find them food, the epoch of diminishing return in agriculture has arrived, and the peril of over-population is already present. Happily, as we have said, that time is not yet, but it will come long, long before the human race fails to find elbow-room in this planet.

Mr. George himself admits that in a country of inconsiderable extent, or in a small island, such as Pitcairn's Island, over-population is quite possible before elbow-room is near exhausted—(p. 74)—and in making the admission he virtually surrenders his case. He admits in detail what he denies in gross. For is not the soil of a small island or an inconsiderable country as eternal as the soil of a continent? The only difference is that it is not so extensive, and therefore comes to the epoch of diminishing return sooner. That is all. The reason why he makes an exception of such an island is because its inhabitants "are cut off from communication with the rest of the world, and consequently from the exchanges which are necessary to the improved modes of production resorted to as population becomes dense" (p. 74). But if density of population is such a sure improver of production as Mr. George represents it to be elsewhere, why should it fail here? And if it fail anywhere, how can he argue that it must succeed everywhere? Once he admits, as he does in this passage, that subsistence has a definite limit in the modes of production that happen to be known in any age and country, and that population has a definite limit for such age and country in the amount of subsistence which the known modes of production are capable of extracting from the soil, he really admits all that Malthusians generally contend for, and coming to curse, he has really blessed them altogether. The limit of subsistence which he here recognises—the limit imposed by the state of the arts—is far within the limit which he has just been denying, the natural limit to the inherent fertility of the soil, on which economists base their law of diminishing return. The former point is far sooner reached than the latter. Men will starve because they don't know how to make the best use of nature long before they will starve because nature is used up; and it is exactly that earlier limit on which Malthusians lay stress.

But except for this inconsistent admission in the case of a petty isolated island, Mr. George persistently refuses to recognise any kind of limit to subsistence, either in the productive capacity of the soil or in the state of the arts. He seems to fancy that land will go on yielding larger and larger harvests ad infinitum to accommodate an increasing population, and that even if it failed to do so, new inventions or improved processes of production would be constantly discovered when they were needed, and keep the supply of food always equal to the demand. With these crude assumptions in his head, he arrives very easily at his own peculiar theory, which is, that subsistence tends to increase faster than population, because the growth of population itself affords the means of such economies and organization of labour as multiply immensely the productive capacity of each individual labourer. A hundred labourers, he is fond of arguing, will produce much more than a hundred times the amount that one will, and it is therefore clear folly to think of population as capable of encroaching on subsistence. On the contrary, it seems almost fitter to speak of it as a means of positively economizing subsistence. Mr. George's mistake arises from ignoring the fact that subsistence depends on the productive capacity of land as well as on the productive capacity of labour, and the productive capacity of land is not indefinitely progressive.

Mr. George's new wages fund theory is based on a precisely analogous misconception of the real conditions of the case, and is just as much in the air as his population theory. "Wages," he says, "cannot be diminished by the increase of labourers, but on the contrary, as the efficiency of labour manifestly increases with the number of labourers, the more labourers, other things being equal, the higher wages should be" (p. 62). Just as he has already argued that food can never run short before an advancing population, because the new hands can produce much more than the new mouths can consume, as if the hands span it out of their own finger nails; so he now argues that wages can never decline for want of capital to employ labourers, because the capital that employs them is made by the labourers themselves. They are paid, he declares, not out of the capital of their employers, but out of the product of their own labour. Mr. F. A. Walker, the eminent American economist, had already taught a similar doctrine, but with the reservation that while wages were really paid out of the produce of the labour they remunerated, they were usually advanced out of the employer's capital. But Mr. George throws aside this reservation, and declares boldly that wages are neither paid nor advanced out of capital, and that if any advance is made in the transaction at all, it is the labourer who makes it to the employer, not the employer to the labourer. "In performing his labour, he (the labourer) is advancing in exchange; when he gets his wages, the exchange is completed. During the time he is earning the wages, he is advancing capital to his employer; but at no time, unless wages are paid before work is done, is the employer advancing capital to him" (p. 49).

In this contention Mr. George relies much on the analogy of the "self-employing" labour of primitive society. When men live by gathering eggs, he tells us, the eggs they gather are their wages. No doubt; but in our complicated civilization we don't live by gathering eggs from day to day, but by sowing the seed in spring which is to yield us food only in harvest—by preparing work for the market which may take weeks, months, even years before it is marketable. The energetic Sir John Sinclair is said to have once danced at a ball in the evening dressed in a suit the wool of which was still growing on the sheep's back in the morning; but rapidity like that is naturally foreign to ordinary commerce. The successive operations of clipping, fulling, teasing, spinning, dying, weaving, cutting, sewing, occupy considerable time. So with other things. Houses, ships, railways, are not built in a day, or by a single workman. The product of a single workman's work for a day at any of these things has no value apart from the product of the other workmen's work, nor has the work of them all any value unless the work is, or is to be, completed. The wages paid during the period of construction, therefore, cannot possibly have come out of the work for which they were paid, but must have been advanced otherwise. Who advances them? Clearly not the labourer himself, for he receives them. And yet that is what Mr. George unhesitatingly asserts, and his argument is as courageous as it is ingenious. He does not shrink from applying it to the extremest case you like to suggest—the Great Eastern, the Gothard Tunnel, the Suez Canal; even in these cases the labourers, who spent months and years in doing the work, were paid out of the work itself, out of the Great Eastern, out of the Gothard Tunnel, out of the Suez Canal. "For," says Mr. George, "a work that is incomplete is not valueless, it is not unexchangeable; money may be raised on it by mortgage or otherwise, and as this money is raised on the product of the labourer's work, the wages it is employed to pay are really paid out of that product." But this only shifts the question a little: it does not answer it. Where does this lent money come from? Certainly not from the work it is lent on. Perhaps not, Mr. George will rejoin, again shifting his ground, but it comes from the product of the contemporaneous work of other labourers. "It is not necessary to the production of things that cannot be used as subsistence or cannot be immediately utilized that there should have been a previous production of the wealth required for the maintenance of the labourers while the production is going on. It is only necessary that there should be, somewhere within the circle of exchange, a contemporaneous production of subsistence for the labourers, and a willingness to exchange this subsistence for the thing on which the labour is being bestowed" (p. 51). But this is only passing round the dilemma. For this contemporaneous production has itself the same difficulty to face; it has to sustain its labourers during the time taken to complete their work; and it can only do so, according to Mr. George's explanation, by raising the means through a mortgage on the unfinished work. It borrows to pay its own wages, but is apparently able to lend to pay other people's. Mr. George has a happy method of carrying on the affairs of society by mutual accommodation. Peter is a shoemaker who wants money to buy leather to make shoes and food to maintain him till the shoes are made. Paul is a carpenter who is in a like case, and wants money to buy food and timber. Peter borrows the money he needs from Paul on mortgage, and then Paul in turn borrows what he needs from Peter, on the same terms. Utopia is a pleasanter world than ours, and an IOU probably goes a long way in it; but here on this hard earth Peter would certainly make no shoes nor Paul any chairs, unless he had either himself saved enough to purchase the materials, or found a neighbour who had done so and was ready to make him an advance. Except for this neighbour he could not work at all, and could not therefore "create any wages," and the amount of work he got and wages he earned would manifestly depend greatly on the amount of capital this stranger possessed and was disposed to invest in such an enterprise.

It is true that the wages of labour will be guided in amount by the quantity of the product, but they are not on that account actually paid out of the product. And it is true that the labourer gives value for his wages—certainly he would not otherwise be employed—but that value is not usually marketable until some time, in many cases years, after the wages have been enjoyed, and therefore cannot have been the source whence these wages came. The wages were paid out of the saved results of previous labour—that is, out of capital—and Mr. George has absolutely no conception of the amount of capital that is necessary to carry on the work of industry. He says we live from hand to mouth, and so in a sense we do. Our capital is being constantly consumed and constantly reproduced again, and economists are fond of showing, from the speedy recovery of a civilized state after a devastating war, how short a time it would really take to replace it entirely. But until it is replaced every inhabitant undergoes considerable privations, which simply means that the rate of wages has fallen for want of it. There are some trades, like the baker's, where the product is actually sold before the wages are paid; and there are many, like the whaler's mentioned by Mr. George, where the labourers can afford to wait long terms for part at least of their remuneration (no great sign, by the way, of the minimum of a bare living); but even in these much capital must be set aside before a single hand is engaged. The whalers, for example, must be furnished with a ship to start with, and be provisioned for the voyage; and if these requisites are not forthcoming, they must go without work and wages altogether, or take work at inferior terms in a market glutted by their own arrival in it. Mr. George speaks lightly of the labourers who excavated the Suez Canal advancing value to the company who employed them, and yet before a single pick or spade was stuck into the sand of the Isthmus the company had laid out, in preliminary expenses and machinery, as much as six millions sterling—more than a third of the whole cost of the Canal. They had then to pay other five or six millions in wages before the work fetched a single fee; and yet Mr. George will have us believe that those five or six millions actually came out of the profits, merely because the projectors hoped and believed they might eventually come out of them. Labourers give an equivalent to the capitalists for their wages, but their wages are really paid out of the capital which their employers have saved for the purpose of purchasing that equivalent. I may have bought a cow in the hope of recouping myself by selling her milk, but I did not therefore pay her price out of the milk money—for nobody would have sold her to me if he had to wait for that; I bought her out of money I had previously saved, and from the same source exactly, and no other, do capitalists buy labour.

But, objects Mr. George, that cannot be; wages cannot be paid out of capital, because they are often lowest when, as shown by the low rate of interest, capital is most abundant. But Mr. George here confounds existent capital with employed capital. It is only the capital actually employed that tells on wages; the low rate of interest merely shows that there has been an increase in unemployed capital, and since that is generally a correlative of a diminution of employed capital, it is but natural that low interest should be attended by low wages. Low wages are a consequence of unemployed labour, unemployed labour a consequence of unemployed capital, and unemployed capital a consequence of unfavourable industrial conditions which labour, either with capital or without it, cannot evade or reverse.