34
INVESTMENT AND ENTERPRISE
IF, having finished your dinner, you can find a hungry person who can be depended on to give you a dinner, say after a year’s time, for nothing, you can spend your spare money in giving him a dinner for nothing; and in this way you will in a sense both spend your money on the spot and save it for next year, or, to put it the other way, you will have your spare food eaten while it is fresh and yet have fresh food to eat a year hence.
You will at once reply that you can find a million hungry persons only too easily, but that none of them can be depended on to provide a dinner for themselves, much less for you, next year: if they could, they would not be hungry. You are quite right; but there is a way round the difficulty. You will not be able to find dependable men who are hungry; but your banker or stockbroker or solicitor will find you plenty of more or less dependable persons, some of them enormously rich, who, though overfed, are nevertheless always in want of huge quantities of spare food.
What do they want it for? Why, to feed the hungry men who cannot be depended on, not on the chance of their returning the compliment next year, but for doing some work immediately that will bring in money later on. There is nothing to prevent any Intelligent Woman with spare money enough from doing this herself if she has enough invention and business ability.
Suppose, for instance, she has a big country house in a big park. Suppose her park blocks up the shortest way from one important town to another, and that the public roads that go round her park are hilly and twisty and dangerous for motor cars. She can then use her spare food to feed the hungry men while they make a road for motors through her park. When this is done she can send the hungry men away to find another job as best they can, leaving herself with a new road for the use of which she can charge a shilling to every motorist who uses it, as they all will to save time and risk and difficulty. She can keep one of the hungry men to collect the shillings for her. In this way she will have changed her spare food into a steady income. In city language, she will have gone into business as a roadmaker with her own capital.
Now if the traffic on the road be so great that the shillings, and the spare food they represent, pile themselves up on her hands faster than she can spend them (or eat them), she will have to find some new means of spending them to prevent the new spare food going bad. She will have to call the hungry men back and find something new for them to do. She might set them to build houses all along the road. Then she could present the road to the local authorities to be maintained by the ratepayers as a public street, and yet greatly increase her income by letting the houses. Having in this way obtained more spare money than ever, she could establish a service of motor buses to the nearest town to enable her tenants to work there and her workmen to live there. She could set up an electric lighting plant and gasworks to supply their houses. She could turn her big house into a hotel, or knock it down and cover its site and the park with new houses and streets. The hungry would do all the executive work for her: what she would have to do would be to give them the necessary orders and allow them to live on her spare food meanwhile.
But, you will say, only an exceptionally able and hardworking woman of business could plan all this and superintend its carrying-out. Suppose she were too stupid or too lazy to think of these things, or a genius occupied with art or science or religion or politics! Well, if only she had the spare money, hungry women and men with the requisite ability would come to her and offer to develop her estate and to pay her so much a year for the use of her land and of her spare money, arranging it all with her solicitor so that she would not have to lift her little finger in the matter except to sign her name sometimes. In business language, she could invest her capital in the development of her estate.
Now consider how much further these operations can be carried than the mere investment of one lady’s savings, and the development of one lady’s estate in the country. Big companies, by collecting millions of spare subsistence in small or large sums from people all over the country who are willing to take shares according to their means, can set the hungry to dig those mines that run out under the sea and need twenty years work before the coal is reached. They can make railways and monster steamships; they can build factories employing thousands of men, and equip them with machinery; they can lay cables across the ocean: there is no end or limit to what they can do as long as they can borrow spare food enough for the hungry men until the preparations are finished and the businesses begin to pay their own way.
Sometimes the schemes fail, and the owners of the spare food lose it; but they have to risk this because, as the food will not keep, they would lose it all the same if they did not invest it. So there is always spare money being offered to the big men of business and their companies; and thus our queer civilization, with its many poor and its few rich, grows as we see it with all its shops, factories, railways, mines, ocean liners, aeroplanes, telephones, palaces, mansions, flats, and cottages, on top of the fundamental sowing and reaping of the food that it all depends on.
Such is the magic of spare subsistence, called capital. That is how idle people who have land and spare subsistence become enormously rich without knowing how, and make their babies enormously rich in their cradles, whilst the landless penniless persons who do it all by slaving from dawn to dusk are left as poor at the end of the job as they were at the beginning.