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Most of these commodities and services were used up within that period in maintaining the 41,500,000 inhabitants, and Sir R. Giffen estimates that about £200,000,000 is “saved". annually (Essays in Finance, vol. ii., p. 407). The bulk, of this "saving" consists of new houses and of new railways, steamers, machinery, and other aids to future labor.
For subsequent comparison the total is represented by the annexed figure :
II.-Who Produces It. The desirable commodities and useful services measured by this vast sum are produced solely by the efforts and sacrifices” (Cairnes), whether of muscle or of brain, of the working portion of the community, employed upon the gifts of Nature.
Adam Smith “showed that labor is the only source of wealth, . . . It is to labor, therefore, and to labor only, that man owes everything possessed of exchangeable value” (McCulloch's Principles of Political Economy, part ii., sec. 1).
“No wealth whatever can be produced without labor" (Professor Henry Fawcett (Cambridge), Manual of Political Economy, p. 13).
“That useful function, therefore, which some profound writers fancy they discover in the abundant expenditure of the idle rich turns out to be a sheer illusion, Political economy furnishes no such palliation of unmitigated selfishness. Not that I would breathe a word against the sacredness of contracts. But I think it is important, on moral no less than on economic grounds, to insist upon this, that no public benefit of any kind arises from the existence of an idle rich class. The wealth accumulated by their ancestors and others on their behalf, where it is employed as capital, no doubt helps to sustain industry; but what they consume in luxury and idleness is not capital, and helps to sustain nothing but their unprofitable lives. By all means they must have their rents and interest, as it is written in the bond ; but let them take their
* It may be observed that the estimated amount of “money” or currency in the country is about £130,000,000, or under £4 per head, including bank notes. Gold coin and bullion, between £80,000,000 and $100,000,000 ; shlver and bronze, $15,000,000; bank notes, beyond gold reserves, 624,000,000 (W. S. Jevons, Investigations in Currency and Finance, p. 272; Report of Deputy-Master of the Mint, 1889; Mr. Goschen's Speech on Second Reading of the Coinage Act, 1891).
proper place as drones in the hive, gorging at a feast to which they have contributed nothing” (Some Leading Principles of Political Economy, p. 32, by the late John Elliott Cairnes, M.A., Emeritus Professor of Political Economy at University College, London ; 1874).
III.-Who the Workers Are. Those who profess to be taking part in the work of the community were divided, at the census of 1901, into the following classes :
Males. Females. Total. Industrial ... ... 8,884,116 2,594,684 11,478,800 Agricultural
2,038,096 183.881 2,241,977 Commercial
845,127 89,106 934,233 Domestic
357,037 2,038,528 2,415,565 Professional ...
20,102,408 21,356,313 41,458,72 I (Compiled from Reports of the 1901 Census for England and Wales, Scotland
and Ireland.) Among the professed workers there are, of course, many whose occupation is merely nominal. The number is swelled by the "sleeping" partners, the briefless barristers, the invalids, and the paupers, prisoners, and sinecurists of every description. Many thousands more have occupations useless or hurtful to the community; and others, as for example many domestic servants, labor honestly, but for the personal comfort of the idlers, and they might, therefore, as far as production is concerned, as well be themselves idle.
Nevertheless, there were, in 1901, 663,656 adult men (one in twenty) who did not even profess to have the shadow of an occupation. Most of these form the main body of the idle rich, “the great social evil of .,.. a non-laboring class" (J. S. Mill, Political Economy, Popular Edition, p. 455).
It is clear that the labor of the workers is much increased by the presence among them of so large a proportion of persons who take no useful part in the business of life. The possible reduction of the daily hours of work has, however, been much exaggerated. Thus Mr. William Hoyle, writing in 1871, committed himself to the assertion that, “ assuming every person did his share, a total of it hours' daily labor would suffice to supply us in abundance with all the comforts of life" (Our National Resources, p. 56). It appears. from the context that his calculation refers to a community composed exclusively of actual workers in the production of material necessaries, whereas in ordinary human societies about half the population is under the age of twenty, and more than half the adults are women mostly occupied in domestic duties. The it hours daily have, therefore, at once to be multiplied fourfold, and account
* Most of these are married women engaged in domestic work, although not so described.
The whole calculation is indeed of little value, and has never been accepted by other authorities.
IV.-How the Idle Rich Live. “Whence is their purchasing power derived ? It does not descend to them from the skies ; nor is it obtained by submarine telegraph direct from California or Australia ; nor is its presence exhaustively accounted for by the presence of certain figures on the credit side of their accounts in their bankers' books" (Professor J. E. Cairnes, Some Leading Principles of Political Economy, p. 31).
They live, in the main, upon the portions of the national product which are called rent and interest, by the legal “guarantee to them of the fruits of the labor and abstinence of others, transmitted to them without any merit or exertion of their own" (J. S. Mill, Political Economy, Popular Edition, p. 129).
“It is at once evident that rent is the effect of a monopoly" (J. S. Mill, Political Economy, p. 255).
“Monopoly, in all its forms, is the taxation of the industrious for the support of indolence, if not of plunder" (Ibid, p. 477).
V.-Rent of Land and Houses. The total profits from the ownership of lands, houses, tithes, etc., as assessed for income tax in 1905-6, was f 258,948,671 ; the rents of mines, quarries, ironworks, gasworks, waterworks, canals, fishings, shootings, markets, tolls, etc., amounted to £42,863,644 (Inland Revenue Report, 1906-7, Cd.—3,686). Many of these are notoriously far from being fully assessed. The total “rent”* of immovables of the United Kingdom must therefore amount to at least £310,000,000, or nearly one-sixth of the total produce. Of this amount probably £100,000,000 may be estimated as the annual rental value of the bare site, without buildings.
Total produce £ 1,920,000,000. R.-Rent, £ 310,000,000. * In 1843 the total was (for Great Britain only) £95,284,497 ; in 1855 (for the United Kingdom) £ 124,871,885.
VI.-Interest on Capital. Interest is distinguished by economists from the rent on the one hand, and the “wages of superintendence," or other payment for services on the other ; but a large part of the “rent" already dealt with consists of interest on capital embodied in land in the form of houses, etc.
The profits of public companies, foreign investments, railways, etc., assessed to income tax in the United Kingdom in 1905-6 amounted to £311,366,085. The interest payable from British public funds (rates and taxes) was, in addition, £22,680,741, and from Indian, Colonial, and Foreign Governments £30,932,067 (Inland Revenue Report, 1906-7, Cd.-3,686).
That these amounts are understated may be inferred from Mr. Mulhall's estimate of the stocks, shares, bonds, etc., held in Great Britain alone, as being worth £ 2,655,000,000, producing an annual income of upwards of £ 122,000,000 (Dictionary of Statistics, p. 106). Sir Louis Mallet estimated the English income from foreign investments alone in 1883-4 at £ 100,000,000 annually (National Income and Taxation (Cobden Club), p. 13), and later returns show that this estimate must be considerably increased.* Nearly the whole of this vast income may be regarded as being received without any contemporary services rendered in return by the owners as such.
We have, however, to add the interest on capital employed in private undertakings of manufacture or trade. This is included with
wages of superintendence," in business profit, both for the purpose of the income tax returns and in ordinary speech. Sir R. Giffen estimated it, in 1884, apart from any earnings of personal service, at £89,000,000 (Essays in Finance, vol. ii, p. 403). Allowing for the increase since then, the total amount of interest cannot therefore be less than £390,000,000.
Adding hereto the rent mentioned in the preceding section, we have a total of £700,000,000 for rent and interest together.
The following diagram represents the proportion of the nation's
Total product, £1,920,000,000. R.–Rent, £310,000,900.
I.-Interest, £ 390,000,000.
rendered to the community, but merely as the payment for permission to use the land and the already accumulated capital of the country.
VII.-Profits and Salaries. But those who enjoy the vast unearned income just mentioned cannot all be accurately described as the “idle rich," though they would forego none of it by refusing to work. If they are disposed to increase it by leading active lives, they can do so; and most of them adopt this course to some extent, especially those whose share is insufficient for their desires.*
When the members of this endowed class elect to work, they are able to do so under unusually favorable conditions. Associated with them in this respect are the fortunate possessors of exceptional skill in hand or brain and the owners of literary, artistic, or commercial monopolies of every kind. These workers often render inestimable service to the community, and they are able to exact in return remuneration proportionate neither to their utility nor to the cost of their education or training, but to the relative scarcity of the faculty they possess.
The numbers and total income of this large class cannot be exactly ascertained. It includes workers of all grades, from the exceptionally skilled artizan to the Prime Minister, and from the city clerk to the President of the Royal Academy.
It is convenient for statistical purposes to include in it all those who do not belong to “the manual labor class." If we take the * rent of ability" to have increased in the same proportion as the assessments to income tax, this prosperous body may be estimated to receive as profits and salaries for its work about $490,000,000 annually.t
• As the unearned income is not equally distributed, some of the participants are in comparatively humble circumstances; but it may be observed that the " manual labor class," or the poor, possess but a small fraction of the land and capital. In 1906 The Deposits in P.O. Savings Bank ... ... were 6155,996,446 Trustee
53,009,299 Consols purchased for small holders P. O. S. B. ...,
18,916,199 Trustee S. B.
2,369,869 In 1905 The Capital of Building Societies ...
70,348,997 The Funds of Trade Unions, Co-operative,
Friendly and Provident Societies ... ... were 123,517,888 The Funds of Industrial Life Assurance Societies
(See Eleventh Annual Report of the Labor Department of the Board of Trade, Cd.3.690, 1907 ; Statistical Abstract, C.-3,691, 1907; and Fabian Tract No.7, "Capital and Land ''), or less than one thirty-second part of the total accumulated wealth, and about 629 per head of the adult workers in the "manual labor class,' even supposing the whole was owned by members of that class. Against this, too, must be set the debts of the laborers to pawnbrokers, shopkeepers, and others, which amount, in the aggregate, to a considerable sum.
† Some of this might, from another point of view, be reckoned rather as interest op the cost of education of valuable servants of the community, and accordingly deducted from this total and added to that of interest.