is even then taken only of food, clothing, houses and furniture. 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" (Prof. 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. The total profits from the ownership of lands, houses, tithes, etc., as assessed for income tax in 1901-2 was 238,231,937; the rents of mines, quarries, ironworks, gasworks, waterworks, canals, fishings, shootings, markets, tolls, etc., amounted to £40,988,572 (Inland Revenue Report, 1902-3, Cd-1,717). Many of these are notoriously far from being fully assessed. The total "rent"* of the United Kingdom must therefore amount to at least £290,000,000, or nearly one-sixth of the total produce. Total produce, £1,800,000,000. R.-Rent, £290,000,000. In 1843 the total was (for Great Britain only) £95,284.497; in 1855 (for the United Kingdom) £124,871,885. Interest is distinguished by economists from the rent of land on the one hand, and the "wages of superintendence," or other payment for services on the other. The profits of public companies, foreign investments, railways, etc., assessed to income tax in the United Kingdom in 1901-2 amounted to 260,274,742. The interest payable from British public funds (rates and taxes) was, in addition, 22,757,110, and from Indian, Colonial and Foreign Governments 28,126,796 (Inland Revenue Report, 1901-2, Cd.-1,717). 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 £360,000,000. Adding hereto the rent mentioned in the preceding section, we have a total of £650,000,000 for rent and interest together. The following diagram represents the proportion of the nation's income thus claimed from the workers, not in return for any service Total product, £1,800,000,000. R.-Rent, £290,000,000. * See Fabian Tract No. 7, "Capital and Land," pp. 7 and 8. 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 for its work as profits and salaries about £460,000,000 annually.+ *As the unearned income is not equally distributed, some of the participants are in comparatively humble circumstances; but it may be observed that the "manuallabor class," or the poor, possess but a small fraction of the land and capital. In 1901 The Deposits in P.O. Savings Bank were 140,392,916 £348,804,106 (see Eighth Annual Report of the Labor Department of the Board of Trade, Cd.-1,124, 1902; Statistical Abstract, C.-1,239, 1902; and Fabian Tract No. 7, "Capital and Land"), or less than one thirty-fifth part of the total accumulated wealth, and under £23 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 on the cost of education of valuable servants of the community, and accordingly deducted from this total and added to that of interest. ... ... Sir R. Giffen: total income, less rent, interest, ... ... VIII.-The Classes. £313,000,000 300,000,000 244,000,000 180,000,000 The total amount of rent, interest, profits and salaries was estimated some years ago as follows : Professor Alfred Marshall, Report of Industrial ... £753,000,000 675,000,000 Sir R. Giffen, Essays in Finance, vol. ii., p. 467 (1886) Mr. Mulhall, Dictionary of Statistics, p. 246 Mr. A. L. Bowley, Statistical Society's Journal, vol. lviii., part 2, p. 284 (1891) Since these estimates were made the wealth of the country has grown greatly, and on the basis of the increase in gross assessments to income tax, we estimate that the total drawn by the legal disposers of what are sometimes called the "three rents" (of land, capital and ability) amounts at present to about £1,110,000,000 yearly, or just under two-thirds of the total produce. And the Masses. The total amount of wages was at the same time estimated by the statisticians :: Professor Leone Levi (as above)... *These estimates, which are based on average rates of wages, multiplied by the number of workers, assume, however, reasonable regularity of employment, and take no account of the fact that much of the total amount of nominal wages is reclaimed from the workers in the shape of rent. Much must, therefore, be deducted to obtain their real net remuneration. Allowing for the increase since these estimates were made we may safely say that the manual-labor class receives for all its millions of workers only some £690,000,000. This unequal division of the fruits of the combined labor of the working community divides us, as Lord Beaconsfield said, into "two nations," widely different from each other in education, in comfort, and in security. There is some limited central territory between, and some luckier few escape from the large camp in which their fellows are toiling to the more comfortable fortress of the monopolists, from which, on the other hand, others sink into destitution from extravagance or misfortune. But for the great majority the lines between these two nations are practically impassable. It is not that this division is based on any essential differences in the industry or morality between individuals. "Since the human race has no means of enjoyable existence, or of existence at all, trut what it derives from its own labor and abstinence, there would be no ground for complaint against society if every one who was willing to undergo a fair share of this labor and abstinence could attain a fair share of the fruits. But is this the fact? Is In this connexion it may be mentioned that the total income of the charities of the United Kingdom, including endowments, amounts to £10,040,000, or 1 per cent. of the foregoing total. £2,040,000 of this, it may be added, is expended upon Bible societies alone (Mulhall, Dictionary of Statistics, p. 112). The total cost of poor relief in 1901-2 was £15,305,642. |