Labour and the Popular Welfare

BOOK I. The Divisible Wealth of the United Kingdom

THE DIVISIBLE WEALTH OF THE UNITED KINGDOM

CHAP. PAGE

I. The Welfare of the Home, as the Logical End of Government—

A Ground of Agreement for all Parties 3 Facts and Principles which are the same for everybody 6 The Income of the Individual as the Aim and Test of Government 8 Private Income and the Empire 10 Patriotism and the Home 11 Cupidity as a motive in Politics 12 The right Education of Cupidity 13

II. The Conditions involved in the idea of a Legislative Redistribution of Wealth; and the Necessary Limitations of the Results—

Cupidity and the Poorer Classes 14 The Limits of Sane Cupidity as fixed by the Total Production 16 Unforeseen Results of an Equal Division of Wealth 18 Contemporary Agitator on Slavery 20 Workmen as their own Masters 21 Ownership of the Means of Labour impossible for Modern Workman 22 Equality possible only under a Universal Wage-System 24 Equality and Universal Labour 26

III. The Pecuniary Results to the Individual of an Equal Division, first of the National Income, and secondly of certain parts of it—

The Income of Great Britain 27 Division of the National Income 29 How to divide the Income equally 30 Shares of Men, Women, and Children 31 The Maximum Income of a Bachelor 32 Smallness of the result 33 Maximum Income of a Married Couple 34 Practical absurdity of an Equal Division of Income 36 A complete Redivision of Property advocated by nobody 38 The attack on Landed Property 40 Popular ignorance as to the Real Rental of the Landlords 42 The Landed Aristocracy 44 Multitude of Small Landowners 45 Owners of Railway Shares and Consols 46 Inappreciable cost of the Monarchy 47 Forcible Redistribution impossible 48

IV. The Nature of the National Wealth: first, of the National Capital; second, of the National Income. Neither of these is susceptible of Arbitrary Division—

Difference between Wealth and Money 49 Wealth as a whole not divisible like Money 52 More luxurious forms of Wealth incapable of division 54 The Wealth of Great Britain considered as Capital 56 The elements which compose the National Capital 58 Ludicrous results of an Equal Division of Capital 60 Division of Income, not of Capital, alone worth considering 62 Elements which compose the National Income 64 Material Goods and Services 66 Home-made Goods and Imports 67 Two-thirds of the Population dependent on Imported Food 68 Variation of the National Income relatively to the Population 70 Incomes of other countries compared with that of our own 72 Productivity of Industry not determined by Time 74 Unperceived increase of the Income of the United Kingdom 76 Immense Possible Shrinkage in our National Income 78 The Great Problem 80

BOOK II. The Chief Factor in the Production of the

THE CHIEF FACTOR IN THE PRODUCTION OF THE NATIONAL INCOME

I. Of the various Factors in Production, and how to distinguish the Amount produced by each—

The Cause of Production generally 84 The Production of Given Quantities 85 Production a Century Ago 86 Amount of Capital employed in it 87 Land, Capital, and Human Exertion 88 How much produced by each 89 The chief Practical Problem in Contemporary Economics 90

II. How the Product of Land is to be distinguished from the Product of Human Exertion—

Rent the Product of Land 93 The Accepted Theory of Rent illustrated by an Example 94 The Product of Agricultural Labour 96 The Product of Land 97 Maximum Produce of Labour 98 Surplus produced by Land 99 Land a Producing Agent as distinct from Labour 100 The Existence of Rent not affected by Socialism 102 Rent necessarily the Property of whoever owns the Land 104 The Argument of this Volume embodied in the case of Rent 106

III. Of the Products of Machinery or Fixed Capital, as distinguished from the Products of Human Exertion—

Capital of Two Kinds 108 The part of the Product produced by Machinery or Fixed Capital 110 Example of Product of Machinery as distinct from that of Labour 112 The Products of a Machine necessarily the Property of Owner 114 The Cotton Industry in the Last Century 116 Arkwright’s Machinery 118 The Iron Industry of Great Britain 119 Machinery and Production of Iron 120 Machinery and Wage Capital 121

IV. Of the Products of Circulating Capital, or Wage Capital, as distinguished from the Products of Human Exertion—

Simplest Function of Wage Capital 122 Distinguishing Function of Modern Wage Capital 124 Wage Capital mainly productive as a means of directing Labour 126 Slaves and Free Labourers 128 Wage Capital and Progress 129 Wage Capital as related to the production of New Inventions 130 Capital the Tool of Knowledge 132 Wage Capital and Arkwright 133 Wage Capital as Potential Machinery 134 How to discriminate the amount produced by Wage Capital 136

V. That the Chief Productive Agent in the modern world is not Labour, but Ability, or the Faculty which directs Labour—

The best Labour sometimes useless 138 Labour not the same faculty as the faculty which directs Labour 140 Extraordinary confusion in current Economic Language 142 Labour a Lesser Productive Agent 144 Ability a Greater Productive Agent 145 The Vital Distinction between Ability and Labour 146 Ability not a form of Skilled Labour 148 Capital applied successfully the same thing as Ability 150 Obvious Exceptions 152 Ability the Brain of Capital 153 Ability as the Force behind Capital the Cause of all Progress 154

VI. Of the Addition made during the last Hundred Years by Ability to the Product of the National Labour. This Increment the Product of Ability—

Production in the Last Century 156 Growth of Agricultural Products 158 Growth of Production of Iron 159 Ability and Agriculture in the Last Century 160 The Maximum Product that can be due to Labour alone 162 Present Annual Product of Ability in the United Kingdom 164 The Product of Capital virtually Product of the Ability of the Few 166

BOOK III. An Exposure of the Confusions Implied in Socialistic

AN EXPOSURE OF THE CONFUSIONS IMPLIED IN SOCIALISTIC THOUGHT AS TO THE MAIN AGENT IN MODERN PRODUCTION.

I. The Confusion of Thought involved in the Socialistic Conception of Labour—

A confusing Socialistic Formula 171 A Plausible Argument 173 A Plausible Argument analysed 174 Its implied meaning considered 175 The real Taskmaster of Labour not an Employing Class, but Nature 176 Different position of Ability 178 The Organist and Bellows-blower 179 The Picture and the Canvas 180 The Qualifying Factor 181 Do all men possess Ability 182 Labour itself non-progressive 183 Ancient Labour equal to Modern 184 A Remarkable Illustration 185 Labour as trained by Watt 186 Labour as assisted by Maudslay 187

II. That the Ability which at any given period is a Producing Agent, is a Faculty residing in and belonging to living Men—

A Socialistic Criticism 188 Primæval Progress and Labour 190 Rudimentary Ability 191 Primæval and Modern Inventions 192 A more Important Point 193 The necessity for Managing Ability increased by Inventive Ability 194 The main results of Past Ability inherited by Living Ability 196 Productive Ability the Ability of Living Men 198 Fresh demonstration of the Productivity of Ability 200

III. That Ability is a natural Monopoly, due to the congenital Peculiarities of a Minority. The Fallacies of other Views exposed—

An Error of Mr. Herbert Spencer’s 202 A Philosophic Truth, but an Economic Falsehood 204 Whole body of Successful Inventors a very small Minority 206 Ability and Opportunity 208 Ability not produced by Opportunity 209 Ability the Maker of its own Opportunities 210 Ability as a matter of Character 212 Function of such Ability 213 Characters not equalised by Education or Opportunity 214 Progress due solely to the Few 216 Progress in the Iron Industry 217 Early Applications of Ability to British Iron Production 218 Ability opposed by the Age instead of representing it 220 Isolated Action of Ability 222 Arkwright and his associates 223 The Value of Watt’s Patent as estimated by his Contemporaries 224 Industrial Progress the work of the Few only 226

IV. The Conclusion arrived at in the preceding Book restated. The Annual Amount produced by Ability in the United Kingdom—

Grades of Ability 228 Proportion of Able Men to Labourers 230 A Rough Calculation 231 More than half our National Income produced by a Small Minority 232

BOOK IV. The Reasonable Hopes of Labour—Their Magnitude,

THE REASONABLE HOPES OF LABOUR—THEIR MAGNITUDE, AND THEIR BASIS

I. How the Future and Hopes of the Labouring Classes are bound up with the Prosperity of the Classes who exercise Ability—

Short Summary of the preceding Arguments 237 The preceding Arguments from the Labourer’s Point of View 240 The Share of Labour in the growing Products of Ability 242 The amount produced by Labour 244 The amount taken by Labour 245 Continuous Recent Growth of the Receipts of Labour 246 Growth of the Receipts of Labour during Queen Victoria’s Reign 248 Actual Gains of Labour beyond the Dreams of Socialism 250 Two Points to be considered 252

II. Of the Ownership of Capital, as distinct from its Employment by Ability—

Land and its Owners 253 Passive Ownership of Capital 255 The Class that Lives on Interest 256 The Hope of Interest as a Motive 257 Capital created and saved mainly for the sake of Interest 258 Family Feeling 260 The Bequest of Capital 261 Interest a Necessary Incident as the Price of the Use of Capital 262 A Part of the Interest of Capital constantly appropriated by Labour 264 Interest not to be confused with Large Profits 266 Interest not to be confused with the Profits of Sagacity 268 Enormous gains of Labour at the expense of Ability 270 Labour and the Existing System 272

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