FOOTNOTES:

To return then to definite facts, since in the year 1800 an equal division of all the wealth of Great Britain would have yielded to each family an income of eighty pounds, and since eighty years later an equal division of the total which was actually appropriated as wages by wage-paid labour alone, would have yielded to each labourer's family some twenty-five pounds in addition, the labouring class as a whole in Great Britain to-day, instead of receiving less than its labour produces, receives on the lowest computation from thirty to thirty-three per cent. more. Or, to put the matter otherwise, more than a fourth of its present income is drawn from a fund which would cease to have any existence if it were not for the continued activity of a specially gifted class, by whose brains the data of science are being constantly remastered and re-assimilated, and by whose energy they are applied to the minds and muscles of the many from the earliest hour of each working day to the latest. And what is true labour, its products, and receipts in Great Britain, is broadly true of them inAmerica and all other countries also, where modern capitalism has arrived at the same stage of development.

We are, let me say once more, not here contemplating individual cases. Of the total wage-fund divided among the labourers in any given country, too much may be given to some men, and too little to others; but of every million pounds which a million of such men receive, some two hundred and fifty thousand are distributed well or ill, which have not been produced by the efforts of these men themselves, but are due to the efforts of a class which is definitely outside their own.[21]If, then, it is contended that the just reward of labour is that total of wealth which labour itself produces, the idea that labour, in respect of its pecuniary remuneration, is, under present conditions, the victim of any general wrong, is so far from having any justification in fact that it only touches fact at all by representing a direct inversion of it. Labour, as a whole, does not, under existing conditions, get less than it produces.[22]It gets a very great deal more. If, therefore, the claims of labour are based on, and limited to, the amount of wealth which is produced by labour itself—that is to say, the total which it would now produce were the faculties of the directing and organising minority paralysed—what labour, thus appropriating the entire product, would receive, would be far less, not more, than what it actually receives to-day. Instead of defrauding it of any part of its due, the existing system is treating it with an extreme and even wanton generosity.

Is it, then, here contended, many readers will ask, that if matters are determined by ideal justice, or anything like practical wisdom, the remuneration of labour in general ought henceforth to be lessened, or at all events precluded from any possibility of increase? Is it contended that the employing and directing class should attempt or even desire to take back from those directed by it every increment of wealth possessed by them which is not produced by themselves? If any one thinks that such is the conclusion which is here suggested, let himsuspend his opinion until, as we shall do in another chapter, we return to the subject and deal with it in a more comprehensive way. Our conclusion, as for the moment we must now be content to leave it, is not that the labourers have not a claim, practically valid, to the only portion of their income which has any tendency to grow, but merely that they should understand the source from which this portion is drawn—a source which consists of the efforts of other men, not of their own.

And now, before we return to this particular question, we will go on to deal with another which to a certain extent overlaps it, but is narrower in its compass, and seems, for that very reason, to many minds of greater practical moment. I mean the question of interest, or the income which comes to its recipients without any necessary effort on their own part to correspond to it.

FOOTNOTES:[18]I met an interesting embodiment of this mood of mind in America, in the person of a slim young man, well-dressed, well-educated, refined in his speech and manners, who worked as a clerk or accountant in some large financial house. To my great astonishment he introduced himself to me as a socialist. "I don't believe like Marx," he said, "that labour produces everything, but I maintain that the task-work of the employed and directed labourer, of whatever grade—whether he uses a pen or a chisel—is always worth more than the wages which the employers pay him for performing it. I feel this myself with regard to my own firm. Month by month I am worth to it more than the sums it gives me. This," he went on, with an odd gleam in his eyes, "is what I may not endure to think of—that others should be always appropriating values which I have produced myself; and nine out of ten of the men who become socialists, do so because they feel as I do about this particular point."[19]General Walker also seeks to assimilate the product of ability to rent; and my criticism of Mr. Webb in this respect applies to him also. General Walker's book was mentioned frequently in connection with my late addresses in America; and it was said by one or two critics that I had borrowed from, and ought to have acknowledged my debt to, him. As a matter of fact, I never saw his book till after my return to England, when I read it with interest and admiration. His doctrines with regard to theentrepreneuris, so far as it goes, fundamentally identical with the main argument of this volume. My criticism of him would be that he does not give to this particular part of his doctrine the foremost place which logically belongs to it; and that though attributing to theentrepreneursome special productive faculty distinct from labour, he starts his work with re-enumerating the old doctrine that labour, capital, and law are the only factors in production.[20]For example, the silk factory at Derby, erected by Lombe, in the reign of George II., the machinery of which comprised 26,000 wheels.[21]These figures represent less than the truth. They are merely given in order to indicate the general character of the situation to-day, as compared with that of an earlier, but still comparatively recent period. To go into details minutely would involve extensive and here needless discussion.[22]A letter was sent me by a friend in America, from a writer who, commenting on my late addresses in that country, said that in the main he entirely agreed with my arguments, as against socialism; but that he could not divest himself of the belief that labour as a whole got less than it produced, and was thus as a whole suffering a chronic wrong. He suggested, however, a method, fundamentally analogous to that set forth in the text, of computing what labour, as such, does produce in reality. He gave his own opinion as to actual facts, as an impression merely; but how misleading impressions may be can be seen from his statements "that allvery greatfortunes, at all events, must be derived from the underpayment of labour." Had he only considered the case in detail, he would have seen that labour received the highest wages from some of the richest employers. According to his theory the wages of labour, in such cases, would touch the minimum.

[18]I met an interesting embodiment of this mood of mind in America, in the person of a slim young man, well-dressed, well-educated, refined in his speech and manners, who worked as a clerk or accountant in some large financial house. To my great astonishment he introduced himself to me as a socialist. "I don't believe like Marx," he said, "that labour produces everything, but I maintain that the task-work of the employed and directed labourer, of whatever grade—whether he uses a pen or a chisel—is always worth more than the wages which the employers pay him for performing it. I feel this myself with regard to my own firm. Month by month I am worth to it more than the sums it gives me. This," he went on, with an odd gleam in his eyes, "is what I may not endure to think of—that others should be always appropriating values which I have produced myself; and nine out of ten of the men who become socialists, do so because they feel as I do about this particular point."

[19]General Walker also seeks to assimilate the product of ability to rent; and my criticism of Mr. Webb in this respect applies to him also. General Walker's book was mentioned frequently in connection with my late addresses in America; and it was said by one or two critics that I had borrowed from, and ought to have acknowledged my debt to, him. As a matter of fact, I never saw his book till after my return to England, when I read it with interest and admiration. His doctrines with regard to theentrepreneuris, so far as it goes, fundamentally identical with the main argument of this volume. My criticism of him would be that he does not give to this particular part of his doctrine the foremost place which logically belongs to it; and that though attributing to theentrepreneursome special productive faculty distinct from labour, he starts his work with re-enumerating the old doctrine that labour, capital, and law are the only factors in production.

[20]For example, the silk factory at Derby, erected by Lombe, in the reign of George II., the machinery of which comprised 26,000 wheels.

[21]These figures represent less than the truth. They are merely given in order to indicate the general character of the situation to-day, as compared with that of an earlier, but still comparatively recent period. To go into details minutely would involve extensive and here needless discussion.

[22]A letter was sent me by a friend in America, from a writer who, commenting on my late addresses in that country, said that in the main he entirely agreed with my arguments, as against socialism; but that he could not divest himself of the belief that labour as a whole got less than it produced, and was thus as a whole suffering a chronic wrong. He suggested, however, a method, fundamentally analogous to that set forth in the text, of computing what labour, as such, does produce in reality. He gave his own opinion as to actual facts, as an impression merely; but how misleading impressions may be can be seen from his statements "that allvery greatfortunes, at all events, must be derived from the underpayment of labour." Had he only considered the case in detail, he would have seen that labour received the highest wages from some of the richest employers. According to his theory the wages of labour, in such cases, would touch the minimum.

INTEREST AND ABSTRACT JUSTICE

The essential feature of interest, as distinct from the income due to active ability, is that while the latter ceases as soon as the able man ceases to exert himself, the former continues to replenish the recipient's pockets, though for his part he does nothing, or need do nothing, in return for it. Since, then, the possession of this particular form of income is admittedly unconnected with any concurrent exertion on the part of those possessing it (such is the argument of the objectors) the whole portion of the national wealth which, in the form of interest, is at present appropriated by the presumably or the possibly idle, might obviously be appropriated by the state, and applied to public purposes, without lessening in any way even the highest of those rewards which are due to, and are needed to stimulate any active ability whatsoever, and hence without lessening the efficiency of the wealth-producing process as a whole. If we adopt the programme which this argument suggests, itwill be possible, so its advocates say, to satisfy the demands of labour by a shorter and more direct method than that of committing ourselves to an estimate of what labour actually produces, and endeavouring to secure that the total which is paid to labour shall accord with it.

Now, this programme raises two separate questions. One question is whether the proposed confiscation of interest is in reality, as its advocates maintain it to be, practicable in the sense that the disturbances which it would necessarily cause would not interfere with the production of the fund which it is desired to distribute, and so perhaps leave all classes poorer and not richer than they are. The other question is whether such a confiscation would be just. To some people this second question will possibly seem superfluous. If it can be shown, they will say, that a policy, the avowed object of which is the enrichment of the many at the expense of the relatively few, could be really carried out successfully, and if the many had the power of insisting on it, an inquiry into its abstract justice is merely a waste of time; for whenever the wolf is face to face with the lamb, it will eat up the lamb first and justify its conduct afterwards. And in this argument there is a certain amount of truth; but those who take it for the whole truth allow their own cynicism to overreach them. The fact remains that even the wolves of the human world are obliged to assume, as a kind of necessary armour, and often as theirprincipal weapon, a semblance of justice, however they may despise the reality. The brigand chief justifies his war on society by declaring that society has unjustly made war on him. The wildest demagogues, in their appeals to popular passion, as the history of the French Revolution and of all revolutions shows us, have always been obliged to exhibit the demands of mere self-interest as based on some general theory of what is morally just or right; and however much the theory may accommodate itself to the hope of private advantage, there are few demands made for any great social change which do not derive a large part of their force from persons with whom a belief in the justice of the demands stands first, while—so far at least as their own consciousness is concerned—the prospect of personal advantage stands second or nowhere. This is certainly so in the case which we are now considering. We will, therefore, begin with the question of abstract justice.

Let us begin, then, with reminding ourselves that when interest is attacked as such, on the ground that its recipients have themselves done nothing to produce it, whereas other incomes, no matter how large, are presumably the equivalents of some personal effort which corresponds to them, it is assumed that every man has, in natural justice, a right to such wealth as he actually himself produces; and what he produces, as we saw in the last chapter, is that amount of wealth which would not have been produced at all had his efforts notbeen made, or been other or less intense than they have been.

Thus far, then, for the purposes of the present discussion, all parties are agreed; but the moment the assailants of interest take the next step in their argument, we shall find that their errors begin—errors resulting, as we shall see, from an imperfect analysis of facts. For them the two types of correspondence between productive effort and product are, firstly, the manual labourer, who performs some daily task such as riveting plates or bricklaying, and receives an equivalent in wages at the end of each day or week; and, secondly, the manager of some great industrial enterprise, who spends each day so many hours in his office, issuing minute directions with regard to the conduct of his subordinates, and sending his receipts to the bank as they come in from his customers. But these types, though accurate so far as they go, do but cover a part of the actual field of fact. Practically, though of course not absolutely, they ignore the element of time. They represent effort and product as being always so nearly simultaneous that, although the former must literally precede the latter, yet, if we estimate life in terms of years, or even months, or weeks, a man has ceased to produce as soon as he has ceased to work.

Now, of certain forms of effort this may be true enough. A bricklayer, for example, as soon as he ceases to lay bricks, ceases to produce anything. His wall-building closes its effects with the wallswhich he himself has built. It does nothing to facilitate the building of other walls in the future. Similarly such ability as consists in a gift for personal management often ends its effects, and leaves no trace behind it, as soon as the manager possessing these gifts retires.

But with many forms of ability the case is precisely opposite. The products of their exercise do not even begin to appear till after—often till long after—the exercise of the ability itself has altogether come to an end. Let us, for example, take the case of a play; and since socialists are still included among the objectors whom we have in view, let us take one of the popular plays written by Mr. Bernard Shaw. Such a play, as Mr. Shaw has publicly boasted—for otherwise I should not mention, and should know nothing of his private affairs—brings to its author wealth in the form of amazing royalties; but until it is acted it brings him no royalties at all, and the actors begin with it only when his own efforts are ended. Moreover, not only do these royalties only begin then, but having once begun, they have no tendency to exhaust themselves. On the contrary the chances are that they will go on increasing till the time arrives, if it ever does, when Mr. Shaw is no longer appreciated. Mr. Shaw, in fact, if he had written one of his most successful plays at twenty, might, so far as that play is concerned, be idle for ever afterwards, even if he lived to the age of Methuselah, and still be enjoying in royalties theproduct of his own exertions, though he had not exerted himself productively for some seven or eight hundred years.

There is no question here of whether, under these conditions, a person like Mr. Shaw might not feel himself constrained on some ground or other to surrender his copyright at some period prior to his own demise. The one point here insisted on is that he could not renounce it on the ground that the wealth protected by it was no longer produced by himself. If he is entitled to the royalties resulting from the performance of his play at any time, on the ground that every man has a right to the products of his own exertions, his right to the royalties resulting from its ten-thousandth performance is, on this ground, as good as his right to the royalties resulting from the first. The royalties on a play, in short, show how certain forms of effort, though not all, continue to yield a product for an indefinite period, though the original effort itself may be never again repeated; and herein these royalties are typical of modern interest generally. They do not, however, constitute in themselves more than a small part of it. We will therefore turn to interest of other kinds, the details of whose genesis are indeed widely different, but which consist similarly of a constant repetition of values, without any corresponding repetition of the effort in which the series originated.

Those which we will consider first are theproducts of organic nature, which have been dwelt upon by a well-known writer as showing us the ultimate source of industrial interest generally, and also at the same time its natural and essential justice. It may be a surprise to some to learn who this writer is. He is Henry George, who is best known to the public as the advocate of a measure of confiscation so crude and so arbitrary, that even socialists have condemned it as impracticable without serious modifications. Henry George, however, although he outdid most socialists in his attack on private wealth of one particular kind—that is to say, the rent of land—was equally vehement in his defence of the interest of industrial capital. Socialists say—and the aphorism is constantly repeated—"A man can get an income only by working or stealing; there is no third way." In answer to this, it was pointed out by George that one kind of wealth, at all events—and we may add that here we have wealth in its oldest form—consists of possessions yielding a natural increase, which has been neither made by the possessors, nor yet stolen by them from anybody else. That is to say, it consists of flocks and herds. A shepherd or herdsman starts with a single pair of animals, from which parents there arises a large progeny. This living increment has not been produced by the man, but it is still more obvious that it has not been produced by his neighbours, and it therefore belongs in justice to the man who owns the parents. George pointed out also that whole classes ofpossessions besides are, for by far the larger part of their value, equally independent either of corresponding work or of theft. Among such possessions are wines, whose quality improves with time, and which, if sold to-day, may be worth tenpence a bottle, but which four years hence may be worth perhaps half-a-crown. In all such cases—this was George's contention—we have some possession originally small to start with, which year by year is increased in amount or at least in value, not by the efforts of the possessor, but by the secret operations of nature. Here, he argued, we have capital in its typical form; and interest is the gift of nature to the man by whom the capital is owned.

George, however, is constrained to supplement this proposition by another. Though he assumes that of the products which are, in the modern world, actually paid as interest by the borrower of capital to the owners of it, the larger part consists of gifts of unaided nature, he admits that they are not the whole. He admits that a part of it is paid for the use of machinery. Now, such interest, he says, has a definitely different origin, and cannot intrinsically be justified in the same way; and if all wealth consisted of such commodities as are due to the efforts of man, and to the man-made machinery which assists him, all interest would be really, as it is said to be by some, indefensible. But, he continues, since interest on capital such as machinery is not thewhole of the interest paid in the modern world, but is only a minor part of it, and since in the modern world all forms of capital are interchangeable, the laws which govern us in our dealings with the lesser quantity must necessarily be assimilated to those which govern us in our dealings with the greater. If a ram and a sheep are capital which yields just interest, because their wool and their progeny are increments due to nature, and if a ram and a sheep are exchangeable for some kind of machine, the possession of the one must be placed on a par with the possession of the other. The machine must be treated, though it is not so in strictness, as if it were prolific in the same sense as the beasts are; and a part of what it is used to produce must be paid by the user to the owner of it.

Now, both these arguments—that which deals with the fact of natural increase, and that which deals with the assimilation of all such possessions as are interchangeable—are in principle sound. The first, indeed, touches the very root of the whole matter; but the first is exaggerated in his statement of it, and unduly limited in his application, and the second is wholly unnecessary for proving what he desires to prove. The first is exaggerated in his statement of it because, as a matter of fact, the kind of capital whose interest is described by him as the gift of nature is not the major, it is only a minor part of the capital yielding interest under the conditions which obtain to-day.A part far larger is capital in the form of machinery; and if the distinction which George draws between the two is a true one, the case of the flocks and herds should be assimilated to that of the machines, not the case of the machines to that of the flocks and herds. Interest should be denied to both kinds of capital because machines are not naturally prolific, instead of being conceded to both because flocks and herds are so. We shall find, however, that the distinction which George seeks to establish is illusory, that both kinds of capital yield interest in the same way, and that his justification of it in the one case is equally applicable to it in the other.

His attempt to distinguish between the two takes the form of a criticism of Bastiat, according to whom the typical source of interest is the added productivity which a given amount of human effort acquires by the use of certain lendable implements. As a type of such implements or machines, Bastiat takes a plane. The maker of a plane lends this plane to another man, who is thus enabled to finish off in a week four more planks than he could have done had he used an adze. If, at the end of the week, the borrower does nothing more than return the plane in good repair to the lender, the borrower gains by the transaction; but the maker and lender not only gains nothing, he loses. For a week he loses his implement which he otherwise might have used himself, and the extra planks which, by the use of it, he could have produced just as easily ashis fellow. Such an arrangement would be obviously and absurdly unjust. Justice demands—and practice here follows justice—that he get at the end of the week, not only his own plane back again, but two of the extra planks due to its use besides. A plane, in short—such is Bastiat's meaning, though he does not put it in this precise way—is a possession which is fruitful no less than a sheep and a ram are, or a wine which adds to its value by the mere process of being kept, and it, therefore, yields interest for a virtually similar reason. George, however, seeks to dispose of Bastiat's argument thus: If the maker of the plane lends it, he says, instead of himself using it, and the borrower borrows a plane, instead of himself making one, such an arrangement is simply due to the fact that both parties for the moment happen to find it convenient. For, George observes, it is no part of Bastiat's contention that the plane is due to the exertion of any faculties possessed by the maker only. Either man could make it, just as either man could use it. Why, then, should A pay a tribute to B for the use of something which, to-morrow, if not to-day, he could make for himself without paying anything to anybody?

Now, if Bastiat's plane is to be taken as signifying a plane only, the criticism of George is just. But what George forgets is that, if the plane means a plane only—an implement which any man could make just as well as the lender—interest on planes, besides being morally indefensible, would as a matterof fact never be paid at all. Bastiat's plane, however, stands for a kind of capital, the borrowing of which and the paying of interest on which, form one of the most constant features of the modern industrial world; and he evidently assumes, even if he does not say so, that for all this borrowing and paying there is some constant and sufficient reason. Now, the only reason can be—and George's own criticism implies this—that in order to produce the machine-capital borrowed certain faculties are needed which are not possessed by the borrowers; and though this may not be true of a simple hand-plane itself, it is emphatically true of the elaborate modern machinery of which Bastiat merely uses his hand-plane as a symbol. In order to produce such implements of production as these, the exertion of faculties is required which are altogether exceptional, such as high scientific knowledge, invention, and many others. Let invention—the most obvious of these—here do duty for all, and let us consider, for example, the mechanism of a modern cotton mill, or of a boot factory, or a Hoe printing press, or a plant for electric lighting. All these would be impossible if it had not been for inventive faculties as rare in their way as those of a playwright like Mr. Shaw.

No one will deny that when a play like "Man and Superman" first acquires a vogue which renders its performance profitable, the royalties paid to the author are values which he has himself created, not indeed by his faculties used directly,but by his faculties embodied in a work which he has accomplished once for all in the past, and which has thenceforward become a secondary and indefinitely enduring self; and if this is true of the royalties resulting from its first profitable performance, it would be equally true of those resulting from the last, even though this should take place on the eve of the Day of Judgment. With productive machinery the case is just the same. If Mr. Shaw, instead of writing "Man and Superman," had been the sole inventor of the steam-engine, and the only man capable of inventing it, every one will admit that he would, by this one inventive effort, have personally co-operated for a time with all users of steam-power, and been part-producer of the increment in which its use resulted. And if this would have been true of his invention when it was only two years old, it would be equally true now. He would still be co-operating with the users of every steam-engine in the world to-day, and adding to their products something which they could not have produced alone.

Here, then, we see that in one respect at all events the two kinds of capital, which George attempts to contrast, yield interest for a precisely similar reason. Both consist of a productive power or agency which is external to the borrower himself; and it makes no difference to him whether the auxiliary power borrowed inheres in living tissue, or in a mechanism of brass or iron.

But the resemblance between these two forms of capital, and the identity of the reasons why both of them bear interest, do not end here. I quoted in a former chapter an observation of Mr. Sidney Webb's, which he himself applies in a very foolish way, but which is obviously true in itself, and in the present connection is pertinent. Some men he admits are incomparably more productive than others, because they happen to be born with a special kind of ability. But what is this ability itself? It is simply the result, he says, of a process which lies behind them—namely, the natural process of animal and human evolution; and its special products are like those of exceptionally fertile land. That is to say, the ability which produces modern machines is in reality just as much a force of nature as that which makes live-stock fertile, and brings raw wine to maturity. But the same line of argument will carry us much farther than this. As Dr. Beattie Crozier has shown in his work,The Wheel of Wealth, the part which nature plays in productive machinery is not confined to the brains of the gifted inventors and their colleagues. It is incorporated in, and identified with, the actual machines themselves. The lever, the cam, the eccentric, the crank, the piston, the turbine, the boiler with the vapour imprisoned in it—devices which it has taxed the brains of the greatest men to elaborate and to co-ordinate—were all latent in nature before these men made them actual; and when once such devices areactualised it is nature that makes them go. There is not merely a transformation of so much human energy into the same amount of natural energy; but nature adds to the former a non-human energy of her own; as—to take a good illustration of Dr. Crozier's—obviously happens in the case of a charge of gunpowder, which, "when used for purposes of blasting, has," he observes, "in itself a thousand times the quantity of pure economic power that is bought in the work of the labourers who supply and mix the ingredients." That is to say, whenever human talent invents and produces a machine which adds to the productivity of any one who uses it with sufficient intelligence, the inventor has shut up in his machine some part of the forces of nature, as though it were an efreet whom a magician has shut up in a bottle, and whose services he can keep for himself, or hand over to others. The efreets shut up in machinery will not work for human beings at all, unless there are human magicians who manage thus to imprison them. They therefore belong to the men who, in virtue of their special capacities, are alone capable of the effort requisite to perform this feat; and it matters nothing to others, by whom the efreets' services are borrowed, whether the effort in question occupied a year or a day, or whether it took place yesterday or fifty years ago.

The borrowed efreet produces the same surplus in either case, and interest is a part of this surplus which goes, not to the efreet himself (for this is notpossible), but to his master, just as a cab-fare is paid to the cabman and not his horse.

Machine-capital, then—or capital in its typical modern form—consists of productive forces which are usable by, and which indeed exist for, the human race at large, because, and only because, they have been captured and imprisoned in implements by the efforts of exceptional men, whose energy thus exercised is perpetuated, and can be lent to others; and what these men receive as interest from those by whom their energy is borrowed, is a something ultimately due to the energy of the lenders themselves—nor is this fact in any way altered by lapse of time. Thus, so far as these special men are concerned, the alleged difference between earned income and unearned altogether disappears; and if one man lives in luxury for sixty years on the interest of an invention which it took him but a month to perfect, while another man every day has to toil for his daily bread, the difference between the two consists not in the fact that the one man works for his bread and the other man does nothing for it, but in the fact that the work of one produces more in a day than that of the other would do in a hundred lifetimes.

Here, however, we shall be met with two important objections. In the first place, it will no doubt have occurred to many readers that throughout the foregoing discussion we have assumed that the persons who receive interest on machinery arein all cases the persons by whom the machinery was invented and produced. To the actual inventors and producers it may, indeed, be conceded that the interest which they themselves receive has been earned by their own exertions; but no such concession, it will be said, can be made to these men's heirs. An Edison or a Bessemer may have produced whatever income has come to him in his latest years from the inventive efforts of his earliest; but if such a man has a son to whom this income descends—a half-witted degenerate who squanders it on wine and women, who will not work with his hands and who cannot work with his head—no one can pretend that, in any sense of the word, a fool like this produces any fraction of the thousands that he consumes. And though all of those who live on the interest of inherited capital are not foolish nor vicious, yet in this respect they are all of them in the same position—they have not produced their incomes, and so have no moral right to them.

In the second place, the following argument, which was discussed in an earlier chapter, will also be brought forward, refurbished for the present occasion. Let us grant, it will be said, that the inventions which have enriched the world were originally due to the talents of exceptional men, and that without these exceptional men the world would never have possessed them; but when once they have been made, and their powers seen in operation, the human race at large can, if left toitself, take over these powers from the inventors just as the inventors took them over from nature. Indeed, this constantly happens. Any boy with a turning-lathe can to-day make a model steam-engine, and no one will contend that such a model was not made by himself, on the ground that it could not have been made either by him or by anybody unless Watt, with his exceptional genius, had invented steam as a motive-power. One might as well contend that a savage does not really light his own fire, on the ground that the art of kindling wood was found out by Prometheus, and that no one, except for him, would have had any fires at all. The truth is, it will be said, that in such cases as these the powers of the exceptional man, originally confined to himself, are, when his invention is once in practical operation, naturally shared by his fellows, who can only be restrained from using them by artificial devices such as patents—these devices being at best, from a moral point of view, devices by which one man who has given a cheque to another man steals back half the money as soon as the cheque is cashed.

Now, both these arguments, so far as they go, are true; but neither has any bearing on the problem which is now before us. That problem arises—let me observe once more—out of the assumption that, as a matter of justice, every man has a right to the products of all such forces as are his own; whence it follows that nobody has a right to the products of any forces which arenot definitely in himself. Let us take, then, the latter of the above arguments first. It would doubtless be absurd to contend, were Prometheus alive to-day, that because he invented the art of striking fire from flints he ought to be paid a tribute by every savage who boiled a kettle; for the savage can strike a flint as well as Prometheus himself could. But if fire could be kindled only by a particular sort of match which Prometheus alone could make, the fact that he was really the lighter of all fires would be obvious, and his claim to a payment in respect of the lighting of every one of them would be as sound as the claim of the lighter of street-lamps to his wages. If "Man and Superman" were not a play, but a hoot, which Mr. Shaw had invented in order to call attention to himself, and which any street boy could imitate with the same results, it would be idle for Mr. Shaw to claim a right to royalties from the street boys; but it would be idle only because it would not be possible to collect them. He is able to collect them on his play because, and only because, his play exists in a form which is susceptible of legal protection. If in justice he has a right to these, as he no doubt has, he would, if abstract justice were the sole determining factor, have an equal right to royalties on the use of his peculiar hoot. He fails to have any such right because, as a matter of fact, the principle of abstract justice with which we are here concerned—that every one has a right to everything that he himself produces—has, in common with all abstract moral principles whatsoever, no application to cases in which, from the nature of things, it is wholly impossible to enforce it.

And the same criticism is applicable to the other argument before us, which admits that a man who invents a productive machine, or who writes a remunerative play, is, so long as he lives, entitled, because he is the true producer of them, to certain profits arising from the use of either; but adds that his rights to such profits end with his own life, and lose all sanction in justice the moment they are transferred to an heir. In the heir's hands, it is urged, they entirely change their character, and, instead of enabling a man to secure what is honestly his own, become means by which he is enabled to steal what morally belongs to others.

Now, if it is seriously contended that nobody has a right to anything which at some time or other he has not personally produced, the interest on machinery, as soon as the inventor dies, not only ought not to belong to the inventor's heir, but it ought not to belong to anybody; for if this interest is not produced by the heir, it is certainly not produced by any of the heir's contemporaries. A contention like this is absurd; there must therefore be something amiss with the premises which lead up to it. Socialists who admit that an inventor during his lifetime has a right to the interest resulting from the use of his own inventions, endeavour to solve the difficulty by maintaining that after his death both invention and interest should pass into the hands of the state; but this doctrine, on whatever grounds it may be defended, cannot be defended as based on the principle now in question, that the sole valid title to possession is personal production. It must, if it is based on any abstract moral principle at all, be based on one of a much more general kind, according to which the ultimate standard of justice is not the deeds of the individual, but the general welfare of society.

Here it is true that the appeal is still to abstract justice, but it is not an appeal to abstract justice only. In order to condemn interest on any such ground as this, it is necessary to assume or prove that to make interest illegal, or to confiscate it by taxation when it arises, or by any other means to render its enjoyment impossible, will as a matter of fact have the result desired—namely, a permanent rise in the general level of prosperity. It is only by means of an assumption of this purely practical kind that the abstract moral principle can be applied to the case at all; and thus let us approach the problem from whatever side we will, we are brought from the region of theory down into that of practice, not, indeed, by an abrupt leap, but by a gradual and necessary transition. We are not abandoning our considerations of what, in abstract justice, ought to be; but we are compelled to interpret what ought to be byconsiderations of what, as the result of such and such arrangements, will be.

To sum up, then, the conclusions which we have reached thus far—if we confine our attention to those recipients of interest who have themselves produced the capital from which the interest is derived, and compare such incomes with those which renew themselves only as the result of continued effort, it is absolutely impossible, on any general theory of justice, to sanction the latter as earned, and condemn the former as unearned. If, on the other hand, we turn to those whose incomes consist of interest on capital produced by, and inherited from, their fathers, and if we argue that here at all events we come to a class of interest on which its living recipients can have no justifiable claim, since we start with admitting that it originates in the efforts of the dead, our argument, though plausible in its premises, is stultified by its logical consequence; since the same principle on which we are urged as a sacred duty to take the income in question away from its present possessors, would forbid our allowing it to pass into the possession of anybody else. In short, if continued daily labour, or else the exercise of invention, or some other form of ability, at some period of their lives by persons actually living, constitutes in justice the sole right to possession, the human race as a whole has no right to profit by any productive effort on the part of past generations; but each generation ought, so far as is practicable, to start afresh in theposition of naked savages. The fact that nobody would maintain a fantastic proposition like this is sufficient to show that, on the tacit admission of everybody, it is impossible to attack interest by insisting on any abstract distinction between incomes that are earned and unearned, and treating the latter as felonious, while holding the former sacred. It is equally true, however, that on such grounds alone it is no less impossible to defend interest than to attack it; and here we arrive at what is the real truth of the matter—namely, that in cases like the present the principles of ideal justice do not, indeed, give us false guidance, but give us no guidance at all, unless we take them in connection with the concrete facts of society, and estimate social arrangements as being either right or wrong by reference to the practical consequences which do, or which would result from them.

The practical aspects of the question we will discuss in the following chapter.

THE SOCIALISTIC ATTACK ON INTEREST AND THE NATURE OF ITS SEVERAL ERRORS

If we reconsider what we have seen in the last chapter, we shall realise that the moral or theoretical attack on interest, as income which is unjustifiable because it has not been personally earned, is, when tested by the logic of those who make it, an attack, not on interest itself, but on bequest; and that such is the case will become even more evident when we see what the theory comes to, as translated into a practical programme.

The majority of those who attack interest to-day, no matter whether in other respects they are advocates of socialism or opponents of it, agree in declaring that what a man has personally produced he has a perfect right to enjoy and spend as he pleases. The only right they deny to him is the right to any further products which, before the capital has been spent by him, may result from the productive use of it. Now, the practical object with which this restriction is advocated is to render impossible, not accumulations of wealth (for theseare recognised as legitimate when the reward of personal talent), but merely their perpetuation in the hands of others who are economically idle. So far, therefore, as this practical object is concerned, it would matter little whether the man by whom the accumulation was made were allowed to receive interest on it during his own lifetime or no, provided that this right to interest were not transmissible to his heir; or even whether he were allowed or were not allowed to leave anything to an heir at all. For the heir at best would merely receive a sum which, since it could not be used by him so as to bring about its own renewal, would be bound soon to exhaust itself; and the general effect of permitting bequests of this sterilised kind would differ from the effect of prohibiting bequests altogether, not because it would tend to render accumulated fortunes permanent, but only because it would protract for a decade or two the process of their inevitable dissipation.

We may, therefore, say that, for the purposes of the present discussion, the modern attack on interest, considered apart from any otherwise socialistic programme, practically translates itself into this—namely, the advocacy of a scheme which, as regards the actual producers of capital, leaves their existing rights both to principal and interest untouched, and would not even extinguish altogether their existing powers of bequest, but would limit the exercise of these to the principal sumonly,[23]and prohibit the transmission to any private person of any right whatever to the usufruct of its productive employment.

Here, then, at last, we have something definite to discuss—a single proposed alteration in certain existing arrangements; and by comparing the situation which actually exists to-day with that which the proposed alteration, if carried into effect, would produce, we shall see whether the alteration is workable and practically defensible or no. Let us begin with the situation which actually exists to-day, confining ourselves to those features of it which are vital to the present issue.

Let us take two men of practically contrasted types, each of whom has inherited a capital of fifty thousand pounds. The ultimate object of each is, in one way or another, to make his capital provide him with the life that he most desires; but the first man is thoughtful, far-seeing, and shrewd, while the second cares for nothing but the gaiety and pleasure of the moment; and they deal with their capitals in accordance with their respective characters. The first meets, let us say, with the inventor of an agricultural machine, which will, ifsuccessfully manufactured, double the wheat crop of every acre to the cultivation of which it is applied. He places his capital, as a loan, in this inventor's hands. The machine is constructed, and used with the results desired; and the man who has lent the capital receives each year a proportion of the new loaves which are due to the machine's efficiency, and would not have existed otherwise. The second man invests his fortune in any kind of security which has the advantage of being turned easily into cash, and draws out month by month so many hundred pounds, without reference to anything but the pleasures he desires to purchase; and by the end of a few years both his capital and his income have disappeared.

Now, any one judging these men by the current standards of common-sense would, while praising the first as a model of moral prudence, condemn the second as a fool who had brought his ruin upon himself, and curtly dismiss him, if a bachelor, as being nobody's enemy but his own. But before we indorse either of these judgments as adequate, let us consider more minutely what in each case has been really done.

Let us start, then, with noting this. Whether a man invests his capital in any productive machine and then lives on the interest, or else spends it as income on his own personal pleasures, he is doing in one respect precisely the same thing. He is giving something to other men in order that they in return may make certain efforts for his benefit,of a kind which he himself prescribes. This is obviously true when, spending his capital as income, what he pays for is personal service, such as that of a butler or footman who polishes his silver plate. It is equally true when he pays for the plate itself. He is paying the silversmith so to exert his muscles that an ounce or a pound of silver may be wrought into a specific form. If he pays a toy-maker to make him a dancing-doll, he is virtually paying him to dance in his own person. He is paying him to go through a series of prescribed muscular movements. Similarly when he pays a large number of men to construct a productive machine instead of a doll or an ornament, he is paying for the muscular movements from which the machine results. Here we come back to one of the main economic truths to the elucidation of which our earlier chapters were devoted. It was there pointed out that the machinery of the modern world owes its existence to the fact that men of exceptional talent, by possessing the control of goods which a number of other men require, are able in return for the goods to make these other men exert themselves in a variety of minutely prescribed and elaborately co-ordinated ways. In short, all spending is, on the part of those who spend, a determination of the efforts of others in such ways as the spender pleases. Further, as was pointed out in an earlier chapter also, the only goods thus generally exchangeable for effort are those common necessaries of existencefor which most men must always work, and which may here be represented by food, the first and the most important of them. Hence, whenever the question arises of how any given capital shall be treated—of whether it shall be invested or else spent as income—this capital must be regarded as existing in the indeterminate form of food, which is equally capable of being treated in one way or the other. And any man's capital represents for him, according to its amount, the power of feeding, and so determining the actions of a definite number of other men for some definite period. Since, therefore, the two capitalists whose conduct we have been taking as an illustration have been supposed by us to possess fifty thousand pounds apiece, we shall give precision to the situation if we say that each, at starting, has the power of feeding, and so determining the actions of, two hundred other men for a period of two years.

So much, then, being settled, let us consider these further facts. Both the capitalists, as we set out with observing, have in employing their capital the same ultimate object—namely, that of securing through the purchased efforts of others a continuous supply of things which will render their lives agreeable. And now in connection with this fact let us go back to another, which has also been pointed out before, that all efforts, the sole object of which is to please from moment to moment the man who directs and pays for them, are, whether embodied in the form of commoditiesor no, really reducible to some kind of personal service, if a toy-maker, in return for food, makes a dancing-doll for another man, he might just as well have pirouetted for so many hours himself; and if the purchaser would be more amused by a man's antics than by a puppet's, this is precisely what the toy-maker would have been set to do. In short, if we consider only the economic side of the matter, without reference to the moral, whenever a man spends anything on his own personal pleasure, he is virtually paying some other man, or a number of other men to dance for him.[24]What, therefore, both our capitalists desire as their ultimate object, is to keep as many men as they are able to provide with food always dancing for their pleasure, or in readiness to do so when wanted; but in setting themselves to achieve this object in their two different ways, what happens is as follows.

Both use their capital by dispensing it in the form of daily rations to two hundred other men, on condition that these men do something; but the first feeds the other men, not on condition that they dance for him, or do anything that ministers to his own immediate pleasure, but on condition that they construct a machine which will enable, as soon as it is finished, a given amount of human effort to double the amount of food which such effort would have produced otherwise. Thus, by the end of two years—the time which we suppose to be required for the machine's completion—though the original food-supply of the capitalist will all have been taken up and disappeared, its place will have been taken by a machine which will enable forever afterwards one-half of the two hundred men to produce food for the whole. A hundred men, therefore, are left for whom food can be permanently provided, without any effort to produce it being made by these men themselves; and since of this annual surplus a part—let us call it half—will be taken as interest on the machine by the man with whose capital it was constructed, he will now have the means of making fifty men dance for his pleasure in perpetuity; for as often as they have eaten up one supply of food, this, through the agency of the machine, will have been replaced by another.

Our second capitalist, meanwhile, who deals with his capital as income, starts with setting the dancers to dance for his behoof at once; and he keeps the whole two hundred dancing and doing nothing else, so long as he has food with which to feed them. This life is charming so long as it lasts, but in two years' time it abruptly comes to an end. The capitalist's cupboard is bare. He has no means of refilling it. Thedancers will dance no more for him, for he cannot keep them alive; and the efforts for two years of two hundred men, as directed by a man who treats his capital as income, will now have resulted in nothing but the destruction of that capital itself, and a memory of muscular movements which, so far as the future is concerned, might just as well have been those of monkeys before the deluge.

Now, if we take the careers of our two capitalists as standing for the careers of two individuals only, and estimate them only as related to these men themselves, we might content ourselves with indorsing the judgment which conventional critics would pass on them, and say of the one that he had acted as his own best friend, and dismiss the other as nobody's enemy but his own. But we are, in our present inquiry, only concerned with individuals as illustrating kinds of conduct which are, or which might be, general; and the effects of their conduct, which we here desire to estimate, are its effects of it, not on themselves, but on society taken as a whole. If we look at the matter in this comprehensive way, we shall find that the facile judgments to which we have just alluded leave the deeper elements of our problem altogether untouched.

The difference between the ultimate results of the two ways of treating capital will, to the conventional critic, seem to have been sufficiently explained, by saying that the energy stored up ina given accumulation of food reappears when employed in one way, in the efficiency of a permanent machine; and is, when employed in the other, so far as human purposes are concerned, as completely lost as it would have been had it never existed. But if we reconsider a fact which was dwelt upon in our last chapter, we shall see that the difference is really much greater than this.

When the potential energy residing in so much food has been converted into the energy of so much human labour, and when this is so directed that a productive machine results from it, there is in the machine, as Dr. Crozier puts it, an indefinitely larger amount of "pure economic power," than that which has been expended in the work of the labourers' muscles. While the energy of the labourers has merely resulted in a bottle, or a cage, we may say, of sufficient strength, the genius of the man who directed them has captured and imprisoned an elemental slave in it, who, so long as the cage confines him, will supplement the efforts of human muscle with his own. But when the energy latent in food is converted into such efforts as dancing, the result produced is the equivalent of the human effort only. Thus in the modern world of scientific enterprise and invention, to invest capital in machinery and then live on the interest from it, means to press into the service of mankind an indefinite number of non-human auxiliaries, and year by year to live on a part of the products which these deathless captives are never tired of producing.

To spend capital as income on securing immediate pleasures means either to forgo the chance of adding any new auxiliaries to those that we possess already, or else to let those who are at our service already, one after one, escape us—or, in other words, to make the productive force now at the disposal of any prosperous modern country decline towards that zero of efficiency from which industrial progress starts, and which marks off helpless savagery from the first beginnings of civilisation.

It is no doubt inconceivable, in the case of any modern nation, that a climax of the kind just indicated could never reach its completion. If all the capitalists, for example, of Great Britain or America, were suddenly determined to live on their capital itself, they could do so only by continuing for a considerable time to employ a great deal of it precisely as it is employed at present. Indeed, so long as they continued to demand the luxuries which machines produce, it might seem that it was hardly possible for them to get rid of their capital at all. But what would really happen may be briefly explained thus:—

If we take the case of any modern country, the amount of its income at any given time depends for its sustentation on machines already in existence; and its increase is dependent on the gradual supersession of these by new ones yet more efficient. But the efficiency of the former would soon begin to decrease, and would ultimately disappear altogether, unless they were constantly repaired andtheir lost substance was renewed; while the latter would never exist unless there were men to make them. Hence, under modern conditions, in any prosperous and progressive country, a large portion of what is called the manufacturing class is always engaged, not in producing articles of consumption, comfort, or luxury, but in repairing and renewing the machines by which such articles are at present multiplied, or else in constructing new machines which shall supplement or replace the old. Thus, in Great Britain, towards the close of the nineteenth century, these makers and repairers of machinery were, with the exception of coal-miners, the industrial body whose proportional increase was greatest. In the modern world the spending of capital as income is a process which, in proportion as it became general, would accomplish itself by affecting the position of men like these. It would consist of a withdrawal of men who are at present occupied in maintaining existing machines, or else in constructing new ones from their anvils, hammers, files, lathes, and furnaces, and making them dance instead. This withdrawal would, in proportion as it became general, render the construction of new machines impossible, and would leave the efficiency of those now in use to exhaust itself.

That such is the case is illustrated on a small scale by the conduct of individuals who live on their capital now. If a farmer, whose capital consists largely of an agricultural plant, desires to spend more than his proceeds of his farm areworth, he virtually takes the men who have been mending his barns and reapers, and sets them to build a buggy which will take him to the neighbouring races. The varnish on the buggy is bought with the rust on the reaper's blades; the smart, weather-proof apron with the barn's unmended roof. If the managing body of a railroad pays a higher dividend to the shareholders than can be got out of its net earnings, the results are presently seen in cars that are growing dirty, in engines that break down, in rotten sleepers, and in trains that run off the track. The men who were once fed out of a certain portion of the traffic receipts to keep these things in repair, are now fed to dance for the shareholders, thus supplying them with spurious dividends. A farm or a railroad which was managed on these principles would ultimately cease to produce or to do anything for anybody; and if all modern capital were managed in a similar way, all the multiplied luxuries distinctive of modern civilisation would, one by one, disappear like crops which were left to rot for lack of machines to reap them with, and train services which had ceased because the engines were all burned out.

That such a climax should ever, in any modern country, complete itself cannot, let me say once more, be apprehended as a practical possibility; but it is practically impossible only because the earlier stages of the approach to it would lead to a situation that was intolerable long before itceased to be irreparable. And here we reach the point to which the foregoing examination has been leading us. It is precisely this course of conduct, the end of which would be general ruin, that any attack on interest, by means of special taxation or otherwise, would, so long as it lasted, stimulate and render inevitable. Let me point out—though it ought in a general way to be self-evident—precisely how this is.

We start with assuming—for, as we have seen already, so much is conceded by those who attack interest to-day—that the owners of capital, however their rights may be restricted, still have rights to it of some kind. But a man's rights to his capital will not be rights at all unless they empower him to use it in one way or another as a means of ministering to his own personal desires; and it is possible for him so to use it in one or other of two ways only—either by keeping it in the form of some productive machine or plant, and living on a part of the values which this produces, or by trenching on the substance of the machine or the plant itself in the manner, and with the results, which have just been explained and analysed. If, therefore, capitalists are to be virtually deprived of their interest, either by means of a special tax on "unearned incomes" or otherwise, but are yet permitted to enjoy their capital somehow, no course is open to them but to employ for their private pleasures the men by whom this capital, in such forms as machines or railroads, isat present maintained, renewed, and kept from lapsing into a state in which it would be unable to do or to produce anything. And if any one still thinks that, by such a course of conduct, if ever it became general, as it would do under these conditions, the owners of capital would be injuring themselves alone, he need only reflect a little longer on one of our suggested illustrations, and ask himself whether the gradual deterioration of railroads would have no effect on the world beyond that of impoverishing the shareholders. It would obviously affect the many as much as it affected the few, and the kind of catastrophe that would result from the deterioration of railroads is typical of that which would result from the deterioration of capital generally.

It would, then, be a sufficient answer to those who attack interest, and propose to transfer it from its present recipients to the state, to elucidate, as has here been done, the two following points: firstly, that to interest as a means of enjoying wealth—the right to such enjoyment itself not being here disputed—the only alternative is a system which would thus prove fatal to everybody; and, further, that, conversely, the enjoyment of wealth through interest not only possesses this negative advantage, but is actively implicated in, and is the natural corollary of, that progressive accumulation of force in the form of productive machinery to which all the augmented wealth of the modern world is due. By the identificationof the enjoyment of capital with the enjoyment of some portion of the products of it, the good of the individual capitalist is identified with the good of the community; for it will, in that case, be the object of all capitalists to raise the productivity of all capital to a maximum; while a system which would compel the possessor, if he is to enjoy his capital at all, to do so by diminishing its substance and allowing its powers to dwindle, would identify the only advantage he could possibly get for himself with the impoverishment of everybody else, and ultimately of himself also.

But the crucial facts of the case have not been exhausted yet. There are few phenomena of any complex society which are not traceable to more causes than one, or at least to one cause which presents itself under different aspects. Such is the case with interest. Its origin, its functions, and its justification, in the modern world, must be considered under an aspect, at which hitherto we have only glanced.

Throughout the present discussion we have been assuming that the questions at issue turn ultimately on the character of human motive. On both sides it has been assumed that men of exceptional powers will not produce exceptional amounts of wealth, unless they are allowed the right of enjoying some substantial proportion of it. This is a psychological truth which, together with its social consequences, has been dealt with elaborately in two of our earlier chapters. It was there shownthat the production of exceptional wealth by those men whose peculiar powers alone enable them to produce it, involves efforts on their part which, unlike labour, cannot be exacted of them by any outside compulsion, but can only be educed by the prospect of a secured reward; and that this reward consists, as has just been said, of the enjoyment of a part of the product proportionate to the magnitude of the whole. But what the proportion should be, and in what manner it should be enjoyed, were questions which were then passed over. They were passed over in order that they might be discussed separately. It was pointed out, however, that the reward, in order to be operative, must be such as will be felt to be sufficient by these men themselves, and that its precise amount and quality can be determined by them alone—just as, if what we desire is to coax an invalid to eat, we can coax him only with food which he himself finds appetising. Let us now take these questions up again, and examine them more minutely, and we shall find that interest is justified from a practical point of view by the fact that the enjoyment of capital by this particular means is not only the sole manner of enjoying it which is consistent with the general welfare, but also constitutes the advantage which, in the eyes of most great producers, gives to capital the larger part of its value, and renders the desire of producing it efficient as a social motive.

The reasons why the right to interest forms, inthe eyes of the active producers of capital, the main object of their activity are to be found, firstly, in the facts of family affection, and, secondarily, in those of general social intercourse, which together form the medium of by far the larger part of our satisfactions. In spite of the selfishness which distinguishes so much of human action, a man's desire to secure for his family such wealth as he can is one of the strongest motives of human activity known; and the fact that it operates in the case of many who are notoriously selfish otherwise, shows how deeply it is ingrained in the human character. One of the first uses to which a man who has produced great wealth puts it is in most cases to build a house more or less proportionate to his means; and it is his pride and pleasure to see his wife and children acclimatise themselves to their new environment. But such a house would lose most of its charm and meaning for him if the fortune which enabled him to live in it were to dwindle with each day's expenditure, and his family after his death were to be turned into the street, beggars. If each individual were a unit whose interests ended with himself; if generations were like stratified rocks, superposed one on another but not interconnected; if—to quote a pithy phrase, I do not know from whom—"if all men were born orphans and died bachelors," then the right to draw income from the products of permanently productive capital would for most men lose much of what now makes it desirable.

But since individuals and generations are not thus separated actually, but are, on the contrary, not merely as a scientific fact, but as a fact which is vivid to every one within the limits of his daily consciousness dovetailed into one another, and could not exist otherwise, a man's own fortune, with the kind of life that is dependent on it, is similarly dovetailed into fortunes of other people, and his present and theirs is dovetailed into a general future.

We have seen how this is the case with regard to his own family; but the matter does not end there. Individual households do not live in isolation; and there are for this fact two closely allied reasons. If they did there could be no marriage; there could also be nothing like social intercourse. It is social intercourse of a more or less extended kind that alone makes possible, not only love and marriage, but most of the pleasures that give colour to life. We see this in all ranks and in all stages of civilisation. Savages meet together in numerous groups to dance, like civilised men and women in New York or in London. The feast, or the meal eaten by a large gathering, is one of the most universal of all human enjoyments. But in all such cases the enjoyment involves one thing—namely, a certain similarity, underlying individual differences, between those persons who take part in it. Intimate social intercourse is, as a rule, possible only between those who are similar in their tastes and ideas with regard to the minute details which for most of us make up the tesseræof life's daily mosaic—similar in their manners, in their standards of beauty and comfort, in their memories, their prospects, or (to be brief) in what we may call their class habituations. This is true of all men, be their social position what it may. It is true, of course, that the quality of a man's life, as a whole, depends on other things also, of a wider kind than these. It depends not only on the fact, but also on his consciousness of the fact, that he is a citizen of a certain state or country, though with most of its inhabitants he will never exchange a word; or that he is a member of a certain church; or that, being a man and not a monkey, his destiny is identified with that of the human species. But, so far as his enjoyment of private wealth is concerned, each man as a rule, though to this there are individual exceptions, enjoys it mainly through the life of his ownde factoclass—the people whose manners and habits are more or less similar to his own, because they result from the possession of more or less similar means. He is, therefore, not interested in the permanence of his own wealth only. He is equally interested in the permanence of the wealth of a body of men, the life of which must, like that of all corporations, be continuous.

There is in this fact much more than at first appears. Let us go back to a point insisted on in the previous chapter. It was there shown, in connection with the question of abstract justice, that those who attack interest on the ground that it is essentially income for which its recipientsgive nothing in return, fall into the error of ignoring the element of time, without reference to which the whole process of life is unintelligible. It was shown, by various examples, that in a large number of cases the efforts which ultimately result in the production of great wealth do not produce it till after, often till long after, the original effort has come altogether to an end. Let us now take this point in connection, not with abstract theories, but with the concrete facts of conduct. Here again those who attack interest fall into the same error. For example, in answer to arguments used by me when speaking in America, one socialistic critic eagerly following another called my attention by name to persons notoriously wealthy, some of whom had never engaged in active business at all, while others had ceased to do so for many years; and demanded of me whether I contended that idlers such as these are doing anything whatever to produce the incomes which they are now enjoying. If they are, said the critics, let this wonderful fact be demonstrated. If they are not, then it must stand to reason that the community will gain, and cannot possibly suffer, by gradually taking the incomes of these persons away from them, and rendering it impossible that incomes of a similar kind shall in the future be ever enjoyed by anybody.

The general nature of the error involved in this class of argument can be shown by a very simple illustration. In many countries the government year by year makes a large sum by state lotteries. This may be a vicious procedure, but let us assume for the moment that it is legitimate, and that everybody is interested in its perpetuation. The largest of the prizes drawn in such lotteries is considerable—often amounting to more than twenty thousand pounds. Now, as soon as the drawing on any one occasion had been accomplished, it might be argued with perfect truth, in respect of that occasion only, that, the man who had won such fortune having done nothing to produce it, the community would be so much richer if the government, having paid the money to him, were to take it all back again by a special tax on winnings. This would be true with respect to that one occasion; but if any government were to follow such a procedure systematically, no one would ever buy a lottery ticket again, and the whole lottery system would thenceforth come to an end.

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