The Use and Abuse of Wealth

Southland Times, Issue 12770, 1 December 1893, Page 3

The Use and Abuse of Wealth

Edinburgh Review. The desire to attain wealth has been the cause of all progress in ths past, and its expansion has promoted the prosperity of every class. Wealth in former ages may have been acquired in war, or have been promoted by class legislation. In our own time it is created by the energy of the labouring classes struggling from their manhood to their age to gam for themselves and for their children the opportunity for greater leisure or greater comfort. If, however, the struggle to obtain wealth is prompted by the desire which each man feels to improve his own position, its honest acquisition always promotes the common weal, and improves the lot of the labouring poor. It is moreover, illogical to complain that the rich men should devote a portion of their weal ch to the luxuries of their position. The taste for luxury and the demands which it creates encourage invention. The desire of the educated classes in the fifteenth century to possess books of their own led to the discovery of printing ; and the determination of rich people to have sugar at any cost forty years ago stimulated in Europe the cultivation of beet root, which has provided the people to-day with a commodity as wholesome as it is cheap. Luxury, in short, is an evil which the moralist may deplore, but the economist cannot wholly condemn. As society is organised,it is the desire for luxury which is the chief incentive for saving, and consequently for exertion; it is saving which amasses capital; it is capital which employs industry. The great additions which have been made to the world during the last thirty years have not been due to the accumulation of great, but to the multiplication of small, fortunes. Nor is it only true that the great incomes are comparatively few ; the striking fact is that the masses of the people are the owners of property. The diffusion of property, which can be traced so clearly from M. Jannet’s statistics in the case of France, may be found in England, in the United States, and among all advanced communities. If few people have realised how widely wealth is diffused, still fewer are aware how frequently it changes hands. It is hardly too much to say that the rich of to-day are the poor of to-morrow. The growth of wealth has, in its turn, led to a constant decrease in the profits of capital. The savings of the world are so large that it is annually more difficult to invest them in profitable undertakings, and the investor is consequently compelled to content himself with lower and lower rates of interest. M. Jannet agrees with M. Leroy Beaulieu in thinking that should there be no great European war or no violent social revolution the rate of profit on sound commercial undertakingswill inevitably fall to 1| or 2 per cent. It is a matter of common knowledge that, in Western Europe, at any rate, the hours of work, so far from increasing, are steadily diminishing. During the last thirty years the incomes of the richest class [in England] have decreased 33 percent., while the incomes of the middle classes have been increased 37 per cent. In the same period the wages of labour have increased 59 per cent. The rapid additions which have thus been made to the rate of wages have probably been chiefly attributable to the introduction of machinery into every industry. Nothing that had ever previously happened in the history of the world had done so much to improve the condition of the labouring poor. Wherever the employer, either by improving his. machinery or in a,ny other way, is able to increase the efficiency of the employed, he is concurrently enabled and is practically compelled to raise the rate of their wages. Every individual invention, therefore, tends to improve the condition of the workmen. Thus, we see that the views which Socialist writers are fond of propounding are commonly based on a defective hypothesis. So far from great fortunes tending steadily to increase, the characteristic of the age is the multiplication of moderate and small fortunes. So far from their being any marked dividing line between rich and poor, no definite boundary can be drawn between them ; so far from the profits of capital absorbing the wages of labour, the profits of the capitalists are constantly declining, while the rate of wages is as steadily increasing. So far from it being the interest of the labouring classes to insist on an equal division of profits between themselves and their employers wages already absorb the greater portion of these profits, and the share which the labourer receives tends constanty to increase, Thus the reasons which have led Socialist writers to demand the nationalisation of land and the abolition of capital are founded on faulty hypotheses.