CHAPTER XII. THE AGRARIAN SOCIALISM OF HENRY GEORGE.

Mr. George sent his "Progress and Poverty" into the world with the remarkable prediction that it would find not only readers but apostles. "Whatever be its fate," he says, "it will be read by some who in their heart of hearts have taken the cross of a new crusade.... The truth I have tried to make clear will not find easy acceptance. If that could be, it would have been accepted long ago. If that could be, it would never have been obscured. But it will find friends—those who will toil for it, suffer for it: if need be, die for it. This is the power of the truth" (p. 393). Mr. George's prediction is not more remarkable than its fulfilment. His work has had an unusually extensive sale; a hundred editions in America, and an edition of 60,000 copies in this country are sufficient evidences of that; but the most striking feature in its reception is precisely that which its author foretold; it created an army of apostles, and was enthusiastically circulated, like the testament of a new dispensation. Societies were formed, journals were devised to propagate its saving doctrines, and little companies of the faithful held stated meetings for its reading and exposition. It was carried as a message of consolation to the homes of labour. The author was hailed as a new and better Adam Smith, as at once a reformer of science and a renovator of society. Smith unfolded "The Nature and Causes of the Wealth of Nations," but to Mr. George, we were told, was reserved the greater part of unravelling "the nature and causes of the poverty of nations," and if the obsolete science of wealth had served to make England rich, the young science of poverty was at length to make her people happy with the money. Justice and Liberty were to begin their reign, and our eyes were to see—to quote Mr. George's own words—"the City of God on earth, with its walls of jasper and its gates of pearl" (p. 392).

The fervour of this first reception may—as was perhaps only natural—have suffered some abatement since, but it affords a striking proof how largely modern society is disquieted by the results of our vaunted industrial civilization. Even those amongst us who are most unwilling to disparage the improvement that has really taken place during the last hundred years in the circumstances of the people, still cannot help feeling that the improvement has fallen far short of what might have been reasonably expected from the contemporaneous growth of resources and productive power. But numbers of people will not allow that any improvement has occurred at all, and deliver themselves to an unhappy and unwarranted pessimism on the whole subject. Because industrial progress has not extinguished poverty, they conclude that it has not even lessened it; that it has no power to lessen it; nay, that its real tendency is to aggravate it, that it increases wealth with the one hand, but increases want with the other, so that civilization has developed into a purely upper-class feast, where the rich are grossly overfilled with good things, and the poor are sent always emptier and emptier away. Invention, they tell us, has followed invention; machinery has multiplied the labourer's productivity at least tenfold; new colonies have been founded, new markets and channels of commerce opened in every quarter of the globe; gold-fields have been discovered, free trade has been introduced, railways and ocean steamers have shortened time and space themselves in our service. Each and all of these things have excited hopes of introducing an era of popular improvement, and each and all of them have left these hopes unfulfilled. They think, therefore, they now do well to despair, and they fortify themselves in their gloom by citing the opinion of Mr. Mill, that "it is questionable whether all the mechanical inventions yet made have lightened the day's toil of any human being," without observing that Mr. Mill immediately follows up that opinion by expressing the confident assurance that it was "in the nature and the futurity" of these inventions to effect that improvement. These gloomy views have in France received the name of Sisyphism, because they represent the working class under the present industrial system as being struck with a curse like that of Sisyphus, always encouraged by fresh technical advantages to renewed expectations, and always doomed to see their expectations perish for ever.

Now, it was upon these despondent and burdened souls that Mr. George counted so confidently, and, as time has shown, so correctly, for his apostles and martyrs; and he counted so confidently upon them because he had himself borne their sorrows, and drunk of their despair, and because he now believed most entirely that his discoveries would bring "inexpressible cheer" to their minds, as, in the same circumstances, they had already brought inexpressible cheer to his own. "When I first realized," he says, "the squalid misery of a great city"—that is, of the latest and most characteristic product of industrial development—"it appalled and tormented me, and would not let me rest for thinking of what caused it and how it could be cured" (p. 395). Poverty seemed to him to be most abounding and most intense in precisely the most advanced countries in the world. "Where the conditions to which material progress everywhere tends are most fully realized—that is to say, where population is densest, wealth greatest, and the machinery of production and exchange most highly developed—we find the deepest poverty, the sharpest struggle for existence, and the most enforced idleness" (p. 4). Nay, poverty, he thought, seemed "to take a darker aspect" in every community at the very moment when it might be reasonably expected to brighten—at the moment when the community made a distinct advance in material civilization, when "closer settlements and a more intimate connection with the rest of the world and greater utilization of labour-saving machinery make possible greater economies in production and exchange, and wealth increases in consequence, not merely in the aggregate, but in proportion to population" (p. 4). This process of impoverishment might, he says, escape observation in an old country, because such a country has generally contained from time immemorial a completely impoverished class, who could not be further impoverished without going out of existence altogether, but in a new settlement like California, where he resided, poverty might be seen almost in the act of being produced by progress before one's very eyes. While the colony had nothing better than log cabins or cloth shanties, "there was no destitution," though there might be no luxury. But "the tramp comes with the locomotive, and alm-houses and prisons are as surely the marks of 'material progress' as are costly dwellings, rich warehouses, and magnificent churches" (p. 4). "In the United States it is clear that squalor and misery, and the vices and crimes that spring from them everywhere, increase as the village grows to the city, and the march of development brings the advantages of improved methods of production and exchange. It is in the older and richer sections of the Union that pauperism and distress are becoming most painfully apparent. If there is less deep poverty in San Francisco than in New York, it is not because San Francisco is yet behind New York in all that both cities are striving for? When San Francisco reaches the point where New York now is, who can doubt that there will also be ragged and barefooted children in her streets?" (p. 6). The prospect alarmed and agitated him profoundly. It deprived him, as it has deprived so many of the continental socialists, of all religious belief, for if the real order of things make an ever-deepening poverty to be the only destiny of the mass of mankind, it seemed vain to dream of a controlling Providence or an immortal life. "It is difficult," says he, "to reconcile the idea of human immortality with the idea that nature wastes men by constantly bringing them into being where there is no room for them. It is impossible to reconcile the idea of an intelligent and beneficent Creator with the belief that the wretchedness and degradation, which are the lot of such a large proportion of human kind, result from His enactments; while the idea that man mentally and physically is the result of slow modifications perpetuated by heredity, irresistibly suggests the idea that it is the race life, not the individual life, which is the object of human existence. Thus has vanished with many of us, and is still vanishing with more of us, that belief which in the battles and ills of life affords the strongest support and deepest consolation" (p. 396).

The inquiry Mr. George undertook was consequently one of the most vital personal concern to himself, and we are glad to think that it has been the means of restoring to him the faith and hope he prizes so much. "Out of this inquiry," he tells us, "has come to me something I did not think to find, and a faith that was dead revives" (p. 395).

It may be ungracious to disturb a peace won so sorely and offered so sincerely to others, but the truth is, Mr. George has simply lost his faith by one illusion and recovered it again by another. He first tormented his brain with imaginary facts, and has then restored it with erroneous theories. His argument is really little better than a prolonged and, we will own, athletic beating of the air; but since both the imaginary facts and the erroneous theories of which it is composed have obtained considerable vogue, it is well to subject it to a critical examination. I shall therefore take up successively, first, his problem; second, his scientific explanation; and third, his practical remedy.

 

I. Mr. George's Problem.

He states his problem thus:—"I propose to seek the law which associates poverty with progress and increases want with advancing wealth" (p. 8). The first rule of scientific investigation is to prove one's fact before proceeding to explain it. "There are more false facts than false theories in the world," and a short examination whether a phenomenon actually exists may often relieve us from a long search after its law. Mr. George, however, does not observe this rule. He seeks for the law of a phenomenon without first verifying the phenomenon itself—nay, apparently without so much as suspecting that it ought to be verified. He assumes a particular view of the social situation to be correct, because he assumes it. But his assumption is a purely subjective and, as will presently be shown, delusive impression. We imagine our train to be going back when a parallel train is going faster forward, and we are apt to take the general condition of mankind to be retrograding when we fix our eyes exclusively on the rapid and remarkable enrichment of the fortunate few. What Mr. George calls "the great enigma of our time" is just the enigma of the apparently receding train, and he proceeds to solve it by coiling himself in a corner and working out an elaborate explanation from his own inner consciousness "by the methods of political economy," instead of taking the simple and obvious precaution of looking out of the opposite carriage-window and testing, by hard facts, whether his impression was correct. Had he taken this precaution, had he resorted to an examination of the actual state of the facts, he would have found good reason to change his impression; he would have found that on the whole poverty is not increasing, that in proportion to population it is considerably less in the more advanced industrial countries than in the less advanced ones, and that he had simply mistaken unequal rates of progress for simultaneous movements of progress and decline. His impression, it must be admitted, is a prejudice of considerable currency; there are many who tell us, as he does, that want is growing pari passu with wealth, and even gaining on it; that if the rich are getting richer, the poor are at the same time getting poorer; but it is a question of fact, and yet no one has ever seriously tried to prove the assertion by an appeal to fact. That Mr. George should have neglected to submit it to such a test is the more remarkable, because he was, as he has told us, "tormented" in mind by it, and because he acknowledges that it is a "paradox"—i.e., against the reason of the case, and that it is also, to some extent at least, against appearances. He owns, for example, that "the average of comfort, leisure, and refinement has been raised," and that though the lowest class may not share in these gains, yet even they have in some ways improved. "I do not mean," he says, "that the condition of the lowest class has nowhere nor in anything been improved, but that there is nowhere any improvement which can be credited to increased productive power. I mean that the tendency of what we call material progress is in no wise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is to still further depress the condition of the lowest class. The new forces, elevating in their nature though they be, do not act upon the social fabric from underneath, as was for a long time hoped and believed, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through society. Those who are above the point of separation are elevated, but those who are below are crushed down" (p. 5). From this passage it would appear that, according to Mr. George, the condition of all except the lowest class has improved in consequence of material progress, and that the condition of the lowest class has improved in spite of it. He does not undertake, it seems, to affirm of any class that it has, as a matter of actual fact, become impoverished in the course of social development, but only that there is a tendency in the increase of productive power—in "the new productive forces"—in "material progress"—to impoverish the lower strata of society. But then he contends that these forces are practising exactly the same tendency on some of the highest strata, on classes that we know have been growing richer and richer every day. For he tells us that these new forces, entering our social system like a wedge, depress all who happen to be on the wrong side; and we shall presently discover that this unhappy company on the wrong side of the wedge embraces many groups of persons who will be excessively astonished to learn that they are there. It includes, not only the poor labourers who live on wages, but the great capitalists who live on profits; the great cotton spinners, ironmasters, brewers, bankers, contractors; the very men, in short, of all the world, whom the new productive forces have most conspicuously and enormously enriched. I shall revert to this preposterous conclusion later on, but at present it is enough to say that a tide, which so many have swum against and swum to fortune, cannot be very formidable, and at all events can furnish no clue whatever to the possible condition of those who are exposed to it. For that we have only one resort. It is a plain question of fact—is poverty really increasing? Are the poor really getting poorer? And this can only be competently decided by the ordinary inductive evidence of facts. The data of this kind which we possess for settling the question may not be so exact as would be desirable, but there is no higher tribunal to which we can appeal. The question must be answered by them, or not answered at all.

Now any data we have all conduct to the conclusion that poverty is not increasing. If poverty were increasing with the increase of wealth, it would show itself either in an increase of pauperism, or in a decline in the general standard of living among the labouring classes, or in a fall in the average duration of life, and these symptoms would be most acute in the countries that are most wealthy and progressive. Now, let us take England as a crucial case of a country in a very advanced stage of industrial development. Is English pauperism greater now than it was before the "new productive forces" entered the country? Is the general standard of living among the labouring classes lower? Is the average duration of life less? Are poverty and the various symptoms of poverty more acute in England than in more backward countries?

In a foot-note to the passage last quoted from his book, Mr. George explains that the improvement he recognises in the lot of the lowest class does not consist in greater ability to obtain the necessaries of life. Does he mean, because more things are now reckoned among the necessaries of life? If so, we fear there is no chance of that difficulty being removed, nor indeed is there any reason for desiring it to be so. Men's wants will always increase with their incomes, and the struggle to make both ends meet may in that case indefinitely continue. But the fact remains that they have more wants satisfied than before, that they realize a higher standard of life, and that is the mark, and indeed the substance, of a more diffused comfort and civilization. It is true that as the general standard of living rises, people feel the pinch of poverty at a higher level than before, and become pauperized for the want of comforts that are now necessary, but which formerly few ever dreamt of possessing. To have no shoes is a mark of extreme indigence to-day; it was the common lot a century ago. People may be growing in general comfort, and yet their ability to obtain necessaries remain stationary, because their customary circle of necessaries may be always widening. The real sign of an advancing poverty is when the circle of recognised necessaries is getting narrow, and yet men have more difficulty in obtaining them than before; in other words, 1st, when the average scale of living falls; and 2nd, when a larger proportion of the people are unable to obtain it, reduced though it be. Now, in England, the contrary has happened; the general standard of living has risen, and the proportion of those who are unable to obtain it has declined.

In a preceding chapter I adduced evidence to show how greatly improved the working-class standard of living now is from what it was two hundred years ago, in the good old times socialist writers like to sing of, when men had not yet sought out many inventions and the world was not oppressed by the large system of production. But let us tap the line between then and now at what point we may, and we find the same result; the tendency is always to a better style of living. Mr. Giffen, for example, in his address, as President of the Statistical Society, on 20th November, 1883, compares the condition of the working classes to-day with their condition half a century since, and concludes from official returns that while the sovereign goes as far as it did then in the purchase of commodities, money wages have increased from 30 to 100 per cent., and, at the same time, the hours of labour have been reduced some 20 per cent. Except butcher-meat and house-rent, every other element of the working man's expenditure is cheaper, and butcher-meat was fifty years ago hardly an element of his expenditure at all, and the kind of house he then occupied was much inferior, as a rule, to what he occupies now, bad as the latter may in many cases be.

But while the general standard of comfort has been rising, the proportion of the population who are unable to obtain it has been diminishing. I have already stated that King estimated the number of persons in receipt of relief in England and Wales in 1688 at 900,000. Now in 1882 the average number in receipt of relief at one and the same time was, according to official returns, 803,719; and if we are right in doubling that figure to find the whole number of paupers relieved in the course of the year (that being the proportion borne in Scotland), then we may conclude that there are some 1,600,000 paupers in England and Wales at the present day. That is to say, with nearly five times the population, we have less than twice the pauperism. The result is far from being entirely gratifying; a million and a half of paupers (with more than half as many again in Ireland and Scotland) constitute a very grave problem, or rather ganglion of problems; but the fact supplies a decisive enough refutation of the pessimist idea that the actual movement of pauperism has been one of increase instead of one of decrease.

During these two hundred years there is no period in which wealth and productive power multiplied more rapidly than the last thirty years, and, therefore, if Mr. George's ideas were correct, there is no period that should show such a marked increase of pauperism. What do we find? We find that pauperism has steadily declined in England during that period. The decrease has been gradual and attended with no such striking interruptions as were frequently exhibited in former times. But the most remarkable feature about it is that the number of able-bodied paupers has diminished by nearly a half; from 201,644 in 1849 to 106,280 in 1882. That is the very class of paupers whom Mr. George represents it to be the special effect of increasing productive power to multiply, and yet, though wealth and productive power have made almost unexampled progress, and though the population has also considerably risen in the interval, we have not more than half as many of this class of paupers now as we had thirty years ago. No doubt this result is due in part to a better system of administering relief, just as it is due in part to the growth of trade unions and friendly societies, to the extension of savings banks, and to other agencies. But if Mr. George's principle is true, could such a result have taken place at all? If "material progress" has a tendency to multiply "tramps" or able-bodied paupers, the tendency must be weak, indeed, when a little judicious management on the part of public bodies, or of working men themselves, would not only counteract it, but turn the current so strongly the other way. But the truth is that the "tramp" has never been so little of a care in this country as at the present hour, and that it is to material progress we owe his disappearance. He was a very serious problem to our ancestors for centuries and centuries. The whole history of our social legislation is a history of ineffectual attempts to deal with vagrants and sturdy beggars, and we are less troubled with them now mainly because industrial progress has given them immensely more opportunities of making an honest and regular living. Industrial progress has all along been creating work and annihilating tramps, but it has all along been followed by absurd and perverse complaints like Mr. George's, that it was only creating tramps and annihilating opportunities of work. Mr. George says the tramp comes with the locomotive, but a writer in 1673 (quoted by Sir F. Eden, "State of the Poor," I., 190) declared that he came with the stage-coach. He pictures the happy age before stage-coaches, when (as Mr. George says of California) there might be no luxury, but there was no destitution, when every man kept one horse for himself and another for his groom. But with the introduction of the stage-coach the scene was changed. People got anywhere for a few shillings, and ceased to keep horses. They were so much the richer themselves, but their grooms were ruined and thrown upon the world without horse or home. Now class privations like these are incidental to industrial transformations, and in an age of unusual industrial transitions like ours, they may be expected to be unusually numerous. But the effect of material progress on the whole is to prevent such privations rather than cause them. It multiplies temporary redundancies of labour, but it multiplies still more the opportunities for permanently relieving them. Why are we now free from the old scourges of famine and famine prices? Partly because of free trade, but mainly because of improved communications, because of the steamer and the locomotive. Even commercial crises are getting less severe in their effects. The distress among our labouring classes during the American Civil War was nothing compared with the suffering under the complete paralysis of industry that followed the close of the great continental war in 1815. Miss Martineau tells us of that time:—"The poor abandoned their residences, whole parishes were deserted, and crowds of paupers, increasing in numbers as they went from parish to parish, spread wider and wider this awful desolation." (History of England, I. 39.) No such severe redundancy of labour has taken place since then, and the redundancies that attend changes of fashion or of mechanical agency, though they undoubtedly constitute a serious difficulty, are yet lightened and not aggravated by the various and complex ramifications of modern industry. Except a new colony, there is no place where new-comers are so easily taken on as in a highly developed industrial country. There are more poor in Norway than in England, and they are increasing; yet in Norway there is no rent and no great cities. Mr. George may say, and in fact he does say, that in old countries the number of paupers is reduced by simple starvation; but if that were so, the death-rate would be increasing. But in England the death-rate is really diminishing. Let us again quote from Mr. Giffen's address:—"Mr. Humphreys, in his able paper on 'The Recent Decline in the English Death-Rate,' showed conclusively that the decline in the death-rate in the last five years, 1876-80, as compared with the rates on which Dr. Farr's English Life Table was based—rates obtained in the years 1841-45—amounted to from 28 to 32 per cent. in males at each quinquennial of the 20 years, 5-25, and in females at each quinquennial from 5-25, to between 24 and 35 per cent.; and that the effect of this decline in the death-rate was to raise the mean duration of life among males from 39.9 to 41.9 years, a gain of two years in the average duration of life. Mr. Humphreys also showed that by far the larger proportion of the increased duration of human life in England was lived at useful ages, and not at the dependent ages of either childhood or old age. No such change could have taken place without a great increase in the vitality of the people. Not only had fewer died, but the masses who had lived must have been healthier and suffered less from sickness than they did. From the nature of the figures also the improvement must also have been among the masses, and not among a select class whose figures threw up the average. The improvement, too, actually recorded obviously related to a transition stage. Many of the improvements in the condition of the working classes had only taken place quite recently. They had not, therefore, affected all through their existence any but the youngest lives. When the improvements had been in existence for a longer period, so that the lives of all who are living had been affected from birth by the changed conditions, we might infer that even a greater gain in the mean duration of life will be shown. As it was the gain was enormous. Whether it was due to better and more abundant food and clothing, to better sanitation, to better knowledge of medicine, or to these and other causes combined, improvement had beyond all question occurred." The decline of pauperism in this country then is not due to any increasing mortality in the classes from which the majority of the paupers come; but it is one among many other proofs that these classes have profited, like their neighbours, by the course of material progress. They may not have profited in the same degree as some others, or in the degree we think desirable and believe to be yet possible for themselves. But they have profited. The situation is really, as we have said, one of unequal rates of progress, and not one of simultaneous progress and decline.

And this Mr. George seems, at a later stage of his argument, freely to admit. For when he comes to state "the law which associates poverty with progress and increases want with advancing wealth," he explains that he does not contend that poverty is associated with progress at all, but only that a lessening proportion of the gross produce of society falls to some classes; that want may possibly not in the least increase with advancing wealth; that all classes may be the wealthier for the growth of wealth; and practically, that the only evidence of the poverty of the poor is the greater richness of the rich. It seems he is not explaining in any wise why the poor are getting poorer, but only why they are not getting rich so fast as some of their neighbours. We must quote chapter and verse for this extraordinary vacillation about the very problem he wants to solve. "Perhaps," he says, in the last paragraph of Book III., chapter vi. (p. 154), "it may be well to remind the reader, before closing this chapter, of what has been before stated—that I am using the word wages, not in the sense of a quantity, but in the sense of a proportion. When I say that wages fall as rent rises, I do not mean that the quantity of wealth obtained by labourers as wages is necessarily less, but that the proportion which it bears to the whole produce is necessarily less. The proportion may diminish while the quantity remains the same, or even increases. If the margin of cultivation descends from the productive point, which we will call twenty-five, to the productive point we will call twenty, the rent of all lands that before paid rent will increase by this difference, and the proportion of the whole produce which goes to labourers as wages will to the same extent diminish; but if in the meantime the advance of the arts or economies that become possible with greater population have so increased the productive power of labour that at twenty the same exertion will produce as much wealth as before at twenty-five, labourers will get as wages as great a quantity as before, and the relative fall of wages will not be noticeable in any diminution of the necessaries or comforts of the labourer, but only in the increased value of land and the greater comforts and more lavish expenditure of the rent-receiving class." It thus turns out that the alleged impoverishment of the labouring classes through the increasing wealth of society—the sad and desolating spectacle that "tormented" Mr. George, "so that he could not rest"—the cruel mystery that robbed him even of his religious faith, and moved him to write his powerful but inconclusive book—this was no real impoverishment at all, but only an apparent one. It is not so much as "noticeable" in "any diminution of the necessaries or comforts of the labourer"; it is noticeable only in "the greater comforts and more lavish expenditure of the rent-receiving class." The poverty of the labourer consists in the greater wealth of the landlord. The poor are not poorer; they only seem poorer, because certain of the rich have got so much richer. The problem is thus, on Mr. George's own showing, just the mock problem of the apparently receding train.

But let us take up this new issue. Mr. George's assertion now is that wages are a less proportion of the gross produce of the country than they were, because rent absorbs a correspondingly larger proportion than it did. Is that so? Mr. George does not think of showing that it is: he assumes it, without apparently having the smallest pretence of fact for his assertion. His assumption is entirely wrong. Rent is a much smaller proportion of the gross produce of the country than it was, and wages are not only in their aggregate a larger proportion of the aggregate produce of the country, but in their average a larger proportion of the per capita production. There is no need to rest in random assumptions on the matter. The gross annual produce of the United Kingdom is reckoned at present at twelve hundred millions sterling, and the rent of the land at less than seventy millions, or about one seventeenth of the whole. In the time of King and Davenant, 200 years ago or so, the annual produce of England and Wales was forty-three millions, and the rent of land ten millions—little less than one-fourth. (Davenant's Works, iv., 71.) It is hardly worth while, however, making a formal assertion of so self-evident a proposition as that rent constitutes a much smaller fraction of the national income now that wealth is invested so vastly in trade and manufactures, than it did when agriculture was the one great business of life: but it is perhaps better worth showing that rent does not absorb a greater proportion even of the agricultural produce of the country than it used to do. Rent has risen nearly 200 per cent. in the course of the last hundred years, but it does not take one whit a larger share of the gross produce of the land than it took then.

According to the calculations of Davenant and King, the gross produce of agriculture amounted, at the time of the Revolution, to four rents, or, allowing for tithes, to three rents; but this was only on the arable. The produce of other land, natural pasture and forest land and the like, came to less than two rents; so that while the rent of arable was not more than a third of the produce (or, to state it exactly, 27 per cent.), the rent of land generally was more nearly a half. The figures are—

	Gross Produce.	Rent.
Arable Land	£9,079,000	£2,480,000
Other Land	12,000,000	7,000,000
	—————	—————
Total	£21,079,000	£9,480,000

(Davenant's Works, iv., 70.) Arthur Young, a century later, declares that the doctrine of three rents was already exploded, and that farmers had begun to expend so much on high cultivation that they would be very ill content if they produced no more than three rents. In fact, he declares that even in former times rent could never have amounted to a third of the produce, except on lands of the very first quality, and that a fourth was more probably the average proportion. In his "Political Arithmetic," published in 1779 (Part II., pp. 27, 31), he estimated the gross agricultural produce of England (exclusive of Wales) at £72,826,827, and the gross agricultural rental at £19,200,000, or 26 per cent.,—very nearly one-fourth of the produce. To come down nearer our own time, M'Culloch estimated the gross agricultural produce of England and Wales in 1842-3 to have been £141,606,857, and the gross agricultural rental £37,795,906, or 26 per cent. of the produce. ("Statistical Account of the British Empire," 3rd Edition, p. 553.) The gross, agricultural produce of the United Kingdom is now 270 millions sterling, and the gross agricultural rental 70 millions. Mr. Mulhall, indeed, estimates it at only 58 millions; but at 70 millions it would be, as nearly as possible, 26 per cent.,—curiously enough the same figure exactly as in 1843 and in 1779, and almost the same as in 1689.

So far of rent; now as to wages. I have already, in a former chapter (p. 301), produced some evidence to show that the average labourer's wages bears a higher proportion to the average income of the country than it did in former times, or, in other words, that the labourer enjoys a higher per capita share of the gross annual produce of the country as measured in money, and I need not repeat that evidence here. Mr. Mulhall has made some calculations which confirm the conclusions there drawn. ("Dictionary of Statistics," p. 246.) He compares the income of the people of the United Kingdom at the three epochs of 1688, 1800, and 1883. He divides the people into classes and numbers them by families, stating the total income of each class and the total number of families among whom it was divided. I select the two columns containing the results for the whole population and the results for the working class.

(1) Number of Families:—
	A.D. 1688.	A.D. 1800.	A.D. 1883.
Whole Nation	1,200,000	1,780,000	6,575,000
Working Class	759,000	1,117,000	4,629,000
(2) Earnings:—
	A.D. 1688.	A.D. 1800.	A.D. 1883.
Whole Nation	£45,000,000	£230,000,000	£1,265,000,000
Working Class	11,000,000	78,000,000	447,000,000

A single glance at these tables will show that the aggregate wages of the country constitutes a slightly better proportion of its aggregate annual income at present than in 1800, and a decidedly better proportion than in 1688. But if we look, not to the aggregate income of the class, but to the average income of the individual families it contains, the result is in nowise more favourable to Mr. George's assumption. The following table will show that:—

(3) Average Income of Families:—
	A.D. 1688.	A.D. 1800.	A.D. 1883.
Whole Nation	£37	£129	£189
Working Class	14	69	96

The average working-class income was thus 37 per cent. of the average income of the country in 1688; 53 per cent. of it in 1800; and 51 per cent. of it in 1883. The difference between the last two epochs is so indecisive that we may count them practically identical. The real position of affairs then as to the proportion of wages to national produce is this, that wages enjoy a considerably larger share of that produce now than they did at the end of the seventeenth century, and about the same proportion as they enjoyed at the end of the eighteenth. If, accordingly, Mr. George resolves to stick by the point of proportion, he would therefore have no more solid ground to stand on than on the point of quantity. Rent, as a proportion of the entire wealth of the country, has enormously declined, and even as a proportion, of agricultural wealth has not increased. Wages as a proportion have not declined, but rather risen.

These, among other things, are indications that we have been concluding too hastily that concentration of wealth is the characteristic tendency of the time, and ignoring the existence of many minor and less conspicuous forces which have been working in the contrary direction. The real prospect at present is towards diffusion. The enormous accumulations that have marked the last hundred and fifty years have owed their existence largely to causes that cannot be expected to endure; in the case of land, to vicious laws directly favouring aggregations; and in the case of trade, to the unparalleled rapidity of the transformations and extensions industry has undergone during the period. Great inequalities are natural to such a time. Huge fortunes are made by pioneers, and will not be easily made by their successors. Railway contracting will never produce again a millionaire like Mr. Brassey, but it will continue to furnish the means of many moderate fortunes and competencies. So with every other new branch of industry, or new field of investment. The lucky person who is the first to occupy it may rise to great riches, but his successors will divide the custom, and instead of one large fortune, there will be a considerable number of small ones. Mr. George himself admits that the opportunities of making large fortunes are growing more limited, but oddly enough he considers the fact to be a signal evidence of "the march of concentration." In his "Social Problems" (p. 59) he writes: "An English friend, a wealthy retired Manchester manufacturer, once told me the story of his life. How he went to work at eight years of age, helping to make twine, when twine was made entirely by hand. How, when a young man, he walked to Manchester, and having got credit for a bale of flax, made it into twine and sold it. How, building up a little trade, he got others to work for him. How, when machinery began to be invented, and steam was introduced, he took advantage of them, until he had a big factory and made a fortune, when he withdrew to spend the rest of his days at ease, leaving his business to his son. 'Supposing you were a young man now,' said I, 'could you walk into Manchester and do that again?' 'No,' replied he, 'no one could. I couldn't with fifty thousand pounds in place of my five shillings.'" The true moral of this little story is of course that it is more difficult to amass a huge fortune in that particular line now than when machinery was young, and that a man with £50,000 to start with must now content himself with a much poorer figure than Mr. George's lucky friend made out of nothing. Would Mr. George compute what limit could be set to the sum his friend might have amassed, had he started in those golden days with £50,000 instead of five shillings? Even as things stood, his solitary success did not distribute the wealth of Manchester any the better among his fellow-spinners who were not fortunate enough to get credit for a bale of flax, or pushing enough to ask for it, and were not in a position to take advantage of the first introduction of a new power, and rise with it to great wealth. That the stream of things is now making for more moderate fortunes, and more of them, is confirmed by the testamentary statistics of the previous ten years published some time ago by the Spectator newspaper. These figures show that the number of fortunes of the first rank left during that period has been very much less than it was in the preceding ten years, but that the number of moderate fortunes has been very much larger.

What the future may hide in it I shall not venture to divine. It will no doubt bring upon industry fresh transformations, but we can hardly expect them to be so numerous or so rapid as in the brilliant era of industrial progress and colonial development we have passed through, and some at least of the changes that are in store for us point, as I have shown in the introductory chapter of this book, to a greater diffusion rather than a greater concentration in the future. Mr. George says: "All the currents of the time run to concentration. To successfully resist it we must throttle steam and discharge electricity from human service" (p. 232). Now steam has undoubtedly been a great concentrator, but electricity, which is likely to take its place in the future, will to all appearance be as great a distributor. Mr. George is equally mistaken regarding the real effect of the other "currents of the time." "That concentration is the order of development," says he, "there can be no mistaking—the concentration of people in large cities, the concentration of handicrafts in large factories, the concentration of transportation by railroad and steamship lines, and of agricultural operations in large fields. The most trivial businesses are being concentrated in the same way—errands are run and carpet sacks are carried by corporations" (p. 232). The concentration of people in cities is not the same thing as the concentration of the wealth of those cities in the hands of a few individuals. The centralization of labour in cities has assisted the birth of the trade union and the co-operative society, which are among the best agencies for diffusing wealth; and the growth of joint-stock companies is a strange proof of a tendency to greater concentration of wealth, for the joint-stock company is really an instrument of the small capital, enabling it by combination to compete successfully with the larger; and as to agriculture, the real tendency, in this country at any rate, seems to be to lesser holdings. When we complain of the inequalities of our time—and I am far from desiring to underrate their extent or to palliate their mischievousness—we are apt to forget how largely the real and natural process of evolution is after all one of distribution, how much the most conspicuous of the inequalities have been incidental to a transition period, and due to causes of a temporary nature, and how many indications we possess that they are not unlikely to be corrected and moderated in the future course of social development. Some of the official returns made in connection with the income tax show that the immense increase of wealth of the last thirty years has been far from being reaped by any single class, but has been shared pretty evenly by all the classes included in those returns. We possess detailed accounts of the number of persons paying income tax in each grade of income under Schedule D, from the year 1849, and if we compare the figures of that year with those of 1879, we shall obtain a fair index to the movement of distribution during those thirty years. Schedule D, it is true, includes only incomes derived from trades and professions, but these incomes may fairly enough be taken as sufficiently characteristic to afford a trustworthy indication of the general movement. While population increased in the thirty years by 22 per cent., the number of incomes liable to income-tax increased by 161 per cent., and of these, the incomes that have increased in much the largest proportion are precisely those middling or lower middling incomes which I have before shown to have unfortunately declined since 1688. While the number of incomes over £1,000 a year has increased by 165 per cent., the number of incomes between £150 and £400 a year has increased by 256 per cent. Mr. Goschen, in his inaugural address as President of the Royal Statistical Society in December, 1887, produced later evidence showing the continuance, and even growth of the same tendency. He showed from the Income Tax Returns that, in spite of the increase of population between 1877 and 1886, the number of incomes over £1,000 a year had decreased by 2.40 per cent., and the number of incomes between £500 and £1,000 had remained the same, while the number of incomes between £150 and £500 had increased 21.4 per cent. He showed from the statistics of certain selected public companies, that in the ten years from 1876 to 1886 the number of their shareholders had increased by 72 per cent., while the average capital per shareholder had decreased from £443 to £323. He drew similar conclusions from the probate and inhabited house duty figures, and from several other sources. (See Journal of Statistical Society, December, 1887.) These figures prove that the tendency of things, so far as it concerns the classes above the labourers, is not to further and exclusive concentration, but rather towards a wider and beneficial diffusion; and in regard to the labouring classes, it is admitted by all—even by the extremest social pessimists—that the upper and middle strata of them have participated in the progress of wealth equally with their neighbours. There remains only the lowest class of all, and their emancipation is the serious task of social reform in the immediate future; but that class is even now not increasing in the ratio of population; its misery comes from many causes, most of them moral and physical rather than economic; and though it presents difficult and trying problems, there is no reason for renouncing the hope which alone can sustain social reformers to success.

 

II. Mr. George's Explanation.

If there is any force in the foregoing observations, it is plain that there is no such problem as Mr. George has undertaken to explain, and we are therefore exempted from all necessity of examining his explanation. But to Mr. George's own mind his explanation of the appearance that troubled him really constitutes the demonstration of it; at any rate, he offers no other. The question of the increase of poverty is of course a question of fact, that cannot be settled by a priori deduction alone; but Mr. George seems to think otherwise. He is too bent on proving it to be necessary to think of asking whether it is actual, and even a man of science like Mr. A. R. Wallace, while regretting that Mr. George had not chosen to build his proposals on ground of fact, declares that he adopted an equally legitimate method in deducing his results "from the admitted principles and data of political economy." ("Land Nationalization," p. 19.) Moreover, most of the social pessimism of the present time draws its chief support, exactly like Mr. George's, from the supposed bearing of certain received economic doctrines; and our task would therefore be incomplete if we did not follow Mr. George on this "high priori road" on which he so boldly fares forth, and performs, as will presently be seen, many a remarkable feat.

Before beginning his explanation, he throws the problem itself into what he conceives to be a more suitable scientific form. "The cause," says he, "which produces poverty in the midst of advancing wealth is evidently the cause which exhibits itself in the tendency everywhere recognised of wages to a minimum. Let us therefore put our inquiry into this compact form: Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living?" (p. 10). The problem, as thus restated, is clearly, be it observed, one of quantity, not of proportion. A bare living is not a relative share, but a definite amount, of produce. But the tendency in wages to such a minimum, which he asserts to be everywhere recognised, is really not recognised at all. In alleging that it is so, Mr. George evidently alludes to the doctrine of wages taught by Ricardo and his school; but what they recognised in wages was a tendency, not to a minimum that would give but a bare living, but to a minimum that would give a customary living; in other words, that would sustain the labourers in the standard of comfort customary among their own class. The economic minimum is not the absolute minimum of a bare living; it is, as Mr. George himself elsewhere puts it, "the lowest amount on which labourers will consent to live and reproduce,"—that is, not the lowest amount on which any individual labourer will do so, but the lowest amount which labouring people in general consider it necessary to earn before they will undertake the responsibility of marriage. If they were to get less than this, it was contended, they would refrain from marrying to an extent that would tell sufficiently on the supply of labour to force wages up again to their old level. This level was the minimum to which wages constantly tended, but then it was always higher than a bare living; it was determined by the standard of requirements current among the labouring class at the time; and it was recognised to be capable of rising if that standard rose. True, Ricardo and the economists of his generation entertained very poor hopes of any such rise, because the working classes of their time, being without the intelligence, the ideas of comfort, the higher wants that are powerfully operative among the working classes of our day, were generally seen to "take out" their better wages when they chanced to get them in nothing but earlier marriages, which in the end brought their wages down again. We have happily now to do with a more aspiring and a less uniformly composed working class. It is perhaps more aspiring in some measure because it is less uniformly composed. It contains many ranks and inequalities and standards of social refinement and comfort, and the presence of these side by side develops a more active tendency upward, which, by supplying a stronger check than before on improvident marriages, will enable the labourers, class after class of them, to appropriate securely more and more of the common domain of advancing civilization. We have had abundant experience of a rise in the standard of life, and a rise in the rate of wages, both remaining as permanent possessions of sections of the labouring class. But if Ricardo and his school had less faith than they reasonably might have had in the possibility of a permanent upward tendency in wages, they certainly never dreamt of believing in any permanent downward tendency. According to their doctrine the rate of wages moved up and down within certain limits, but always tended to come back to a particular figure—the amount necessary to give the labourer the living customary among his class. This figure was really no more a minimum than it was a maximum; wages were supposed to fall sometimes below it, as they were supposed to rise sometimes above it; and to speak of it as a minimum that would give but a bare living is completely to misrepresent its nature.

The assumption from which Mr. George starts is thus in no wise an admitted principle of political economy, and would therefore not answer the test of legitimacy laid down by Mr. Wallace. It has no ground outside of Mr. George's own imagination. Economists would solve his problem, "why in spite of increased productive power wages tend to a minimum that will give but a bare living?" by simply denying his fact, and having done with it. But Mr. George persuades himself that they would answer it otherwise, and devotes the next section of his book to an elaborate confutation of the false answers he supposes they would return to it. They would either explain it, he thinks, by their theory of the wages fund, or they would explain it by their theory of population; and so before confiding to us his own explanation, he considers it necessary to stop and clear these two venerable theories out of his way. I am not concerned to defend these theories; their truth would not make Mr. George's own view any the falser, nor their falsehood make it any the truer. One of them indeed was dead and buried before Mr. George attacked it, though I am bound to say it would never have fallen before the particular line of attack he directs against it. The wages fund doctrine, which played a considerable rôle both in its original form as taught by Senior, and in its subsequent form as modified by M'Culloch, was refuted by Mr. Thornton in 1869, was almost instantly abandoned by the candid mind of Mr. Mill, and is now rarely met with as a living economic doctrine. The wages fund is still regarded of course as having its limit in capital, and in the conditions which generate capital, but since these conditions include among other things the number and efficiency of the labourers, the amount of the wages fund is no longer represented as at any given moment a fixed and predetermined quantity susceptible of no possible alteration to meet the exigencies of the labour market, and when once this characteristic was given up, the wages fund doctrine was seen to have degenerated into little more than a stately truism. The Malthusian theory of population is not in the same way discredited, but it likewise is now generally stated with some reserve. It has become well understood that the earlier economists assigned it too absolute and universal a validity, and that it is not, as they thought, a law for all ages, and especially and happily not a law for our own. It is true of an era of progressive population and diminishing return from agriculture, but for our day it has been robbed of its terrors by free trade and steam navigation, which have connected our markets with continents of virgin soil, and carried us virtually into an era of increasing return of indefinite duration. The population question was one of serious practical import for our fathers, and as they saw people marrying and giving in marriage, while every fresh bushel of food was extracted with increasing difficulty from an exhaustible soil, they looked with a reasonable dread to the future, and saw no way of hope except in the practice of a heroic continence. But we live in another time. We find population increasing and yet bread cheapening, simply because the locomotive which alarmed Mr. George by taking the tramp to California has brought back plenty to the rest of the world. It is due to the material progress he preaches against that we are the first generation who can afford to make light of the population question, and leave our remote posterity to deal with the peril when it shall actually arrive.

Mr. George, however, is not content with disputing these doctrines; he insists on replacing them with others exactly opposite to them in purport, and for which he claims a like universal validity. He propounds a new population theory, and a new wages fund theory of his own. The more population abounds, the more will subsistence superabound, is his comfortable counter-proposition to Malthusianism. "I assert," says he, "that in any given state of civilization a greater number of people can collectively be better provided for than a smaller.... I assert that the new mouths which an increasing population calls into existence, require no more food than the old ones, while the hands they bring with them can in the natural order of things produce more. I assert that, other things being equal, the greater the population, the greater the comfort which an equitable distribution of wealth would give to each individual" (p. 99). In a word, his teaching is that "other things being equal" over-population is a ridiculous impossibility. What may be all concealed under the reservation, "other things being equal," he does not enlighten us, but it avowedly contains at least one presupposition of decisive importance to the question, the presupposition of the unlimited productiveness of the soil. Mr. George denies the law of diminishing return. We shall presently find him, in his doctrine about rent, basing his whole book on the operation of this law. But here in his doctrine about population it suits him to deny it, and he does so on singularly fantastical grounds (p. 93). He denies it on the ground that "matter is eternal, and force must for ever continue to act," as if the indestructibility of matter was the same thing as its infinite productiveness. "As the water that we take from the ocean must again return to the ocean, so the food we take from the reservoirs of nature is, from the moment we take it, on its way back to those reservoirs. What we draw from a limited extent of land may temporarily reduce the productiveness of that land, because the return may be to other land or may be divided between that land and other land, or perhaps all land; but this possibility lessens with increasing area, and ceases when the whole globe is considered. That the earth could maintain a thousand billions of people as easily as a thousand millions is a necessary deduction from the manifest truths that at least, as far as our agency is concerned, matter is eternal and force must for ever continue to act.... And from this it follows that the limit to the population of the globe can only be the limit of space. Now this limitation of space—this danger that the human race may increase beyond the possibility of finding elbow-room—is so far off as to have for us no more practical interest than the recurrence of the glacial period or the final extinguishment of the sun" (p. 94-5). If this passage means anything, it means that the race may go on multiplying as long as it finds room to stand on, and that even when that limit is reached it can only be squeezed to death and not starved. It can in no case apparently be starved. Subsistence cannot possibly run short, for the inherent powers of the soil are not permanently destructible. But he might as well argue that man must be omnipotent because he is immortal. The question is not one of the durability of the productive powers of the earth—it is one of their limited or unlimited productive capacity. Up to a certain point they may yield the same return at the same cost year after year in sæcula sæculorum, but will they yield more? Manifestly not. Every bushel they give after that is got at continuously increasing cost. Now of course wherever population increases so much, compared with the land at its disposal, that this increasing cost must be incurred in order to find them food, the epoch of diminishing return in agriculture has arrived, and the peril of over-population is already present. Happily, as we have said, that time is not yet, but it will come long, long before the human race fails to find elbow-room in this planet.

Mr. George himself admits that in a country of inconsiderable extent, or in a small island, such as Pitcairn's Island, over-population is quite possible before elbow-room is near exhausted—(p. 74)—and in making the admission he virtually surrenders his case. He admits in detail what he denies in gross. For is not the soil of a small island or an inconsiderable country as eternal as the soil of a continent? The only difference is that it is not so extensive, and therefore comes to the epoch of diminishing return sooner. That is all. The reason why he makes an exception of such an island is because its inhabitants "are cut off from communication with the rest of the world, and consequently from the exchanges which are necessary to the improved modes of production resorted to as population becomes dense" (p. 74). But if density of population is such a sure improver of production as Mr. George represents it to be elsewhere, why should it fail here? And if it fail anywhere, how can he argue that it must succeed everywhere? Once he admits, as he does in this passage, that subsistence has a definite limit in the modes of production that happen to be known in any age and country, and that population has a definite limit for such age and country in the amount of subsistence which the known modes of production are capable of extracting from the soil, he really admits all that Malthusians generally contend for, and coming to curse, he has really blessed them altogether. The limit of subsistence which he here recognises—the limit imposed by the state of the arts—is far within the limit which he has just been denying, the natural limit to the inherent fertility of the soil, on which economists base their law of diminishing return. The former point is far sooner reached than the latter. Men will starve because they don't know how to make the best use of nature long before they will starve because nature is used up; and it is exactly that earlier limit on which Malthusians lay stress.

But except for this inconsistent admission in the case of a petty isolated island, Mr. George persistently refuses to recognise any kind of limit to subsistence, either in the productive capacity of the soil or in the state of the arts. He seems to fancy that land will go on yielding larger and larger harvests ad infinitum to accommodate an increasing population, and that even if it failed to do so, new inventions or improved processes of production would be constantly discovered when they were needed, and keep the supply of food always equal to the demand. With these crude assumptions in his head, he arrives very easily at his own peculiar theory, which is, that subsistence tends to increase faster than population, because the growth of population itself affords the means of such economies and organization of labour as multiply immensely the productive capacity of each individual labourer. A hundred labourers, he is fond of arguing, will produce much more than a hundred times the amount that one will, and it is therefore clear folly to think of population as capable of encroaching on subsistence. On the contrary, it seems almost fitter to speak of it as a means of positively economizing subsistence. Mr. George's mistake arises from ignoring the fact that subsistence depends on the productive capacity of land as well as on the productive capacity of labour, and the productive capacity of land is not indefinitely progressive.

Mr. George's new wages fund theory is based on a precisely analogous misconception of the real conditions of the case, and is just as much in the air as his population theory. "Wages," he says, "cannot be diminished by the increase of labourers, but on the contrary, as the efficiency of labour manifestly increases with the number of labourers, the more labourers, other things being equal, the higher wages should be" (p. 62). Just as he has already argued that food can never run short before an advancing population, because the new hands can produce much more than the new mouths can consume, as if the hands span it out of their own finger nails; so he now argues that wages can never decline for want of capital to employ labourers, because the capital that employs them is made by the labourers themselves. They are paid, he declares, not out of the capital of their employers, but out of the product of their own labour. Mr. F. A. Walker, the eminent American economist, had already taught a similar doctrine, but with the reservation that while wages were really paid out of the produce of the labour they remunerated, they were usually advanced out of the employer's capital. But Mr. George throws aside this reservation, and declares boldly that wages are neither paid nor advanced out of capital, and that if any advance is made in the transaction at all, it is the labourer who makes it to the employer, not the employer to the labourer. "In performing his labour, he (the labourer) is advancing in exchange; when he gets his wages, the exchange is completed. During the time he is earning the wages, he is advancing capital to his employer; but at no time, unless wages are paid before work is done, is the employer advancing capital to him" (p. 49).

In this contention Mr. George relies much on the analogy of the "self-employing" labour of primitive society. When men live by gathering eggs, he tells us, the eggs they gather are their wages. No doubt; but in our complicated civilization we don't live by gathering eggs from day to day, but by sowing the seed in spring which is to yield us food only in harvest—by preparing work for the market which may take weeks, months, even years before it is marketable. The energetic Sir John Sinclair is said to have once danced at a ball in the evening dressed in a suit the wool of which was still growing on the sheep's back in the morning; but rapidity like that is naturally foreign to ordinary commerce. The successive operations of clipping, fulling, teasing, spinning, dying, weaving, cutting, sewing, occupy considerable time. So with other things. Houses, ships, railways, are not built in a day, or by a single workman. The product of a single workman's work for a day at any of these things has no value apart from the product of the other workmen's work, nor has the work of them all any value unless the work is, or is to be, completed. The wages paid during the period of construction, therefore, cannot possibly have come out of the work for which they were paid, but must have been advanced otherwise. Who advances them? Clearly not the labourer himself, for he receives them. And yet that is what Mr. George unhesitatingly asserts, and his argument is as courageous as it is ingenious. He does not shrink from applying it to the extremest case you like to suggest—the Great Eastern, the Gothard Tunnel, the Suez Canal; even in these cases the labourers, who spent months and years in doing the work, were paid out of the work itself, out of the Great Eastern, out of the Gothard Tunnel, out of the Suez Canal. "For," says Mr. George, "a work that is incomplete is not valueless, it is not unexchangeable; money may be raised on it by mortgage or otherwise, and as this money is raised on the product of the labourer's work, the wages it is employed to pay are really paid out of that product." But this only shifts the question a little: it does not answer it. Where does this lent money come from? Certainly not from the work it is lent on. Perhaps not, Mr. George will rejoin, again shifting his ground, but it comes from the product of the contemporaneous work of other labourers. "It is not necessary to the production of things that cannot be used as subsistence or cannot be immediately utilized that there should have been a previous production of the wealth required for the maintenance of the labourers while the production is going on. It is only necessary that there should be, somewhere within the circle of exchange, a contemporaneous production of subsistence for the labourers, and a willingness to exchange this subsistence for the thing on which the labour is being bestowed" (p. 51). But this is only passing round the dilemma. For this contemporaneous production has itself the same difficulty to face; it has to sustain its labourers during the time taken to complete their work; and it can only do so, according to Mr. George's explanation, by raising the means through a mortgage on the unfinished work. It borrows to pay its own wages, but is apparently able to lend to pay other people's. Mr. George has a happy method of carrying on the affairs of society by mutual accommodation. Peter is a shoemaker who wants money to buy leather to make shoes and food to maintain him till the shoes are made. Paul is a carpenter who is in a like case, and wants money to buy food and timber. Peter borrows the money he needs from Paul on mortgage, and then Paul in turn borrows what he needs from Peter, on the same terms. Utopia is a pleasanter world than ours, and an IOU probably goes a long way in it; but here on this hard earth Peter would certainly make no shoes nor Paul any chairs, unless he had either himself saved enough to purchase the materials, or found a neighbour who had done so and was ready to make him an advance. Except for this neighbour he could not work at all, and could not therefore "create any wages," and the amount of work he got and wages he earned would manifestly depend greatly on the amount of capital this stranger possessed and was disposed to invest in such an enterprise.

It is true that the wages of labour will be guided in amount by the quantity of the product, but they are not on that account actually paid out of the product. And it is true that the labourer gives value for his wages—certainly he would not otherwise be employed—but that value is not usually marketable until some time, in many cases years, after the wages have been enjoyed, and therefore cannot have been the source whence these wages came. The wages were paid out of the saved results of previous labour—that is, out of capital—and Mr. George has absolutely no conception of the amount of capital that is necessary to carry on the work of industry. He says we live from hand to mouth, and so in a sense we do. Our capital is being constantly consumed and constantly reproduced again, and economists are fond of showing, from the speedy recovery of a civilized state after a devastating war, how short a time it would really take to replace it entirely. But until it is replaced every inhabitant undergoes considerable privations, which simply means that the rate of wages has fallen for want of it. There are some trades, like the baker's, where the product is actually sold before the wages are paid; and there are many, like the whaler's mentioned by Mr. George, where the labourers can afford to wait long terms for part at least of their remuneration (no great sign, by the way, of the minimum of a bare living); but even in these much capital must be set aside before a single hand is engaged. The whalers, for example, must be furnished with a ship to start with, and be provisioned for the voyage; and if these requisites are not forthcoming, they must go without work and wages altogether, or take work at inferior terms in a market glutted by their own arrival in it. Mr. George speaks lightly of the labourers who excavated the Suez Canal advancing value to the company who employed them, and yet before a single pick or spade was stuck into the sand of the Isthmus the company had laid out, in preliminary expenses and machinery, as much as six millions sterling—more than a third of the whole cost of the Canal. They had then to pay other five or six millions in wages before the work fetched a single fee; and yet Mr. George will have us believe that those five or six millions actually came out of the profits, merely because the projectors hoped and believed they might eventually come out of them. Labourers give an equivalent to the capitalists for their wages, but their wages are really paid out of the capital which their employers have saved for the purpose of purchasing that equivalent. I may have bought a cow in the hope of recouping myself by selling her milk, but I did not therefore pay her price out of the milk money—for nobody would have sold her to me if he had to wait for that; I bought her out of money I had previously saved, and from the same source exactly, and no other, do capitalists buy labour.

But, objects Mr. George, that cannot be; wages cannot be paid out of capital, because they are often lowest when, as shown by the low rate of interest, capital is most abundant. But Mr. George here confounds existent capital with employed capital. It is only the capital actually employed that tells on wages; the low rate of interest merely shows that there has been an increase in unemployed capital, and since that is generally a correlative of a diminution of employed capital, it is but natural that low interest should be attended by low wages. Low wages are a consequence of unemployed labour, unemployed labour a consequence of unemployed capital, and unemployed capital a consequence of unfavourable industrial conditions which labour, either with capital or without it, cannot evade or reverse.

 

So far then of Mr. George's views on population and the wages fund, for which much value, as well as originality, has been claimed. The chapters in which he states them are certainly among the most impressive and characteristic in his book. Nowhere else does he display more strikingly his remarkable acuteness, fertility, and literary power, and nowhere else are these high qualities employed more fruitlessly from sheer want of grasp of the elements of the problems he discusses. These chapters are after all, however, something of a digression from the main business of the book, and they have perhaps detained us too long from Mr. George's own explanation of the supposed growth of poverty.

His explanation is this: "The reason why, in spite of the increase of productive power, wages constantly tend to a minimum which will give but a bare living is that with increase in productive power, rent tends to even greater increase" (p. 199). "Rent swallows up the whole gain, and pauperism accompanies progress" (p. 158). "The magic of property," it seems, has an unsuspected malignancy; but, in the present case, its spell is really exercised only over Mr. George's own vision. For who, with his eyes open, would believe for a moment what Mr. George so gravely asserts, that of the whole gain won by our multiplied productive power, none whatever has gone to the great bankers, and brewers, and cotton spinners, and ironmasters, and corn factors, and shipbuilders, and stockbrokers, and railway contractors; that our Rothschilds, and Brasseys, and Barings, and Bairds, the great plutocrats of the time, the possessors of the largest fortunes in the country, the very men and classes who have been most conspicuously enriched through the material progress of the nation, have all the while been conducting a hard struggle against a fatal tendency in their incomes to sink to a bare living, and had to feed, exactly like the manual labourers, from the crumbs that fall from the landowners' table. The assertion is too violent and preposterous to merit serious refutation. Everybody knows that the greatest part of the wealth of modern society is not concentrated in the hands of the landlords at all, that it has not accrued from rent and that it would not be a farthing the less though private property in land were abolished to-morrow.

But violent and preposterous as Mr. George's conclusion is, it has not been arrived at without the exercise of much perverse ingenuity. Having been brought by his examination of the wages fund and population theories to the conviction that the key to his riddle was not to be discovered in the conditions that regulated production, he concludes that it must, therefore, be sought in the conditions that regulate distribution. His problem is thus one in the distribution of wealth, and it must be explained, if it is to be explained at all, by the laws of distribution. To investigate these laws, therefore, becomes now his object, and the first step he takes is a truly amazing one. At the very outset he throws the most important class of participators in the distribution—the class that appropriates the largest share—out of court altogether, and he proceeds to settle the whole question as if they never got a penny, and as if the entire spoil were divided among their neighbours. People who live on profits, it seems, have no locus standi in a question of distribution, and the case must be considered as if the parties exclusively concerned were the people who live on wages, the people who live on interest, and the people who live on rent. "With profits," he says, "this inquiry has manifestly nothing to do. We want to find what it is that determines the division of their joint produce between land, labour, and capital, and profits is not a term that refers exclusively to any one of these three divisions. Of the three parts into which profits are divided by political economists, namely compensation for risk, wages of superintendence, and returns for the use of capital, the latter falls under the term interest, which includes all the returns for the use of capital and excludes everything else; wages of superintendence falls under the term wages, which includes all returns for human exertions and excludes everything else; and compensation for risk has no place whatever, as risk is eliminated when all the transactions of a community are taken together" (pp. 113-4).

Now we have to do here with no mere difference of terminology. Profits may be employers' wages, if you like to call them so; but it is a fatal confusion to suppose that, because you have called them employers' wages, you are therefore entitled to treat them as if they were governed by the same laws and conditions as labourers' wages. The truth is that they are governed by opposite conditions, and that the pith of the labour question is just the conflict between these two kinds of wages for the better share in the distribution. The battle of labour is not against the employer receiving fair interest on his capital in proportion to its quantity, but against the amount of additional profit which the employer claims as wages of superintendence, and which he also rates in proportion to capital invested instead of rating it in proportion to his own trouble or efficiency. One of the chief hopes of the workman resides in the possibility of breaking down this erroneous criterion of fair remuneration for superintendence, and so getting the employers to content themselves with smaller profits than they have been in the habit of considering indispensable. Profits and wages have thus opposite and conflicting interests in the distribution, but Mr. George, having once disguised the one in the garb of the other, is imposed on by the disguise himself, and treats them in his subsequent speculations as if they were the same thing, or at any rate—what in the present connection is equally pernicious in its effects—as if their respective shares in the distribution were determined by precisely the same conditions. The result is, as might be expected, a series of singular contretemps springing from mistaken identity, like those we are familiar with on the comic stage. The manufacturing millionaire appears before us as the victim of the same harsh destiny as the penniless crossing-sweeper, and the banker of Lombard Street is overshadowed by the same blighting poverty as the lumper of Wapping. Proudhon, in a powerful passage, describes pauperism as invading modern society at both extremes; it invaded the poor in the positive form of natural hunger; it invaded the rich in the unnatural but more devouring form of insatiable voracity. The burden of Mr. George's prophetic vision contains no such refinements. He sees a huge wedge driven through the middle of society; and on the underside of that enchanted wedge he sees the merchant princes of the world eating the bread of poverty with their lowest dependents. Mr. George's classification of profits under wages therefore involves much more than a mere change of nomenclature, for it has led him to pass off this absurd vision as a literal description of things as they are. By that classification he has really put out of his own sight the most important factor in the settlement of the question he is discussing, and so he begins playing Hamlet by leaving the part of Hamlet out.

Having simplified matters by throwing profits out of the cast, Mr. George's next step is to assign the leading rôle to rent. In the whole drama of the modern distribution of wealth, no part is more striking or more often misunderstood than the part played by rent. Wages never cease to cost much and to be worth little, but rent seems to have the property of going on growing while the landlords themselves sleep or play. This fact has impressed Mr. George so profoundly that, losing sight of things in their true connection and proportions, he declares that the growth of rent is the key to the whole situation, and that neither wages nor any other kind of income, not derived from land, can ever draw any advantage from the increase of prosperity, because rent always steps in before them and runs off with the spoil. He professes to found this conclusion on Ricardo's theory of rent, which he accepts, not only as being absolutely true, but as being too self-evident to need discussion. Indeed, he seems disposed, like some others, to have his fling at Mill for calling it the pons asinorum of political economy; but we shall presently discover various grounds for suspecting that he has not crossed the bridge successfully himself, and that here, as elsewhere, he has been led seriously astray by looking at things through the mist of doctrines he has only imperfectly mastered. Anyhow, he offers his theory as a deduction from Ricardo's law of rent, and this deduction claims particular attention because it is the corner-stone of his speculations, and constitutes what he would consider his most original and important contribution to economic science. He says that the law of rent itself "has ever since the time of Ricardo ... been clearly apprehended and fully recognised. But not so its corollaries. Plain as they are, the accepted doctrine of wages ... has hitherto prevented their recognition. Yet, is it not as plain as the simplest geometrical demonstration that the corollary of the law of rent is the law of wages, when the division of the produce is simply between rent and wages; or the law of wages and interest together, when the division is into rent, wages, and interest" (p. 120). It is really plainer. It is a mere truism. In any simple division, if you know how much one of the factors gets, you know how much is left for the others, and if you like to dignify your conclusion by the name of corollary, you are free to do so. But the real point is this, whether the share obtained by rent is fixed irrespectively of the share obtained by wages and interest, or whether, on the contrary, it does not presuppose the previous determination of the latter. There is no doubt, at any rate, as to how Ricardo—Mr. George's own authority—regarded the matter. According to his celebrated theory, wages and interest are satisfied first, and then rent is just what is over. Rent is simply surplus profit. In hiring land, the farmer hires a productive machine, and under the influence of competition gives, for the use of that productive machine for a year, the whole amount of its annual produce which remains as a surplus after paying the wages of his labourers, and allowing interest on his capital, and what he considers a fair profit for his own work of superintendence. A certain current rate of wages and a certain current rate of profit are presupposed, and after these demands are met, then if the land has yielded anything more, that surplus is what is paid as rent. Ricardo always presumes that land that cannot produce enough to meet these demands will not be cultivated at all, and that the poorest land actually under cultivation is land that meets them and does no more; in other words, that leaves nothing over for rent. Let us take Ricardo's law as it is stated by Mr. George himself (p. 118): "The rent of land is determined by the excess of its produce over that which the same application can secure from the least productive land in use." The standard by which, according to this law, the amount of rent is supposed to be determined, is the produce of the least productive land in use. Now, what is the least productive land in use? It is land that produces just enough to pay the wages the labourers upon it are content to work for, and the profits the farmer of it is content to farm for. How that rate of wages and that rate of profits are fixed is no matter here; but one thing is clear—and it is enough for our present purpose—that they cannot be determined, as Mr. George represents them as being, by a law of rent which presumes and is conditioned by their operation. Ricardo's law virtually explains rent in terms of wages and profits, and it would therefore be the height of absurdity to re-explain wages and profits in terms of rent. And if that is so, the circumstance which excites Mr. George's surprise, that economists have always so clearly apprehended the law of rent itself, and yet failed so completely to recognise the corollaries which he plumes himself on being the first to deduce from it, admits of a very simple explanation: the economists understood the law they expounded, and were better reasoners than to employ it as a demonstration of its own postulates.

This will become still plainer, if we look more closely at the fact which has struck Mr. George so much—the constant rise of rent in modern society. He attributes that rise to many causes; in fact, there are few things that will not, in his opinion, raise rent. Progress of population will do so; but if population is stationary, it will be done all the same by progress in the arts; the spread of education will do it; retrenchment of public expenditure will do it; extending the margin of cultivation will do it; and so will artificial contraction of that margin by speculation. In short, he is so haunted by the idea, that he seems to believe that so long as rent is suffered to survive at all, whatever we do will only conduce to its increase. Every step of progress we take extends its evil reign, and if progress were to reach perfection, rent would drive wages and interest completely off the field and appropriate "the whole produce" (p. 179). These fears are not sober, but they could never have risen had Mr. George first mastered the theory of rent he founds them on. For rent, being the price paid by producers for the use of a productive machine, cannot rise unless the price of the product rises first (or its quantity, if so be that it does not increase so much as to reduce its price), for unless the price of agricultural produce rises, the farmer cannot afford to pay a higher rent for the land than he paid before. No part of Ricardo's theory is more elementary or more unchallenged than this, that the rent of land constitutes no part of the price of bread, and that high rent is not the cause of dear bread, but dear bread the cause of high rent. Rent cannot rise further or faster than the price of bread (or meat, of course) will allow it, and the price of bread is beyond the landowner's control. He cannot raise it, but once it rises, he can easily raise rent in a corresponding degree. If a rise of rent depends on a rise in the price of bread, what does a rise in the price of bread depend on? On two things which Mr. George ignores or misunderstands—the progress of population and the diminishing return in agricultural production. The growth of population increases the demand for food so much as to raise its price, and renders it profitable to resort to more difficult soils or more expensive methods for additional supplies. The price will then remain at the figure fixed by the cost of the costliest portion that is brought to market.

Now Mr. George laughs at the idea of increase of population causing any difficulty about the supply of food—population, which he is never tired of telling us, is the very thing most wanted to multiply that supply, and possesses a power of multiplying it in even a progressive ratio to its numbers. "The labour of 100 men," he says, "other things being equal, will produce much more than one hundred times as much as the labour of one man" (p. 163). And he laughs in the same way at the idea of a diminishing return in agriculture, as if, says he, matter were not eternal, and as if an increasing population did not of itself increase the productive capacity of the land through increasing the productive capacity of the labour upon it. These two misunderstandings lie at the bottom of all Mr. George's vagaries about rent, and they are perhaps natural to a speculator, resident in a rich new colony, which, as he describes it himself, "with greater natural resources than France, has not yet a million people." No doubt in a country at that particular stage of its historical development, increase of population may involve an increase, and even a more than proportional increase, of food as well as of other commodities; but that particular stage is a temporary and fleeting one, and the world in general is very differently situated from the State of California thirty years ago. Where there is plenty of good land, the increase of population occasions no increase in the cost of producing food, because there is no need to resort to poorer land for the purpose; and while food is got as cheaply as before, other things are got much more easily and abundantly in consequence of the economies of labour and the many mutual services which result from the increased numbers of the community. But that state of matters only continues so long as there remains no occasion to resort to poorer soils for the production of food, and that time is long past in most countries of the world. Mr. George no doubt contends that in all countries it is just the same as in California, because even though it may have become more difficult in some places to produce food, it has become everywhere much easier to produce other commodities, and (so he argues) the production of any kind of commodity is practically equivalent to the production of food, for it can always be exchanged for food. So it can, if food is there to exchange for it; but the very question is whether food is there, or is there in the same relative quantity. If I say it is more difficult to get food, it is no answer to tell me that it is much easier to get other things. And because other things may be multiplied indefinitely at the same cost, that is no reason for denying that food can only be multiplied indefinitely at increasing cost. Yet Mr. George reasons as if it were. This confusion is repeated again and again in the course of his book, and has evidently had much influence on his whole speculations. He describes the advantages which the colonist derives from the arrival of other settlers. "His land yields no more wheat or potatoes than before, but it does yield far more of all the necessaries and comforts of life. His labour upon it will bring no heavier crops, and we will suppose no more valuable crops, but it will bring far more of all the other things for which men work" (p. 168). That is true, but it is not to the purpose. The new settler required a market, and population brought it; but although population up to a certain point is beneficial, you cannot for that reason declare that beyond that point it cannot possibly become embarrassing; for on Mr. George's own hypothesis the ground yields no more wheat and potatoes than before, and the limit to convenient population is prescribed by the amount of food the ground yields, and not by the quantity of other commodities which skilled labour can produce. If population were to exceed what that stock of food would adequately serve, then new-comers would find little comfort in Mr. George's rhetorical commonplace that they had two hands and only one mouth. His simple confidence, that they never can be at a loss, because they can get food by exchange as well as by direct production, is a mere dream, because he forgets that the people they are to exchange with are in the same case as themselves. They can only give food in exchange for other things so long as they raise more food than serves their own numbers, and when their numbers increase beyond that point, they will have no food to sell. The limit to subsistence is not the productive capacity of labour, but the productive capacity of land.

Mr. George's argument rests on another very curious fallacy. He builds his whole theory of distribution on the fact of the extension of the margin of cultivation from better to worse soils, but in the same breath he denies the existence of the very conditions that alone make that fact possible. Nobody would resort to worse land unless the better were unable to furnish indefinite supplies at the old cost, i.e., unless the principle of diminishing return prevailed in agriculture. Nor would any one resort to worse land until it paid him to do so, i.e., until the produce of this worse land became, through a rise in its price or through improvements in the art of agriculture, equal in net value to the produce previously yielded by the worst land then in cultivation. Mr. George denies the principle of diminishing return. He denies "that the recourse to lower points of production involves a smaller aggregate of produce in proportion to the labour expended." He denies this, "even where there is no advance in the arts and the recourse to lower points of production is clearly the result of the increased demand of an increased population. For," says he, "increased population of itself, and without any advance of the arts, implies an increase in the productive power of labour" (p. 163). But the question is, does it imply any increase in the productive power of the soil? Mr. George contends that it does, but only on the superior soils, not on the inferior. Increasing population, in his opinion, renders all labour so much more effective that "the gain in the superior qualities of land will more than compensate for the diminished production on the land last brought in" (p. 165). Now to all this there is one simple answer: why then resort to inferior soils at all? If crowding on the superior soils can make those soils indefinitely productive, why go farther and fare worse? There can be no reason for having recourse to worse land, but that the better has ceased to yield enough at the old cost. Organization and economy of labour are excellent things, but they cannot press from the udder more milk than it contains, or rear on the meadow more sheep than it will carry, or grow on a limited area available for cultivation more than a definite store of food.

But while Mr. George denies that there is anything to force people to poorer soils, he supposes at the same time that they go freely in order to get a less profit. He holds the amount of return obtained from cultivating the least productive land in use to be the lowest rate of return for which anybody will invest his capital, and therefore to serve in some sense as a standard rate of remuneration for all applications of capital and labour. Nobody, he declares, will work for less than he can make on land that pays no rent. But will any one work such land for less than he can make in other industries? That is what Mr. George supposes to be done every day, although he laughs at the idea of there being any necessity for doing it. It need not be said that men are not such lunatics. They are really forced to go to worse soils because the better cannot increase their yield indefinitely at the same cost, and they never go till they possess a reasonable expectation of making as much out of the worse land as they did before out of the better.

From all these remarkable misconceptions of the working of rent, and of the theory of Ricardo on the subject, which he professes to follow, he draws his first law of distribution, which is nevertheless, so far as it goes, undoubtedly correct: "Rent depends on the margin of cultivation, rising as it falls and falling as it rises" (p. 155).

To find the law of rent, he has told us, is to find at the same time its correlatives, the laws of wages and interest, and these laws accordingly he states thus: "Wages depend on the margin of cultivation, falling as it falls and rising as it rises. Interest (its ratio with wages being fixed by the net power of increase which attaches to capital) depends on the margin of cultivation, falling as it falls and rising as it rises" (p. 156). He is not content, however, with merely inferring these two laws as corollaries from the law of rent, but thinks it necessary to construct for wages and interest a certain independent connection with the movement of the margin of cultivation. To do so, he first reduces interest, as he had already reduced profits, to a form of wages; he then erects all the different forms of wages (i.e., every form of income except rent) into a single hierarchical system, in which there are many different rates of remuneration, occasioned by the necessity of compensating different risks and exertions, but all moving up and down concurrently with a certain general rate of wages at the bottom of the scale; and he finally connects this general or standard rate of wages with the margin of cultivation, by saying that no one would work at anything else for less than he can make on land open to him free of rent, and that therefore the income made by cultivating such land must be the lowest going.

Mr. George's view of the nature of interest is peculiar. He considers it to be the natural increase of capital, the fruit of inherent reproductive powers, like the increase of a calf into a cow, or of a hen into a hen and chickens; and because interest comes in this way freely from nature, he believes the private appropriation of it to be thoroughly just, although he presently gives precisely the same reason for declaring rent to be theft. It is unnecessary to discuss either the truth or the consistency of this doctrine here, and I refer to it now merely to explain that although Mr. George thus justifies interest as being the price of a natural force, he introduces it into his theory of the origin of poverty, as the price of human labour. "The primary division of wealth," he says, "is dual, not tripartite. Capital is but a form of labour, and its distinction from labour is in reality but a subdivision, just as the division of labour into skilled and unskilled would be. In our examination we have reached the same point as would have been attained had we simply treated capital as a form of labour, and sought the law which divides the produce between rent and wages; that is to say between the possessors of the two factors, natural substance and powers and human exertion—which two factors, by their union, produce all wealth" (p. 144). The difference between interest and wages is but as the difference between the wages of skilled labour and the wages of unskilled; the wages of skilled labour is only the wages of unskilled, plus some consideration for the skill, or for the time spent in training, or for drawbacks of various kinds; and the wages of unskilled labour is fixed by the amount that can be made on land that pays no rent. Profits, salaries, stipends, fees are, in the same way as interest, declared to be modes of wages. The £50,000 a year of the merchant prince, it seems, is just the £50 of the day-labourer, with £49,950 added to compensate him for the additional perils or drawbacks or discomforts of his life. All incomes, except the landowner's, row in the same boat, and the day-labourer's sets the stroke. When the margin of cultivation descends, he is the first to suffer, and then all the rest suffer with him. If he loses £10 a year, they successively lose £10 too; the doctor or bank-agent will have £490, instead of £500; the railway chairman, £4,990, instead of £5,000; the merchant prince, £49,990, instead of £50,000; and their loss is the landlord's gain. Here then we see the whole mystery of iniquity as Mr. George professes to unravel it. "The wealth produced in every community is divided into two parts by what may be termed the rent line, which is fixed by the margin of cultivation, or the return which labour and capital could obtain from such natural opportunities as are free to them without payment of rent. From the part of produce below this line, wages and interest must be paid. All that is above goes to the owners of land" (p. 121).

Mr. George here confounds the margin of cultivation with the margin of appropriation. When economists speak of an extension of the margin of cultivation, they mean a resort to less productive land, and that is always accompanied by a rise of rent; but an extension of the margin of appropriation may be a resort to more productive land, and may occasion a fall of rent, as has been done in Europe to-day through appropriation in America. But what in reality he builds his argument on is neither the movement of the margin of cultivation, nor the movement of the margin of appropriation, but simply the existence of abundance of unappropriated land. Where that exists, rent will, of course, be low, and wages will be high, for nobody will give much for land when he can get plenty for nothing at a little distance off, and nobody will work at anything else for less than he can make on land that he may have for nothing. For such land supplies labourers with an alternative. It is not the best of alternatives, for it needs capital before one can make use of it, and it takes time before any return is made from it. A diversity of national industries, for example, is better, and raises wages more effectively. Agricultural wages are higher in the manufacturing counties of England than in the purely agricultural; and they are higher in the manufacturing Eastern States of Mr. George's own country than in the purely agricultural States of the West, which possess the largest amount of unappropriated land. The reason of this is twofold: other industries increase the competition for labour generally, and create, at the same time, a better market for farm produce. Unoccupied land would act—though less effectually—in the same way as an alternative; but few countries are fortunate enough to possess much of it, and as Mr. George does not propose to interfere with the occupation of land, but only to tax the occupiers, he has no scheme for showing how countries that have it not are to get it. It is easy, of course, to call it from the vasty deep. "Put to any one capable of thought," says Mr. George, "this question: 'Suppose there should arise from the English Channel or the German Ocean a Noman's land on which common labour to an unlimited amount should be able to make ten shillings a day, and which would remain unappropriated and of free access like the commons which once comprised so large a part of English soil. What would be the effect upon wages in England?' He would at once tell you that common wages throughout England must soon increase to ten shillings a day" (p. 207). Perhaps so; but a little more thought would teach him that "a Noman's land on which common labour to an unlimited amount should be able to make ten shillings a day" must be itself unlimited in extent, and could not be accommodated in the English Channel. Apart from preternatural conditions, it could not afford remunerative employment to more than a definite number of occupants and cultivators, and when it came to be entirely occupied, England would stand exactly as it does at present. If the millennium of the working class is to depend on the discovery of a Noman's land of infinite expansibility, it must be indefinitely postponed.

But supposing such an alternative existed and did influence the amount employers pay their workmen, how is it to influence in the same direction the amount they reserve to themselves? It is true, as a matter of fact, that wages and interest generally rise and fall together, for the simple reason that they are generally subject to the same influences. When capital is busily employed, so is necessarily labour, and then both wages and interest are high; when capital is largely unemployed, so is naturally labour also, and then both wages and interest are low. But an influence like that which is now adduced by Mr. George does not act on labourer and employer alike. It supplies the labourer with an alternative which strengthens his hands in his battle for wages with employers. Does it then at the same time strengthen the employer in his battle with the labourer? Does it first raise wages at the expense of profits, and then raise profits at the expense of wages? It clearly cannot. To argue as if the existence of alternative work which benefits the labourer, must benefit the employer in the same degree, and as if the want of it must injure the employer because it injures the labourer, is simply to misunderstand the very elements of the case. One might as well argue that because the heights of Alma were a decided strategical advantage to the Russians, who were posted on them, they were therefore an equal advantage to the Allies, who had to scale them.

Laws of distribution, which are founded on a series of such arbitrary absurdities as those which I have successively exposed, are manifestly incapable of throwing any rational light on the causes of poverty, or giving any practical guidance to its amelioration. But, absurd as they may be, they are at least propounded with considerable parade, and we are therefore quite unprepared for the strange turn Mr. George next chooses to take. It will be remembered that the only reason why he undertook to search for these laws at all was, that by means of them he might explain why wages tended to sink to a minimum that would give but a bare living; but now that he has discovered those laws, he declines to apply them to the solution of this problem. He will not draw the very conclusion he has laid down all his apparatus to establish. He will not solve the problem he has promised us to solve; in fact, he tells us he never meant to solve it; he never thought or said wages tended to sink to a minimum that would give a bare living; he never said they tended to sink at all; all he meant to assert was that if they increased, they did not increase so fast as the national wealth generally. He used "the word wages not in the sense of a quantity, but in the sense of a proportion" (p. 154). He will not therefore, after all, show us why the poor are getting poorer; but he will read for us, if we like, another riddle, why they are not growing rich so fast as some of their neighbours. In the name of the patient reader, I may be permitted to lodge a humble but firm protest against this eccentric and sudden change of front. Mr. George ought really to have decided what problem he was to write about before he began to write at all, and we may therefore for the present dismiss both his problem and his explanation till he makes up his mind.

 

III. Mr. George's Remedy.

After our experience of his problem and his explanation, we cannot indulge expectations of finding any serious or genuine worth in the practical remedy Mr. George has to prescribe; and we hear, without a thought of incongruity, the lofty terms in which, like other medicines we know of, it is advertised to the world by its inventor as a panacea for every disease society is heir to. "What I propose," he says, "as the simple yet sovereign remedy which will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crimes, elevate morals and taste and intelligence, purify government, and carry civilization to yet nobler heights, is—to appropriate rent by taxation" (p. 288). And the direction for applying the remedy is equally simple: it is to "abolish all taxation save that upon land values" (ibid.). This remedy is currently described as the nationalization of land; but nationalization of land is a phrase which stands for several very different and even conflicting ideas. With the usual fatality of revolutionary parties, the English land nationalizers are already broken into three separate organizations, and represent at least three mutually incompatible schemes of opinion. There is first the socialist idea of abolishing both individual ownership and individual occupation of land, and cultivating the soil of the country by means of productive associations or rural communes. Then there is the exactly opposite principle of Mr. A. R. Wallace and his friends, who are so much in love with both individual ownership and individual occupation that their whole aim is to compel us all by law to become occupying owners of land, whether we have any mind to be so or no. And, finally, we have the scheme of Mr. George, which must be carefully distinguished from the others, because he would destroy individual ownership but leave individual occupation perfectly intact. His non-interference with individual occupation is remarkable, because, as we have seen, he declares the cause of poverty to be the exclusion of unemployed labour from the opportunity of cultivating land, and because that exclusion is chiefly due to the prior occupation of the land by earlier settlers. Mr. George, however, thinks he can provide a plentiful supply of unoccupied land, at a nominal price, for an indefinite number of new-comers without disturbing any prior occupant. He would do it by merely abolishing the private owner and asking the occupant to pay his rent to the State instead of to a landlord, and he explains to us how it is that this simple expedient is to effect the purpose he desires. "The selling price of land would fall; land speculation would receive its death-blow; land monopolization would no longer pay. Millions and millions of acres, from which settlers are now shut out by high prices, would be abandoned by their present owners, or sold to settlers upon nominal terms. And this not merely on the frontiers, but within what are now considered profitable districts.... And even in densely populated England would such a policy throw open to cultivation many hundreds of thousands of acres now held as private parks, deer preserves, and shooting grounds. For this simple device of placing all taxes on the value of land would be in effect putting up the land at auction to whoever would pay the highest rent to the State. The demand for land fixes its value, and hence if taxes were placed so as to very nearly consume that value, the man who wished to hold land without using it would have to pay very nearly what it would be worth to any one who wanted to use it." (p. 309).

Putting up land to auction will not secure cheap or nominally rented farms to an indefinite number of new-comers, unless there is an indefinite supply of land to divide into farms, but in the present world that is not so; and when the existing stock of agricultural land is exhausted, and every man has his farm, but there is no more for any new-comer, what is Mr. George's remedy then? Abolition of property in land will of course abolish all trading in such property; but trading in landed property does not restrict its occupation. The land speculator, while he holds the land, of course keeps out another competitor from the ownership, but he keeps nobody from its occupation and cultivation. He is surely as ready as anybody else to make money, if money is to be made, by letting it, even by putting it up to auction, if Mr. George prefers that mode of letting. The transfer of the power of letting to the State will not secure a tenant any faster. And as to the private parks, deer forests and shootings of England, Mr. George forgets that they are, most of them, at present rented, and not, as he seems to fancy, owned by their occupants, and that it would not make a straw of difference to them whether they paid their rents to the Crown factor or to the landlord's agent. Since Mr. George does not prohibit the making of fortunes, he cannot prevent commercial kings from America or great brewers from England hiring forests in the Scotch Highlands. And since, in spite of his celebrated declaration, that "to the landed estates of the Duke of Westminster the poorest child that is born in London to-day has as much right as has his eldest son," he would still leave the Duke a princely income from the rents of the buildings upon his estates, and would suffer him to enjoy it without paying a single tax or rate on it all (p. 320), why should the Duke give up his forest in Assynt, merely because the Crown is to draw the rent instead of the Duke of Sutherland? Mr. George accordingly proposes a remedy that would remedy nothing, but leave things just as they are. Deer forests and the like may not be the best use of the land, but the particular change Mr. George suggests would not suppress them or even in the slightest degree check their spread, and would not throw the ground now occupied by them into the ordinary market for cultivation. And, besides, even if it did, the land so provided for new-comers would necessarily soon come to an end, and with it Mr. George's "simple and sovereign remedy," at least in its specific operation.

But it is noteworthy that in his lectures in this country in 1884, Mr. George made little account of the specific operation of his remedy as a means of furnishing unemployed labourers with a practicable alternative in agricultural production, to which they might continue indefinitely to resort, and that he preferred for the most part drawing his cure for poverty from the public revenue which the confiscation of rent would place at the disposal of the community. Now as to this aspect of his remedy, it is surely one of the oddest of his delusions to dream of curing pauperism by multiplying the recipients of poor relief, and taking away from it, as he claims credit for doing, through the countenance of numbers, that reproach which has hitherto been the strongest preventive against it. Besides, he and his friends greatly exaggerate the amount of the fund the country would derive from the rent of its ground. It would really fall far short of paying the whole of our present taxation, not to speak of leaving anything over for wild schemes of speculative beneficence. The rural rent of the country is only seventy millions, and that sum includes the rent of buildings, which Mr. George does not propose to touch, and which would probably in the aggregate balance the ground rent of towns, which he includes in his confiscation project. Now our local taxation alone comes very near that figure, and certainly the people generally can scarcely be expected to rise from a condition of alleged poverty to one of substantial wealth, or even comfort, through merely having their local rates paid for them.

The result would therefore be poor, even if no compensation were to be made to the present receivers of the rent; but with the compensation price to pay, it would be really too ridiculously small to throw a whole nation into labour and disorder for. Much may be done—much must be done—to make the land of the country more available and more profitable for the wants of the body of the people, but not one jot of what is required would be done by mere nationalization of the ownership, or even done better on such a basis than on that which exists. The things that are requisite and necessary would remain still to be done, though land were nationalized to-morrow, and they can be equally well done without introducing that cumbrous innovation at all. With compensation the scheme is futile; without it, it is repugnant to a healthy moral sense. Mr. George indeed regards confiscation as an article of faith. It is of the essence of the message he keeps on preaching with so much conviction and courage and fervour. Private property in land, he tells us, is robbery, and rent is theft, and the reason he offers for these strong assertions is that nothing can rightly be private property which is not the fruit of human labour, and that land is not the fruit of human labour, but the gift of God. As the gift of God, it was, he believes, intended for all men alike, and therefore its private appropriation seems to him unjust. Under these circumstances he considers it as preposterous to compensate landowners for the loss of their land, as it would be to compensate thieves for the restitution of their spoil. To confiscate land is only to take one's own, Mr. George has no difficulty about the sound of the word, nor is he troubled by any subtleties as to the length it is proper to go in the work. Mr. Mill, whose writings probably put Mr. George first on this track, proposed to intercept for national purposes only the future unearned increase of the rent of land, only that portion of the future increase of rent which should not be due to the expenditure of labour and capital on the soil. Mr. George would appropriate the entire rent, the earned increase as well as the unearned, the past as well as the future; with this exception, that interest on such improvements as are the fruit of human exertion, and are clearly distinguishable from the land itself, would be allowed for a moderate period. He says in one place, "But it will be said: These are improvements which in time become indistinguishable from the land itself! Very well; then the title to the improvements becomes blended with the title to the land; the individual right is lost in the common right. It is the greater that swallows up the less, not the less that swallows up the greater. Nature does not proceed from man, but man from nature, and it is into the bosom of nature that he and all his works must return again" (p. 242). And in another place, speaking of the separation of the value of the land from the value of the improvements, he says: "In the oldest country in the world no difficulty whatever can attend the separation, if all that be attempted is to separate the value of the clearly distinguishable improvements made within a moderate period, from the value of the land, should they be destroyed. This manifestly is all that justice or policy requires. Absolute accuracy is impossible in any system, and to attempt to separate all the human race has done from what nature originally provided would be as absurd as impracticable. A swamp drained, or a hill terraced by the Romans, constitutes now as much a part of the natural advantages of the British Isles as though the work had been done by earthquake or glacier. The fact that after a certain lapse of time the value of such permanent improvements would be considered as having lapsed into that of the land, and would be taxed accordingly, could have no deterrent effect on such improvements, for such works are frequently undertaken upon leases for years" (p. 302). The sum of this teaching seems to be that Mr. George would recognise no separate value in any improvements except buildings, and would be disposed to appropriate even them after such lapse of time as would make it not absolutely unprofitable to erect them.

What Mr. George fails to perceive is that agricultural land is in no sense more a gift of God, and in no sense less an artificial product of human labour, than other commodities—than gold, for example, or cattle, or furniture, in which he owns private property to be indisputably just. Some of the richest land in England lies in the fen country, and that land is as much the product of engineering skill and prolonged labour as Portland Harbour or Menai Bridge. Before the days of Sir Cornelius Vermuyden it was part of the bottom of the sea, and its inhabitants, as they are described by Camden, trode about on stilts, and lived by snaring waterfowl. Some of the best land in Belgium was barren sand-heaps a hundred years ago, and has been made what it is only by the continuous and untiring labour of its small proprietors. "God made the sea, man made the dry land," is a proverb among the Dutch, who have certainly made their own country as much as Mr. George has made his book. In these cases the labour and the results of the labour are obvious, but no cultivated land exists anywhere that is not the product of much labour—certainly much more labour than Mr. George seems to have any idea of. In the evidence taken before the recent Crofters' Commission, Mr. Greig, who conducted the Duke of Sutherland's improvements in the Strath of Kildonan, stated that the cost of reclaiming 1,300 acres of land there, and furnishing them with the requisite buildings for nine variously sized farms, was £46,000. Apart from the buildings, the mere work of reclamation alone is generally estimated to have cost £20 an acre, and in another part of the same estates an equally extensive piece of reclamation is said to have cost £30 an acre. By means of this great expenditure of capital and labour, land that would hardly fetch a rent of a shilling an acre before was worth twenty or thirty shillings an acre after. Not the buildings only, but the land itself has been made what it is by labour. It has been adapted to a useful office by human skill as really as the clay is by the potter, or the timber by the wright. Deduct from the rent of these reclaimed acres the value contributed by human labour, and how much would remain to represent the gift of God? And would it be greater or less than would remain after a like process applied, say, to a sovereign or to a nugget of gold? Mr. George has no scruple about the justice of private property and inheritance in the nugget, and indeed in all kinds of movable wealth. "The pen with which I am writing," he says, for example, "is justly mine. No other human being can rightfully lay claim to it, for in me is the title of the original producers who made it" (p. 236). The original producer of the nugget appropriated what was surely a gift of God as much as the clays or loams of husbandry; and if he, as Mr. George admits, has "a clear and indefeasible title to the exclusive possession and enjoyment" of his nugget, and may transmit that title by bequest or sale unimpaired for an unrestricted period of time, why is the original producer of agricultural land to be held up as more than half a thief, and the present possessor as one entirely? And if a proprietor has spent £20,000 in buildings, and £26,000 in reclamations, in order to convert the surface of the earth into useful arable soil, why is he to be allowed rent on the £20,000, and denied it on the £26,000?

So far as the distinction between gifts of nature and products of labour goes, movable wealth and immovable stand on precisely the same footing. Both are alike gifts of nature, and both are alike products of labour. In thinking otherwise Mr. George is certainly supported by the high authority of Mr. Mill, who has also failed to recognise how far arable land was really an artificial product. He says: "The land is not of man's creation, and for a person to appropriate to himself a mere gift of nature, not made to him in particular, but which belonged to all others until he took possession of it, is prima facie an injustice to all the rest" (Dissert. iv., 289). But what is of man's creation? He finds his materials already created, and he merely appropriates them, and adapts them to his own uses by labour, exactly as he does with the soil that in his hands becomes fruitful fields. Land is as much a creation of man as anything else is, and everything is as much a gift of God as land. That distinction is therefore of no possible help to us. The true ground for observing a difference between the right of property in land and the right of property in other things must be sought for elsewhere. It is not because land is a gift of nature, while other things are products of labour, but because land is at once limited in quantity, and essential to the production of the general necessaries of life. These are the characteristics that make land a unique and exceptional commodity, and require the right of property in it to be subject to different conditions from the right of property in other products of labour. The justification of the restriction of that right in the case of land accordingly rests neither on theological dogma nor on metaphysical distinction, but on a plain practical social necessity. Where land is still abundant, where population is yet scanty as compared with the land it occupies, there is no occasion for interference; the proprietor might enjoy as absolute a title as Mr. George claims over his pen, without any public inconvenience, but, on the contrary, with all the public benefit that belongs to absolute ownership in other things. But as soon as population has increased so much as to compel recourse to inferior soils for its subsistence, it becomes the duty of society to see that the most productive use possible is being made of its land, and to introduce such a mode of tenure as seems most likely effectually to secure that end. Under these circumstances private property in land requires an additional justification, besides that which is sufficient for other things; it must be conducive to the best use of the land. Society has become obliged to husband its resources; if it will do so most efficiently by means of private property, private property will stand; if not, then it must fall. Of course land is not the only kind of property that is subject to this social claim. All property is so held, but in the case of other things the claim seldom comes into open view, because it is only on exceptional occasions that it is necessary to call it into active operation. Provisions are among the things Mr. George considers not gifts of God but products of labour, but in a siege private property in provisions would absolutely cease, and the social right would be all in all. These products of labour would be nationalized at that time because in the circumstances the general interests of the community required them to be so, and the reason why they are not nationalized at other times is at bottom really this, that the general interest of the community is better served by leaving them as they are. In some parts of the world all products of labour actually are nationalized; in Samoa, for example, a man who wants anything has a latent but recognised claim to obtain it from any man who has it; but Dr. Turner explains that the result is most pernicious, because while it has extinguished absolute destitution, it has lowered the level of prosperity and prevented all progress, no man caring to labour when he cannot retain the fruits of his labour. Civilized communities, however, have always perceived the immense public advantage of the institution of private property, and the right to such property, of whatever kind, really rests in the last analysis on a social justification, and is held subject to a social claim, if any reason occurred to exert it. In this respect there is nothing peculiar about land. The only peculiarity about land is that a necessity exists for the practical exercise of the claim, because landed property involves the control of the national food supply, and of other primary and essential needs of the community. The growth of population forces more and more imperatively upon us the necessity of making the most of our land, and consequently raises the question how far private property in such a subject is conducive to that end.

Now, in regard to capital invested in trade or manufactures, it has always been justly considered that the private interest of its possessor constitutes the best guarantee for its most productive use, because the trader or manufacturer is animated by the purely commercial motive of gaining the greatest possible increase out of the employment of his capital. But it must be admitted that the private interest of the landlord does not supply us with so sure a guarantee. He desires wealth no doubt as well as the trader, but he is not so purely influenced by that desire in his use of his property. He is apt to sacrifice the most productive use of land—or, in other words, his purely pecuniary interest—to considerations of ease or pleasure, or social importance, or political influence. He may consolidate farms, to the distress of the small tenants and the injury of the country generally, merely because there is less trouble in managing a few large farmers than a number of small; or he may refuse to give his tenants those conditions of tenure that are essential to efficient cultivation of the land, merely to keep them more dependent on himself in political conflicts. Mr. George, however, has a strong conviction that even the purely pecuniary interest of the private owner tends to keep land out of cultivation, but he builds his conclusion on the special experiences of land speculation rather than on the general facts of land-owning. Of course if there were no land-owning, there would be no land speculation; but to abolish land-owning merely to cure the evils of land speculation is, if I may borrow an illustration of his own, tantamount to burning a house to roast a joint. Besides, all that is alleged is that speculation keeps a certain amount of land in America out of the market. In other countries it suffers from a contrary reproach. The evil of the bandes noires of France and the Landmetzger of Germany is their excessive activity in bringing land into the market, by which they have aggravated the pernicious subdivision of estates that exist. In America the effect of speculation may be different, but at any rate keeping land out of the market is one thing, keeping it out of cultivation is another; and it is hard to see how speculation should prevent the extension of cultivation, because cultivation may be as well undertaken by tenant as proprietor, and why should a speculator, who buys land to sell it in a few years at a high profit, object to taking an annual rent in the interval from any one who thought it would pay him to hire the land? It would not be fair to condemn the landlord for the sins of the land speculator, even if the latter were all that Mr. George's curious horror of him represents him to be, and if he exercised any of the irrationally extravagant effects which Mr. George ascribes to his influence over the economy of things; but as a matter of fact a sober judgment can discover no possible reason why the private interest of a land speculator as such should stand in the way of the cultivation of the soil he happens to hold. What concerns us here, however, is not the private interest of the speculator, but the private interest of the landlord, whether a speculative purchaser or not. Now, much land lies waste at present through the operation of the Game Laws, which establish an artificial protection of sport as an alternative industry against agriculture, but then the general institution of private property in land must not be credited with the specific effects of the Game Laws, and need not be suppressed in order to get rid of them. The abolition of these laws would place the culture of wild animals and the culture of domestic animals on more equal terms in the commercial competition, and would probably restore the balance of the landlord's pecuniary advantage in favour of the latter. Besides, it is not a question of ownership but of occupation of land that is really involved. If the land were nationalized to-morrow, the State would have to decide whether it would let as much land as had hitherto been let to sporting tenants; and of course it can decide that, if it chooses, now.

So far as I am able to judge, there is only one respect in which the pecuniary interest of the landlord appears to be unfavourable to an extension of cultivation. There is probably a considerable quantity of land that might be cultivated with advantage to the community generally by labourers who expected nothing from it but the equivalent of ordinary wages, and which is at present suffered to lie waste, because its produce would be insufficient to yield anything more than wages, and would afford nothing to the capitalist farmer as profit or to the landlord as rent. How far this operates I have, of course, no means of knowing; but here again one may deal with waste ground if it were judged requisite to do so, without resorting to any revolutionary schemes of general land nationalization. Of course much land is kept in an inferior condition, or perhaps absolutely waste, through want of capital on the part of its owners, but the same result would happen under the nationalization plan, through want of capital on the part of the tenants. Mr. George does not propose to supply any of the necessary capital out of public funds, but trusts to the enterprise and ability of the tenants themselves to furnish it; so that the occupier would be no better situated under the State than he would be under an embarrassed landlord, if he enjoyed compensation for his improvements. In either case he would improve as far as his own means allowed, and he would improve no further. But if by nationalization of land we get rid of the embarrassed landlord, we lose at the same time the wealthy one, and the tenants of the latter would be decidedly worse off under the State, which only drew rents, but laid out no expenses. The community, too, and the general cultivation of the country would be greatly the losers. Mr. George has probably little conception of the amount of money an improving landlord thinks it necessary to invest in maintaining or increasing the productive capacity of his land. A convenient illustration of it is furnished by the evidence of Sir Arnold Kemball, commissioner of the Duke of Sutherland, before the recent Crofters' Commission. Sir Arnold gave in an abstract of the revenue and expenditure on the Sutherland estates for the thirty years 1853-1882, and it appears that the total revenue for that period was £1,039,748, and the total expenditure (exclusive of the expenses of the ducal establishment in Sutherland) was £1,285,122, or a quarter of a million more than the entire rental. Here, then, is a dilemma for Mr. George: With equally liberal management of the land on the part of the State, how is he to endow widows and pay the taxes of the bourgeoisie out of the rents? And without such liberal management how is he to promote the spread of cultivation better than the present owners?

The production of food, however, is only one of those uses of the land in which the public have a necessary and growing interest. They require sites for houses, for churches, for means of communication, for a thousand purposes, and the landlord often refuses to grant such altogether, or charges an exorbitant price for the privilege. He has refused sites to churches from sectarian reasons; for labourers' cottages in rural districts for fear of increasing the poor-rate; in small towns with a growing trade from purely sentimental objections to their growth; he has refused rights of way to people in search of pure air, for fear they disturbed his game, and he has enclosed ancient paths and commons which had been the enjoyment of all from immemorial time. I do not speak of the ground rent in large cities where owners are numerous, because that, though a question of great magnitude, involves peculiarities that separate it from the allied question of rural ground-rent, and make it more advantageously treated on its own basis. But in country districts where owners are few, and the possession of land therefore confers on one man power of many sorts over the growth and comfort of a whole community, that power ought certainly to be closely controlled by the State. Its tyrannical exercise has probably done more than anything else to excite popular hostility against landlordism, and to lend strength to the present crusade for the total abolition of private property in land. But here again the cure is far too drastic for the disease. What is needed is merely the prevention of abuses in the management of land, and that will be accomplished better by regulations in the interest of the community than by any scheme of complete nationalization. A sound land reform must—in this country at least—set its face in precisely the contrary direction. It must aim at multiplying, instead of extirpating, the private owners of land, and at nursing by all wise and legitimate means the growth of a numerous occupying proprietary. State ownership by itself is no better guarantee than private ownership by itself for the most productive possible use of the land; indeed, if we judge from the experience of countries where it is practised, it is a much worse one; but by universal consent the best and surest of all guarantees for the highest utilization of the land is private ownership, coupled with occupation by the owner.