1.1:11, DISTRIBUTION OF WEALTH. N OW that the immediate excitement „caused
by the series of strikes and by the meeting of the Trade Union Congress has subsided, it is worth while to pause for a minute to take a broader view of the whole movement which the country has been witnessing. At the back of all the labour disturbances, as everyone sees plainly enough, is the desire of the underpaid worker to improve his posi- tion, and that is a desire with which every thoughtful perdon must heartily sympathize. So long as a large part of our population was uneducated, and, as a consequence, had only a limited range of desires, a low wage was con- siderably less of a hardship than it is at the present time. But the poorest workman can now read about the wonders of the world in which he lives. He can read also about the manner of life of persons richer than himself, and he can see something of it with his own eyes. For whereas, in earlier days, the extravagance of the rich, to a large extent, consisted in costly homes and costly entertainments within them, now riches are paraded on every roadway by the agency of the motor car, and the extravagance of dress and entertainment is blatantly advertised by personal paragraphs in halfpenny newspapers. All this necessarily breeds discontent, and though there is always an ugly side to discontent there is also a quite honourable and healthy side. The motive for new endeavour springs from discontent, and surely it is an honourable thing that the mass of the working classes should wish to obtain—not for themselves only, but also for their wives and children— a greater amount of comfort and greater opportunities for reasonable enjoyment.
The practical question is, How is it to be done ? We need not spend much time in discussing the crude Socialist suggestion that all that is necessary is to divide the wealth of the rich among the poor. The division, even if it could be carried out, would not make such a very great difference, for the divisor is so big that the dividend is bound to be small. But the fatal objection to this proposal is that the moment we began to distribute wealth in proportion to population we should destroy the principal motives which exist for the creation of wealth, and soon there would be little or nothing left to distribute at all. In the main we must adhere—if we wish to have wealth to distribute—to the principles upon which private property has hitherto been based. Men must be left free to use their faculties to earn as much as they can. They must be left free to spend or to save as they choose. And, finally, they must be left free to bequeath their savings to their heirs, for otherwise it is quite certain that savings would be immensely reduced, with the result that the general dividend would suffer. This is an aspect of the matter which the Socialist habitually ignores. When pressed he would doubtless admit that capital is as important to the production of wealth as labour ; but that is not the sort of doctrine which suits him when he is speaking in the market place. Then he professes to believe that the whole product belongs to the labourer ; and, though he does not say so explicitly, he generally implies that the " labourer " means the purely manual worker, and that the men who organize the industry are as superfluous as those who provide the capital.
Until these delusions are cleared away no progress can be made towards understanding the problem. In order to realize the part played by capital, it suffices to compare the output of primitive man, armed with a stone axe, with the output of a modern artisan, employing tools driven by steam or electricity. Skill for skill, there is probably not much to choose between the two men— unless, indeed, the balance lay on the side of the primitive man, who, in consequence of the imperfection of his tools, had to develop a higher level of personal skill. But the wealth produced by primitive man with- out capital was so meagre that he remained a savage ; the wealth produced by man aided by capital is so enormous that a population of millions is able to enjoy comforts and luxuries which were never even dreamt of in earlier centuries. As to the value of the directing labour of the captain of industry one can only appeal to the experience of those who know what is the difference between a well-managed and an ill-managed business. There' are many businesses to-day where it would be distinctly profitable for the manual workers to subscribe out of their own wages in order to induce a better manager to come and take charge of the business. And when the Socialists direct attention to the huge incomes obtained by some captains of industry the answer is that those incomes represent a very small percentage on the wage of the hundreds or thousands of people whose labour is made profitable by the ability of their captain. Starting, then, with the proposition that capital must be paid in order to secure an adequate supply, and that directing ability must be paid at a high rate in order to obtain the services of men who are unfortunately rare, we still have to consider on what lines we ought to proceed in order to improve the position of the badly paid. worker. The recently published Census of Production shows that at the present moment the margin available for raising wages is not nearly so great as the Socialist assumes. The census applies to most of the better-paid industries of the country._ and to a few of those which are badly paid, but it includes the pick of the working classes, and the figures show that in the industries dealt with about 7,000,000 persons are employed and that the value of their output is roughly £712,000,000 in the year. That works out to just over £100 a man, and the market- place Socialist would be inclined to exclaim : " That is just my point. There is two quid a week for every- body." But there is not. For out of this hundred credited to each workman, or workwoman, there has to be paid a very heavy sum for rates and taxes, also rent of the land occupied, interest on capital employed, insurance, commissions, and various other items, all of which must be paid if the industry is to go on. And, finally, there must be some margin for the employer's profit, for other- wise he will not take the trouble to set the industry afoot. When these factors are taken into account it is not sur- prising to learn that the average wage, even in the best- paid industries, works out, not at 40s., but just under 30s. a week. This, of course, means that a large number of cotton workers are paid very much less, and Mr. Philip Snowden, speaking recently, had the courage and honesty to declare that a minimum wage of 30s. a week in the cotton trade would wipe out all profit and destroy the industry. That is perfectly true, and what is true of the cotton trade is, a fortiori, true of most of the other trades of the country.
Clearly, then, we cannot greatly improve the wage of the manual worker unless the value of his output is in- creased. How is that to be done ? The Tariff Reformer of course has his remedy ready. He would solve the pro- blem by excluding foreign products so as to raise the value of the articles produced at home. It is sufficient for the moment to reply that a very large number of British workmen are occupied in export industries, and the articles they produce have to compete in the world's market. To raise their price would prevent the sale. A similar con- sideration applies to a good many purely domestic industries. If, for example, the railways were appreciably to raise rates or fares, they would lose a great deal of business which they now get, and so on through practically every industry in the country. Of course it is true that if prices were raised all round, then this loss of business would not occur ; but it is equally true that in that case nobody would be any better off than he is now. We should all be merely using more counters to express the same service. Therefore the Tariff Reformer's nostrum may be dismissed as being at least as hopeless as that of the Socialist.
If there is to be any real improvement, it must be by creating additional real values, not additional values which are merely nominal. This resolves itself into the proposi- tion that either the individual workman himself must become more efficient or he must be supplied with more efficient tools, or he must work under a better organization of industry. To what extent it is possible to increase the efficiency of the individual workman it is not easy to guess, but this may safely be said—that on the moral side there is room for a very considerable improvement in certain industries. In some trades it is notorious that men deliberately, with the approval, expressed or implied, of the trade-union leaders, do less work than they are fairly capable of doing. This is part of a deliberate policy to diminish the output per man, on the false supposition that, as a result, more men will be employed. If the trade unions were completely to reverse their policy on this point, and insist on their members doing a fair day's work in return for the agreed wage, there would be quite an appreciable addition to the sum total of national wealth, and the working classes would be in an excellent position to claim the greater part, if not the whole, of that addition for themselves. We incline to believe, however, that the main requisite for securing increased production of wealth is the increased use of capital. But the world cannot have capital to use unless it has first been saved, and therefore it is of the utmost importance to give security to the capital- owner, and not to penalize the accumulation of wealth. Mere accumulation, whether by a million individuals or by hundreds, is not in itself an injury to the community. The injury lies in the wasteful expendi- ture of wealth, and this is a crime that runs through all classes. If Socialists could persuade the rich as well as the poor to spend less-and to save more, not only would there be a greater supply of capital for rendering our industries more efficient, but the capital could be supplied at a cheaper price, thus permitting a relative as well as an absolute improvement in the wage-earner a position. We are only too painfully aware that this remedy must sound very disappointing to persons who imagine that they can solve any social problem in five minutes ; but it is a remedy which will work, even if it works slowly, and this is more than can be said of most suggested solutions.
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