entire income producible in this country by all the forces of its inhabitants three or four generations ago had been equally distributed amongst the population then existing, and if, subsequently increasing in proportion to the increase of the population, it had year by year been similarly distributed till to-day, the poorer classes to-day would possess a collective income which would be less by more than 30 per cent. than the income which is actually their own.

I mention specific figures; but, to repeat what I have said before, the argument does not require an insistence on their absolute exactitude. If anyone prefers to do so, let him take the figures of Mr. Chiozza Money, who aims at estimating the income of the poorer classes at a minimum. According to Mr. Money's computations, the income of these classes per head, instead of exceeding 301., only reaches to 251. If we accept this figure, the fact on which I have been just insisting suffers indeed some slight modification, but its essential character is unchanged. The poorer classes as a whole will, at the present day, be still dividing between them a collective income which, relatively to their present numbers, exceeds anything that would have been possible in the days of their great-great-grandfathers by an equal division of everything that was then produced or producible. The actual course of events, however we may seek to minimise it, has been the exact opposite of that which is ascribed to it by the formula of the Socialists. Instead of having been defrauded of anything that they once possessed, the poorer classes' of this country, under the system of modern capitalism, have done more than appropriate everything in the way of wealth, per head of their total number, which could have possibly been called into existence when that system was first establishing itself.

Of course this statement has the defect of all similar generalisations. It is made in terms of averages, and assumes that distribution is equal. But the fallacy to which it is opposed is a generalisation of the same kind, and just as this is not meant to deny that many poor people have become richer, so the counterassertion of the truth constitutes no denial of the fact that, of a class which has grown richer as a whole, certain sections have remained as poor as they ever were.

Having mentioned this aspect of the case, to which I shall return hereafter, let me now pause to remark that this question of economic development, which is concerned with the history of the past, and inferentially with anticipations of the future, may strike some persons as being more or less academic, and not connected directly enough with the pressing actualities of the present. Such a view, let me say with emphasis, is altogether erroneous,

even if we desire to confine ourselves to such examinations of facts as are calculated to influence the opinion of the least-instructed sections of the community. A man who is shivering with cold, but is on his way to a warm fire, is practically far more comfortable than a man who, warm for the moment, watches his last log burn, and knows that he will be freezing presently. In the same way the existing condition of things, whatever it may be in itself, is coloured for all who contemplate it according as they believe it to be a stage in an upward or downward progress. The possession, therefore, of some true conception of the actual tendency of events would, for this reason alone, even if there were no other, form a primary element of any sane public opinion; but, in addition to this general reason, there is one which is more precise. Not only does the popular attitude towards economic conditions as they are depend on whether they are taken as representing a fall from better to worse, or a rise from worse to better, but the socialistic estimate of existing conditions in themselves is intimately bound up with the socialistic fable as to their history, and is, indeed, that fable translated into a practical form, and influencing the passions and the problems of the hour in which we are now living.



Let us pass, then, from the socialistic diagnosis of economic conditions in their development, and examine the socialistic estimate, now commonly current, of such conditions as they are at the present time. The main feature of these estimates is the assumption that the proportion of the national income appropriated by those who are vaguely classified as the rich is so enormous, so overwhelming, so inexhaustible, that if only, whether by strikes or taxation, it could be tapped, like a reservoir of water, in a sufficient number of places, it would flood every average household with an almost incredible opulence, and transfigure almost past recognition the entire aspect of society. This conception of existing conditions would be merely the logical consequence of modern economic tendencies, if these were really as Socialists represent them. Everybody knows and admits that, since the beginning of the nineteenth century, the increase of our national income relatively to the population has been enormous, and if, during that period, small incomes have been growing smaller, and moderate incomes have been decreasing in number, all the new wealth produced, which cannot but have gone somewhere, must necessarily have passed into the hands of the richer, of the rich, or of the richest. Since, however, as we have seen, both these

assumptions are erroneous-since of the new wealth in question a vast proportion at all events has gone to make small incomes continuously larger and larger, and moderate incomes continuously more numerous, it follows naturally, as a matter of a priori certitude, that the wealth of the richer classes, whatever may have been its increase absolutely, cannot possibly bear to the whole anything like that proportion which the Socialists, with their false premises and their inflamed imaginations, attribute to it.

Let us turn, then, once more to definite facts and figures, and consider what at the present time the actual proportion is.

The entire income, from all sources, of the inhabitants of the United Kingdom is now, according to the latest computations, about 1,970,000,000l.-a total which accords substantially with the figures which I have just been giving. It comprises one element, however, which it is necessary to distinguish from the rest. This consists of an income which comes into this country from abroad, and does not originate in the employment of home labour. Now it is perfectly obvious that, according to socialistic principles, this income from abroad, if it ought not to remain in the hands of its present possessors, ought just as little to belong to any other class in this country. It ought to belong to workers in America, in India, in South Africa, or any other region in which the business of producing it is conducted; and, as Mr. Keir Hardie has very justly observed, it ought, if the principles of Socialism and of the Labour party mean anything, never to come into the United Kingdom at all. The only income, therefore, with which we are here concerned as the subject of socialistic analysis, and the subject of any possible socialistic redistribution, is the income which is produced in this country itself, through the activity of its own inhabitants. Now the income from abroad (represented by an invested capital of approximately three thousand millions, of which nearly one-half is in India, South Africa, and North America) must amount, according to the latest figures, to something like 200,000,000l., and if this be deducted from the national income in its entirety we get a sum of about 1,770,000,000l. as the total income produced in Great Britain and Ireland.

How much, then, of this sum goes to those who can be called 'the rich '? Once again we require a definition of terms; for without it we shall talk at random. Mr. Chiozza Money, when tendering his evidence to the Select Committee on Income-tax, replied to a question concerning this particular point that he would include under the term 'rich' all whose incomes were as much as several thousands a year. We will, however, here, for the purpose of the present discussion, use the term in a much more comprehensive sense. We will suppose that 'riches,' as

signifying any income which, on account of its magnitude, Socialists would regard as illegitimate, begin with incomes in excess of 8001. a year. We can hardly put the limit lower when we consider that one of the Socialists representing Labour' in Parliament not only receives 400l. a year as a member, but nearly as much again as the secretary of some party organisation.

Let us begin accordingly with reviewing such specific information as we possess with regard to those incomes which do not exceed the limit which has just been mentioned. So far as those are concerned which do not exceed 1601.-incomparably the largest factor in the case-I have pointed out already that they amount to an aggregate sum of certainly not less than 1,210,000,000l., and I need not recapitulate the details of which this sum is composed. We have now to compute, and to add to this, the aggregate of incomes lying between 1601. a year and 8001. Our data, which are provided by the reports of the Commissioners of Inland Revenue, though voluminous, are incomplete, and yield a result which must fall short of the truth. They are comprised in a particular portion of the income-tax returns which records the number of incomes earned individually by 'persons,' by firms (other than companies), and by official and business employees whose salaries exceed 160l. a year. The private firms,' as enumerated in these records, are computed to represent on an average two and a-half partners each, and will so be treated here. According to the latest returns, which were issued late last year, the number of incomes between 1601. and 8001. which were thus separately identified was approximately 1,100,000, to which must be added the partners in about 30,000 small companies yielding an average profit per business of less than 1000l., and also certain farmers. The incomes of these persons, as earned by professions or businesses, amount to a gross total of nearly 230,000,000l., to which must be added an unearned income which amounts to over 100,000,000l.—nearly 50,000,0001. being identifiable; and which is derived from lands, houses, Government stock, and shares in the larger companies. The net total of these incomes, earned and unearned, cannot be less than 320,000,0001.

If these assessed incomes not exceeding 8001. be taken together with those not exceeding 1601., the aggregate of the two will be about 1,530,000,000l. produced by the efforts of workers in the United Kingdom, about one-tenth of this arising from property, and nine-tenths being direct earnings.

Compare, then, this home-produced income of more than 1,500,000,000l. with the total income produced in the United Kingdom, amounting, as we have seen, to some 1,770,000,000l., and what is the proportion of the total which is taken by persons

whose incomes are not above 8001. a year? The proportion, as nearly as possible, is 87 per cent.

To many who have grown familiar with the wild statistics of Socialists-those, for instance, of Mr. Hyndman, who twentyeight years ago asserted that of a national income of 1,300,000,0001. the predatory or wholly idle rich appropriated as much as 77 per cent., leaving only 23 per cent. to the masses who alone produced the whole of it-it may seem hardly credible that of the homeproduced income to-day a fraction so small as that which has just been indicated is really the sum of all incomes exceeding 8001. Their temptation to incredulity may, however, be lessened if I refer them to one of the most eminent statisticians of to-day in connexion with an estimate which a few years ago on admittedly imperfect data, he hazarded of the aggregate of incomes in excess of 5000l. Mr. Bowley's tentative estimate amounted to 200,000,000l. Mr. Chiozza Money's was 250,000,000l. Since then the imposition of a super-tax on incomes of this class, and the stringent inquisition required by it, has disclosed an actual total of less than 129,000,000l.—a sum which, according to the Commissioners of Inland Revenue, may be taken as practically exhaustive. If, then, the actual income of this one section of the rich falls so short of what an expert like Mr. Bowley was inclined to regard as likely, there will be less surprise at the discovery that the income of the rich in a wider sense falls yet farther short of the purely fantastic total imputed to it by persons who know nothing even of the meaning of such figures as they quote, and who see and seek in them nothing but an instrument of popular agitation.

But perhaps the temptation to incredulity which I have just mentioned as possible will be lessened yet more efficaciously if I again call attention to evidence of a different kind-namely, that supplied by the number of houses of different values. As I have said already, there is obviously some broad correspondence between the number of incomes exceeding 1601. and that of houses whose annual value is in excess of 201. Now, any difficulty which may be felt in realising how small is the actual proportion borne by the income of the richer to that of the less rich classes is one which will relate mainly to the distribution of incomes above the assessment limit. When I first dealt with the evidence provided by houses, I used it to illustrate the rate at which houses of different values (and the incomes presumably corresponding to them) had been annually increasing in number during a certain recent period. Let us now take things as they are, and see what, according to the latest reports, is the actual number, classified according to their value, of houses worth more than 201. a year.

The number of private houses worth more than 201. a year, according to the latest reports, exceeds by a few thousands one

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