The majority of those who attack interest to-day, no matter whether in other respects they are advocates of socialism or opponents of it, agree in declaring that what a man has personally produced he has a perfect right to enjoy and spend as he pleases. The only right they deny to him is the right to any further products which, before the capital has been spent by him, may result from the productive use of it. Now, the practical object with which this restriction is advocated is to render impossible, not acc.u.mulations of wealth (for these are recognised as legitimate when the reward of personal talent), but merely their perpetuation in the hands of others who are economically idle. So far, therefore, as this practical object is concerned, it would matter little whether the man by whom the acc.u.mulation was made were allowed to receive interest on it during his own lifetime or no, provided that this right to interest were not transmissible to his heir; or even whether he were allowed or were not allowed to leave anything to an heir at all.
For the heir at best would merely receive a sum which, since it could not be used by him so as to bring about its own renewal, would be bound soon to exhaust itself; and the general effect of permitting bequests of this sterilised kind would differ from the effect of prohibiting bequests altogether, not because it would tend to render acc.u.mulated fortunes permanent, but only because it would protract for a decade or two the process of their inevitable dissipation.
We may, therefore, say that, for the purposes of the present discussion, the modern attack on interest, considered apart from any otherwise socialistic programme, practically translates itself into this--namely, the advocacy of a scheme which, as regards the actual producers of capital, leaves their existing rights both to princ.i.p.al and interest untouched, and would not even extinguish altogether their existing powers of bequest, but would limit the exercise of these to the princ.i.p.al sum only,[23] and prohibit the transmission to any private person of any right whatever to the usufruct of its productive employment.
Here, then, at last, we have something definite to discuss--a single proposed alteration in certain existing arrangements; and by comparing the situation which actually exists to-day with that which the proposed alteration, if carried into effect, would produce, we shall see whether the alteration is workable and practically defensible or no. Let us begin with the situation which actually exists to-day, confining ourselves to those features of it which are vital to the present issue.
Let us take two men of practically contrasted types, each of whom has inherited a capital of fifty thousand pounds. The ultimate object of each is, in one way or another, to make his capital provide him with the life that he most desires; but the first man is thoughtful, far-seeing, and shrewd, while the second cares for nothing but the gaiety and pleasure of the moment; and they deal with their capitals in accordance with their respective characters. The first meets, let us say, with the inventor of an agricultural machine, which will, if successfully manufactured, double the wheat crop of every acre to the cultivation of which it is applied. He places his capital, as a loan, in this inventor"s hands. The machine is constructed, and used with the results desired; and the man who has lent the capital receives each year a proportion of the new loaves which are due to the machine"s efficiency, and would not have existed otherwise. The second man invests his fortune in any kind of security which has the advantage of being turned easily into cash, and draws out month by month so many hundred pounds, without reference to anything but the pleasures he desires to purchase; and by the end of a few years both his capital and his income have disappeared.
Now, any one judging these men by the current standards of common-sense would, while praising the first as a model of moral prudence, condemn the second as a fool who had brought his ruin upon himself, and curtly dismiss him, if a bachelor, as being n.o.body"s enemy but his own. But before we indorse either of these judgments as adequate, let us consider more minutely what in each case has been really done.
Let us start, then, with noting this. Whether a man invests his capital in any productive machine and then lives on the interest, or else spends it as income on his own personal pleasures, he is doing in one respect precisely the same thing. He is giving something to other men in order that they in return may make certain efforts for his benefit, of a kind which he himself prescribes. This is obviously true when, spending his capital as income, what he pays for is personal service, such as that of a butler or footman who polishes his silver plate. It is equally true when he pays for the plate itself. He is paying the silversmith so to exert his muscles that an ounce or a pound of silver may be wrought into a specific form. If he pays a toy-maker to make him a dancing-doll, he is virtually paying him to dance in his own person. He is paying him to go through a series of prescribed muscular movements. Similarly when he pays a large number of men to construct a productive machine instead of a doll or an ornament, he is paying for the muscular movements from which the machine results. Here we come back to one of the main economic truths to the elucidation of which our earlier chapters were devoted. It was there pointed out that the machinery of the modern world owes its existence to the fact that men of exceptional talent, by possessing the control of goods which a number of other men require, are able in return for the goods to make these other men exert themselves in a variety of minutely prescribed and elaborately co-ordinated ways. In short, all spending is, on the part of those who spend, a determination of the efforts of others in such ways as the spender pleases. Further, as was pointed out in an earlier chapter also, the only goods thus generally exchangeable for effort are those common necessaries of existence for which most men must always work, and which may here be represented by food, the first and the most important of them. Hence, whenever the question arises of how any given capital shall be treated--of whether it shall be invested or else spent as income--this capital must be regarded as existing in the indeterminate form of food, which is equally capable of being treated in one way or the other. And any man"s capital represents for him, according to its amount, the power of feeding, and so determining the actions of a definite number of other men for some definite period. Since, therefore, the two capitalists whose conduct we have been taking as an ill.u.s.tration have been supposed by us to possess fifty thousand pounds apiece, we shall give precision to the situation if we say that each, at starting, has the power of feeding, and so determining the actions of, two hundred other men for a period of two years.
So much, then, being settled, let us consider these further facts. Both the capitalists, as we set out with observing, have in employing their capital the same ultimate object--namely, that of securing through the purchased efforts of others a continuous supply of things which will render their lives agreeable. And now in connection with this fact let us go back to another, which has also been pointed out before, that all efforts, the sole object of which is to please from moment to moment the man who directs and pays for them, are, whether embodied in the form of commodities or no, really reducible to some kind of personal service, if a toy-maker, in return for food, makes a dancing-doll for another man, he might just as well have pirouetted for so many hours himself; and if the purchaser would be more amused by a man"s antics than by a puppet"s, this is precisely what the toy-maker would have been set to do. In short, if we consider only the economic side of the matter, without reference to the moral, whenever a man spends anything on his own personal pleasure, he is virtually paying some other man, or a number of other men to dance for him.[24] What, therefore, both our capitalists desire as their ultimate object, is to keep as many men as they are able to provide with food always dancing for their pleasure, or in readiness to do so when wanted; but in setting themselves to achieve this object in their two different ways, what happens is as follows.
Both use their capital by dispensing it in the form of daily rations to two hundred other men, on condition that these men do something; but the first feeds the other men, not on condition that they dance for him, or do anything that ministers to his own immediate pleasure, but on condition that they construct a machine which will enable, as soon as it is finished, a given amount of human effort to double the amount of food which such effort would have produced otherwise. Thus, by the end of two years--the time which we suppose to be required for the machine"s completion--though the original food-supply of the capitalist will all have been taken up and disappeared, its place will have been taken by a machine which will enable forever afterwards one-half of the two hundred men to produce food for the whole. A hundred men, therefore, are left for whom food can be permanently provided, without any effort to produce it being made by these men themselves; and since of this annual surplus a part--let us call it half--will be taken as interest on the machine by the man with whose capital it was constructed, he will now have the means of making fifty men dance for his pleasure in perpetuity; for as often as they have eaten up one supply of food, this, through the agency of the machine, will have been replaced by another.
Our second capitalist, meanwhile, who deals with his capital as income, starts with setting the dancers to dance for his behoof at once; and he keeps the whole two hundred dancing and doing nothing else, so long as he has food with which to feed them. This life is charming so long as it lasts, but in two years" time it abruptly comes to an end. The capitalist"s cupboard is bare. He has no means of refilling it. The dancers will dance no more for him, for he cannot keep them alive; and the efforts for two years of two hundred men, as directed by a man who treats his capital as income, will now have resulted in nothing but the destruction of that capital itself, and a memory of muscular movements which, so far as the future is concerned, might just as well have been those of monkeys before the deluge.
Now, if we take the careers of our two capitalists as standing for the careers of two individuals only, and estimate them only as related to these men themselves, we might content ourselves with indorsing the judgment which conventional critics would pa.s.s on them, and say of the one that he had acted as his own best friend, and dismiss the other as n.o.body"s enemy but his own. But we are, in our present inquiry, only concerned with individuals as ill.u.s.trating kinds of conduct which are, or which might be, general; and the effects of their conduct, which we here desire to estimate, are its effects of it, not on themselves, but on society taken as a whole. If we look at the matter in this comprehensive way, we shall find that the facile judgments to which we have just alluded leave the deeper elements of our problem altogether untouched.
The difference between the ultimate results of the two ways of treating capital will, to the conventional critic, seem to have been sufficiently explained, by saying that the energy stored up in a given acc.u.mulation of food reappears when employed in one way, in the efficiency of a permanent machine; and is, when employed in the other, so far as human purposes are concerned, as completely lost as it would have been had it never existed. But if we reconsider a fact which was dwelt upon in our last chapter, we shall see that the difference is really much greater than this.
When the potential energy residing in so much food has been converted into the energy of so much human labour, and when this is so directed that a productive machine results from it, there is in the machine, as Dr. Crozier puts it, an indefinitely larger amount of "pure economic power," than that which has been expended in the work of the labourers"
muscles. While the energy of the labourers has merely resulted in a bottle, or a cage, we may say, of sufficient strength, the genius of the man who directed them has captured and imprisoned an elemental slave in it, who, so long as the cage confines him, will supplement the efforts of human muscle with his own. But when the energy latent in food is converted into such efforts as dancing, the result produced is the equivalent of the human effort only. Thus in the modern world of scientific enterprise and invention, to invest capital in machinery and then live on the interest from it, means to press into the service of mankind an indefinite number of non-human auxiliaries, and year by year to live on a part of the products which these deathless captives are never tired of producing.
To spend capital as income on securing immediate pleasures means either to forgo the chance of adding any new auxiliaries to those that we possess already, or else to let those who are at our service already, one after one, escape us--or, in other words, to make the productive force now at the disposal of any prosperous modern country decline towards that zero of efficiency from which industrial progress starts, and which marks off helpless savagery from the first beginnings of civilisation.
It is no doubt inconceivable, in the case of any modern nation, that a climax of the kind just indicated could never reach its completion. If all the capitalists, for example, of Great Britain or America, were suddenly determined to live on their capital itself, they could do so only by continuing for a considerable time to employ a great deal of it precisely as it is employed at present. Indeed, so long as they continued to demand the luxuries which machines produce, it might seem that it was hardly possible for them to get rid of their capital at all.
But what would really happen may be briefly explained thus:--
If we take the case of any modern country, the amount of its income at any given time depends for its sustentation on machines already in existence; and its increase is dependent on the gradual supersession of these by new ones yet more efficient. But the efficiency of the former would soon begin to decrease, and would ultimately disappear altogether, unless they were constantly repaired and their lost substance was renewed; while the latter would never exist unless there were men to make them. Hence, under modern conditions, in any prosperous and progressive country, a large portion of what is called the manufacturing cla.s.s is always engaged, not in producing articles of consumption, comfort, or luxury, but in repairing and renewing the machines by which such articles are at present multiplied, or else in constructing new machines which shall supplement or replace the old. Thus, in Great Britain, towards the close of the nineteenth century, these makers and repairers of machinery were, with the exception of coal-miners, the industrial body whose proportional increase was greatest. In the modern world the spending of capital as income is a process which, in proportion as it became general, would accomplish itself by affecting the position of men like these. It would consist of a withdrawal of men who are at present occupied in maintaining existing machines, or else in constructing new ones from their anvils, hammers, files, lathes, and furnaces, and making them dance instead. This withdrawal would, in proportion as it became general, render the construction of new machines impossible, and would leave the efficiency of those now in use to exhaust itself.
That such is the case is ill.u.s.trated on a small scale by the conduct of individuals who live on their capital now. If a farmer, whose capital consists largely of an agricultural plant, desires to spend more than his proceeds of his farm are worth, he virtually takes the men who have been mending his barns and reapers, and sets them to build a buggy which will take him to the neighbouring races. The varnish on the buggy is bought with the rust on the reaper"s blades; the smart, weather-proof ap.r.o.n with the barn"s unmended roof. If the managing body of a railroad pays a higher dividend to the shareholders than can be got out of its net earnings, the results are presently seen in cars that are growing dirty, in engines that break down, in rotten sleepers, and in trains that run off the track. The men who were once fed out of a certain portion of the traffic receipts to keep these things in repair, are now fed to dance for the shareholders, thus supplying them with spurious dividends. A farm or a railroad which was managed on these principles would ultimately cease to produce or to do anything for anybody; and if all modern capital were managed in a similar way, all the multiplied luxuries distinctive of modern civilisation would, one by one, disappear like crops which were left to rot for lack of machines to reap them with, and train services which had ceased because the engines were all burned out.
That such a climax should ever, in any modern country, complete itself cannot, let me say once more, be apprehended as a practical possibility; but it is practically impossible only because the earlier stages of the approach to it would lead to a situation that was intolerable long before it ceased to be irreparable. And here we reach the point to which the foregoing examination has been leading us. It is precisely this course of conduct, the end of which would be general ruin, that any attack on interest, by means of special taxation or otherwise, would, so long as it lasted, stimulate and render inevitable. Let me point out--though it ought in a general way to be self-evident--precisely how this is.
We start with a.s.suming--for, as we have seen already, so much is conceded by those who attack interest to-day--that the owners of capital, however their rights may be restricted, still have rights to it of some kind. But a man"s rights to his capital will not be rights at all unless they empower him to use it in one way or another as a means of ministering to his own personal desires; and it is possible for him so to use it in one or other of two ways only--either by keeping it in the form of some productive machine or plant, and living on a part of the values which this produces, or by trenching on the substance of the machine or the plant itself in the manner, and with the results, which have just been explained and a.n.a.lysed. If, therefore, capitalists are to be virtually deprived of their interest, either by means of a special tax on "unearned incomes" or otherwise, but are yet permitted to enjoy their capital somehow, no course is open to them but to employ for their private pleasures the men by whom this capital, in such forms as machines or railroads, is at present maintained, renewed, and kept from lapsing into a state in which it would be unable to do or to produce anything. And if any one still thinks that, by such a course of conduct, if ever it became general, as it would do under these conditions, the owners of capital would be injuring themselves alone, he need only reflect a little longer on one of our suggested ill.u.s.trations, and ask himself whether the gradual deterioration of railroads would have no effect on the world beyond that of impoverishing the shareholders. It would obviously affect the many as much as it affected the few, and the kind of catastrophe that would result from the deterioration of railroads is typical of that which would result from the deterioration of capital generally.
It would, then, be a sufficient answer to those who attack interest, and propose to transfer it from its present recipients to the state, to elucidate, as has here been done, the two following points: firstly, that to interest as a means of enjoying wealth--the right to such enjoyment itself not being here disputed--the only alternative is a system which would thus prove fatal to everybody; and, further, that, conversely, the enjoyment of wealth through interest not only possesses this negative advantage, but is actively implicated in, and is the natural corollary of, that progressive acc.u.mulation of force in the form of productive machinery to which all the augmented wealth of the modern world is due. By the identification of the enjoyment of capital with the enjoyment of some portion of the products of it, the good of the individual capitalist is identified with the good of the community; for it will, in that case, be the object of all capitalists to raise the productivity of all capital to a maximum; while a system which would compel the possessor, if he is to enjoy his capital at all, to do so by diminishing its substance and allowing its powers to dwindle, would identify the only advantage he could possibly get for himself with the impoverishment of everybody else, and ultimately of himself also.
But the crucial facts of the case have not been exhausted yet. There are few phenomena of any complex society which are not traceable to more causes than one, or at least to one cause which presents itself under different aspects. Such is the case with interest. Its origin, its functions, and its justification, in the modern world, must be considered under an aspect, at which hitherto we have only glanced.
Throughout the present discussion we have been a.s.suming that the questions at issue turn ultimately on the character of human motive. On both sides it has been a.s.sumed that men of exceptional powers will not produce exceptional amounts of wealth, unless they are allowed the right of enjoying some substantial proportion of it. This is a psychological truth which, together with its social consequences, has been dealt with elaborately in two of our earlier chapters. It was there shown that the production of exceptional wealth by those men whose peculiar powers alone enable them to produce it, involves efforts on their part which, unlike labour, cannot be exacted of them by any outside compulsion, but can only be educed by the prospect of a secured reward; and that this reward consists, as has just been said, of the enjoyment of a part of the product proportionate to the magnitude of the whole. But what the proportion should be, and in what manner it should be enjoyed, were questions which were then pa.s.sed over. They were pa.s.sed over in order that they might be discussed separately. It was pointed out, however, that the reward, in order to be operative, must be such as will be felt to be sufficient by these men themselves, and that its precise amount and quality can be determined by them alone--just as, if what we desire is to coax an invalid to eat, we can coax him only with food which he himself finds appetising. Let us now take these questions up again, and examine them more minutely, and we shall find that interest is justified from a practical point of view by the fact that the enjoyment of capital by this particular means is not only the sole manner of enjoying it which is consistent with the general welfare, but also const.i.tutes the advantage which, in the eyes of most great producers, gives to capital the larger part of its value, and renders the desire of producing it efficient as a social motive.
The reasons why the right to interest forms, in the eyes of the active producers of capital, the main object of their activity are to be found, firstly, in the facts of family affection, and, secondarily, in those of general social intercourse, which together form the medium of by far the larger part of our satisfactions. In spite of the selfishness which distinguishes so much of human action, a man"s desire to secure for his family such wealth as he can is one of the strongest motives of human activity known; and the fact that it operates in the case of many who are notoriously selfish otherwise, shows how deeply it is ingrained in the human character. One of the first uses to which a man who has produced great wealth puts it is in most cases to build a house more or less proportionate to his means; and it is his pride and pleasure to see his wife and children acclimatise themselves to their new environment.
But such a house would lose most of its charm and meaning for him if the fortune which enabled him to live in it were to dwindle with each day"s expenditure, and his family after his death were to be turned into the street, beggars. If each individual were a unit whose interests ended with himself; if generations were like stratified rocks, superposed one on another but not interconnected; if--to quote a pithy phrase, I do not know from whom--"if all men were born orphans and died bachelors," then the right to draw income from the products of permanently productive capital would for most men lose much of what now makes it desirable.
But since individuals and generations are not thus separated actually, but are, on the contrary, not merely as a scientific fact, but as a fact which is vivid to every one within the limits of his daily consciousness dovetailed into one another, and could not exist otherwise, a man"s own fortune, with the kind of life that is dependent on it, is similarly dovetailed into fortunes of other people, and his present and theirs is dovetailed into a general future.
We have seen how this is the case with regard to his own family; but the matter does not end there. Individual households do not live in isolation; and there are for this fact two closely allied reasons. If they did there could be no marriage; there could also be nothing like social intercourse. It is social intercourse of a more or less extended kind that alone makes possible, not only love and marriage, but most of the pleasures that give colour to life. We see this in all ranks and in all stages of civilisation. Savages meet together in numerous groups to dance, like civilised men and women in New York or in London. The feast, or the meal eaten by a large gathering, is one of the most universal of all human enjoyments. But in all such cases the enjoyment involves one thing--namely, a certain similarity, underlying individual differences, between those persons who take part in it. Intimate social intercourse is, as a rule, possible only between those who are similar in their tastes and ideas with regard to the minute details which for most of us make up the tesserae of life"s daily mosaic--similar in their manners, in their standards of beauty and comfort, in their memories, their prospects, or (to be brief) in what we may call their cla.s.s habituations. This is true of all men, be their social position what it may. It is true, of course, that the quality of a man"s life, as a whole, depends on other things also, of a wider kind than these. It depends not only on the fact, but also on his consciousness of the fact, that he is a citizen of a certain state or country, though with most of its inhabitants he will never exchange a word; or that he is a member of a certain church; or that, being a man and not a monkey, his destiny is identified with that of the human species. But, so far as his enjoyment of private wealth is concerned, each man as a rule, though to this there are individual exceptions, enjoys it mainly through the life of his own _de facto_ cla.s.s--the people whose manners and habits are more or less similar to his own, because they result from the possession of more or less similar means. He is, therefore, not interested in the permanence of his own wealth only. He is equally interested in the permanence of the wealth of a body of men, the life of which must, like that of all corporations, be continuous.
There is in this fact much more than at first appears. Let us go back to a point insisted on in the previous chapter. It was there shown, in connection with the question of abstract justice, that those who attack interest on the ground that it is essentially income for which its recipients give nothing in return, fall into the error of ignoring the element of time, without reference to which the whole process of life is unintelligible. It was shown, by various examples, that in a large number of cases the efforts which ultimately result in the production of great wealth do not produce it till after, often till long after, the original effort has come altogether to an end. Let us now take this point in connection, not with abstract theories, but with the concrete facts of conduct. Here again those who attack interest fall into the same error. For example, in answer to arguments used by me when speaking in America, one socialistic critic eagerly following another called my attention by name to persons notoriously wealthy, some of whom had never engaged in active business at all, while others had ceased to do so for many years; and demanded of me whether I contended that idlers such as these are doing anything whatever to produce the incomes which they are now enjoying. If they are, said the critics, let this wonderful fact be demonstrated. If they are not, then it must stand to reason that the community will gain, and cannot possibly suffer, by gradually taking the incomes of these persons away from them, and rendering it impossible that incomes of a similar kind shall in the future be ever enjoyed by anybody.
The general nature of the error involved in this cla.s.s of argument can be shown by a very simple ill.u.s.tration. In many countries the government year by year makes a large sum by state lotteries. This may be a vicious procedure, but let us a.s.sume for the moment that it is legitimate, and that everybody is interested in its perpetuation. The largest of the prizes drawn in such lotteries is considerable--often amounting to more than twenty thousand pounds. Now, as soon as the drawing on any one occasion had been accomplished, it might be argued with perfect truth, in respect of that occasion only, that, the man who had won such fortune having done nothing to produce it, the community would be so much richer if the government, having paid the money to him, were to take it all back again by a special tax on winnings. This would be true with respect to that one occasion; but if any government were to follow such a procedure systematically, no one would ever buy a lottery ticket again, and the whole lottery system would thenceforth come to an end.
What is true of wealth won in lotteries is true of wealth in general. If the desire of possessing wealth is in any way a stimulus to the production of it, those who are motived to produce it by this desire to-day are motived by the desire of a something which they see to be desirable and attainable because they see it around them, embodied in the position of others, as the final result of the efforts of a long-past yesterday. If this result were never to be seen realised, no human being would make any effort to achieve it.
Let us--to go into particulars--suppose that the sole desire which moves exceptional men to devote their capacities to the augmentation of their country"s wealth is the desire to join a cla.s.s which, whether idle or active otherwise--whether devoted to mere pleasure or to philanthropy, or an enlightened patronage of the arts, or to speculative thought and study--is itself in an economic sense altogether unproductive. In order to join such a cla.s.s, and to work with a view of joining it, society must be so organised that such a cla.s.s can exist; and the fact of its existence const.i.tutes the main moral magnet which, on our present hypotheses, is permanently essential to the development of the highest economic activity. Such being the case, then, the following conclusion reveals itself, which, although it may seem paradoxical, will be found on reflection to be self-evident--the conclusion namely, that a cla.s.s which, if considered by itself, is absolutely non-productive, may, when taken in connection with the social system as a whole, be an essential and cardinal factor in the working machinery of production, const.i.tuting, as it would do by the mere fact of its existence, the charged electric acc.u.mulator by which the machinery is kept in motion; just as the mere existence of men, seen to be secure in their possession of the prizes of past lotteries, is the magnet which alone can make other men buy tickets for the lotteries of the future.
I have given this case as an a.s.sumption; but it is not an a.s.sumption only. The desire for wealth as a means of living in absolute idleness is probably confined, as a fact, in all countries to a few. In America especially it is a matter for surprise to strangers that men who have made fortune beyond the possibilities of pleasurable expenditure so rarely retire on them to cultivate the pursuits of leisure. But even in America, if they do not value leisure for themselves, they value it for their women, to whom, there as in all countries, four-fifths of the charm and excitement of private life are due; and the sustained possibility of leisure, even if not the enjoyment of it--a possibility which can rest only on a basis of sustained fortunes--is the main advantage which, in all civilised countries, gives wealth its meaning for those who already possess it, and its charm for those who are, in order to possess it, exerting at any given moment their energies and their intellect in producing it.
The source of such sustained fortunes, in their distinctively modern form, is, as we have seen already, such and such forces of nature, which, captured and embodied in machines and other appliances by the masters of science and men of executive energy, and subsequently directed by other men of cognate talents, supplement the efficiency of ordinary human labour, thus yielding the surplus of which modern fortunes are a part, the remainder forming a fund which diffuses itself throughout the ma.s.s of the community. That part of the surplus which const.i.tutes such fortunes is interest; and now let us sum up what in this and the previous chapter our examination of the criticisms directed against interest has shown us.
In the first place, then, we saw that the theoretical attack on interest, on the ground that it is income which is not earned by the recipients, but is virtually taken by the few from the products of the labour of the many, is chimerical in its moral and false in its economic implications.
We saw, in the second place, coming down to the practical aspects of the question, that interest is the only form in which the owners of capital can enjoy their wealth at all, without drying up the sources from which most modern wealth springs, thus bringing ruin to the community no less than to themselves.
We saw, in the third place, that, quite apart from the welfare of the community, interest const.i.tutes, for the owners of wealth themselves, the means of enjoying it which mainly makes it desirable, and the object for the sake of which, at any given moment, the master spirits of industry are engaged in producing and increasing it.
The reader must observe, however, that this conclusion is here stated in general terms only. It has not been contended--for this question has not been touched upon--that interest may not, when received in certain amounts, be justifiably made the subject of some special taxation. Any such question must be decided by reference to special circ.u.mstances, and cannot be discussed apart from them. Nor has it been contended that, within certain limits, the power of bequest is not susceptible of modification without impairing the energies of the few or the general prosperity of the many. The sole point insisted on here is this: that any special tax on interest, or any tampering with the powers of bequest, begins to be disastrous to all cla.s.ses alike, if it renders, and in proportion as it renders to any appreciable degree, the natural rewards of the great producers of wealth less desirable in their own eyes than they are and otherwise would be.
FOOTNOTES:
[23] Mr. G. Wilshire, in his detailed criticism of my American speeches, states twice over the modern socialistic doctrine as to this point. The maker or inheritor of capital, he says, could, under socialism, "buy all the automobiles he wanted, all the diamonds, all the champagne; or he could build a palace. In other words, he could spend his income in consumable goods, but he could not invest either in productive machinery or in land."
[24] This is merely saying that all economic effort has, for its ultimate aim, a desirable state of consciousness, which might be contemptible if it really depended on looking on at dances, or refined if it depended on the cultivation of flowers, or listening to great singers, or witnessing the performance of great plays, or on the enlargement of the mind by travel.
CHAPTER XV
EQUALITY OF OPPORTUNITY
Having now dealt with two of those three ideas or conceptions which, though not necessarily connected with the specific doctrines of socialism, owe much of their present diffusion to the activity of socialistic preachers--that is to say, the idea, purely statistical, that labour, as contrasted with the directive ability of it, actually produces much more than it gets, and the further idea that the many could ameliorate their own position by appropriating the interest now received by the few; having dealt with these two ideas, it remains for us to consider the third--namely, that which is generally suggested by the formula Equality of Opportunity, or, more particularly (for this is what concerns us here), equality of opportunity in the domain of economic production.
We must start with recollecting that if the wealth of a country depends mainly, as we have here seen that it does, on the efforts of those of its citizens whose industrial talent is the greatest, the more effectively all such talent is provided with an opportunity of exerting itself the greater will the wealth and prosperity of that country be. In other words, if potential talent is to be actualised, opportunity is as needful for its exercise as is the stimulus of a proportionate reward.
That economic opportunity ought, therefore, to be equalised, so far as possible, is, as an abstract principle, too obvious to need demonstration. But abstract principles are useless till we apply them to a concrete world; and when we apply our abstract doctrine of opportunity to the complex facts of society and human nature, a principle so simple in theory will undergo as many modifications as a film of level water will if we spill it over an uneven surface.
The first fact which will confront us, when we come down from theory to facts, is one which could not be more forcibly emphasised than it has been by a socialistic writer,[25] whose utterances were quoted in one of our previous chapters. This is the fact that, in respect of their powers of production, just as of most others, human beings are in the highest degree unequal. They are unequal in intellect and imagination. More especially they are unequal in energy, alertness, executive capacity, initiative and in what we may describe generally as practical driving force. Such being the case, then, if it could actually be brought about that every individual at a given period of his life should start with economic opportunities identical with those of his contemporaries, each generation would be like horses chosen at haphazard, and started at the same instant to struggle over the same course in the direction of a common winning-post. And what would be the result? A few individuals would be out of sight in a moment; the ma.s.s at various distances would be struggling far behind them, and a large residuum would have been blown before it had advanced a furlong. Thus, by making men"s advent.i.tious opportunities equal, we should no more equalise the result for the sake of which the opportunities were demanded than we should give every cab-horse in London a chance of winning the Derby by allowing it on Derby Day to go plodding over the course at Epsom. On the contrary, by inducing all to contemplate the same kind of success, we should be multiplying the sense of failure and dooming the majority to a gratuitous discontent with positions in which they might have taken a pride had they not learned to look beyond them.
And now, from this fact, to which we shall come back presently, let us turn to the question of how, and in what respects, equality of opportunity is in practical life attainable.
The most obvious manner in which an approach to such equality can be made is by an equalisation of opportunities for education in early life, or, in other words, by a similar course of schooling, a similar access to books, and similar leisure for studying them. But even here, at this preliminary stage, we shall find that the equality of opportunity is to a large extent illusory. Let us suppose that there are two boys, equal in general intelligence, and unequal only in their powers of mental concentration, who start their study of German side by side in the same cla.s.s-room. One boy, in the course of a year or so, will be able to read German books almost as easily as books in his own language, while the other will hardly be able to guess the drift of a sentence without laborious reference to his hated grammar and dictionary. Now, when once a situation such as this has arisen, the opportunities of the two boys have ceased to be equal any longer. The one has placed himself at an indefinite advantage over the other, which is quite distinct from the superiority originally inherent in himself. Among the educational opportunities which reformers desire to equalise, one of the chief is that of access to adequate libraries; and it is, they say, in this respect more perhaps than any other that the rich man has at present an unfair advantage over the poor. It is virtually this precise advantage that will now be in possession of the boy who has thus far outstripped his cla.s.smate. In his mastery of German he has a key to a vast literature--a key which the other has not. He is now like a rich man with an illimitable library of his own, while the other by comparison is like a poor man who can get at no books at all. Thus if opportunity, in its most fundamental form, were equalised for all boys, no matter how completely, the equality would be only momentary. It would begin to disappear by the end of the first few months, not because the boys would still, as they did at starting, be bringing to their tasks intrinsically unequal faculties, but because some of them would have already monopolised the aid of an advent.i.tious knowledge by which the practical efficiency of their natural faculties would be multiplied.
But education is merely a preliminary to the actual business of life.
Let us pa.s.s on to the case of our equally educated youths when they enter on the practical business of making their own fortunes. What kind of equal opportunity can be possibly provided for them now?
Since socialists are the reformers who, in dealing with objects aimed at, are least apt to be daunted by practical difficulties, let us see how equality of opportunity in business life is conceived of and described by them. The general contention of socialists in this respect is, says one of their best-known American spokesmen,[26] "that the fact that capital is now in the hands of private persons gives them an unfair advantage over those who own nothing," for capital consists of the implements of advantageous production; and socialists, he says, would secure an equality of industrial opportunity for all by "vesting the ownership of the means of production in the state"; the result of which procedure would, he goes on, be this: "that every one would have his own canoe, and it would be up to each to do his own paddling."