_Recent decrease of land values._-In the United States during recent years there has been a decided shrinkage of land values in most of the country.
Several evident causes appear worthy of mention. The most evident is a rapid increase of farms on the western plains, recently bringing their products into the compet.i.tion. These prairie regions give the largest range for farming in the world. In the same connection is the introduction, upon these immense fields of cheap land, of extensive machinery by which the productive power of labor is multiplied. The labor of one man for 300 days is said to have produced in California 5,000 bushels of wheat, so that one man"s labor on many acres gives to each of 1,000 people a barrel of flour a year. Next to this is the opening of new agricultural enterprises in South America, Australia, India and South Africa, with still greater prospects in Siberia-all the result of great improvements in transportation, opening to these regions the world"s great markets. This has pushed the supply of staple products toward the condition of over-production. The same cause has diminished the demand for our staples by greatly stimulating the consumption of foreign fruits and nuts. Most recently has come the depression from loss of confidence in enterprise, through excessive speculation and waste of capital, undermining the market for land as well as for all the machinery of production. In these conditions the whole world has shared.
_Population drifting to cities._-The drift of farm population toward the cities is a symptom of the changed conditions, not a cause. If, as decided by an expert investigator, three men on a farm do the work that fourteen did forty years ago, the farms can well spare to the cities an increasing number of its boys and girls. The drift is real and permanent, diminishing rural population in 100 years from 96 per cent of the whole to 70 per cent, though exaggerated in figures through arbitrary division between towns and cities. This movement has been noticed the world over since 1848, when machinery began to affect agricultural production.
That this drift is wholesome is evident, if we look at the diversity of employment resulting and the improved welfare of all. A simple comparison of figures from the United States census will show the readjustment of employment. No one can doubt the advantage gained in the entire nation.
_Abandoned farms._-The most disturbing feature of this readjustment is the desertion of some farms in the rougher parts of New England and the drier parts of the West. These lands will find a profitable use in the woodlots through the East, and in grazing ranges through the West, with slight permanent loss. They are not signs of poverty, but of a developing thrift, just as the abandoned country woolen mills tell the story of immense growth in the factory methods. While individuals seeking profit in sale or rent of their farms may suffer in any such shrinkage of local values, it must not be forgotten that the total of rural welfare is not necessarily diminished. Land values, aside from improvements, are everywhere evidence of limitations to welfare in some special direction. If human enterprise and invention and thrift lessen such limitations, the world is better off.
The great ma.s.s of farmers, who think more of their homes than of property, will suffer little from lower prices of land unless such low prices result from a general lack of thrift and of adaptation to new circ.u.mstances.
While the changes in price which affect reduction of rent values do require readjustment of plans and methods, the farmer who keeps in touch with the world"s work will not suffer, but gain, in the general advancement. In many instances, the low condition of farm property is due to unthrifty neglect of farmers in whole neighborhoods. Bad roads, short schools, weak fences and poor stock are as often a cause as an effect of low prices of land. Whole regions in our country suffer in this way from unthrift, whatever the price of farm products or of lands.
_Farms in the United States._-These are under conditions best suited to attend the general thrift of the world in every way. Ownership is not complicated in any way with magisterial duties or prestige or entailment, as in England. It is not so distinctly hereditary as to embarra.s.s agriculture by extreme subdivision of farms, as in France and other portions of Europe. It is in no danger of combination into great estates under absentee landlords, as in Ireland. Its laws of transfer and guaranty are growing more and more simple and direct, while protection to homestead rights is strong. Farmers themselves have such responsibility in state and nation as to make their genuine interests felt everywhere, and no system of caste can make them a peasantry, as in most of the Old World. Indeed, the farmer in every region makes his farm; and the enterprising, educated farmer of the next generation in our country will find in himself the forces at work to give value to his land. The speculative movement in land holding will be outgrown when genuine farm homes are more prized for their welfare than for their wealth; but this very welfare will maintain a stable value in lands.
PART III. CONSUMPTION OF WEALTH.
Chapter XXIII. Wealth Used By Individuals.
_Wealth to be consumed for welfare._-The only economic motive for the acc.u.mulation of wealth is its use in promotion of welfare. While the old maxim says, "A penny saved is worth two gained," every one recognizes the penny as absolutely worthless except in view of some utility to be gained in spending it. So with every form of wealth. All economic value disappears when the thought of use is wanting. Such use, whether practically instantaneous, like the destruction of the gunpowder projecting the bullet, or extended through hundreds of years, as in the wearing out of a castle, or a bridge, is properly called consumption of wealth.
A majority of the great problems concerning social welfare are connected with the use of wealth, and therefore fall under the discussion of consumption. Indeed, so long as there is little acc.u.mulated wealth, as in the savage state, social problems have little significance. The statement of the Apostle Paul, "The love of money is the root of all evil," while not confined in application to wealth already acc.u.mulated, has its most important bearing in the fact that wealth acc.u.mulated is itself a power to be used or abused by whoever controls it. The saying of Emerson, "The best political economy is care and culture of men," applies most strictly to the uses of wealth and the methods of its consumption. The great question of today in every civilized land is, How can the acc.u.mulations of power in the shape of wealth made by this generation be used to establish a continuous welfare, not only for this generation, but for its successors?
The wants of society today include not only a reasonable provision for life and health and wisdom and virtue during the life of those who are now active, but an equal provision for the same wants increased with each succeeding generation. In all thought of consuming wealth, we must remember that power in this form is rightly used only when power in some other form results. Thus wealth is consumed, according to natural laws, either for reproducing itself in more advantageous form or for sustaining human power in form of health or wisdom or virtue.
We have social welfare as the result of wealth consumed, or used up.
Society is interested in all the wealth acc.u.mulated, and the methods of its acc.u.mulation and its fair distribution are a part of social machinery; yet these have their chief significance in the final consumption. It is not what we have, but what we do with it, that makes society interested in our possessions. It is not what society has, but how it uses it, that settles the chief questions of welfare or illfare. Not only gunpowder, but every conceivable power in material wealth, has blessing or bane in the use to which it is put. So the welfare of a community cannot be judged by the amount and kind of wealth produced or by the methods in production or by the distribution of ownership. These may be significant in showing the trend of social customs as to individual control, but the last inquiry will still have to be, What welfare comes to the entire community when all this wealth is used? Moreover, no a.n.a.lysis of qualities in any substance called wealth can measure the welfare involved in its use. Its relation to the individual using it and his relation to the whole community, with a careful a.n.a.lysis of wants met and character developed, must be considered.
The final question is, How many and what kind of wants are satisfied?
_Use of wealth individual._-It is necessary to realize that the social organization is maintained solely for the sake of individuals. All study of welfare and illfare is a study of individual human beings. The mutual relations of these human beings in society are means to individual life, growth and enjoyment. Even the total power of a generation in society is dependent upon how the individual wants of individual members of that society are met. Some of the greatest mistakes in estimating social welfare arise from overlooking the essential individuality of wants, upon which all wealth depends for its use.
This individuality makes the proper consumption of wealth largely a question of right and wrong. The possessor of any form of wealth is obliged to recognize his place in society as a promoter of welfare, and society compels, as far as it is able, a recognition of individual needs.
Yet the very nature of consumption, as concerned with individual wants, makes individual judgment supreme in the use of wealth. It is my ideal of good health, high culture and sound morals that must be met for my enjoyment. My welfare, so long as I have rational powers, is the meeting of my ideal. Society rightly hesitates to interfere with my ideals by force as long as my actions do not disturb the welfare of my neighbors.
The necessity of human liberty for actual welfare limits the control of society to very evident infringements upon others" welfare in every activity, including the use of wealth as well as other powers. This very restriction is in the interest of highest total enjoyment of welfare in the whole community.
_Individual responsibility for use of wealth._-In estimating the proper uses of wealth, it is necessary to remember that mere animal existence is a very small part of human welfare. It would not be enough for any human society that every individual in it be fed, clothed, warmed and maintained in reasonably long life. The highest uniformity of mere animal enjoyment would not make a society worthy to be called human. Even uniformity of wants far higher, with uniform supply for those wants, would give but little organization and but little total welfare if that uniformity was brought by curtailment of natural powers or by constraint that hinders growth. The most natural fact among human beings, as in all the rest of nature, is variety; and every conception of proper consumption of wealth must involve this thought of variety of individuals in wants and powers left free to grow. It is a purely false a.s.sumption that the ideal community toward which all ought to strive is a community of equals in either ability or capacity. That is the ideal community which gives to every member of it opportunity to make most of himself; that is, to make himself most useful, and able to enjoy the truest use of his powers.
Hence we find the tendency in every community, with reference to wealth as to other individual forces, to recognize early and complete personal responsibility. This personal responsibility makes the question of consumption of wealth a question of morals as well as of wisdom. The whole discussion here turns upon the wisdom or unwisdom of certain personal uses or social uses of what the world has acc.u.mulated. We can ask what use of wealth is prudent, what imprudent; then what social organization best develops the wisdom which secures a prudent use of wealth; and finally, how far and in what ways society can act as a unit in the place of individuals. The machinery of government then becomes a part of every person"s welfare, and his relation to its maintenance by contribution of his wealth is a part of prudent consumption. The economic question in consumption, then, involves not so much what one can get from society as what he can give to society, since his welfare comes largely through organization in the use of acc.u.mulated wealth.
Chapter XXIV. Prudent Consumption.
_Prudent uses of wealth._-It has already been suggested that a proper use of wealth looks always beyond the present. We acc.u.mulate, not only to spend, but to spend in such a way as will give larger abilities in the future. The name prudential consumption has been given to all that use of wealth which has for its end the maintenance of individual powers at highest efficiency for the longest life and provision for a more efficient posterity with more efficient instruments of production.
It is prudential use of wealth to gather into the farm, not only such machinery in the shape of buildings, fences and roadways as will make the future labor more effective, but all possible fertility that will make the future owners of the farm a larger welfare in possession. All wealth put into the form of productive capital is prudentially consumed. All so-called permanent improvements which look to the better satisfaction of future wants fulfil the condition of prudent foresight. All public improvements are really such, when this far-seeing provision for future wants and abilities of society is made. Such methods are the genuine economic saving in which the community should be encouraged. A saving which merely stores against a future personal want contributes less to general welfare, and does not stimulate the natural growth of wants in the individual, which is the chief source of increasing power. The one who saves that he may have better tools with which to do more for his future satisfaction, not only adds to his physical abilities to meet his daily wants, but adds the strongest stimulant to energy in his work. The supply of ordinary wants being provided for, new wants arise.
In the spirit of prudential consumption such wants are encouraged as give greater and greater abilities. Thus the ideal of life is constantly raised, and the struggle is not for existence but for higher enjoyment and more genuine welfare. The wealth which comes in this acc.u.mulation of capital for larger accomplishment aids true philanthropy. The whole world gets more of welfare with every addition made by farmers to their working capital. In the same way all increase of capital in machinery, tools, warehouses, ships and other means of transport contribute to a philanthropy that makes society richer.
Such saving is entirely opposed to the miserly spirit which hides wealth because of mere love of possession or fear of future want. It is the true way of both spending and having, since it expends earnings for that which continues to aid in bringing larger returns to meet increasing want. That social system is most prudent for the world which acc.u.mulates productive capital without reducing any part of society to poverty. Prudence, however, requires that this capital saving be adjusted to the abilities of the community in which it is to be used. The building of an enormous factory, where skill has yet to be developed and where a market is wanting, would be the height of imprudence. Such waste is sometimes seen under the false stimulant of a bounty or a restrictive tariff. Just so, great public improvements upon rivers, harbors and highways are a part of economy and prudent investment of wealth only when a community is able to use them to advantage. The test of prudence in capital saving is in its nice adjustment to the abilities of the users.
_Prudent adjustment of capital._-A still further adjustment is required by prudence between the capital put into fixed forms and the circulating capital needed for best use of the more lasting machinery. A farmer is said to be stock poor when he overloads his farm or crowds his farm buildings with growing stock. Having all his capital in stock, he is unable to handle it to advantage, and must readjust his capital in live stock to his capital in the farm and machinery by selling some of his stock and adding to the value of his farm. On the other hand, many a farmer is land poor, where the bulk of his capital is invested in land, while he cannot command circulating capital in stock and wages sufficient to make the land useful. He needs, in the spirit of prudence, to sell some of his land for the sake of current funds to invest in live stock and in labor. The same principle applies to all investments of capital. A railroad may so exhaust the funds of the community in building it that it cannot be fairly manned for work. Sometimes a whole nation invests so largely in permanent forms of capital as to bring distress and poverty from want of means to use the great machine.
Prudence also requires a further adjustment between the amount of labor directly producing wealth and that employed in what may be called the arts of consumption, contributing directly to personal comfort and enjoyment.
The neatness of a farmer"s yard, outbuildings, fences and machinery is a part of his welfare. It also indicates a certain thrift, which enhances the value of the farm. But it is a proper sign of such thrift when it grows naturally out of the productive energy employed upon the crops and the stock. The wealth used in maintaining this neatness is not wasted, but it will not reproduce itself. It must be supplied from other sources in direct production. All services in the household, in contributing to bodily comfort of the family, make an essential part of human welfare, but prudence requires such an adjustment of these services to the total wealth-producing energy that they may be maintained without reducing the total power. All public expenditures in the care of streets and parks are an essential to welfare so long as the sources of wealth production are kept the more active from such advantages. The test of prudence in all such adjustment is the increase of power in wealth-production, along with increasing welfare.
_Provision for future wants._-True prudence is largely foresight, and so is the enterprise of speculative energy which provides any product for a future market. No more careful adjustment is necessary than that which secures such a product of farm or factory as the world will need when it reaches its actual market. The greatest wisdom is needed in studying the conditions of a community with reference to its future wants, and the supply actually acc.u.mulating for meeting those wants.
Farmers need, as truly as any producers, to know the wants of the world for which they are producing food. The crops they plant in the spring will actually be consumed in large measure during the following year. Prudence suggests that they plant such crops as will be most in demand. If they judge by the market today, they are in danger of two errors: first, of overestimating the future demand, which may be satisfied before the new crop comes; second, of diverting from ordinary staple crops too large a portion of the crop-raising force. Common experience has taught that a high price of hops or onions or broom corn has almost certainly wrought a reduction of the price for succeeding crops below the normal cost. Still larger foresight is needed with reference to the raising of live stock, which requires more than a single season"s investment of capital. To stock a farm with hogs, sheep, cattle or horses, requires from one to five years of acc.u.mulated capital. The record of farm stock shows successive waves of such production in direct opposition to prudence. (Chart No. 4, p. 83.)
The manufacturing world has similar experiences of imprudent consumption in the effort to forestall a market. But the record of failures in this respect is scarcely as marked, because of more business-like collection of information for the guidance of judgment. Farmers too generally follow the lead of their neighbors in adjustment of crops or stock. Manufacturers more generally try to do what their rivals are not doing. Success in producing what is not finally wanted we call overproduction. While the whole world is warned against this, each individual producer fails to study as well as he might the means of avoiding it.
Prudential consumption does not properly provide for those speculative dealings which end simply in a readjustment of wealth by gains on the one side through losses on the other. All these imply an actual waste of wealth and energy, whether they are exhibited in a gambling machine or a board of trade. But there are certain great enterprises, like wonderful inventions, which involve a prudential consumption of wealth. The wealth consumed in developing the electric telegraph system, or in laying the Atlantic cable, everyone would judge to be well invested. Every thought of prudence sustains such expenditure. Yet the spirit of invention, as a mere venture in desire to hit upon something which may chance to be wanted, shows lack of prudence, and the world suffers by great waste of energy in this direction. The only test of prudential consumption in provision for the future market is in the careful study of all conditions, favorable and unfavorable.
_Consumption for growth._-True prudence in public improvements has just been mentioned, but such prudence has a larger range in promoting the permanent growth of human powers and capacities. Every wise father wishes his children to know more, be more efficient in the arts of life, and enjoy more of true welfare than he does. Communities which show no advancement in these respects are called dead, and decay is sure to follow. Prudence looks after all educational interests by expending wealth upon the means of education; not only sustaining schools, but making more permanent provision and increasing facilities for instruction. This is not only a means of preserving and wisely using the wealth acc.u.mulated, but a means of increased production. Such prudence suggests large endowments for public education, including the support of government machinery for uniformity of education. A similar prudence sustains the philanthropic spirit which maintains all the means of philanthropy. The endowment of asylums for the weak and afflicted and the support of religious inst.i.tutions are prudent ways not only of caring for present welfare, but of increasing the welfare of the future. The next generation will be stronger and happier for the prudent foresight of this generation in overcoming obstacles to health and wisdom and virtue. To leave wealth thus invested is far better for successors than to leave it in form for ready consumption upon temporary wants. Thus all prudent consumption of wealth has for its basis the genuine welfare of a continuous society of human beings subject to improvement. Any forming community looks surely to future welfare when it invests wealth in good homes, good schools and good churches.
Chapter XXV. Imprudent Consumption.
_Society interested in imprudence._-This fact, that the wealth of each generation is so largely dependent upon the prudence of the preceding, emphasizes the importance of public sentiment in favor of prudential consumption. Public criticism naturally attacks the most noticeable failures of prudence, and it therefore seems worth while to consider some of those imprudent forms of consumption which society may seek to prevent.
It is also proper to consider the ways in which society may act for prevention of imprudence.
_Luxurious consumption._-The question of luxury in the same society with extreme poverty is always prominent. Luxury is supposed to be extravagant expenditure in meeting individual wants. Though such wants may be real and legitimate, lavish expenditure by any portion of a community seems at first sight a trespa.s.s upon common welfare. Some have considered that person wanting in good will to his fellows who expends upon his own comfort more than his neighbors can afford. Others define luxury to be expenditure for living above the average expenditure in the whole community. Still others regard any expenditure a luxury which is not needed to maintain physical powers.
It is easy to see that all these efforts at definition are imperfect, because the idea of luxury implies such a mode of life as does not contribute to the total welfare, and each one"s idea of total welfare enters into his definition of luxury. It is an evident fact that the so-called luxuries of one generation become the actual necessities of the next. This is because the life of the race means more and includes more with each succeeding generation. To live in the twentieth century will mean, as it has always meant in the past, to have such exercise of every ability as circ.u.mstances permit. Luxury is therefore always relative to the duties one has to perform, as well as to the society in which one moves. Moreover, luxury is relative to individual abilities and individual plans. It would be luxury for a farmer to go without a needed plow for the sake of buying a lawn mower. It would be luxury for a student to own two coats, if he must go without a dictionary to buy the second.
It is easy to settle the luxuries of others, but less easy to so define luxury that the public can agree in the definition. In general, it is described to be a meeting of fanciful rather than real wants. Any individual in society is spending his wealth in luxury if he allows his imagination to conjure up adornments of person or household which contribute chiefly to display rather than to comfort or enlightenment. All such adornments of person, or home, or the public streets, as cultivate genuine taste and inspire to more of energy contribute to the general welfare far more than mere expenditure for food can do. Yet in times of starvation the food must come first. The world sometimes sneers at the desire among very poor people to cultivate flowers and maintain a canary or other pets; yet every philanthropist knows that these desires are among the strongest incentives to greater thrift and keener exertion.
_Legal restrictions upon luxury._-With all this difficulty in definition and the certainty of change from age to age, there is nevertheless a disposition on the part of society to restrict actual luxury. Again and again this has led to enactment of laws prohibiting expenditure in certain definite forms. The dress of ladies of rank has been restricted as to style and quant.i.ty of material and ways of making. The variety upon a dinner table has been limited to a certain number of dishes and certain kinds of food.
All of these have been egregious failures, from the impossibility of measuring results upon the general progress of civilization. The indirect effects of ingenuity in dress and cooking have been on the whole so beneficial that the world cannot afford to hinder it. The intricacies of French cooking seem to an ordinary household extreme luxury, yet that very ingenuity has cheapened the cost of living, to a large portion of the world, by rendering palatable the coa.r.s.er vegetables and cheaper meats which lie within the reach of the poor.
No real student of human nature would now attempt, unless it be in the emergency of a great famine, to restrict expenditures by law upon the plea of luxury. Still, society as a whole has some voice in directing the judgment of individuals. Public opinion is an effective check upon desires. The good will of the mult.i.tude is more important to the ma.s.s of men than any particular gratification. It is proper, therefore, to discuss at any time and at all times the limits of luxury, both for ourselves and for our neighbors. The sole cure for imprudent expenditure in luxuries is individual culture of mind and heart and conscience, so that each may do his best to secure, not only the good will of his neighbors, but their welfare.
_Wasteful consumption._-Wasteful expenditure through ignorance or recklessness is more common and more weakening than luxury. Its limits cannot be described, since it covers expenditures of every kind, from the simplest provision for food and clothing to the most elaborate structures and wildest schemes of development. Though noticeable wastes are seen in the households of the rich, they are relatively larger among the poor.
Yet any attempt to regulate such waste by law is futile, chiefly from the fact that it ignores the personal responsibility and wants which make individual character. It is properly applied to the imbecile and the insane, as well as to children and youth, through the appointment of a prudent guardian. Society can protect itself only by fostering more complete systems of education in the arts of life. The tendency of our times toward a more technical education, especially in reference to the home and the common industries of life, marks the growth of public opinion toward a clearer ideal of prudence against waste. The study of economic principles in every department of life, and especially the clear understanding of everyday facts as to the things men handle and use, cannot but give wisdom for preventing waste.
_Vicious consumption._-It is customary to distinguish from all other forms of imprudent consumption of wealth such vicious indulgence of appet.i.tes as not only consumes acc.u.mulated wealth but diminishes power in production.