第8章

Ifindustrywereinfacttheirrational，unjustandutterlyinhumananarchyitissometimesrepresentedtobe，itwouldnotholdtogetherfortwenty-fourhours。Notmerelyistheindividualbusinessinitsnormalstateafinelyadjusted，accurately-workingcomplexofhumanskill，industryandcooperativegood-will，butthelargerandlesscentralisedstructures，whichwecalltradesandmarkets，showawonderfulintricacyoforderintheirformandworking。TofeedthethousandsofmillsandworkshopsofEnglandwithafairlyregularsupplyofcountlessmaterialsdrawnfromthewideworld，tofeedthemillionsofmouthsofourpeoplewiththeirregularsupplyofdailyfood，arenotableachievementsofindustrialorder。 Inconcentrating，aswemust，ourchiefthoughtuponthedisorderofthesystem，theplaceswhereitfails，andthedamageofsuchfailure，wegainnothingbyexaggeratingtheindustrialmaladiesandtheirsocialinjuries。 Theproportionsoforderanddisorder，healthanddisease，humancostandhumanutility，intheworkingofourindustrialsystemarebestascertainedbyturningoncemoretoourconcretemassofwealth，ourincome，andenquiringintothequantitativemethodofitsdistribution。 Inexaminingthehumancostsinvolvedinagivenoutputoflabour-power(andofotherproductiveenergy)werecognisedthatverymuchdependedupontheconditionsofthatoutput，andparticularlyuponthelengthandintensityoftheworking-dayandworking-week。 Similarly，inexaminingthehumanutilitygotfromtheconsumptionofagivenquantityofgoods，werecognisedthatitwilldependuponthesortandthenumberofpersonswhoreceiveitforconsumption。 SofrombothsidesofthequestionweapproachthecentralissueofthedistributionofWealth。 Ifthe£；2，000，000，000ofgoodswerefoundtobesodistributedinthemodesoftheirproductionastoinvolvenoburdenoftoilandnoinjuryupontheproducers，whiletheyweresodistributedinincomeastoinvolvenowasteordamageinconsumption，thehumanutilityitrepresentedwouldreachamaximumandcostwouldbezero。 If，ontheotherhand，thesamegoodswerelargelyproducedbyill-nourishedlabourers，workinglonghoursunderbadhygienicconditions，andusingcapitallargelyfurnishedbythepainfulandinjurioussavingofthepoor，whilethedistributionofthegoodswassuchastoassignthebulkofthemtoasmallaffluentclass，themasseslivingonabaresubsistencelevel，thehumanutilityofsuchasystemwouldbeverysmall，itshumancostverygreat。Judgedindeedfromanyrightstandardofcivilisation，anindustrialsocietyofthelattersortmightrepresentaminusquantityofhumanwelfare。 Theremightevenbetwonationsofequalpopulationandeconomicincome，equallyprosperousfromthestandpointofstatisticsofcommerce，whichnevertheless，byreasonofthedifferentapportionmentofworkandincome，stoodpolesasunderineverytruecountofhumanprosperity。 §；3。NowtheHumanLawofDistribution，initsapplicationtoindustry，aims，aswehaveseen，todistributeWealth，inrelationtoitsproductionontheonehandanditsconsumptionontheother，soastosecuretheminimumofHumanCostsandthemaximumofHumanUtility。Nobareruleofabsoluteequality，baseduponthedoctrineofequalrights，equalpowersorequalneeds，willconducetothisresult。Thenotionthattheclaimsofjusticeorhumanitywouldbemetbyrequiringfromallpersonsanequalcontributiontothegeneraloutputofproductiveenergyismanifestlyfoolishandimpracticable。 Torequirethesameoutputofenergyfromastrongasfromaweakman，fromanoldasfromayoung，fromawomanasfromaman，toignorethoseactualdifferencesofage，sex，health，strengthandskill，wouldberejectedatonceasapreposterousapplicationofhumanequality。 Ifsuchanequaloutputwererequired，itcouldonlybeobtainedbyanaveragetaskwhichwouldundulytaxthepowersoftheweak，andwouldwastemuchofthepowersofthestrong。Asimilarhumaneconomyholdsoftheprovisionofcapitalthroughsaving。Toimposesavinguponworkingfolkwhoseincomebarelymaintainsthefamilyefficiency，whenotherfolkpossesssurplus-incomesoutofwhichthesociallynecessarycapitalcanbeprovided，isamanifestlywastefulpolicy。Thosewhohavenotruepowertosaveshouldnotbecalledupontoundergothis\'cost\':allsavingshouldcomeproportionatelyoutofhigherincomeswhereitinvolvesnohumansacrifice。Alike，asregardslabourandcapital，thetruesocialeconomyisexpressedintheprinciplethateachshouldcontributeinaccordancewithhisability。 Itshouldbesimilarlyevidentthatexactequalityofincomesinmoneyoringoodsforallpersonsisnotlesswasteful，orlesssociallyinjurious。 Icannotprofesstounderstandbywhatreasoningsomeso-calledSocialistsdefendanidealorderinwhicheverymemberofsociety，man，womanandchild，shouldhaveanabsolutelyequalshareofthegeneralincome。Theneedsofpeople，theircapacitytogetutilityoutofincomesbyconsumingit，arenomoreequalthantheirpowersofproduction。Neitherinrespectoffood，orclothing，orthegeneralmaterialstandardofcomfort，cananysuchequalityofneedsbealleged。Tosaythatabigstrongman，givingoutacorrespondinglylargeoutputofenergy，needsexactlythesamesupplyoffoodasasmallweaklyman，whoseoutputisathirdasgreat，wouldbeasridiculousastopretendthatafifty-horsepowerengineneedednomorefuelthanaten-horsepowerone。 Norwillthedifferencesinonesetofneedsbecloselycompensatedinanother。Mankindisnotequalinthesensethatallpersonshavethesamenumberoffacultiesdeveloped，orcapableofdevelopment，tothesameextent，anddemandingthesameaggregateamountofnutriment。Tomaintaincertainordersofproductiveefficiencywilldemandamuchlargerconsumptionthantomaintainothers。Becausedifferencesofincomeandexpenditureexistatpresentwhicharemanifestlyunjustandinjurious，thatisnoreasonforinsistingthatalldifferencesareunwarrantable。Equalityofopportunitydoesnotimplyequalitybutsomeinequalityofincomes。Foropportunitydoesnotconsistinthemerepresenceofsomethingwhichamancanuse，irrespectiveofhisowndesiresandcapacities。Abanquetdoesnotpresentthesameamountofopportunitytoafullmanastoahungryman，toaninvalidastoarobustdigestion。 £；1，000，spentinlibraryequipmentforuniversitystudents，representsfarmoreeffectiveopportunitythanthesamesumspentonlibraryequipmentinacommunitywherefewcanreadorcaretoreadanybookworthreading。 Equalityofopportunityinvolvesthedistributionofincomeaccordingtocapacitytouseit，andtoassumeanabsoluteequalityofsuchcapacityisabsurd。 Itmaynodoubtbeurgedthatitisdifficulttomeasureindividualneedsandcapacitiessoastoapplythetrueorganicmodeofdistribution。 Thisistrueandanypracticalrulesforadjustingincome，orfordistributionoftheproduct，accordingtoneeds，willbelikelytoinvolvesomewaste。 Butthatisnoreasonforadoptingaprincipleofdistributionwhichmustinvolvegreatwaste。Howeverdifficultitmaybetodiscoverandestimatedifferencesofneedsinindividualsorclassesofmen，toignorealldifferencesinsuresamaximumofwaste。For，assuming，asitdoes，asingleaverageorstandardman，towhichtypenoactualmanconforms，itinvolvesanecessarywasteineachparticularcase。Everyone，inaword，wouldunderthismechanicalinterpretationofequalitypossesseitheralargerorasmallerincomethanhecoulduse。Suchadoctrine，thoughsometimespreachedbypersonswhocallthemselvessocialists，isreallyasurvivaloftheeighteenth-centurydoctrineofindividualrights，graftedontoatheoryoftheuniformityofhumannaturethatiscontradictedbytheentiretrendofscience。 Thislevellingdoctrineonlyservestobuttresstheexistingformsofinequality，bypresentingintheguiseofreformaspuriousequality，thefollyandthewasteofwhichareobviouseventotheleastreflectingofmankind。 §；4。Distributionofincomeaccordingtoneeds，orabilitytouseit，doesnot，indeed，dependforitspracticalvalidityupontheapplicationofexactanddirectmeasurementsofneeds。Thelimitsofanysortofdirectmeasurementevenofmaterialneedsappearinanydiscussionofthescienceofdietetics。Butinexactthoughsuchscienceis，itcanfurnishcertainvalidreasonsfordifferentstandardsoffoodindifferentoccupations，andforotherdiscriminationsrelatingtorace，age，sexandvigour。Whatholdsoffoodwillalsoholdofhousing，leisure，modesofrecreationandintellectualconsumption。Normustitbeforgottenthat，forexpenditure，thefamilyisthetrueunit。Thesizeandageofthefamilyiscertainlyarelevantfactorinestimatingneeds，andinanydistributiononaneedsbasismustbetakenintoaccount。 Publicbodies，andlesscommonlyprivateforms，infixingsalariesandwages，areconsciouslyguidedbysuchconsiderations。Theideaistoascertainthesumwhichwillmaintainaworker，withorwithoutafamily，inaccordancewitheconomicefficiency，andhavingregardtotheacceptedconventionsoftheclassfromwhichhewillbedrawn。Havingdeterminedthis\'proper\'salaryorwage，theyseektogetthebestmanforthework。 Itistruethattheconventionalfactorloomssobiginthisprocessasoftentoobscurethenaturaleconomy。WhenitisdeterminedbyamunicipalitythatitsTownClerkoughtothave£；1500ayearanditsdustman22s。 aweek，itappearsapalpablestrainingoflanguagetosuggestthatdifferencesof\'needs\'correspondtothisdescrepancyofpay。For，thoughitistruethatintheexistingstateofthemarketforlegalabilityandexperiencethetownmaynotbeabletogetareallygoodtownclerkforless，thatstateofthelegalmarketisitselftheresultofartificialrestrictionsinopportunityofeducationandofcompetition，whichhavenonaturalbasisandwhichasocietyversedinsoundsocialeconomywillalter。Butthefactthattheexistinginterpretationofneedsisfrequentlyartificialandexaggeratedmustnotleadustoignoretheelementoftruthembodiedinit。Thewagesofpolicemen，therealwagesofsoldiersandsailors，aredeterminedwithconsciousrelationtotheneedsofable-bodiedmenengagedinhardphysicalwork，andwithsomeregardtotheexistenceofawifeandfamily。ButIneednotlabourthepointofthedifferencebetweenthesalaryandthe\'commodity\'viewoflabour。Theacceptanceamongallthoughtfulemployersof\'theeconomyofhighwages\'appliedwithinreasonablelimitsisitselftheplainesttestimonytotheactualityofthe\'needs\' basisofincome。Thatunlessyoupayamanenoughtosatisfyhisneeds，youcannotgetfromhimhisfullpowerofwork，isapropositionwhichwouldmeetwithuniversalacceptance。 Butitwillcommonlybeaddedthatthesafestwayofmeasuringneedsisbymeansofoutput。Thisoutput，measuredbywork-time，orbypiece，orbyacombinationofthetwo，stillremainsthegeneralbasisofpayment。 Howfaristhisconformabletoourtheoryofhumandistribution，accordingtoneeds？Thatthereissomeconformitywill，Ithink，beeasilyperceived。 Ifonedockerunloadstwiceasmuchgrainortimberasanotherdockerinthesametime，orifonehewerworkingunderthesameconditions\'gets\' twiceasmuchcoalasanother，thereisareasonablepresumptionthatthelargeractualquantityoflabourhastakenagooddealmore\'outofhim\'。 Puttingthecomparisononitsbarestphysicalbasis，therehasbeenalargerexpenditureoftissueandofenergy，whichmustbereplacedbyalargerconsumptionoffood。Astrongmandoingmuchworkmaynotbeexertinghimselfmorethanaweakmandoinglittlework。Butallthesamethereissomeproportionbetweentherespectivevaluesoftheiroutputofphysicalenergyandtheirintakeoffood。This，ofcourse，isapurelyPhysiologicalapplicationofourlawofhumandistribution。Itappliesbothtosortsofworkandtoindividualcasesinthesamesortofwork，andconstitutesan\'organic\'basisfordifferenceof\'class\'wagesandindividualwages。 Weurgethatitisapplicabletootherfactorsofconsumptionthanfood，andthroughoutthewholeareaofproductionandconsumption。Butappliedasapracticalprinciplefordeterminingdistinctionsofclassorgradepayment，andstillmoreforindividualpaymentwithinaclass，ithasaverylimitedvalidity。Rigorouslyapplieditisthepure\'commodity\'viewoflabour，theantithesisofthe\'salary\'viewwhichbestexpressesthe\'needs\'economy。But，thoughoutputcannotbetakenasanaccuratemeasureof\'needs\'forthepurposeofremuneration，itclearlyoughttobetakenintoaccount。Thepracticalreformerwillindeedrightlyinsistthatitmustbetakenintoaccount。Forhewillpointoutthatoutputisaquestionnotmerelyofphysiologicalbutstillmoreofmoralstimulus。 Astrongmanwillnotputoutmoreproductiveenergythanhisweakerfellowunlessheknowsheistogetmorepay；askilfulmancannotbereliedupontousehisfullskillunlesshepersonallygainsbydoingso。Ifthesenseofsocialservicewerestrongerthanitis，abonusforextrastrengthorskillmightbeunnecessary。Butashumannatureactuallystands，thisstimulustodoa\'best\'thatisbetterthantheaverage，mustberegardedasamoral\'need\'tobecountedforpurposesofremunerationalongwiththephysiologicalneeds。Toomuchneednotbemadeofthisdistinctivelyselfishfactor。Inmanysortsofwork，indeed，itmaynotbelargeenoughtoclaimrecognitioninremuneration。Butwhereitisimportant，theapplicationofourneedseconomyofdistributionmustprovideforit。Thisadmissiondoesnotintheleastinvalidateourorganiclaw。Forthemoralnatureofamanisas\'natural\'ashisphysicalnature。Bothareamenabletoeducation，andwitheducationwillcomechangeswhichwillhavetheirjustreactionsuponthepolicyofremuneration。 §；5。Theorganiclawofdistributioninregardingneedswill，therefore，takeasfullanaccountasitcanbothoftheunityandthediversityofhumannature。Therecognitionof\'common\'humanitywillcarryanadequateprovisionoffood，shelter，health，educationandotherprimenecessariesoflife，soastoyieldequalsatisfactionofsuchrequirementstoallmembersofthecommunity。Thisminimumstandardoflifewillbesubstantiallythesameforalladultpersons，andforallfamiliesofequalsizeandage。Uponthisstandardofhumanuniformitywillbeerectedcertaindifferencesofdistribution，adjustedtothespecificneedsofanyclassorgroupwhoseworkorphysicalconditionsmarksitoutasdifferentfromothers。Thepresentinequalitiesofincome，solargelybaseduponconventionalortraditionalclaims，wouldfindlittleornosupportunderthisapplicationoftheorganiclaw。Indeed，itseemsunlikelythatanyspecificrequirementsofindustrialorprofessionallifewouldbulksolargelyininterpretinghumanneedsastowarrantanywidediscriminationofincomes。Thereseemsnoreasontomaintainthatalawyer\'soradoctor\'sfamilywouldrequire，orcouldadvantageouslyspend，alargerincomethanabricklayer\'s，inasocietywhereequalityofeducationalandotheropportunitiesobtained。 But，iftherewereanysortsofworkwhich，byreasonofthespecialcallstheymadeuponhumanfaculties，orofthespecialconditionstheyimposed，requiredanexpenditureoutofthecommon，theorganiclawofdistributionaccordingtoneedswouldmakeprovisionforthesameasanadditiontothestandardminimum。Solikewisethehoursoflabourwouldbevariedfromastandardworking-daytomeetthecaseofworkunusuallyintenseorwearinginitsincidence。Towhatextentsocietywouldfinditnecessarytorecogniseindividualdifferencesofefficiencywithineachgradeasagroundforparticularremuneration——andhowfarsuchclaimswouldrepresent，notpaymentaccordingtotrueneedsbutpowertoextortapersonalrent—— isaquestionwhichcanonlybeansweredbyexperience。Itmay，however，beregardedascertainthatthehighindividualrentswhichprevailatpresentinskilledmanualandmenialwork，couldnotbemaintained。Forthesehighratesdependuponconditionsofsupplyandofdemandwhichwouldnotthenexist。Theenormousfeeswhichspecialistsofreputeinthelawormedicinecanobtaindepend，partly，upontheinequalityofeducationalandsocialopportunitiesthatlimitsthesupplyofablemenintheseprofessions； partly，uponotherinequalitiesofincomethatenablecertainpersonstoaffordtopaysuchfees。Equalityofopportunityandevenanapproximateequalisationofincomewoulddestroyboththesesourcesofhighrentsofability。Whatappliesintheprofessionswouldapplyineverytrade。Individual\'rents\'ofabilitymightsurvive，buttheymustbebroughtwithinanarrowcompass。 While，then，theselfishnessofindividualmanmightgiveaslighttwisttotheapplicationofthesocialpolicyofdistributionaccordingtoneeds，itwouldnotimpairitssubstantialvalidityandpracticability。 Thusweseethislawofdistribution，operativeasapurelyphysicaleconomyintheapportionmentofenergyformechanicalwork，operativeasabiologicaleconomythroughthewholerangeoforganiclife，isstrictlyapplicableasaprincipleofsocialeconomy。Itsproperapplicationtosocialindustrywouldenablethatsystemtofunctioneconomically，soastoproducethemaximumofhumanutilitywiththeminimumofhumancost。 §；6。Ifwecangetanindustrialorder，inwhicheverypersonisinducedtodiscoverandapplytotheserviceofsocietyhisbestabilitiesofbodyandmind，whilehereceivesfromsocietywhatisrequiredtosustainandtodevelopthoseabilities，andsotolivethebestandfullestlifeofwhichheiscapable，wehaveevidentlyreachedaformallysoundsolutionofthesocialproblemonitseconomicside。Wearenowinapositiontoapproachtheactualprocessesofeconomicdistributionthatprevailto-day，soastoconsiderhowfartheyconformtothissoundprincipleofhumanindustry。 Wearenotjustifiedattheoutsetinassumingthatanywidediscrepancywillbeadmitted。Onthecontrary，inmanyquarterstheresurvivesafirmconvictionthatouractualsystemofindustrydoesworkinsubstantialconformitywiththehumanlawofdistribution。 Theso-calledlaissez-fairetheoryofindustrialismbaseditsclaimstoutilityandequityuponanassertionofthevirtualidentityoftheeconomicandthehumandistribution。Ifeveryownerofcapitalorlabouroranyotherfactorofproductionwerefreetoapplyhisfactorinanyindustryandanyplacehechose，hewouldchoosethatindustryandthatplacewherethehighestremunerationforitsemploymentwasattainable。 Butsinceallremunerationforthefactorsofproductionisderivedfromtheproductitself，whichisdistributedamongtheownersoftheseveralfactors，itfollowsthatthehighestremunerationmustalwaysimplythemostproductiveuse。Thus，bysecuringcompletemobilityofcapitalandlabour，weensurebothamaximumproductionandanequitabledistribution。 \'Ledasbyaninvisiblehand\'，everyownerofcapital，labourorotherproductivepower，disposedofhisfactorinamanneratoncemostserviceabletotheproductionofthegeneralbodyofwealthandmostprofitabletohimself。Theapplicationofthistheory，ofcourse，assumedthateverybodykneworcouldgettoknowwhatemploymenthewouldbelikelytofindmostprofitableforhiscapitalorlabour，andwouldusethatknowledge。Itwas，moreover，heldthattheactualconditionsofindustryandcommercedidandmustsubstantiallyconformtothishypothesisofmobility。Anycircumstances，indeed，whichcontraveneditbyobstructingthemobilityandlibertyofemploymentweretreatedasexceptional。 Suchexceptionsweremonopolies，theexclusiveownersofwhichforbadefreedomofentryorofcompetitiontooutsidecapitalandlabour，andsecuredhigherratesofprofitthanprevailedinotherbusinesses。Theharmonyofperfectindividualismdemandedthatallsuchmonopolies，togetherwithprotectivedutiesandotherbarrierstocompletelibertyofcommerceandofindustry，shouldberemoved。Allproductivepowerwouldthenflowlikewaterthroughthevariousindustrialchannels，maintainingauniformlevelofefficientemployment，theproductbeingdistributedinaccordancewiththeseveralcostsofitsproductionandbeingabsorbedintheprocessesofproductiveconsumptionthatwererequiredtomaintainthecurrentvolumeofproductivepowerortoenhanceit。 Therewasalittledifficultyinthecaseofrentsofland。Thoughdifferentialrents，measuringthesuperiorproductivityofvariousgradesoflandascomparedwiththeleastproductivelandinuse，werenecessarypaymentstolandowners，theycouldnotrankascostsandcouldnotbeproductivelyconsumed。Solikewisewiththescarcityrents，paidevenfortheleastproductivelandswherethesupplyforcertainuseswasrestricted。Bothscarcityanddifferentialrentswereclassedassurplus。Butthoughthemagnitudeofthisexceptionalelementmightseemtohavebeenafatalflawintheindividualistharmony，acharacteristicmodeofescapewasfoundinthedoctrineofparsimonywhichprevailed。 Thougheconomicrentscouldnotbeproductivelyconsumedbytheirrecipients，theyfurnishedanaturalfundofsavings，soprovidingthegrowingvolumeofnewcapitalwhichwasnecessarytosetlabourtoproductivework。So，byasomewhatliberalinterpretation，itwascontendedthat\'thesimplesystemofnaturalliberty\'，evenoperatingonabasisofprivateownershipofland，drewfromeachmanthebestandfullestuseofhisproductivepowers，andpaidhimwhatwaseconomicallynecessarytomaintainandtoevokethosepowers。Earlycriticsofthistheory，ofcourse，pointedoutthattheinterpretationofdistribution\'accordingtoneeds\'wasdefectivefromthestandpointofhumanity，sincetheonlyneedstakenintoaccountwereefficiencyforproductivework，thenourishmentandstimulustoproducealargerquantityofmarketablegoods，nottheattainmentofthehigheststandardofhumanwell-being。 Buttomosteconomistsofthatdaysuchacriticismseemedunmeaning，sodominantintheirmindswastheconceptionofeconomicwealthastheindexandtheinstrumentofhumanwelfare。 §；7。Itiscommonlyassertedandassumedthatthislaissez-fairetheoryisdead，andthattheattainmentofaharmonyofsocialwelfare，bythefreeintelligentplayofindividualself-interestinthedirectionofeconomicforces，hasbeendisplacedbysometheoryofconsciouscooperativeorcorporatedirectioninwhichtheStatetakesaleadingpart。Butatthisverytime，whenthepolicyofeverycivilisednationisengagedmoreandmoreincheckingmonopoliesandindustrialprivilegesupontheonehand，andinplacingrestraintsuponthehavocofunfetteredcompetitionontheother，adistinctandpowerfulrevivalofaneconomictheoryofproductionanddistributionundistinguishableinitsessentialsfromthecrude18thcenturylaissez-fairehassetin。Largelyinfluencedbythedesiretoapplymathematics，soastosecureaplaceforeconomicsasan\'exact\'science，manyEnglishandAmericaneconomistshavecommittedthemselvestoa\'marginalist\'doctrine，whichforitsefficiencyrestsuponassumptionsofinfinitedivisibilityofthefactorsofproduction，andfrictionlessmobilityoftheirflowintoallthechannelsofindustryandcommerce。 Theseassumptionsgranted，capitalandlabourflowintoallemploymentsuntilthelastdropineachisequallyproductive，theproductsofthe\'marginal\'orfinaldropsexchangingonabasisofabsoluteequalityandearningfortheirownersanequalpayment。AmongEnglisheconomistsMr。 Wicksteedhassetoutthisdoctrineinallitseconomicapplicationsmostfully。Heshowshowbyadelicatebalanceofpreferences\'atthemargins\' i。e。，inreferencetothelastportionofeachsupplyofordemandforanythingthatisboughtorsold，theremustbebroughtaboutanexactequivalenceofutility，ofworth，andofremuneration，forthemarginalincrementsinallemployment。\'Sofarastheeconomicforcesworkwithoutfriction，theysecuretoeveryonetheequivalentofhisindustrialsignificanceatthepartoftheindustrialorganismatwhichheisplaced。\'2Elsewhere3 heasseveratesthat，asregardstheworkersinanyemployment，thismeansthat\'theyarealreadygettingasmuchastheirworkisworth，\'andthatiftheyaretogetmore，this\'more\'canonlybegoteitheroutof\'communalfunds，\'orbymakingtheirworkworthmore。ThesameapplicationofthemarginalistdoctrineismadebyProfessorChapman。\'Thetheory，then，merelydeclaresthateachpersonwilltendtoreceiveashiswagehisvalue—— thatis，thevalueofthismarginalproduct-nomoreandnoless。Inordertogetmorethanheactuallydoesget，hemustbecomemorevaluable，—— workharder，forinstance——thatis，hemustaddmoretotheproductinwhichheparticipated。\'4Thisispreciselytheold\'laissez-faire，laissez-aller\' teaching，fortifiedbytheconceptionthatsomespecialvirtueattachestotheequalisingprocesswhichgoeson\'atthemargin\'ofeachemploymentofthefactorsofproduction。 The\'lawofdistribution\'whichemergesisthateveryownerofanyfactorofproduction\'tendstoreceiveasremuneration\'exactlywhatitis\'worth\'。Nowthis\'law\'isdoublydefective。Itsfirstdefectarisesfromthefactthateconomicscienceassignsnoothermeaningtothe\'worth\' or\'value\'ofanythingthanwhatitactuallygetsinthemarket。Tosay，therefore，thatanybody\'getswhatheisworth\'，ismerelyanidenticalproposition，andconveysnoknowledge。Theseconddefectistherelianceupona\'tendency\'whichfalselyrepresentsthenormalfactsandforces。 Itisfalseinthreerespects。Itassumesinthefirstplaceaninfinitedivisibilityoftheseveralfactors，necessarytosecuretheaccuratebalanceof\'preferences\'atthemargins。Itnextassumesperfectmobilityorfreedomofaccessforallcapitalandlabourintoallavenuesofemployment。Finally，itassumesastaticalconditionofindustry，sothattheadjustmentofthefactorsonabasisofequalproductivityandequalremunerationatthemarginsmayremainundisturbed。Allthreeassumptionsareunwarranted。 Veryfewsortsofrealcapitalorlabourapproachtheidealofinfinitedivisibilitywhichmarginalismrequires。Anindividualworker，sometimesagroup，isusuallytheminimal\'drop\'oflabour，andcapitalisonlyinfinitelydivisiblewhenitisexpressedintermsofmoney，insteadofplants，machinesorotherconcreteunits。Stilllessisitthecasethatcapitalorlabourflowsor\'tends\'toflowwithperfectaccuracyandlibertyofmovementintoeverychannelofemploymentwhereitisrequired，soastoaffordequalityofremunerationattheseveralmargins。Lastly，inmostindustrialsocietiestheconstantchangestakingplace，involumeandinmethodsofindustry，entailacorrespondingdiversityintheproductivityandtheremunerationofthecapitalandlabouremployedinthevariousindustries\'atthemargin。\'5 §；8。Thisslightlytechnicaldisquisitionisrenderednecessarybythewideacceptancewhich\'marginalism\'haswoninacademiccircles。 Itsexpositorsareabletodeducefromitpracticalpreceptsveryacceptabletothosepoliticiansandbusinessmenwhowishtoshowtheinjustice，thedamageandthefinalfutilityofallattemptsofthelabouringclasses，bytheorganisedpressureoftradeunionismorbypolitics，togethigherwagesorotherexpensiveimprovementsoftheconditionsoftheiremployment。 Forif\'marginalism\'canprovethat，asProfessorChapmanholds，\'inordertogetmorethanheactuallydoesget，hemustbecomemorevaluable-workharder，forexample，\'ithasevidentlyre-createdthedefencesagainsttheattacksoftheworkersuponthefortressesofcapitalwhichwereformerlysuppliedbythewage-fundtheoryinitsmostrigorousform。 Ifwagescanonlyriseonconditionoftheworkersworkingharderorbetter，nodivergenceofinterestsexistsbetweencapitalandlabour，noinjusticeisdonetoanyclassoflabour，howeverlowits\'worth\'maybe，andnoremedyexistsforpovertyexceptthroughimprovedefficiencyoftheworkers。Ifourpoliticaleconomistscanbringthisgospelofmarginalismhometotheheartsandheadsoftheworking-classes，theywillsetasidealltheirfoolishattempttogethigherwagesoutofrentsandpropertyandwillsetthemselvestoproducingbyharder，moreskilfulandmorecarefullabouranenlargedproduct，thewholeorpartofwhichmaycometothembytheinevitableoperationoftheeconomiclawofequaldistributionatthemargin! Itisrighttoaddthatanattemptissometimesmadetobringmarginalismintoameasureofconformitywiththenotoriousfactthatlargediscrepanciesexistintheratesofremunerationforcapitalorlabourorbothinvariousindustries，bytreatingtheseinequalitiesasbrieftemporaryexpedientsforpromotingthe\'freeflows\'ofproductivepowerfromlesssociallyproductiveintomoresociallyproductivechannels，andforstimulatingimprovementsintheartsofindustry。Abnormalgains，ofthenatureofprizesorbonuses，arethusobtainablebyindividualemployment，orbygroupsofemployers，whoarepioneersinsomenewindustryorintheintroductionofsomenewinventionorothereconomy。Buttheserewardsofspecialmerit，itisargued，arenotlasting，butdisappearsosoonastheyhaveperformedtheirsociallyserviceablefunctionofdrawingintothefavouredemploymentstheincreasedquantityofnewproductivepowerwhichwillrestoretheequalityofproductivityandremuneration\'atthemargins\'。 Now，evenwereitpossibletoacceptthisrehabilitationoflaissez-fairetheory，acceptingthisequalising\'tendency\'aspredominantandnormal，andclassifyingallopposingtendenciesasmerefriction，itwouldnotsupplyalawofdistributionthatwouldsatisfytheconditionsofour\'human\' law。Itwouldaffordnosecurityofdistributionaccordingto\'needs\'，orhumancapacityofutilisingwealthforthepromotionofthehigheststandardofindividualandsocialwelfare。Itwouldremainanideallygooddistributiononlyinthesensethatitwouldsoapportiontheproductastofurnishtoallproducersastimuluswhichwouldevoketheirbestproductivepowers，socontributingtomaximisetheaggregateproductionofmarketablegoods。Onlysofarasmanwasregardedasaneconomicbeing，concernedmerelyinthenourishmentandimprovementofhismarketablewealth-producingfaculties，woulditbeasoundeconomy。 Justasinthecaseoftheolder，cruder\'freedomofcompetition\'，itrestsuponthefundamentalassumptionthatalltheproduct，therealincomeofthecommunity，willbeabsorbedin\'productiveconsumption\'，defrayingthebare\'costs\'ofmaintainingandimprovingtheproductivepowersofcapital，labourandability，forthefurtherproductionofobjectiveeconomicgoodsandservices。Itwouldremainopentotheobjectionthatitassumedanidentityofeconomicwealthandhumanwelfarewhichisinadmissible，andthatitrefusedtoprovidethatsubordinationofeconomicproductionandconsumptiontothelargerconceptionofhumanwelfarewhichsoundprinciplesofhumanityrequire。Thoughallworkmightbemostproductivelyapplied，itmightstillcontainexcessiveelementsofhumancost，andthoughallproductswereproductivelyconsumedmanyofthefinerneedsofindividualmenandofsocietymightstillremainwithoutsatisfaction。 §；9。Butthefulldivergencebetweentheoperationoftheactualeconomiclawofdistributionandthehumanlawcanbestbediscoveredbyunmaskingthefundamentalfalsehoodofallformsofthelaissez-faireorcompetitiveeconomy，viz。，theassumptionthatthenationalincometendstobedistributedinajusteconomyofcosts。Isthereinfactanyoperativelawwhichdistributesor\'tends\'todistributethe£；2，000，000，000 worthofgoodsthatformourincome，sothatall，orevenmostofit，actsasanecessarYfoodandstimulustoevokethefullandbestproductiveworkofthosewhoreceiveit？Or，iftherearefailuresinthiseconomicaldistribution，aretheysofew，sosmall，andsoephemeral，thattheymayreasonablybetreatedas\'friction\'，orasthatadmixtureoferrororwastewhichisunavoidableinallhumanarrangements？ Nowitisofcoursetruethatthenationalincomemustcontinuallyprovideforthesubsistenceofthelabour，abilityandcapital，requiredtomaintaintheexistingstructureofindustryandthecurrentoutputofgoodsandservices。Thebrain-workersandthehand-workersofeverysortandgrade，fromartistandinventortoroutinelabourer，mustbecontinuouslysuppliedwiththematerialandnon-materialconsumablessufficienttoenablethemtoreplaceintheirownpersons，orthroughtheiroffspring，thephysicalandpsychicalwearandtearinvolvedintheirwork。Thefertilityofthesoil，therawmaterials，fuel，buildings，toolsandmachines，requisiteinthevariousproductiveprocesses，mustsimilarlybemaintainedoutofthecurrentoutput。Thesebarecostsofsubsistence，thewages，salariesanddepreciationfundsnecessarytoreplacethewearandtearofthehumanandmaterialagentsofproduction，areafirstchargeuponthenationaldividend。Torefusethepaymentswhichprovidethissubsistencewouldbesuicidalonthepartoftheadministratorsoftheincome。Theyrank，fromthestandpointofsociety6ascostsofproduction。Iftheproductwhichresultsfromtheproductiveuseofthesefactorsexceedswhatisnecessarytodefraythesecosts，thesurplusmaybeemployedineitheroftwoways。 Itmaybedistributedamongtheproductiveclassesinextra-paymentssoastoevokebyasetofeconomically-adjustedstimulisuchenlargedorimprovedefficiencyaswillprovideforalargerorabetterproductinthefuture。Inasocietyofaprogressiveorderwherethenumbersorthewholesomeneeds，orboth，areontheincrease，nosurplus，howeverlarge，canbeexcessiveforsuchprovision。Asociallysoundandjustdistributionofthesurpluswouldbeonewhichabsorbeditentirelyinwhatmaybecalledthe\'costsofgrowth\'。This，however，doesnotbyanymeansimplythatthewholeofthesurplusmustadvantageouslybedistributeddirectlyamongtheindividualownersoflabour，abilityorsavingpower，inordertoevokefromthemthemaximumextensionoftheirseveralproductivepowers。 Agooddealofthesurplusmay，indeed，bethusappliedinhigherindividualincomesofproducers。ButtheState，politicallyorganisedsociety，mustlooktothe\'surplus\'foritscosts，notonlyofupkeepbutofprogress。ForwhateverpartwemayassigntotheStateinaidingindustrialproduction，allwillagreethatmuchofitswork，intheprotectionandimprovementoftheconditionsoflife，isessentialtothestabilityandprogressofindustry，andinvolves\'costs\'whichcanonlybemetbyaparticipationintheindustrialdividend。 ItmayevenbeurgedthattheclaimsoftheStatetomaintenanceandprogressareequaltotheclaimsofindividualsuponthesurplus。Foritisevidentthatindustrialprogressdemandsthatbothindividualandsocialstimuliandnutrimentofprogressmustbeprovidedfromthesurplusbysomeconsideredadjustmentoftheirseveralclaims。Asurplus，thusproperlyapportionedinextra-subsistencewagesandotherpaymentstoproducersandinpublicincome，wouldbeproductivelyexpendedandwouldthuscontributetothemaximumpromotionofhumanwelfare。7 §；10。Butthoughinsuchasocietyasoursacertainpartofthesurplusisthus\'productively\'applied，andisrepresentedinindustrialandhumanprogress，alargepartisnotsoexpendedin\'costsofprogress\'。 Alargequantityof\'surplus\'iseverywheredivertedintounproductivechannels。Theincomewhichshouldgotoraisetheefficiencyoflabour，toevokemoresaving，andtoimprovethepublicservices，islargelytakenbyprivateownersofsomefactorofproductionwhoareinapositiontoextortfromsocietyapaymentwhichevokesnoincreaseofproductiveefficacy，butissheerwaste。Thispowertoextortsuperfluousandunearnedincomeisattherootofeverysocial-economicmalady。Indeed，itoftengoesbeyondthediversionofsurplusfromproductiveintounproductivechannels。 Itoftenencroachesuponcostsofmaintenance。Forthevitalstatisticsoflargeclassesoflabourshowthatthefood，housingandotherelementsofrealwages，areinsufficientfortheupkeepofanormalworkinglifeandfortherearingofahealthyandefficientoffspring。Thismeansthatsurplusisactuallyeatinginto\'costs\'，inthatthecostsofmaintenance，whichsoundbusinessadministrationautomaticallysecuresforthecapitalemployed，arenotsecuredforthelabour。Thereasonwhythispolicy，whichfromthesocialstandpointissuicidal，canneverthelessbepractised，isobvious。Forthecapital\'belongsto\'thebusiness，inasenseinwhichthelabourdoesnot。Asweatingeconomywhich\'letsdown\'theinstrumentsofcapitalisofnecessityunprofitabletotheindividualfirms:asimilarsweatingeconomyappliedtotheinstrumentsoflabourneednotbeunprofitable。 Tothenationasawhole，indeed，regardedmerelyasagoods-producingbody，anysuchwithholdingofthetruecostsofmaintenancemustbeunprofitable。 Buttherearebusinesses，ortrades，where\'sweated\'labourmaybeprofitabletotheemployersortheownersofcapital。Therearemanymorewheresuchawage-policy，thoughnotreallyprofitable，appearsso，andisactuallypractisedas\'soundbusiness\'。Howlargeaproportionofthe14，000，000 wage-earnerswhoseincomesarepaidoutofour£；2，000，000，000comeunderthiscategoryof\'sweated\'workers，wecannothereprofitablydiscuss。 But，apartfromthegreatbulkofcasualworkersinalllessskilledtrades，therearelargestrataofskilledandtrainedadult-labourinthestapletradesofthecountrywhicharenotpaidafullsubsistencewage。Sucharethelargebodiesofwomenemployedinfactoriesandworkshopsandinretailtrade，atwagesvaryingbetweeneightandfourteenshillings。Indeed，itmaysafelybeassertedthattheaveragewageofanadultworking-womaninthiscountry，notindomesticservice，isasweatingwage，definitelybelowtrueeconomicmaintenance，andstillmorebelowthedecenthumanrequirementsoflife。ThesamestatementalsoholdsofthewageofagriculturallabourinmostdistrictsofthemiddleandsoutherncountiesofEngland。 Insuchemploymentsthetrueeconomic\'costs\'ofmaintenancearenotprovidedoutof thepresentdistributionofthenationalincome。Ofafarwiderrangeoflabourisittruethatthetruewagesofprogressiveefficiency，whichwehaveseenarevitaltotheeconomicprogressofthenation，arewithheld。Thoughthisdeprivationdoesnotformthewholecaseforlabourasstatedfromthe\'human\'standpoint，itconstitutestheheaviesteconomiccountagainstthecurrentdistributionofwealth。Thefullphysicalandspiritualnutriment，thematerialcomforts，theeducation，leisure，recreation，mobilityandbroadexperienceoflife，requisiteforanalert，resourceful，intelligent，responsible，progressiveworking-class，arenotprovidedeitherbythepresentwage-system，orbythegrowingsupplementswhichthecommunalactionoftheStateandthemunicipalityaremakingtotheindividualincomesoftheworkers。Outofthe£；2，000，000，000awhollyinsufficientsumisdistributedinwagesofprogressiveefficiencyforlabour。 Incertainotherrespectsalsothecurrent\'costs\'distributionisexceedinglydefective。Thesavingwhichgoestoprovidefortheenlargementofthecapitalstructureofindustryisverywastefullyprovided。Alargeproportionofsuchsavingsasarecontributedoutofworking-classincomesinvolvesanencroachmentupontheircostsofprogressiveefficiency，andrepresents，fromthestandpointbothoftheindividualfamilyandofsociety，badeconomy。Moreover，themethodsofcollectionandofapplicationofsuchcapitalaresowastefulandsoinsecureastorenderworking-classthriftabywordintheannalsofbusinessadministration。 §；11。Butthesedeficienciesintheeconomyof\'costs\'canonlybeunderstoodbyastudyofthatlargesectionofthenationalincomewhichinitsdistributionfurnishesnofoodorstimuluswhatevertoanyformofproductiveenergy。Evenintheidealistlaissez-faireeconomicswesawthatrentoflandwasdistinguishedfromthewages，interestandprofits，whichconstitutedthe\'costsofproduction\'，andwasdescribedas\'surplus\'。 Itwasrecognisedthat，wherelandwasrequiredforanyproductivepurpose，itsownerswouldreceiveinpaymentforitsuseanyportionoftheproduct，oritssellingvalue，whichremainedoverafterthecompetitivelydetermined\'costs\'ofcapitalandlabourhadbeendefrayed。Thepaymentwaseconomicallynecessarybecausesuitablelandformostindustrialuseswasscarce，andtheamountofthepaymentwoulddependuponhowmuchwasleftwhencapitalandlabourhadreceivedtheirshare。Forthelandlordwouldtakeallthesurplus。Therearethosewhostillinsistthattheownersoflandareeverywhereinthispositionofresiduarylegatees。Land，theythink，isalwaysrelativelyscarce，capitalandlabouralwaysandeverywhererelativelyabundant。Freecompetitionthenbetweentheownersoftherelativelyabundantfactorswill keepdownthepriceforthemtobare\'costs\'，leavingamaximumamountofsurpluswhichtheso-calledland\'monopolists\'willreceiveasrent。 Thissurplusevokesnoproductivityfromthesoiloritsowners；itspaymentdoesnothingtostimulateanyartofindustry。But，ifthelandownerdidnottakeit，anditwaskeptbyfarmersasprofits，orbylabourersaswages，itwouldbejustaswastefulfromtheproductivestandpoint，asifitpassedasrent，for，uponthehypothesisofsucheconomists，thefullcompetitivewagesandprofitsaretheonlypaymententitledtocountascost，andnoadditiontosuchpaymentswouldincreasetheproductivityofcapitalorlabour。 §；12。Nowthoughtherehavebeentimesandcountriesinwhichrentoflandwastheonlyconsiderablesurplus，thisisnotthecaseinanydevelopedindustrialcommunitytoday。Otherfactorsofproduction，capital，ability，oreveninsomeinstanceslabour，sharewithlandthepowertoextortscarcityprices。 Thehypotheticalabundance，mobilityandfreedomofcompetition，whichshouldprevailamongallownersofcapital，abilityandlabour，keepingdownalltheirremunerationtoacommonminimum，areeverywherefalsifiedbyindustrialfacts。Atvariouspointsinindustrycapitalormanagerialabilityisfoundstronglyentrenchedagainstthecompetitionofoutsiders，andabletosetlimitsuponinternalcompetition。Whereverthisconditionisfound，theownersofthecapitalortheabilitysoadvantageouslyplacedareabletoobtaina\'surplus\'，which，initsoriginanditseconomicnatureandeffects，nowisediffersfromtheeconomicrentsofland。Thefluidityandcompletefreedomwhichappeartoattachtothetermcapital，solongaswetreatitinitsabstractfinancialcharacter，disappearassoonasforcapitalwesubstitutecertainskilfullymademachineryconstructedunderpatentrightsandoperatedbymoreorlesssecretprocesses，turningout，withtheassistanceofcarefullytrained。andorganisedlabour，goodswhichenjoyahalf-superstitiousfameandspecialfacilitiesofmarket。 Anexaminationofthecapitalistsystemwilldiscloseineveryfieldofindustrynumerousinstancesofbusinessesorgroupsofbusinesses，sometimesconstitutingwholetrades，whichbyreasonofsomeadvantageinobtainingrawmaterials，transportormarketingfacilities，publiccontracts，legalprivilegeorprotection，byusingsomesuperiorprocessofmanufacture，skillinadvertising，establishedreputation，financialbacking，orbysheermagnitudeofoperations，arescreenedfromthefullforceoffreecompetition，andareearninginterestandprofitsfarexceedingtheminimum。