Doubts and Difficulties. The Poverty of the Capitalist
A correspondent forwards me an extract from a recent book of Sir Robert Giffen’s for explanation. The distinguished capitalist statistician contends that the advantages derived from science and invention during the last 50 years have in the main gone to the working-class.
“Now,” says my correspondent, “I wish you to show how this statement made by the highest living statistical authority in England squares with the position of the Socialist. You contend, as I understand, that the economic position of the worker is with every advance in science and invention becoming relatively if not absolutely worse. Who am I to believe—the highest of our statistical anthories, Sir Robert Giffen, or the unknown, tin-pot, little Socialist “Ecouomicus?”
Before proceeding to deal with the main economic question raised in the preceding paragraph
I wish to protest against the last sentence with its appeal to authority. Far be it from me to place myself against Sir Robert Giffen as a statistical authority. At the same time it may well happen that he is entirely wrong on this question and the Socialist entirely right. The whole history of both the inductive and deductive sciences is the relation of the mistakes of authorities. In no field of human knowledge has the authority always been infallible.
Not only is it the case that in physics and in metaphysics, in medicine and in art, the authority has been fallible but it is he who has been the most bitter opponent of new ideas and of new truths. Foremost among the revilers of those who put forward the Coperniean theory as against the Ptolemaic in astronomy, the undulatory theory as opposed to the atomic theory in optics were the so-called leaders of opinion in those sciences.
It may well be then that in economics the statistician of recognised repute may be as little justified in his contentions as his fellows in other directions. The appeal in all discussions must be less to authority than to fact. Is Giffen justified by existing conditions in saying that the greatest share of the advantages oi the science and invention of ths last fifty years has gone to the working-class ?
In modern society the greatest advantage that one can secure is the ownership of material wealth. It is around this ownership that the whole of our present-day life revolves. Wealth is the motor which sets in motion the industries, the pleasures, the pastimes, of the nation. Invention pertains more largely to industry than to any other feature of our lives. If Giffen’s contention is correct we should find the worker owning a larger proportion of the national wealth than heretofore. The industries modified or revolutionised by invention—by improvements in machinery or in the application of electricity as a motor—should yield for the worker an ever increasing share.
On what grounds does Sir Robert Giffen contend that the worker receives such an increasing proportion of the wealth he creates ? On the grounds of improving Income Tax returns and of improving figures from the Savings Banks ! He contends that the higher savings in Savings Banks and Friendly Societies and the larger revenue derived from Income Tax show a continued improvement in the prosperity of the people of whom the working-class form the majority.
This contention would be unanswerable if (a) the accumulations in Savings Banks and Friendly Societies were the savings of the working-class ; (b) any material proportion of the income tax was paid by the worker; or (c) the prosperity of the country meant the same thing as the prosperity of the working-class.
As to (a) I pointed out in the June number of THE SOCIALIST STANDARD that the Savings Banks contained in the main the savings of the petty shopkeeper and of the children of the middle class. When we find, for instance, as many as 50,000 depositors in the Post Office Savings Bank putting in £50 in one lump sum in one year we know that not one of them is a member of the wage earning class.
Similarly with (b). The worker does not as a rule receive a wage enabling him to pay income tax. Incomes of less than £160 per annum are exempt from the payment of income tax, and we know that wage-workers getting so high a remuneration are difficult to find. We have the evidence of Sir Robert Giffen himself, given before the Labour Commission a few years ago, that the average wage of the working-class was 24s. 7d. a week or (say) £64 a year. Our experience tells us and this opinion is somewhat strengthened by the investigations, among others, of Messrs. Booth and Rowntree, that even this sum is exaggerated.
The statistician studying rates of wages in his library is too apt to mistake nominal for actual wages and forgets to make due allowance for periods of sickness, short time, or out of work. When these modifications have been made, and every day they become of greater importance, it, is found that the actual money wage differs very considerably from the nominal money wage.
With (c) I cannot now deal but on a further occasion I may he permitted to show that periods of trade prosperity and periods of national prosperity are not necessarily synonymous with periods of well-being for the working-class.
We see then that the grounds upon which our statistician bases his contentions are not relevant. The income tax returns will increase the more rapidly as the workers’ wage goes down and the savings in the Savings Banks are not appreciably affected when the working-class is at its lowest level of unemployment,
The reverse of the contention we are criticising is that the least benefit from our increasing powers of production go to the property owning class. The poor capitalist we are often told is not doing nearly so well as is the man who works for him, but we never see any haste on the part of the capitalist to exchange.
We are told by Sir Robert Giffen and other “authorities” that the capitalised value of the wealth of this country has increased in the last 40 years from £6,000,000,000 to £14,000,000,000. According to this statement the capital of the country has increased during the last 40 years at an average rate of £200,000,000 a year.
Here we have a spectacle of capitalist poverty ! The capitalist draws his revenues from industry—in essence, from the unpaid labour of the working-class. With it he satisfies his every whim, luxury, vice, necessity, and comfort. And even then he has an immense sum amounting to two hundred millions of pounds sterling to apply in further investment.
The worker, on the other hand, is enjoying with the progress of science and invention a speeding up of the machinery he minds, an intensification of his labour, a dwelling in the slums, polluted air in the streets, vitiated air in the factories. Clad in shoddy clothing manufactured for his sole use, fed on the poorest of food, he is told that the income tax returns show his growing prosperity.
The worker has a grim sense of humour but this must be too much even for him. Not always will he be content to produce the whole of the wealth and get for himself a beggarly pittance. He will one day awake to the fact that a parasitic class of rich idlers is fattening upon the results of his labours and he will then show the stuff that’s in him.
When that time comes woe betide the capitalist class who have robbed him and woe betide the apologists of that capitalist class—the economists and the statisicians unable to rise above their own class interests. The day is rapidly nearing when those who produce the wealth will control its production and its distribution and may one of those who lives to see that day be—
ECONOMICUS.