received nearly a half. Bowley shows that since 1880 the proportion taken by the income-tax-paying non-wageearning classes had increased its share by 5 per cent. Thus in the intervening 33 years the wage-earners, despite the fact that their actual receipts had increased by about a third, suffered a reduction in their share of the total income (which had nearly doubled) by 6 per cent. These classifications are naturally very arbitrary, and the proportions should not be interpreted too rigidly. But every latitude being allowed, the shares of the different classes give food for thought. Professor Bowley proceeds to demonstrate that the proportions that went to property and to services of all kinds (though the latter category embraces more people than the wage-earners only) remained the same in 1913 as in 1880, namely 37 per cent. to property and 62 per cent. to services. Sir Josiah Stamp's findings are in many ways similar.* He states that in 1914 about 8 per cent. of the total income went to less than one-tenth of 1 per cent. of the people. The next 22 per cent. of the total income went to about I per cent. of the people, and the next 15 per cent. of the total income to 4 per cent. of the people. Altogether 45 per cent. of the national dividend went to about 5 per cent. of the population. He submits, however, that although all classes may have become better off, they have kept their relative positions and proportions with remarkable stability so far as we can test." The same writer computes that in 1919 about one-twelfth of the total income was enjoyed by about one 480th of the people, and one-half of the income by between one-ninth and onetenth of the people.† * Wealth and Taxable Capacity, 1922, p. 87. † Ibid., p. 95. Taxation, of course, modifies these proportions, but the disparity remains considerable. It has been endeavoured in the preceding pages to indicate the extent and some of the causes of poverty, so far as one can judge from the few scientific inquiries that have yet been made. The chapter has been confined largely to a cold summary of the conclusions of the different investigators, no attempt having been made to describe the facts of poverty which are all too evident to anybody who cares to look around him. The nature and the meaning of poverty are best studied, not in wordy narrative, but in the actual manifestations in the slums and the casual wards. But observation, however sympathetic, of the miserable conditions in which a large proportion of the people exist does not of itself point to the cause of the evil. Even elaborate statistical inquiries, such as those outlined above, only touch the surface of the problem. Study of the outward effects of poverty is but a preliminary to the more difficult yet more important examination of its sources. The simple statement that poverty is mainly the result of unequal distribution does not carry one very ✓ far, and further inquiry into the industrial system is essential if one is to probe and endeavour to remove the roots of the evil. CHAPTER III. Population THE WAGES OF LABOUR. § I. THE SUPPLY OF LABOUR. Fundamental to all social problems is the question of population. The growth in the numbers of the people, meaning on the one hand an increase in productive force, on the other an increase in number of mouths to be fed, has given rise to much speculation as to future conditions. The name of Malthus is closely associated with the subject of population, and though it is over a century ago since he enunciated his famous doctrine, his views, with certain modifications, are still widely held.* Malthus wrote at a time when the economic and social conditions of the country were undergoing a rapid change. The revolutionary views prevalent at the time were reflected in the writings of many contemporaries who were sometimes prone to under-estimate the hard facts of life. Godwin, for instance, wrote a work on the equality of man. Having to face the question of a growing population pressing on food supplies, he contended that mind would one day become omnipotent over matter. Malthus, in his Essay on the Principle of Population, 1798, criticised these * Most of Malthus's ideas had been anticipated by previous thinkers, but he was the first to present the facts and principles in a clear and co-ordinated form. See C. E. Stangeland, Pre-Malthusian Doctrines of Population. writers as visionary, and maintained that they played too lightly with the vital question of subsistence. He held that any increase in the material welfare of the people must necessarily be followed by an addition to the population, which, in view of the limited bounty of nature, must in turn lead to a reduction in the standard of life. In the first edition of his work he stated, that "population, when unchecked, increases in a geometrical ratio, subsistence increases only in an arithmetical ratio."* The population, he submitted, would tend to double itself every twenty-five years. But, he went on to say, 'by that law of our nature which makes food necessary, the effects of these two unequal powers must be kept equal." Population is restricted, he said, by the relentless pressure of nature's limited resources, and also by vice. In his second edition (1803) Malthus was rather less dogmatic; realising that his mathematical presentation was not strictly true, he practically abandoned the use of the geometrical and arithmetical progressions, and contented himself with the simple statement of the law that population increases at a faster rate than food. In this edition, too, he added another " check" to the growth of population -moral restraint. His "checks" now fell into two categories, the "positive check," working through a high death rate, and the " preventive check," operating through a low birth rate. In the former class are disease, famine and war; in the latter are vice and intelligent restraint. Malthus's law of population is linked up with the tendency known in economics as the law of diminishing * In a geometrical progression the number increases through the multiplication by the given factor, whereas in a mathematical progression the number increases through the addition of the given factor. Thus, if 2 is taken as the factor, the geometrical progression would be (say) 10, 20, 40, 80, etc.; the arithmetical progression would be 10, 12, 14, 16, etc. returns to land. After a point, applications of capital and labour to land result in a less than proportional return; in other words, there is a tendency for agricultural output to increase at a slower rate than the capital and labour applied to land. If diminishing returns did not operate, Malthus's theory would be meaningless, since an increase in population would cause a proportional addition to food supplies, and the reduction in the standard of living feared by Malthus would therefore not come about. Thus there are two supplementary methods of approach to the problem of population. One is concerned primarily with the growth of population, the other deals with the rate of food production and the possibility of increasing it at least as quickly as the rate of population. The question of food supplies may be considered first. The problem of increasing the means of subsistence in proportion to the growth of population reIncreasing solves itself into that of countering the Food Supplies: Invention and tendency to diminishing returns. Economic Organisation. history is largely a record of the contest of man with the stinginess" of nature. The struggle has not been uniform: sometimes, as during the nineteenth century in England, man has appeared to be supremely dominant; at other times, as now, according to some writers, man's advantage is not so pronounced, and he has to labour hard to make ends meet. Malthus did not appreciate the power of man's ingenuity nor did he foresee the discoveries of the nineteenth century that, for the time at any rate, relieved the pressure on food supplies. The adage that "necessity is the mother of invention" was amply proved, showing that in invention, employing the term in its broadest sense, lies man's greatest hope of coping with the population problem. Since Malthus's time, the discovery of new wheat lands and of new SOC. ECON. 3 |