below the wage of the least-paid worker. It is deemed advisable not to pay more than this sum lest malingering be encouraged. Further, to pay higher benefits might involve larger contributions than the poorer workers could afford. On the other hand, a low flat-rate benefit causes hardship to people who are usually in receipt of high wages, and who have become accustomed to a higher standard of life. Even under the separate schemes it should not be impossible to remedy this defect; but it would be much easier if the schemes were combined and a single payment, graduated according to income, secured benefits varying in proportion. The difficulties in the way of unification are enormous, but they should not prove insuperable. One State of the chief obstacles is presented by the Monopoly vested interests of the different private or State Competition? bodies at present sharing in the administration of the various schemes. The problem is wider than that of merely countering the influence of the big companies and friendly societies in Parliament and elsewhere. Thousands of collectors and other employees of the numerous insurance bodies afford a kind of vested interest with which it will not be easy to deal. Many of these fear that a general national scheme would cause unemployment among their members, and they are likely to oppose, therefore, any attempt, at unification that might prejudice their livelihood. If any precipitate action is taken such unemployment might easily result, for the number of additional officials required by the extended State scheme would not be sufficient to absorb all those discharged from private employment. Yet it must be recognised that the present system is extremely wasteful; that thousands of insurance collectors are doing work which would be unnecessary, or at least capable of reduction, under a State scheme.

Another difficulty would arise in connection with compensation, if the State decided to monopolise all the social insurance services. How much should be paid to the big insurance companies? At the other extreme, how should one deal with a collector who has invested his savings in the purchase of a particular "round," established by a predecessor?

Solution of difficulties such as these would be much easier if the State decided to compete with the existing private bodies, with the intention of gradually ousting them from the field, rather than to assume forthwith a monopoly of all Social Insurance. Nationalisation of insurance is, in this respect, different from (say) nationalisation of the railways. In the event of the State undertaking railway transport, it would have to secure the existing railroads first, for competing railway tracks would obviously be out of the question. But in the case of the insurance industry, the fixed capital is of comparatively small amount, and it would be perfectly practicable for the State to supply policies in competition with the existing companies. Decision to compete rather than monopolise would obviate the difficulty of compensation, while it would also stimulate the companies to reduce their management expenses and to give better services.

Nor would the danger of unemployment among the insurance workers be as serious as if the State suddenly assumed complete monopoly of the industry. Absorption of these workers by other occupations would be easier if spread over a period of years. In the meantime, there would be a natural shrinkage in the number of insurance employees through death and retirement, while youths who would normally enter the service of the companies would seek employment elsewhere. In a similar manner, capital that would ordinarily be invested in this section of the

insurance business would seek fresh channels, though the original capital would continue for many years to yield a

return.

Lastly, it would hardly be practicable at present to effect a complete State monopoly of Social Insurance unless the State determined to monopolise the entire insurance industry. A large number of workers would want to insure themselves for greater benefits than those provided by the State, and would take advantage of privately administered schemes. Further, there is no hard and fast distinction between burial insurance, so called, and life insurance for larger amounts. The question of the State supplying ordinary life, endowment, and other forms of insurance, not specifically affecting the working classes, and the possibility of the State monopolising the whole of the insurance industry in all its branches, do not come within the present discussion. So far as Social Insurance in the strict sense is concerned, it would appear that, for reasons of both economy and expediency, a policy of State competition is preferable to one of immediate monopoly.

CHAPTER XIV.

Housing and
Health.

HOUSING.

There is an intimate connection between the health of the people and the housing conditions in which they live. Overcrowding and illhealth go together, and most public medical officers put unsatisfactory dwellings and surroundings in the first rank of adverse influences.* Reference to the vital and similar statistics of different districts shows discrepancies that can doubtless be attributed largely to the respective housing conditions in those areas. Thus, the death rate in Hampstead Garden Suburb is considerably lower than that in the East End of London, that of Bournville much lower than the death rate in the industrial parts of Birmingham. In Finsbury the general death rate in 1906 was 6.4 per 1000 in houses of four or more rooms, but 39′0 in one room houses or tenements.

The vicious effects of unhealthy houses are especially marked in infant mortality. In Glasgow in 1913 the death rates per 1,000 were: (a) for infants under 1, 210 in one room houses and 103 in houses of 4 rooms and over; (b) for children between 1 and 5, 41 and 10 respectively.† The

* A few authorities consider the influence of bad housing on health to be less harmful than is popularly supposed. Professor K. Pearson, for instance, considers that "the effect of home influence is not one-tenth that of heredity." See A. Newsholme, The Elements or Vital Statistics, 1923, Ch. XXVI., for the different views. † A. K. Chalmers, quoted in Newsholme., op. cit., p. 307.

following table shows among other things that the infantile mortality of a Birmingham artisan area with bad housing was nearly twice that of a similar class area in the same town where the housing was of a better standard.

HOUSING AND HEALTH IN BIRMINGHAM, 1912-16.

Statistics for tuberculosis and other diseases are no less significant. Overcrowding, absence of sunlight, insufficient ventilation and sanitation are conducive to the spread of tuberculosis, which is the cause of 9 per cent. of the total deaths. It is proved that this disease and others are heaviest where the population is overcrowded. Slum clearance and re-housing would enormously reduce the mortality rates, and incidentally would effect a large saving of the money now devoted to combating disease. Further, the present conditions give insufficient privacy and are detrimental to character and sobriety. Reports of crime and intemperance prove that the demolition of slum property and the re-housing of the displaced tenants in better dwellings and surroundings are invariably followed by a general improvement in life and conduct.*

*See, for example, J. A. Harford, Memorandum of the Housing of the Dispossessed in Liverpool, 1917.

SOC. ECON.

23