bring them back to the fundamental purposes they were originally intended to fulfil, and which the conditions of modern society-its terrible contrasts of profuse wealth and grinding poverty, of the noblest intellectual achievements with the most degrading ignorance, of the most pure and elevated morality with the lowest depths of vice -render perhaps of more vital importance to our national well-being than at any previous epoch of our history? Shall we preserve and re-create, in accordance with the principle of religious liberty, or shall we utterly abolish our great historic National Church? CHAPTER XV INTEREST-BEARING FUNDS INJURIOUS AND UNJUST The "The millionaire is, and as long as he is allowed to exist, THE passage quoted at the head of this chapter shows such an extraordinary misconception as to the real nature of wealth that I propose to devote a few pages to a discussion that will, I think, show the fact to be the very reverse of that maintained by Mr. Bradley Martin, jun. He confounds money with wealth; the increase of money, or its equivalent claims on the earnings of other people -as increase of wealth. I maintain on the contrary that the result of numbers of rich men saving a large portion of their incomes every year, instead of making a community or a nation richer makes it poorer-makes it a smaller producer of real wealth-causes the bulk of its people to work harder and fare worse. Those who will read the following pages carefully, will, I think, admit that my conclusion is correct, and that it is by moving in the very opposite direction, so as to bring about the diminution rather than the increase of great individual money-wealth that the real wealth and well-being of the whole community is to be attained. Interest-bearing Funds a Danger to the Community. The evil effects of wealth-accumulation, as now understood, are by no means limited to those cases where it is accumulated in abnormally large amounts by individuals, but are not less real or less important when more widely distributed and devoted, as it so often is, to supporting a considerable section of the population in idleness and luxury during their whole lives. For this class of persons are not only, so far as they are idle, an incubus on the community, but, so far as they are luxurious, they become a far greater source of evil in withdrawing large bodies of labourers from the production of useful wealth and keeping them employed in useless or even injurious work. The thousands and tens of thousands whose lives are spent in the manufacture and sale of luxuries, ornaments, nick-knacks, and worthless toys, as well as the majority of those permanently occupied as domestic servants to the wealthy, or in connexion with horse-racing, yachting, and other amusements of the upper classes, represent not only so much lost productive power but are themselves a heavy burthen, since they are all supported by the productive labour of others. In an ideal social state no one would live idly and luxuriously on wealth produced by another. No one would be able to obtain surplus wealth, and no children would be brought up to a life of idleness, but would be taught that they are debtors to society for all that they receive and must therefore perform their fair share of useful work. In order to make true social progress progress we must always keep some such ideal in view; and this brings me to what I consider to be at the very root of the questionthe evil of all institutions which permit or favour the paying of (nominally) perpetual interest, income, or profits, on any invested capital, Real and Fictitious Wealth. Nothing is more certain than that wealth-real wealth -is continually used up and destroyed, and as continually reproduced by fresh labour. All articles of food, of clothing, of furniture, and even tools, machines, dwellings, books, works of art, and ornaments, are either wholly or partly used up day by day or year by year, and as continually reproduced; and it is those which are most continually consumed and reproduced which are, pre-eminently, beneficial wealth. If, then, a man acquires a large surplus of this real wealth beyond what he can consume himself, it must be either profitably consumed by others or be wasted by natural decay. In either case it soon ceases to exist. But our fiscal and legislative arrangements enable a man to change this perishable wealth into securities which bring him a permanent income -an income supposed to be perpetual, but at all events lasting long after the wealth of which it is the symbol, and which is supposed to produce it, has totally disappeared. Incomes thus derived constitute a tax or tribute on the community, for which it receives nothing in return, and may truly be termed fictitious wealth. To show that this is so, and at the same time to exhibit clearly not only the evil but the inherent absurdity of these arrangements, let us consider a few indisputable facts. Every year much surplus wealth is accumulated by individuals and is invested as reproductive capital. This invested capital goes on producing an income which, it is supposed, is and ought to be permanent; and as more and more surplus wealth is continually produced and invested, it is evident that the permanent incomes thus derived will continually increase, and thus in each successive generation a larger and larger number of persons will be enabled to live in idleness on incomes derived from this invested capital. But this is a state of things that evidently carries with it its own destruction, since a time must come when the number of idle persons living on "independent incomes," and the aggregate of those incomes, will be so great, that the working portion of the population will be ground down to penury in the attempt to pay them, and this will more quickly come about from the tendency of a large idle and luxurious class to withdraw labour from beneficial work to the production of useless luxuries. The end will inevitably be the worst kind of revolution, brought about by the determination of the labouring poor no longer to support the burthen of an ever-increasing class of idle rich. How to Abolish Fictitious Wealth. The only cure for this state of things (to which we are steadily drifting) is for our Legislature to acknowledge the principle and act on it, that all capital expenditure must be repaid (if at all) by means of terminable rentals or annuities (including interest and repayment of capital), in a limited term, such term never much to exceed the average duration of one generation-say 30 to 40 years; while all permanent works of general utility, such as railways, harbours, docks, canals, gas and water-works &c., shall, when the capital is thus repaid, revert to the State, to the Municipalities, or to other freely elected local authorities, and be thenceforth administered for the public benefit. By this measure alone a considerable portion of the permanent investments, which now enable wealthproducers to provide for the support of the next generation in idleness, would be abolished; but there would remain the largest and the least defensible of all the national debts of civilized nations. It is now generally admitted to be wrong for one generation, or even for one government, to borrow money for its own purposes (generally for the most wasteful and injurious of all purposeswar) and leave the debt as a burthen on its successors. How to Extinguish National and other Debt. Confining ourselves to our own National Debt, I maintain that it is an unmixed evil, as well as a cruel injustice to the present generation of workers; and I further VOL. II S |