Review of the Book
Social Problems
by Henry George
Alfred Russel Wallace
[A letter to the editor, printed in The Times
(London) of 29 January 1884]
The writer of the review of Mr. George's "Social Problems"
in The Times of Wednesday last comments with some show of
justice on the deficiency of proof of his fundamental position of "increasing
want with increasing wealth," and remarks:--"Yet this is
what Mr. George really needs to prove. Any one can see that rich men
constantly get richer, but assuredly it does not necessarily follow
that poor men get, not merely comparatively and relatively, but
absolutely poorer."
Now, although I think Mr. George has proved this fundamental position
fairly well, yet he has done so in a very discursive manner, and
chiefly by illustrations and general historical comparisons; whereas
there are other and very powerful arguments which he has altogether
omitted. Although to develop these fully would require an elaborate
essay, yet their general nature can be briefly set forth, and as the
subject is one of the greatest possible interest, I ask permission to
state them in The Times, and to show that, when rich men
constantly get richer, poor men necessarily get poorer.
Let us suppose, to begin with, a society in which all men are engaged
in productive work and there is no great difference of condition. Much
wealth would be produced, and, being distributed by free exchange,
there would be no poverty and no exceptional riches. But under our
present laws and customs inequality would very soon arise, and after a
time we should find a certain proportion of rich men who have no need
to work and who do not work. Let this proportion at first be
small--say, 2 per cent. of the whole population: and the first effect
evidently is that the productive labour formerly done by the whole is
now done by 98 per cent. of the population, and to that extent each
has to work harder. But that is only a very small part of the effect
produced; for the rich men, just in proportion to their riches and to
increasing luxury, divert labour from productive to unproductive
channels. Not only do they employ large numbers of personal servants,
but they keep a host of men employed in producing luxuries who before
produced necessaries and comforts for the whole population. Showy
dress and furniture, horses and carriages, feasting, entertainments,
and all the varied forms of wasting money on useless trifles which
arise with superfluous wealth, employ an army of labourers who are
absolutely unproductive as regards the rest of the community. If in
these various ways each rich man on the average employs only eight men
in his service, then we have one tenth of the population practically
idle; and all the food, clothing, and comforts they require have to be
produced by the remaining 90 per cent., who will therefore have to
work harder. Now, as wealth increases, not only does the number of
those who live in luxury increase, but the amount of individual wealth
increases, till millionaires, at first rare phenomena, become common
as they are now. With this increase, therefore, the number of those
employed unproductively in ministering to luxury increases still more
rapidly, because the very servants and dependants of the rich are now
themselves rich and live in luxury. Hence the proportion of
unproductive to productive labour increases continually, which means
in other words that the productive labourers have to work harder than
ever and for longer hours, and this they would certainly do only under
stress of necessity--that is, of poverty. Poverty, therefore,
increases with increasing wealth; and this result is contained in the
following passage from Adam Smith, Book II., chap. 3:--"Both
productive and unproductive labourers, and those who do not labour at
all, are all equally maintained by the annual produce of the land and
labour of the country. Accordingly, therefore, as a smaller or greater
proportion of it is employed in maintaining unproductive hands, the
more in the one case, and the less in the other, will remain for the
productive."
The same general result may be reached through another principle laid
down by Adam Smith--that wealth is really command over labour or the
power of purchasing labour to a practically unlimited extent. It
follows that great wealth can only arise when numbers of men are
forced to labour by their necessities--that is, when they are poor;
and the increase of wealth necessarily implies the increase of those
who are obliged to work and create that wealth, not for themselves,
but for others.
Combining these two arguments, we see that if wealth goes on
continually increasing, as it is admitted that it does, then poverty
must go on also increasing, absolutely as well as relatively, because
a smaller and smaller proportion of the population have to do the
productive work of the whole population, and they can only be forced
to do this by the pressure of poverty. There will be a steady progress
from a period when all worked and none were either rich or poor--as in
all newly-settled countries--to one where half the population are
either rich or engaged in ministering to the rich, and the other half
forced by poverty to continuous labour, and each step of the progress
must intensify the difference. It is therefore almost equivalent to a
contradiction in terms to maintain that poverty can be diminished
while individual wealth goes on increasing.
I feel only too painfully that I have not put this argument so
clearly and convincingly as it might be put; but I feel sure
nevertheless that economists will see that it expresses a fundamental
truth.
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