1 64 



NATURE 



[October 23, 1919 



which should be so added. The question was still 

 awaiting a final settlement at the outbreak of war. 



[The position of the railways is examined; the 

 small yield to the shareholders is set out; the need of 

 the expenditure of fresh capital to enable the com- 

 panies to cope with the growing traffic is stated; and 

 the address proceeds :• — ] 



There has been a persistent demand by labour 

 throughout the country for better pay, and an equally 

 persistent demand for more leisure. To these de- 

 mands no objection cjn be taken. On the contrary, 

 rightly understood, they must meet with approval by 

 all who desire to see the country, as a whole, happy 

 and prosperous. But we must consider how they can 

 be satisfied. 



The only source from which satisfaption can be 

 derived is the sum-total of the product of the industry 

 of the country, and indeed of the world, in the period 

 under consideration. It must be noted that in many 

 cases the product may not be realised within that 

 period, as, for example, when a manufacturer holds 

 large stocks of goods which he has not yet marketed, 

 but on which much the greater part of the cost has 

 been paid. It must also be noted that a very con- 

 siderable part of the industry of the country does not 

 add to the total product which is the subject of 

 division, but is, in fact, a charge on that product. The 

 whole burden is borne by those engaged in providing 

 commodities or services necessary for the members. 

 We touch at this point a very difficult problem, the 

 proper solution of which may possibly show us how 

 all our economic troubles may be ended. I can do 

 no more than state it as briefly as may be. 



There can be no question that a very great part 

 of human activities is spent, and the resulting product 

 used, in providing things which cannot be called 

 necessaries of existence. The simplest food, clothing, 

 and shelter may be said to cover all that comes under 

 this head. But life that gives us nothing but the 

 indispensable minimum of these essentials would be 

 so dull and monotonous as to be scarcely worth the 

 exertion needed to procure them. We must have 

 more than these if we are to get enjoyment as well 

 as mere life. How much more can we claim — perhaps 

 we might say, extort — from our environment? And 

 how shall this extra tribute be shared among us? 



If we made a complete analysis of the division of 

 the product of industry we should be astonished to 

 find how large is the amount which remains after the 

 essential demands have been satisfied. If we sought 

 to classify our expenditure we might come to some 

 such division as this : — 



On essential needs. 

 , On things making for the irreproachable amenities 

 of life. 



On luxuries which add to and aid our reasonable 

 enjoyment. 



On those which subserve mere pleasures. 



On extravagant expenditure for which no justifica- 

 tion can be offered. 



It is difficult to draw any clear line between the 

 heads of this very rough division. Each class passes 

 imperceptibly into the next. Fortunately for our pre- 

 sent purpose, we do not require to do this. It is 

 enough that we should admit that not all activi- 

 ties are well directed, and that we consume a great 

 many things we could do without. No class is ex- 

 empt from this blame, if blame it be. Each is dis- 

 posed to look askance at what is called the extrava- 

 gance of some other. When people talk of waste, 

 they often mean expenditure on things for which thev 

 themselves do not care. But the question is : How 

 can we check this extravagance and provide more 



NO. 2608, VOL. 104] 



fully for the more essential needs of the whole 

 people ? 



If rich men did not drive motor-cars or drink costly 

 wines, would the jxiople who produce these luxuries 

 be better off? Or if, instead of making these things, 

 they made articles needed for the mass of the people, 

 could these buy the result if they had no more means 

 than they now possess? Do we not come back at the 

 end to the proposition that men can have more only 

 if they have more to offer in exchange? 



It may be contended that men have obtained more 

 or less completely what they wanted most urgently. 

 They wanted shorter hours. In many trades they 

 have got them, and might have had them in more 

 had they gone about it in the right way. They were 

 not sufficiently desirous of having better houses, and 

 they failed to procure what their well-wishers desired 

 for them. 



A relatively small part of the population does un- 

 questionably get a very large share of the total income 

 produced by the whole community. Can we do any- 

 thing by which this share may be reduced without 

 bringing about greater evils than those w-e seek to 

 overcome ? The history of the sumptuary laws does not 

 encourage much hope that attempts to prevent expendi- 

 ture in particular directions will have much success. 

 My own studies had brought me, many years ago, to 

 the conclusion that in every industry examined there 

 is no way of giving to those engaged shares greatly 

 differing from what has been afforded in the fjast. 

 The margins on which manufacture in general is con- 

 ducted are too small to make it possible to give the 

 larger contributors to the ultimate result any con- 

 siderable addition to what they have been accustomed 

 to receive. This impression was confirmed by the 

 elaborate general survey of the industry of the king- 

 dom carried out by the Census of Production of 1907. 



No doubt iSbour (which is much the most important 

 item of cost) has obtained a gradually increasing pay- 

 ment, though not necessarily any larger proportionate 

 share. \ steady improvement in the methods in 

 which the labour of men is applied has resulted in 

 enabling a larger product to be obtained. Each new 

 implement, each fresh application of energy of various 

 kinds, as, for example, steam and electricity, has 

 meant that the individual man produced more in his 

 day's worlv, and he got, in fact, a larger return for 

 what he did. But at the same time the capital en- 

 gaged was increased, and consequently the proportion 

 of the product to be allotted to rewarding capital also 

 increased. It is neither possible nor desirable to 

 attempt to alter this state of things. 



The whole question has been treated in a very 

 masterly way by Prof. Bowley in a book published 

 some months ago, entitled "The Division of the Pro- 

 duct of Industry." Mr. Herbert G. Williams's pam- 

 phlet, entitled "The Nation's Income," also deals with 

 the same subject with much care and skill. In it he 

 makes a critical examination of Sir Leo Chiozza 

 Money's book entitled "Riches and Poverty." 



The conclusion reached in these publications is prac- 

 tically the same. It may be stated, in the cautious 

 words with which Mr. Bowley ends his book : — 



" This analysis has failed in part of its purpose if 

 it has not shown that the problem of securing the 

 wages, which people rather optimistically believe to 

 be immediately and permanently possible, is to a great 

 extent independent of the question of national and 

 individual ownership unless it is seriously believed 

 that production would inci-ease greatly if the State 

 were sole employer. The wealth of the country, how- 

 ever divided, was insufficient before the war for a 

 general high standard ; there is nothing as yet to show 



