144 SECTIONAL ADDRESSES. 



much more afEected by comparisons than by absolute facts." Under a 

 state of affairs in which accumulation, inheritance, and bequest have been 

 the rule, A finds himself in possession of 10 units out of a total of 10,000, 

 and he sees B enjoying 1,000 out of that total. His assumption may be 

 that if the present practice of inheritance did not exist, but some other 

 practice obtained in its place, he would enjoy some different number, a 

 number, in his judgment, much more than 10— say 20 — and B would 

 have less, say 500. Or perhaps he assumes that equality would reign, 

 and that with 500 inhabitants each would enjoy 20. This, so far, is only 

 an argument post hoc ergo propter hoc, for, failing demonstration, some 

 other reason majr exist for the difference. But it is almost invariably 

 assumed in this, as in other discussions of distribution of wealth, that 

 under a system in which inheritance was not the rule, the aggregate jDroduc- 

 tion to be divided would be at least the same — -viz. 10,000 units^ — -whereas 

 of course it remains a probability that it would be either less or more, 

 and an improbability that it would be identical, for the inheritance system 

 must have some appreciable economic effect on accumulation and produc- 

 tion. Sujjpose, for example, that inheritance, whatever its effects on 

 distribution, has a net beneficial effect on aggregate production ; then it 

 might well be that, instead of 10,000 units, there would in its absence be 

 only 8,000, of which A would have 18 and B 500— that is, the distribution 

 is not so extreme, though, measured absolutelj^, all are worse oft'. Now 

 men are not given to the comparison of absolute changes, mainly because 

 they arc not available at any moment of time, and arc at best historical. 

 Thej^ do not compare their own absolute position at one moment in their 

 actual condition with what it would be in liypothetical conditions. 

 Neither does it im2)ress them very much if it is proved to them that under 

 the existing scheme of society they are four or five times as well off abso- 

 lutely in goods and services as their forefathers in similar circumstances 

 a hundred years ago. They compare themselves with their fellows at 

 the same moment of time. So a man may be even worse oft' absolutely, 

 but his sense of social justice will be less oft'ended if the difference between 

 himself and B is less marked than it was. He would rather have 10 jjcr 

 cent, of a moderate cake than 8 per cent, of a larger one, because he is 

 always comparing his angle of the sector with another man's angle or the 

 length of the arc, but never thinks of the cubic content. As a matter of 

 fact, any sense of injustice in distribution based upon this attitude of mind 

 is a very poor measure of actual economic welfare. 



We can thus postulate three possible positions of the economic aggre- 

 gate for a community which results when a system of unlimited inheritance 

 is banned as compared with a system where inheritance is in force. The 

 first is that it would be lower, the second that it would be the same, and 

 the third that it would be greater. But this tells us little about the 



f '•> Dr. Daltou, in touching upon ambiguities and confusions between absolute and 

 relative shares, dismisses this aspect by accepting it. ' Though absolute shares are 

 the chief determinant of actual economic welfare, relative shares are one of the 

 determinants of the potential economic welfare, which might be realised under a 

 difierent scheme of distribution. Human psj'chology is such that the satisfaction, 

 and hence the economic welfare derived from an income, depends not onl,y on the 

 absolute size of this income, but also on its relative size as compared with other 

 incomes.' Op. cit., p. 161. 



