Progress and Poverty

There is this difference where a man works for himself, or where, when working for an employer, he takes his wages in kind, his wages depend upon the result of his labor. Should that, from any misadventure, prove futile, he gets nothing. When he works for an employer, however, he gets his wages anyhow—they depend upon the performance of the labor, not upon the result of the labor.

There is, and always has been, a widespread belief among the more comfortable classes that the poverty and suffering of the masses are due to their lack of industry, frugality, and intelligence. This belief, which at once soothes the sense of responsibility and flatters by its suggestion of superiority, is probably even more prevalent in countries like the United States, where all men are politically equal, and where, owing to the newness of society, the differentiation into classes has been of individuals rather than of families, than it is in older countries, where the lines of separation have been longer, and are more sharply, drawn.

If each laborer in performing the labor really creates the fund from which his wages are drawn, then wages cannot be diminished by the increase of laborers, but, on the contrary, as the efficiency of labor manifestly increases with the number of laborers, the more laborers, other things being equal, the higher should wages be.

Just as the subsistence of the laborers who built the Pyramids was drawn not from a previously boarded stock, but from the constantly recurring crops of the Nile Valley; just as a modern government when it undertakes a great work of years does not appropriate to it wealth already produced, but wealth yet to be produced, which is taken from producers in taxes as the work progresses; so it is that the subsistence of the laborers engaged in production which does not directly yield subsistence comes from the production of subsistence in which others are simultaneously engaged.

The great cause of inequality in the distribution of wealth is inequality in the ownership of land. The ownership of land is the great fundamental fact which ultimately determines the social, the political, and consequently the intellectual and moral condition of a people.

It is but natural for those who can trace their own better circumstances to the superior industry and frugality that gave them a start, and the superior intelligence that enabled them to take advantage of every opportunity,∗ to imagine that those who remain poor do so simply from lack of these qualities.

But whether the amount of capital ever does limit the productiveness of industry, and thus fix a maximum which wages cannot exceed, it is evident that it is not from any scarcity of capital that the poverty of the masses in civilized countries proceeds. For not only do wages nowhere reach the limit fixed by the productiveness of industry, but wages are relatively the lowest where capital is most abundant.

Capital is but a form of labor, and its distinction from labor is in reality but a subdivision, just as the division of labor into skilled and unskilled would be.

All I wish to make clear is that, without any increase in population, the progress of invention constantly tends to give a larger proportion of the produce to the owners of land, and a smaller and smaller proportion to labor and capital.

The amount of wealth produced is nowhere commensurate with the desire for wealth, and desire mounts with every additional opportunity for gratification.

Hitherto, it is questionable if all the mechanical inventions yet made have lightened the day’s toil of any human being. John Stuart Mill.

To ascertain the effects of material progress upon the distribution of wealth, let us, therefore, consider the effects of increase of population apart from improvement in the arts, and then the effect of improvement in the arts apart from increase of population.