The Crown of Wild Olive Part 7

23. Money, therefore, cannot be arbitrarily multiplied, any more than t.i.tle-deeds can. So long as the existing wealth or available labour is not fully represented by the currency, the currency may be increased without diminution of the a.s.signed worth of its pieces. But when the existing wealth, or available labour is once fully represented, every piece of money thrown into circulation diminishes the worth of every other existing piece, in the proportion it bears to the number of them, provided the new piece be received with equal credit; if not, the depreciation of worth takes place, according to the degree of its credit.

24. When, however, new money, composed of some substance of supposed intrinsic value (as of gold), is brought into the market, or when new notes are issued which are supposed to be deserving of credit, the desire to obtain the money will, under certain circ.u.mstances, stimulate industry: an additional quant.i.ty of wealth is immediately produced, and if this be in proportion to the new claims advanced, the value of the existing currency is undepreciated. If the stimulus given be so great as to produce more goods than are proportioned to the additional coinage, the worth of the existing currency will be raised.

Arbitrary control and issues of currency affect the production of wealth, by acting on the hopes and fears of men, and are, under certain circ.u.mstances, wise. But the issue of additional currency to meet the exigencies of immediate expense, is merely one of the disguised forms of borrowing or taxing. It is, however, in the present low state of economical knowledge, often possible for governments to venture on an issue of currency, when they could not venture on an additional loan or tax, because the real operation of such issue is not understood by the people, and the pressure of it is irregularly distributed, and with an unperceived gradation.

25. The use of substances of intrinsic value as the materials of a currency, is a barbarism;--a remnant of the conditions of barter, which alone render commerce possible among savage nations. It is, however, still necessary, partly as a mechanical check on arbitrary issues; partly as a means of exchanges with foreign nations. In proportion to the extension of civilization, and increase of trustworthiness in Governments, it will cease. So long as it exists, the phenomena of the cost and price of the articles used for currency are mingled with those proper to currency itself, in an almost inextricable manner: and the market worth of bullion is affected by mult.i.tudinous accidental circ.u.mstances, which have been traced, with more or less success, by writers on commercial operations: but with these variations the true political economist has no more to do than an engineer, fortifying a harbour of refuge against Atlantic tide, has to concern himself with the cries or quarrels of children who dig pools with their fingers for its streams among the sand.

26. III.--RICHES. According to the various industry, capacity, good fortune, and desires of men, they obtain greater or smaller share of, and claim upon, the wealth of the world.

The inequalities between these shares, always in some degree just and necessary, may be either restrained by law or circ.u.mstance within certain limits; or may increase indefinitely.

Where no moral or legal restraint is put upon the exercise of the will and intellect of the stronger, shrewder, or more covetous men, these differences become ultimately enormous. But as soon as they become so distinct in their extremes as that, on one side, there shall be manifest redundance of possession, and on the other manifest pressure of need,--the terms "riches" and "poverty" are used to express the opposite states; being contrary only as the terms "warmth" and "cold" are contraries, of which neither implies an actual degree, but only a relation to other degrees, of temperature.

27. Respecting riches, the economist has to inquire, first, into the advisable modes of their collection; secondly, into the advisable modes of their administration.

Respecting the collection of national riches, he has to inquire, first, whether he is justified in calling the nation rich, if the quant.i.ty of wealth it possesses relatively to the wealth of other nations, be large; irrespectively of the manner of its distribution. Or does the mode of distribution in any wise affect the nature of the riches? Thus, if the king alone be rich--suppose Croesus or Mausolus--are the Lydians or Carians therefore a rich nation? Or if a few slave-masters are rich, and the nation is otherwise composed of slaves, is it to be called a rich nation? For if not, and the ideas of a certain mode of distribution or operation in the riches, and of a certain degree of freedom in the people, enter into our idea of riches as attributed to a people, we shall have to define the degree of fluency, or circulative character which is essential to the nature of common wealth; and the degree of independence of action required in its possessors. Questions which look as if they would take time in answering.[13]

28. And farther. Since the inequality, which is the condition of riches, may be established in two opposite modes--namely, by increase of possession on the one side, and by decrease of it on the other--we have to inquire, with respect to any given state of riches, precisely in what manner the correlative poverty was produced: that is to say, whether by being surpa.s.sed only, or being depressed also; and if by being depressed, what are the advantages, or the contrary, conceivable in the depression. For instance, it being one of the commonest advantages of being rich to entertain a number of servants, we have to inquire, on the one side, what economical process produced the riches of the master; and on the other, what economical process produced the poverty of the persons who serve him; and what advantages each, on his own side, derives from the result.

29. These being the main questions touching the collection of riches, the next, or last, part of the inquiry is into their administration.

Their possession involves three great economical powers which require separate examination: namely, the powers of selection, direction, and provision.

The power of SELECTION relates to things of which the supply is limited (as the supply of best things is always). When it becomes matter of question to whom such things are to belong, the richest person has necessarily the first choice, unless some arbitrary mode of distribution be otherwise determined upon. The business of the economist is to show how this choice may be a wise one.

The power of DIRECTION arises out of the necessary relation of rich men to poor, which ultimately, in one way or another, involves the direction of, or authority over, the labour of the poor; and this nearly as much over their mental as their bodily labour. The business of the economist is to show how this direction may be a Just one.

The power of PROVISION is dependent upon the redundance of wealth, which may of course by active persons be made available in preparation for future work or future profit; in which function riches have generally received the name of capital; that is to say, of head-, or source-material. The business of the economist is to show how this provision may be a Distant one.

30. The examination of these three functions of riches will embrace every final problem of political economy;--and, above, or before all, this curious and vital problem,--whether, since the wholesome action of riches in these three functions will depend (it appears), on the Wisdom, Justice, and Farsightedness of the holders; and it is by no means to be a.s.sumed that persons primarily rich, must therefore be just and wise,--it may not be ultimately possible so, or somewhat so, to arrange matters, as that persons primarily just and wise, should therefore be rich?

Such being the general plan of the inquiry before us, I shall not limit myself to any consecutive following of it, having hardly any good hope of being able to complete so laborious a work as it must prove to me; but from time to time, as I have leisure, shall endeavour to carry forward this part or that, as may be immediately possible; indicating always with accuracy the place which the particular essay will or should take in the completed system.

FOOTNOTES:

[10] _See_ Appendix I.

[11] Observe these definitions,--they are of much importance,--and connect with them the sentences in italics on this and the next page.

[12] [I cannot now recast these sentences, pedantic in their generalization, and intended more for index than statement, but I must guard the reader from thinking that I ever wish for cheapness by bad quality. A poor boy need not always learn mathematics; but, if you set him to do so, have the farther kindness to give him good compa.s.ses, not cheap ones, whose points bend like lead.]

[13] [I regret the ironical manner in which this pa.s.sage, one of great importance in the matter of it, was written. The gist of it is, that the first of all inquiries respecting the wealth of any nation is not, how much it has; but whether it is in a form that can be used, and in the possession of persons who can use it.]

CHAPTER II.

STORE-KEEPING.

31. The first chapter having consisted of little more than definition of terms, I purpose, in this, to expand and ill.u.s.trate the given definitions.

The view which has here been taken of the nature of wealth, namely, that it consists in an intrinsic value developed by a vital power, is directly opposed to two nearly universal conceptions of wealth. In the a.s.sertion that value is primarily intrinsic, it opposes the idea that anything which is an object of desire to numbers, and is limited in quant.i.ty, so as to have rated worth in exchange, may be called, or virtually become, wealth. And in the a.s.sertion that value is, secondarily, dependent upon power in the possessor, it opposes the idea that the worth of things depends on the demand for them, instead of on the use of them. Before going farther, we will make these two positions clearer.

32. I. First. All wealth is intrinsic, and is not const.i.tuted by the judgment of men. This is easily seen in the case of things affecting the body; we know, that no force of fantasy will make stones nouris.h.i.+ng, or poison innocent; but it is less apparent in things affecting the mind.

We are easily--perhaps willingly--misled by the appearance of beneficial results obtained by industries addressed wholly to the gratification of fanciful desire; and apt to suppose that whatever is widely coveted, dearly bought, and pleasurable in possession, must be included in our definition of wealth. It is the more difficult to quit ourselves of this error because many things which are true wealth in moderate use, become false wealth in immoderate; and many things are mixed of good and evil,--as mostly, books, and works of art,--out of which one person Will get the good, and another the evil; so that it seems as if there were no fixed good or evil in the things themselves, but only in the view taken, and use made of them.

But that is not so. The evil and good are fixed; in essence, and in proportion. And in things in which evil depends upon excess, the point of excess, though indefinable, is fixed; and the power of the thing is on the hither side for good, and on the farther side for evil. And in all cases this power is inherent, not dependent on opinion or choice.

Our thoughts of things neither make, nor mar their eternal force; nor--which is the most serious point for future consideration--can they prevent the effect of it (within certain limits) upon ourselves.

33. Therefore, the object of any special a.n.a.lysis of wealth will be not so much to enumerate what is serviceable, as to distinguish what is destructive; and to show that it is inevitably destructive; that to receive pleasure from an evil thing is not to escape from, or alter the evil of it, but to be _altered by_ it; that is, to suffer from it to the utmost, having our own nature, in that degree, made evil also. And it may be shown farther, that, through whatever length of time or subtleties of connexion the harm is accomplished, (being also less or more according to the fineness and worth of the humanity on which it is wrought), still, nothing _but_ harm ever comes of a bad thing.

34. So that, in sum, the term wealth is never to be attached to the _accidental object of a morbid_ desire, but only to the _constant object of a legitimate one_.[14] By the fury of ignorance, and fitfulness of caprice, large interests may be continually attached to things unserviceable or hurtful; if their nature could be altered by our pa.s.sions, the science of Political Economy would remain, what it has been hitherto among us, the weighing of clouds, and the portioning out of shadows. But of ignorance there is no science; and of caprice no law.

Their disturbing forces interfere with the operations of faithful Economy, but have nothing in common with them: she, the calm arbiter of national destiny, regards only essential power for good in all that she acc.u.mulates, and alike disdains the wanderings[15] of imagination, and the thirsts of disease.

35. II. Secondly. The a.s.sertion that wealth is not _only_ intrinsic, but dependent, in order to become effectual, on a given degree of vital power in its possessor, is opposed to another popular view of wealth;--namely, that though it may always be const.i.tuted by caprice, it is, when so const.i.tuted, a substantial thing, of which given quant.i.ties may be counted as existing here, or there, and exchangeable at rated prices.

In this view there are three errors. The first and chief is the overlooking the fact that all exchangeableness of commodity, or effective demand for it, depends on the sum of capacity for its use existing, here or elsewhere. The book we cannot read, or picture we take no delight in, may indeed be called part of our wealth, in so far as we have power of exchanging either for something we like better. But our power of effecting such exchange, and yet more, of effecting it to advantage, depends absolutely on the number of accessible persons who can understand the book, or enjoy the painting, and who will dispute the possession of them. Thus the actual worth of either, even to us, depends no more on their essential goodness than on the capacity existing somewhere for the perception of it; and it is vain in any completed system of production to think of obtaining one without the other. So that, though the true political economist knows that co-existence of capacity for use with temporary possession cannot be always secured, the final fact, on which he bases all action and administration, is that, in the whole nation, or group of nations, he has to deal with, for every atom of intrinsic value produced he must with exactest chemistry produce its twin atom of acceptant digestion, or understanding capacity; or, in the degree of his failure, he has no wealth. Nature's challenge to us is, in earnest, as the a.s.syrians mock; "I will give thee two thousand horses, if thou be able on thy part to set riders upon them." Bavieca's paces are brave, if the Cid backs him; but woe to us, if we take the dust of capacity, wearing the armour of it, for capacity itself, for so all procession, however goodly in the show of it, is to the tomb.

36. The second error in this popular view of wealth is, that in giving the name of wealth to things which we cannot use, we in reality confuse wealth with money. The land we have no skill to cultivate, the book which is sealed to us, or dress which is superfluous, may indeed be exchangeable, but as such are nothing more than a c.u.mbrous form of bank-note, of doubtful or slow convertibility. As long as we retain possession of them, we merely keep our bank-notes in the shape of gravel or clay, of book-leaves, or of embroidered tissue. Circ.u.mstances may, perhaps, render such forms the safest, or a certain complacency may attach to the exhibition of them; into both these advantages we shall inquire afterwards; I wish the reader only to observe here, that exchangeable property which we cannot use is, to us personally, merely one of the forms of money, not of wealth.

37. The third error in the popular view is the confusion of Guardians.h.i.+p with Possession; the real state of men of property being, too commonly, that of curators, not possessors, of wealth.

A man's power over his property is at the widest range of it, fivefold; it is power of Use, for himself, Administration, to others, Ostentation, Destruction, or Bequest: and possession is in use only, which for each man is sternly limited; so that such things, and so much of them as he can use, are, indeed, well for him, or Wealth; and more of them, or any other things, are ill for him, or Illth.[16] Plunged to the lips in Orinoco, he shall drink to his thirst measure; more, at his peril: with a thousand oxen on his lands, he shall eat to his hunger measure; more, at his peril. He cannot live in two houses at once; a few bales of silk or wool will suffice for the fabric of all the clothes he can ever wear, and a few books will probably hold all the furniture good for his brain.

Beyond these, in the best of us but narrow, capacities, we have but the power of administering, or _mal_-administering, wealth: (that is to say, distributing, lending, or increasing it);--of exhibiting it (as in magnificence of retinue or furniture),--of destroying, or, finally, of bequeathing it. And with mult.i.tudes of rich men, administration degenerates into curators.h.i.+p; they merely hold their property in charge, as Trustees, for the benefit of some person or persons to whom it is to be delivered upon their death; and the position, explained in clear terms, would hardly seem a covetable one. What would be the probable feelings of a youth, on his entrance into life, to whom the career hoped for him was proposed in terms such as these: "You must work unremittingly, and with your utmost intelligence, during all your available years, you will thus acc.u.mulate wealth to a large amount; but you must touch none of it, beyond what is needful for your support.

Whatever sums you gain, beyond those required for your decent and moderate maintenance, and whatever beautiful things you may obtain possession of, shall be properly taken care of by servants, for whose maintenance you will be charged, and whom you will have the trouble of superintending, and on your deathbed you shall have the power of determining to whom the acc.u.mulated property shall belong, or to what purposes be applied."

38. The labour of life, under such conditions, would probably be neither zealous nor cheerful; yet the only difference between this position and that of the ordinary capitalist is the power which the latter supposes himself to possess, and which is attributed to him by others, of spending his money at any moment. This pleasure, taken _in the imagination of power to part with that with which we have no intention of parting_, is one of the most curious, though commonest forms of the Eidolon, or Phantasm of Wealth. But the political economist has nothing to do with this idealism, and looks only to the practical issue of it--namely, that the holder of wealth, in such temper, may be regarded simply as a mechanical means of collection; or as a money-chest with a slit in it, not only receptant but suctional, set in the public thoroughfare;--chest of which only Death has the key, and evil Chance the distribution of the contents. In his function of Lender (which, however, is one of administration, not use, as far as he is himself concerned), the capitalist takes, indeed, a more interesting aspect; but even in that function, his relations with the state are apt to degenerate into a mechanism for the convenient contraction of debt;--a function the more mischievous, because a nation invariably appeases its conscience with respect to an unjustifiable expense, by meeting it with borrowed funds, expresses its repentance of a foolish piece of business, by letting its tradesmen wait for their money, and always leaves its descendants to pay for the work which will be of the least advantage to them.[17]

39. Quit of these three sources of misconception, the reader will have little farther difficulty in apprehending the real nature of Effectual value. He may, however, at first not without surprise, perceive the consequences involved in his acceptance of the definition. For if the actual existence of wealth be dependent on the power of its possessor, it follows that the sum of wealth held by the nation, instead of being constant, or calculable, varies hourly, nay, momentarily, with the number and character of its holders! and that in changing hands, it changes in quant.i.ty. And farther, since the worth of the currency is proportioned to the sum of material wealth which it represents, if the sum of the wealth changes, the worth of the currency changes. And thus both the sum of the property, and power of the currency, of the state, vary momentarily as the character and number of the holders. And not only so, but different rates and kinds of variation are caused by the character of the holders of different kinds of wealth. The transitions of value caused by the character of the holders of land differ in mode from those caused by character in holders of works of art; and these again from those caused by character in holders of machinery or other working capital. But we cannot examine these special phenomena of any kind of wealth until we have a clear idea of the way in which true currency expresses them; and of the resulting modes in which the cost and price of any article are related to its value. To obtain this we must approach the subject in its first elements.

40. Let us suppose a national store of wealth, composed of material things either useful, or believed to be so, taken charge of by the Government,[18] and that every workman, having produced any article involving labour in its production, and for which he has no immediate use, brings it to add to this store, receiving from the Government, in exchange, an order either for the return of the thing itself, or of its equivalent in other things, such as he may choose out of the store, at any time when he needs them. The question of equivalence itself (how much wine a man is to receive in return for so much corn, or how much coal in return for so much iron) is a quite separate one, which we will examine presently. For the time, let it be a.s.sumed that this equivalence has been determined, and that the Government order, in exchange for a fixed weight of any article (called, suppose _a_), is either for the return of that weight of the article itself, or of another fixed weight of the article _b_, or another of the article _c_, and so on.

Now, supposing that the labourer speedily and continually presents these general orders, or, in common language, "spends the money," he has neither changed the circ.u.mstances of the nation, nor his own, except in so far as he may have produced useful and consumed useless articles, or _vice versa_. But if he does not use, or uses in part only, the orders he receives, and lays aside some portion of them; and thus every day bringing his contribution to the national store, lays by some per-centage of the orders received in exchange for it, he increases the national wealth daily by as much as he does not use of the received order, and to the same amount acc.u.mulates a monetary claim on the Government. It is, of course, always in his power, as it is his legal right, to bring forward this acc.u.mulation of claim, and at once to consume, destroy, or distribute, the sum of his wealth. Supposing he never does so, but dies, leaving his claim to others, he has enriched the State during his life by the quant.i.ty of wealth over which that claim extends, or has, in other words, rendered so much additional life possible in the State, of which additional life he bequeaths the immediate possibility to those whom he invests with his claim. Supposing him to cancel the claim, he would distribute this possibility of life among the nation at large.

41. We hitherto consider the Government itself as simply a conservative power, taking charge of the wealth entrusted to it.

But a Government may be more or less than a conservative power. It may be either an improving, or destructive one.

If it be an improving power, using all the wealth entrusted to it to the best advantage, the nation is enriched in root and branch at once, and the Government is enabled, for every order presented, to return a quant.i.ty of wealth greater than the order was written for, according to the fructification obtained in the interim. This ability may be either concealed, in which case the currency does not completely represent the wealth of the country, or it may be manifested by the continual payment of the excess of value on each order, in which case there is (irrespectively, observe, of collateral results afterwards to be examined) a perpetual rise in the worth of the currency, that is to say, a fall in the price of all articles represented by it.

42. But if the Government be destructive, or a consuming power, it becomes unable to return the value received on the presentation of the order.

This inability may either be concealed by meeting demands to the full, until it issue in bankruptcy, or in some form of national debt;--or it may be concealed during oscillatory movements between destructiveness and productiveness, which result on the whole in stability;--or it may be manifested by the consistent return of less than value received on each presented order, in which case there is a consistent fall in the worth of the currency, or rise in the price of the things represented by it.

43. Now, if for this conception of a central Government, we subst.i.tute that of a body of persons occupied in industrial pursuits, of whom each adds in his private capacity to the common store, we at once obtain an approximation to the actual condition of a civilized mercantile community, from which approximation we might easily proceed into still completer a.n.a.lysis. I purpose, however, to arrive at every result by the gradual expansion of the simpler conception; but I wish the reader to observe, in the meantime, that both the social conditions thus supposed (and I will by antic.i.p.ation say also, all possible social conditions), agree in two great points; namely, in the primal importance of the supposed national store or stock, and in its destructibility or improveability by the holders of it.