Without the instruments of production now in use Mr. George declares that the product could not be a tithe, or a tenth part, of what it is now; that is, the capital produces nine tenths, and, if our calculations be correct, the whole people get two thirds of this advantage, and the owners of the capital get one third; but this one third they spend in such a shape as to cause the existence of various classes who are not employed in producing necessaries, and whose demand for necessaries enables those who do produce them to procure by exchange a vast amount of conveniences and luxuries, and to be thus stimulated to make the earth yield a greater amount of necessaries.

PROPERTY AS AN INCENTIVE TO PRODUCTION.

Out of the institution of property, then, has grown both the present great productive power and also the distribution of the population into various grades of wealth, each of which stimulates the next poorer to strive to better its condition; and this beneficent effect should be seen most fully in the United States, where the almost universal sentiment of the people demands the equal or nearly equal division of properties among the children at the death of the possessor. Enormous estates are said to have destroyed Italy and the provinces of the Roman Empire; but it does not follow that there should be no estates and no landlords, and it is to be feared that Mr. George is giving fatal advice to the already sufficiently miserable Irish. Native landlords living on their estates and using Irish products would speedily change the whole aspect of that island. The abolition of landlords will indefinitely postpone her resurrection.

For the purposes of this discussion an improved farm is as much an instrument of production as a power-loom, and so is a store in Broadway. The position of this last may be such that the land, apart from the building, possesses great exchangeable value; but the totality of such ground rents form but a small part of the value of the annual product, nine tenths of which product Mr. George calculates to be due to the efficiency lent to labor by capital. Such ground rents are what Mr. Wm. Lucas Sargant calls ascending rents. They spring from the improvement of the productive forces of the community, and in this are

A

totally unlike the descending rents, which may come into existence where population presses upon the means of subsistence. The former are the accompaniment of national growth and prosperity; the latter are an indication of national decay.

Out of the twenty-four hundred millions which is assumed as having, in 1880, gone in the first place to rent and profits, probably one half went for services not issuing in commodities, -such as those of actors, artists, barbers, clergymen, clerks, copyists, hotel-keepers, dentists, designers, draughtsmen, domestic servants, civil engineers, gardeners, government officials (in taxes), hostlers, intelligence-office keepers, journalists, laundresses, librarians, lawyers, managers, musicians, nurses, physicians, professors, restaurant-keepers, teachers, surgeons, and so on.

The other half must have gone to the butchers, bakers, confectioners, carriage-makers, furniture-makers, blacksmiths, carpenters, tailors, etc., etc., who furnished commodities; and a little reflection will show that less than half of the value of these would upon the average consist of raw materials. We have then, at most, only six hundred millions consumed by the owners of property to the exclusion of the rest of the community; six hundred out of seven thousand, which last is, according to Mr. George, ten times more than could be produced without capital. This includes the cases of all recipients of profits and of all recipients of rent, and the latter includes the rent of improvements as well as ground rent. The reader will then see that ground rent, from the abolition of which Mr. George expects the return of the golden age, is altogether too minute to produce any perceptible harm; while the commission of so stupendous a breach of public faith would be likely to lessen the general confidence in the stability of individual fortunes, and in this way to diminish the effective desire for accumulation which lies at the very foundation of national prosperity.

WAGES INCREASE WITH PRODUCTION.

We appear, then, to have arrived at the conclusion that more than nine tenths of the gross annual product goes directly or indirectly to those who labor with the hands or with the head; and this is so near the whole, that, for purposes of comparison,

we may say that the great wage fund of the entire community is the gross annual product, or, at all events, that in comparing different periods the wages fund is in proportion to the annual products. Now the most we could make out for 1840 was an average of $70 per head for the whole population; the least which seems probable for 1880 is $140 per head. Gold may have depreciated since 1840, but not enough to account for a quarter part of this difference; and we are forced to the conclusion that real wages must have risen immensely; and this is what the personal observation of each individual and what statistics in detail bear witness to. The question then

"Why, in spite of increase in productive power, do wages tend to a minimum which will give but a bare living?" which Mr. George propounds as "the riddle which the Sphinx of Fate puts to our civilization, and which not to answer is to be destroyed," this question appears to have no existence out of his imagination. Wages, fees, salaries, emoluments of every kind, have risen every ten years. They were higher in 1850 than in 1840, again higher in 1860, and very much higher in 1880. At each period there was more to divide, and every portion of the community obtained a larger dividend, every portion, that is, in which no exceptional or temporary causes overcame the general swing of financial events.

The problem, then, for the solution of which Mr. George wrote his eloquent book.seems not to exist. It appears that wages do not tend to a minimum, but that, on the contrary, they are constantly and steadily increasing if we examine them at considerable intervals and under similar circumstances: it would appear that "where population is the densest, wealth greatest, and the machinery of production and exchange most highly developed," we do not "find the deepest poverty, the sharpest struggle for existence, and the most enforced idleness." His proposition is universal, and is demolished the moment we compare Ireland with England, or Portugal with France, or the farmer of fifty years ago with the farmer now, or the domestic servant and 'longshoreman of those days with the same classes to-day.

II.

BUT although it appears quite certain that all classes who are able and willing to work have shared in the great increase of opulence which has during the last century resulted from the greater security of property and the introduction of machinery and the division of employments, still it is equally certain that the progress has not been continuous. It has been in waves. Each wave has run higher than the last; but, during the reflux, there has been distress enough to wring the heart of any one who observed it at its focus in the poorer quarters of a great city. It is in vain to answer that this is a trivial matter compared to the famines and consequent pestilences that used to attend short crops, and that still attend them in nations which modern trade prevents from attaining a diversity of occupations. It is in vain to point to Ireland and Orissa and Behar and the Punjab with their many millions of victims; for, although we have passed from the scene of such horrors, the evil which remains is great enough to demand that we use every effort to discover and remove its causes.

THE REAL PROBLEM

would seem to be to ascertain why, during the advance of modern society from one plane of opulence to another, there should occur periods of depression in which a considerable portion of the population suffers want of employment and all consequent evils for periods of several consecutive years.

At the bottom of the whole trouble lie the imperfect information and consequent imperfect judgment of individuals.

A market, which has been for some time closed, is opened. A manufacturing and commercial nation hastens to send goods

to it. They pay a profit. Then all prudence is cast to the winds; immense supplies are poured upon the market and forced upon it by long credits and all the devices of trade. The thing is overdone. The comparatively agricultural nation has taken vastly more than it can pay for in goods. It has to pay in treasure, and this sort of trade at last comes to an end; but not until the buying nation has suffered a disarrangement of its machinery of exchange which keeps it in a state of paralysis for years.

We suffered this after the war of the Revolution and after the war of 1812-15.

But there is another field in which the inaccurate judgment of men would bring about excitement and subsequent depression, even if there were no such thing as trade.

The efficiency of modern labor springs, in a great measure, from the aid given by fixed and floating capital; and the disposition to save or to form capital-is stimulated by the manifold instruments of convenience and luxury which increasing opulence bestows.

AMERICAN CAPITAL AND POPULATION.

But, in a country like the United States, the desire to save finds wide scope. The population, and its effective demand for capital, increase at the rate of three per cent annually. If, then, we take the value of all capital and of all improvements on land to have been $30,000,000,000 in 1880, the average demand for new capital and improvements would be to the amount of $900,000,000; that is, commodities would every year be exchanged, not for other commodities, but for labor employed in forming new property, to this enormous extent.

At the commencement of a period of excitement more than this would be invested, and with profit; then more, while the prudent shook their heads. But perhaps, nevertheless, a profit would ensue; and so on until the formation of instruments of production and convenience is carried beyond the point where society can and will pay for their use enough to satisfy the desire for profit current in the community. Up to this point there has been a greater and greater demand for commodities, and consequently for labor to form commodities. Now, suddenly, the