effects upon economic welfare, various current ideas of justice, which bear on the problem of the ideal distribution of income. These ideas fall into two groups, according as they do, or do not, offer a complete solution of this problem. Among those that offer only an incomplete solution, we may here notice two, namely the positive idea that it is just that all workers should receive a "living wage," and the negative idea that it is unjust to disappoint legitimate expectations."

In common usage a living wage means a wage which will enable a worker to live and bring up a family at the lowest standard of comfort which modern opinion regards as "reasonable " or " tolerable for human beings." This is a very vague and fragmentary conception. It is vague, because it is defined by reference to a standard of reasonableness, which is itself not only vague, but liable to arbitrary change. It is fragmentary, because it takes account of wages only and not of other factors in the worker's standard of life, such as leisure and healthy conditions of employment and housing. Further it only offers an incomplete solution of the problem of ideal distribution of income, because it gives no answer to the question, whether, assuming that all workers have at least a living wage, it is just that great inequalities of income, due to the inheritance of property and other causes, should continue.

The principle of the living wage, as commonly interpreted, is not inconsistent with the canons of economic welfare. But it is less comprehensive and less easy to apply. The principle of the National Minimum, which is conceived with reference to economic welfare as a whole, includes it and much more besides, and is to be preferred as a guide to practical policy.

§4. The disappointment of legitimate expectations is often said to be unjust. It was this conception of justice which led the Rugby schoolboy to say of Temple that he

"

was a beast, but a just beast." It is, of course, often very difficult to decide what expectations are legitimate.1 But it is obvious that, in normal times, any large and sudden interference with economic expectations, which, whether legitimate or not, have become firmly established in men's minds, creates a sense of insecurity, which tends to check production and thus to diminish economic welfare. Considerations of economic welfare carry us thus far, and the doctrine of legitimate expectations carries us no further, in the pursuit of practical conclusions.

This doctrine is, in any case, purely negative and cannot furnish any positive solution of the problem of ideal distribution. In practice, this and similar notions of justice act only as slowly yielding obstacles to new ideas, as somewhat undiscriminating "brakes upon the wheels of change." They supply no positive guidance as to the form which change should take.

§5. We may now go on to consider various competing principles of economic justice, which do offer complete solutions of our problem. The two main principles here are "distribution according to deserts" and "distribution according to needs." But at least three rival interpretations of "distribution according to deserts" are commonly met with. The first is absolute equality of incomes, the second is distribution according to the value of work done, provided that " equality of opportunity" is first secured, the third is distribution according to the value of work done in the sting state of society.3

1 Compare Cannan, History of Local Rates, pp. 162-3.

* In abnormal times, when a strong sense of insecurity is already present, this objection to drastic changes loses much of its force. In Russia, for example, a strong case can be made out, on grounds of economic expediency, for the recent expropriation of large landowners and other capitalists without compensation and for the repudiation of the internal, though not perhaps of the external, debt.

"Value of work done" in both cases is generally taken to mean exchange value. Attempts are sometimes made to interpret value as

§6. Absolute equality of incomes, as an ideal of economic justice, has found few weighty advocates. It requires no lengthy argument to prove that an absolutely equal distribution, whether among families or among individuals, is in fact quite impracticable, and that, even if it could be realised in the modern world, it would inflict vast damage on economic welfare. It would, indeed, be a typical application of the shallow precept “fiat justitia, ruat cœlum!" "Perfect equality," as Bentham says, "is a chimera, all we can do is to diminish inequality."

The rejection of crude equalitarianism does not, however, take us far, though there are some who seem to think that, when they have disposed of the argument for absolute equality, they have disposed also of all arguments for reducing existing inequalities.1

§7 Given equality of opportunity, distribution according to the value of work done appears to many to be just. Many, therefore, hold that equality of opportunity is just. The firm basis of government," said President Wilson in his Inaugural Address to the people of the United States in 1913, " is justice, not pity; and equality of opportunity is the first essential of justice in the body politic."

If we are to use words strictly, it is obvious that absolute equality of economic opportunity is no more attainable in the real world than absolute equality of incomes. "A logical individualism requires a fair start and an equal opportunity for each individual within the period of his own life, whereas the actual unit, the family, is all the time doing its utmost to abolish the boundaries

"social value," but this idea, on closer examination, is too vague to permit of wide practical application. Value, therefore, in the discussion which follows is taken to mean exchange value, as elsewhere in economics.

1 See, for example, Smart, Distribution of Income, pp. 100-102, and the writings of Mr. Mallock, passim.

between life and death and to give its own members, with the aid of the dead hand as well as the living, a long lead and a safe retreat." To alter this state of things, so as to secure absolute equality of opportunity, we should need effectively to prohibit all inheritances and bequests, all gifts from one person to another, and all expenditure, in excess of a small prescribed maximum, by parents on the education and upbringing of their children. Indeed we should need to go further, and to take all children away from their parents as soon as possible after birth and lodge them in public institutions. For a child's opportunity in life depends intimately upon the conditions and surroundings in which its early years are spent. Such policies are, of course, fantastic. If it were practicable to carry them into effect, which obviously it is not, nearly all motives for saving and many motives for exertion would disappear, and economic welfare would gravely suffer. Fantastic, therefore, would be an unconditional demand, in the name of justice, for equality of opportunity. It would once more be a cry of "fiat justitia, ruat cœlum!"

But, though the establishment of perfect equality of opportunity is impracticable, there are many practicable policies which will make opportunities far more nearly equal than they are to-day in most modern communities." Wisely carried out, such policies will increase economic welfare both by diminishing the inequality of incomes and by increasing production.

Equality of opportunity, then, is defensible conditionally by reference to considerations of economic welfare. It is not defensible unconditionally by reference to considerations of justice. But the greater the approach towards equality of opportunity, the more reasonable

1 Spender, Comments of Bagshot, II, pp. 15-16.

2 Compare Part IV., Chapters II, III, IV and X below.

the contention that a distribution according to the value of work done is just.

In communities where rough equality of opportunities prevails, and where men recognise that it prevails, economic contrasts are likely to cause less resentment than elsewhere. Such rough equality is found at certain stages in the development of new countries, when nearly all large incomes are due, not to inheritance, nor to a superior education, but to the labour and fortunate enterprise of their possessors, and when all men have an almost equal chance to make their way. But no community has hitherto succeeded in maintaining such a state of things for long.

§8. The justice of distribution according to the value of work done in the existing state of society in an old country is a doctrine which it is hard to render plausible. For inequalities in the value of work done are here largely due to unequal opportunities of doing work that is valuable, and a social order which permits great inequalities of opportunity is, as we have seen, widely held to be itself essentially unjust.

Further, in most interpretations of this doctrine, "work done" is taken to include all economic services rendered to society, and all owners of property are held to render services in proportion to the income which society permits them to receive. Such an interpretation is necessary, if the doctrine is to cover incomes from property. Now, though it is clear enough that he who saves renders a service to society by adding to the stock of existing capital and hence to society's productive power, it is by no means clear that he who inherits property, or he who merely happens to own property, which, through no action of his own, increases in value, necessarily renders any service at all. Many thoughtful persons find it hard to believe that merely to permit one's land to be used, or merely to refrain from consuming