it will be necessary both to remove various legal and customary restrictions, especially in the professions, and to educate consumers and employers, including many public authorities.1 An improvement of trade union organisation among women workers is also very desirable and, as far as possible, the entry of women into the same trade unions with men engaged in the same occupation. The attempt to remove inequalities in particular occupations by insisting upon "equal pay for equal work," however interpreted, apart from improved education and trade union organisation of women, and still more apart from an extension of the field of women's employment, is likely, by actually reducing the latter field, to increase inequalities on the whole. The supply of women workers, apart from those engaged in domestic work in their own homes, would tend to be reduced, relatively to the supply of men workers, by an increase in the income of mothers from civil rights,' and, to a slight extent, by a reduction in the surplus of women over men in the total population. Such a reduction would probably be caused by a reduction in infant mortality, since mortality among boy babies is greater than among girls. Again, an increase in the standard of comfort of men workers has often been found to reduce the inclination of the women of their families to work outside their homes.3 In the opposite direction, tending to increase the relative supply of women workers, is the increase in the interests and activities of educated women outside their own homes, arising from the fact that fewer and fewer women are content that their lives should be 1 "The opening of industrial occupations freely to both sexes was advocated more than seventy years ago by Mill, Principles of Political Economy, p. 759. Compare the recommendations of the recent Royal Commission on the Civil Service. * Compare Part IV., Chapter II., above. See Pigou, Wealth and Welfare, p. 30. "an uninterrupted succession of pregnancies." To impose legal limitations upon a married woman's right to work, except for a period immediately before and immediately after childbirth, does not seem either practicable or desirable,' but the receipt by a mother of income from civil rights might perhaps be made dependent on her not undertaking paid work outside her home. Many men hold the opinion that women in general are " by nature" economically less efficient than themselves. This, like the opinion that success in business requires exceptional natural ability, is at present a mere hypothesis. Its truth will only be able to be tested when the economic opportunities of the two sexes have been approximately equalised by the changes indicated above. 1 Brentano, Economic Journal, 1910, p. 386. 2 It has been proposed, however, by Mr. Rowland Kenny, in an outspoken article quoted by Bechhofer and Reckitt, Meaning of National Guilds, p. 416. CHAPTER IV INEQUALITY OF INCOMES FROM PROPERTY. A. Causes of Inequality. §1. In modern communities, the inequality of incomes from property is generally even greater than the inequality of incomes from work. Nearly all families derive some income from work, but many derive none, or practically none, from property. The large property-incomes, moreover, are both larger and more numerous than the large work-incomes. The causes of the inequality of incomes from property have received very little direct attention from economists. Professor Cannan's treatment of this branch of economic theory, in the course of his article on the Division of Income in 19052 and in Chapter XI of his Wealth in 1913, though admittedly only brief and preliminary, still holds the field. Most economists have been apt to take the institution of property, as it existed in their own time and country, very much for granted, and to treat it as one of the unchangeable factors at the base of all their theories. In America a distinction has even been drawn between "institutional economics," which takes account of variations, both actual and possible, in property and other social institutions, and non-institutional economics," in which such variations are ignored, and some writers have been found, who defend the latter method against the 1 Compare Pareto, Cours d'Economie Politique, II., p. 310, Pigou, Wealth and Welfare, p. 75, Watkins, Growth of Large Fortunes, p. 18. • Republished in Economic Outlook, Ch. VII. former. But "non-institutional economics," if carried beyond a few elementary propositions, is likely to prove a sterile monstrosity. Sociologists and historians, on the other hand, have given much study to the origins and comparative forms of property, but most of their work is not of great importance for economists. Professor Ely's Property and Contract and Professor Underwood's Distribution of Ownership, however, both books by expert economists, contain much information which is of modern economic interest, though what they offer is chiefly the raw material of fact, rather than the finished product of generalisation. §2. In modern communities at the present time the three immediate causes of the inequality of individual incomes from private property are, first, differences in the amounts of property received by different individuals by way of inheritance and gift, second, differences in the amounts of property accumulated by different individuals by way of saving, and third, the changes which take place, apart from the action of the respective property owners, in the value, both capital and annual, of different pieces of property. Of these three causes it seems clear that, in general, the first is considerably the most important. The question of inherited property is postponed, however, to the next chapter. Inequality of savings is due to individual differences both in the power to save and in the will to save. An individual's power to save is measured by his total income in excess of the bare necessaries of himself and his dependents, if any. His will to save depends upon his character and personal tastes, upon the comparative importance which he attaches to expenditure in the present and provision for expenditure in the future, and upon the rate of interest obtainable from various invest 1 American Economic Review, March, 1919 (Supplement), pp. 309 ff. 2 Compare Cannan, Wealth, Chapter XI ments open to him. The will to save will seldom equal, and will generally fall a long way short of, the power to In general, the larger any individual's income, the larger the proportion which he will save. save. Negative saving, or the conversion by property owners of part of their capital into income, may be brought about in many ways. In an individual it is sometimes a sign of wisdom,1 but more often of folly, or at least of misfortune. Decumulation on a large scale might considerably reduce the inequality of incomes from property, but it would also reduce productive power. In spite of the old saying, "three generations from shirtsleeves to shirtsleeves," which under modern conditions is increasingly false, decumulation is likely in practice to be continually outweighed by positive accumulation through saving. And on the whole, "saving does not mitigate inequality arising from other causes, but aggravates it.”3 Changes in income from particular pieces of property, independent of the action of the owners, are continually occurring. It is not only landowners, who, in Mill's phrase, grow rich in their sleep." A recent grim enrichment was that of the shareholders in Courtauld's, the makers of mourning weeds, as the "roll of honour lengthened on the battlefields. Other property owners likewise grow poor in their sleep, and others, again, grow richer or poorer by unintelligent buying and selling of property rights. Professor Cannan argues that, in so " 1 Compare Fisher, (The Rate of Interest, pp. 120 ff.) and Cassel, (Nature and Necessity of Interest, pp. 147 ff.), who points out that, if the rate of interest falls below a certain point, there will be a strong tendency to buy life annuities instead of permanent investments. As to the precise significance of decumulation, see footnote to Chapter X., § 5 below. Cannan, Wealth, p. 186. It is a nice question of degree how far speculators can be said to derive their incomes from work, as distinct from the temporary ownership of property rights of fluctuating value. At one end of the scale, deliberate and intelligently directed speculation is clearly a form of |