THE MAKING OF WEALTH

Hokitika Guardian, 29 December 1923, Page 4

THE MAKING OF WEALTH

1 Uy Truest J. Ik Beun.i Joint sduurt Mill, gives us the standard definition of wealth. He says that "wealth con.si.sts of all things useful and agreeable having an exchange value.” Adam Smith tells us that wealth is ‘ all the necessaries and conveniences of life,” and a rather more restricted definition if Marshall's follows Adam Smiths and says that wealth consists of desirable things, i.e. tilings which satisfy human wants, directly and indirectly. Henry Geoige gives a definition v. iiii-h appeals u> me most strongly, ]|c says that ‘‘wealth consists ol natural products that have been secured. moved, combined, separated, or in other ways modified by human exertions so as to fit them for the gratification of human desires.” Karl .Marx, so far as I have been able to discover, has not defined wealth. He does say that the two primary creators wealth are labour and land, which to me is about as sensible as saying that the two primary creators of music aie catgut and horsehair, or that the two primurv creators of literature are paper and ink. Sydney Webb, another eipal economist, seems to nave avoid--1 ed a definition ol wealth. At all el cuts I have read ino-i of his contributions to human wisdom and 1 do not ro- • member that lie has committed him- ll • to a definition *>! wealth. Il he ha-, ha lias been carefill to leave it- out of i the index.

I 11 m ESSENCE OF TH M PROBLEM. I hold licit the veiy essence ol the problem ol wealth is exchange. ibilt Wealth .really arises from exchange. The great problem is bow to move things about, how to distribute wealth, how to exchange wealth The next tl.ory of wealih will, 1 believe he that it arises not liom hind, or lahoui or capital all these tilings conti ibiitc towards iL—but that it really consists in exchange. I submit that we h\e ny exchange and that money is the medium oi exchange and nothing else.

Incidentally, it i- the attempt to u-e money for other purposes than exchange which has brought us into a good deal of our present troubles. I; i> a diversion but I do not think for what, it is worth, that siieli quostions as indemnities, reparations, capV;a I levies and I lie like.—which have nothing whatever to do with go are .scientific absurdities and t Ird i> v,■ iy Hies cause us so much trouble. SOME ill FE( TS DM MODERN I.MGISI /AT lON. One of my Labour friends at a rectnt meeling of the Industrial League and Council claimed Mr Sydney Webb to be ike real inspirer of all l lie social legislation of the last 2o years. 1 •e-

, ( pu d ibal claim for the not iiiinalinai reason Licit I am no very great admire:' of 'liest of the legislation of the last Of. wears, but the whole tendency ol modern legislation lias l.ecn to regulate, re.-t i lit. direct, boss, manage mid order the distribution or exchange ol wealth. :-'o< iali-m. M.r Ham-.iv MacDonald define. as "tile < ontrol of tlie ceoiioinic ciiviim-taiiccs ol lile." and we have

ctmirol of the eionoinic eireumstances of life with results which are surely suiliciently appalling. Tilts control breaks out among professed Socialists on the one hand, ami, at the other end of the political scale, among people like protectionists, hut ot course protcciion-i-is are merely an improved lorm ol Social i-1.

IN VMIiTMI) TMI.KSt'i >PKS. It is interesting lo ictice. in coti-.id-'i'iurf thi.s (pieslioii oi wealth and

.vmiltli distribution, the ernumiii habit into which collective man seems to fall of looking at tilings throngli tin* wrung end of the telescope. 'Hike the pio--1 eiioni~t in i onnectic-i l , shall we say. with fabric gloves, lie forgets the millions who arc wealing gloves and thinks eidv if the hundred-, who are unking them, v it!: tie 1 t!*<uk you U.O.- agice il:: me. "that, there a fulling oil HI the .supply oi glove-. 'lake Ihc- trade unionist, in connection with the housing question and see hew he applies his eye Lo the wrong end of the telescope. lie forgets oi overlooks the Multitude wiio live ill houses and concentrates u] on the few who make them; he thinks in terms of bricklayers and bricks, with tile result that we are not owidoiie in the mailer ol houses. And the public generally, on a question like profit'", always look throngli the wrong end of ilie telescope. They think of the thousand pounds profit and how they can do with it. but they overlook altogether the many thousands ol ; •.i!i, 1s of turn-over which have been lii’olved before any question ol piofit can arise. Hence the ii-ndeney to diminish tin ii-ti\"cr and wages. My contention is that the exchanger the middleman. ihe profile ril you like, the mcrcianl. the entrepreneur, iln* risk-taker. Iran: mis in importance every oiliei 1,1! 1(1) in Weal til prodilei ion because, if .-o.ihc, he i- eouceriied and eollcei nrd only, with distribution of wealth. Met me try to elaborate that somewhat unorthodox statement and let us picture to ourselves a set ol circumstances as. they exist. lake, tor instance, paper. I here are lorcsts <>! i linker in Siberia, or there were the last time we heard anything about that delightful land. There is a surplus of labour in Siberia—or there was ready and willing and presumably able to turn that timber into suitable shape for the manufacture of paperThere is iron ore in Spain and there are a thousand tilings which we require. There are engineers in England with the skill and the knowledge* and (ho willingness to make the necessary machinery. There is unemployment in Kngland ; there is money unuseahle because of had trade, and there is an ever-growing and an ever-increasing demand for paper for use by human beings for all sorts of purposes. So you have got raw materials, labour, capital. demand—every factor which is usual!v associated with this question of wealth—all waiting for the risklaker, the middleman, the profiteer il you like, to get into the middle of the situation to conic to the view that ho can sec his way to make it balance and set everybody in motion portorming their various functions, so that the timber now waiting in Siberia may, in the course of time, turn up in the form of a copy of a popular journal on our break fast table, lint nothing happens until tlie risk-taker or middleman is persuaded or encouraged or cajoled to step into the middle ol all that set of circumstances and set the whole ill motion, f submit that nothing can happen, nothing can take place, without the middleman or profiteer, for the reason that he has to shoulder the burden. Lite necessary burden, of making tlie whole thing balance, and making quite sure, so lar as he is able, that the money which you pay at the end of the transaction for the paper produced is sufficient to pay (or the wages and all the expenses of the many processes that go on Irom the first te the Inst stage in the process of production. That operation is difficult enough in any ease, hut it has been rendered in the last few years infinitely more difficult hv this mania for controlling the.economic circumstances of life. The entrepreneur, ill such circumstances n>> I have roughly sketched, is faced with every sort of harrier, starting with passports. liven a little scheme running into a few thousand pounds lit would not be able to get through withcut having to deal with a 26 per cent export tariff and export prohibition licenses, to say nothing of trade union regulations and restrictions, limitations and obstructions everywhere.

THE THING. THAT MATTERS. J Trade and commerce is rapidly L- | carping a lost ail. 'lhc eiuerpi'is". ilie j brains, the skill, the initiative winch ought to he employed in business and exchange and maintaining and creating markets and providing us with employment anti the amenities ot life have been so affected by social changes that business men are becoming experts in the intricacies of legislation, skilled in the arts of committee work, marvellous manipulators of memoranda Incile form filler.-, tariff dodgers, hniitat ors. anything hilt business men, and in consequence the standard o. life is going down and eivilsation i.- going backwards. I suggest that we must raise again the haulier oi freedom: we must return, if you hire to laissex-fairc. and once again elitnrone the individual as the only thing that

matters. Mar too many of our people regard themselves as dependent. Me au ' couraging the growth of a dependent rh-s hut von cannot depend unless you have somebody to depend upon, and if onlv enough of us become dependent tlie whole thing ‘•"““l**’*' A SHORTAGE OF M KAMI I! A.H) .SCR PM MS OF I.ATIOI’R. "J offer in conclusion, this very serious little lul of theory- which 1 am sure is wori’u thinking over. H we time tic whole world, -tlie situation to-day ear. he described as a sort age ot wealth and a .-m plus of labour. That is. 1 think , th correct, diagnosis "I am m | n .„ u1 ,,. as exists. Suppo-iug i th . a the whole " 011(1 ! to-morrow to alter its point <■! i and go in with all the energy P j messes and all the faedmes which are at iis disnosal whole-heartedly t -r h 1 '"’- duetioii; 1 believe that we snoiid. very rapidl v. almost wiilim a nrittrl *' month's or years, reach a P"S'ti<>« 1,1 which we shorn! have " surplus ->1 wealth and a shortage of labour. whole range of political prebbuns would be turned upside down and at all events we should ■ have a world in wl.ieh there was no want and no _"lie had cause for complaint o! that kind. Give up the theory and take up the practice.