THE MAKING OF WEALTH

Hokitika Guardian, 22 July 1924, Page 4

THE MAKING OF WEALTH

Cam wealth he made at the expense of others? It is obvious and 1 evident that iir some .simple eirentnstanees it can. One man ean put liis lingers into the pocket of another and extract a watch, and hi* becomes wealthier sit the expense of the loser of the watch. Two persons can make a bet on a horse race ; one can lose a sovereign to the other who quite definitely heroines the richer at his expense. And so within the elaborate, wonderful, and complicated machinery of wealth, production and exchange, there is room for the operation of the thief and for the trouble which arises from the existence of the fool. But an economic philisnphy fountled upon details of this kind leads straight to error. Those details are the exceptions which prove the rule and lire not in any sense examples of the ordinary processes wherein- weal if. i is made and man is benefited. If one takes a typical case ol a man who lias made great wealth one sees very clearlv how the process operates. Lord Northclilfe started life as an office buv and left live millions nt his death. Where did that suin'of five millions cornu from? At whose expense was it made? Certainly not at the expense of tho ronsumer, because at the* height of Lord XorthcliiFc’s activities. just Ik*fore the war. he achieved what was previously thought to he impossible, and gave the public 32-page newspaper for a half-penny. Neither was his wealth made at the excuse of the workers. for wo know that during the period of his operations, and very largely os a result of them, printers’ wages wore doubled and every class <>f newspaper worker was raised to a higher scale oi remuneration. Xorthchiie not onlv paid much more to his own workers’than had ever been paid to similar people before, hull his action had the effect of lifting the. rates of all similar workers in all similar businesses am. added enormously in the aggregate to the wages of newspaper producers. Nor ean it he said that Lord Northch le made his money at the expense of lus competitors, for while it may be true that a publisher here and there had to if a under in consequence ol the lug mi standard set by NorthcliliVs enterprise, it is certainly the fact that he so widened and increased, the market for periodical literature as to enhance tlm value of all newspapers and multiply greatlv their numbers and sizes till l ’. UKAL KKI-'KCTS OlCOM I’KTITION. This brings me to the Inlse impression that competition in business " a process whereby one man steals Urn order, of another. When two commercial travellers arc hath hoping to secure one order, one of then is doomed to disappointment, and it dues seem at short range as if the one has benchted at the expense of the other. Such adunllv the case when we have a small market ami an article of limited consumption. Init those conditions an verv rare. The real effects nt competition arc to increase the market, increase demand, increase supply and benefit competitor-, as well as consumers. A simple illustration ot this ion uiveii to us when Selfridge established himself at the western cud ol tfxloid Street No big store had appeared in that, locality before, and the trade was carried on by a large number ol small shop-keepers. These people, holding the .short-sighted and erroneous view o : competition. gut into a panic as soon - 1 ' Sd fridge started to build. Mime of them shut up shop. Holds aroiim Selvf ridge’s t.uilding declined lor a time, and the theory was that this oreat monoplist was going to crush ail the many little folk who had hitherto served tiieir fellows by keeping shops V verv short period, however, siifhced io show the folly of this theory, and 1 lielieve the rents m the ■''ellridge aeiid.himrhnnd were actually doubled within a. few years of his starting. Here. then, is a case of a man going into a market to do himseli a business in excess of the total ol the u hobmarket before he arrived, ami yet leaving more than ever there was he ore for the remainder to share beta ecu them. Kelridge’s fortune so far from beiim made at the expense ol others has actually enriched all those around him.

WKAI.TII r.VI.IMITKI). Tlio notion that wealth is made at the expense of Other, litis its roots in the fundamental eri'or that wealth i' ■' ed quantity—that there is a liinitei. amount of it. So far trout wealth in«r nriplired tit the expense o! othels. the truth is sttrelv that—always Planted those exceptions which tire in the class to which I referred to at the heftiunino- wealth tail only he made on the condition that the hull, nl it is distrihuted to others a, the ptoce-s o c i, alonp- and it only exists on cumlition that it confers hi.oielits on otheras well o'viii'r.

Till- 111:111 who owns II million is ill.inly regarded ns possessing Llnil •which ought tn l»‘ given t" tlinst' « !'" ini' in [in-ntiir need. but in point- n! l’ni-1. even if lie. loads n lilt 1 ol luxury and inn!;.is no pretence of savin*: tin' public. In- <r 11111 <' t it void adding g'ont]v to tin l wealth of tlie community m which In' lives. To lii'Llill v.'iili. Ids million is no good to liim unless lie employs. il. lie must invest it. anil it does not matter how lie invests it: llte elfeet of tilt' elilployi 11*4 it must lie to reduce tit" rate of interest on nil other money for till* lielietit- in nil otliei people. In investing it. in order to earn interest nt nil. lie must employ people, nml the presence of that million. providin'.' wages nml railing lor service, must luivc a tendency to iut r, i> so nil m n>:es nml mill to tin; value of nil -erviee. The Mol'd "service" is one of the most badly used word- in 1 lie Inngtuigc; it is used in 11 wn.v which relleets very little credit upon our eeononiie iutelligriirO. It lots eoino l'> hnvc it meaning which di-nssoeintes it entirely from any notion nl protit. “Service." Inis ln*en coloured hv tin* Socialist, who apparently would have us eiteh render the service that we ourselves decide, without the ossenjial cheek which the consumer exercises through the norninl process of the market under capitalism. The unei|iliil distriliution of wealth is absolutely e-soti-tial in order that the eotistmier may have the menus of expressing the dillcrent values which lie places upon dillerent services. This does not menu that some must he rich and some must he poor, hut it does mean that some must he richer than others, the excess ef riches heme a measure of the consumers' valuation of the services which we all render to him. The idea that wealth is made at the expense of others is essentially a political notion, nml its wide acceptance may he attributed to the way we hate of id villi' to polities an exaggerated importance. Tiie politician's lile depends upon his appeal to the vanity of the majority, and -comp; that the majority must always lie composed of those whose means will lie modest beside those of the leaders, the politician is led into an attitude of antagonism to a f.inall minority who. in any .scheme of things, must rise to the tot). A PLEA EOR IXDIVI DI'ALLSM. There is only one place I know of

which is almost free from tin's class of follv, and that is America, the reason being that the American nation is composed of people, who. tired of t ic sophisticated complications that are characteristic of European life, have at various times run away to the ireer atmosphere of a new world. 'c American is almost a hundred per cent, individualist. Ho .starts with the ffrst rule of sound eeonomics suminarrised in the old dictum: ‘‘Look aftoi the ponce and the pounds will look after themselves.” He realises that if each individual will do the best for himself, which must always he the best for others, then the best for the whole will emerge. In America there is all independent people; here, in our own country, you have a dependent people, the idividual for the most part hugging the fa Iso idea that in some way or another lie has a claim on the rest. If everybody will try to give a little more than he guts he will find that what is left for him will be more than ever he had before. In this complicated way—this paradoxical way, if you like -wealth untold still remains to be acquired for ttie benefit of all of us. We esmiot make wealth at the expense of others, but we can each of us make a goad deal of wealth for ourselves if we will recognise that in so doing we cannot avoid distributing the bulk of it to those bv whom we an' surrounded. -