Note 62 — APPENDIX

It is interesting to see the analysis which Mr. Shaw gives of the elements which make up the five hundred million pounds (see page 482 of his article). It shows a curious want of sense of proportion, and reads much like a statement that a young man’s bankruptcy was due to the one hundred thousand pounds he has spent on the turf, the fifty thousand pounds he had spent on building a house, the fifty pounds he has spent on a fur coat, and the sixpence he gave last Saturday to the porter at Paddington Station. But there is in it a more serious error than this. Mr. Shaw says, and rightly, that a large part of the millions to which he alludes consists of payments to artists and other professional men (e.g. doctors), by very rich commonplace people competing for their services. But he entirely mistakes the meaning of this fact. I have pointed it out carefully in Labour and the Popular Welfare (Book I. chap. iii.) and have illustrated it by one of the exact cases Mr. Shaw has in view, viz. that of a doctor who gets a fee of one thousand two hundred pounds from “a very rich commonplace person.” I pointed out that in the estimates, from which Mr. Shaw gets his figures of five hundred million pounds, all such payments are counted twice over. The “very rich commonplace person” and the doctor both pay income-tax on and are regarded as possessing the same one thousand two hundred pounds. As matters stand this is right enough, for the patient receives either in good or fancied good an equivalent for his fee in the doctor’s services; but if the sum in question were to be divided up and distributed, there would for distribution be one one thousand two hundred pounds only. By reference to calculations of Professor Leone Levi, with whom I corresponded on these matters, I drew the conclusion that the sum thus counted twice over was about one hundred million pounds annually ten years ago. This would knock off twenty per cent at once from Mr. Shaw’s five hundred million pounds; and I may again mention Mr. Giffen’s emphatic warning that, if we are thinking of any general redistribution, another two hundred million pounds would have to be deducted from the sums which persons like Mr. Shaw imagine await their seizure.