Book 3 — CHAPTER VII.
John J. (John Joseph) Lalor translation
DISTRIBUTION OF NATIONAL INCOME.
SECTION CCIII.
EFFECT OF AN EQUAL DIVISION OF THE NATIONAL INCOME.
The best distribution of the national income among a people is that which enables them to enjoy the greatest amount and variety of real goods, and permanently to produce real goods in an increasing quantity and variety.
If the income of a people were divided equally among all, each one would indeed, be, to a very great extent, independent of all others. But then, no one would care to devote himself to the coarser and less agreeable occupations, and these would be either entirely neglected, or people would have to take turns in engaging in them.[203-1] (§ 9.) And thus would disappear one of the chief advantages of the division of labor, viz: that the higher orders of talent are devoted to the higher orders of labor. Besides, it is very doubtful, whether, under such circumstances, there would still be any solvent (zahlungsfähige) demand for the achievements of art.
Nor would the saving of capital prosper, where such equality prevailed. Most men consider the average outlay of their equals as an unavoidable want, and save only to the extent that they possess more than others of their class. If, therefore, every one had an equal income, no one would consider himself in a condition to save.[203-2] The same consideration would deter most men from every economic venture, and yet no great progress is possible where no venture is made.[203-3] [203-4]
SECTION CCIV.
DISTRIBUTION OF NATIONAL INCOME.—MONEYED ARISTOCRACIES AND PAUPERISM.
The extreme opposite of this, when the middle class disappears and the whole nation falls into a few over-rich men and numberless proletarians, we call the oligarchy of money, with pauperism as the reverse of the medal. Such a social condition has all the hardship of an aristocracy without its palliatives. As it is, as a rule, the offspring of a degenerated democracy,[204-1] it cannot in form depart too widely from the principle of equality. Only get rich, they cry to the famishing poor; the law puts no obstacle in your way, and you shall immediately share our position.[204-2] Here the uniformity and centralization of the state, which are an abomination in the eyes of genuine aristocracy, are carried to the extreme. Capital takes the place of men, and is valued more than men. All life is made to depend on the state, that its masters, the great money-men, may control it as they will. The falling away of all restrictions on trade, and of all uncommercial considerations relating to persons and circumstances, gives full play to capital, and speculators seek to win all that can be won. And, indeed, all colossal fortunes are generally made at the expense of others, either with the assistance of the state-power or by speculation in the fluctuations of values.[204-3] The dependence of proletarians on others is here all the greater, because from a complete absence of capital and land, so far as they are concerned, they are compelled, uninterruptedly, to carry their entire labor-force to market; and also because the supply of labor is made in masses embracing a large number of individuals, while the demand for labor lies in the hands of very few, and may be very readily and systematically concentrated.[204-4] So great and one-sided a dependence is, for men too far removed from one another for real mutual love, doubtless one of the greatest of moral temptations. It is as easy a matter for the hopelessly poor to hate the law, as it is for the over-rich to despise it.[204-5] Under such circumstances, the contagious power of communism, the dangers of which to order and freedom we have treated of in § So, is great. There is a dreadful lesson in the fact of history, that six individuals owned one-half of the province of Africa, when Nero had them put to death![204-6] Externally, a moneyed oligarchy will always be a weak state. The great majority who have nothing to lose take little interest in the perpetuation of its political independence. They rather rejoice at the downfall of their oppressors hitherto, and are cheered by the hope of obtaining a part of the general plunder.[204-7] The rich, too, separated from the neglected and propertyless masses of the nation, and rightly distrustful of them, begin to forget their nationality, and to balance its advantages against the sacrifices necessary to preserve it. But, a merely materialistic calculation leads doubtless to the conclusion, that universal empire is the most rational form of the state. The world-sovereignty of Rome was, by no circumstance more promoted than by the struggles between the rich and the poor, which devastated the orbis terrarum, and in which the Romans generally sided with the property classes.[204-8] [204-9] [204-10] [204-11] However, the worst horrors of the contrast here described can occur only in slave-countries. Compare Roscher, Nationalökonomik des Ackerbaues, § 141.
SECTION CCV.
DISTRIBUTION OF THE NATIONAL INCOME.—HEALTHY DISTRIBUTION.
Hence a harmony of the large, medium and small incomes may be considered the indispensable condition of the economic prosperity of a people.[205-1] This prosperity is best secured when the medium-class income prevails, when no citizen is so rich that he can buy the others, and no one so poor that he might be compelled to sell himself. (J. J. Rousseau.)[205-2] Where there is not a numerous class of citizens who have time enough to serve the state even gratis, as jurymen, overseers of the poor, municipal officers, representatives of the people etc. (compare § 63), and property enough to be independent of the whims and caprices of others, and to maintain themselves and the state in times of need, even the most excellent of constitutions must remain a dead letter. Nor should there be an entire absence of large fortunes, and even of inherited large fortunes. The changes of ministry which accompany constitutional government are fully possible only when the choice of men who would not lose their social position by a cessation of their salaries as public functionaries is not altogether too limited.[205-3] Thus the transaction of the most important political business, especially that which relates to foreign affairs, requires a peculiar elasticity of mind, and a capacity for routine on the grandest scale, which with very rare exceptions, can be acquired only by habituation to them from childhood, and which are lost as soon as the care for food is felt. The bird's-eye-view of those who are born "great" does not, by any means, embrace the whole truth of human things, but it does a very important side of it. Among this class, as a rule, it is easiest to find great party leaders, while leaders who have to be paid by their party, generally become in the long run, mere party tools.[205-4] It is true that it requires great intellectual and moral power to resist the temptations which a brilliant hereditary condition presents; temptations especially to idleness, to pride and debauchery. For ordinary men, it is a moral and, in the end, an economic blessing, that they have to eat their bread in the sweat of their brow,[205-5] and that they can grow rich only by long-continued frugality.[205-6] However, the distribution of the national income, and every change in that same distribution, constitute one of the most important but at the same time one of the most obscure departments of statistics.[205-7] When inequality increases because the lower classes absolutely decline, there is no use in talking any longer about the prosperity of the nation.[205-8] It is different, of course, when only the higher classes become, relatively speaking, higher yet. But even this latter kind of inequality may operate disastrously, inasmuch as it nourishes the most dangerous tendency of democracy, that of envy towards those who are better off.