Joseph Shield Nicholson

“ The musical and artistic skill, for example, 'fixed and embodied' in young ladies should be included in an estimate of living capital, just as much as their pianos and paint-boxes are included in the dead capital. It is plain that the value of the greater part of movable property would vanish but for the acquired abilities of the inhabitants. A simple example will make this point clear. The more widely spread the love of art of the highest kind so much greater will be the value of old pictures. ”

“ In this way we can see that Petty was justified in valuing the people as he valued the land—both are permanent sources of income. If the society under consideration is progressive, we are still more justified in this method of procedure in arriving at a minimum valuation. If wages are rising and the number of workers is increasing, we may he certain that after an interval of, say, ten years, the value of the 'living capital,' however estimated, will be greater than at present, and this living capital may be regarded as of the most permanent kind. ”

“ Domesticated humanity may properly be considered to have a money-value, first, because it costs a very real expense to produce and maintain, and, secondly, because it furnishes pleasures which common experience shows rank very high in the scale of limited and desirable things. This second ground of valuation is of importance qualitatively, as showing the real basis of the comparison, but it is plainly unworkable quantitatively, and it therefore seems necessary to fall back upon cost of production for a measure as in the case of public property which also is not directly exchangeable. ”

“ But secondly, even the 'occupied' classes must be considered not merely as earning income but as furnishing in their private capacity utilities to the community or to their families on which a value may properly be placed. There is no difficulty in seeing that in an estimate of 'living capital' some allowance must he made for the people themselves (apart from their wealth-producing power) —the difficulty is to determine the most reasonable measure. ”

“ The term 'wealth' is wanted to denote the desirable objects which they possess, not inclusive of, but in contradistinction to, their own persons.' It is true that at a later stage in his work Mill attempts to distinguish between the skill and the personality of the artisan, and to include the former under wealth and not the latter, but in doing so he destroys the value of his first position. ”

“ Passing now from the capital owned by those paying income tax to the other principal items in the national inventory, the first in importance is the 'movable property not yielding income, e.g., furniture in houses, works of art, &c.' This valuation is made by simply taking half the value of the houses, and reaches the round figure of £1,000 millions or thereby. For the purpose in hand it is only necessary to observe that even to make a proper use of this movable property involves a large amount of labour, which is unrepresented in the wage-earning or profit-earning classes. ”

“ There can be no question whatever that the part of the national income due to personal exertion of all kinds is far larger than that derived from the pure interest on previous accumulations, or from the rent of appropriated natural agents. The relative proportions assigned, it may be remarked, might have been set down still more in favour of 'living' capital if other considerations had been allowed for, as, for example, the 'abstinence' involved in saving. ”

“ Giffen's simple method of halving a known item seems very attractive; if the dead movables are half the value of the houses, why should the living not be roughly estimated in the same manner? As the object of the present inquiry is mainly comparative, in default of any better plan the value of the house may provisionally be taken as the basis of the valuation of the people in it, just as it is taken as the basis of their expenditure for purposes of taxation. ”

“ There are important classes of income which do not pay income tax, and there are items of property which do not yield income at all, e.g., the furniture in houses and public buildings. Again, of some important classes of income only a certain portion is supposed to be due to capital in the strict sense of the term, that is to say, as distinct from labour. ”

“ The people of Ireland are 'living capital' in a disadvantageous situation. If they were transported to the more populous districts of England and Wales and the Lowlands of Scotland their labour would be worth so much more, and the value and strength of this really 'United' Kingdom would be so much greater. ”

“ The fundamental difficulty, which has probably thrust this problem into the background, is to pass from income to capital. We are all familiar with capital valuations of lands, houses, &c., based upon the revenues which they yield, but since the abolition of slavery in civilised communities we are not familiar with the capitalisation of wage-earning power. ”

“ In the ancient world, when slaves were trained in all kinds of accomplishments, a very high value was placed upon natural abilities and education, and the mere fact of personal freedom cannot be held to destroy the meaning of an economic estimate. ”

“ When this principle is once admitted, the only difficulty is to separate that part of the total income of the community, due to living labour in every shape and form, from that part due to capital in the narrow sense of the term. ”

“ Adam Smith boldly places under 'fixed capital' the acquired and useful abilities of all the inhabitants or members of the society on the grounds: first, that the acquisition of such talents 'by the maintenance of the acquirer during his education, study, or apprenticeship always costs a real expense, which is a capital fixed and realised as it were in his person' ”

“ The individual lawyer or carpenter perishes, but the profession or the trade survives, like a Platonic idea. In a stationary economic condition of a people, we might suppose that every trade and profession is an immortal, unchanging corporation. ”

“ Atkinson, may be heeded when he states that the richest nation has never more than the value—all told—of two or three years' production in hand in a concrete form, and that the whole world is always within a year of starvation. The recent accumulations of dead capital, when regarded in this manner, will assume somewhat less startling proportions. ”

“ The loss of a leg has its value appraised equally with blighted affections and shocks to the system. Again, to look at the question from another point of view, every father of a family knows that it costs a considerable sum to rear children to a self-supporting age, and the higher the trade or profession selected so much the greater is the cost. ”

“ We must exclude the very old and the very young, so far as earning-power is concerned, or even regard them as of negative value—but where shall we draw the line?
The clue to the solution seems to be given in the practice of insurance companies, based on the principle that whilst the individual dies the race remains, and not merely the race, but the classes and divisions of the race remain to a great extent uniform. Life insurance is mainly concerned with age and mortality, but a similar principle may be applied to the occupations of the people. ”

“ Without entering further into this very thorny subject of accurate definitions, it may be premised that the application of the term 'capital' to skill and the like will be justified or not according as we wish to emphasise resemblances or differences. In many inquiries we certainly ought to draw a sharp line between capital and labour in the narrow and popular senses of the terms, especially in cases where ethical considerations cannot he altogether excluded. ”

“ This preliminary didiculty, however, must in some way be surmounted before the comparison between 'dead' and 'living' capital can be effected; and a few facts may be noticed which serve to show that the valuation of human beings is not so remote from ordinary thought as at first sight appears. Constantly, for example, cases are occurring in the law courts which recall the methods of compensation adopted by our Saxon forefathers. A money-value is placed upon husbands, wives, sons, and daughters, and even upon their component parts. ”

“ For just as there are close analogies between the living instrument and the dead, as clearly expressed by Adam Smith, there are also differences of vital importance. To take but one example: the interest derived from dead capital must for many purposes be contrasted with the wages obtained for skilled labour. ”

“ Next we must consider the people of the country not as mere producers, labourers, or employers, but as 'things in themselves,' or rather superior domestic animals reared for their affectionate dispositions and intellectual and moral activities. Here, as already explained, it seemed best to take a rough empirical rule founded on 'cost of production.' For the present purpose it has been assumed that every 'person' is worth, or rather costs, at least as much as every 'house.' Without stopping to expand the meaning of the inverted commas we reach at once a sum total of £l0,000 millions. ”

“ Now a child has as just a claim from the present point of view to valuation as a colt, and the employment of domestic servants and governesses shows that the unpaid work of women of the class described ought to be considered of at least equal value. ”

“ Giffen is, in some respects, inconsistent. There seems to be no sufficient reason discoverable for the precise figures adopted for turning income into capital, nor for deciding what part of income ought to be considered as derived from capital proper, and what part from the management of the capital. Farmers' capital, for example, is calculated on the basis that it yields over 12 per cent. ”

“ In this way a first approximation will be made to the income derived from 'living' capital, and greater accuracy may be then attained by considering in more detail certain kinds of income, and also certain comparatively permanent sources of 'wealth' (personal) which do not yield income. ”

“ Giffen's tables the total rental of houses is about £128 millions, whilst the total income of the nation is about £1,300 millions, from which it follows that ten per cent. is spent upon house-rent. If we take the usual figure of five persons to every house, and further assume that ten per cent. of income is spent upon the complete maintenance of each person and ten per cent. ”

“ At thirty years' purchase this gives the value of labour qua labour as £24,000 millions. Next consider the capitalist as an employer and worker and not merely as the receiver of interest. Mr. Giffen assumes that four-fifths of the income under Schedule D (trades and professions) is really not interest but earnings of management. This, however, mounts to upwards of £140 millions, and capitalised as before extends beyond £4,000 millions. To this amount must be added the £8,000 millions derived, as already explained, from considering the management of the aggregate national dead capital. ”

“ These instances, however, do not at once suggest any practicable method of valuing the total human stock of a nation, with its infinite variety of ages, occupations, and abilities, A simple enumeration and summation is plainly impossible. The difficulty involved in the ages alone, from this point of view, seems at first sight almost insuperable. ”

“ It is well, also, that some of the teaching of the older economists should be remembered—that capital, although saved, is always being consumed, and that, as Adam Smith says, 'the annual labour of every nation is the fund which originally supplies it with all the necessaries and conveniences of life which it annually consumes.' If this learning is somewhat too musty, at any rate the American statistician, Mr. ”

“ Take drst of all a simple hypothetical case to illustrate the principle. Five shillings a week for fifteen years is about £200, and this does not seem an extravagant estimate for bringing up the child of a superior artisan or tradesman. The value of the house in which the child is reared would probably be something less than this sum; in other words, an 'economic man' could more easily purchase a house in fifteen years than rear a child during that period. ”

“ Now the capitalist (i.e. the species, not the individual) qua labourer, remains as much a permanent factor of the industrial resources of the country as the land itself, and therefore we may fairly assume that the aggregate value of the living capitalist (considered as an enduring species) is, on Mr. ”