# SECTIONS

# 1 What the word “rich” really means

# 2 How rich men enjoy their riches

# 3 The example of inequality: Two farmers (shipwrecked sailors)

# 4 The example of the merchant who exploits two farmers

# 5 The limitations of monetary wealth. The nature of true wealth.

Notes»

# ↑ What the word “rich” really means Sec 1

- 1 Political economists respond that political economy is simply the science of getting rich and that it has enriched all the capitalists of Europe.
- 2 In fact, businessmen don’t know political economy. They know only mercantile economy and only the part of mercentile economy that made them rich.
- 3 Furthermore they refuse to recognize that in the mercantile economy being rich requires that someone else be poor (“a zero sum game”).
- 4 Political economy is about adding to the total well-being of the nation. Conscientious farmers, housewives, shpwrights, and many others all contribute.
- 5 Mercantile economy (commercial wealth) is simply about one person’s claim upon and power over the labor of someone else. It does not necessarily contribute to the state’s well being.
- 6 Men think of riches in terms of commercial wealth because it is can instantly be converted into property, while property is harder to convert into commercial wealth.
- 7 They think this also because we typically can’t enjoy our property unless we have the power over someone’s labor—as illustrated by the example of the rich man who cannot find a servant.

▲1 The answer which would be made by any ordinary political economist to the statements contained in the preceding paper, is in few words as follows: (26)
“It is indeed true that certain advantages of a general nature may be obtained by the development of social affections. But political economists never professed, nor profess, to take advantages of a general nature into consideration. Our science is simply the science of getting rich. So far from being a fallacious or visionary one, it is found by experience to be practically effective. Persons who follow its precepts do actually become rich, and persons who disobey them become poor. Every capitalist of Europe has acquired his fortune by following the known laws of our science, and increases his capital daily by an adherence to them. It is vain to bring forward tricks of logic, against the force of accomplished facts. Every man of business knows by experience how money is made, and how it is lost.”
▲2 Pardon me. Men of business do indeed know how they themselves made their money, or how, on occasion, they lost it. Playing a long-practised game, they are familiar with the chances of its cards, and can rightly explain their losses and gains. But they neither know who keeps the bank of the gambling-house, nor what other games may be played with the same cards, nor what other losses and gains, far away among the dark streets, are essentially, though invisibly, dependent on theirs in the lighted rooms. They have learned a few, and only a few, of the laws of mercantile economy; but not one of those of political economy.
Primarily, which is very notable and curious, I observe that men of business rarely know the meaning of the word “rich.” At least, if they know, they do not in their reasonings allow for the fact, that it is a relative word, implying its opposite “poor” as positively as the word “north” implies its opposite “south.” ▲3 Men nearly always speak and write as if riches were absolute, and it were possible, by following certain scientific precepts, for everybody to be rich. Whereas riches are a power like that of electricity, acting only through inequalities or negations of itself. The force of the guinea you have in your pocket depends wholly on the default of a guinea in your neighbour's pocket. If he did not want it, it would be of no use to you; the degree of power it possesses depends accurately upon the need or desire he has for it,—and the art of making yourself rich, in the ordinary mercantile economist's sense, is therefore equally and necessarily the art of keeping your neighbour poor. (27)
▲4 Political economy (the economy of a State, or of citizens) consists simply in the production, preservation, and distribution, at fittest time and place, of useful or pleasurable things. The farmer who cuts his hay at the right time; the shipwright who drives his bolts well home in sound wood; the builder who lays good bricks in well-tempered mortar; the housewife who takes care of her furniture in the parlour, and guards against all waste in her kitchen; and the singer who rightly disciplines, and never overstrains her voice, are all political economists in the true and final sense: adding continually to the riches and well-being of the nation to which they belong. (28)
▲5 But mercantile economy, the economy of “merces” or of “pay,” signifies the accumulation, in the hands of individuals, of legal or moral claim upon, or power over, the labour of others; every such claim implying precisely as much poverty or debt on one side, as it implies riches or right on the other.
It does not, therefore, necessarily involve an addition to the actual property, or well-being, of the State in which it exists. ▲6 But since this commercial wealth, or power over labour, is nearly always convertible at once into real property, while real property is not always convertible at once into power over labour, the idea of riches among active men in civilized nations, generally refers to commercial wealth; and in estimating their possessions, they rather calculate the value of their horses and fields by the number of guineas they could get for them, than the value of their guineas by the number of horses and fields they could buy with them.
▲7 There is, however, another reason for this habit of mind; namely, that an accumulation of real property is of little use to its owner, unless, together with it, he has commercial power over labour. Thus, suppose any person to be put in possession of a large estate of fruitful land, with rich beds of gold in its gravel, countless herds of cattle in its pastures; houses, and gardens, and storehouses full of useful stores; but suppose, after all, that he could get no servants? In order that he may be able to have servants, some one in his neighbourhood must be poor, and in want of his gold—or his corn. Assume that no one is in want of either, and that no servants are to be had. He must, therefore, bake his own bread, make his own clothes, plough his own ground, and shepherd his own flocks. His gold will be as useful to him as any other yellow pebbles on his estate. His stores must rot, for he cannot consume them. He can eat no more than another man could eat, and wear no more than another man could wear. He must lead a life of severe and common labour to procure even ordinary comforts; he will be ultimately unable to keep either houses in repair, or fields in cultivation; and forced to content himself with a poor man's portion of cottage and garden, in the midst of a desert of waste land, trampled by wild cattle, and encumbered by ruins of palaces, which he will hardly mock at himself by calling “his own.” (29)

Notes»

# ↑ How rich men enjoy their riches Sec 2

- 1 What rich men really want is control over those who have little. And, our riches are worth more when most people are poor.
- 2 For example, if there is but one rich person, the musician will have to sing for what that person will pay.
- 3 One fallacy of political economy is that the inequality of wealth is inherently advantageous to the nation. In fact, inequalities can arise in either a just or unjust manner and can be either beneficial or destructive.
- 4 Thus the circulation of wealth in a nation is like the circulation of blood—it may be healthy or else diseased

The most covetous of mankind would, with small exultation, I presume, accept riches of this kind on these terms. ▲1 What is really desired, under the name of riches, is essentially, power over men; in its simplest sense, the power of obtaining for our own advantage the labour of servant, tradesman, and artist; in wider sense, authority of directing large masses of the nation to various ends (good, trivial or hurtful, according to the mind of the rich person). And this power of wealth of course is greater or less in direct proportion to the poverty of the men over whom it is exercised, and in inverse proportion to the number of persons who are as rich as ourselves, and who are ready to give the same price for an article of which the supply is limited. ▲2 If the musician is poor, he will sing for small pay, as long as there is only one person who can pay him; but if there be two or three, he will sing for the one who offers him most. And thus the power of the riches of the patron (always imperfect and doubtful, as we shall see presently, even when most authoritative) depends first on the poverty of the artist, and then on the limitation of the number of equally wealthy persons, who also want seats at the concert. So that, as above stated, the art of becoming “rich,” in the common sense, is not absolutely nor finally the art of accumulating much money for ourselves, but also of contriving that our neighbours shall have less. In accurate terms, it is “the art of establishing the maximum inequality in our own favour.” (30)
▲3 Now, the establishment of such inequality cannot be shown in the abstract to be either advantageous or disadvantageous to the body of the nation. The rash and absurd assumption that such inequalities are necessarily advantageous, lies at the root of most of the popular fallacies on the subject of political economy. For the eternal and inevitable law in this matter is, that the beneficialness of the inequality depends, first, on the methods by which it was accomplished; and, secondly, on the purposes to which it is applied. Inequalities of wealth, unjustly established, have assuredly injured the nation in which they exist during their establishment; and, unjustly directed, injure it yet more during their existence. But inequalities of wealth, justly established, benefit the nation in the course of their establishment; and, nobly used, aid it yet more by their existence.That is to say, among every active and well-governed people, the various strength of individuals, tested by full exertion and specially applied to various need, issues in unequal, but harmonious results, receiving reward or authority according to its class and service;1 while, in the inactive or ill-governed nation, the gradations of decay and the victories of treason work out also their own rugged system of subjection and success; and substitute, for the melodious inequalities of concurrent power, the iniquitous dominances and depressions of guilt and misfortune.(31)
▲4 Thus the circulation of wealth in a nation resembles that of the blood in the natural body. There is one quickness of the current which comes of cheerful emotion or wholesome exercise; and another which comes of shame or of fever. There is a flush of the body which is full of warmth and life; and another which will pass into putrefaction. (32)
The analogy will hold down even to minute particulars. For as diseased local determination of the blood involves depression of the general health of the system, all morbid local action of riches will be found ultimately to involve a weakening of the resources of the body politic.
The mode in which this is produced may be at once understood by examining one or two instances of the development of wealth in the simplest possible circumstances.

Notes»

# ↑ The example of inequality: Two farmers (shipwrecked sailors) Sec 3

- 1 Let’s imagine two shipwrecked sailors who begin farming together, achieve prosperity, and then decide to divide the land into two separate farms.
- 2 One farmer becomes ill and requires assistance from the other. He therefore signs a binding agreement to work the fields of the other farmer after he recovers.
- 3 Collectively, this little society is poorer due to the illness of one of the two men, but a huge inequality of wealth will likely arise so that one farmer can live in idleness while the other toils.
- 4 Inequalities can arise in various ways. The important point is that the establishment of mercantile wealth often arises with the decline of the totality of real wealth.

▲1 Suppose two sailors cast away on an uninhabited coast, and obliged to maintain themselves there by their own labour for a series of years. (33)
If they both kept their health, and worked steadily and in amity with each other, they might build themselves a convenient house, and in time come to possess a certain quantity of cultivated land, together with various stores laid up for future use. All these things would be real riches or property; and, supposing the men both to have worked equally hard, they would each have right to equal share or use of it. Their political economy would consist merely in careful preservation and just division of these possessions. Perhaps, however, after some time one or other might be dissatisfied with the results of their common farming; and they might in consequence agree to divide the land they had brought under the spade into equal shares, so that each might thenceforward work in his own field, and live by it. ▲2 Suppose that after this arrangement had been made, one of them were to fall ill, and be unable to work on his land at a critical time—say of sowing or harvest.
He would naturally ask the other to sow or reap for him.
Then his companion might say, with perfect justice, “I will do this additional work for you; but if I do it, you must promise to do as much for me at another time. I will count how many hours I spend on your ground, and you shall give me a written promise to work for the same number of hours on mine, whenever I need your help, and you are able to give it.”
Suppose the disabled man's sickness to continue, and that under various circumstances, for several years, requiring the help of the other, he on each occasion gave a written pledge to work, as soon as he was able, at his companion's orders, for the same number of hours which the other had given up to him. What will the positions of the two men be when the invalid is able to resume work? (34)
▲3 Considered as a “Polis,” or state, they will be poorer than they would have been otherwise: poorer by the withdrawal of what the sick man's labour would have produced in the interval. His friend may perhaps have toiled with an energy quickened by the enlarged need, but in the end his own land and property must have suffered by the withdrawal of so much of his time and thought from them: and the united property of the two men will be certainly less than it would have been if both had remained in health and activity.
But the relations in which they stand to each other are also widely altered. The sick man has not only pledged his labour for some years, but will probably have exhausted his own share of the accumulated stores, and will be in consequence for some time dependent on the other for food, which he can only “pay” or reward him for by yet more deeply pledging his own labour.
Supposing the written promises to be held entirely valid (among civilized nations their validity is secured by legal measures2, the person who had hitherto worked for both might now, if he chose, rest altogether, and pass his time in idleness, not only forcing his companion to redeem all the engagements he had already entered into, but exacting from him pledges for further labour, to an arbitrary amount, for what food he had to advance to him.
There might not, from first to last, be the least illegality (in the ordinary sense of the word) in the arrangement; but if a stranger arrived on the coast at this advanced epoch of their political economy, he would find one man commercially Rich; the other commercially Poor. He would see, perhaps, with no small surprise, one passing his days in idleness; the other labouring for both, and living sparely, in the hope of recovering his independence at some distant period. (35)
▲4 This is, of course, an example of one only out of many ways in which inequality of possession may be established between different persons, giving rise to the Mercantile forms of Riches and Poverty. In the instance before us, one of the men might from the first have deliberately chosen to be idle, and to put his life in pawn for present ease; or he might have mismanaged his land, and been compelled to have recourse to his neighbour for food and help, pledging his future labour for it. But what I want the reader to note especially is the fact, common to a large number of typical cases of this kind, that the establishment of the mercantile wealth which consists in a claim upon labour, signifies a political diminution of the real wealth which consists in substantial possessions.

Notes»

# ↑ The example of the merchant who exploits two farmers Sec 4

- 1 Envision two farmers and a merchant who controls the trade between them.
- 2 Suppose the merchant manipulates supply and demand between the two farmers. Eventually, the two impoverished farmers become the merchant’s servants.
- 3 We see that wealth always has a moral dimension. It may arise justly from productive energy or from merciless tyranny (exploitation).
- 4 Nothing is as disgraceful as the economic principle to buy at the cheapest price and sell at the dearest. What really matters is the social justice that underlies all your transactions.

▲1 Take another example, more consistent with the ordinary course of affairs of trade. Suppose that three men, instead of two, formed the little isolated republic, and found themselves obliged to separate, in order to farm different pieces of land at some distance from each other along the coast: each estate furnishing a distinct kind of produce, and each more or less in need of the material raised on the other. Suppose that the third man, in order to save the time of all three, undertakes simply to superintend the transference of commodities from one farm to the other; on condition of receiving some sufficiently remunerative share of every parcel of goods conveyed, or of some other parcel received in exchange for it. (36)
▲2 If this carrier or messenger always brings to each estate, from the other, what is chiefly wanted, at the right time, the operations of the two farmers will go on prosperously, and the largest possible result in produce, or wealth, will be attained by the little community. But suppose no intercourse between the landowners is possible, except through the travelling agent; and that, after a time, this agent, watching the course of each man's agriculture, keeps back the articles with which he has been entrusted until there comes a period of extreme necessity for them, on one side or other, and then exacts in exchange for them all that the distressed farmer can spare of other kinds of produce: it is easy to see that by ingeniously watching his opportunities, he might possess himself regularly of the greater part of the superfluous produce of the two estates, and at last, in some year of severest trial or scarcity, purchase both for himself and maintain the former proprietors thenceforward as his labourers or servants.
This would be a case of commercial wealth acquired on the exactest principles of modern political economy. But more distinctly even than in the former instance, it is manifest in this that the wealth of the State, or of the three men considered as a society, is collectively less than it would have been had the merchant been content with juster profit. The operations of the two agriculturists have been cramped to the utmost; and the continual limitations of the supply of things they wanted at critical times, together with the failure of courage consequent on the prolongation of a struggle for mere existence, without any sense of permanent gain, must have seriously diminished the effective results of their labour; and the stores finally accumulated in the merchant's hands will not in any wise be of equivalent value to those which, had his dealings been honest, would have filled at once the granaries of the farmers and his own. (37)
▲3 The whole question, therefore, respecting not only the advantage, but even the quantity, of national wealth, resolves itself finally into one of abstract justice. It is impossible to conclude, of any given mass of acquired wealth, merely by the fact of its existence, whether it signifies good or evil to the nation in the midst of which it exists. Its real value depends on the moral sign attached to it, just as sternly as that of a mathematical quantity depends on the algebraical sign attached to it. Any given accumulation of commercial wealth may be indicative, on the one hand, of faithful industries, progressive energies, and productive ingenuities: or, on the other, it may be indicative of mortal luxury, merciless tyranny, ruinous chicane. Some treasures are heavy with human tears, as an ill-stored harvest with untimely rain; and some gold is brighter in sunshine than it is in substance.
And these are not, observe, merely moral or pathetic attributes of riches, which the seeker of riches may, if he chooses, despise; they are, literally and sternly, material attributes of riches, depreciating or exalting, incalculably, the monetary signification of the sum in question. One mass of money is the outcome of action which has created, another, of action which has annihilated, —ten times as much in the gathering of it; such and such strong hands have been paralyzed, as if they had been numbed by nightshade: so many strong men's courage broken, so many productive operations hindered; this and the other false direction given to labour, and lying image of prosperity set up, on Dura plains dug into seven-times-heated furnaces. That which seems to be wealth may in verity be only the gilded index of far-reaching ruin: a wrecker's handful of coin gleaned from the beach to which he has beguiled an argosy; a camp-follower's bundle of rags unwrapped from the breasts of goodly soldiers dead; the purchase-pieces of potter's fields, wherein shall be buried together the citizen and the stranger. (38)
And therefore, the idea that directions can be given for the gaining of wealth, irrespectively of the consideration of its moral sources, or that any general and technical law of purchase and gain can be set down for national practice, is perhaps the most insolently futile of all that ever beguiled men through their vices. ▲4 So far as I know, there is not in history record of anything so disgraceful to the human intellect as the modern idea that the commercial text, “Buy in the cheapest market and sell in the dearest,” represents, or under any circumstances could represent, an available principle of national economy. Buy in the cheapest market? yes; but what made your market cheap? Charcoal may be cheap among your roof timbers after a fire, and bricks may be cheap in your streets after an earthquake; but fire and earthquake may not therefore he national benefits. Sell in the dearest? —Yes, truly; but what made your market dear? You sold your bread well to-day: was it to a dying man who gave his last coin for it, and will never need bread more; or to a rich man who to-morrow will buy your farm over your head; or to a soldier on his way to pillage the bank in which you have put your fortune?
None of these things you can know. One thing only you can know: namely, whether this dealing of yours is a just and faithful one, which is all you need concern yourself about respecting it; sure thus to have done your own part in bringing about ultimately in the world a state of things which will not issue in pillage or in death. And thus every question concerning these things merges itself ultimately in the great question of justice, which, the ground being thus far cleared for it. I will enter upon the next paper, leaving only, in this, three final points for the reader's consideration.

Notes»

# ↑ The limitations of monetary wealth. The nature of true wealth. Sec 5

- 1 The power over other men that is achieved by money is always imperfect. Furthermore, many of the joys of life cannot be bought with gold.
- 2 Moral power, “invisible gold,” is just as real as bullion. Political scientists should take heed of this.
- 3 The authority conferred by wealth seems to be failing now in England. Servants, wanting their pay, disobey.
- 4 The true veins of wealth are the veins of men, and the true purpose of wealth is producing active, happy people—though modern wealth appears to work the other way.
- 5 Perhaps England will one day reject the doctrine of monetary wealth and declare that its people are the nation’s jewels.

▲1 It has been shown that the chief value and virtue of money consists in its having power over human beings; that, without this power, large material possessions are useless, and to any person possessing such power, comparatively unnecessary. But power over human beings is attainable by other means than by money. As I said a few pages back, the money power is always imperfect and doubtful; there are many things which cannot be reached with it, others which cannot be retained by it. Many joys may be given to men which cannot be bought for gold, and many fidelities found in them which cannot be rewarded with it
▲2 Trite enough, —the reader thinks. Yes: but it is not so trite, —I wish it were, —that in this moral power, quite inscrutable and immeasurable though it be, there is a monetary value just as real as that represented by more ponderous currencies. A man's hand may be full of invisible gold, and the wave of it, or the grasp, shall do more than another's with a shower of bullion. This invisible gold, also, does not necessarily diminish in spending. Political economists will do well some day to take heed of it, though they cannot take measure.
▲3 But farther. Since the essence of wealth consists in its authority over men, if the apparent or nominal wealth fail in this power, it fails in essence; in fact, ceases to be wealth at all. It does not appear lately in England, that our authority over men is absolute. The servants show some disposition to rush riotously upstairs, under an impression that their wages are not regularly paid. We should augur ill of any gentleman's property to whom this happened every other day in his drawing-room.
▲4 Finally. Since the essence of wealth consists in power over men, will it not follow that the nobler and the more in number the persons are over whom it has power, the greater the wealth? Perhaps it may even appear, after some consideration, that the persons themselves are the wealth that these pieces of gold with which we are in the habit of guiding them, are, in fact, nothing more than a kind of Byzantine harness or trappings, very glittering and beautiful in barbaric sight, wherewith we bridle the creatures; but that if these same living creatures could be guided without the fretting and jingling of the Byzants in their mouths and ears, they might themselves be more valuable than their bridles. In fact, it may be discovered that the true veins of wealth are purple—and not in Rock, but in Flesh—perhaps even that the final outcome and consummation of all wealth is in the producing as many as possible full-breathed, bright-eyed, and happy-hearted human creatures. Our modern wealth, I think, has rather a tendency the other way; —most political economists appearing to consider multitudes of human creatures not conducive to wealth, or at best conducive to it only by remaining in a dim-eyed and narrow-chested state of being. (40).
▲5 Nevertheless, it is open, I repeat, to serious question, which I leave to the reader's pondering, whether, among national manufactures, that of Souls of a good quality may not at last turn out a quite leadingly lucrative one? Nay, in some far-away and yet undreamt-of hour, I can even imagine that England may cast all thoughts of possessive wealth back to the barbaric nations among whom they first arose; and that, while the sands of the Indus and adamant of Golconda may yet stiffen the housings of the charger, and flash from the turban of the slave, she, as a Christian mother, may at last attain to the virtues and the treasures of a Heathen one, and be able to lead forth her Sons, saying, —
“These are My Jewels.”
(41)