529

p We can now see that both Goschen’s "silent socialism" and Mul-

p hall’s "diffusion of wealth" are something out of this world. Mulhall himself has had to admit that there is an ever greater congestion of wealth in the upper reaches of society. But if that is so, then, regarded from their economic aspect, social contradictions, far from becoming “blunted”, are increasing more and more. Mulhall tries to “blunt” this conclusion by pointing out that the number of persons in Britain possessing fortunes in excess of £ 100 is growing far more rapidly than the population is. It would be timely to take a closer look at this sham consolation.

p Let us imagine a society made up of three classes: the wealthy, the well-to-do, and the poor. Let us imagine, for the sake of simplicity, that the poor class live exclusively by the sale of their labour, the well-to-do engage in trade, while the wealthy consist of capitalist entrepreneurs and landowners; the poor class total one thousand, the well-to-do, one hundred, and the wealthy, ten persons.  [529•**  In the distribution of social income, the share of each of these classes is a magnitude we shall denote as A.  Consequently, society’s aggregate income equals 3^4; on the average, a member of the wealthy class is ten times as rich as any member of the well-to-do class, any member of which, in his turn, is ten times as rich as one belonging to the poor class. Such is the relative condition of classes in a particular period, say 1875.

p Twenty-five years have passed. The social income has doubled, so that the share of each social class is now 2 A instead of the previous i A.  [529•***  We can now say that the economic prosperity of each class of society has doubled. However, the relationship 530 between these classes has remained unchanged: just as before, the rich man is, on the average, ten times as wealthy as the well-to-do man, while the latter’s fortune averages ten times as much as the possessions of the poor man. Consequently, we have no right to speak either of a "diffusion of wealth" in our society, or of " automatic socialism" as changing the distribution of incomes in the sense of blunting the contradictions between the social classes. We shall proceed, keeping this conclusion in mind.

p Let us suppose that income tax exists in our society, payable by all persons with incomes of £ 100 or more. Let us also suppose that the wealthy and the well-to-do classes do not contain a single person with an income below & 100, while there is not a single person in the poor class, whose income reaches that figure. Consequently, no person in the latter class paid income tax in 1875.

p But how will matters stand 25 years hence, when the aggregate income of each class of society has doubled?

p If we suppose, in the first place that, 25 years ago, there were 250 persons in the poor class, who annually received between & 50 and & 100, and, in the second place, the distribution of wealth within each class remained constant, we shall now have, in the poor class, 250 persons receiving between £ 100 and £ 200, and consequently liable to income tax. Thus the number of poor incometax payers will increase though no "diffusion of wealth" has taken place since the rich man will be ten times as wealthy as the well-to-do person, and the latter will still be ten times as rich as the poor man.

p However, in what degree will the number of poor income-lax payers increase?

p That, of course, will depend on the distribution of wealth within the well-to-do class. Let us suppose that 25 years ago that class contained 25 persons with annual incomes of between £ 500 and & 1,000. In that case, these 25 persons will be receiving—after the doubling of that class’s income (with the distribution of that income remaining unchanged)—between & 1,000 and & 2,000. Assuming that persons in receipt of over £ 1,000 can be called big payers, we shall see that the category of such payers will now be joined by 25 persons belonging to the middle class. Consequently, the total number of modest payers (in other words, the total number of "moderate incomes"  [530•* ) will now be 325 (75 remaining from the former number—100, and 250 new incomes formerly belonging to the working class), i.e., it will now have increased by 225 per cent.

p Let us continue our calculations. Twenty-five persons of the trading class, who receive between £ 1,000 and & 2,000, will 531 now figure in the lists of big payers, in the same category as persons in the upper class consisting of industrialists and landowners. These formerly numbered ten.  By adding to them 25 persons from the middle class, we find that the number of big payers now totals 35—an increase of 250 per cent.

p The number of big payers has grown somewhat faster than that of the “moderates”, but it will easily be seen that, with some change in our hypothetical figures, we shall arrive at an opposite result.

p Indeed, let us assume that we had only ten persons receiving from & 500 to £ 1,000 in 1875. Twenty-five years later, with the doubling of the income of the middle class, these ten persons will be receiving between £ 1,000 and £ 2,000 and will therefore join the big payers of income tax. Adding their number to that of the former big payers, who, as we remember, also totalled ten, we shall find that we now have twenty such payers in this category, which means that their number has grown only by 100 per cent. In view of the far more rapid growth in the number of “moderate” payers, we are now in a position to vociferate about "automatic socialism" and to evoke in uncritical “critics” the idea that the Marxist “dogma” is obsolete, and so on. In actual fact, however, there has been no "diffusion of wealth" since each social class receives its former share of the national income.

p We shall arrive at exactly the same “gratifying” conclusion— in the Goschen sense—by assuming that the concentration of property in the class of industrialists and landowners has taken place more rapidly than in the trading class, which is quite possible—and even highly probable—without casting any aspersions on the Marxist “dogma”.  [531•* 

p Until now we have assumed that, with the growth of the national income, the share of each social class has remained unchanged. Let us now see how the uneven growth of the incomes of the various classes would be reflected in the lists of income-tax payers.

p Let us suppose that the social income has quadrupled and is distributed as follows: the working class gets 2A; the middle class, 4A, and the upper class, 6A.  When the working class’s income 532 doubles, that class will include—just as in our former assumption—two hundred and fifty persons in receipt of incomes of £ 100 or more. These persons will now have to pay income tax, thus increasing the number of “moderate” payers. Previously the middle class wholly belonged to this “moderate” bracket, but now, when the income of the middle class has quadrupled, a considerable number of its members will go over into the bracket of big payers. How great will that number be? If we assume that the middle class formerly contained twenty-five persons getting between £ 250 and I 500, now each of these twenty-five persons ( given an unchanged distribution of middle-class quadrupled incomes among its members) will be getting between £ 1,000 and & 2,000, i.e., will cross the line separating the modest from the big payers of income tax. However, the same class also contained, according to our former assumption, twenty-five persons with incomes of between & 500 and £ 1,000. With the income of the middle class quadrupled, these persons will now be getting between £ 2,000 and & 4,000 each, and will therefore be included with greater reason among the big payers. Consequently, only fifty members of the middle class (100 minus 25, minus 25) will remain within the bracket of “moderate” payers. By adding the number of such persons to the number (250) of payers of modest means from the lower class we shall find that the total number of payers of modest means is now 300 (50 plus 250); it has gone up by 200 per cent.

p If we go over to the schedule of big payers, we shall see that, to their former number of ten, we must now add another 50 ( twentyfive persons with incomes of between & 1,000 and £ 2,000, and another twenty-five whose incomes range from £ 2,000 to £ 4,000). The total number, consequently, will be 60; it will have gone up by 500 per cent.

p If we assume that concentration will reduce the number of modest payers to 250, and the number of big payers to 55, it will follow that the aggregate of “moderate” incomes has gone up by 150 per cent, and of big incomes, by 450 per cent.

p All this reasoning of ours, however, has not taken into account the population growth. The population may grow 1) more rapidly than the social income; 2) just as rapidly, or 3) more slowly than the social income. We are concerned here only with the third instance, which is in keeping with capitalist reality. Let us consider that instance.

p We shall assume that the number of members of our society has doubled in the space of fifty years, whereas the social income has quadrupled, and now equals 12^4, with the working class getting 2A, the middle class, 4,4, and the upper class, 6,4. Since the doubled income of the working class is now distributed among a double number of persons, it follows that (with the 533 distribution of incomes within that class unchanged) the prosperity of each individual worker will not increase, which means that no stratum of the working class will join the ranks of the payers of income tax.

p Things will be different with the middle class: here the income has quadrupled while the number of persons has only doubled. Consequently, each person will be twice as wealthy as previously. The number of persons in receipt of incomes of between £ 1,000 and £ 2,000 will have now reached 50. The latter will now belong to the schedule of big payers, the remaining 150 (200 minus 50) remaining in the schedule of modest incomes. The number of " moderate" incomes will thus have increased by 50 per cent.

p The upper class formerly contained ten payers, who were of course in the upper bracket.  The doubling of the population has increased their number to twenty, to which should be added another fifty persons of the middle class, who have now joined the upper bracket.  The total is now 70 (20 plus 50); it has gone up by 600 per cent.

p Even if we suppose that the concentration of property has reduced the number of big payers to 55, we are nevertheless confronted by the fact of a vast increase in the number of big payers: an increase of up to 450 per cent.

p What is proved by all these examples, which have probably palled on the reader?

p Among other things, these examples prove the following:

p 1) The growth in the number of payers of modest means—this as a result of the increase in the social income—does not of itself testify to the "diffusion of wealth" or to the successes of "automatic socialism”, inasmuch as it is quite compatible with a\yast growth of inequality in the distribution of social wealth.

p 2) The greater the concentration of property in the upper class of society, the more salient is the growth in the number of payers of modest means. In certain cases, the number of "moderate incomes" will grow more rapidly than the number of big incomes, despite the simultaneous and very considerable growth of social inequality.

3) In present-day capitalist societies, the number of moderate incomes is increasing more rapidly than the overall size of the population. However, to infer therefrom that wealth has become diffused and social inequality has decreased would mean revealing a total and shameful lack of understanding of the matter. For a proper realisation of how the national income is distributed in present-day societies, one should first determine in what measure that income has grown in the period under consideration, and how its accretion has been divided among the separate classes. Those who speak of the diffusion of wealth and compare the growth of the

534 population with the growing number of moderate incomes have contributed absolutely nothing to that determination.  [534•* 

p Their arguments will therefore reveal nothing except their own feebleness.

p If we glance from the point of view of these conclusions at the data provided by Mulhall in his Dictionary of Statistics, we shall readily understand how and why those data can exist cheek by jowl with data which obviously have a diametrically opposite significance.

p Mulhall says that the number of persons in Britain with property in excess of £ 100 is growing far more rapidly than the population. That is very true, but Mulhall does not ask himself how rapidly Britain’s national income is growing. In fact, that income is growing far more rapidly than the number of persons in the bracket indicated by Mulhall, which is why the growth of that number goes hand in hand with the far more rapid increase of social inequality. That is borne out most explicitly by the data provided by the selfsame Mulhall in his book Industries and the Wealth of Nations. True, the data he gives in his Dictionary of Statistics seem to show that “moderate” incomes are growing far more rapidly in Britain than the big ones; however, we already know, in the first place, that even if that were the case, it would still be a far cry from the "diffusion of wealth”; in the second place, we know that the second half of the seventies was marked by a deep industrial depression which temporarily led to a decline in big incomes, and consequently to a temporary fall in their number. We therefore understand how and why a comparison of figures referring to 1860 on the one hand, and to 1880 on the other, are indicative of the more rapid growth in the number of moderate incomes as against big ones. But if we compare the overall results of economic development over a longer period, we shall see that, despite temporary setbacks, the big incomes grew far more rapidly in number than did the moderate ones. Indeed, the Mulhall table we have cited shows that, in 1812, there were 3,314 persons per 1,000,000 inhabitants in Britain with incomes in excess of £ 200; in 1880, they numbered 6,313, i.e., their total had not even doubled, whereas the number of persons with incomes of over £ 5,000 rose from 34 in 1812 to 88 in 1880: it went up by 163.6 per cent.

535

p These figures completely disprove Mulhall’s talk of the diffusion of social wealth, and fully bear him out when he says that "fortunes over £ 5,000 are multiplying much faster than those under & 5,000" (see above, p. 528).

“Figures themselves never lie”, said Goschen in the address we have referred to above, "but every one must admit that there is no sound and accurate material which can be so easily handled for the special purposes of the compiler as statistics can....” In this case, we are in full agreement with Goschen: indeed, figures do not lie....