Let us then look at those elements of the wealth of a nation which are commonly ignored when estimating the wealth of the individuals composing it. The most obvious forms of such wealth are public material property of all kinds, such as roads and canals, buildings and parks, gasworks and waterworks; though unfortunately many of them have been secured not by public savings, but by public borrowings, and there is the heavy "negative" wealth of a large debt to be set against them.

But the Thames has added more to the wealth of England than all its canals, and perhaps even than all its railroads. And though the Thames is a free gift of nature, except in so far as its navigation has been improved, while the canal is the work of man, we ought for many purposes to reckon the Thames a part of England's wealth'.

1 We should also, in accord with German economists, lay stress on the non-material elements of national wealth. Scientific knowledge indeed, wherever discovered, soon becomes the property of the whole civilized world, and may be called cosmopolitan rather than specially national wealth. The same is true of mechanical inventions and of many other improvements in the arts of production; and it is true of music. But those kinds of literature which lose their force by translation, may be regarded as in a special sense the wealth of those nations in whose language they are written. And the organization of a free and well-ordered State is an important element of national wealth.

But National wealth includes the Individual as well as the Collective property of its members. And in estimating the aggregate sum of their individual wealth, we may save some trouble by omitting all debts and other obligations due to one member of a nation from another. For instance, so far as the English national debt and the bonds of an English railway are owned within the nation, we can adopt the simple plan of counting the railway itself as part of the national wealth, and neglecting railway and Government bonds altogether. But we still have to deduct for those bonds etc. issued by the English Government or by private Englishmen, and held by foreigners; and to add for those foreign bonds etc. held by Englishmen.

Individual and national rights to wealth rest on the basis of civil and international law, or at least of custom that has the force of law. An exhaustive investigation of the economic conditions of any time and place requires therefore an inquiry into law and custom; and economics owes much to those who have worked in this direction. But its boundaries are already

wide; and the historical and juridical bases of the conceptions of property are vast subjects which may best be discussed in separate treatises.

There are many things which lie across the lines of division indicated in the text, partly on one side, and partly on the other. Some of these cases are discussed in Principles II. II. with reference especially to the distinctions between Transferable and Non-transferable Goods; to personal advantages that are and are not to be classed as Personal Wealth; and to the relations in which the privileges, which individuals derive from their credit and business connections, stand to National Wealth.

PRODUCTION.

CHAPTER III.

CONSUMPTION. LABOUR.

NECESSARIES.

utilities

§ 1. MAN cannot create material things. In the mental and moral world indeed he may produce new Man can proideas; but when he is said to produce material duce only things, he really only produces utilities; or in other words, his efforts and sacrifices result in changing the form or arrangement of matter to adapt it better for the satisfaction of wants. All that he can do in the physical world is either to re-adjust matter so as to make it more useful, as when he makes a log of wood into a table; or to put it in the way of being made more useful by nature, as when he puts seed where the forces of nature will make it burst out into life1.

and can con

CONSUMPTION may be regarded as negative production. Just as man can produce only utilities, so he can consume nothing more. He can produce ser- sume only vices and other immaterial products, and he can consume them.

utilities.

But as his production of material products is

1 It is sometimes said that traders do not produce: that while the cabinetmaker produces furniture, the furniture-dealer merely sells what is already produced. But there is no scientific foundation for this distinction. They both produce utilities, and neither of them can do more: the furniture-dealer moves and re-arranges matters so as to make it more serviceable than it was before, and the carpenter does nothing more. The sailor or the railway-man who carries coal above ground produces it, just as much as the miner who carries it underground; the dealer in fish helps to move on fish from where it is of comparatively little use to where it is of greater use, and the fisherman does no more. It is true that if there are more traders than are necessary there is waste. But there is also waste if there are two men to a plough which can be well worked by one man; in both cases all those who are at work, produce, though they may produce but little.

really nothing more than a rearrangement of matter which gives it new utilities; so his consumption of them is nothing more than a disarrangement of matter, which lessens or destroys its utilities. Often indeed when he is said to consume things, he does nothing more than to hold them for his use, while, as Senior says, they "are destroyed by those numerous gradual agents which we call collectively time.” As the "producer" of wheat is he who puts seed where Nature will make it grow, so the "consumer" of pictures, of curtains and even of a house or a yacht does little to wear them out himself; but he holds them and uses them while time wastes them.

And here we may note that Goods may be divided into CONSUMPTION GOODS', which satisfy wants directly, Consumption and production such as food, clothes, etc.; and PRODUCTION GOODS goods. which satisfy wants, not directly, but indirectly by contributing towards the production of consumption

goods.

§ 2.

Nearly all labour is in some sense

productive.

All labour is directed towards producing some effect. For though some exertions are taken merely for their own sake, as when a game is played for amusement, they are not counted as labour. We may define LABOUR as any exertion of mind or body undergone partly or wholly with a view to some good other than the pleasure derived directly from the work. And if we had to make a fresh start it would be best to regard all labour as productive except that which failed to promote the aim towards which it was directed, and so produced no utility. But both business men and economists have used the word Productive in narrower senses, without however any general agreement as to details. And on the whole it seems best to decide that, when used alone it will

1 Consumption Goods are sometimes called Goods of the First Order. A flour mill would be classed as a Good of the Second Order; machinery for making flour mills as a Good of the Third Order, and so on.

mean Productive of the means of production, and of lasting sources of enjoyment1. And if ever we want to use it in a different sense we must say so: for instance we may speak of labour as productive of necessaries or as productive of capital.

Productive consumption is commonly defined as the use of wealth in the production of further wealth. But Productive this definition is ambiguous. For it is sometimes consumption. taken to include everything that is actually consumed by people engaged in productive work, even though it may not conduce at all to their efficiency as workers. But Productive consumption, strictly so called, must be taken to include only such consumption by productive workers as is necessary for their work; under which head may be reckoned the necessary consumption of children, who will hereafter be productive workers, as well as that of adults during sickness.

§ 3. This brings us to consider the term Necessaries. It is common to divide wealth into Necessaries, Comforts and Luxuries; the first class including all things required to meet wants which must be satisfied, while the latter consist of things that meet wants of a less urgent character. But here again there is a troublesome ambiguity. When we say that a want must be satisfied, what are the consequences which we have in view if it is not satisfied? Do they include death? Or do they extend only to the loss of strength and vigour? In other words, are Necessaries the things which are necessary for life, or those which are necessary for efficiency?

The older use of the term Necessaries was limited to those

1 No doubt the dividing line between permanent and ephemeral sources of enjoyment cannot be drawn rigidly. But this is a difficulty which exists in the nature of things and cannot be evaded by any device of words. We can speak of an increase of tall men relatively to short, without deciding whether all those above five feet nine inches are to be classed as tall, or only those above five feet ten. And we can speak of the increase of productive labour at the expense of unproductive without fixing on any rigid, and therefore arbitrary line of division between them. If such an artificial line is required for any particular purpose, it must he drawn explicitly for the occasion. But in actual fact such occasions seldom or never occur.