England's Ideal and Other Papers on Social Subjects

Edward Carpenter

• Publisher: Routledge
• Year: 2016
• Print ISBN:
  9781138184480
• eBook ISBN:
  9781317291121
• Topic: Social Sciences
• Subtopic: Sociology
• Index: Social Sciences

Originally published in 1887, Edward Carpenter's England's Ideal and other Papers on Social Subjects is a collection of his essays in the field of Social Science with a focus on English society at the time of writing. His writing was so influential that there was a near constant demand in the late nineteenth and early twentieth centuries for this work to be reprinted with this particular edition being published in 1919. Papers included in this volume discuss issues such as labour, trade and property and all provide insight into the English class structure as well as illuminating Carpenter's socialist values. This title will be of interest to students of sociology.

MODERN MONEY-LENDING,

AND THE

MEANING OF DIVIDENDS.

“If I lend £100, and for it covenant to receive £105, or any other sum greater than was the sum I did lend, this is that that we call usury; such a kind of bargaining as no good man, or godly man, ever used.”—Bp. Jewell.

“Chi fila ha una camiccia, e chi non fila ne ha due.”

THE practice of Money-lending is now carried out on such an enormous scale, and by such a large class of society, and is attended by certain evils so widespread and disastrous, that it has become fairly necessary to look the problem in the face; and whatever may be the conclusion arrived at, I shall consider the purpose of this paper fulfilled if it causes the reader (and myself) to confront the question, and to see that it requires solution.

There has always been a disagreeable odor about this trade. The very word Usury has unpleasant associations with it. How is it then that we who reprobate the money-lending Jew of mediæval Europe and the marwari whose loans press so heavily to-day upon the peasant of India, are light-hearted enough to lend our money out at interest without a qualm, and (some of us) to make our entire subsistence on the gains so got from other people?

Is it that the Shylock and the marwari are so distant from us that we do not perceive our relationship to them?

“No,” says someone, “the reason is that they practised and practise Usury; we only reap Interest. To live on the gains of other people becomes criminal when you depass a certain point.”

What then is that point? Where is that line to be drawn which divides legitimate Interest from Usury? Let us remember that the word Usury simply indicates that the person who lends the money expects a reward for the use of it; and the word Interest indicates that the person who lends the money is interested in, or a party to, the concern from which the gain is expected to be made. There is nothing in the original signification of the two words to show one proceeding as more legitimate than the other.

Certainly it is quite conceivable that a high rate of Interest might be grossly unfair, and a low rate only just and equitable; but this distinction of degree can hardly be the ground of our action, since there is nothing that we usually covet more or congratulate ourselves more upon than the obtaining of a high rate of interest for our money.

No—the reason, it seems to me, why we carry on our money-lending business without qualms lies simply in the fact that the practice, in its modern form, is universal round us. Every body (which in the “society” signification of the word means everyone who does not work with his hands) does it. Custom sanctions it; “the law allows it.” And to most people involved in the practice it naturally never occurs to consider its rightfulness or wrongfulness at all.

But this does not make it the less incumbent on us—once we have looked into the matter—to get to the roots of it. Rather more. Let us dig into it then.

The fundamental principle of social life and just living can never, it seems to me, be too often brought forward. For some reason or other it is only too often liable to be obscured. It is this—that the existence and well-being of a people are secured by their collective labor, and that only by taking his part in that labor can each man have a right to the advantages which flow from it. Political Economy always begins with an island! At first all are workers, and by a few hours’ work daily from each man sufficient of the necessaries and adornments even of life are produced (from the natural resources of the island) to maintain every one in comfort. After a time it is found that the state of affairs has changed. Half the population is now living in idleness—or at most engaged in occupations whose benefit to the community is very remote and dubious. The other half is working very hard—twice as many hours a day, in fact, as before—as it must do to keep things up to the former level.

This is a sad change for the worse. One half of the community is living in degrading slavery, has more work to do than can be done without injury and the blunting of noble powers. The other half is living in (even more) degrading dependence, and is suffering that injury to its soul which comes and must come from all meanness and selfishness.

This second state of affairs on the island is what we notice on our own island to-day and in modern social life at large. The causes which have led up to it and the means by which it is kept going are manifold. The use of money and of capital, hereditary acquirements, monopoly of land, customs and laws now grown false and harmful, are some of the engines by which one part of the community retains its power over the other part. The problem of the little island is complicated, too, when we come to consider the big island, by such matters as foreign trade, taxes, misunderstandings as to the nature of money, and all the cog-wheels big and little of social life—but essentially it is the same. These things only serve to disguise the fact that one class is living on the labor of another; they do not in any way alter the fact.

Let us look at the matter again. I have said that the money-lending classes are in our modern society very large. They are also greatly on the increase. It can hardly be otherwise. Let us suppose that in some society conducted on our present system one man (and only one at first) accumulates enough money to bring him in a substantial income—say £500 a year. Then that man is safe. He has escaped from the labor of feeding himself and children, and may fold his arms and amuse himself as he likes—he has got on the dry land beyond the flood—and this in perpetuity practically; for he may live as long as he can and then transmit the right to those who come after him. He is safe, and except by his own imprudence need never again join the throng of those who toil and spin. Presently another man accumulates the desired amount. He also “retires,” and is safe. Then a third and fourth. Then hundreds and thousands, then a considerable portion of the whole nation—where shall we stop? All the footsteps (with but few exceptions) point the same way. Few, who by their own exertions or those of their fathers and grandfathers have reached the desired haven, are likely to quit it again. The number must go on increasing—yet it is impossible for a whole nation to retire and suck its thumb! What is happening? This is happening—a vast and ever vaster proportion of the nation is getting (by force of existing social rights and machinery) to live on the labor of the rest. Every day, of those who are harnessed to the car of national life and prosperity, one or another by dint of extra forethought, prudence, miserliness, cunning, or whatever it may be, gets an advantage over the rest, leaves them, jumps inside the car, and thenceforth instead of drawing is drawn. The end is only too obvious. It is a reductio ad absurdum of national life. It is breakdown, smash up—and the car left in the ditch.

These are serious charges to bring against the practice of money-lending as carried on in modern society. Let us look at the other side of the question.

I have £500 which I have saved out of the products of my own labor—and which I have no immediate use for. My neighbor offers me 5 per cent. per annum for the use of the sum for a given period. Have I not a perfect right to accept his offer? Should I not be a perfect fool if I refused it?

Yes (in answer to the first question—the answer to the second will, perhaps, appear later on) I have a perfect (legal) right to accept his offer. On this view Interest is a gratitude. It is presumably a payment made by the borrower in return for some advantage he derives from the money lent. It does not matter to me in a sense how he employs the money. He may merely squander it for his own amusement, or he may employ it as capital to bring him a profit In either case he gives me what I consider sufficient security for its repayment, and if he offers me 5 per cent. interest besides it is because the advantage is worth that to him; and I have a perfect right to accept it.

Besides, am I not by lending this money actually in the second case benefiting society? Do I not put capital into the hands of a man who is willing and able to employ it, and thus actually encourage and further production? Nay more, I may go further, and waiving my request for a security may subscribe my funds directly to his concern, taking the risk and sharing some of the profits—may become a shareholder, in fact. In doing this do I not benefit my country, and may I not pocket my returns with a glow of substantial and generous satisfaction?¹

Yes, I believe that it is possible that in the ways mentioned I may be useful to society; and it seems to me possible that, for instance, the Jew money-lender of the thirteenth and fourteenth centuries in England was a useful member of society. At that time, when capital was scarce, and for the budding demands of commerce private individuals could often not supply sufficient funds, his services may have been indispensable; and if he sometimes took undue advantage of his position, plentiful laws restrained him.

How then can it be that the gains of the modern money-lender, whether bond or shareholder, should lead to such disastrous conclusions as I have pointed out? How can we reconcile the supposed rightfulness of interest with the immorality of a life of idleness, and the meanness of a vast class supported by the excessive and exhausting labor of the mass of the people?

Is it possible that a practice which may be wholesome and useful to society in a moderate or small degree and at one period, may become highly dangerous when carried out on a large scale and at another period; that the Jew money-lender, in consideration of his services, could in his time really be tolerated, but that the shareholder has become an insupportable Old Man of the Sea, who must be torn off and got rid of at all costs? Quite possible, I think; though I will not by any means say that this brings us to the bottom of the whole matter. Let us dig at it again.

Is it still not obvious that the poverty of the mass of the people stands in direct relationship to the wealth of the money-lending classes, that they are the two opposite sides or faces, in fact, of the same thing? Has that original illustration about the people on the island grown dim by reason of some considerations by the way which have been introduced? Let it stand out clear again. It cannot be got over.

Where does Interest come from? Have you ever thought of that?

If I lend £500 to a man, he may, as I have said, either squander it away or invest it as capital to bring him in a profit. The first case need not detain us long; it is in the main an exceptional case. If the borrower squanders my money, I shall probably have to sell him up to repay myself capital and interest; I shall not lend to him again, and that game soon comes to an end. The money-lending which constitutes the great problem of modern society, is that which is connected in some way or other with capital. I lend my £500 to a man who employs it as capital in some concern, and the interest which I receive comes out of the profits of that concern.

But where does it come from? Who pays it? How does the capitalist make his profit?

The capitalist buys raw material; he employs labor to work it up into a finished article; and he Bells the finished article. These are the three processes of his business, and in one (or more) of these processes he must get more than he gives—otherwise he can make no profit. That is quite clear, I think. He is a clothier. He buys cloth, employs men and women to cut and stitch it, and sells coats. The coat contains so much cloth and so much added labor (including the labor necessary to replace the wear and tear of the sewing machines). And the value of the coat is equal to the value of the cloth plus the value of the labor put into it.

It is obvious that in the long run the coat will not sell for more than this. But if not, where does his profit come from? It must come out of the cloth or out of the labor. But he has paid the full value of the cloth in purchasing it, and, therefore, he cannot, on the average, get more in selling it. Has he paid the full value of the labor in purchasing that? No, certainly not; and it is not difficult to see that it is here that his profit arises. He gives his young women eighteenpence (generally less) for their day’s work at the sewing machines. But the labor they put into the cloth is worth far more than eighteenpence; and the value that he gets in the market for the coat (above the value of the cloth out of which it is made) is the actual value of the labor put into it, not the value of the wretched wage which he gives. Thus it is that he gets more than he gives.

The process is simple enough. An article for whose entire production the total sum of labor expended is nine hours will fetch on the average in the market an equivalent of nine hours’ labor, e.g., such an amount of coin as would on the average cost nine hours’ labor in its production. So if the workwoman puts nine hours’ labor into the coat, she will at any rate increase the value of the coat on the market by that equivalent sum. But does anyone for a moment suppose that the eighteenpence which she receives is the equivalent, or anything like the equivalent, of those same nine hours?¹ What, if you please, in the way of the ordinary necessaries of life does nine hours’ labor represent? Godwin, the author of “Political Justice,” calculated that a man with ordinary labor, unhampered by the rapacity of others, should be able in two hours daily to supply himself with the necessaries and conveniences of life. Bastiat, if I am not mistaken, mentions two and a half hours. Karl Marx, whose calculations on capital I am following, supposes six hours’ labor per diem necessary, in order that a man may provide for himself, a wife, and two children. Of course an exact estimate on this subject is difficult to make. So far has society got from any simple and equitable relation between labor and its reward that we actually do not know how much (or how little) labor is required for a man to support himself in health and comfort (see p. 12). But all authors agree that it is very small compared with the nine hours’ daily slavery which constitute the beginning and the end of a modern working man’s life.

The nine hours’ labor, then, which our sempstress or machinist puts into the article ought to represent for her a comfortable subsistence for several days. It represents a bare living for one day. She ought to get, say, a value of 6s. for it. She receives Is. 6d. The capitalist pockets the difference. The wretched girl makes him a present, or has to make him a present, of four days’ work in the week. She gets the value of her labor for two. And this is where profits, where interest, under our present social system, come from.

The position of women in these matters is notoriously bad, but that of the male laborers, skilled or unskilled, is little better. Marx calculates that the ordinary cotton-spinner makes a present to his master of three days’ work in the week. He puts six days’ labor into the yarn, and his master in selling the cotton gets the equivalent of that six days’ labor, but he only gives the spinner the money value of three days’ labor. “Under the old system of corvée a man was obliged to give, say one day’s work in the week, or at most two, to his feudal lord without any payment Such a man, though he had the remaining five or six days wholly to himself, was thought little better than a slave. Nor was he. English capitalists would, of all men, subscribe largely to relieve human beings from continuing in such a shameful and degraded position. But here at home, we have men, women, and children, who are obliged to give four, five, six hours a day to the capitalist for nothing, and yet are thought free.”¹

Now let us take the case of a railway company (I am interested in this as I am a shareholder myself, and should like to see how my dividends arise).

We (the shareholders) have subscribed the funds, and—to simplify the matter—we will suppose that we have bought over with a large portion of them the entire plant of an old company. This then forms our capital stock; and we can begin running trains at once. We shall have to maintain the permanent way and the rolling stock, and for this purpose shall have to employ a large number of men, besides purchasing materials from time to time; and we shall have a large staff of general servants and officials. Our chief expenditure, therefore, will be in wages. And our receipts will arise principally from the transport of goods and passengers. How do we expect to make our profits? Obviously by reducing the expenditure below the receipts.

We have to transport 20 truck-loads of coal. There is a lot of labor required. There is the labor of shunters and signalmen, of station-masters and platelayers, of driver, stoker, and guard; there is the labor of those who replace the wear and tear of the line and of the rolling stock. All this labor and much more has to be considered. When totted up it constitutes the labor-value of the service rendered. What we expect to get in exchange for the service is an equivalent labor-value as expressed in money—that is to say, if we get £5 for the service it may be supposed that the labor necessary for the production of a piece of gold, value £5, is equivalent to the labor involved in the transport of the said 20 truck-loads of coal. This is the basis of all just exchange. It is possible, however, that we may get more than our labor-value. If we are secure from competition or have a monopoly of any kind, we may succeed in getting more than we give—simply because our customers cannot get their transport done at a less price through other channels. It is possible also that we may sometimes have to take actually less than the labor-value of our services rendered. How we can do this and yet make a profit we shall see presently.

The obvious method, through all this, of securing dividends, is to keep down wages.

Let us take the three cases supposed. Let us first assume that the price we can get for our service represents exactly the just exchange—that we receive a labor-value from our customer exactly equal to that which we give him. How do we make our profits? How must we make our profits? Obviously by giving our own servants and workmen less than the labor-value of what they do for us—by giving them wages which do not represent their labor—which are not an equivalent for it.

Let us suppose, secondly, that competitio...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Copyright Page
• Table of Contents
• ENGLAND’S IDEAL: Reprinted from “To-Day,” May, 1884
• MODERN MONEY-LENDING, AND THE MEANING OF DIVIDENDS: A Tract for the Wealthy
• SOCIAL PROGRESS AND INDIVIDUAL EFFORT: A Lecture given at Sheffield, February, 1885
• DESIRABLE MANSIONS: Reprinted from “Progress,” June, 1883
• SIMPLIFICATION OF LIFE: A Paper read before the Fellowship of the New Life, January, 1886
• DOES IT PAY? Reprinted from “To-Day,” October, 1886
• TRADE: Reprinted from “To-Day,” January, 1887
• PRIVATE PROPERTY: A Lecture given in London and in Edinburgh, 1886
• THE ENCHANTED THICKET: An Appeal to the “Well-to-Do”