most of the restrictive acts of public legislation and most of the restrictive by-laws of the private legislation of trade-unions, knights of labor, and the like, retard rather than promote the development of general comfort and welfare. In the last analysis each man fixes his own rate of wages by the measure of his individual capacity.

In conclusion,' let it be observed that if the accumulation not only of capital, but of all forms of wealth, reproductive or otherwise, during the last century has not exceeded three cents a day per capita, or ten per cent. upon a consumption measured at thirty cents per day, then the present value of all our national wealth, aside from the valuation put upon land, would be nearly three times the computed and probably large valuation which I have put upon the present annual product. I think it is a well-established fact that such an accumulation can be reached only in the richest and most prosperous State. I made an analysis of the wealth and product of Massachusetts in 1875, with

"The

1 The writer was led to prepare this article by a review of his book upon Distribution of Products," contributed by Mr. F. B. Hawley, to the Quarterly Journal of Economics of Harvard University. When writing this first article of the Forum series it did not occur to him that it would be the first of a series of ten; hence the controversial form in which the subject is treated in this first number.

In the Forum for May, 1889, Mr. Hawley published a rejoinder under the title of "Edward Atkinson's Economic Theories," in which he again contests the accuracy of the computation made by me in respect to the annual product of 1880. He admits or accepts the substantial accuracy of the estimate of that part of the annual product which had been assigned by me as the sum of all wages, small salaries, or of the earnings of the small farmers, whom he classed with their hired men among those who earn little more than the cost of living, computed at $8,100,000,000. But Mr. Hawley believes the portion, or share, of the annual product assigned by myself to profits, or to rent or interest, or under whatever other title the share of the capitalist and of the man who is not in a strict sense a wage earner may be called, to be altogether too small.

He estimates the share falling to the owners of property as the measure of increase at thirty-nine hundred million dollars, in place of nine hundred million dollars computed by myself, a difference of three thousand million dollars. But Mr. Hawley does not undertake to estimate the value of the annual product itself; he does not show where there was any material substance or product of 1880 to be added to my computation, although he fully accepts the principle that the annual product or the product of each series of four seasons is or must be in the nature of things the source of all rents, profits, interests, wages, salaries, and carnings. He says, in respect to this principle: "Nothing can be more clearly stated than this proposition, to the exact truth of which I cordially assent."

So far as I can comprehend the somewhat obscure methods of reasoning on the basis of which Mr. Hawley contests my estimates, it is on the ground that the "services of wealth" must be compensated in somewhat the measure which he has assigned thereto; and he appears to hold, if I comprehend his position, that services of any kind for which compensation is made are to be classed as products. I confess to a great difficulty in the treatment of criticisms based on such a definition.

If the annual product of food, fuel, fibres, and fabrics of all kinds is the source of all wages, profits, etc., it must also be the source of the compensation for all services.

the aid and criticism of Carroll D. Wright, and we could then barely find a sum of wealth equal to three years' product in what is probably the richest State per capita in the Union.

If, then, we cannot find in existence any form of capital or wealth aside from the valuation of land, even including, as in the census estimates, public property which is of the common wealth-and my critics, who doubt my estimates or my distribution of the annual product should find an annual product of much greater value than my estimate, then it would follow that less than ten per cent. has been or can be saved in a normal year to be applied to the maintenance and increase of capital. It would then be proved that want treads closer on the heels of plenty than even I have ventured to suggest.

In the last analysis it will appear that there is no such thing as fixed capital; there is nothing useful that is very old except the precious metals, and all life consists in the conversion of forces. The

Now if there was no additional product in the year 1880 to be found anywhere, equal to the sum assigned by Mr. Hawley as compensation for the services of wealth—and if the sum assigned by me from the product to wages, earnings, and salaries is correct, how can the service of wealth be compensated in any greater measure than by the remainder of the annual product at the measure which I have assigned, if my computation of the gross product is approximately correct?

I can only submit to Mr. Hawley, and those who concur with him in his criticisms of my estimates, that they must take these estimates for what they are worth. My computation was at least an honest attempt to solve a difficult problem, and it has been sustained by many subsequent computations. Any determination of the respective shares falling to capital and labor must be of little value until the subject of division, which is shared, to wit, the annual product, shall be proved to be greater than my computation. I fully admit the possibility of error, but I admit only a small margin for

error.

I cannot agree, however, with Mr. Hawley in his conception that a service for which compensation is made is the same as a product, and should be classed with products. For instance, there are two classes of boot-blacks-one who will black my boots at the corner of the street at a charge of five cents, the other who will black my boots in the office of a hotel at a charge of ten cents; I pay either sum for the service as I may choose, and the boy who receives the money spends it in order to secure his share of the annual product-food, fuel, clothing, and shelter, on which he exists. This is one of the minor services, rendered by the relatively poor to the relatively rich, which Mr. Hawley treats. In this form of service the boot-black obtains his share of the annual product.

On the basis of Mr. Hawley's reasoning, however, the boot-black at the corner of the street who renders the service at five cents adds five cents to the annual product of the country, while the boot-black who renders the service in the office of the hotel at ten cents adds ten cents to the annual product, and, therefore, to the wealth which is to be divided. If this view is correct, it would be incumbent upon Mr. Hawley always to have his boots blacked in the hotel rather than at the corner of the street, as he will thereby add to the sum of services which, he says, must be classed as products, and he would thereby increase the annual product of the people of this country which is subject to division by ten cents' worth every time he has his boots blacked.

only capital which is of permanent value is immaterial, the experience of generations and the development of science. It is not given to material capital to save any one generation from the work of getting its own living; all that it can accomplish is to lighten the labor; the condition on which it attains its own income is, that it shall render full service for all that it receives and that it shall also render the general struggle for life less and less severe.

IN

II.

MUST HUMANITY STARVE AT LAST?1

Na review of my analysis of the distribution of products, in the Quarterly Fournal of Economics, published for Harvard Universi

ty, to which I made a rejoinder in part in the July number of the Forum, a much wider issue is raised than the mere question of the accuracy of my figures of distribution. Having treated some of the questions of fact which are at issue, a short treatise on the theory of wages may be timely.

My critic says: "Mr. Atkinson's results will not be so readily accepted when his very inadequate comprehension of the theories of Malthus and of Ricardo are called to mind." Again he says: "Among economists, especially among those who believe that statistical investigation can rarely be fruitful of any valuable results except in the hands of an investigator well grounded in economic theory, Mr. Atkinson's results will not be readily accepted." In this latter statement my critic presents an example of the danger to which the student of books is exposed in becoming a mere interpreter of the hypotheses of writers who may have failed to adopt a true inductive method, or who may not have been capable observers. Possibly Malthus and Ricardo may have applied great ability to false theories, by which a vast deal of mischief has been done, and it may not be consistent with true economic science to adopt their hypotheses.

It may be fully admitted that in the physical sciences some of the most brilliant results have been attained by deductive methods based on hypotheses or a priori concepts, but one may well distrust such methods in economic science. If the a priori concepts of Malthus and Ricardo are to be received as demonstrations of science, then of what use are all our efforts to prevent war, to stop famine, to alleviate poverty, or to save life from disease and pestilence? The more we accomplish for the present generations of men the more must posterity suffer, the more urgent must the struggle for life become, the more fearful must be the anarchy when the whole art of living can consist only in securing a sufficient subsistence for the few by any method of force or 1 Reprinted from the Forum.

fraud, even at the cost of those who starve. In other words, if human passions and human nature lead to a disproportion of population in ratio to the means of subsistence, or if the mind of man applied as a factor to production cannot provide for this tendency of population to increase without resort either to violent or to purely artificial methods for checking it, then indeed does political economy become a "dismal science"; and may we not as well eat and drink, for to-morrow we die," without taking any thought for the future of our race?

The fault of these hypotheses may be that their proponents had not taken cognizance of the human mind as a factor in material production. They were based on very narrow observation, and when they were put forth the science of statistics had little more than an elementary existence. One may well ask whether so acute a reasoner as either Malthus or Ricardo would have ventured to present either hypotheses, had either one conceived that within a short period ironstone would be converted into food for man and beast, by grinding into powder the phosphoric slag which is the waste product of the iron furnace under the basic process of making steel and using it as a fertilizer.

I have ventured to doubt the validity of the hypotheses of Malthus and Ricardo, whether I comprehended them or not, because they have not yet been sustained either by experience, by observation, or by statistics. The hypothesis of Malthus is very simple; it may be stated in a very few words, to wit: "there is a tendency of the population of the world to increase faster than the means of subsistence." He even held that, while population might increase in a geometrical ratio, the means of subsistence might increase only in an arithmetical ratio. The hypothesis of Ricardo in respect to rent is also very simple; he holds that economic rent is the margin of product of the better or the more accessible land over and above the returns which can be obtained from the poorer or more distant land, of which the product will only repay the cultivator for the cost of production. Both these hypotheses rest upon the so-called law of diminishing returns from land, under which it is held that land may fail to yield an equal increment of product in ratio to equal increments of labor and capital expended upon it. If these hypotheses are pushed to their logical conclusion, and if there is no countervailing force which may ultimately bring land and life, or population and production to an equilibrium, does it not of necessity follow that all our humanitarian or philanthropic efforts may only make the final catastrophe so much the greater?

Admitting that a century or less is quite insufficient to warrant absolute inductions from experience, yet it may well be considered that there has not been a single decade, since the hypothesis of Malthus was first presented, in which the means of subsistence have not gained very rapidly upon the population of the world.