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(c) That the relationship established between a unit of property and the money unit
representing it shall be maintained.
The original conception of the classical economist that wealth arises from the interaction
of three factors land, labour, and capital, was a materialistic conception which did not
contemplate and, in fact, did not need to contemplate, the preponderating importance
which intangible factors have assumed in the productive process of the modern world.
The cultural inheritance, and what may be called the "unearned increment of association"
probably include most of these factors, and they represent not only the major factor in the
production of (189) wealth, but a factor which is increasing in importance so rapidly that
the other factors are becoming negligible in comparison.
It is both pragmatically and ethically undeniable that the ownership of these intangible
factors vests in the members of the living community, without distinction, as tenants-for-
life. Ethically, because it is an inheritance from the labours of past generations of
scientists, organisers, and administrators, and pragmatically because the denial of its
communal character sets in motion disruptive forces, threatening, as at the present time,
its destruction. If this point of view be admitted, and I find it difficult to believe that
anyone who will consider the matter from an unprejudiced point of view can deny it, it
seems clear that the money equivalent of this property, which is so important a factor in
production, vests in and arises from the individuals who are the tenants-for-life of it.
The question of its net increase is also beyond reasonable question. Every scientific
invention and discovery, besides forming a real asset in itself and being essentially an
addition to the assets of civilisation, reacts on other assets in a manner which
automatically increases their value, just as the addition of a new subscriber to (190) a
telephone exchange automatically increases the value of the telephone system to the
existing subscribers by giving each one of them an additional line of communication.
This factor, probably far more than the material assets of civilisation forms the basis of its
real and growing store of wealth. To be set against this, is merely the depreciation and
obsolescence of material assets, including consumption goods, and it is beyond question
that on balance the yearly appreciation of wealth is greatly in excess of depreciation.
The relationship of money issued, to the goods against which it is issued, is completely
maintained if prices are in the first place related to costs, and the value of the unit in
which costs and prices are computed is consistently related to the changing ratio between
production and consumption. This is not satisfactorily attained by any of the devices for
the production of stabilised money, even if it were possible to achieve them, since a
stabilised unit of money involves the adjustment of past values on a scale which seems to
me, at any rate to be, fantastically impracticable. But if, without varying the accounting
figures which apply to plant, machines, and other real property, we vary the purchasing
power of these units for which they are accoun- (191) ted in accordance with the
fundamental proposition that the true unit of account derives from the ratio
consumption
,
production
the whole of our production values are automatically adjusted in accordance with the
facts as these vary from day to day.
This may be put in the following mathematical form.
Let Y be any arbitrary unit and t = time, then the total production at any time is P = f (y.t)
and total consumption at any time is C = �(y1.t). Rates of change of P and C with respect
to time are
dP dC
=
= f, (y.t) and �,(y1.t).
dt dp
Price varies as
dC
dP
This is an instantaneous value. Mean values can be found for a period and the price factor
then becomes
T2 dC
dt
+"
T1 dt
_____________
T2 dP
dt
+"
T1 dt
mean consumption-rate for selected period
i.e. price factor = ����������������������������������
mean production-rate for selected period
(192)
It should be emphasised that the practical operation of a price factor of this character
involves no difficulty and is, in fact, in various forms a commonplace of business
operations at the present time. As compared with the complex system of discounts which
are a feature of every business, and vary not merely from business to business, but from
one department of the same business to another, the application of a uniform price factor
for the purpose of reducing the general price level is a matter of elementary simplicity.
As an appendix to this book a model scheme, intended in the first place to apply to
Scotland, is attached, and it will be seen that a number of considerations not apparently
arising from this theorem have been included, but on consideration it will probably be
realised that the general principles explained in the foregoing pages form the basis of the
conception underlying the proposals. (193)
CHAPTER III
THE CRITICAL MOMENT
THERE are two hypotheses as to the method by which changes of so far reaching a
character as those we have been discussing might come about, one of which may be
described as the evolutionary method, and the second as the revolutionary. For my own
part I am inclined to believe in the probability of a combination of the two.
The outstanding fact in regard to the existing situation in the world at the present time, is
that it is unstable. No person whose outlook upon life extends even so far as the
boundaries of his village, can fail to see that a change is not merely coming, but is in
progress; and it requires only a moderately comprehensive perception of the forces which
are active in every country of the world to-day, to realise that the change which is in
progress must proceed to limits to which we can set no bounds.
That is to say, the break-up of the present (196) financial and social system is certain.
Nothing will stop it; "Back to 1914" is sheer dreaming; the continuation of taxation on
the present scale, together with an unsolved employment problem, is fantastic; the only
point at issue in this respect is the length of time which the break-up will take, and the
tribulations we have to undergo while the breakup is in progress. But while recognising
this, it is also necessary not to fall into the error which has its rise in Darwinism; that
change is evolution, and evolution is ascent. It may be; but equally it may not be. That is
where the necessity for the revolutionary element arises; using, of course, the word
revolutionary in a constructive sense.
There will probably come well within the lives of the present generation, a period at
which the blind forces of destruction will appear to be in the ascendant. It does not seem
to me to be necessary that this should be so, but it does seem to be probable.
There is, at the moment, no party, group, or individual possessing at once the power, the
knowledge, and the will, which would transmute the growing social unrest and
resentment (now chiefly marshalled under the crudities of Socialism and Communism)
into a constructive effort for the regeneration of Society. This (197) being the case, we
are merely witnesses to a succession of rear-guard actions on the part of the so-called
Conservative elements in Society, elements which themselves seem incapable, or
undesirous of genuine initiative; a process which can only result, like all rearguard
actions, in a successive, if not successful, retreat on the part of the forces attacked. While
this process is alone active, there seems to be no sound justification for optimism; but it is
difficult to believe that the whole world is so bereft of sanity that a pause for reflection is
too much to hope for, pending a final resignation to utter catastrophe.
When that pause occurs mankind will have reached one of those crises which no doubt
have frequently been reached before, but which so far have failed to avert the fall of [ Pobierz całość w formacie PDF ]