Fabian TraCt No. 121 PUBLIC SERVICE VERSUS PRIVATE EXPENDITURE. BY SIR OLIVER LODGE. PuBLISHED ANn So1.n BY THE FABIAN SOCIETY. PRICE ONE PENNY. LONDON: THE FABIAN SociETY, 3 CLEMENT's INN, STRAND, W.C. jUNE, 1905. An Address to the Anc·ient Order of Forestet·s at their Anmtal Gathet·ing in Birmingham Town Hall, on Sttnday, October 9th, 1904.':' "Pu BLI C.: WEAL'l'H" means wealth belonging to a Community or Corporate Body; and the possessor of such wealth can utilize and administer it as Corporate Expendi ture. By" Corporate Expenditure" I mean not municipal expenditure alone, nor trades union expenditure alone, nor benefit society expenditure alone, but something of all of thorn; combined expenditure for corporate ends, as distinguished from private and individual expenditure. I wish to maintain that more good can be done and greater value attained by the thoughtful and ordered expenditure of corporate money, than can be derived from even a lavish amount distributed by private hands for the supplyof personal comfort and the maintenance of special privileges. It sounds like a secular subject, but no subject is really secular, in the sense of being opposed to sacred, unless it is a subject intrinsically bad; and if the truth be as I imagine myself now to conceive it, the subject I am endeavoring to bring forward has possible developments of the most genuinely sacred character. I shall not have time to develop this fully, but I can make a beginning. Careless Spending. First I would direct your attention to a fact and ask you to observe how little thought is expended by mankind in general on the spending of money, and how much time and attention are devoted to the earning of it. That may seem natural; it is considered easy to spend and hard to earn. I am by no means sure that it is easy to spendwisely. Men who have much money to spend-and few of us are in that predicament-if they are conscientious • The Society is indebted to Sir Oliver Lodge for permission to print and issue this Address as a pamphlet. 3 and good men, feel the difficulty seriously; they realize that it is so easy to do harm, so difficult to know how to do real good. Charity may seem a safe and easy method of disbursing, and much of it at present alas is necessary, but few things are more dangerons: it is an easy salve to the conscience, but it by no means conduces to fulness and dignity of life. But eliminating men of large fortunes, let us attend to our own case. We, the ordinary citizens, how little time do we find to consider our manner of spending; we mostly do it by deputy, all our time is occupied in earning. It may be said roughly that men earn the money and that their wives spend it: a fair division of labor. They spendit best: and if the man insists on retaining and spending much of it, he is liable to spend it very far from wisely or well. Public v. Private Expenditure. 1 will not labor the point; we get something by private expenditure undoubtedly: we get the necessaries of life, and we get some small personal luxuries in addition. We do not get either in the most economical fashion. Buying things by the ounce or by the pint is not the cheapest way of buying; nor is a kitchen fire in every household the cheapest way of coobng, especially in the summer. Without going into details, and without exaggerating, we must all see that individualism results in some waste. If each man pays for the visits of his own doctor it is expensive. If each man provides his own convalescent home it is expensive. If each man goes on his own excursion or travels it is not so cheap as when several club together and run the journey on a joint purse. Private and solitary travel may be luxurious, but it is not cheap. A cab is dearer than an omnibus; a private garden is far dearer in proportion than a public park. Of private expenditure altogether it may be said: some of it is necessary, much of it is luxurious, but none of it is economical. Corporate or combined expenditure achieves a greaterresult, not only for the whole, but actually for each individual. "Each for himself" is a poor motto; the idea of " Each for all" is a far more powerful as well as a more stimulating doctrine than " Each for himself." Thus 4 already you see our subject shows signs of losing its secular character and of approaching within hailing distance of the outposts of Christianity. The Objects of Thrift. Very well, now go on to consider the subject of th1·1:[t -not personal spending, but personal saving. What is the saving for ? There are two chief objects: (1) To provide for sickness, for old age, and for those who are dependent upon us, and whom we should otherwise leave helpless when we go. This is clearly the chief and especially forcible motive for saving: it is the mainspring and original motive-power of this and all other benefit societies. But there is also another not at all unworthy motive, though it is one less generally recognized or admitted, and to this I wish incidentally to direct attention. The second g-reat motive for thrift and wise accumulation is-..... (2) To increase our own power and influence ::~,nd effective momentum in the world. The Power of Wealth. The man of wealth is recognized as a force in the world, sometimes indeed a force for evil, sometimes for good, but undeniably and always a power. People often complain of this and abuse the instinct which recognizes wealth as being such a power. But it is inevitable. It does not indeed follow that great wealth need be concentrated in a few hands, or that one single individual shall have the disposal of it: it is an accidental and, as I think, an unfortunate tempor::~,ry arrangement. of society which brings about that result; but, whether in many hands or in few, wealth is bound to be a power: it is no use abusing what iR inevitable, we must study and learn how to utilize the forces of natnre. Wealth is one of those forces. Why is it so powerful? Because it enables its owner to carry out his plans, to execute his purposes, to achieve his ends. He bas not to go cap in hand to somebody and ask permission; be can do the tbing-himself. He cannot do everything indeed, his power is limited, but 5 he can do much. So also the members of a wealthy corporate body, if they want to do something, if they want to meet elsewhere than in a public-house, for instance, encounter no difficulty, they can have a hall of their own, or they can hire one. Wealth is accumulated savings. Considered as power, it does not matter whether the wealth is in many hands or in few. The owners of it are important people; and if they mean to do good the material accessories are at their command. A rich corporation, like a rich man, has great power. Suppose he wants to bring-out an invention, his own or someone else's, he has the means. Suppose he wants to build a laboratory or endow a University, he can do it. Suppose he wants to plant waste land with forest trees, who will stop him? But he cannot do everything. A genius has powers greater than his. A rich man's power is great, but it is limited; for suppose he wants to compose an oratorio, to paint a picture, to make a scientific discovery, and has not the ability; his wealth is impotent, he cannot do it. No, his power is strictly limited, but it is not so limited as that of the poor man. The Weakness of Poverty. We are poor men, and some of us want to renovate the Black Country and cover up its slag heaps with vegetation and with forests-a beautiful and sane ideal-but it is a difficult task. I do not own a square foot of soil, nor do most of you. What right have we to go to plant trees on someone else's land? We should be trespassers; and, at a whim of the owner, they might be rooted up. The owners of the soil however may be willing for there- a:fforestation of the Black Country, they may give us assistance, they may enable us to carry out the scheme. I sincerely hope they will, but we must go and ask them. Without the wealth we are powerless. We see so many things that might be done if we had the means : for instance, we helplessly lament the existence of slums, we see numerous ways in which to improve cities, we would like to suppress smoke and show how the air could be kept pure for the multitudes herded in cities to breathe and enjoy; but we cannot do it, we are not rich enough. Moreover, if we did, what would happen; at least at 6 first? Rents would rise, and the improved propertywould become too dear for the present inhabitants to live in. Clear and purify the air of towns, and they would at once, with their good drainage and fine sanitary conditions, become the best and healthfullest places to live in. Now they are too dirty, then they would be too dear. But, if the land near all large towns belonged to the community, if we had corporate ownership of land, what would we not do ! Then the improvements would be both possible and profitable, and the community who made them would reap the benefit. Someday : someday an approach to this condition of things is bound to come. It feels to me almost like part of the meaning of that great prayer " Thy Kingdom come "; and if so we are again not far away from the atmosphere of Christianity. Public Wealth and PublicjDebts. For accummulation of wealth to be really beneficial it should contribute to the common weal, it should conduce to well being, and so be worthy of the name of weal-th or wealth. The only way probably you and I can ever become wealthy is by becoming corporately wealthy, by clubbing our savings and becoming an influence and a power in the land. Already I see, by your Report, that this organization or corporate body owns more than seven millions : not seven millions free to be dealt with as you like, it is all ear-marked to good and beneficent objects, and aU needed for the achievement of those objects; but still it is a sub stantial sum, and it can increase. Roll it up to seventy millions, apply it to other objects than sickness and death, and you will become capitalists, able to execute your be- bests, an influence and a power in the world. Would this be a good thing ? Ah, that is a large question. There are always dangers in great capital, it is a. serious responsibility; and if badly and domineeringly used, it may become a fearful evil. In unwise and un scrupulous hands, if they are ignorant and foolish, it is far from safe. But let it come gradually, let it be owned by mankind or by the community at large, and I for one 7 would trust them-we are bound to trust mankind- would trust them at first to endeavor to make a good use of it, and ultimately to succeed in so doing. I believe in public capital and public expenditure, so it be clean and honest and well managed; everything depends upon that; but in this fortunate city that is already accomplished. What is known as a public debt is really a public investment, and anything nob spent in the waste of war should have public works, or elevated humanity, or other good results, to show for it. Then it at once becomes capital, and is no more appropriatelycalled debt; it has not been spent, but invested. "Funds" is a better name for it. The Economy of Rising Rates. That is why I believe in Rates-not altogether in the Poor Rate, for I am unable to feel that the Poor Law is on a satisfactory basis, though it is administered with the best intentions by the guardians: the system is as I think in some respects mistaken, but I will not go into that now; I only say parenthetically that the Poor Rate I do not welcome-but rates for public works, education rates, rates for municipal and corporate services generally, rates for museums and libraries and recreation grounds and parks and rational amusements, all these I would welcome and wish to grow. We should not try to economize in these things, we should put our heads together so as to spend the publicmoney wisely and well, and then, we should spend it. Private thrift, public expenditure; that is the way to raise a town or a nation in the standard of civilization. The spendings of an individual, what are they? They are gone in his individual comfort and luxury. The spendings of a community are Capital: they result in public works, in better housing, in good roads, in thorough lighting; they open up the country, they develop its resources, they educate the citize:JtS, they advance all the amenities of existence, in an economical because corporate or co-operative manner. Good management is required; and that is why you take pains to send good men to the City Council to look after your interests: your interests, not in screwing and economizing, but in spending wisely and honestly and well, getting the most they can for your money, and looking out for improvements and for good schemes worthy of encouragement. .And when they do this well, be ready to trust them with more; see that not only the municipal but the national purse also is properly supplied. Our National Government is for all good purposes miserably poor. I fear there is sad waste somewhere, and that before the taxes can be judiciously raised the sources of the waste must be discovered and checked. I trust that already this labor is being put in hand. You have fine public servants who are trying to do their best with an ancient and very cumbrous and over-centralized machine; much revenue has to be spent in various unprofitable ways, wars and other, but in every good and noble direction of expenditure the country is miserably poor. Where it is economical it should be lavish; and where it is lavish it should be economical; that is an exaggeration, but there is a kind of truth underlying it. Our national economy in higher education is having disastrous results, it is a real danger to the Nation. While other nations are investing millions of public money on higher education and research we prefer to keep the money in our pockets in order to spend it privately; and the result 1 that while the State is poor the individual is rich. Individuals are over rich in this country; money breeds money on our present system \vith very little work, and it is apt to roll itself up into portentous and top-heavyfortunes. The result is, I fear, a tate of things that some people say is becoming a scandal. I do not know. But however that may be I should like to see this wealth owned by communities; I hould like to see it in corporate hands and expended for the general O'Ood. Unearned Incomes. Do not think that the original making of a fortune i easy. Mo t fortunes be,gan by thrift and enterprise; it is not the making of a fortune that i ea y : it is the transferring and the inheriting of it that arc o fatally a y and o clang rou . If th mak r of the fortune him elf had th di bur ing of it, thor wonld be but little harm don , and there miO'ht b much goo