STATISTICS OF CONSUMPTION.

PAPER BY MR. EDWARD ATKINSON, READ BEFORE THE NATIONAL CONVENTION OF LABOR BUREAUS.

GENTLEMEN: It is my purpose to invite your attention to a short treatise on the importance of the statistics of consumption. Our information is becoming very adequate in the matter of production and distribution, but what we do with our abundance is as yet but little known. Let me say a few words in introduction. There is one α priori conception which I accept for my own guidance in matters relating either to political, social or physical science, and from which I am prepared to reason deductively. If an apparent rule, law of nature or prime motive of human action is presented to me which appears to control, or which has controlled, the doings of men from the dawn of history to the present day, I deduce the theory that it must have a beneficent rather than a malignant purpose, end or object. That is to

say, the pessimist philosophy cannot, in my judgment, possess any foundation in truth. I do not care to disprove, and do not care to have any one else attempt to disprove, a theory, however logical in its form, which is based upon an apparent maleficent law of nature, whether material or immaterial; such a law, like the so-called laws of population or of diminishing returns from land, would condemn the body of man to hunger, famine and pestilence as a matter of necessity rather than a matter of his own choice. It is necessary to my conception of a power which makes for righteousness to supplement that spiritual conception with the idea of material welfare being ultimately within the grasp of man, because the spiritual and the material are but two phases of manifestations of the same life.

It is useless for economists to discuss the old clerical dogmas of the fall of man and the consequent curse of labor. We know that the modern conditions of life have been evolved from those of prehistoric

ages, and therefore the myths of the past must no longer keep science and religion apart. To that end, nothing is more needful, in the branch of science in which we are all interested, than to place before our minds a clear conception of the methods by which social progress has been, and will be evolved. In this view of the matter we must conceive of the effort or labor by means of which subsistence is gained as a method of progress, and not as a punishment for sin. The garden of Eden may be symbolic of the future, if not of the past, when mankind may have earned leisure through the application of intelligence and effort.

We may use both the deductive and the inductive methods, but we may not trust wholly to either; and, unless we can read the prophecy of the future which is written between the columns of our figures or our collation of facts as to the past, our work is truly dry as dust.

Now, there is a permanent custom, rule or law which has controlled, and which now controls, the doings of men, in what we call the production and distribution of wealth, which law is commonly assumed to be distinctly selfish, i. e., selfish in the maleficent significance of that word, and this rule of law is what we know under the title or name of competition. In connection with this view of competition, we are warned that the love of money is the root of all evil; that there is greater moral danger in wealth than in poverty, and that the world, the flesh and the devil are synonymous terms. To the eclesiastical mind, the methods of business are usually deemed broad ways in which one man seeks to get the advantage of his neighbor, and hence they lead to destruction. Now, these are all such partial truths that they have the effect of very gross errors; and I cannot but think that they are among the causes of the great separation which exists between what is commonly called religion and life; hence the basis of our economic gospel is a profoundly moral one, which will sometime remove the false notions of the necessary business of life which causes this separation to exist.

The distribution of wealth or of products has always been worked in part, if not wholly, by the way of competition, from the earliest to the latest date. This is not so apparent in the period before the change. from status to contract as it has been since. Ever since, however, the distribution of wealth or product has been governed by wealth or contract or agreement, the prime force in all commerce or exchange has been competition. In these later davs, competition is condemned by many tender-hearted and right-minded persons because they see its hardships and do not see its benefits. They allege that it grinds the faces of the poor; that it makes the rich richer at the expense of the poor, and that it works in other ways toward prosperity and progress.

But this is a very shallow conception of the true function of competition, and when its method is explored to the bottom I think it will prove that in the end competition is the most effective mode of co-operation among men, and that it tends directly toward making a good subsistence common to all persons of ordinary intelligence, industry and health. Its end is therefore beneficent. It will not remove all poverty, because there is, and always will be, a little poverty, due to misfortune or to want of mental and bodily vigor. Such poverty is, however, but the smallest part of that which now exists, and for its relief charity will always suffice. Competition will abate all poverty that is not irremediable, because it stimulates intelligence, and ignorance is the chief cause of poverty.

All commerce being now conducted by competitive methods, we must ask ourselves the elementary question:

WHAT IS COMMERCE ?

It is an exchange of service for service, or of product for product. Each person parts with what he can best spare, and which some one else wants, and each one obtains in exchange something which he needs and which some one else can part with. Each serves the other. Each thinks that he gains by the transaction, and in the long run each one does gain. There can be no permanent commerce or exchange of services, unless it satisfies both parties and is beneficial to both, whether it be between individual men or between nations.

I have said that all commerce is conducted by way of competition, and I assert this even with respect to the so-called co-operative system, which has been so successfully applied to distribution in England. (The co-operative factories in Great Britain are nothing but corporations managed in the competitive way, but mainly owned by factory operatives.) In order to prove this, it must be remembered that there is competition in buying as much as in selling, and the co-operative shopkeepers are combined and compete with other dealers in the very act of hiring the ablest men to buy their goods under the sharpest application of the competitive idea. Very high salaries are paid for this service, and none understand better the common axiom of trade than the managers of the co-operative shops; that "goods well bought are already half sold." These shops also compete with the common dealers, and in some cases drive them out of the business of distribution. How do they do it? By refusing to grant credits and by requiring every buyer to carry his own parcels away from the shop.*

*I have been informed, since this address was given, that the co-operative shops have of late been compelled to adopt a delivery of parcels.

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These are most subtle and useful methods of competition, beneficial alike to the shopkeeper and to the customer. Unless the co-operators adopted such methods of competition even the Rochdale pioneers, who founded the whole system, would themselves have failed. Why does not co-operation succeed in this country in the distribution of product? is a question often asked. The reason is very plain. The shopkeepers of this country early learned and applied a competitive principle to the distribution of articles which are not quickly perishable, which is yet but little comprehended in England in respect to retail traffic, namely, large sales at small profits and large dealings only with cash customers. The margin of profit with which our great shopkeepers are satisfied, and on which they grow rich, is so smɛll that there is little left for the co-operative shop to work upon. In this department competition having already done the work of co-operation in reducing the cost of distribution, and, having proved itself to be a synonymous term, there is nothing left for co-operation to accomplish in the distribution of many of the staple articles of commerce. is, however, yet great room for improvement in the distribution of per. ishable articles and in the small traffic. It is the small shops which cost the most for their support. The charge in the distribution of meat, milk, fruit, green vegetables and the like, is the heaviest. The baker is a high-priced man even if he does not grow rich himself. How to abate excessive tolls on small traffic is of paramount interest and importance. It is written: "To him that shall be given, and from him that hath not shall be taken, even that which he hath." That is a hard saying, yet it is a profoundly true one, even to the economist. Let us interpolate a little. To him who hath (gumption) shall be given (opportunity), and from him who hath not (gumption) shall be taken even (a large share) of that which he hath, namely, of his small products, because his service is of little worth to others. No man can exchange services with another who is incapable of conferring a service himself. The rule of material success in life is never to do anything yourself which you can more easily get done for you by some one else. The employer who can use other men's hands or wits cannot spare his own time or brain for such work, and, conversely, the man who desires to be employed will find the exact measure of his wages to be the exact measure of the service which he is capable of rendering. This is just as true of borrowing and lending. The borrower must find out not only who has capital to lend, but also whether he himself is capable of using it without losing it. There is vastly more capital awaiting use than there is capacity to make use of at this very moment. That is just what's the matter. To him that hath capital which he has earned

himself, whether in his head or in his pocket, shall be given all the capital he can use, and from him that hath no capital, either in his head or hands, shall be taken even that which he hath in his pocket, if his father has left him a bit and he has not been put under the care of a trustee.

One very great advantage in the increase of capital in ratio to the possible use which can be made of it, and the consequent diminishing share of product which capital can secure, will consist in the lessening proportion of those who will be able to live without working themselves, either with brain or hand.

Witness the tremendous revolution which is now in progress in Great Britain. The mere possession of land devoted to agriculture, entirely aside from city property, is computed to have yielded £60,000,000-nearly $300,000,000-a year rent. To the extent of the purchasing power of this sum families have been enabled to live without work, except they worked from choice. This system has been continued and sustained by custom and statute in respect to the land tenure, until, according to Arthur Arnold, four-fifths of the land of Great Britain is nominally possessed by less than 7,000 owners; and of this four-fifths, the greater portion is held only in life tenancy subject to entails and settlements, so that those who nominally possess it can make no profitable use of it. This rent is now becoming impossible simply by the beneficent working of competition. The competition of our farmers, our railways and of the English steamships has given the masses of the people of England cheap bread, and the 7,000 landlords can no longer exact rent in any great measure by power of mere possession. Yet it is not by their dispossession that a remedy can be found even for their own misfortunes. The need is that the land shall be repossessed, free of incumbrances, so that it can be put to use by its present nominal owners or by others to whom they may sell it when freed from incumbrance, while to the present owners will come the beneficent necessity of working themselves on their land or off it in order to subsist. Without possession there can be no abundant production from land.

Free competition, both in the possession and use of land and its products, has had full play for the longest period over the area of the northern States of this Union where slavery did not exist to any extent. Let us judge it by its fruits. What has it accomplished, especially in New England?

1. It has resulted in the largest aggregate production in ratio to the number of persons employed that has ever been realized in any country.