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that disgraceful degree of poverty which, it is presumed, nobody can well
fall into without extreme bad conduct. Custom, in the same manner, has
rendered leather shoes a necessary of life in England. The poorest credit-
able person of either sex would be ashamed to appear in public without
them. In Scotland, custom has rendered them a necessary of life to the
lowest order of men, but not to the same order of women, who may, with-
out any discredit, walk about bare-footed. Under necessaries, therefore, I
comprehend, not only those things which nature, but those things which the
established rules of decency have rendered necessary to the lowest rank of
people. All other things I call luxuries, without meaning by this appellation
to throw the smallest degree of reproach upon the temperate use of them.
Beer and ale, for example, in Great Britain, and wine, even in the wine
countries, I call luxuries. A man of any rank may, without any reproach,
abstain totally from tasting such liquors. Nature does not render them
necessary for the support of life ; and custom nowhere renders it indecent
to live without them.

Marshall 2 divides consumers' goods into necessaries, comforts,
and luxuries, making no special class to be called decencies.

This brings us to consider the term necessaries. It is common to divide
wealth into necessaries, comforts, and luxuries; the first class including all
things required to meet wants which must be satisfied, while the latter con-
sist of things that meet wants of a less urgent character. But here again
there is a troublesome ambiguity. When we say that a want must be satis-
fied, what are the consequences which we have in view if it is not satisfied?

1 The Wealth of Nations, pp. 466-467. The Clarendon Press, Oxford, 1880.

2 Alfred Marshall, Principles of Economics, pp. 67-69. Macmillan and Co.,
London, 5th ed., 1907.



LUXURY 475

Do they include death ? Or do they extend only to the loss of strength and
vigour ? In other words, are necessaries the things which are necessary for
life or those which are necessary for efficiency ? . . .

It may be true that the wages of any industrial class might have sufficed
to maintain a higher efficiency, if they had been spent with perfect wisdom.
But every estimate of necessaries must be relative to a given place and
time ; and unless there be a special interpretation clause to the contrary,
it may be assumed that the wages will be spent with just that amount of
wisdom, forethought, and unselfishness which prevails in fact among the
industrial class under discussion. With this understanding we may say that
the income of any class in the ranks of industry is below its necessary level,
when any increase in their income would in the course of time produce a
more than proportionate increase in their efficiency. Consumption may be
economized by a change of habits, but any stinting of necessaries is wasteful.

Luxuries. Where comforts or even luxuries have entered
into the laborer's standard of living, it would undoubtedly be
true, as Marshall suggests, that any forcible reduction of wages
would result in less efficiency on the part of the laborers.
From the standpoint of either the lawmaker or the employer,
therefore, all those things which the customs of the time and
country give to the laborer must be considered as necessaries.
To cut down a portion of the laborer's wages would not result
in the mere cutting out of a few luxuries from his consump-
tion. He would be quite as likely to cut down his consumption
of physical necessaries as of those things which, from an abso-
lute point of view, could be called decencies or luxuries. It
is a well-known fact that high-spirited people, with social
standards and traditions to maintain, will, if they find them-
selves in reduced circumstances, deprive themselves of absolute
physical necessaries of life in order to keep up appearances.
This, of course, is certain to reduce their efficiency.

While this is a final consideration so far as the employer or
the lawmaker is concerned, it does not alter the fact that if
these people could be appealed to on moral or other grounds
to rationalize their habits of consumption, they would be much
better off. If they would reduce their consumption of luxuries



476 PRINCIPLES OF POLITICAL ECONOMY

and increase their consumption of the necessaries of life, not
only their working efficiency but their general economic well-
being would be improved. " Wherefore will ye spend your
money for that which is not bread " ? demanded the prophet.
He was making his appeal, however, directly to the individual
and not proposing any control of consumption by law.

Luxuries have very much the same meaning to-day as that
which Adam Smith gave to them. They are articles of con-
sumption which are not demanded either by the physical health
and strength of the people or by the rules of society, but are
wholly matters of individual indulgence. The dividing line,
however, between decencies and luxuries is still very obscure.
If a person belongs to a small group of spendthrifts, it may
be claimed that the rules of his social group compel him to
spend money lavishly on things which others would regard
as pure luxuries. He may therefore claim that these are only
decencies, because they are prescribed by the rules of his
group or class. Instead of accepting the verdict of any special
class or set, it would seem better to confine our idea of
decencies to those things which are prescribed by the almost
universal consensus of opinion of the time and place. Thus,
in America, for example, it would be almost universally
thought to be indecent for men and women to appear in
public places, even in warm weather, without shoes, though
there are certain isolated communities where this rule would
not prevail. Before the advent of the waist shirt it was gen-
erally regarded as improper for a man to appear at any
public place, especially indoors, without a coat. That every
woman shall possess certain articles of finery is a rule even
among the poorest of people. It will be better, therefore, if
we restrict the definition of decencies to those things which
society in general, rather than some special clique or coterie,
prescribes as necessary.

Stimulating effect of luxury. Economists have been some-
what divided on the question as to whether a luxury is always



LUXURY 477

to be condemned or not. McCulloch 1 states that any grati-
fication, however trivial, is necessary if an individual is stimu-
lated to work in order to attain it. John Stuart Mill 2 says,
" To civilize a savage, he must be inspired with new wants
and desires, even if not of a very elevated kind, provided
that their gratification can be a motive to steady and regu-
lar bodily and mental exertion." It is a well-known fact that
in certain low states of civilization the laborer or the peon
is content with so few articles of consumption that he will
not work efficiently or steadily. If, by working three days
in a week, he can earn wages enough to support him, in
the style to which he is accustomed, for seven days, he will
work only three days in the week. It has been generally
recognized that the only cure for this difficulty is to raise
his standard of living and increase his wants, so that he
will have a motive for regular and steady work. Many inter-
esting stories are told of the devices by means of which the
laborer is induced to work or by which his wife is induced
to demand more wages of him in order that she may provide
herself with finery.

We need not go to backward countries, however, to find
examples which illustrate precisely the same principle. There
are men among us who reduce the number of working hours
per day for much the same reason. Finding that they can earn
enough in four hours to support them for twenty-four, they
choose to work only four hours a day ; that is, they go to their
offices at about ten o'clock in the morning and stay until about
two, and spend the rest of the day at the club or the golf course.
There are still others who find that they can earn enough in
twenty years to support them for the whole of their lives.
They therefore retire from business long before their physical
and mental capacity has begun to decline, and spend the rest
of their time in pleasant pursuits.

1 J. R. McCulloch, The Principles of Political Economy. Edinburgh, 1825.

2 Principles of Political Economy, Bk. I, Chapter VII, 3.



478 PRINCIPLES OF POLITICAL ECONOMY

Economically speaking, however, all these men, from the
peon up, are merely choosing between different kinds of luxury.
To the peon, leisure, sport, amusement, and even rest are lux-
uries in which he delights. If his desire for this sort of luxury
is stronger than his desire for other kinds, he will choose this
kind. The same is true of the man who cuts down his work-
ing day or his working years. To him, leisure, sport, and
rest are luxuries. If he cares more for these than for such
additional luxuries of other kinds as he could secure by working
longer, he will of course choose these.

Material and immaterial luxuries. It is true that by choos-
ing material luxuries rather than the immaterial satisfaction
of leisure and rest the quantity of material goods which are
produced and put on the market is increased. The statistics
of wealth are expanded. The census taker and the tax assessor
find more tangible articles of wealth in such a community than
they would find in the community which preferred to take its
luxuries in the form of leisure. Doubtless all of us who are
members of a strenuous race, to whom leisure does not seem
so very desirable, and also of a race which might be malignly
characterized as a greedy or a gluttonous race, having powerful
desires for material luxuries, think that we have made much
the better choice. We are therefore much inclined to despise
the race which chooses otherwise. There is such a thing as
a pot calling a kettle black.

A storehouse of labor. There is another argument, however,
which goes back at least as far as David Hume, to the effect
that luxuries must be regarded as a storehouse of labor which
in the exigencies of the state may be turned to the public
service. This may mean merely that a community which is
expending a large proportion of its energy in the production of
luxuries may, in times of great crisis, turn that surplus energy
into the work of meeting the crisis. In time of war, for in-
stance, the consumption of luxuries may be cut down, and the
productive energy, which had been used in the production of



LUXURY 479

luxuries, may now be used in the prosecution of the war or
in the manufacture of munitions and war equipment. This is
undoubtedly a sound argument so far as it goes.

In order to put several million men of working age into the
army and navy, and more millions into the munition factories
and navy yards, and others into the mines to produce the raw
materials^ and still others onto the farms in order to increase
the food production, it is absolutely certain that labor must be
withdrawn from some other industries. It is fairly obvious that
there are only two sources from which they can be drawn.
They who are not working may be put to work, and those who
are doing unnecessary kinds of work may be put into the
necessary industries. There is no other possibility. The nation
must therefore look about and see what can be done in these
two directions.

Most of our men of working age are now at work doing
something which is necessary, convenient, or pleasing. A good
many women are virtually idle, though they all probably man-
age to keep busy at something or other. Some of them may
work in munition factories or take places in the ordinary fac-
tories, shops, and stores, displacing men and women already
employed. Those who are displaced may then enlist or go into
munition factories. A much better opportunity is offered in
their own homes. Every woman who keeps one or more serv-
ants, and who is able to do anything either inside or outside
the home, may do her own housework and discharge her serv-
ants. They will then be available for the industries whose
expansion is made necessary by the war. Those who are
situated where they can have a sizable garden may work ad-
vantageously at gardening, but they should take it seriously
and not waste their time on a few struggling garden plants.
They should do an appreciable fraction of what is known as
a man's work.

Reducing consumption in times of national crisis. A much
greater opportunity lies in the closing or cutting down of all



480 PRINCIPLES OF POLITICAL ECONOMY

unnecessary industries and occupations. If every luxury-
producing industry were closed down, a vast quantity of labor
would be released. It would then be available either for mili-
tary purposes or for the production of the necessaries of life.
Our golf courses, baseball fields, and tennis courts could be
transformed into farms and gardens. This would add a good
many acres to the productive land, and, what is vastly more
important, the players as well as the spectators could be used in
productive work. These suggestions are enough to indicate that
considerable changes in the daily habits of the people may be
necessary if a great national crisis is to be met.

These changes in habits may profitably go much farther.
The people may economize greatly in their consumption. It
is amusing to hear some people talk about the waste in Ameri-
can life. You would think that the great American garbage
pail was a veritable gold mine if it could only be profitably
worked. Doubtless there is some waste there, and it will bear
looking into ; but if we would consume more food and fewer
.condiments, relishes, and delicacies, whose real function is to
make the food palatable, we should reduce the cost of food
about one half. Starch, in the form of grain, potatoes, or
coarse vegetables, is our principal food. To this must be added
a very moderate amount of protein, fats, and sugar. These,
however, may also be made to serve the purpose of making the
basic starchy food more palatable. Fruits and the finer vegetables
and salads should be made to serve mainly as relishes. Instead,
many of us make our meals principally of things which should
serve as condiments, relishes, and delicacies, using starchy food
only as a means of diluting them. It is this habit, rather than
our garbage pails, with which the French people, who are so
much wiser in matters of food than we are, find most fault. As
to clothing, if the people patch and darn it and make it last
longer, the textile and clothing trades will then have time to
produce army supplies. Without such changes of habits as
these, let it be remembered, it will be impossible to recruit



LUXURY 481

an army and navy and at the same time increase the produc-
tion of supplies for the army and navy as well as of all the
basic necessaries of life.

There are, however, two ways in which these changes may
be forced upon the people, whether they will or no. If they
insist on consuming wastefully and spending their money for
things which are not necessary, while men are being at the
same time taken out of productive industry, this unbalancing
of supply and demand will send prices so high that most of the
people, particularly the poor people, will not be able to buy
anything but the barest necessaries. The well-to-do owe it as
a duty, therefore, to reduce their consumption and thereby re-
duce the demand upon the undermanned industries. Again,
if the government is wise enough, it will put such high taxes
upon all incomes as to compel the people to reduce their con-
sumption and their purchases. In this case, instead of buying
supplies and hiring men with their money, the people will turn
it over to the government, which will then buy supplies and
hire men with it. If the taxes are high enough, women will
be compelled to do their own housework and discharge their
servants, men will be compelled to close their golf courses and
stop going to ball games, and everybody will be compelled
to buy cheaper and more nutritious food and to wear their
old clothes longer. But they ought to do all these things and
a multitude of others anyway, in a time when the strength of
the nation is being put to the test and its very life is at stake.

The slogan "business as usual" in time of a great war is
the result of crass ignorance of some of the basic facts of eco-
nomic life. It is sometimes asserted in support of that slogan
that the only reason why the people are well-to-do is that they
have been spending their money for the products of industry.
Therefore, if the people quit spending their money, production
will be cut off and prosperity destroyed. But a little intelligent
analysis will show that it is not proposed to spend any less
money in time of war, or to hire any less labor, than in time



482 PRINCIPLES OF POLITICAL ECONOMY

of peace. The obvious thing is that the energy of the people
must be completely redirected. The great purpose of most
people in time of peace is to gratify their desires. In time of
war the great purpose must be to win the war. The energies
which have been devoted to the work of producing objects of
gratification must now be turned to the work of beating the
enemy. If everyone insisted on having as many objects of desire
and gratification in time of war as in time of peace, it would
take just as many men to produce these objects of desire and
gratification, and there would be none to spare for defending
the country. Instead of spending their money directly for their
own private purposes, the obvious duty of the people is to turn
over as much of it as they can possibly spare, and let the
government spend it in purchasing war supplies and in paying
men to do the few things which are supremely needful for the
national defense.

Rapid recovery after a local disaster. Even in cases of
great local disaster, such as a great fire or earthquake, it has
been remarked many times that recovery comes with amazing
rapidity. In spite of the fact that vast quantities of wealth
are destroyed, the city soon recovers and becomes apparently
as prosperous as ever. Luxury is supposed by some to have
an important bearing on this question. The energy which,
before the disaster, was spent in producing luxuries is now
available to be spent in rebuilding what was destroyed. In order
to do this, however, the people must, for a time at any rate,
reduce their consumption of luxuries. The individual whose
property has been destroyed is to that extent poorer than he
was before. He may borrow capital with which to rebuild, but
until the debt is paid off, his effective income is considerably
reduced. He therefore has less money to spend on articles of
luxury ; he is virtually spending that money on a new building.

The objection may be raised that the luxury which takes
the form of leisure would also furnish a fund of energy for
the meeting of a great national crisis or repairing a local



LUXURY 483

disaster. Men who have remained idle, enjoying leisure, may
now go to work to carry on the war or to rebuild the city
which has been partially destroyed. This objection is some-
what weak, however, because, in the first place, habits of sloth
and idleness are much more difficult to overcome than habits
of lavish consumption. The sheer inertia of the people makes
it almost impossible to rouse them to extra exertions in time
of crisis, whereas the people who have been , exerting them-
selves strenuously in the production of articles of luxury may,
with less difficulty, redirect their strenuous energy. In a sense
the productive machinery of the community is already going.
It can be kept going and its direction changed more easily
than it can be started up.

In the second place, when a community takes its luxury in
the form of idleness, it is certain to be ill equipped with the
machinery of production as well as with the technical knowl-
edge and skill which are necessary to efficient production.
If they lack machinery and technical knowledge and skill,
they will not be able to carry on a modern war successfully
or to repair a local disaster; whereas a community that takes
its luxury in the form of material goods will have learned in
the process of production much technical skill, and will have
accumulated vast funds of machinery and tools. If there is
anything that modern warfare has taught, it is the superiority
in war of the nation that is thus equipped. The technical
skill and the machinery which are accumulated for purposes
of production may easily be turned to the purposes of destruc-
tion, and in war the community that is best equipped for the
work of destruction will win.

Reducing the rate of permanent construction. So far the
argument seems conclusive in favor of material luxury as
against immaterial luxury in the form of leisure and idleness.
We are far, however, from a complete justification of luxury
in the ordinary sense. The community that is in the habit of
investing its money for the future rather than of buying objects



484 PRINCIPLES OF POLITICAL ECONOMY

of immediate gratification will likewise have a fund of surplus
energy at its disposal. All the energy which has been devoted
to permanent construction for the future good of society may,
in time of great national crisis or local disaster, be redirected
toward meeting the crisis or repairing the local damage. The
kind of skill which is necessary to permanent construction is
of quite as high an order as the kind which is necessary to
the production of ephemeral articles of consumption. All the
advantages, in short, which a luxurious community possesses
for the meeting of a great crisis are also possessed by the
thrifty community which spends a good portion of its income
in durable construction and in building for future generations.
In the long run the community that spends a large portion of
its energy in permanent construction will have certain advan-
tages over the community that consumes luxuriously. If every
farmer, for example, should put back into his farm a part of
his annual income, in the way of improvement of the soil, in
ditching, draining, fencing, and building, he would be using
up surplus energy just as truly as he would be if he spent that
amount of money in luxurious consumption. In time of national
crisis he can suspend, for the time, further building and im-
provements on his farm and have energy to spare for the
production of more food ; or he can dispense with a certain
amount of hired help, which will then be available for govern-
ment purposes. After a few generations the nation whose
farmers systematically put back into their farms a part of their
incomes will have much better farms and much greater pro-
ductive power than the community which merely keeps its
agricultural wealth intact and spends the surplus in luxurious
consumption.

That which applies to farms applies also to factories, shops,
and all other productive establishments. The community which
is in the habit of adding to its accumulated wealth in each gen-
eration by investing a part of its income in tools and instruments
for future production will, after the lapse of a few generations,



LUXURY 48$

be vastly stronger than the community which merely keeps its
productive power intact and consumes all its income. Thus
we reach the conclusion that, although the luxurious consumption
of material articles may be very much better than the luxurious
enjoyment of leisure, nevertheless thrift, forethought, and the
investment of incomes in instruments for future production is
better still. He who does less well than he can, does ill.
Therefore he who consumes luxuriously when he might invest
productively is doing badly.



CHAPTER XLI
THE CONTROL OF CONSUMPTION

Sumptuary laws. Luxurious consumption can undoubtedly
be condemned on economic grounds as being less desirable
than frugality, forethought, and the investment of funds in
productive industries and objects of durable satisfaction. Never-
theless it does not follow of necessity that the government
should, through sumptuary laws, attempt to repress luxury.
To prohibit the consumption of articles of luxury might very
easily take away the motive to industry. If the people cannot
have expensive commodities, they may take their luxury in the
form of leisure, idleness, and self-amusement. This, as we saw
in the last chapter, is even less desirable than luxurious con-
sumption. If we grant the argument used by Mill and others,
to the effect that an increase of wants sometimes has the effect



Online LibraryThomas Nixon CarverPrinciples of political economy → online text (page 39 of 48)