The attitude of the great majority of people towards the lux urious expenditure of the rich is a mixture of envy, often entirely devoid of any feeling of resentment, and of approval based on popular economic reasoning which is definitely fallacious. It is a very widespread belief that such expenditure is good for trade, that it makes money circulate and, therefore, increases employ ment. On the face of it, it is obvious that the maintenance of racing stables or private yachts, the purchase of magnificent furs or jewellery, gives employment to those engaged in the trades concerned and that the localities in which these trades are situ ated benefit from such expenditure. But the fallacy of such rea soning lies in ignoring the fact that the aggregate real resources of producing power in a country are limited at any one time. A large amount of capital and labour is required to make and equip yachts and racing stables and this capital and labour is withdrawn from other uses to which it would be put. If the wealth consumed extravagantly was saved and invested the volume of capital would be increased, the rate of interest would tend to fall and there would be a larger demand for labour to co-operate in the produc tion of goods consumed by other sections of the community. If, in a capitalist society, there was a sudden change in the standards of expenditure of the wealthy classes such that all expenditure commonly recognized as luxurious was regarded with strong social disapprobation, these persons would find themselves impelled to save on a much larger scale than formerly, and a great deal more capital would be available for production. But as the ultimate aim of production is consumption the net effect of the change of policy in regard to expenditure would be to transfer additional spending power to all the less wealthy members of the commu nity. The latter would benefit by higher money wages, owing to the greater demand for their services, and from the still higher real wages, owing to the fall in the rate of interest and to the larger production of the type of commodities which they consume. Some proportion, though it is impossible to say how much, of this increased wealth would be consumed by the poorer classes in the form of luxuries, as we have defined this term above, or in an increased enjoyment of the quasi-commodity, leisure. The ulti mate consequences of such a change would depend, firstly, upon the economic and social effects of this transfer of real income to the poorer classes and, secondly, upon the willingness of the wealthier classes to continue to work as hard and efficiently as formerly to produce incomes which they do not themselves enjoy by consumption, and the spending power of which they in fact transfer to other people. This hypothetical case, while serving to disprove the fallacy that luxurious spending is good for trade, also brings into relief the fact that a mere lopping off of the higher incomes, whether voluntarily or involuntarily, would not dis pose of the problem of luxury; it would merely alter its mani festations. The luxurious expenditure of the wife of a bolshevist commissary differs in kind and extent from that of the wife of a grand duke of the tsarist regime, but it has none the less its bear ing on the economic structure of bolshevist society. It is probable that, over a large part of the less wealthy sections of the popula tion of England and other Western countries, the proportion of the total income spent on luxuries is appreciably greater than amongst the rich, and that the economic evils of this expenditure, owing to the withdrawal of income from other directions in which it would have a high direct utility, are of considerable magnitude. It may be as well to point out in connection with the above illus tration that there is a further alternative open to the rich who re frain voluntarily from luxurious expenditure ; they may devote large sums to endowing hospitals, education or other socially use ful institutions. In this way they can benefit the world and at the same time reap a large income of satisfaction from the knowledge that their wealth is benefiting humanity.
had its duties and responsibilities, which were widely, if not uni versally, recognized, but • the industrial revolution (q.v.) has tended for a while to divorce wealth from responsibility, and though a new social consciousness is springing up, nowhere more clearly than in the United States of America, it has not yet pene trated very deeply. As a result there has grown up in modern times in every class an enormous amount of purely ostentatious expenditure—the outcome of the desire for distinction which is one of the most deep-rooted characteristics of human nature. Until new standards arise—and there is evidence that they are being f ormed—distinction in the modern world is most easily afforded by the opportunities which wealth provides for display. As Veblen has shown in his Theory of the Leisure Class, the evils of low standards of expenditure are not confined to the wealthy classes from which they spring; they propagate and perpetuate themselves by example and imitation right down the social scale from top to bottom; what is called "snobbishness" is a very potent social force, but it is one which may as easily work for the good as for the harm of humanity. It has been well said that mankind is nowhere more vulgar than in the way in which it spends its in comes. No amount of time, effort or thought is grudged to the acquiring of wealth, but when we come to consume it we dissi pate the fruits of our labours often with small gain to ourselves and with unforeseen and undesired repercussions on the welfare of the community as a whole. What R. H. Tawney has termed— in a notable book bearing this title—"the sickness of an acquisi tive society"—is the outcome of false social values, inspired by the all-pervading impulse to acquire riches to the elimination, or at least repression, of every other ideal. While the Churches wrangle over doctrines, they largely ignore the great problem of the art of spending, which is almost synonymous with the art of living. There can be no doubt that wiser methods of spending on the part of both rich and poor would do more than any legislation, and more than any equalization of the distribution of wealth that is conceivable, to raise the general standard of living and to provide a remedy for social unrest. The hopes of the future must rest on the creation and extension of an enlightened public opinion in such matters.