Consumption of Wealth 1

public, government, living, productive, governments, social and welfare

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showed a division of expenditures somewhat different from that of the Engel table, tho practically substan tiating it. In the New York investigations food is ' placed at 43.4 per cent, rent 19.4, clothing 10.6, light and fuel 5.1, insurance 3.9, and sundry expendi tures 17.6.

The conclusion is that the fair living wage for a workingman's family in New York City should be at least $728, or a, steady income of $14 per week. Since 1914 the cost of living has advanced, so that the wage now required is probably above $1,000.

13. for philanthropy tends to reduce the inunediate amount of c,apital available for industry ; but if it has the effect of raising standards of living and bettering the con dition of the workman, the ultimate gain may be many times that of the present cost. The problem involved requires genuine statesmanship; the imme diate cost must be measured against the possibility of a better race that can maintain a higher standard of living.

At one of the meetings of the American Academy of Political and Social Science, according to the American Year Book for 1913 (p. 46), the art of giv ing was discussed as an exact science. The reader of the paper declared that in 1912 gifts totaling nearly $267,000,000 were reported by the press, and that for the twelve years preceding, the annual total of notable gifts liad exceeded $100,000,000. This statement tells something of the extent to which consumption for social purposes may be carried voluntarily.

The incorporation of the Carnegie funds and the application to Congress for a charter for the Rocke feller Corporation, raised the question of the influ ence of these private philanthropies upon public inter ests. It lias been alleged that their influence might be detrimental to political welfare, but in reality the question of the withdrawal of the income of these en dowments from- productive enterprise and the weak ening of capital accumulation may be more vital.

Like taxation for social purposes, private philan thropy may materially diminish the productive ca pacity of the nation. The effect upon the community can be observed only after a prolonged period; the im mediate effects are difficult to see. As a people we are now entering upon a period of' public and private philanthropy that is bound to have a wide influence upon national growth.

14. Cost of large amount of the world's new wealth is consumed in the support of the governments of nations and their various subdivisions. This is sometimes referred to as public consumption ; and the various methods of raising and distributing the necessary funds form the subject-matter of public finance.

Much of the consumption of wealth by governments may properly be called productive. Courts of law are necessary for the maintenance of justice; police men and firemen for the protection of life and prop , erty; public school teachers in order that education may be open and free to all; boards of health that the inroads of disease may be checked; and congresses, legislatures and parliaments in order that expend itures may be made for tbe common welfare of all citizens.

For example, the United States Government in the first decade of the twentieth century expended $242,000,000 for the improvement of rivers and harbors, and this expenditure if wisely planned and executed was productive in the economic sense. Unhappily much wealth is consumed by governments wastefully and therefore unproductively. It is a notorious fact that government employes work with less energy and diligence than the employes of a pri vate concern, that producers selling to a government exact exorbitant profits whenever possible, and that public officials are less wary in entering into contracts for the gOvernment than they would be if doing busi ness for themselves. For this state of affairs no remedy can be found except in education. As people realize more fully the services which a good govern ment can render and how closely it is related to their own personal welfare, they will insist upon placing in office only men of integrity, zeal and intelligence.

15. War.—In times of peace most governments maintain armies and navies; and many of them ex pend considerable smns in the payment of pensions to old soldiers. All expenditures of this sort are eco nomically unproductive. If all thought, of war could disappear from the minds of men, the wealth of the world would increase flinch more rapidly; and a much larger population be supported.

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