Modern Economic Problems - Economics Vol. II | Page 4

2. Irrigation enterprises [a] [a] 360 3.
Agricultural equipment (livestock, tools, etc.) 3,822 4,919 7,706 4.
Manufacturing equipment 2,541 3,298 6,069 5. Transportation agencies
11,249 14,434 22,360 6. Telegraph and telephones 612 813 1,304 7.
Waterworks (privately owned) 263 275 290 8. Electric lighting plants
403 563 2,099 9. Products (still in trade)[b] 8,294 10,212 21,577 10.
Direct goods in use[c] 6,880 8,250 12,758 11. Gold and silver 1,677
1,999 2,617
[Footnote a: No figures for these years.]
[Footnote b: The main items are agricultural and mining products and
imported merchandise.]
[Footnote c: The main items are clothing, personal adornment, furniture,
and carriages.]
§ 5. #Average wealth and the problem of distribution#. The foregoing
figures make a most satisfactory showing, and appear to indicate that
mere economic problems are rapidly being solved by the growth of
national wealth. But unfortunately these figures have little significance
in connection with such an inquiry, if indeed they are not badly
misleading.
In the first place, the final figures of "per capita wealth" are merely
averages; a per capita increase, therefore, may appear when total wealth
increases, altho the total may be due to the growth of comparatively
few very large fortunes. The fact is evident that vast numbers of
individuals and families are nearly propertyless and in so far as this is
true there is involved one of the greatest of our socio-economic
problems, that of the distribution of wealth and income among the
people. The more unequal the distribution, the greater, in all likelihood,
is the discontent; and the greater the effort of many men to find some

methods by which greater equality may be attained.
§ 6. #Changes in the price-standard#. These figures, moreover, are
expressed in terms of the monetary price-unit, in dollars of the gold
standard, and therefore the increasing total figure (and correspondingly,
the increasing per capita) may be but the reflection of a change in the
value of the monetary unit. It is well known that the gold dollar has
now less purchasing power than in 1880, and less also than at any
intervening time.[2] To the extent that this is true the increase in the
figures of wealth (total and per capita) is only nominal and does not
indicate increase in the quantity and betterment in the quality of real
wealth. This fact is so evident that it would seem unnecessary to call
attention to it, if it were not constantly overlooked in citing these
figures.
§ 7. #A sum of capital, not of wealth#. Consider further, that the figures
here given for wealth really express but the sum of capitals of the
individuals (or private corporations) of the nation. These do not
constitute a sum of social wealth in any proper sense of the term.[3]
Arithmetically it is a fallacious kind of a total, for the sum of the
individual capitals contains some items that should be canceled to find
the sum of wealth. Moreover, capital is an acquisitive concept. It is an
expression of the value of a man's possessions, and not of the utility[4]
of them. It measures intensity of desire for goods and not necessarily
the degree of welfare. Such a total, therefore, embodies the difficulties
of the paradox of value; in some cases increased value reflects a
growing scarcity and not greater abundance.[5]
For example, between 1900 and 1915, with the growth of population,
the total number of improved acres in farms in the United States
increased but little, and the per capita number diminished. At least in
part as a result of this fact, the prices of nearly all kinds of food rose
rapidly, as did also the price of farm land. The prices (and estimated
values) of farm lands are the expression of the individual capitals,
which formed each year an increasing statistical total of so-called
wealth. The people had less land per capita, and were poorer per capita
as respects this item of landed-wealth, had less meat per capita, and had

to give more labor in exchange for food, at the same time that the
statistical per capita of land values increased.
So it may be as respects forests, coal, cotton, and eventually iron,
copper, and many other things. When forests were plentiful, lumber and
fire wood were free goods in many neighborhoods. Forests entered into
the total of national "wealth" in 1850 and 1860 at a comparatively
small sum. But in 1910 when the forests had been half used up they
appeared as a greater total and probably as a greater per capita item of
"wealth" than in 1850. The figures reflect changes in the paradoxical
section of the scale of values, and express scarcity rather than wealth.
Altho the wealth of a nation may not be expressed as a single sum of
values that accurately reflects the weal-bringing