<h2>CHAPTER 40</h2>
<h3>WASTE AND LUXURY</h3>
<h4>§ I. WASTE OF WEALTH</h4>
<div class="sidenote">Loss of wealth in an isolated or an exchanging economy</div>
<p>1. <i>The accidental destruction of wealth is a loss to the owner, rarely
with benefit, on the whole, to others.</i> In the consumption of wealth the
loss of its utility is accompanied by the gratifying of wants; in the
destruction of wealth utility is lost without the gratifying of wants.
In a simple society, without exchange, the result of such a loss is
evident. If food is destroyed, men suffer from hunger or gratify
appetite less perfectly; if clothing is destroyed, they are cold; if
houses are destroyed, they have no shelter. Likewise, if the
self-sufficing family on a farm loses wealth by fire or storm or blight,
its economic environment is made less fitted to gratify wants. In the
conditions of our society, where goods are exchanged, the result appears
to be different. The need to replace the lost goods makes a demand for
special kinds of labor or goods. There may be, therefore, an immediate
benefit to some, which obscures the corresponding loss to others. If a
part of the income of the loser must be diverted from other uses to
replace the wealth destroyed, those from whom he would have bought
suffer an unexpected falling off of their sales, and he has himself
gained nothing. The net result is a loss of wealth and gratification to
the community as a whole.</p>
<p>There is a real exception where the accidental destruction removes some
social difficulty. The great fire in London and the great fire in
Chicago resulted in wonderful improvement.<span class="pagenum"><SPAN name="Page_382" id="Page_382">[Pg 382]</SPAN></span> When an old city is built
almost entirely of wood, each owner may think it to his interest to keep
the old buildings. A great fire sweeps them all down and compels the
rebuilding of the city on a new and higher standard. But the usual
social result of accidental destruction is a loss. It is a use of wealth
without a fulfilling of the purpose of production, the gratifying of
wants.</p>
<div class="sidenote">Intentional destruction of wealth by the owner</div>
<p>2. <i>The intentional destruction of wealth by the owner, to make trade
good, benefits neither himself nor others.</i> The case in mind is one
where there is full choice between keeping or losing the good, not such
a case as the throwing overboard of a part of the cargo when the ship is
in danger of sinking, in the hope thereby of saving the rest, or as the
blowing up of buildings to prevent the spread of a fire. In such cases
the destruction is inevitable without man's action; he merely tries to
minimize it. The case in mind is the deliberate destruction of wealth
that might be kept for use. One labor leader, for example, boasted that
when he drank pop he always broke the bottle "to make trade good" by
helping the glass industry. The refuting of this fallacy is one of the
time-honored tasks in political economy. There is, it is true, an
increase in the demand for glass and glass-blowers' labor, but without
an increase in gratification; but at the same time there is a decrease
in the demand for other goods which would afford additional
gratification. The proverb, old in Shakespeare's time, runs, "Nothing
can come of nothing." What is spent for one purpose cannot be for
another; "you cannot eat your cake and have it too." A given income can
be spent in one of many ways, but not in all ways or even in two ways at
once. It is a question of this <i>or</i> that. At the same moment that the
demand for pop-bottles is increased, the demand for other things is
decreased, possibly that for pop-corn or pop-guns or Populist
papers—who can tell? Such a form of benevolence is a mistaken,
uneconomic attempt to provide labor for one man by taking it from
another.</p>
<p><span class="pagenum"><SPAN name="Page_383" id="Page_383">[Pg 383]</SPAN></span></p>
<p>If the advocate of wealth-destruction would be consistent, he should
break, not merely the pop-bottle, but the water-pitcher and the table as
well; he should make a bonfire at least once daily of his clothing, his
house, and its furnishings; he should advise blowing up the steamboat
and ripping up the railroad when they have carried a single load of
passengers. Thus, when all men were naked and starving, and civilization
had sunk to savagery, trade would have been made as "good" as, by the
policy of destruction, he could ever hope to make it.</p>
<div class="sidenote">Intentional destruction of others' wealth</div>
<p>3. <i>The intentional destruction of wealth owned by other persons is
falsely thought to benefit trade in general.</i> The cases referred to are
not acts done with criminal motives, but those done with a view to the
public interest. If one sets fire to the property of another, seeking
revenge or plunder, he is guilty of the crime of arson. But what shall
be said of volunteer firemen that let an old house burn down to provide
labor for carpenters and "to make business good"? The duty of firemen is
to put out fires, no matter what the building is; but they choose
sometimes to be ministers to the social interest as they interpret it.
The more spent for carpenters' work out of any income, the less can be
spent for other objects. It is true, however, that if in a small town
the money to rebuild is borrowed from a distant loan or insurance
company, there is an increase in employment in that town for one season;
and that is as far as most men try to carry their economic analysis. Let
the student carry it further.</p>
<div class="sidenote">The seen and the unseen</div>
<p>Servants sometimes excuse the breaking of dishes and furniture on the
ground that it makes work, and that the employer can afford it. But
income is thus diverted from other expenditure, either for production or
for consumption. In the light of the theory of wages, it would appear
that carelessness reduces the servant's own efficiency, and in the long
run the loss comes, in part at least, off the wages of that particular
servant. Bastiat's discussion of the broken window-pane<span class="pagenum"><SPAN name="Page_384" id="Page_384">[Pg 384]</SPAN></span> is often and
deservedly quoted. What is seen is a certain immediate benefit that the
glass-maker and glazier get; what is not seen is that the power to
expend an equal amount for other things is thereby lost by the owner of
the house.</p>
<div class="sidenote">The wasteful use of wealth</div>
<p>4. <i>The destruction of unnecessarily large value to secure a given
gratification is not economically sound.</i> The careless use of wealth to
secure an inadequate result is likewise justified as "making trade
good." The blunder that compels the rebuilding of a wall in a rich man's
garden is an occasion for congratulation to those who see in it a happy
provision of work for the unemployed. It is easy to forget that the
proper use of goods is the final step in production. According as goods
are well or poorly used, the production—that is, the real income or
gratification they afford—is large or small. Differences in skill in
the use of wealth are great. A French cook, we are often told, can make
a palatable soup from what goes from the average American kitchen into
the swill-pail. Waste in the use of goods is more likely to be found in
new countries where wealth comes more easily and necessity does not
enforce frugality.</p>
<p>The praise of waste implies the error noted in the preceding
propositions. Deliberately securing less than the maximum result from
wealth is merely a minor degree of the intentional destruction of
wealth. The mistaken view is essentially that of the opponents of
labor-saving machinery. It may be true, if the interests of a small
class of workers or of tradesmen for the moment are looked at; it is
false, if the interests of society as a whole be considered. Far more of
wisdom lies in the proverb, "A penny saved is two earned." The economic
use of wealth as surely adds to wealth (and, ultimately, to the income
of society) as any other mode of production.</p>
<div class="sidenote">Waste in public outlay</div>
<p>Some government expenditures, as for river and harbor improvements, are
sometimes favored, not because their immediate purposes are good, but
because they "make work"<span class="pagenum"><SPAN name="Page_385" id="Page_385">[Pg 385]</SPAN></span> and "distribute money" throughout the country.
This money comes from taxation, and no matter what the system of
taxation, the burden falls on some one, reducing the incomes at the
disposal of the people to expend for objects of their own choice. If the
work is not worth doing for itself, the collection of money in small
amounts from many taxpayers and its expenditure as a large sum in one
locality results in a net loss to society as a whole. Where the result
is worth something, but not enough by itself to justify the expenditure,
the fallacy of the destruction of wealth is present in a smaller degree.
Examples are seen in the extreme use of pensions and in some public
subsidies.</p>
<div class="sidenote">The fallacy of waste</div>
<p>5. <i>The supposed benefits of destruction and waste are due to a narrow
and incomplete view of the question.</i> Let us restate the ideas that have
been touched upon. In many cases it is possible that one person may
benefit by another's mishap or folly in the use of wealth. The complex
interrelations of men in society make this inevitable. But, to
appreciate the final effects of such action upon society, one needs but
to go back to the essential thought of wealth and its purposes. As the
average efficiency and bounty of the world fall, so fall the income and
welfare of men. As it rises, the social and economic levels rise also.
Every kind of economic wealth has potentially two kinds of uses: to
gratify wants—thus fulfilling its destiny—or to be converted into
higher and more efficient agents—consumption or production. That the
possibilities of the latter are boundless is overlooked in the fallacies
here criticized. An efficient world would be the result of "economy" and
saving; a wasted and used-up world, the result of the fallacy of the
destruction and waste of wealth.</p>
<h4>§ II. LUXURY</h4>
<div class="sidenote">Luxury defined</div>
<p>1. <i>Luxury, while variously defined, involves always the thought of
great consumption of wealth for unessential pleasures.</i> <span class="pagenum"><SPAN name="Page_386" id="Page_386">[Pg 386]</SPAN></span>It is not
possible to define luxury absolutely; it is a relative term. Those
opposed to it condemn it in their definition of it, as, for example: "an
excessive consumption of wealth," or "devoting a relatively large amount
of wealth to the satisfaction of a relatively superfluous want." Those
who take a more moderate and favorable view say: "It is the enjoyment of
forms of wealth not obtainable by the mass of men." The difficulty in
the definition as well as in the problem of luxury is that it involves a
mixture of economic and of ethical questions.</p>
<div class="sidenote">Extravagance "to give employment"</div>
<p>2. <i>Luxury is erroneously justified by some as giving employment to
labor.</i> Typical instances are extravagant dress and elaborate balls
where fine and costly flowers, decorations, music, coaches, require the
expenditure of a large amount of money. It is said of the Empress
Eugenie, wife of Napoleon III, that, in order to help the glove industry
of France, she wore no pair of gloves more than once; in order to help
other French industries, she purchased many silks and laces. It is a
very comfortable doctrine to some people that the oftener they change
their dress, the greater benefactors to society they are. A few years
ago the "Bradley-Martin ball" was given in New York city. It was
possibly little more elaborate and expensive than many another ball, but
it chanced to be a dull time for news and the papers all over the land
gave columns to its discussion. In the many interviews with ministers
and business men, the thought appeared over and over that the ball had
at least the merit of giving employment to labor.</p>
<div class="sidenote">The fallacy of luxury</div>
<p>The fallacy of this is essentially the same as that in the argument for
waste and destruction. From the fact that these particular tailors,
musicians, and florists would have less employment if this ball were not
given, it is falsely concluded that, but for this ball, this particular
income, or capital, would not be used at all. The average of employment
in those special industries which minister to luxury is the result of
and is determined by the average level of<span class="pagenum"><SPAN name="Page_387" id="Page_387">[Pg 387]</SPAN></span> demand. There are more
caterers and florists in Ithaca than in Hayt's Corners. A more than
ordinarily gay season gives unusual profits to these enterprises, and it
is true that an abrupt and extreme falling off in demand would cause
them large losses, and leave many workers lacking employment for that
one season. But, if this limited demand became usual, capital and labor
would shift to the other industries to which expenditure had shifted.
Other modes of expenditure than twenty-five thousand-dollar balls are
possible, as, for example, twenty-five thousand-dollar public libraries.
Mr. Carnegie takes his dissipation in that form. That gives employment
also; not less does investment in new houses, in new railroads, and in
new factories. More employment of a particular kind of labor is caused
in one case than in another, but not more employment of labor as a whole
and on the average.</p>
<div class="sidenote">Results of a sudden change in standards of living</div>
<p>3. <i>If all extreme luxury ceased, men of means would improve durable
agents more or would give more or would take more leisure while
producing less.</i> The question of luxury is most difficult when put thus:
What would happen if everybody began suddenly to live on the simplest
food and to confine himself to the bare necessities of life? A sudden
change of this sort is almost unthinkable, but if it took place, all the
factories and agents used for non-essentials would lose their value at
once. A great industrial crisis would follow, as industry would have to
adjust itself abruptly to an unprecedented standard of desires. What
would happen if that standard continued would vary as human nature
varies. There might follow increase of population, or a heightening of
the efficiency of such agents as were of use, or, more probable than all
else, a progressive lightening of labor, a use of the surplus of energy
in study, rest, and recreation. It is, of course, illogical to suppose
that with limited desires for the objective goods of the world there
would continue undiminished efforts to produce goods and to save for
future superfluities. In actual life<span class="pagenum"><SPAN name="Page_388" id="Page_388">[Pg 388]</SPAN></span> changes of standard occur
gradually. Economizing in material things by simpler living makes
possible not only the increased efficiency of productive agents but the
increased enjoyment of immaterial goods.</p>
<div class="sidenote">Luxury as an incentive to progress</div>
<p>4. <i>The defenders of luxury claim that it is the great incentive to
progress.</i> It is undoubtedly true that a dead level of conditions is
unfavorable to the progress of society. There must be in society some
motive for emulation and ambition after the bare necessities of life are
provided. There is therefore much strength in the defense of luxury.
Necessities, strictly understood, are things absolutely essential to
life and health. No hard line can be drawn between necessities and
comforts, between comforts and luxuries. The level rises; it is a trite
and true saying that the luxuries of one age become the necessities of
the next. The rise of the bath-tub in the nineteenth century is an
epitome of the progress of civilization in that period. The free baths
in our cities surpass the hopes of the wealthy of a century ago. Even
the meaner motives of envy may have their social function. The lower
social grades, emulous of the higher standard held before them, labor
with greater energy. The successful and capable, not content with
necessities, continue to give their efforts to production. The
destruction of the motive of luxury before the development of a
substitute in a higher social conscience, would be paralyzing to
industry. Luxury in a moderate measure may be defended by the same
arguments as those for private property. True as this view may be in
many cases, in others it seems directly opposed to the facts. Let us
look at the economico-moral questions involved from the side of the
individual who is indulging in luxury, and from that of the society in
which he lives.</p>
<div class="sidenote">Happiness and the simple life</div>
<p>5. <i>As a question of consumption luxury involves for the individual both
an economic and a moral problem.</i> The economic question is, Does luxury
enhance the man's real income? Does a greater expenditure on himself
give him a<span class="pagenum"><SPAN name="Page_389" id="Page_389">[Pg 389]</SPAN></span> larger sum of gratification in life than a moderate
expenditure would give? Ostentation has its penalties. Undue striving
after effect defeats its own purpose. This is the cold fact of
experience, not a speculative proposition. To get back to the
fundamental principle: gratification results from a harmonious relation
between man's nature and the world. Life loaded with too much luggage
staggers under the burden. The tired faculties of the Sybarite cease at
length to respond to natural pleasures. When the senses are robbed of
their fineness, youth grows blasé, mature manhood is ennuied, life is
empty. The praise of "the simple life" has lately been heard in a
quarter whence such counsel does not usually come. In gay Paris, a wise
pastor has made one of the most beautiful and rational pleas for plain
and sincere living that society has heard since the time of the stoic
philosophers. The word is needed. With the growth of incomes grows the
strain to reach the self-imposed standards of frivolity. Insanity and
suicide are on the increase. The stress of modern life makes men yearn
for the simpler joys. Happiness dwells not outside of men; they must
seek it within.</p>
<div class="sidenote">Luxury vs. social welfare</div>
<p>An economic failure, luxury is likewise in most cases a moral failure.
Morality has to do with others; the social aspect of luxury is its
effect on other people. The mere spending of a large income in selfish
indulgence absorbs all the energies and interests of some men and women.
Not only happiness in the narrow sense, but self-realization, is to such
lives impossible. Those absorbed in display can give no due measure of
thought to social obligations. A society made up of self-absorbed and
self-centered individuals is a selfish society, foredoomed to decay.</p>
<div class="sidenote">Luxury generally condemned</div>
<p>6. <i>The larger moral problem involved in luxury is connected with
distribution or the justice of the income, rather than with consumption
or the spending of the income.</i> The individual effects of luxury broaden
thus into the larger social effects. Most of the enemies of luxury
condemn all<span class="pagenum"><SPAN name="Page_390" id="Page_390">[Pg 390]</SPAN></span> expenditure of wealth above a very moderate sum, declaring
that it is "unjust" for one man to have much while others are in
poverty. This communistic doctrine pervades the teaching of many moral
teachers, pagan and Christian. In many ways a public opinion can be
developed to disapprove and condemn ostentation. Frivolous display
becomes bad taste. Flaunting riches meet the public frown. The spending
of income for dress and display has never been successfully forbidden by
law. The Middle Ages are full of futile sumptuary laws which sprang from
the envy of the nobles for the wealthy merchants. The growth of good
taste may do what formal law found impossible.</p>
<div class="sidenote">Increasing social uses of wealth</div>
<p>The use of wealth in these days is taking more social directions. It
turns from dress toward education, art, music, and travel; then ceases
to be applied merely to self and family, and benefits the community.
Nowhere and never before has this movement gone so far as in America.
Andrew Carnegie, with his gifts of millions annually to public
libraries; Peter Cooper, founder of the People's Institute; Ezra
Cornell, the patron and prophet of the modern type of higher
education—are citizens of a kind better known in this country than in
any other.</p>
<div class="sidenote">Justice of the large income</div>
<div class="sidenote">Legal repression of luxury inadvisable</div>
<p>The immorality of luxury rests in most minds on the conviction that it
is unjust that any one should have so large an income to use. The
question of luxury leads back to the question of distribution: Has the
man honestly gained his wealth? If so, he may spend it with good
judgment or poor, with good taste or bad, but, so long as he does not
injure others in the spending of it, there is much vagueness and
confusion in the talk of "justice" or "injustice." Each must in large
measure be his own judge of the wisdom of expenditure. Luxury is not
always a question of wealth. Every person of moderate income has
relatively superfluous and expensive tastes. One spends more for music
than many a millionaire does; another more for books. How many college
students' budgets could pass the censorship of Hetty<span class="pagenum"><SPAN name="Page_391" id="Page_391">[Pg 391]</SPAN></span> Green, reputed to
be the richest woman in America? If expenditures were regulated by the
public, few persons would be within the law. But whatever the goods that
are bought, if income is unjustly acquired, if its distribution is by
rules that do not give the best possible approach to social service,
there may well be talk of injustice. There is need of better standards
of taste and judgment in expenditure, but not of sumptuary laws. If
there is any legal change, it should be rather in the law of property.</p>
<hr class="chap" />
<p><span class="pagenum"><SPAN name="Page_392" id="Page_392">[Pg 392]</SPAN></span></p>
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