NOTE ON THE STATISTICS OF THE GROWTH OF WEALTH11.The statistical history of the growth of wealth is singularly poor and misleading.This is partly due to difficulties inherent in any attempt to give a numerical measure of wealth which shall be applicable to different places and times, partly to the absence of systematic attempts to collect the necessary facts.The Government of the United States does indeed ask for returns of every person's property; and though the results thus obtained are not satisfactory, yet they are perhaps the best we have.
Estimates of the wealth of other countries have to be based almost exclusively on estimates of income, which are capitalized at various numbers of years' purchase; this number being chosen with reference (i) to the general rate of interest current at the time, (ii) to the extent to which the income derived from the use of wealth in any particular form is to be credited (a) to the permanent income-yielding power of the wealth itself; and (b) to either the labour spent in applying it, or the using up of the capital itself.This last head is specially important in the case of ironworks which depreciate rapidly, and still more in the case of such mines as are likely to be speedily exhausted; both must be capitalized at only a few years' purchase.On the other hand, the income-yielding power of land is likely to increase; and where that is the case, the income from land has to be capitalized at a great number of years' purchase (which may be regarded as making a negative provision under the head of ii, b).
Land, houses, and live stock are the three forms of wealth which have been in the first rank of importance always and everywhere.But land differs from other things in this, that an increase in its value is often chiefly due to an increase in its scarcity; and is therefore a measure rather of growing wants, than of growing means of meeting wants.Thus the land of the United States in 1880 counted as of about equal value with the land of the United Kingdom, and about half that of France.Its money value was insignificant a hundred years ago; and if the density of population two or three hundred years hence is nearly the same in the United States as in the United Kingdom, the land of the former will then be worth at least twenty times as much as that of the latter.
In the early middle ages the whole value of the land of England was much less than that of the few large-boned but small-sized animals that starved through the winter on it: now, though much of the best land is entered under the heads of houses, railways, etc.; though the live stock is now probably more than ten times as heavy in aggregate weight, and of better quality; and though there is now abundant farming capital of kinds which were then unknown; yet agricultural land is now worth more than three times as much as the farm stock.The few years of the pressure of the great French war nearly doubled the nominal value of the land of England.Since then free trade, improvements in transport, the opening of new countries, and other causes have lowered the nominal value of that part of the land which is devoted to agriculture.And they have made the general purchasing power of money in terms of commodities rise in England relatively to the Continent.Early in the last century 25 fr.would buy more, and especially more of the things needed by the working classes, in France and Germany than ? would in England.But now the advantage is the other way: and this causes the recent growth of the wealth of France and Germany to appear to be greater relatively to that of England than it really is.
When account is taken of facts of this class, and also of the fact that a fall in the rate of interest increases the number of years' purchase at which any income has to be capitalized, and therefore increases the value of a property which yields a given income; we see that the estimates of national wealth would be very misleading, even if the statistics of income on which they were based were accurate.But still such estimates are not wholly without value.
Sir R.Giffen's Growth of Capital and Mr Chiozza Money's Riches and Poverty contain suggestive discussions on many of the figures in the following table.
Country and Land Houses Farm-Capital Author ofillionillionillion Estimate England 1679 (Petty)144 30 361690 (Gregory King) 180 45 251812 (Colquhoun)750300 1431885 (Giffen) 1,333 1,700 382United Kingdom 1812 (Colquhoun) 1,200400 2281855 (Edleston) 1,700550 4721865 (Giffen) 1,864 1,031 6201875 -- 2,007 1,420 6681885 -- 1,691 2,827 5221905 (Money)966 2,827 285United States 1880 (Census) 2,040 2,000 4801890 --
1900 --
France 1892 (de Foville) 3,000 2,000 400Italy 1884 (Pantaleoni) 1,160360Other Total Wealth WealthWealthper cap.
illion illion?
England 1679 (Petty) 40 250421690 (Gregory King) 70 320581812 (Colquhoun) 653 1,846 1801885 (Giffen) 3,012 6,427 315United Kingdom 1812 (Colquhoun) 908 2,736 1601855 (Edleston)1,048 3,760 1301865 (Giffen) 2,598 6,113 2001875 -- 4,453 8,548 2601885 -- 5,897 10,037 2701905 (Money) 7,326 11,414 265United States 1880 (Census) 4,208 8,728 1751890 -- 13,200 2081900 -- 18,860 247France 1892 (de Foville) 4,000 9,400 247Italy 1884 (Pantaleoni) 1,92065But their divergences show the great uncertainty of all such estimates.Mr Money's estimate of the value of land, i.e.
