THE COST OF LIVING. T HE Report on Rents and Prices—in

other words, the Report on the cost of living—which was issued by the Board of Trade on Tuesday, is the most care- ful and accurate that has ever been published. Few arts have advanced more rapidly in scientific precision in recent years than the art of the official statistician. Some day, perhaps, the proverbial election agent will no longer be able to provide the candidate with figures to prove anything he wants to say. Blue-books in the past have generally provided a perfect armoury of proofs to men who put forward flatly contradictory propositions. The Report by Sir H. Llewellyn Smith which is before us is exceptionally clear in its arrangement, and has the comparatively new merit of making it possible to draw broad, simple, and, in most cases, indisputable conclusions. Provided with such a book any intel- ligent heckler might bring to nought the disingenuous figures of the election agent. The conclusion of the Blue-book that the total cost of living has risen TO per cent. in the seven years between 1905 and 1912 is a. moderate estimate. Rents on the whole have not increased. Indeed the tendency has been for them to fall slightly ; but the price of food and coal together has risen about 13 per cent. No previous Blue-book has included clothing. The touch of the compiler in this matter is necessarily. rather uncertain, but be believes the rise in price to be about the same as that of food. The vagaries in the rise of food-prices are extraordinary. Tea and sugar have fallen, mutton has risen 6 per cent., beef has risen 9 per cent., bread 15 per cent., cheese 18 per cent., eggs 13 per cent., butter 9 per cent., bacon 32 per cent., and potatoes 46 per cent. Coal has risen 22 per cent. Rents have fallen in twenty-eight towns out of the eighty-eight selected for comparison. In London the fall has been 4 per cent. and in Burton-on-Trent 10 per cent. In Birmingham, Dublin, Glasgow, Leeds, Manchester, Sheffield, and several other towns of importance there has been no change. The rise at Coventry, on the other hand, has been 18 per cent.

London, in spite of the fall in rent, remains the most expensive town to live in. When all the necessaries of life, rent, rates, and clothing have been included, London is between 11 and 12 per cent. more expensive than the eighty-seven other towns with which comparison is made. Taking the figure for London at 100, the cost of living in some other dear and cheap towns is represented by the following most interesting table :—

DEAR TOWNS.

Croydon, Plymouth, and

Devonport ... Newcastle-on-Tyne Swansea ... Dublin Birkenhead ... 87 84 '76 73

CRP A P TowNs.

Chester, Derby, Norwich, Leicester, Stockport ...

Bedford, Warrington ...

Cork ... ...

Crewe... ... Burton-on-Trent 52 51 50 49 48 Jarrow

7

Gloticester,Ipswich,Taunton 47 Huddersfield, Southampton,

705

Galashiels, Belfast 46 S. Shields, and Leith Edinburgh, Walsall ... ...

Kidderminster, Peter- 43 Greenock ...

68 borough, Waterford ... 42 Gateshead, Sheerness,

Londonderry... ... 40 Dundee ...

67 Macclesfield ... 38 Glasgow ...

67

The chief feature of the report, however, is the evidence it offers that the rise in prices is world-wide. The rise has been greater in foreign countries—with the exception of France—than in Great Britain. The greatest rise has been in Canada, Austria-Hungary, the United States, and Japan. Since 1900 the rise in Austria-Hungary has been 35 per cent., in Belgium 32 per cent., in Germany 30 per cent., in Italy 20 per cent. In the same period the British and French rise has been only 15 per cent. Canada easily tops the list with a rise of 51 per cent. It is suggested that the rise in the United States and Japan would be found even higher if the figures for 1912 had been avail- able for the Report. Australia and New Zealand show a comparatively modest rise of 16 per cent.

But to return to the conditions at home. The move- ment of prices in the past is illustrated in a chart which gives the wholesale prices since 1871 and of retail prices of food in London since 1877. We here note some very striking facts. From 1873 to 1896 there was a regular and marked fall in prices. 1896 was the low-water mark in the price of necessaries. A slight but gradual rise then began. If the year 1900 is taken as the basis of com- parison the downward and upward tendency would be expressed arithmetically as follows : 1873, 151.9 ; 1896, 88.2 ; 1912, 114-9. Thus, although prices have risen in recent years, the cost of living is not higher even now than it was in 1884, and it is actually lower by a percentage varying from 10 to 37 per cent. than it was in the years 1871 to 1884. These are facts from which we cannot get away, and we are bound to say that they are a corrective to a great deal of loose talk. That there has been, and still is, a serious enough rise in prices is plain ; but it is not a new phenomenon, nor is it in itself an alarming one. People found much too facile conclusions on what happens to come under their own experience at any particular moment. They talk of the rise in prices as a latter-day portent, just as they talk of the physical deterioration of the race as a self-evident proposition, although such figures as are available show that the tendency of national physique is to improve.

Although there is no reason whatever to take alarm at the rise of prices as such—to a certain extent we are the victims of a cyclic movement which political economy notes rather than explains—we can and must watch most carefully the simultaneous economic con- ditions upon which the whole significance of food prices depends. It is obvious that it does not matter very much to a man if bacon costs him much more than it did ten years ago if he has got more than enough money in the form of increased wages to pay the new price and still be as well off as before, if not better off. The real point in estimating the rise or fall in the standard of comfort—by which alone we can ultimately judge the welfare of the community — is whether wages have risen proportionately to the rise in the cost of living. If they have, all is well. The world- wide rise in the cost of necessaries need mean no more than that the standard of living has universally risen, and that, demand having increased in relation to supply, prices have also automatically risen. There would be nothing to deplore in that. It is a very desirable thing that the standard of living should continually rise, and all classes enjoy more of the good things of the world. But of course there is a real rise in wages only if that rise has exceeded the simultaneous rise in the cost of living. Brought to this test, British wages are not what they ought to be. There has been an upward movement, as everyone knows, but it is not what it should have been, or what we venture to say it would have been if the free operation of capital in the employ- ment of labour had not been checked and frightened by the reckless finance of the Government. The rise in wages has not kept pace with the rise in the cost of living. The greatest average rise in the past seven years is only half the average rise in the cost of living. In the engineering trade the rise in wages for skilled men has been 5.5 per cent., for labourers 3°9. In the printing trade it has been 4.1 for compositors. But in the building trade, in spite of the extraordinary prosperity of the country, the wages of skilled men have risen only 1.9 and of labourers 2.6. The checks to the building trade are only too well known. Just when the building trade should have been the most prosperous in the country Mr. Lloyd George's land taxes caused enterprise to fall into a state of panic and collapse. The whole result of the Government's quasi-Socialistic legislation is enough to make any observer who has a grain of independence left ask himself seriously whether the time has not already arrived for Liberals as well as Conservatives to admit that the policy of turning the State into a universal provider, on the principle that the State knows better what is good for us than we know ourselves, has not utterly failed. We notice with much interest that that most thoughtful of Liberal papers, the Manchester Guardian, acknowledges failure, though it ascribes defeat to "obscure causes," whereas we ascribe it very largely to the terribly mistaken policy of the Government. " While we have been legislating," it says, " prices have been rising."

Compensation Acts, Wages Boards, Old-Age Pensions, National Insurance have been of no avail. "If money wages all round," it says, " had increased as much as 5 per cent., the position would still be that the workman who in 1905 earned a sovereign in a given time now requires 22s. to procure the necessaries which he then enjoyed, and in fact gains only 21s. He is a shilling short on the transaction. The rise of prices has meant a fall in what economists call real wages. " Notwithstand- ing all that has been done by statesmen," adds the Manchester Guardian, " the struggle for existence for the mass of the workers is in some respects harder than it was when the century began." We must not forget that when there is very little unemployment, as there is in these times of booming trade, the regular hiring of every sort of unskilled labour tends to produce a lower average wage in the figures of the statistician. Nor do we forget the ex- planation of economists, which we are old-fashioned enough sincerely to believe in, that the output of gold from the mines has a great and measurable effect upon prices. An increased output makes gold cheaper, which is the same thing as saying that it makes prices higher. That, we are convinced, is partly the explanation of the mounting prices. But when all allowances have been made, the main cause of our troubles is Socialistic legislation, which restrains freedom of exchange.

The economic truth is so elementary and so easy to under- stand that the blindness of our statesmen seems almost like demoniacal possession. A Socialistic policy destroys the general accumulation of capital. But it is the general accumulation of capital which makes it possible for labour to be hired freely. When those who want to hire labour are in competition with one another in getting it, the cost of labour naturally goes up. In other words, wages rise because demand has risen in relation to supply. Plenty of capital in the country, or " cheap " capital, means a strong demand for labour, and a strong demand for labour means a rise of wages. What we want in Great Britain is more hirers of labour, but there never will be appreciably more so long as capital is dearer than it ought to be. Low taxation and a low rate of interest—these are two of the greatest blessings which can visit any industrial community. When these conditions exist labour is most freely employed. But these conditions are discouraged on every hand by the Government. Not till they are achieved can the work- man's paradise be realized of three jobs looking for two men instead of three men looking for two jobs. If only the British workman could be made to understand that his own savings—his own "capital," though he may dislike the word—when invested helps to cheapen capital and produce a demand for more labour ! His capital joins with all other capital in creating employment. All capital and all labour constitute a union of forces in the very act of effecting their exchange. If the workman only under- stood this be would want to stimulate such exchanges. He would then ask how they could be stimulated. The answer is by " a general sense of security." Capital is a shy bird. It flies away when it thinks it spies an officious woodman round the corner waiting to cut off the branch on which it had intended to sit. The workman will be therefore well advised if he begins to understand that all laws framed ostensibly for his benefit—in order to put more money into his pocket—in reality take money out of his pocket if they alarm capital, and so make those who are normally the hirers of labour chary of fulfilling their function. Perhaps we may look to those engaged in the building trade to make a start in preaching what may seem to trade unionists to be a new doctrine, but is really one of the oldest in the world.