property or from labor. The first step, then, is to determine the amount of expenditure; the second, to ascertain from what sources this expenditure is chiefly met. This done, taxation may be imposed, either directly upon the expenditure or upon the property which makes the expenditure possible, as administrative considerations may dictate. He assumes, accordingly, that the average of annual expenditure in England is £6 13s. 4d. per capita. No ground whatever is assigned for this assumption; and I cannot help suspecting that he reached it by guessing at a total annual expenditure of 40 million pounds and dividing that sum among an assumed population of 6 million people.[1] However that may be, he established to his own satisfaction that the people of England spend 40 million pounds per annum, and are really and actually rich in proportion. He next inquires in what their wealth consists. The lands, houses, cattle, goods, ships, and money of the country are separately valued, giving a total of 250 millions, which is supposed to yield its possessors 6 per cent.; or 15 millions yearly, out of the 40 millions which the community spends. The remaining 25 millions must be due to labor. Now the people who perform this labor are as valuable as would be the fee of lands renting for what they earn; "for, although the Individiums of Mankind be reckoned at about 8 years' purchase, the Species of them is worth as many as Land, being in its nature as perpetual, for ought we know."[2] The people are therefore worth 416⅔ millions as against 250 millions for "the stock of the kingdom."[3]
- ↑ Graunt had calculated the population of England in 1662 at 6,440,000. In 1687 Petty thought it to be 7,369,000, as previously noted. See p. 317. In the Political Arithmetick Petty returned to the question of average expenditure, and then (1676) gave some reasons for thinking that £7 per annum "may well enough stand for the Standard of Expense of the whole mass of Mankind" in England. Writings, i. 306.
- ↑ Writings, i. 108.
- ↑ Cf. Political Arithmetick, 31, 32; Writings, i. 267. This ingenious calculation has heen brought down to date by Professor J. S. Nicholson, "The Living Capital of the United Kingdom," in Economic Journal, i. 95 (1891).
