inferred that the greater economists were any more advocates of mere
license than Prince Kropotkin, or Mr. Herbert Spencer, or Mr. Benjamin
Tucker of Boston, or any other modern Anarchist. They did not admit
that the alternative to State regulation was anarchy; they held that
Nature had provided an all-powerful automatic regulator in Competition;
and that by its operation self-interest would evolve order out of chaos
if only it were allowed its own way. They loved to believe that a right
and just social order was not an artificial and painfully maintained
legal edifice, but a spontaneous outcome of the free play of the forces
of Nature. They were reactionaries against feudal domineering and
medieval meddling and ecclesiastical intolerance; and they were able
to shew how all three had ended in disgraceful failure, corruption
and self-stultification. Indignant at the spectacle of the peasant
struggling against the denial of those rights of private property
which his feudal lord had successfully usurped, they strenuously
affirmed the right of private property for all. And whilst they were
dazzled by the prodigious impulse given to production by the industrial
revolution under competitive private enterprise, they were at the
same time, for want of statistics, so optimistically ignorant of the
condition of the masses, that we find David Hume, in 1766, writing to
Turgot that “no man is so industrious but he may add some hours more in
the week to his labor; and scarce anyone is so poor but he can retrench
something of his expense.” No student ever gathers from a study of the
individualist economists that the English proletariat was seething
in horror and degradation whilst the riches of the proprietors were
increasing by leaps and bounds.
The historical ignorance of the economists did not, however, disable
them for the abstract work of scientific political economy. All their
most cherished institutions and doctrines succumbed one by one to
their analysis of the laws of production and exchange. With one law
alone--the law of rent--they destroyed the whole series of assumptions
upon which private property is based. The apriorist notion that among
free competitors wealth must go to the industrious, and poverty be
the just and natural punishment of the lazy and improvident, proved
as illusory as the apparent flatness of the earth. Here was a vast
mass of wealth called economic rent, increasing with the population,
and consisting of the difference between the product of the national
industry as it actually was and as it would have been if every acre of
land in the country had been no more fertile or favorably situated than
the very worst acre from which a bare living could be extracted: all
quite incapable of being assigned to this or that individual or class
as the return to his or its separate exertions: all purely social or
common wealth, for the private appropriation of which no permanently
valid and intellectually honest excuse could be made. Ricardo was quite
as explicit and far more thorough on the subject than Mr. Henry George.
He pointed out--I quote his own words--that “the whole surplus produce
of the soil, after deducting from it only such moderate profits as
are sufficient to encourage accumulation, must finally rest with the
landlord.”[76]
It was only by adopting a preposterous theory of value that Ricardo
was able to maintain that the laborer, selling himself for wages to
the proprietor, would always command his cost of production, _i.e._,
his daily subsistence. Even that slender consolation vanished later
on before the renewed investigation of value made by Jevons,[77]
who demonstrated that the value of a commodity is a function of the
quantity available, and may fall to zero when the supply outruns the
demand so far as to make the final increment of the supply useless.[78]
A fact which the unemployed had discovered, without the aid of the
differential calculus, before Jevons was born. Private property, in
fact, left no room for new comers. Malthus pointed this out, and
urged that there should be no newcomers, that the population should
remain stationary. But the population took exactly as much notice of
this modest demand for stagnation, as the incoming tide took of King
Canute’s ankles. Indeed the demand was the less reasonable since the
power of production per head was increasing faster than the population
(as it still is), the increase of poverty being produced simply by the
increase and private appropriation of rent. After Ricardo had completed
the individualist synthesis of production and exchange, a dialectical
war broke out. Proudhon had only to skim through a Ricardian treatise
to understand just enough of it to be able to shew that political
economy was a _reductio ad absurdum_ of private property instead of a
justification of it. Ferdinand Lassalle, with Ricardo in one hand and
Hegel in the other, turned all the heavy guns of the philosophers and
economists on private property with such effect, that no one dared to
challenge his characteristic boasts of the irresistible equipment of
Social Democracy in point of culture. Karl Marx, without even giving up
the Ricardian value theory, seized on the blue books which contained
the true history of the leaps and bounds of England’s prosperity,
and convicted private property of wholesale spoliation, murder and
compulsory prostitution; of plague, pestilence, and famine; battle,
murder, and sudden death. This was hardly what had been expected from
an institution so highly spoken of. Many critics said that the attack
was not fair: no one ventured to pretend that the charges were not
true. The facts were not only admitted; they had been legislated
upon. Social Democracy was working itself out practically as well as
academically. Before I recite the steps of the transition, I will, as
a matter of form, explain what Social Democracy is, though doubtless
nearly all my hearers are already conversant with it.
What the achievement of Socialism involves economically, is the
transfer of rent from the class which now appropriates it to the whole
people. Rent being that part of the produce which is individually
unearned, this is the only equitable method of disposing of it. There
is no means of getting rid of economic rent. So long as the fertility
of land varies from acre to acre, and the number of persons passing by
a shop window per hour varies from street to street, with the result
that two farmers or two shopkeepers of exactly equal intelligence and
industry will reap unequal returns from their year’s work, so long
will it be equitable to take from the richer farmer or shopkeeper the
excess over his fellow’s gain which he owes to the bounty of Nature
or the advantage of situation, and divide that excess of rent equally
between the two. If the pair of farms or shops be left in the hands of
a private landlord, he will take the excess, and, instead of dividing
it between his two tenants, live on it himself idly at their expense.
The economic object of Socialism is not, of course, to equalise farmers
and shopkeepers in couples, but to carry out the principle over the
whole community by collecting all rents and throwing them into the
national treasury. As the private proprietor has no reason for clinging
to his property except the legal power to take the rent and spend it
on himself--this legal power being in fact what really constitutes
him a proprietor--its abrogation would mean his expropriation. The
socialisation of rent would mean the socialisation of the sources of
production by the expropriation of the present private proprietors, and
the transfer of their property to the entire nation. This transfer,
then, is the subject matter of the transition to Socialism, which began
some forty-five years ago, as far as any phase of social evolution can
be said to begin at all.
It will be at once seen that the valid objections to Socialism consist
wholly of practical difficulties. On the ground of abstract justice,
Socialism is not only unobjectionable, but sacredly imperative. I
am afraid that in the ordinary middle-class opinion Socialism is
flagrantly dishonest, but could be established off-hand to-morrow with
the help of a guillotine, if there were no police, and the people were
wicked enough. In truth, it is as honest as it is inevitable; but all
the mobs and guillotines in the world can no more establish it than
police coercion can avert it. The first practical difficulty is raised
by the idea of the entire people collectively owning land, capital, or
anything else. Here is the rent arising out of the people’s industry:
here are the pockets of the private proprietors. The problem is to
drop that rent, not into those private pockets, but into the people’s
pocket. Yes; but where is the people’s pocket? Who is the people?
what is the people? Tom we know, and Dick: also Harry; but solely and
separately as individuals: as a trinity they have no existence. Who is
their trustee, their guardian, their man of business, their manager,
their secretary, even their stakeholder? The Socialist is stopped
dead at the threshold of practical action by this difficulty until he
bethinks himself of the State as the representative and trustee of the
people. Now if you will just form a hasty picture of the governments
which called themselves States in Ricardo’s day, consisting of rich
proprietors legislating either by divine right or by the exclusive
suffrage of the poorer proprietors, and filling the executives with the
creatures of their patronage and favoritism; if you look beneath their
oratorical parliamentary discussions, conducted with all the splendor
and decorum of an expensive sham fight; if you consider their class
interests, their shameless corruption, and the waste and mismanagement
which disgraced all their bungling attempts at practical business
of any kind, you will understand why Ricardo, clearly as he saw the
economic consequences of private appropriation of rent, never dreamt of
State appropriation as a possible alternative. The Socialist of that
time did not greatly care: he was only a benevolent Utopian who planned
model communities, and occasionally carried them out, with negatively
instructive and positively disastrous results. When his successors
learned economies from Ricardo, they saw the difficulty quite as
plainly as Ricardo’s vulgarisers, the Whig doctrinaires who accepted
the incompetence and corruption of States as permanent inherent State
qualities, like the acidity of lemons. Not that the Socialists were not
doctrinaires too; but outside economics they were pupils of Hegel,
whilst the Whigs were pupils of Bentham and Austin. Bentham’s was not
the school in which men learned to solve problems to which history
alone could give the key, or to form conceptions which belonged to
the evolutional order. Hegel, on the other hand, expressly taught the
conception of the perfect State; and his pupils saw that nothing in
the nature of things made it impossible, or even specially difficult,
to make the existing State, if not absolutely perfect, at least
practically trustworthy. They contemplated the insolent and inefficient
government official of their day without rushing to the conclusion that
the State uniform had a magic property of extinguishing all business
capacity, integrity, and common civility in the wearer. When State
officials obtained their posts by favoritism and patronage, efficiency
on their part was an accident, and politeness a condescension. When
they retained their posts without any effective responsibility to the
public, they naturally defrauded the public by making their posts
sinecures, and insulted the public when, by personal inquiry, it made
itself troublesome. But every successfully conducted private business
establishment in the kingdom was an example of the ease with which
public ones could be reformed as soon as there was the effective will
to find out the way. Make the passing of a sufficient examination
an indispensable preliminary to entering the executive; make the
executive responsible to the government and the government responsible
to the people; and State departments will be provided with all the
guarantees for integrity and efficiency that private money-hunting
pretends to. Thus the old bugbear of State imbecility did not terrify
the Socialist: it only made him a Democrat. But to call himself so
simply, would have had the effect of classing him with the ordinary
destructive politician who is a Democrat without ulterior views for
the sake of formal Democracy--one whose notion of Radicalism is the
pulling up of aristocratic institutions by the roots--who is, briefly,
a sort of Universal Abolitionist. Consequently, we have the distinctive
term Social Democrat, indicating the man or woman who desires through
Democracy to gather the whole people into the State, so that the State
may be trusted with the rent of the country, and finally with the land,
the capital, and the organisation of the national industry--with all
the sources of production, in short, which are now abandoned to the
cupidity of irresponsible private individuals.
The benefits of such a change as this are so obvious to all except
the existing private proprietors and their parasites, that it is very
necessary to insist on the impossibility of effecting it suddenly. The
young Socialist is apt to be catastrophic in his views--to plan the
revolutionary programme as an affair of twenty-four lively hours, with
Individualism in full swing on Monday morning, a tidal wave of the
insurgent proletariat on Monday afternoon, and Socialism in complete
working order on Tuesday. A man who believes that such a happy despatch
is possible, will naturally think it absurd and even inhuman to stick
at bloodshed in bringing it about. He can prove that the continuance
of the present system for a year costs more suffering than could be
crammed into any Monday afternoon, however sanguinary. This is the
phase of conviction in which are delivered those Socialist speeches
which make what the newspapers call “good copy,” and which are the only
ones they as yet report. Such speeches are encouraged by the hasty
opposition they evoke from thoughtless persons, who begin by tacitly
admitting that a sudden change is feasible, and go on to protest that
it would be wicked. The experienced Social Democrat converts his too
ardent follower by first admitting that if the change could be made
catastrophically it would be well worth making, and then proceeding
to point out that as it would involve a readjustment of productive
industry to meet the demand created by an entirely new distribution
of purchasing power, it would also involve, in the application of
labor and industrial machinery, alterations which no afternoon’s work
could effect. You cannot convince any man that it is impossible to
tear down a government in a day; but everybody is convinced already
that you cannot convert first and third class carriages into second
class; rookeries and palaces into comfortable dwellings; and jewellers
and dressmakers into bakers and builders, by merely singing the
“Marseillaise.” No judicious person, however deeply persuaded that the
work of the court dressmaker has no true social utility, would greatly
care to quarter her idly on the genuinely productive workers pending
the preparation of a place for her in their ranks. For though she is
to all intents and purposes quartered on them at present, yet she at
least escapes the demoralisation of idleness. Until her new place is
ready, it is better that her patrons should find dressmaking for her
hands to do, than that Satan should find mischief. Demolishing a
Bastille with seven prisoners in it is one thing: demolishing one with
fourteen million prisoners is quite another. I need not enlarge on the
point: the necessity for cautious and gradual change must be obvious
to everyone here, and could be made obvious to everyone elsewhere if
only the catastrophists were courageously and sensibly dealt with in
discussion.
What then does a gradual transition to Social Democracy mean
specifically? It means the gradual extension of the franchise; and the
transfer of rent and interest to the State, not in one lump sum, but
by instalments. Looked at in this way, it will at once be seen that
we are already far on the road, and are being urged further by many
politicians who do not dream that they are touched with Socialism--nay,
who would earnestly repudiate the touch as a taint. Let us see how far
we have gone. In 1832 the political power passed into the hands of
the middle class; and in 1838 Lord John Russell announced finality.
Meanwhile, in 1834, the middle class had swept away the last economic
refuge of the workers, the old Poor Law, and delivered them naked to
the furies of competition.[79] Ten years turmoil and active emigration
followed; and then the thin end of the wedge went in. The Income
Tax was established; and the Factory Acts were made effective. The
Income Tax (1842), which is on individualist principles an intolerable
spoliative anomaly, is simply a forcible transfer of rent, interest,
and even rent of ability, from private holders to the State without
compensation. It excused itself to the Whigs on the ground that those
who had most property for the State to protect should pay _ad valorem_
for its protection. The Factory Acts swept the anarchic theory of the
irresponsibility of private enterprise out of practical politics;
made employers accountable to the State for the well-being of their
employees; and transferred a further instalment of profits directly
to the worker by raising wages. Then came the gold discoveries in
California (1847) and Australia (1851), and the period of leaps and
bounds, supported by the economic rent of England’s mineral fertility,
which kindled Mr. Gladstone’s retrogressive instincts to a vain hope of
abolishing the Income Tax. These events relieved the pressure set up
by the New Poor Law. The workers rapidly organized themselves in Trades
Unions, which were denounced then for their tendency to sap the manly
independence which had formerly characterized the British workman,[80]
and which are to-day held up to him as the self-helpful perfection of
that manly independence. Howbeit, self-help flourished, especially at
Manchester and Sheffield; State help was voted grandmotherly; wages
went up; and the Unions, like the fly on the wheel, thought that they
had raised them. They were mistaken; but the value of Trade Unionism
in awakening the social conscience of the skilled workers was immense,
though to this there was a heavy set-off in its tendency to destroy
their artistic conscience by making them aware that it was their duty
to one another to discourage rapid and efficient workmanship by every
means in their power. An extension of the franchise, which was really
an instalment of Democracy, and not, like the 1832 Reform Bill, only an
advance towards it, was gained in 1867; and immediately afterwards came
another instalment of Socialism in the shape of a further transfer of
rent and interest from private holders to the State for the purpose of
educating the people. In the meantime, the extraordinary success of the
post-office, which, according to the teaching of the Manchester school,
should have been a nest of incompetence and jobbery, had not only shewn
the perfect efficiency of State enterprise when the officials are made
responsible to the class interested in its success, but had also proved
the enormous convenience and cheapness of socialistic or collectivist
charges over those of private enterprise. For example, the Postmaster
General charges a penny for sending a letter weighing an ounce from
Kensington to Bayswater. Private enterprise would send half a pound the
same distance for a farthing, and make a handsome profit on it. But the
Postmaster General also sends an ounce letter from Land’s End to John
o’ Groat’s House for a penny. Private enterprise would probably demand
at least a shilling, if not five, for such a service; and there are
many places in which private enterprise could not on any terms maintain
a post-office. Therefore a citizen with ten letters to post saves
considerably by the uniform socialistic charge, and quite recognises
the necessity for rigidly protecting the Postmaster’s monopoly.
After 1875,[81] leaping and bounding prosperity, after a final spurt
during which the Income Tax fell to twopence, got out of breath, and
has not yet recovered it. Russia and America, among other competitors,
began to raise the margin of cultivation at a surprising rate.
Education began to intensify the sense of suffering, and to throw light
upon its causes in dark places. The capital needed to keep English
industry abreast of the growing population began to be attracted
by the leaping and bounding of foreign loans and investments,[82]
and to bring to England, in payment of interest, imports that were
not paid for by exports--a phenomenon inexpressibly disconcerting
to the Cobden Club. The old pressure of the eighteen-thirties came
back again; and presently, as if Chartism and Fergus O’Connor had
risen from the dead, the Democratic Federation and Mr. H. M. Hyndman
appeared in the field, highly significant as signs of the times, and
looming hideously magnified in the guilty eye of property, if not
of great account as direct factors in the course of events. Numbers
of young men, pupils of Mill, Spencer, Comte, and Darwin, roused by
Mr. Henry George’s “Progress and Poverty,” left aside evolution and
freethought; took to insurrectionary economics; studied Karl Marx; and
were so convinced that Socialism had only to be put clearly before
the working-classes to concentrate the power of their immense numbers
in one irresistible organization, that the Revolution was fixed for
1889--the anniversary of the French Revolution--at latest. I remember
being asked satirically and publicly at that time how long I thought
it would take to get Socialism into working order if I had my way. I
replied, with a spirited modesty, that a fortnight would be ample for
the purpose. When I add that I was frequently complimented on being one
of the more reasonable Socialists, you will be able to appreciate the
fervor of our conviction, and the extravagant levity of our practical
ideas. The opposition we got was uninstructive: it was mainly founded
on the assumption that our projects were theoretically unsound but
immediately possible, whereas our weak point lay in the case being
exactly the reverse. However, the ensuing years sifted and sobered
us. “The Socialists,” as they were called, have fallen into line as a
Social Democratic party, no more insurrectionary in its policy than any
other party. But I shall not present the remainder of the transition
to Social Democracy as the work of fully conscious Social Democrats.
I prefer to ignore them altogether--to suppose, if you will, that the
Government will shortly follow the advice of the _Saturday Review_,
and, for the sake of peace and quietness, hang them.