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SOCIALISM AS IT IS
A SURVEY OF THE WORLD-WIDE REVOLUTIONARY MOVEMENT
BY
WILLIAM ENGLISH WALLING
New York
THE MACMILLAN COMPANY
1918
_All rights reserved_
COPYRIGHT, 1912,
BY THE MACMILLAN COMPANY.
Set up and electrotyped. Published April, 1912. Reprinted October, 1912;
January, 1915.
Norwood Press
J. S. Cushing Co.--Berwick & Smith Co.
Norwood, Mass., U.S.A.
PREFACE
The only Socialism of interest to practical persons is the Socialism of
the organized Socialist movement. Yet the public cannot be expected to
believe what an organization says about its own character or aims. It is
to be rightly understood only _through its acts_. Fortunately the
Socialists' acts are articulate; every party decision of practical
importance has been reached after long and earnest discussion in party
congresses and press. And wherever the party's position has become of
practical import to those outside the movement, it has been subjected to
a destructive criticism that has forced Socialists from explanations
that were sometimes imaginary or theoretical to a clear recognition and
frank statement of their true position. To know and understand Socialism
as it is, we must lay aside both the claims of Socialists and the
attacks of their opponents and confine ourselves to the concrete
activities of Socialist organizations, the grounds on which their
decisions have been reached, and the reasons by which they are
ultimately defended.
Writers on Socialism, as a rule, have either left their statements of
the Socialist position unsupported, or have based them exclusively on
Socialist authorities, Marx, Engels, and Lasalle, whose chief writings
are now half a century old. The existence to-day of a well-developed
movement, many-sided and world-wide, makes it possible for a writer to
rely neither on his personal experience and opinion nor on the old and
familiar, if still little understood, theories. I have based my account
either on the acts of Socialist organizations and of parties and
governments with which they are in conflict, or on those responsible
declarations of representative statesmen, economists, writers, and
editors which are not mere theories, but the actual material of
present-day polities,--though among these living forces, it must be
said, are to be found also some of the teachings of the great Socialists
of the past.
It will be noticed that the numerous quotations from Socialists and
others are not given academically, in support of the writer's
conclusions, but with the purpose of reproducing with the greatest
possible accuracy the exact views of the writer or speaker quoted. I am
aware that accuracy is not to be secured by quotation alone, but depends
also on the choice of the passages to be reproduced and the use made of
them. I have therefore striven conscientiously to give, as far as space
allows, the leading and central ideas of the persons most frequently
quoted, and not their more hasty, extreme, and less representative
expressions.
I have given approximately equal attention to the German, British, and
American situations, considerable but somewhat less space to those of
France and Australia, and only a few pages to Italy and Belgium. This
allotment of space corresponds somewhat roughly to the relative
importance of these countries in the international movement. As my idea
has been not to describe, but to interpret, I have laid additional
weight on the first five countries named, on the ground that each has
developed a distinct type of labor movement. As I am concerned with
national parties and labor organizations only as parts of the
international movement, however, I have avoided, wherever possible, all
separate treatment and all discussion of features that are to be found
only in one country.
The book is divided into three parts; the first deals with the external
environment out of which Socialism is growing and by which it is being
shaped, the second with the internal struggles by which it is shaping
and defining itself, the third with the reaction of the movement on its
environment. I first differentiate Socialism from other movements that
seem to resemble it either in their phrases or their programs of reform,
then give an account of the movement from within, without attempting to
show unity where it does not exist, or disguising the fact that some of
its factions are essentially anti-Socialist rather than Socialist, and
finally, show how all distinctively Socialist activities lead directly
to a revolutionary outcome.
I am indebted to numerous persons, Socialists and anti-Socialists, who
during the twelve years in which I have been gathering material--in
nearly all the countries mentioned--have assisted me in my work. But I
must make special mention of the very careful reading of the whole
manuscript by Mr. J. G. Phelps Stokes, and of the numerous and vital
changes made at his suggestion.
CONTENTS
PAGE
PREFACE v
INTRODUCTION ix
PART I
"STATE SOCIALISM" AND AFTER
CHAPTER
I. THE CAPITALIST REFORM PROGRAM 1
II. THE NEW CAPITALISM 16
III. THE POLITICS OF THE NEW CAPITALISM 32
IV. "STATE SOCIALISM" AND LABOR 46
V. COMPULSORY ARBITRATION 66
VI. AGRARIAN "STATE SOCIALISM" IN AUSTRALASIA 85
VII. "EQUALITY OF OPPORTUNITY" 97
VIII. THE "FIRST STEP" TOWARDS SOCIALISM 108
PART II
THE POLITICS OF SOCIALISM
I. "STATE SOCIALISM" WITHIN THE MOVEMENT 117
II. "REFORMISM" IN FRANCE, ITALY, AND BELGIUM 131
III. "LABORISM" IN GREAT BRITAIN 146
IV. "REFORMISM" IN THE UNITED STATES 175
V. REFORM BY MENACE OF REVOLUTION 210
VI. REVOLUTIONARY POLITICS 231
VII. THE REVOLUTIONARY TREND 248
PART III
SOCIALISM IN ACTION
I. SOCIALISM AND THE "CLASS STRUGGLE" 276
II. THE AGRICULTURAL CLASSES AND THE LAND QUESTION 300
III. SOCIALISM AND THE "WORKING CLASS" 324
IV. SOCIALISM AND LABOR UNIONS 334
V. SYNDICALISM; SOCIALISM THROUGH DIRECT ACTION OF LABOR UNIONS 354
VI. THE "GENERAL STRIKE" 387
VII. REVOLUTION IN DEFENSE OF CIVIL GOVERNMENT 401
VIII. POLITICAL AND SOCIAL REVOLUTION 416
IX. THE TRANSITION TO SOCIALISM 426
NOTES 437
INDEX 447
INTRODUCTION
The only possible definition of Socialism is the Socialist movement.
Karl Marx wrote in 1875 at the time of the Gotha Convention, where the
present German party was founded, that "every step of the real movement
is of more importance than a dozen programs," while Wilhelm Liebknecht
said, "Marx is dear to me, but the party is dearer."[1] What was this
movement that the great theorist put above theory and his leading
disciple valued above his master?
What Marx and Liebknecht had in mind was a _social class_ which they saw
springing up all over the world with common characteristics and common
problems--a class which they felt must and would be organized into a
movement to gain control of society. Fifty years before it had been
nothing, and they had seen it in their lifetime coming to preponderate
numerically in Great Britain as it was sure to preponderate in other
countries; and it seemed only a question of time before the practically
propertyless employees of modern industry would dominate the world and
build up a new society. This class would be politically and economically
organized, and when its organization and numbers were sufficient it
would take governments out of the hands of the old aristocratic and
plutocratic rulers and transform them into the instruments of a new
civilization. This is what Marx and Liebknecht meant by the "party" and
the "movement."
From the first the new class had been in conflict with employers and
governments, and these struggles had been steadily growing in scope and
intensity. Marx was not so much interested in the immediate objects of
such conflicts as in the struggle itself. "The real fruit of their
victory," he said, "lies, not in immediate results, but in the ever
expanding union of the workers."[2] As the struggle evolved and became
better organized, it tended more and more definitely and irresistibly
towards a certain goal, whether the workers were yet aware of it or not.
If, therefore, we Socialists participate in the real struggles of
politics, Marx said of himself and his associates (in 1844, at the very
outset of his career), "we expose new principles to the world out of the
principles of the world itself.... We only explain to it the real object
for which it struggles."[3]
But the public still fails, in spite of the phenomenal and continued
growth of the Socialist movement in all modern countries, to grasp the
first principle on which it is based.
"Socialism has many phases," says a typical editorial in the
_Independent_. "It is a political party, an economic creed, a religion,
and a stage of history. It is world-wide, vigorous, and growing. No man
can tell what its future will be. Its philosophy is being studied by the
greatest minds of the world, and it deserves study because it promises a
better, a safer, and a fairer life to the masses. But as yet it is only
a theory, a hypothesis. It has never been tried _in toto_.... It has
succeeded only where it has allied itself with liberal and opportunist
rather than radical policies."[4]
As the Socialist movement has nowhere achieved political power,
obviously it can neither claim political success or be accused of
political failure. Nor does this fact leave Socialism as a mere theory,
in view of its admitted and highly significant success in organizing and
educating the masses in many countries and animating them with the
purpose of controlling industry and government.
Mr. John Graham Brooks, in the _Atlantic Monthly_, gives us another
equally typical variation of the same fundamental misunderstanding.
"Never a theory of social reconstruction was spun in the gray mists of
the mind," says Mr. Brooks, "that was not profoundly modified when
applied to life. Socialism as a theory is already touching life at a
hundred points, and among many peoples--Socialism has been a faith. It
is slowly becoming scientific, in a sense and to the extent that it
submits its claims to the comparative tests of experience."[5]
Undoubtedly Socialist theories have been spun both within and without
the movement, and to many Socialism has been a faith. But neither faith
nor theory has had much to do with the great reality that is now
overshadowing all others in the public mind; namely, the existence of a
Socialist movement. The Socialism of this movement has never consisted
in ready-made formulas which were later subjected to "the comparative
test of experience"; it has always grown out of the experience of the
movement in the first instance.
Another typical article, in _Collier's Weekly_, admits that Socialism
is now a movement. But as the writer, like so many others, conceives of
Socialism as having been, in its inception, a "theory," a "doctrine"
promoted by "Utopian dreaming," "incendiary rhetoric," an "anti-civic
jargon," he naturally views it with little real sympathy and
understanding even in its present form. The same Socialism that was
accused of all this narrowness is suddenly and completely transformed
into a movement of such breadth that it has neither a new message nor
even a separate existence.
"It is merely a new offshoot of a very old faith indeed," we are now
told, "the ideal of the altruistic dreamers of all ages, an awakened
sense of brotherhood in men. Stripped of all its husks, Socialism stands
for no other aim than that. All its other teachings, the public
ownership of the land, for example, the nationalization of the means of
production and distribution, the economic emancipation of woman, have
only program values, as they lead to that one end. Whether, so stripped,
it ceases to be Socialism and becomes merely the advance guard of the
world-wide liberal movement is not, of course, a question of more than
academic interest."[6]
The moment it can no longer be denied that Socialism is a movement, it
is at once confused with other movements to which it is fundamentally
and irreconcilably opposed. Surely this is no mere mental error, but a
deep-seated and irrepressible aversion to what is to many a disagreeable
truth,--the rapid growth and development, in many countries, of
political parties and labor organizations more and more seriously
determined to annihilate the power of private property over industry and
government.
The radical misconceptions above quoted, almost universal where
Socialism is still young, are by no means confined to non-Socialists.
Many writers who are supposed, in some degree at least, to voice the
movement, are as guilty as those who wholly repudiate it. Mr. H. G.
Wells, for instance, says that Socialism is a "system of ideas," and
that "Socialism and the Socialist movement are two different things."[7]
If Socialism is indeed no more than a "growing realization of
constructive needs in every man's mind," and if every man is more or
less a Socialist, then there is certainly no need for that antagonism to
employers and property owners of which Mr. Wells complains.
Mr. Wells himself gives the true Socialist standpoint when he goes on to
write that political parties must be held together "by interests and
habits, not ideas." "Every party," he continues, "stands essentially for
the interests and mental usages of some definite class or group of
classes in the existing community.... No class will abolish itself,
materially alter its way or life, or drastically reconstruct itself,
albeit no class is indisposed to coöperate in the unlimited
socialization of any other class. In that capacity of aggression upon
the other classes lies the essential driving force of modern
affairs."[8]
The habits and interests of a large and growing part of the population
in every modern country are developing a capacity for effective
aggression against the class which controls industry and government. As
this class will not socialize or abolish itself, the rest of the people,
Socialists predict, will undertake the task. And the abolition of
capitalism, they believe, will be a social revolution the like of which
mankind has hitherto neither known nor been able to imagine.
FOOTNOTES:
[1] John Spargo, "Karl Marx," pp. 312, 331.
[2] John Spargo, _op. cit._, p. 116.
[3] John Spargo, _op. cit._, p. 73.
[4] The _Independent_ (New York), commenting on the Socialist victory in
the Milwaukee municipal elections of April, 1910.
[5] "Recent Socialist Literature," by John Graham Brooks, _Atlantic
Monthly_, 1910. Page 283.
[6] _Collier's Weekly_, July 30, 1910.
[7] H. G. Wells, "Socialism and the Family."
[8] H. G. Wells, "The New Macchiavelli."
SOCIALISM AS IT IS
PART I
"STATE SOCIALISM" AND AFTER
CHAPTER I
THE CAPITALIST REFORM PROGRAM
Only that statesman, writer, or sociologist has the hearing of the
public to-day who can bind all his proposed reforms together into some
large and far-sighted plan.
Mr. Roosevelt, in this new spirit, has spoken of the "social
reorganization of the United States," while an article in one of the
first numbers of _La Follette's Weekly_ protested against any program of
reform "which fails to deal with society as a whole, which proposes to
remedy certain abuses but admits its incapacity to reach and remove the
roots of the other perhaps more glaring social disorders."
Some of those who have best expressed the need of a general and complete
social reorganization have done so in the name of Socialism. Mr. J. R.
MacDonald, recently chairman of the British Labour Party, for example
writes that the problem set up by the Socialists is that of
"co-ordinating the forces making for a reconstruction of society and of
giving them rational coherence and unity,"[9] while the organ of the
middle-class Socialists of England says that their purpose is "to compel
legislators to organize industry."[10]
Indeed, the necessity and practicability of an orderly and systematic
reorganization in industrial society has been the central idea of
British Socialists from the beginning, while they have been its chief
exponents in the international Socialist movement. But the idea is
equally widespread outside of Socialist circles. It will be hard for
British Socialists to lay an exclusive claim to this conception when
comrades of such international prominence as Edward Bernstein, who holds
the British view of Socialism, assert that Socialism itself is nothing
more than "organizing Liberalism."[11]
Whether Socialists were the first to promote the new political
philosophy or not, it is undeniable that the Radicals and Liberals of
Great Britain and other countries have now taken it up and are making it
their own. Mr. Winston Churchill, while Chairman of the Board of Trade,
and Mr. Lloyd George, Chancellor of the Exchequer, members of the
British Cabinet, leaders of the Liberal Party, recognize that the
movement among governments towards a conscious _reorganization of
industry_ is general and demands that Great Britain should keep up with
other countries.
"Look at our neighbor and friendly rival, Germany," said Mr. Churchill
recently. "I see that great State organized for peace and organized for
war, to a degree to which we cannot pretend.... A more scientific, a
more elaborate, a more comprehensive social organization is
indispensable to our country if we are to surmount the trials and
stresses which the future years will bring. It is this organization that
the policy of the Budget will create."[12]
Advanced and radical reformers of the new type all over the world, those
who put forward a general plan of reform and wish to go to the common
roots of our social evils, demand, first of all, _reorganization_. But
how is such a reorganization to be worked out? The general programs have
in every country many features in common. To see what this common basis
is, let us look at the generalizations of some of the leading reformers.
One of the most scientific and "constructive" is Mr. Sidney Webb. No one
has so thoroughly mastered the history of trade unionism, and no one has
done more to promote "municipal Socialism" in England, both in theory
and in practice, for he has been one of the leaders of the energetic and
progressive London County council from the beginning of the present
reform period. He has also been one of the chief organizers of the more
or less Socialistic Fabian Society, which has done more towards
popularizing social reform in England than any other single educative
force, besides sending into all the corners of the world a new and
rounded theory of social reform--the work for the most part of Sidney
Webb, Bernard Shaw, and a few others.
Mr. Webb has given us several excellent phrases which will aid us to sum
up the typical social reformers' philosophy in a few words. He insists
that what every country requires, and especially Great Britain, is to
center its attention on the promotion of the "national efficiency." This
refers largely to securing a businesslike and economic administration
of the existing government functions. But it requires also that _all_
the industries and economic activities of the country should be
considered the business of the nation, that the industrial functions of
the government should be extended, and that, even from the business
point of view, the chief purpose of government should be to supervise
economic development.
To bring about the maximum of efficiency in production would require, in
Mr. Webb's opinion and that of the overwhelming majority of reformers
everywhere, a vast extension of government activities, including not
only the nationalization and municipalization of many industries and
services, but also that the individual workman or citizen be dealt with
as the chief business asset of the nation and that wholesale public
expenditures be entered into to develop his value. Mr. Webb does not
think that this policy is necessarily Socialistic, for, as he very
wisely remarks, "the necessary basis of society, whether the
superstructure be collectivist or individualist, is the same."
Mr. Wells in his "New Worlds for Old" also claims that the new policy of
having the State do everything that can promote industrial efficiency
(which, unlike Mr. Webb, he persists in calling Socialism) is to the
interest of the business man.
"And does the honest and capable business man stand to lose or gain
by the coming of such a Socialist government?" he asks. "I submit
that on the whole he stands to gain....
"Under Socialist government such as is quite possible in England at
the present time:--
"He will be restricted from methods of production and sale that are
socially mischievous.
"He will pay higher wages.
"He will pay a large proportion of his rent-rate outgoings to the
State and Municipality, and less to the landlord. Ultimately he
will pay it all to the State or Municipality, and as a voter help
to determine how it shall be spent, and the landlord will become a
government stockholder. Practically he will get his rent returned
to him in public service.
"He will speedily begin to get better-educated, better-fed, and
better-trained workers, so that he will get money value for the
higher wages he pays.
"He will get a regular, safe, cheap supply of power and material.
He will get cheaper and more efficient internal and external
transit.
"He will be under an organized scientific State, which will
naturally pursue a vigorous scientific collective policy in support
of the national trade.
"He will be less of an adventurer and more of a citizen."[13]
Mr. Churchill while denying any sympathy for Socialism, as both he and
the majority of Socialists understand it, frankly avows himself a
collectivist. "The whole tendency of civilization," he says, "is towards
the multiplication of the collective functions of society. The ever
growing complications of civilizations create for us new services which
have to be undertaken by the State, and create for us an expansion of
the existing services. There is a growing feeling, which I entirely
share, against allowing those services which are in the nature of
monopolies to pass into private hands. [Mr. Churchill has expressed the
regret that the railways are not in the hands of the State.] There is a
pretty steady determination, which I am convinced will become effective
in the present Parliament to intercept _all_ future unearned increment,
which may arise from the increase in the speculative value of the
land."[14] (Italics mine.)
Mr. Churchill's declared intention ultimately "to intercept _all_ future
unearned increment" of the land is certainly a tremendous step towards
collectivism, as it would ultimately involve the nationalization of
perhaps a third of the total wealth of society. With railways and
monopolies of all kinds also in government hands, a very large part of
the industrial capital of the country would be owned by the State, and,
though all agricultural capital, and therefore the larger part of the
total, remained in private hands, we are certainly justified in calling
such a state of society _capitalist collectivism_.
But not one of the elements of this collectivism is a novelty. Railroads
are owned by governments in most countries, and monopolies often are.
The partial appropriation of the "unearned increment" is by no means
new, since a similar policy is being adopted in Germany at the present
moment, and is favored not by the radicals alone, but by the most
conservative forces in the country; namely, the party of landed Prussian
nobility. Count Posadovsky, a former minister, has written a pamphlet in
which he urges that the State should buy up the land in and about the
cities, and also that it should fix a definite limit beyond which land
values must not rise. Nearly all the chief cities of Prussia, more than
a hundred, are enforcing such a tax in a moderate form, and the
conservatives in the Reichstag proposed that the national government
should be given a right to tax in the same field. Their bill was
enacted, and, in the second half of 1911, the German government, it was
estimated, would raise over $3,000,000 by this tax, and in 1912 it is
expected to give $5,000,000. This tax, which is collected when land
changes hands by sale or exchanges, rises gradually to 30 per cent when
the increase has been 290 per cent or more. Of course this scale is
likely to be still further raised and to be made more steep as the tax
becomes more and more popular.
Mr. Churchill's defense of the new policy of the British government is
as significant as the new laws it has enacted:--
"You may say that unearned increment of the land," he says, "is on
all-fours with the profit gathered by one of those American
speculators who engineer a corner in corn, or meat, or cotton, or
some other vital commodity, and that _the unearned increment in
land is reaped by the land monopolist in exact proportion, not to
the service but to the disservice done_. It is monopoly which is
the keynote; and where monopoly prevails, the greater the injury to
society the greater the reward of the monopolist will be....
"Every form of enterprise, every step in material progress, is only
undertaken after the land monopolist has skimmed the cream off for
himself, and every where to-day the man, or the public body, who
wishes to put land to its highest use is forced to pay a
preliminary fine in land values to the man who is putting it to an
inferior use, and in some cases to no use at all.... _If there is a
rise in wages, rents are able to move forward because the workers
can afford to pay a little more_. If the opening of a new railway
or a new tramway, or the institution of an improved service of
workmen's trains, or the lowering of fares, or a new invention, or
any other public convenience affords a benefit to the workers in
any particular district, it becomes easier for them to live, and
therefore the landlord and the ground landlord, one on top of the
other, are able to charge them more for the privilege of living
there." (Italics mine.)[15]
But we cannot believe that the government of Great Britain, which draws
so much of its support from the wealthy free trade merchants and
manufacturers has been persuaded to adopt this new principle so much by
the argument that a land rent weighs on the working classes, though it
is true that the manufacturer may have to pay for this in higher _money_
wages, as it has by that other argument of Mr. Churchill's that it
weighs directly on business.
"The manufacturer proposing to start a new industry," he says,
"proposing to erect a great factory offering employment to
thousands of hands, is made to pay such a price for his land that
the purchase price hangs around the neck of his whole business,
hampering his competitive power in every market, clogging far more
than any foreign tariff in his export competition; and the land
values strike down through the _profits of the manufacturer_ on to
the wages of the workman. The railway company wishing to build a
new line finds that the price of land which yesterday was only
rated at its agricultural value has risen to a prohibitive figure
the moment it was known that the new line was projected; and either
the railway is not built, or, if it is, it is built only on terms
which largely transfer to the landowner _the profits which are due
to shareholders_ and the privileges which should have accrued to
the traveling public." (My italics.)[16]
No doubt Mr. Churchill's failure to mention shippers was inadvertent.
It was a practical application of these business principles and chiefly
in the interest of the employers, manufacturers, investors, and
shippers, that the State decided, as a first step, to take 20 per cent
of all the increase in land values from the present date and to levy an
annual tax of one fifth of one per cent on all land held for
speculation, _i.e._ used neither for agricultural nor for industrial nor
building purposes.
The collectivist policy, that governments should undertake to reorganize
industry and to develop the industrial efficiency of the population, is
a relatively new one, however, and where non-Socialist Liberals and
Radicals are adopting it, they do so as a rule with apologies. For while
such reforms can be considered as investments which in the long run
repay not only the community as a whole, but also the business
interests, they involve a considerable initial cost, even beyond what
can be raised by the gradual expropriation of city land rents, and the
question at once arises as to who is to pay the rest of the bill. The
supporter of the new reforms answers that the business interests should
do so, since the development of industry, which is the object of this
expenditure, is more profitable to them than to other classes. While Mr.
Churchill declares that Liberalism attacks landlordism and monopoly
only, and not capital itself, as Socialism does, he is at great pains to
show that the cost of the elaborate program of social reform is borne
not by monopolist alone, but by that larger section of the business
interests vaguely known as those possessing "Special Privileges." In
distributing the new taxes in the House of Commons, the question to be
asked of each class of wealth is, he says, "By what process was it got?"
and a distinction is to be made, not between monopoly and competitive
business, but "between wealth which is the fruit of productive
enterprise and industry or of individual skill, and wealth which
represents the capture by individuals of socially created values."[17]
"A special burden," says Mr. Churchill, "is to be laid upon certain
forms of wealth which are clearly social in their origin and have not at
any point been derived from a useful or productive process on the part
of their possessors."[18] And since all income "derived from dividends,
rent, or interest," is, according to Mr. Churchill, unearned increment,
it is evident that nearly every business, all being beneficiaries, ought
to share the burden of the new reforms.[19] At the same time he hastens
to reassure his wealthy supporters, especially among merchants and
shippers, on grounds explained below by Mr. Lloyd George that the new
taxes will not rise faster than the new profits they will bring in, that
they "will not appreciably affect, have not appreciably affected, the
comfort, the status, or even the style of living of any class in the
United Kingdom."[20]
Mr. Lloyd George in proposing the so-called Socialistic Budget of 1910
reminded the representatives of the propertied interests [he might have
added "in proportion to their wealth"] that the State, in which they all
owned a share, should not be looked upon so narrowly as a capitalistic
enterprise. They could afford to allow the State to wait longer for its
returns.
"A State can and ought to take a longer and a wider view of its
investments," said Mr. Lloyd George, "than individuals. The
resettlement of deserted and impoverished parts of its own
territories may not bring to its coffers a direct return which
would reimburse it fully for its expenditure; but the indirect
enrichment of its resources more than compensate it for any
apparent and immediate loss. The individual can rarely afford to
wait; a State can; the individual must judge of the success of his
enterprise by the testimony given for it by his bank book; a State
keeps many ledgers, not all in ink, and when we wish to judge of
the advantage derived by a country from a costly experiment, we
must examine all those books before we venture to pronounce
judgment....
"We want to do more in the way of developing the resources of our
own country....
"The State can help by instruction, by experiment, by
organization, by direction, and even, in certain cases which are
outside the legitimate sphere of individual enterprise, by
incurring direct responsibility. I doubt whether there is a great
industrial country in the world which spends less money on work
directly connected with the development of its resources than we
do. Take, if you like, and purely as an illustration, one industry
alone,--agriculture,--of all industries the most important for the
permanent well-being of any land. Examine the budgets of foreign
lands,--we have the advantage in other directions,--but examine and
compare them with our own, and Honorable Members will be rather
ashamed at the contrasts between the wise and lavish generosity of
countries much poorer than ours and the short-sighted and niggardly
parsimony with which we dole out small sums of money for the
encouragement of agriculture in our country....
"We are not getting out of the land anything like what it is
capable of endowing us with. Of the enormous quantity of
agricultural and dairy produce, and fruit, and the timber imported
into this country, a considerable portion could be raised on our
own lands."[21]
The proposed industrial advance is to be secured largely at the expense
of capital, but for its ultimate profit. The capitalists are to pay the
initial cost. Mr. Lloyd George is very careful to remind them that even
if the present income tax were doubled, five years of the phenomenal yet
steady growth of the income of the rich and well-to-do who pay this tax,
would leave them as well off as they were before. He proposes to leave
the total capital in private hands intact on the pretext that it is
needed as "an available reserve for national emergencies." And as an
evidence of this he refused to increase the existing rate of inheritance
tax levied against the very largest estates (15 per cent on estates of
more than £3,000,000). Though up to this point he graduated this tax
more steeply than before, and nothing could be more widely popular than
a special attack on such colossal estates, Mr. Lloyd George draws the
line at 15 per cent, on the ground that a large part of the income from
such estates goes into investments, and more confiscatory legislation
might seriously affect the normal increase of the capital and "the
available reserves of taxation" of the country.[22]
Mr. Lloyd George does not fail to guarantee to capital as a whole,
"honest capital," that it will suffer no loss from his reforms. "I am
not one of those who advocate confiscation," he said several years ago,
"and at any rate as far as I am concerned _honest_ capital, capital put
in honest industries for the development of the industry, the trade,
the commerce, of this country will have nothing to fear from any
proposal I shall ever be responsible for submitting to the Parliament of
this realm." (My italics.)[23]
Mr. Lloyd George is well justified, then, in ridiculing the idea that he
is waging war against industry or property or trying to destroy riches.
He not only disproves this accusation by pointing to the capitalist
character of his collectivist program, but boasts that the richest men
in the House of Commons are on the Liberal side, together with hundreds
of thousands of the men who are building up trade and business.
And the attitude of the Radicals of the present British government is
the same as that of capitalist collectivists elsewhere. However certain
vested interests may suffer, there is nowhere any tendency to weaken
capitalism as a whole. Capitalism is to be the chief beneficiary of the
new movement.
There are many differences of opinion, however, as to the _ultimate_
effect of the collectivist program. In Great Britain, which gives us our
best illustration, there are Liberals who claim that it is Socialistic
and others who deny that it has anything to do with Socialism;
Conservatives who accept part of the program, and others who reject the
whole as being Socialistic; Socialists, who claim that their ideas have
been incorporated in the last two Budgets, and other Socialists who deny
that either had anything in common with their principles.
While it is certain that the present policy of the British government is
by no means directed against the power or interests of the capitalist
class as a whole, and in no way resembles that of the Socialists, were
not Socialist arguments used to support the government's position, and
may not these lead towards a Socialist policy?
Certainly some of the principles laid down seem at first sight to have
been Socialistic enough. For example, when Mr. Churchill said that
incomes from dividends, rent, and interest are unearned, or when Mr.
Lloyd George cried out: "Who is responsible for the scheme of things
whereby one man is engaged through life in grinding labor to win a bare
and precarious subsistence for himself, and when, at the end of his
days, he claims at the hands of the community he served, a poor pension
of eight pence a day, he can only get it through a revolution, and
another man who does not toil receives every hour of the day, every
hour of the night, whilst he slumbers, more than his poor neighbor
receives in a whole year of toil? Where did the table of that law come
from? Whose fingers inscribed it?"[24]
Lord Rosebery has pointed to the extremely radical nature of Mr. Lloyd
George's arguments. The representatives of the Government had urged, he
said, that the land should be taxed without mercy:--
"(1) because its existence is not due to the owner;
"(2) because it is limited in quantity;
"(3) because it owes nothing of its value to anything the owner
does or spends;
"(4) because it is absolutely necessary for existence and
production."[25]
Lord Rosebery says, justly, that all these propositions except the last
apply to many other forms of property than land, as, for instance, to
government bonds, and that it certainly would be Socialism to attempt to
confiscate these by taxation.
Lord Rosebery's task would have become even easier later, when Mr. Lloyd
George enlarged his attack on the landlords definitely into an attack
against the idle upper classes, who with their dependents he reckoned at
two million persons. He accused this class of constituting an
intolerable burden on the community, said that its existence was the
symptom of the disease of society, and that only bold remedies could
help. The whole class of inactive capitalists he viewed as a load both
on the non-capitalist, wage-earning, salaried and professional classes,
and on the active capitalists. Mr. Lloyd George argues with his
capitalist supporters that capitalism will be all the stronger when
freed from its parasites. But Lord Rosebery could answer that the active
could no more be distinguished from the passive capitalists than
landowners from bondholders.
An article in the world's leading Socialist newspaper, _Vorwaerts_, of
Berlin, shows that many Socialists even regarded these speeches as
revolutionary:--
"The Radical wing of the British Liberals," it said, "is leading
the attack with ideal recklessness and lust of battle. It is
conducting the agitation in language which in Germany is
customarily used only by a 'red revolutionist.' If the German
Junker (landlord conservative) were to read these speeches, he
would swear that they were delivered by the Social Democrats of the
reddest dye, so ferociously do they contrast between the rich and
the poor. They appeal to the passion of the people; they exploit
social distinctions in the manner best calculated to fire popular
anger against the Lords.
"In the heart of battle the Liberals are employing language which
at other times they would have considered twice. Their words will
some day be assuredly turned against them, when more than the mere
Budget or the existence of the Lords is at stake. When the
Liberals, allied with the conservative enemy of to-day, are
fighting the working classes, the Socialists will recall this
language as proof that the Liberals themselves recognize the
injustice of the existing order.
"Mr. Lloyd George made such a speech at Newcastle that the seeds he
is planting may first bring forth Liberal fruit, but there can be
no doubt that Socialism will eventually reap the harvest. His
arguments must arouse the workingmen, and when they have accustomed
themselves to look at things from this standpoint it is certain
that once standing before the safes of the industrial capitalists
they will never close their eyes."
It is perhaps true that the Socialists will at some future day reap the
harvest from Mr. Lloyd George's and Mr. Churchill's campaigns, though a
careful analysis of the expressions of these statesmen will show that
they have said nothing and done nothing in contradiction to their
State-capitalistic or "State Socialist" standpoint.
There is no doubt that the principle of the new taxes and the new
expenditure these statesmen are introducing is radical, and that it
marks a great stride towards a collectivist form of capitalism. Let us
assume that development continues along the lines of their present
policies. In a very few years the increased expenditure on social reform
will be greater than the increased expenditure on army and navy, and the
increase of direct and graduated taxes that fall on the upper classes
will be greater than that of the indirect taxes that fall on the masses.
We will assume even that military expenditure and indirect taxes on
articles the working people consume will begin some day to decrease,
while graduated taxes directed against the very wealthy and social
reform expenditures rise until they quite overshadow them. There is
every reason to believe that the social reformers of the British and
other governments hope for such an outcome and expect it. This would be
in no way inconsistent with their policy of subordinating everything, to
use one of their expressions, to "that trade and commerce which
constitutes the source of our wealth."
For the collectivist expenditures, intended to increase the national
product through governmental enterprises for the promotion of industry,
and for raising the industrial efficiency of the workers, would be
introduced gradually, and would soon be accompanied by results which
would show that they paid financially. And finally, even if railways and
monopolies were nationalized and their profits as well as _all_ the
future rise in land value went to the State to be used for these
purposes, as Mr. Churchill hopes, and even if a method could be found by
which a large part of the income of the idle rich would be confiscated
without touching the active capital of the merchant and manufacturer,
the position of the latter classes, through this policy, might become
still more superior relatively to that of the masses than it is at
present. The industrial capitalists might even control a larger share of
the national income and exercise a still more powerful influence over
the State than they do to-day.
The classes that the more or less collectivist budgets of 1910 and 1911
actually do favor, those whose economic and political power they
actually do increase, are the small and middle-sized capitalists and
even the larger capitalists other than landlords and monopolists. The
great mass of income taxpayers, business men, farmers, and the
professional classes with incomes from about £200 to £3000 ($1000 to
$15,000) are given every encouragement, while those with somewhat larger
incomes are only slightly discriminated against on the surface, in the
incidence of the taxes, and not at all when we inquire into the ways in
which the taxes are being expended. Certainly nothing is being done that
will "appreciably affect the status or style of living of any class in
the United Kingdom," or that will check materially the enormous rise of
this "upper middle" class both in wealth and numbers--for the income tax
payers have doubled their income in a little more than a decade, until
it has reached the total of more than a billion pounds a year. And
surely no tendency could be more diametrically opposed to a Socialism
whose purpose it is to improve the _relative_ position of the "lower
middle" and working classes.
While the new reform programs of the various parties are in general
agreement in all countries, in that they are all collectivist, and favor
as a rule the same social classes, there is much controversy as to
names, whether they shall be called Socialistic or merely radical or
progressive. The question is really immaterial.
"Capital, divested of its perversions, would be natural Socialism,"
says one of Henry George's most prominent disciples.[26] Whether the
proposed reforming is done with a purified and strengthened capitalism
in view, or in the name of "natural Socialism" or "State Socialism," the
program itself is in every practical aspect the same.
If a contrast formerly appeared to exist between "Individualist" and
"State Socialist" reformers, it was never more than a contrast in
theory, quickly dispelled when the time for action arrived. The
individualist radical would have the State do as little as possible, but
still is compelled to resort to an increase of its powers at every turn;
the "State Socialist" would have the State do as much as practicable,
but would still retain State action within the rigid limits imposed by
the need of gaining capitalist support and the desire for immediate
political success. In economic policy the Individualist is for checking
the excess of monopoly and special privilege in order to allow "equal
opportunity" or a free development to whatever competition or "natural
Capitalism" remains, while the "State Socialist" is more concerned with
protecting and promoting the natural checking of the excesses of
competitive capitalism and private property that comes with "natural
monopoly" and its regulation by government. The "State Socialist,"
however critical he is towards competition, recognizes that the first
practical possibility of putting an end to its excesses comes when
monopoly is already established, and when it is relatively easy for the
State to step in to nationalize or municipalize; the Individualist
reformer who wishes to preserve competition where practicable, at the
same time recognizes that it is impossible to do so where monopolies
have become firmly rooted in certain industries, and he also at this
point proposes nationalization, municipalization, or thoroughgoing
governmental control.
Henry George himself recognizes that "State Socialism," which he called
simply "Socialism," and the "natural Capitalism" he advocated, far from
being contradictory, were complementary and interdependent. Mr. Louis
Post says:--
"Even in the economic chapters of 'Progress and Poverty' its author
saw the possibility of society's approaching the 'ideal of
Jeffersonian Democracy, the promised land of Herbert Spencer, the
abolition of government. But of government only as a directing and
repressive power.' At the same time and in the same degree of
approach, he regarded it as possible for society also to realize
the dream of Socialism."[27]
The following passage leaves no doubt that Mr. Post is correct, and at
the same time shows in the clearest way how the two policies of reform
were interwoven in Henry George's mind:--
"Government could take up itself the transmission of messages by
telegraph, as well as by mail, of building and operating railroads,
as well as of the opening and maintaining common roads. With the
present functions so simplified and reduced, functions such as
these could be assumed without danger or strain, and would be under
the supervision of public attention, which is now distracted. There
would be a great and increasing surplus revenue from the taxation
of land values for material progress, which would go on with great
accelerated rapidity, would tend constantly to increase rent. This
revenue arising from the common property would be applied to the
common benefit, as were the revenues of Sparta. We might not
establish public tables--they would be unnecessary, but we could
establish public baths, museums, libraries, gardens, lecture rooms,
music and dancing halls, theaters, universities, technical schools,
shooting galleries, playgrounds, gymnasiums, etc. Heat, light, and
motive power, as well as water, might be conducted through our
streets at public expense; our roads be lined with fruit trees;
discoveries and inventors rewarded, scientific investigation
supported; in a thousand ways the public revenues made to foster
efforts for the public benefit. _We should reach the ideal of the
Socialist_, but not through government repression. _Government
would change its character, and would become the administration of
a great coöperative society. It would become merely the agency by
which the common property was administered for the common
benefit_." (Italics mine.)[28]
But the "State Socialist" and the Individualist reformer, who are often
combined in one person, as in the case of Henry George, differ sharply
from Socialists of the Socialist movement in aiming at a society, which,
however widely government action is to be extended, is after all to
remain a society of small capitalists.
Professor Edward A. Ross very aptly sums up the reformer's objections to
the anti-capitalist Socialists. Capitalism must be "divested of its
perversions," the privately owned monopolies and their political
machines, primarily for the purpose of strengthening it _against_
Socialism. "Individualism should make haste to clean the hull of the old
ship for the coming great battle with the opponents of private
capital...."[29] The reformers, as a rule, like Professor Ross,
consciously stand for a new form of private capitalism, to be built up
with the aid of the State. This is the avowed attitude of the larger
part of the "progressives," "radicals," and "insurgents" of the day.
The new reform programs, however radical, are aimed at regenerating
capitalism. The most radical of all, that of the single taxers, who plan
not only that the state shall be the sole landlord, but that the
railways and the mines shall be nationalized and other public utilities
municipalized, do not deny that they want to put a new life into private
capitalism, and to stimulate commercial competition in the remaining
fields of industry. Mr. Frederick C. Howe, for instance, predicts a
revival of capitalistic enterprise, after these measures are enacted,
and even looks forward to the indefinite continuation of the struggle
between capital and labor.[30]
FOOTNOTES:
[9] The _Socialist Review_ (London), April, 1909.
[10] The _New Age_ (London), Nov. 4, 1909.
[11] Edward Bernstein, "Evolutionary Socialism," p. 154.
[12] Winston Churchill, "Liberalism and the Social Problem," p. 345.
[13] H. G. Wells, "New Worlds for Old," p. 185.
[14] Winston Churchill, _op. cit._, p. 80.
[15] Winston Churchill, _op. cit._, pp. 326, 327.
[16] Winston Churchill, _op. cit._, pp. 326.
[17] Winston Churchill, _op. cit._, p. 396.
[18] Winston Churchill, _op. cit._, p. 399.
[19] Winston Churchill, _op. cit._, p. 336.
[20] Winston Churchill, _op. cit._, p. 339.
[21] Lloyd George, "Better Times," p. 163.
[22] Lloyd George, _op. cit._, pp. 94-101.
[23] Lloyd George, _op. cit._, p. 58.
[24] Lloyd George, _op. cit._, p. 174.
[25] Lord Rosebery's Speech at Glasgow, Sept. 10, 1909.
[26] Louis F. Post, "Social Service," p. 341.
[27] _The Public_ (Chicago), Nov. 4, 1910.
[28] Henry George, "Progress and Poverty," Book IV, p. 454.
[29] Professor E. A. Ross, "Sin and Society," p. 151.
[30] Frederick C. Howe, "Privilege and Democracy in America," p. 277.