CHAPTER VIII WHAT SOCIALISM IS
To those who are writing about such things as Socialism or Political Economy, one of the stumbling-blocks is in the hard or uncommon words, and another in the tediousness—the "dryness"—of the arguments and explanations.
It is not easy to say what has to be said so that anybody may see quite clearly what is meant, and it is still harder to say it so as to hold the attention and arouse the interest of men and women who are not used to reading or thinking about matters outside the daily round of their work and their play. As I want this book to be plain to all kinds of workers, even to those who have no "book-learning" and to whom a "hard word" is a "boggart," and a "dry" description or a long argument a weariness of the flesh, I must beg those of you who are more used to bookish talk and scientific terms (or names) to bear with me when I stop to show the meaning of things that to you are quite clear.
If I can make my meaning plain to members of Parliament, bishops, editors, and other half-educated persons, and to labouring men and women who have had but little schooling, and have never been used to think or care about Socialism, or Economics, or Politics, or "any such dry rot"—as they would call them—if I can catch the ear of the heedless and the untaught, the rest of you cannot fail to follow.
The terms, or names, used in speaking of Socialism—that is to say, the names given to ideas, or "thoughts," or to kinds of ideas, or "schools" of thought, are not easy to put into the plain words of common speech. To an untaught labourer Socialism is a hard word, so is Co-operation; and such a phrase, or name, as Political Economy is enough to clear a taproom, or break up a meeting, or close a book.
So I want to steer clear of "hard words," and "dry talk," and long-windedness, and I want to tell my tale, if I can, in "tinker's English."
What is Socialism?
There is more than one kind of Socialism, for we hear of State Socialism, of Practical Socialism, of Communal Socialism; and these kinds differ from each other, though they are all Socialism.
So you have different kinds of Liberals. There are old-school Whigs, and advanced Whigs, and Liberals, and Radicals, and advanced Radicals; but they are all Liberals.
So you have horse soldiers, foot soldiers, riflemen, artillery, and engineers; but they are all soldiers.
Amongst the Liberals are men of many minds: there are Churchmen, Nonconformists, Atheists; there are teetotalers and there are drinkers; there are Trade Union leaders, and there are leaders of the Masters' Federation. These men differ on many points, but they all agree upon one point.
Amongst the Socialists are many men of many minds: there are parsons, atheists, labourers, employers, men of peace, and men of force. These men differ on many points, but they all agree upon one point.
Now, this point on which men of different views agree is called a principle.
A principle is a main idea, or main thought. It is like the keelson of a ship or the backbone of a fish—it is the foundation on which the thing is built.
Thus, the principle of Trade Unionism is "combination," the combining, or joining together, of a number of workers, for the general good of all.
The principle of Democratic (or Popular) Government is the law that the will of the majority shall rule.
Do away with the "right of combination," and Trade Unionism is destroyed.
Do away with majority rule, and Popular Government is destroyed.
So if we can find the principle of Socialism, if we can find the one point on which all kinds of Socialists agree, we shall be able to see what Socialism really is.
Now, here in plain words is the principle, or root idea, on which all Socialists agree—
That the country, and all the machinery of production in the country, shall belong to the whole people (the nation), and shall be used by the people and for the people.
That "principle," the root idea of Socialism, means two things—
1. That the land and all the machines, tools, and buildings used in making needful things, together with all the canals, rivers, roads, railways, ships, and trains used in moving, sharing (distributing) needful things, and all the shops, markets, scales, weights, and money used in selling or dividing needful things, shall be the property of (belong to) the whole people (the nation).
2. That the land, tools, machines, trains, rivers, shops, scales, money, and all the other things belonging to the people, shall be worked, managed, divided, and used by the whole people in such a way as the greater number of the whole people shall deem best.
This is the principle of collective, or national, ownership, and co-operative, or national, use and control.
Socialism may, you see, be summed up in one line, in four words, as really meaning
BRITAIN FOR THE BRITISH.
I will make all this as plain as the nose on your face directly. Let us now look at the other side.
To-day Britain does not belong to the British; it belongs to a few of the British. There are bits of it which belong to the whole people, as Wimbledon Common, Portland Gaol, the highroads; but most of it is "private property."
Now, as there are Liberals and Tories, Catholics and Protestants, Dockers' Unions and Shipping Federations in England; so there are Socialists and non-Socialists.
And as there are different kinds of Socialists, so there are different kinds of non-Socialists.
As there is one point, or principle, on which all kinds of Socialists agree; so there is one point, or principle, on which all kinds of non-Socialists agree.
Amongst the non-Socialists there are Liberals and Tories, Catholics and Protestants, masters and workmen, rich and poor, lords and labourers, publicans and teetotalers; and these folks, as you know, differ in their ideas, and quarrel with and go against each other; but they are all non-Socialists, they are all against Socialism, and they all agree upon one point.
So, if we can find the one point on which all kinds of non-Socialists agree, we shall find the principle, or root idea, of non-Socialism.
Well, the "principle" of non-Socialism is just the opposite of the "principle" of Socialism. As the "principle" of Socialism is national ownership, so the "principle" of non-Socialism is private ownership. As the principle of Socialism is Britain for the British, so the principle of non-Socialism is Every Briton for Himself.
Again, as the principle of Socialism means two things, so does the principle of non-Socialism mean two things.
As the principle of Socialism means national ownership and co-operative national management, so the principle of non-Socialism means private ownership and private management.
Socialism says that Britain shall be owned and managed by the people for the people.
Non-Socialism says Britain shall be owned and managed by some persons for some persons.
Under Socialism you would have all the people working together for the good of all.
Under non-Socialism you have all the persons working separately (and mostly against each other), each for the good of himself.
So we find Socialism means Co-operation, and non-Socialism means Competition.
Co-operation, as here used, means operating or working together for a common end or purpose.
Competition means competing or vying with each other for personal ends or gain.
I'm afraid that is all as "dry" as bran, and as sad as a half-boiled dumpling; but I want to make it quite plain.
And now we will run over it all again in a more homely and lively way.
You know that to-day most of the land in Britain belongs to landlords, who let it to farmers or builders, and charge rent for it.
Socialists (all Socialists) say that all the land should belong to the British people, to the nation.
You know that the railways belong to railway companies, who carry goods and passengers, and charge fares and rates, to make profit.
Socialists all say that the railways should be bought by the people. Some say that fares should be charged, some that the railways should be free—just as the roads, rivers, and bridges now are; but all agree that any profit made by the railways should belong to the whole nation. Just as do the profits now made by the post office and the telegraphs.
You know that cotton mills, coalmines, and breweries now belong to rich men, or to companies, who sell the coal, the calico, or the beer, for profit.
Socialists say that all mines, mills, breweries, shops, works, ships, and farms should belong to the whole people, and should be managed by persons chosen by the people, or chosen by officials elected by the people, and that all the bread, beer, calico, coal, and other goods should be either sold to the people, or given to the people, or sold to foreign buyers for the benefit of the British nation.
Some Socialists would give the goods to the people, some would sell them; but all agree that any profit on such sales should belong to the whole people—just as any profit made on the sale of gas by the Manchester Corporation goes to the credit of the city.
Now you will begin to see what is meant by Socialism.
To-day the nation owns some things; under Socialism the nation would own all things.
To-day the nation owns the ships of the navy, the forts, arsenals, public buildings, Government factories, and some other things.
To-day the Government, for the nation, manages the post office and telegraphs, makes some of the clothes and food and arms for the army and navy, builds some of the warships, and oversees the Church, the prisons, and the schools.
Socialists want the nation to own all the buildings, factories, lands, rivers, ships, schools, machines, and goods, and to manage all their business and work, and to buy and sell and make and use all goods for themselves.
To-day some cities (as Manchester and Glasgow) make gas, and supply gas and water to the citizens. Some cities (as London) let their citizens buy their gas and water from gas and water companies.
Socialists want all the gas and water to be supplied to the people by their own officials, as in Glasgow and Manchester.
Under Socialism all the work of the nation would be organised—that is to say, it would be "ordered," or "arranged," so that no one need be out of work, and so that no useless work need be done, and so that no work need be done twice where once would serve.
At present the work is not organised, except in the post office and in the various works of the Corporations.
Let us take a look at the state of things in England to-day.
To-day the industries of England are not ordered nor arranged, but are left to be disordered by chance and by the ups and downs of trade.
So we have at one and the same time, and in one and the same trade, and, often enough, in one and the same town, some men working overtime and other men out of work.
We have at one time the cotton mills making more goods than they can sell, and at another time we have them unable to fulfil their orders.
We have in one street a dozen small shops all selling the same kind of goods, and so spending in rent, in fittings, in wages of servants, and other ways, about four times as much as would be spent if all the work were done in one big shop.
We have one contractor sending men and tools and bricks and wood from north London to build a house in south London, and another contractor in south London going to the same trouble and expense to build a house in north London.
We have in Essex and other parts of England thousands of acres of good land lying idle because it does not pay to till it, and at the same time we have thousands of labourers out of work who would be only too glad to till it.
So in one part of a city you may see hundreds of houses standing empty, and in another part of the same city you may see hard-working people living three and four families in a small cottage.
Then, under competition, where there are many firms in the same trade, and where each firm wants to get as much trade as it can, a great deal of money is spent by these firms in trying to get the trade from each other.
Thus all the cost of advertisements, of travellers' wages, and a lot of the cost of book-keeping, arise from the fact that there are many firms all trying to snatch the trade from each other.
Non-Socialists claim that this clumsy and costly way of going to work is really the best way there is. They say that competition gets the work done by the best men and at the lowest rate.
Perhaps some of them believe this; but it is not true. The mistake is caused by the fact that competition is better than monopoly.
That is to say, if there is only one tram company in a town the fares will be higher than if there are two; because when there are two one tries to undersell the other.
But take a town where there are two tram companies undercutting and working against each other, and hand the trams over to the Corporation, and you will find that the work is done better, is done cheaper, and the men are better paid than under competition.
This is because the Corporation is at less cost, has less waste, and does not want profits.
Well, under Socialism all the work of the nation would be managed by the nation—or perhaps I had better say by "the people," for some of the work would be local and some would be national. I will show you what I mean.
It might be better for each town to manage its own gas and water, to bake its own bread and brew its own beer. But it would be better for the post office to be managed by the nation, because that has to do with all the towns.
So we should find that some kinds of work were best done locally—that is, by each town or county—and that some were best done nationally, that is, by a body of officials acting for the nation.
For instance, tramways would be local and railways national; gas and water would be local and collieries national; police would be local and the army and navy national.
The kind of Socialism I am advocating here is Collectivism, or Practical Socialism. Motto: Britain for the British, the land and all the instruments of production, distribution, and exchange to be the property of the nation, and to be managed by the nation for the nation.
The land and railways, collieries, etc., to be bought from the present owners, but not at fancy prices.
Wages to be paid, and goods to be sold.
Thus, you see, Collectivism is really an extension of the principles, or ideas, of local government, and of the various corporation and civil services.
And now I tell you that is Socialism, and I ask you what is there in it to prevent any man from being a Christian, or from attending a place of worship, or from marrying, or being faithful to his wife, or from keeping and bringing up his children at home?
There is nothing in it to destroy religion, and there is nothing in it to destroy the home, and there is nothing in it to foster vice.
But there is something in it to kill ignorance and to destroy vice. There is something in it to shut up the gaols, to do away with prostitution, to reduce crime and drunkenness, and wipe out for ever the sweater and the slums, the beggars and the idle rich, the useless fine ladies and lords, and to make it possible for sober and willing workers to live healthy and happy and honourable lives.
For Socialism would teach and train all children wisely; it would foster genius and devotion to the common good; it would kill scamping and loafing and jerrymandering; it would give us better health, better homes, better work, better food, better lives, and better men and women.
CHAPTER IX COMPETITION v. CO-OPERATION
A comparison of competition with co-operation is a comparison of non-Socialism with Socialism.
For the principle of non-Socialism is competition, and the principle of Socialism is co-operation.
Non-Socialists tell us that competition is to the general advantage, because it lowers prices in favour of the consumer.
But competition in trade only seems desirable when we contrast it with private monopoly.
When we compare the effects of trade competition with the effects of State or Municipal co-operation, we find that competition is badly beaten.
Let us try to find the reasons of this.
The claim for the superior cheapness of competition rests on the theory that where two sellers compete against each other for trade each tries to undersell the other.
This sounds plausible, but, like many other plausible things, it is untrue. It is a theory, but the theory is incomplete.
If business men were fools the theory would work with mathematical precision, to the great joy and profit of the consumer; but business men are not built on those lines.
The seller of any article does not trade for trading's sake; he trades for profit.
It is a mistake to suppose that undercutting each other's prices is the only method of competing between rival firms in trade. There are other ways.
A trader, in order to defeat a rival, may
1. Give better quality at the same price, which is equal to giving more for the money, and is therefore a form of underselling; or
2. He may give the same quantity and quality at a lower price; or
3. He may balance the lowering of his price by resorting to adulteration or the use of inferior workmanship or material; or
4. He may try to overreach his rival by employing more travellers or by advertising more extensively.
As to underselling. This is not carried on to such extremes as the theorists would have us believe.
The object of a trader is to make money. He only desires increased trade if it brings more money.
Brown and Jones make soap for sale. Each desires to get as much of the trade as he can, consistently with profits.
It will pay Brown better to sell 1000 boxes of soap at a profit of sixpence on each box than to sell 2000 boxes at a profit of twopence a box, and it will pay him better to sell 4000 boxes at a profit of twopence each than it will to sell 1000 boxes at a profit of sixpence each.
Now, suppose there is a demand for 20,000 boxes of soap in a week. If Brown and Jones are content to divide the trade, each may sell 10,000 boxes at a profit of sixpence, and so may clear a total profit of £250.
If, by repeated undercutting, the profit falls to a penny a box, Brown and Jones will have very little more than £80 to divide between them. And it is clear that it will pay them better to divide the trade, for it would pay either of them better to take half the trade at even a threepenny profit than to secure it all at a profit of one penny.
Well, Brown and Jones have the full use of their faculties, and are well aware of the number of beans that make five.
Therefore they will not compete beyond the point at which competition will increase their gross profits.
And so we shall find in most businesses, from great railways down to tooth brushes, that the difference in prices, quality being equal, is not very great amongst native traders, and that a margin of profit is always left.
At the same time, so far as competition does lower prices without lowering quality, the benefit is to the consumer, and that much is to be put to the credit of competition.
But even there, on its strongest line, competition is beaten by State or Municipal co-operation.
Because, assuming that the State or Municipality can produce any article as cheaply as a private firm, the State or the Municipality can always beat the private trader in price to the extent of the trader's profit.
For no trader will continue to trade unless he makes some profit, whereas the State or Municipality wants no profit, but works for use or for service.
Therefore, if a private trader sells soap at a profit of one farthing a box, the State or Municipality can sell soap one farthing a box cheaper, other things being equal.
It is evident, then, that the trader must be beaten unless he can produce more cheaply than the State or Municipality.
Can he produce more cheaply? No. The State or Municipality can always produce more cheaply than the private trader, under equal conditions. Why? For the same reason that a large firm can beat a small one, or a trust can beat a number of large firms.
Suppose there are three separate firms making soap. Each firm must have its separate factory, its separate offices, its separate management, its separate power, its separate profits, and its separate plant.
But if one firm made all the soap, it would save a great deal of expense; for one large factory is cheaper than two of half its size, and one manager costs less than three.
If the London County Council made all the soap for London, it could make soap more cheaply than any one of a dozen private firms; because it would save so largely in rent, plant, and management.
Thus the State or Municipality scores over the private firm, and co-operation scores over competition in two ways: first, it cuts off the profit; and, second, it reduces the cost of production.
But that does not exhaust the advantages of co-operation over competition. There are two other forms of competition still to examine: these are adulteration and advertisement.
We all know the meaning of the phrase "cheap and nasty." We can get pianos, bicycles, houses, boots, tea, and many other things at various prices, and we find that many of the cheap pianos will not keep in tune, that the bicycles are always out of repair, that the houses fall down, the boots let in water, and the tea tastes like what it is—a mixture of dried tea leaves and rubbish.
Adulteration, as John Bright frankly declared, is a form of competition. It is also a form of rascality and fraud. It is a device for retaining profits for the seller, but it is seriously to the disadvantage of the consumer.
This form of competition, then, has to be put to the debit of competition.
And the absence of this form of competition has to be put to the credit of the State or the Municipal supply. For since the State or Municipality has no competitor to displace, it never descends to the baseness of adulteration.
The London County Council would not build jerry houses for the citizens, nor supply them with tea leaves for tea, nor logwood and water for port wine.
The sale of wooden nutmegs is a species of enterprise confined exclusively to the private trader. It is a form of competition, but never of commercial co-operation. It is peculiar to non-Socialism: Socialists would abolish it entirely.
We come now to the third device of the private trader in competition: the employment of commercial travellers and advertisement.
Of two firms selling similar goods, of equal quality, at equal prices, that firm will do the larger trade which keeps the greater number of commercial travellers and spends the greater sum upon advertisement.
But travellers cost money, and advertising costs money. And so we find that travellers and advertisements add to the cost of distribution.
Therefore competition, although by underbidding it has a limited tendency to lower the prices of goods, has also a tendency to increase the price in another way.
If Brown lowers the price of his soap the user of soap is the gainer. But if Brown increases the cost of his advertisements and his staff of travellers, the user is the loser, because the extra cost has to be paid for in the price of soap.
Now, if the London County Council made soap for all London, there would be
1. A saving in cost of rent, plant, and management.
2. A saving of profits by selling at cost price.
3. A saving of the whole cost of advertising.
4. A saving of the wages of the commercial travellers.
Under a system of trade competition all those four items (plus the effects of adulteration) have to be paid for by the consumer, that is to say, by the users of soap.
And what is true of soap is true of most other things.
That is why co-operation for use beats competition for sale and profit.
That is why the Municipal gas, water, and tram services are better and cheaper than the same services under the management of private companies.
That is one reason why Socialism is better than non-Socialism.
As an example of the difference between private and Municipal works, let us take the case of the gas supply in Liverpool and Manchester. These cities are both commercial, both large, both near the coalfields.
The gas service in Liverpool is a private monopoly, for profit; that of Manchester is a co-operative monopoly, for service.
In Liverpool (figures of 1897) the price of gas was 2s. 9d. per thousand feet. In Manchester the price of gas was 2s. 3d.
In Liverpool the profit on gas was 8-1/2d. per thousand feet. In Manchester the profit was 7-1/2d. per thousand feet.
In Liverpool the profits went to the company. In Manchester the profits went to the ratepayers.
Thus the Manchester ratepayer was getting his gas for 2s. 3d. less 7-1/2d., which means that he was getting it at 1s. 7-1/2d., while the Liverpool ratepayer was being charged 2s. 9d. The public monopoly of Manchester was, therefore, beating the private monopoly of Liverpool by 1s. 1-1/2d. per thousand feet in the price of gas.
In To-day's Work, by George Haw, and in Does Municipal Management Pay? by R. B. Suthers, you will find many examples as striking and conclusive as the one I have suggested above.
The waste incidental to private traders' competition is enormous. Take the one item of advertisement alone. There are draughtsmen, paper-makers, printers, billposters, painters, carpenters, gilders, mechanics, and a perfect army of other people all employed in making advertisement bills, pictures, hoardings, and other abominations—for what? Not to benefit the consumer, but to enable one private dealer to sell more of his wares than another. In Merrie England I dealt with this question, and I quoted from an excellent pamphlet by Mr. Washington, a man of splendid talents, whose death we have unfortunately to deplore. Mr. Washington, who was an inventor and a thoroughly practical man of business, spoke as follows:—
Taking soap as an example, it requires a purchaser of this commodity to expend a shilling in obtaining sixpennyworth of it, the additional sixpence being requisite to cover the cost of advertising, travelling, etc. It requires him to expend 1s. 1-1/2d. to obtain twopennyworth of pills for the same reason. For a sewing machine he must, if spending £7 on it, part with £4 of this amount on account of unnecessary cost; and so on in the case of all widely advertised articles. In the price of less-advertised commodities there is, in like manner, included as unnecessary cost a long string of middlemen's profits and expenses. It may be necessary to treat of these later, but for the present suffice it to say that in the price of goods as sold by retail the margin of unnecessary cost ranges from threepence to tenpence in the shilling, and taking an average of one thing with another, it may be safely stated that one-half of the price paid is rendered necessary simply through the foolish and inconvenient manner in which the business is carried on.
All this expense would be saved by State or Municipal production for use. The New York Milk Trust, I understand, on its formation dispensed with the services of 15,000 men.
You may ask what is to become of these men, and of the immense numbers of other men, now uselessly employed, who would not be needed under Socialism.
Well! What are these men now doing? Are they adding to the wealth of the nation? No. Are they not doing work that is unnecessary to the nation? Yes. Are they not now being paid wages? Yes.
Then, since their work is useless, and since they are now being paid, is it not evident that under Socialism we could actually pay them their full wages for doing nothing, and still be as well off as we are now?
But I think under Socialism we could, and should, find a very great many of them congenial and useful work.
Under the "Trusts" they will be thrown out of work, and it will be nobody's business to see that they do not starve.
Yes: Socialism would displace labour. But does not non-Socialism displace labour?
Why was the linotype machine adopted? Because it was a saving of cost. What became of the compositors? They were thrown out of work. Did anybody help them?
Well, Socialism would save cost. If it displaces labour, as the machine does, should that prevent us from adopting Socialism?
Socialism would organise labour, and leave no man to starve.
But will the Trusts do that? No. And the Trusts are coming; the Trusts which will swallow up the small firms and destroy competition; the Trusts which will use their monopolies not to lower prices, but to make profits.
You will have your choice, then, between the grasping and grinding Trust and the beneficent Municipality.
Can any reasonable, practical, hard-headed man hesitate for one moment over his choice?