It is first and foremost a reaction, not against the fundamental ideas of the English Classical school, as is generally believed, but against the exaggerations of their second-grade disciples, the admirers of Bastiat and Cobden—known to us as the “Optimists” and styled the “Manchestrians” in Germany. The manifesto, drawn up by Professor Schmoller at the Eisenach Congress, speaks of the “Manchester school,” but makes no mention of the Classical writers.[940] It is true that a great many German writers regard the expressions “Smithianismus” and “Manchesterthum” as synonymous, but these are perhaps polemical exaggerations upon which we ought not to lay too much stress. On the other hand, Liberalism had nowhere assumed such extravagant proportions as it had in Germany. Prince Smith, who is the best-known representative of Liberalism after Dunoyer, was convinced that the State had nothing to do beyond guaranteeing security, and denied that there was any element of solidarity between economic agents save such as results from the existence of a common market. “The economic community, as such, is a community built upon the existence of a market, and it has no facility to offer other than free access to a market.”[941]
The State Socialists, on the contrary, are of opinion that there exists a moral solidarity which is much more fundamental than any economic tie between the various individuals and classes of the same nation—such solidarity as results from the possession of a common language, similar manners, and a uniform political constitution. The State is the organ of this moral solidarity, and because of this title it has no right to remain indifferent to the material poverty of a part of the nation. It has something to do besides protecting people against internal or external violence. It has a real work of “civilisation and well-being”[942] which it ought to perform. In this way State Socialism becomes reconciled to the philosophic standpoint which Lassalle had chosen for it. Lassalle’s insistence upon the mission of Governments and the importance of their historic rôle has been incorporated into its system, and the attention that is paid to national considerations reminds one of the teaching of Friedrich List.
It is impossible not to ask whether the State is capable of carrying out the duties that have been entrusted to it. There is little use in emphasising duty where there is no capacity for discharging it. The State’s incapacity as an economic agent has long been a notorious fact. Wagner and his friends were particularly anxious to correct this false impression, and as far as their doctrine contains anything original it may most conveniently be described as an attempt to rehabilitate the State. Optimists of Bastiat’s genre looked upon the State as the very incarnation of incapacity. The State Socialists, on the other hand, regard government as an economic agent very similar to other agents which the community employs, only a little more sympathetic perhaps. Much of their argument consists of an attempt to create a presumption in favour of government as against the ordinarily accepted opinion which individualism had begotten. Such was the nature of the task which they undertook.
Their first action was to insist upon the weaknesses of individuals. Following in the wake of Sismondi and other socialists, they emphasised the social inconveniences of competition, which is, however, generally confused with individual liberty.[943] They also insisted upon the social inequality of masters and workers when it comes to a question of wage-bargaining—a fact that had already been noted by Adam Smith—as well as upon the universal opposition that exists between the weak and the strong. The inadequacy of merely individual effort to satisfy certain collective wants is another fact that was considerably emphasised.
As far back as the year 1856 Dupont-White, a Frenchman, had complained bitterly that all the paths of civilisation remained closed merely because of the existence of one obstacle—the infirmity and malignity of the individual.[944] He also attempted to show how the collective interests of modern society are becoming increasingly complex in character and of such magnitude as to be utterly beyond the compass of individual thought.[945] “There are,” says he in that excellent formula in which he summarises the instances in which State intervention may be necessary, “certain vital things which the individual can never do, either because he has not the necessary strength to perform them or because they would not pay him; or, again, because they require the co-operation of everybody, which can never be got merely by common consent. The State is the one person—the entrepreneur—who can undertake such tasks.”[946] But his words went unheeded.
Writing in a similar vein, Wagner invokes the testimony of history in support of his State doctrine, showing us how the State’s functions vary from one period to another, so that one never feels certain about prescribing limits to its action. Individual interest, private charity, and the State have always had to divide the field of activity between them. Never has the first of these, taken by itself, proved sufficient, and in all the great modern states its place is taken by State action. To conclude that this solution was useful and necessary and in accordance with the true law of historical development only involved one further step.[947] One almost unconsciously proceeds from the mere statement of a fact to the definite formulation of a law. “Anyone,” says Wagner, “who has appreciated the immanent tendencies of evolution (i.e. the essential features of economic, social, or political evolution) may very properly proceed from such a historical conception of social evolution to the formulation of postulates relative to what ought to be.”[948] In virtue of this conception there is a demand for the extension of the State’s functions, which may easily be justified on the ground of its capacity for furthering the well-being and civilisation of the community. The influence of Rodbertus’s thought, especially his theory concerning the development of governmental organs to meet the needs of a higher social development,[949] is quite unmistakable in this connection.
The similarity between his views and those of Dupont-White, though entirely fortuitous, perhaps, is sufficiently remarkable to justify our calling attention to it. White is equally emphatic in his demand that the State should exercise charity and act beneficently.[950] He shows how the modern State has extended its dominion, substituting local government for class dominion and parental despotism, taking women, children, and slaves successively under its care, and adding to its duties and responsibilities in proportion as civilisation grows and liberty broadens downward. Fresh life requires more organs, new forces demand new regulations. But the ruler and the organ of society is the State.[951] In a moment of enthusiasm he even goes so far as to declare that “the State is simply man minus his passions; man at such a stage of development that he can commune even with truth itself, fearing neither God nor his own conscience. However imperfect it may be, the State is still vastly superior to the individual.”[952] Such writing is not without a touch of mysticism.
Without going the extent of admitting, as M. Wagner would have us do, that the simple demonstration of the truth of historical evolution is enough to justify his policy, we must commend State Socialism for the service it has performed in combating the Liberal contempt for government. If we admit the right of a central power to regulate social relations, it is difficult to understand why certain economic relations only should be subjected to such supervision.
But the real difficulty, even when the principle is fully recognised, is to define the spheres that should respectively belong to the State and to the individual. How far, within what limits, and according to what rules should the State intervene? We must at any rate, as Wagner says, begin with a rough distribution of attributes. It is impossible to proceed by any other method unless we are to assume, as the collectivists seem to do, a radical change in human psychology resulting in the complete substitution of a solicitude for the public welfare for private interest.
Dupont-White thought the problem insoluble,[953] and Wagner is equally emphatic about the impossibility of formulating an absolute rule. The statesman must decide each case on its merits. He does, however, lay down a few general rules. As a first general principle it is clear that the State can never completely usurp the place of the individual.[954] It can only concern itself with the general conditions of his development. The personal activity of the individual must for ever remain the essential spring of economic progress. The principle is apparently the same as Stuart Mill’s, but there is quite a marked difference between them. Mill wished to curtail individual effort as little as possible, Wagner to extend Government action as much as he could. Mill insists throughout upon the negative rôle of Government; Wagner emphasises the positive side, and claims that it should help an ever-increasing proportion of the population to share in the benefits of civilisation. No inconvenience, Wagner thinks, would result from a little more communism in our social life. “National economy should be transferred from the control of the individual to the control of the community in general,” he writes, in a sentence that might have been borrowed directly from Rodbertus.[955] Both he and Mill are agreed that the limit of Government action must be placed just at that point where it threatens to cramp individual development.[956]