New worlds for old: A plain account of modern socialism

by H. G. Wells

So that you see it is not only untrue that Socialism would rob a poor man of his virtuously acquired “bit of property,” but the direct contrary is the truth, that the present system, non-Socialism, is now constantly butchering thrift! Simple people believe the great financiers win and lose money to each other. They are not—to put it plainly—such fools. They use the public, and the public goes on being used, as a perpetual source of freshly accumulated wealth. I know one case of a man of fifty who serves in a shop, a most industrious, competent man, who has been saving and investing money all his life in what he had every reason to believe were safe and sober businesses; he has been denying himself pleasures, cramping his life to put by about a third of his wages every year since he was two-and-twenty, and to-day he has not got his keep for a couple of years, and his only security against disablement and old age is his subscription to a Friendly Society, a society which I have a very strong suspicion is no better off than most other Friendly Societies—and that is by no means well off, and by no means confident of the future.

It is possible to argue that the small man ought to take more pains about his investments, but, as a matter of fact, investing money securely and profitably is a special occupation of extraordinary complexity, and the common man with a few hundred pounds has no more chance in that market than he would have under water in Sydney Harbour amidst a shoal of sharks. It may be said that he is greedy, wants too much interest, but that is nonsense. One of the crudest gulfs into which small savings have gone in the case of the British public has been the trap of Consols, which pay at the present price less than three per cent. Servants and working men with Post Office Savings’ Bank accounts were urged, tempted and assisted to invest in this solemn security—even when it stood at 114. Those who did so have now (November 1907) lost almost a third of their money.

It is scarcely too much to say that a very large proportion of our modern great properties, tramway systems, railways, gas-works, bread companies, have been created for their present owners the debenture holders and mortgagers, the great capitalists, by the unintentional altruism of that voluntary martyr, the Saving Small Man.

Of course the habitual saver can insure with an insurance company for his old age and against all sorts of misadventures, and because of the Government interference with “private enterprise” in that sort of business, be reasonably secure; but under Socialism he would be able to do that with absolute security in the State Insurance Office—if the universal old age pension did not satisfy him. That, however, is beside our present discussion. I am writing now only of the sort of property that Socialism would destroy, and to show how little benefit or safety it brings to the small owner now. The unthinking rich prate “thrift” to the poor, and grow richer by a half-judicious, half-unconscious absorption of the resultant savings; that, in brief, is the grim humour of our present financial method.

It is not only in relation to investments that this absorption of small parcels of savings goes on. In every town the intelligent and sympathetic observer may see, vivid before the eyes of all who are not blind by use and wont, the slow subsidence of petty accumulations, The lodging-house and the small retail shop are, as it were, social “destructors”; all over the country they are converting hopeful, enterprising, ill-advised people with a few score or hundreds of pounds, slowly, inevitably into broken-hearted failures. It is, to my mind, the crudest aspect of our economic struggle. In the little High Street of Sandgate, over which my house looks, I should say between a quarter and a third of the shops are such downward channels from decency to despair; they are sanctioned, inevitable citizen breakers. Now it is a couple of old servants opening a “fancy” shop or a tobacco shop, now it is a young couple plunging into the haberdashery, now it is a new butcher or a new fishmonger or a grocer. This perpetual procession of bankruptcies has made me lately shun that pleasant-looking street, that in my unthinking days I walked through cheerfully enough. The doomed victims have a way of coming to the doors at first and looking out politely and hopefully. There is a rich and lucrative business done by certain wholesale firms in starting the small dealer in almost every branch of retail trade; they fit up his shop, stock him, take his one or two hundred pounds and give him credit for forty or fifty. The rest of his story is an impossible struggle to pay rent and get that debt down. Things go on for a time quite bravely. I go furtively and examine the goods in the window, with a dim hope that this time something really will come off; I learn reluctantly from my wife that they are no better than any one else’s, and rather dearer than those of the one or two solid and persistent shops that do the steady business of the place. Perhaps I see the new people going to church once or twice very respectably, as I set out for a Sunday walk, and if they are a young couple the husband usually wears a silk hat. Presently the stock in the window begins to deteriorate in quantity and quality, and then I know that credit is tightening. The proprietor no longer comes to the door, and his first bright confidence is gone. He regards one now through the darkling panes with a gloomy animosity. He suspects one all too truly of dealing with the “Stores.” … Then suddenly he has gone; the savings are gone, and the shop—like a hungry maw—waits for a new victim. There is the simple common tragedy of the little shop; the landlord of the house has his money all right, the ground landlord has, of course, every penny of his money, the kindly wholesalers are well out of it, and the young couple or the old people, as the case may be, are looking for work or the nearest casual ward—just as though there was no such virtue as thrift in the world.

The particular function of the British lodging-house—though the science of economics is silent on this point—is to use up the last strength of the trusty old servant and the plucky widow. These people will invest from two or three hundred to a thousand pounds in order to gain a bare subsistence by toiling for boarders and lodgers. It is their idea of a safe investment. They can see it all the time. All over England this process goes on. The curious inquirer may see every phase for himself by simply looking for rooms among the apartment houses of such a region as Camden Town, London; he will realize more and more surely as he goes about that none of these people gain money, none of them ever recover the capital they sink, they are happy if they die before their inevitable financial extinction. It is so habitual with people to think of classes as stable, of a butcher or a baker as a man who keeps a shop of a certain sort at a certain level throughout a long and indeterminate life, that it may seem incredible to many readers that those two typically thrifty classes, the lodging-letting householder and the small retailer, are maintained by a steady supply of failing individuals; the fact remains that it is so. Their little savings are no good to them, investments and business beginnings mock them alike: steadily, relentlessly our competitive system eats them up.

It is said that no class of people in the community is more hostile to Socialism and Socialistic legislation than these small owners and petty investors, these small ratepayers. They do not understand. Rent they consider in the nature of things like hunger and thirst; the economic process that dooms the weak enterprise to ruin is beyond the scope of their intelligence; but the rate-collector who calls and calls again for money, for more money, to educate “other people’s children,” to “keep paupers in luxury,” to “waste upon roads and light and trams,” seems the agent of an unendurable wrong. So the poor creatures go out pallidly angry to vote down that hated thing municipal enterprise, and to make still more scope for that big finance that crushes them in the wine-press of its exploitation. It is a wretched and tragic antagonism, for which every intelligent Socialist must needs have sympathy, which he must meet with patience—and lucid explanations. If the public authority took rent there would be no need of rates; that is the more obvious proposition. But the ampler one is the cruelty, the absurdity and the social injury of the constant consumption of unprotected savings which is an essential part of our present system.

It is a doctrinaire and old-fashioned Socialism that quarrels with the little hoard; the quarrel of modern Socialism is with the landowner and the great capitalist who devour it.

§ 4.

While we are discussing the true attitude of modern Socialism to property, it will be well to explain quite clearly the secular change of opinion that is going on in the Socialist ranks in regard to the process of expropriation. Even in the case of those sorts of property that Socialism repudiates, property in land, natural productions, inherited business capital and the like, Socialism has become humanized and rational from its first extreme and harsh positions.