The Servile State

by Hilaire Belloc

Now, of course, the State can do nothing of the kind. The accumulations of wheat being already in the hands of the Capitalists, and those accumulations amounting to much less than 3000 measures of wheat, the thing appears to be a deadlock.

But it is not a deadlock if the Capitalist is a fool. The State can go to the Capitalists and say: “Hand me over your farms, and against them I will give you guarantee that you shall be paid rather more than 100 measures of wheat a year for the thirty years. In fact, I will pay you half as much again until these extra payments amount to a purchase of your original stock.”

Out of what does this extra amount come? Out of the State’s power to tax.

The State can levy a tax upon the profits of both Capitalists A and B, and pay them the extra with their own money.

In so simple an example it is evident that this “ringing of the changes” would be spotted by the victims, and that they would bring against it precisely the same forces which they would bring against the much simpler and more straightforward process of immediate confiscation.

But it is argued that in a complex State, where you are dealing with myriads of individual Capitalists and thousands of particular forms of profit, the process can be masked.

There are two ways in which the State can mask its action (according to this policy). It can buy out first one small area of land and capital out of the general taxation and then another, and then another, until the whole has been transferred; or it can tax with peculiar severity certain trades which the rest who are left immune will abandon to their ruin, and with the general taxation plus this special taxation buy out those unfortunate trades which will, of course, have sunk heavily in value under the attack.

The second of these tricks will soon be apparent in any society, however complex; for after one unpopular trade had been selected for attack the trying on of the same methods in another less unpopular field will at once rouse suspicion.[7]

The first method, however, might have some chance of success, at least for a long time after it was begun, in a highly complex and numerous society were it not for a certain check which comes in of itself. That check is the fact that the Capitalist only takes more than his old yearly revenue with the object of reinvesting the surplus.

I have a thousand pounds in Brighton railway stock, yielding me 3 per cent.: £30 a year. The Government asks me to exchange my bit of paper against another bit of paper guaranteeing the payment of £50 a year, that is, an extra rate a year, for so many years as will represent over and above the regular interest paid a purchase of my stock. The Government’s bit of paper promises to pay to the holder £50 a year for, say, thirty-eight years. I am delighted to make the exchange, not because I am such a fool as to enjoy the prospect of my property being extinguished at the end of thirty-eight years, but because I hope to be able to reinvest the extra £20 every year in something else that will bring me in 3 per cent. Thus, at the end of the thirty-eight years I shall (or my heirs) be better off than I was at the beginning of the transaction, and I shall have enjoyed during its maturing my old £30 a year all the same.