Problems of Poverty: An Inquiry into the Industrial Condition of the Poor

by J. A. Hobson

§ 6. The "Socialism" of Taxation--But there is another form of State interference which is more direct and significant than any of these. One of the largest State works is that of public education. Now the cost of this is in large measure defrayed by rate and tax, the bulk of which, in this case, is paid by those who do not get for themselves or for their children any direct return. The State-assisted education is said to tax A for the benefit of B. Nor is this a solitary instance; it belongs to the very essence of the modern socialistic movement. There is a strong movement, independent too of political partisanship, to cast, or to appear to cast, the burden of taxation more heavily upon the wealthier classes in order to relieve the poor. It is enough to allude to the income tax and the Poor Law. These are socialistic measures of the purest kind, and are directly open to that objection which is commonly raised against theoretic socialism, that it designs "to take from the rich in order to give to the poor." The growing public opinion in favour of graduated income tax, and the higher duty upon legacies and rich man's luxuries, are based on a direct approval of this simple policy of taking from the rich and giving to the poor.

The advocates of these measures urge this claim on grounds of public expediency, and those whose money is taken for the benefit of their poorer brethren, though they grumble, do not seriously impugn the right of the State to levy taxes in what way seems best. Whether we regard the whole movement from the taxation standpoint, or from the standpoint of benefits received, we shall perceive that it really means a direct and growing pressure brought to bear upon the rich for the benefit of the poor. A consideration of all the various classes of socialistic legislation and taxation to which we have referred, will show that we are constantly engaged more and more in the practical assertion and embodiment of the three following principles--

1. That the individual is often too weak or ignorant to protect himself in contract or bargain, and requires public protection.

2. That considerations of public interest are held to justify a growing interference with "rights of property."

3. That the State or municipality may enlarge their functions in any direction and to any extent, provided a clear public interest is subserved.

§ 7. Relation of Theoretic Socialism to Socialistic Legislation.--Now it has been convenient in speaking of this growth of State and municipal action to use the term Socialism. But we ought to be clear as to the application of this term. Although Sir William Harcourt declared, "We are all socialists to-day," the sober, practical man who is responsible for these "socialistic" measures, smiles at the saying, and regards it as a rhetorical exaggeration. He knows well enough that he and his fellow-workers are guided by no theory of the proper limits of government, and are animated by no desire to curtail the use of private property. The practical politician in this country is beckoned forward by no large, bright ideal; no abstract consideration of justice or social expediency supplies him with any motive force. The presence of close detailed circumstance, some local, concrete want to be supplied, some distinct tangible grievance to be redressed, some calculable immediate economy to be effected, such are the only conscious motives which push him forward along the path we have described. An alarming outbreak of disease registered in a high local death-rate presses the question of sanitary reform, and gives prominence to the housing of the working-classes. The bad quality of gas, and the knowledge that the local gas company, having reached the limit of their legal dividend, are squandering the surplus on high salaries and expensive offices, leads to the municipalization of the gas-works. The demand made upon the ratepayers of Bury to expend; £60,000 on sewage-works, a large proportion of which would go to increase the ground value of Lord Derby's property, leads them to realize the justice and expediency of a system of taxation of ground values which shall prevent the rich landlord from pocketing the contribution of the poor ratepayer. So too among those directly responsible for State legislation, it is the force of public opinion built out of small local concrete grievances acting in coalition with a growing sentiment in favour of securing better material conditions for the poor, that drafts these socialistic bills, and gets them registered as Acts of Parliament.

But the student of history must not be deceived into thinking that principles and abstract theories are not operative forces because they appear to be subordinated to the pressure of small local or temporal expediencies. Underneath these detailed actions, which seem in large measure the product of chance, or of the selfish or sentimental effort of some individual or party, the historian is able to trace the underworking of some large principle which furnishes the key to the real logic of events. The spirit of democracy has played a very small part in the conscious effort of the democratic workers. But the inductive study of modern history shows it as a force dominating the course of events, directing and "operating" the minor forces which worked unconsciously in the fulfilment of its purpose. So it is with this spirit of socialism. The professed socialist is a rare, perhaps an unnecessary, person, who wishes to instruct and generally succeeds in scaring humanity by bringing out into the light of conscious day the dim principle which is working at the back of the course of events. Since this conscious socialism is not an industrial force of any great influence in England, it is not here necessary to discuss the claim of the theoretic socialist to provide a solution for the problem of poverty. But it is of importance for us to recognize clearly the nature of the interpretation theoretic socialists place upon the order of events set forth in this chapter, for this interpretation throws considerable light on the industrial condition of labour.

We see that the land nationalizer claims to remove, and the land reformer in general to abate, the evil of poverty by securing for those dependent on the fluctuating value and uncertain tenure of wage-labour an equal share in those land-values, the product of nature and social activity, which are at present monopolized by a few. Now the quality of monopoly which the land nationalizer finds in land, the professed socialist finds also in all forms of capital. The more discreet and thoughtful socialist in England at least does not deny that the special material forms of capital, and the services they render, may be in part due to the former activity of their present owners, or of those from whom their present owners have legitimately acquired them; but he affirms that a large part of the value of these forms of capital, and of the interest obtained for their use, is due to a monopoly of certain opportunities and powers which are social property just as much as land is. The following statement by one of the ablest exponents of this doctrine will explain what this claim signifies--

"We claim an equal right to this 'inheritance of mankind,' which by our institutions a minority is at present enabled to monopolize, and which it does monopolize and use in order to extort thereby an unearned increment; and this inheritance is true capital. We mean thereby the principle, potentiality, embodied in the axe, the spade, the plough, the steam-engine, tools of all kinds, books or pictures, bequeathed by thinkers, writers, inventors, discoverers, and other labourers of the past, a social growth to which all individual claims have lapsed by death, but from the advantages of which the masses are virtually shut out for lack of means. The very best definition of government, even that of to-day, is that it is the agency of society which procures title to this treasure, stores it up, guards and gives access to it to every one, and of which all must make the best use, first and foremost by education."

The conscious socialist is he who, recognizing in theory the nature of this social property inherent in all forms of capital, aims consciously at getting possession or control of it for society, in order to solve the problem of poverty by making the wage-earner not only a joint-owner of the social property in land but also in capital.