Contemporary Socialism

by John Rae

It will be objected that this is to reduce socialism to a mere matter of more or less. The English economists, it will be said, practised a little socialism, because they allowed the use of State means to elevate the condition of the working classes, or to provide for the wants of the general community; and the Continental Social Democrats only practise a little more socialism when they cry for a working-class State or for the progressive nationalization of all industries. But in practical life the measure is everything. So many grains of opium will cure; so many more will kill. The important thing for adjusting claims must always be to get the right measure, and the objection to socialistic schemes is precisely this, that they take up a theory of distributive justice which is an absolutely wrong measure, or else some vague theory of disinheritance which contains no measure at all. They would nationalize industries without paying any respect to their suitability for Government management, simply because they want to see all industries nationalized; and they would grant all manner of compensating advantages to the working class as instalments of some vague claim, either of economic right from which they are alleged to have been ousted by the system of capitalism, or of aboriginal natural right from which they are said to have been disinherited by the general arrangements of society itself. What distinguishes their position and makes it socialism is therefore precisely this absence of measure or of the right measure, and one great advantage of the English doctrine of social politics which I have expounded, is that it is able to supply this indispensable criterion. That doctrine would limit the industrial undertakings of the State to such as it possessed natural advantages for conducting successfully, and the State's part in social reform to securing for the people the essential conditions of all humane living, of all normal and progressive manhood. It would interfere, indeed, as little as possible with liberty of speculation, because it recognises that the best way of promoting social progress and prosperity is to multiply the opportunities, and with the opportunities the incentives, of talent and capital; but, while giving the strong their head, in the belief that they will carry on the world so far after them, it would insist on the public authority taking sharp heed that no large section of the common people be suffered to fall permanently behind in the race, to lose the very conditions of further progress, and to lapse into ways of living which the opinion of the time thinks unworthy of our common humanity. Now State socialism disregards these limits, straying generally far beyond them, and it may not improperly be defined as the system which requires the State to do work it is unfit to do in order to invest the working classes with privileges they have no right to get.

The term State socialism originated in Germany a few years ago to express the antithesis not of free, voluntary, or Christian socialism, as seems frequently to be imagined here, but of revolutionary socialism, which is always considered to be socialism proper, because it is the only form of the system that is of any serious moment at the present day. State socialism has the same general aims as socialism proper, only it would carry out its plans gradually by means of the existing State, instead of first overturning the existing State by revolution and establishing in its place a new political organization for the purpose, the Social Democratic Republic. There are socialists who fancy they have but at any moment to choose a government and issue a decree, as Napoleon once did—"Let misery be abolished this day fortnight"—and misery would be abolished that day fortnight. But the State socialists are unable to share this simple faith. They are State socialists not because they have more confidence in the State than other socialists, but because they have less. They consider it utterly futile to expect a democratic community ever to be able to create a political executive that should be powerful enough to carry through the entire socialistic programme. Like the Social Conservatives of all countries, like our own Young England party, for example, or the Tory Democrats of the present generation, they combine a warm zeal for popular amelioration with a profound distrust of popular government; but when compared with other socialists, they take a very sober view of the capacity of government of any kind; and although they believe implicitly in the "Social Monarchy of the Hohenzollerns," they doubt whether the strongest monarchy the world has ever seen would be strong enough to effect a socialistic reconstruction of the industrial system without retaining the existence for many centuries to come of the ancient institutions of private property and inheritance.

All that is at least very frankly acknowledged by Rodbertus, the remarkable but overrated thinker whom the State socialists of Germany have chosen for their father. Rodbertus was always regarded as a great oracle by Lassalle, the originator of the present socialist agitation, and his authority is constantly quoted by the most eminent luminary among the State socialists of those latter days, Professor Adolph Wagner, who says it was Rodbertus that first shed on him "the Damascus light that tore from his eyes the scales of economic individualism." Rodbertus had lived for a quarter of a century in a political sulk against the Hohenzollerns. Though he had served as a Minister of State, he threw up his political career rather than accept a constitution as a mere royal favour; he refused to work under it or recognise it by so much as a vote at the polls. But when the power of the Hohenzollerns became established by the victories of Königgrätz and Sedan, and when they embarked on their new policy of State socialism, Rodbertus developed into one of their most ardent worshippers. Their new social policy, it is true, was avowedly adopted as a corrective of socialism, as a kind of inoculation with a milder type of the disease in order to procure immunity from a more malignant; but Bismarck contended at the same time that it was nothing but the old traditional policy of the House of Prussia, who had long before placed the right of existence and the right of labour in the statute-book of the country, and whose most illustrious member, Frederick the Great, used to be fond of calling himself "the beggars' king." Under these circumstances Rodbertus came to place the whole hope of the future in the "Social Monarchy of the Hohenzollerns," and ventured to prophesy that a socialist emperor would yet be born to that House who would rule possibly with a rod of iron, but would always rule for the greatest good of the labouring class. Still, even under a dynasty of socialist emperors Rodbertus gave five hundred years for the completion of the economic revolution he contemplated, because he acknowledged it would take all that time for society to acquire the moral principle and habitual firmness of will which would alone enable it to dispense with the institutions of private property and inheritance without suffering serious injury.

In theory Rodbertus was a believer in the modern social democratic doctrine of the labourer's right to the full product of his labour—the doctrine which gives itself out as "scientific socialism," because it is got by combining a misunderstanding of Ricardo's theory of wages with a misunderstanding of the same economist's theory of value—and which would abolish rent, interest, profit, and all forms of "labourless income," and give the entire gross product to the labourer, because by that union of scientific blunders it is made to appear that the labourer has produced the whole product himself. Rodbertus, in fact, claimed to be the author of that doctrine, and fought for the priority with Marx, though in reality the English socialists had drawn the same conclusions from the same blunders long before either of them; but author or no author of it, his sole reason for touching the work of social reform at all was to get that particular claim of right recognised. Yet for five hundred years Rodbertus will not wrong the labourers by granting them their full rights. He admits that without the assistance of the private capitalist during that interval labourers would not produce so much work, and therefore could not earn so much wages as they do now; and consequently, in spite of his theories, he declines to suppress rent and interest in the meantime, and practically tells the labourers they must wait for the full product of labour till the time comes when they can produce the full product themselves. That is virtually to confess that while the claim may be just then, it is unjust now; and although Rodbertus never makes that acknowledgment, he is content to leave the claim in abeyance and to put forward in its place, as a provisional ideal of just distribution more conformable to the present situation of things, the claim of the labourer to a progressive share, step for step with the capitalist, in the results of the increasing productivity given to labour by inventions and machinery. He thought that at present, so far from getting the whole product of labour, the labourer was getting a less and less share of its products every day, and though this can be easily shown to be a delusive fear, Rodbertus's State socialism was devised to counteract it.

For this purpose the first requisite was the systematic management of all industries by the State. The final goal was to be State property as well as State management, but for the greater part of five centuries the system would be private property and State management. Sir Rowland Hill and the English railway nationalizers proposed that the State should own the lines, but that the companies should continue to work them; Rodbertus's idea, on the contrary, is that the State should work, but not own. But then the State should manage everything and everywhere. Co-operation and joint-stock management were as objectionable to him as individual management. He thought it a mere delusion to suppose, as some socialists did, that the growth of joint-stock companies and co-operative societies is a step in historical evolution towards a socialist régime. It was just the opposite; it was individual property in a worse form, and he always told his friend Lassalle that it was a hopeless dream to expect to bring in the reign of justice and brotherhood by his plan of founding productive associations on State credit, because productive societies really led the other way, and created batches of joint-stock property, which he said would make itself a thousand times more bitterly hated than the individual property of to-day. One association would compete with another, and the group on a rich mine would use their advantage over the group on a poor one as mercilessly as private capitalists do now. Nothing would answer the end but State property, and nothing would conduce to State property but State management.

The object of all this intervention, as we have said, is to realize a certain ideal or standard of fair wages—the standard according to which a fair wage is one that grows step by step with the productive capacity of the country; and the plan Rodbertus proposes to realize it by is practically a scheme of compulsory profit-sharing. He would convert all land and capital into an irredeemable national stock, of which the present owners would be constituted the first or original holders, which they might sell or transfer at pleasure but not call up, and on which they should receive, not a fixed rent or rate of interest, but an annual dividend varying with the produce or profits of the year. The produce of the year was to be divided into three parts: one for the landowners, to be shared according to the amount of stock they respectively held; a second for the capitalists, to be shared in the same way; and the third for the labourers, to be shared by them according to the quantity of work they did, measured by the time occupied and the relative strain of their several trades. This division was necessarily very arbitrary in its nature; there was no principle whatever to decide how much should go to the landowners, and how much to capitalists, and how much to labourers; and although there was a rule for settling the price of labour in one trade as compared with the price of labour in another, it is a rule that would afford very little practical guidance if one came to apply it in actual life. At all events, Rodbertus himself toiled for years at a working plan for his scheme of wages, but though he always gave out that he had succeeded in preparing one, he steadily refused to disclose it even to trusted admirers like Lassalle and Rudolph Meyer, on the singular pretext that the world knew too little political economy as yet to receive it, and at his death nothing of the sort seems to have been discovered among his papers. Is it doing him any injustice to infer that he had never been able to arrive at a plan that satisfied his own mind as to its being neither arbitrary nor impracticable?

Now this is a good specimen of State socialism, because it is so complete and brings out so decisively the broad characteristics of the system. In the first place, it desires a progressive and indiscriminate nationalization of all industries, not because it thinks they will be more efficiently or more economically managed in consequence of the change, but merely as a preliminary step towards a particular scheme of social reform; in the next place, that scheme of social reform is an ideal of equitable distribution which is demonstrably false, and is admittedly incapable of immediate realization; in the third place, a provisional policy is adopted in the meanwhile by pitching arbitrarily on a certain measure of privileges and advantages that are to be guaranteed to the labouring classes by law as partial instalments of rights deferred or compensations for rights alleged to be taken away.

It may be that not many State socialists are so thoroughgoing as Rodbertus. Few of them possibly accept his theory of the labourer's right—which is virtually that the labourer has a right to everything, all existing wealth being considered merely an accumulation of unpaid labour—and few of them may throw so heavy a burden on the State as the whole production and the whole distribution of the country. But they all start from some theory of right that is just as false, and they all impose work on the State which the State cannot creditably perform. They all think of the mass of mankind as being disinherited in one way or another by the present social system, perhaps through the permission of private property at all, perhaps through permission of its inequalities. M. de Laveleye, indeed, goes a step further back still. In an article he has contributed on this subject to the Contemporary Review, he uses as his motto the saying of M. Renan that Nature is injustice itself, and he would have society to correct not merely the inequalities which society may have itself had a share in establishing, but also the inequalities of talent or opportunity which are Nature's own work. Accordingly, M. de Laveleye describes himself as a State socialist, because he thinks "the State ought to make use of its legitimate powers for the establishment of the equality of conditions among men in proportion to their personal merit." Equality of conditions and personal merit are inconsistent standards, but if they were harmonious, it would be beyond the power of the State to realize them for want of an effective calculus of either.

Few State socialists, however, profess the purpose of correcting the differences of native endowment; for the most part, when they found their policy on any theoretic idea at all, they found it on some idea of historical reparation. In this country, socialist notions always crop up out of the land. German socialists direct their attack mainly on capital, but English socialism fastens very naturally on property in land, which in England is concentrated into unnaturally few hands: and a claim is very commonly advanced for more or less indefinite compensation to the labouring class on account of their alleged disinheritance, through the institution of private property, from their aboriginal or natural rights to the use of the earth, the common possession of the race. That is the ground, for example, which Mr. Spencer takes for advocating land nationalization, and Mr. Chamberlain for his various claims for "ransom." The last-comer is held to have as good a right to the free use of the earth as the first occupant; and if society deprives him of that right for purposes of its own, he is maintained to be entitled to receive some equivalent, as if society does not already give the new-comer vastly more than it took away. His chances of obtaining a decent living in the world, instead of being reduced, have been immensely multiplied through the social system that has resulted from the private appropriation of land. The primitive economic rights whose loss socialists make the subject of so much lamentation are generally considered to be these four: (1) the right to hunt; (2) the right to fish; (3) the right to gather nuts and berries; and (4) the right to feed a cow or sheep on the waste land. Fourier added a fifth—which was certainly a right much utilized in early times—the right of theft from people over the border of the territory of one's own tribe. Let that right be thrown in with the rest; then the claim with which every English child is alleged to be born, and for which compensation is asked, is the claim to a thirty-millionth part of the value of these five aboriginal uses of the soil of England; and what is that worth? Why, if the "prairie value" of the soil is estimated at the high figure of a shilling the acre per annum, it would only give every inhabitant something under half a crown, and when compensation is demanded for the loss of this ridiculous pittance, one calls to mind what immensely greater compensations the modern child is born to. Civilization is itself a social property, a common fund, a people's heritage, accumulating from one generation to another, and opening to the new-comer economic opportunities and careers incomparably better and more numerous than the ancient liberties of fishing in the stream or nutting in the forest. The things actually demanded for the poor in liquidation of this alleged claim may often be admissible on other grounds altogether, but to ask them in the name of compensation for the loss of those primitive economic rights—even though it was done by Spencer or Cobden—is certainly State socialism.

Mr. Chamberlain's famous "ransom" speeches are an example of that. There was nothing socialist about the substance of his proposals. He expressly disclaimed all sympathy with the idea of equality of conditions; he hesitated about applying the graduated taxation principle to anything but legacies; he explicitly said he would do nothing to discourage the cumulative principle in the rich, or the habit of industry in the poor; he asked mainly for free schools, free libraries, free parks, and other things of a like character; but then he asked for them as a penalty for wrong-doing, instead of an obligation of ability—as a ransom to be paid by the rich, or by society generally, for having ousted the poor out of their aboriginal rights. Mr. Chamberlain merely pled for useful social reforms in a socialistic spirit.