Contemporary Socialism

by John Rae

The same sources of evidence prove with equal clearness the development under socialistic institutions of two other concurrent causes of decline. I have already quoted Mr. Channing's statement that the Brook Farm community showed a disposition to be content with comparatively squalid conditions of life. Mr. Nordhoff would probably not use the word squalid of anything he saw in the Shaker and Rappist communities he describes, except perhaps in certain instances of the state of the public streets; and in some points, such as the scrupulous cleanness of the interior of their houses, he would set them far above their neighbours—you could eat your dinner, he says, off their floors. Still the people he found everywhere content, if not exactly with squalid, certainly with poor and dull and rough conditions of life, much poorer, duller, and rougher than they might easily be. They enjoyed equality, security from harassing anxiety for the morrow, abundance even for their limited wants, independence from subjection to a master, but they were weak in the ordinary springs of progress. The spirit of material improvement was not much abroad among them. Give me the stationary state of society and contentment, you may exclaim; but then even this stationary state is only maintained in these sequestered communities by the constant play of peculiar religious influences which cannot be counted on everywhere, and it would soon change into a declining state in the great seething world outside if it were not effectively counter-worked by the most powerful incentives to progress. Now the same equalizing social arrangements which destroy one of the most essential of these incentives by guaranteeing men the results of industry without its exertion, enfeeble a second by predisposing them to rest content with the lower conditions of life to which they are reduced.

A third cause of decline to which the American experience shows socialistic institutions to be incident is a certain weakness in the management, produced sometimes by divided counsels, sometimes by the delay involved in getting the sanction of a Board to every little detail of business, and sometimes by a difficulty which we find also shattering similar experiments in France, that men were raised to the Committee by their gifts of persuasion rather than their gifts of administration. Well-meaning persons, with a great itch for managing things, and a great turn for bungling them, for whom there is, under the present order of society, a considerable safety-valve in philanthropy, contrive in a socialistic community to get appointed on the Council of Industry, and play sad havoc with the common good. While they preached and wasted, the really practical men who, with better power of talk, might have confounded them, could only sulk and grumble, and eventually lost heart in their work, and all interest and confidence in the concern. This had much to do, according to Mr. Meeker, an old Fourierist, with the ruin of the North American Phalanx, one of the most important of the transatlantic experiments, and it was the main cause apparently of the downfall of the community of Coxsackie—"They had many persons engaged in talking and law-making who did not work at any useful employment; the consequences were that after struggling on for between one and two years the experiment came to an end." A socialist State would probably have as many difficulties with this bustling but unsatisfactory class of persons as a socialist Phalanx, nor would the evils of divided counsels and departmental delays be a whit milder; and the extension of State management to branches of work for which it had not otherwise some sort of special natural qualification would have the same kind of ruinous operation.

In spirit and effect, therefore, as may be palpably seen from these actual experiments, the equalizing institutions of socialism stand quite apart from the very restricted use of State management and the remedial or invigorating legislation that a sound social policy prescribes. When England is accused of heading the nations in the race of State socialism, because England has nationalized the post and telegraph service, and passed a series of factory and agrarian Acts for the protection of the weaker classes of the people, the accusation is made without proper discrimination. It is not the frequency of the intervention, but its purpose and consequences that make it socialistic. If the post is better managed by the State than by private initiative, if the factory and agrarian laws merely reinstate weaker classes in the conditions essential for a normal human life, and neither seek nor produce that equalization of the differences of fortune or skill which is fatal to any high and progressive general level of comfort, then there is no State socialism in it at all. State management is not pushed beyond the limit of efficiency, nor popular rights beyond the positive claims of social justice. Let us go a little further into detail.

IV. State Socialism and State Management.

What are the conditions of efficient State administration? The State possesses several natural characteristics which give it a decided advantage as an industrial manager, some for one branch of work, some for another. It has stability, it has permanency, and it has—what is perhaps its principal industrial superiority—unrivalled power of securing unity of administration, since it is the only agency that can use force for the purpose. On the other hand, it has one great natural defect, its want of a personal stake in the produce of the business it conducts, its want of that keen check on waste and that pushing incentive to exertion which private undertakings enjoy in the eye and energy of the master. This is the great taproot from which all the usual faults of Government management spring—its routine, red-tape spirit, its sluggishness in noting changes in the market, in adapting itself to changes in the public taste, and in introducing improved methods of production. Government servants may very generally be men of a higher stamp and training than the servants of a private company, but they are proverbial, on the one hand, for a certain lofty disdain of the humble but valuable virtue of parsimony, and, on the other, for an unprogressive, unenterprising, uninventive administration of business.

Now the branches of industry which the State is fitted to carry on are of course those in which its great fault happens to have small scope for play, and in which its great merit or merits have great scope for play; those, for example, which gain largely in efficiency or economy by a centralized administration, and suffer little harm comparatively from a routine one. That is the reason Governments always manage the postal service well. In post-office work the specific industrial superiority of Government carries its maximum of advantage, and its specific industrial defect does its minimum of injury. The carrying and delivery of letters from one part of the empire to another require, for efficiency, a single co-ordinated system, and, on the other hand, those operations themselves are of so unvariable and routine a character that little harm is done by their being carried on in a routine spirit; they involve so little capital expenditure—the entire capital of the department in England is only £80,000—that the opportunity for waste and corruption is slight; and being conducted much more largely under the public eye than the affairs of other departments of State, they are consequently subject to the constant and interested criticism of the people whose wants they are meant to satisfy. The same reason explains why Government dockyards and arms factories are always managed so unsatisfactorily. There is, on the one hand, no need in them for any higher unity of administration than is wanted in any ordinary single business establishment; but, on the other, progressiveness and adaptability are of the first moment, routine and obstruction to improvement being indeed among their worst dangers. Then the risk of prodigality and corruption is high, for their capital expenditure is great, and the check of public criticism very distant and ineffectual. So exceptional a business is the post, that the telegraphs, though managed by the same department, have never been managed with the same success. They were bought at first at a ransom, they have involved an increasing loss nearly ever since, and the public have to pay practically as much for their telegrams—perhaps more—than the public of the United States pay to their telegraph companies. Even in the postal department, Government administration shows the usual official slowness in adopting much-needed and even lucrative reforms. Of this, a good example occurred only the other day. It was not until a Boys' Messenger Company was already in the field and doing the work, that the Postmaster-General was brought to recognise, as he said, "the desirability of providing a more rapid means of transmitting single letters for short distances and under special circumstances than at present exists."

It ought of course to be acknowledged that State management in England is tried under the very worst possible conditions, inasmuch as it is tied to the fortunes and exigencies of political party. No business could be expected to thrive where the supreme control is placed in the hands of a good parliamentary debater, who knows nothing about the special work of the department he undertakes; where, even at that, this inexperienced hand is changed for another inexperienced hand every three or four years; where policy shifts without continuity, to dodge the popular breeze of to-day, or to catch the popular breeze of to-morrow; and where the actual incumbent of office, is always able to evade censure by throwing the responsibility on his predecessors, who are out of office. Well may a sagacious man like Mr. Samuel Laing, with large experience of administration both in the affairs of State and of private companies, exclaim: "I often think what the result would be if the railway companies managed their affairs on the same principles as the nation applies to its naval and military expenditure. Suppose the Brighton Board were turned out every three years, and a new Board came in with new views and a new policy, and new men at the head of the locomotive, traffic, and other spending departments, how long would it be before expenses went up and dividends down?" If State management is to succeed—if it is to have fair play—it must be entirely divorced from party fortunes, while subject, of course, to the criticism of Parliament, under some system like that adopted in Victoria for the management of the railways. In such circumstances the question of the advisability of Government assuming the management of any industry, is a question of balancing the probable gains from the greater unity of the administration against the probable losses from its greater inertia.

There are some exceptional branches of industry in which Government does better than private persons, because private persons have too little interest to do the work well, or even to do it at all, and there are others in which the State's very want of personal interest is its advantage instead of its drawback. Forestry is the best example of the first sort. One generation must plant, and another cut down, so that the present owner is often unwilling to incur the expense of a speculation of which he is unlikely to live to reap the fruits; but the natural permanence of the State leads it to do more justice to this important branch of production, and experience everywhere shows that State forests are more productive than private ones. In Prussia and Belgium they are nearly twice as productive. The average annual produce of all forests in Prussia (including State forests) is 0.36 thaler per Morgen, but the produce of State forests alone is 0.66 thaler per Morgen. In Belgium the produce of all forests is 19.33 francs per hectare, and of State forests 34.42 francs.[9] The erection of lighthouses is also a public service, which falls to the State because of individual inability; it cannot be undertaken in any way to make it remunerative to private adventurers.

The best example of an industrial work for which the State's want of personal interest is its advantage is the Mint. Nobody would trust the stamp of a private assayer as he trusts the stamp of the Government, because the private assayer could never succeed in placing his personal disinterestedness so absolutely above the suspicion of fraud. The policy of the official attestation of the quality of commodities is often disputed on the ground that it discourages improvement above the pass standard, but it is never doubted that if a brand is wanted, the brand to command most confidence is the brand of the Crown. Our own Government, out of the infinity of commodities offered for sale, attests none but six—butter, herrings, plate, gun barrels, chains, and anchors—articles in which the dangers of deterioration probably exceed the chances of improvement, and in the case of some of these six there is a strong feeling abroad that the State's intervention is doing more harm than good. Scotch herrings have suffered lately in the German markets, because they were worse cured than the Norwegian, and the herring brand was blamed for the unprogressiveness of the cure. This class of interventions, therefore, is neither numerous now, nor likely to become very numerous in the future.