Fabian Essays in Socialism

by Unknown

And now, how is the raw material of Socialism—otherwise the Proletarian man—to be brought to the Democratic State machinery? Here again the path is easily found. Politicians who have no suspicion that they are Socialists, are advocating further instalments of Socialism with a recklessness of indirect results which scandalizes the conscious Social Democrat. The phenomenon of economic rent has assumed prodigious proportions in our great cities. The injustice of its private appropriation is glaring, flagrant, almost ridiculous. In the long suburban roads about London, where rows of exactly similar houses stretch for miles countrywards, the rent changes at every few thousand yards by exactly the amount saved or incurred annually in travelling to and from the householder’s place of business. The seeker after lodgings, hesitating between Bloomsbury and Tottenham, finds every advantage of situation skimmed off by the landlord with scientific precision. As lease after lease falls in, houses, shops, goodwills of businesses which are the fruits of the labor of lifetimes, fall into the maw of the ground landlord. Confiscation of capital, spoliation of households, annihilation of incentive, everything that the most ignorant and credulous fundholder ever charged against the Socialist, rages openly in London, which begins to ask itself whether it exists and toils only for the typical duke and his celebrated jockey and his famous racehorse. Lord Hobhouse and his unimpeachably respectable committee for the taxation of ground values are already in the field claiming the value of the site of London for London collectively; and their agitation receives additional momentum from every lease that falls in. Their case is unassailable; and the evil they attack is one that presses on the ratepaying and leaseholding classes as well as upon humbler sufferers. This economic pressure is reinforced formidably by political opinion in the workmen’s associations. Here the moderate members are content to demand a progressive Income Tax, which is virtually Lord Hobhouse’s proposal; and the extremists are all for Land Nationalisation, which is again Lord Hobhouse’s principle. The cry for such taxation cannot permanently be resisted. And it is very worthy of remark that there is a new note in the cry. Formerly taxes were proposed with a specific object—as to pay for a war, for education, or the like. Now the proposal is to tax the landlords in order to get some of our money back from them—take it from them first and find a use for it afterwards. Ever since Mr. Henry George’s book reached the English Radicals, there has been a growing disposition to impose a tax of twenty shillings in the pound on obviously unearned incomes; that is, to dump four hundred and fifty millions[84] a year down on the Exchequer counter; and then retire with three cheers for the restoration of the land to the people.

The results of such a proceeding, if it actually came off, would considerably take its advocates aback. The streets would presently be filled with starving workers of all grades, domestic servants, coach-builders, decorators, jewellers, lace-makers, fashionable professional men, and numberless others whose livelihood is at present gained by ministering to the wants of these and of the proprietary class. “This,” they would cry, “is what your theories have brought us to! Back with the good old times, when we received our wages, which were at least better than nothing.” Evidently the Chancellor of the Exchequer would have three courses open to him. (1) He would give the money back again to the landlords and capitalists with an apology. (2) He could attempt to start State industries with it for the employment of the people. (3) Or he could simply distribute it among the unemployed. The last is not to be thought of: anything is better than panem et circenses. The second (starting State industries) would be far too vast an undertaking to get on foot soon enough to meet the urgent difficulty. The first (the return with an apology) would be a reductio ad absurdum of the whole affair—a confession that the private proprietor, for all his idleness and his voracity, is indeed performing an indispensable economic function—the function of capitalising, however wastefully and viciously, the wealth which surpasses his necessarily limited power of immediate personal consumption. And here we have checkmate to mere Henry Georgism, or State appropriation of rent without Socialism. It is easy to shew that the State is entitled to the whole income of the Duke of Westminster, and to argue therefrom that he should straightway be taxed twenty shillings in the pound. But in practical earnest the State has no right to take five farthings of capital from the Duke or anybody else until it is ready to invest them in productive enterprise. The consequences of withdrawing capital from private hands merely to lock it up unproductively in the treasury would be so swift and ruinous, that no statesman, however fortified with the destructive resources of abstract economics, could persist in it. It will be found in the future as in the past that governments will raise money only because they want it for specific purposes, and not on a priori demonstrations that they have a right to it. But it must be added that when they do want it for a specific purpose, then, also in the future as in the past, they will raise it without the slightest regard to a priori demonstrations that they have no right to it.

Here then we have got to a dead lock. In spite of democrats and land nationalisers, rent cannot be touched unless some pressure from quite another quarter forces productive enterprise on the State. Such pressure is already forthcoming. The quick starvation of the unemployed, the slow starvation of the employed who have no relatively scarce special skill, the unbearable anxiety or dangerous recklessness of those who are employed to-day and unemployed to-morrow, the rise in urban rents, the screwing down of wages by pauper immigration and home multiplication, the hand-in-hand advance of education and discontent, are all working up to explosion point. It is useless to prove by statistics that most of the people are better off than before, true as that probably is, thanks to instalments of Social Democracy. Yet even that is questionable; for it is idle to claim authority for statistics of things that have never been recorded. Chaos has no statistics: it has only statisticians; and the ablest of them prefaces his remarks on the increased consumption of rice by the admission that “no one can contemplate the present condition of the masses without desiring something like a revolution for the better.”[85] The masses themselves are being converted so rapidly to that view of the situation, that we have Pan-Anglican Synods, bewildered by a revival of Christianity, pleading that though Socialism is eminently Christian, yet “the Church must act safely as well as sublimely.”[86] During the agitation made by the unemployed last winter (1887-8), the Chief Commissioner of Police in London started at his own shadow, and mistook Mr. John Burns for the French Revolution, to the great delight of that genial and courageous champion of his class.[87] The existence of the pressure is further shewn by the number and variety of safety valves proposed to relieve it—monetization of silver, import duties, “leaseholds enfranchisement,” extension of joint-stock capitalism masquerading as co-operation,[88] and other irrelevancies. My own sudden promotion from the street corner to this platform is in its way a sign of the times. But whilst we are pointing the moral and adorning the tale according to our various opinions, an actual struggle is beginning between the unemployed who demand work and the local authorities appointed to deal with the poor. In the winter, the unemployed collect round red flags, and listen to speeches for want of anything else to do. They welcome Socialism, insurrectionism, currency craze—anything that passes the time and seems to express the fact that they are hungry. The local authorities, equally innocent of studied economic views, deny that there is any misery; send leaders of deputations to the Local Government Board, who promptly send them back to the guardians; try bullying; try stoneyards; try bludgeoning; and finally sit down helplessly and wish it were summer again or the unemployed at the bottom of the sea. Meanwhile the charity fund, which is much less elastic than the wages fund, overflows at the Mansion House only to run dry at the permanent institutions. So unstable a state of things cannot last. The bludgeoning, and the shocking clamor for bloodshed from the anti-popular newspapers, will create a revulsion among the humane section of the middle class. The section which is blinded by class prejudice to all sense of social responsibility, dreads personal violence from the working class with a superstitious terror that defies enlightenment or control.[89] Municipal employment must be offered at last. This cannot be done in one place alone: the rush from other parts of the country would swamp an isolated experiment. Wherever the pressure is, the relief must be given on the spot. And since public decency, as well as consideration for its higher officials, will prevent the County Council from instituting a working day of sixteen hours at a wage of a penny an hour or less, it will soon have on its hands not only the unemployed, but also the white slaves of the sweater, who will escape from their dens and appeal to the municipality for work the moment they become aware that municipal employment is better than private sweating. Nay, the sweater himself, a mere slave driver paid “by the piece,” will in many instances be as anxious as his victims to escape from his hideous trade. But the municipal organisation of the industry of these people will require capital. Where is the municipality to get it? Raising the rates is out of the question: the ordinary tradesmen and householders are already rated and rented to the limit of endurance: further burdens would almost bring them into the street with a red flag. Dreadful dilemma! in which the County Council, between the devil and the deep sea, will hear Lord Hobhouse singing a song of deliverance, telling a golden tale of ground values to be municipalised by taxation. The land nationalisers will swell the chorus: the Radical progressive income taxers singing together, and the ratepaying tenants shouting for joy. The capital difficulty thus solved—for we need not seriously anticipate that the landlords will actually fight, as our President[90] once threatened—the question of acquiring land will arise. The nationalisers will declare for its annexation by the municipality without compensation; but that will be rejected as spoliation, worthy only of revolutionary Socialists. The no-compensation cry is indeed a piece of unpractical catastrophic insurrectionism; for whilst compensation would be unnecessary and absurd if every proprietor were expropriated simultaneously, and the proprietary system at once replaced by full blown Socialism, yet when it is necessary to proceed by degrees, the denial of compensation would have the effect of singling out individual proprietors for expropriation whilst the others remained unmolested, and depriving them of their private means long before there was suitable municipal employment ready for them. The land, as it is required, will therefore be honestly purchased; and the purchase money, or the interest thereon, will be procured, like the capital, by taxing rent. Of course this will be at bottom an act of expropriation just as much as the collection of Income Tax to-day is an act of expropriation. As such, it will be denounced by the landlords as merely a committing of the newest sin the oldest kind of way. In effect, they will be compelled at each purchase to buy out one of their body and present his land to the municipality, thereby distributing the loss fairly over their whole class, instead of placing it on one man who is no more responsible than the rest. But they will be compelled to do this in a manner that will satisfy the moral sense of the ordinary citizen as effectively as that of the skilled economist.

We now foresee our municipality equipped with land and capital for industrial purposes. At first they will naturally extend the industries they already carry on, road making, gas works, tramways, building, and the like. It is probable that they will for the most part regard their action as a mere device to meet a passing emergency. The Manchester School will urge its Protectionist theories as to the exemption of private enterprise from the competition of public enterprise, in one supreme effort to practise for the last time on popular ignorance of the science which it has consistently striven to debase and stultify. For a while the proprietary party will succeed in hampering and restricting municipal enterprise;[91] in attaching the stigma of pauperism to its service; in keeping the lot of its laborers as nearly as possible down to private competition level in point of hard work and low wages. But its power will be broken by the disappearance of that general necessity for keeping down the rates which now hardens local authority to humane appeals. The luxury of being generous at someone else’s expense will be irresistible. The ground landlord will be the municipal milch cow; and the ordinary ratepayers will feel the advantage of sleeping in peace, relieved at once from the fear of increased burdens and of having their windows broken and their premises looted by hungry mobs, nuclei of all the socialism and scoundrelism of the city. They will have just as much remorse in making the landlord pay as the landlord has had in making them pay—just as much and no more. And as the municipality becomes more democratic, it will find landlordism losing power, not only relatively to democracy, but absolutely.

The ordinary ratepayer, however, will not remain unaffected for long. At the very outset of the new extension of municipal industries, the question of wage will arise. A minimum wage must be fixed; and though at first, to avoid an overwhelming rush of applicants for employment, it must be made too small to tempt any decently employed laborer to forsake his place and run to the municipality, still, it will not be the frankly infernal competition wage. It will be, like mediæval wages, fixed with at least some reference to public opinion as to a becoming standard of comfort. Over and above this, the municipality will have to pay to its organisers, managers, and incidentally necessary skilled workers the full market price of their ability, minus only what the superior prestige and permanence of public employment may induce them to accept. But whilst these high salaries will make no more disturbance in the labor market than the establishment of a new joint-stock company would, the minimum wage for laborers will affect that market perceptibly. The worst sort of sweaters will find that if they are to keep their “hands,” they must treat them at least as well as the municipality. The consequent advance in wage will swallow up the sweater’s narrow margin of profit. Hence the sweater must raise the price per piece against the shops and wholesale houses for which he sweats. This again will diminish the profits of the wholesale dealers and shopkeepers, who will not be able to recover this loss by raising the price of their wares against the public, since, had any such step been possible, they would have taken it before. But fortunately for them, the market value of their ability as men of business is fixed by the same laws that govern the prices of commodities. Just as the sweater is worth his profit, so they are worth their profit; and just as the sweater will be able to exact from them his old remuneration in spite of the advance in wages, so they will be able to exact their old remuneration in spite of the advance in sweaters’ terms. But from whom, it will be asked, if not from the public by raising the price of the wares? Evidently from the landlord upon whose land they are organising production. In other words, they will demand and obtain a reduction of rent. Thus the organiser of industry, the employer pure and simple, the entrepreneur, as he is often called in economic treatises nowadays, will not suffer. In the division of the product his share will remain constant; whilst the industrious wage-worker’s share will be increased, and the idle proprietor’s share diminished. This will not adjust itself without friction and clamor; but such friction is constantly going on under the present system in the opposite direction, i.e., by the raising of the proprietor’s share at the expense of the worker’s.

The contraction of landlords’ incomes will necessarily diminish the revenue from taxation on such incomes. Let us suppose that the municipality, to maintain its revenue, puts on an additional penny in the pound. The effect will be to burn the landlord’s candle at both ends—obviously not a process that can be continued to infinity. But long before taxation fails as a source of municipal capital, the municipalities will have begun to save capital out of the product of their own industries. In the market the competition of those industries with the private concerns will be irresistible. Unsaddled with a single idle person, and having, therefore, nothing to provide for after paying their employees except extension of capital, they will be able to offer wages that no business burdened with the unproductive consumption of an idle landlord or shareholder could afford, unless it yielded a heavy rent in consequence of some marked advantage of site. But even rents, when they are town rents, are at the mercy of a municipality in the long run. The masters of the streets and the traffic can nurse one site and neglect another. The rent of a shop depends on the number of persons passing its windows per hour. A skilfully timed series of experiments in paving, a new bridge, a tramway service, a barracks, or a small-pox hospital are only a few of the circumstances of which city rents are the creatures. The power of the municipality to control these circumstances is as obvious as the impotence of competing private individuals. Again, competing private individuals are compelled to sell their produce at a price equivalent to the full cost of production at the margin of cultivation.[92] The municipality could compete against them by reducing prices to the average cost of production over the whole area of municipal cultivation. The more favorably situated private concerns could only meet this by ceasing to pay rent; the less favorably situated would succumb without remedy. It would be either stalemate or checkmate. Private property would either become barren, or it would yield to the actual cultivator of average ability no better an income than could be obtained more securely in municipal employment. To the mere proprietor it would yield nothing. Eventually the land and industry of the whole town would pass by the spontaneous action of economic forces into the hands of the municipality; and, so far, the problem of socialising industry would be solved.

Private property, by cheapening the laborer to the utmost in order to get the greater surplus out of him, lowers the margin of human cultivation, and so raises the “rent of ability.” The most important form of that rent is the profit of industrial management. The gains of a great portrait painter or fashionable physician are much less significant, since these depend entirely on the existence of a very rich class of patrons subject to acute vanity and hypochondriasis. But the industrial organiser is independent of patrons: instead of merely attracting a larger share of the product of industry to himself, he increases the product by his management. The market price of such ability depends upon the relation of the supply to the demand: the more there is of it the cheaper it is: the less, the dearer. Any cause that increases the supply lowers the price. Now it is evident that since a manager must be a man of education and address, it is useless to look ordinarily to the laboring class for a supply of managerial skill. Not one laborer in a million succeeds in raising himself on the shoulders of his fellows by extraordinary gifts, or extraordinary luck, or both. The managers must be drawn from the classes which enjoy education and social culture; and their price, rapidly as it is falling with the spread of education and the consequent growth of the “intellectual proletariat,” is still high. It is true that a very able and highly-trained manager can now be obtained for about £800 a year, provided his post does not compel him to spend two-thirds of his income on what is called “keeping up his position,” instead of on his own gratification.[93] Still, when it is considered that laborers receive less than £50 a year, and that the demand for laborers is necessarily vast in proportion to the demand for able managers, nay, that there is an inverse ratio between them, since the manager’s talent is valuable in proportion to quantity of labor he can organise, it will be admitted that £800 a year represents an immense rent of ability. But if the education and culture which are a practically indispensable part of the equipment of competitors for such posts were enjoyed by millions instead of thousands, that rent would fall considerably. Now the tendency of private property is to keep the masses mere beasts of burden. The tendency of Social Democracy is to educate them, to make men of them. Social Democracy would not long be saddled with the rents of ability which have during the last century made our born captains of industry our masters and tyrants instead of our servants and leaders. It is even conceivable that rent of managerial ability might in course of time become negative,[94] astonishing as that may seem to the many persons who are by this time so hopelessly confused amid existing anomalies, that the proposition that “whosoever of you will be the chiefest, shall be servant of all,” strikes them rather as a Utopian paradox than as the most obvious and inevitable of social arrangements. The fall in the rent of ability will, however, benefit not only the municipality, but also its remaining private competitors. Nevertheless, as the prestige of the municipality grows, and as men see more and more clearly what the future is to it, able organisers will take lower salaries for municipal than for private employment; whilst those who can beat even the municipality at organising, or who, as professional men, can deal personally with the public without the intervention of industrial organisation, will pay the rent of their places of business either directly to the municipality, or to the private landlord whose income the municipality will absorb by taxation. Finally, when rents of ability had reached their irreducible natural level, they could be dealt with by a progressive Income Tax in the very improbable case of their proving a serious social inconvenience.

It is not necessary to go further into the economic detail of the process of the extinction of private property. Much of that process as sketched here may be anticipated by sections of the proprietary class successively capitulating, as the net closes about their special interests, on such terms as they may be able to stand out for before their power is entirely broken.[95]

We may also safely neglect for the moment the question of the development of the House of Commons into the central government which will be the organ for federating the municipalities, and nationalising inter-municipal rents by an adjustment of the municipal contributions to imperial taxation: in short, for discharging national as distinct from local business. One can see that the Local Government Board of the future will be a tremendous affair; that foreign States will be deeply affected by the reaction of English progress; that international trade, always the really dominant factor in foreign policy, will have to be reconsidered from a new point of view when profit comes to be calculated in terms of net social welfare instead of individual pecuniary gain; that our present system of imperial aggression, in which, under pretext of exploration and colonisation, the flag follows the filibuster and trade follows the flag, with the missionary bringing up the rear, must collapse when the control of our military forces passes from the capitalist class to the people; that the disappearance of a variety of classes with a variety of what are now ridiculously called “public opinions” will be accompanied by the welding of society into one class with a public opinion of inconceivable weight; that this public opinion will make it for the first time possible effectively to control the population; that the economic independence of women, and the supplanting of the head of the household by the individual as the recognized unit of the State, will materially alter the status of children and the utility of the institution of the family; and that the inevitable reconstitution of the State Church on a democratic basis may, for example, open up the possibility of the election of an avowed Freethinker like Mr. John Morley or Mr. Bradlaugh to the deanery of Westminster. All these things are mentioned only for the sake of a glimpse of the fertile fields of thought and action which await us when the settlement of our bread and butter question leaves us free to use and develop our higher faculties.

This, then, is the humdrum programme of the practical Social Democrat to-day. There is not one new item in it. All are applications of principles already admitted, and extensions of practices already in full activity. All have on them that stamp of the vestry which is so congenial to the British mind. None of them compel the use of the words Socialism or Revolution: at no point do they involve guillotining, declaring the Rights of Man, swearing on the altar of the country, or anything else that is supposed to be essentially un-English. And they are all sure to come—landmarks on our course already visible to farsighted politicians even of the party which dreads them.