[9] While these pages were in the hands of the printers, a work was published by an American socialist, in which it is asserted that the socialisation of America would consist at first of this precise process—namely, the conversion of all the existing active employers and directors of labour into the salaried servants of some state department.
CHAPTER VII
PROXIMATE DIFFICULTIES. ABLE MEN AS A CORPORATION OF STATE OFFICIALS
For the moment, then, we will waive the problem of motive altogether; we will assume that a society which denied to its able men any pecuniary reward proportionate to the magnitude of its products could provide them with a motive of some kind—we need not inquire what—which would prompt them still to exert themselves as eagerly as they do now; and we will merely consider how, a multitude of such men being given, the most efficient of them could be constantly selected as the official directors of labour, and the rest, in proportion to their inefficiency, be either dismissed or excluded. In order to realise the difficulties which, in this respect, socialism would have to face, let us consider the manner in which the problem is solved now.
Under the system of private capitalism it solves itself by an automatic process. In order that any man may direct the labour of other men, he must, under that system, be the possessor or controller of so much wage-capital. Now this capital—this implement of direction—in proportion as it is employed, disappears, and is reproduced only by a subsequent sale of the products resulting from the labour in the direction of which it has been expended. Thus a man, we will say, invents a new engine for motor-cars, and devotes to the production of twenty engines of the kind all the capital which he possesses—namely, two thousand guineas. Apart from the raw material out of which the engines are to be constructed, his whole expenditure will consist in paying wages to certain labourers, on condition that they work up this metal in a manner which he prescribes to them. For the raw metal he pays, we will say, a hundred pounds, or the odd shillings of the guineas. He pays to twenty labourers a hundred pounds apiece as wages; and the result is twenty engines. If the engines are successful, and if the public will give him a hundred and fifty guineas for each of them, the man has got his entire capital back again, with a thousand guineas added to it, and can continue his direction of labour by means of wages, on the same lines, and on a much more extended scale. But if the engines, when tried, develop some inherent defect, and he consequently can sell none of them, he may still, perhaps, get back the price of the raw metal—a petty sum, insufficient for his own needs—but his whole wage-capital will be gone, and with it his power of directing any further labour in the future. In other words, under the system of private capitalism, if labour has been directed by any man in an unsuccessful way, the resulting products being such that nobody cares to buy them, or in exact proportion as this result is approached, the man's implement of direction passes out of his hands altogether; and the simple fact of his having directed labour ill deprives him of the means of directing or of misdirecting it again.
But under a system of state socialism the situation would be wholly changed. Private capitalism is, in this respect, self-acting, and acts with absolute accuracy, because wage-capital being divided into a multitude of independent reservoirs, its waste at any one point brings about its own remedy. Each reservoir is like a mill-pond which automatically begins to dry up whenever its contents are employed in actuating a useless mill; and the man who has wasted his water is able to waste no more. But the moment the divisions between the reservoirs are broken down, and the separate capitals contained in them become, as would be the case under socialism, fused together like the waters of a single lake, the director of labour who so misused any portion of this fluid stock that the products of labour, as directed by him, failed to replace the wages, would not thereby be incapacitated from continuing his misdirections further; for the wage-capital dissipated by his incompetence could, under these conditions, always be replaced, and its loss more or less concealed, by fresh supplies which had a really different origin. It was only in consequence of conditions resembling these that the London County Council was enabled to continue for so long its service of Thames steamboats, in spite of the fact that the labour thus employed failed to reproduce, by the functions which it performed for the public, more than a fraction of capital which was necessarily consumed in its maintenance. Had labour been thus misdirected by any private capitalist, his misdirection of it would have soon been checked by his loss of the means of continuing it; but the County Council, with the purse of the community at its back, was able, by taxing the industrial successes of others, to refinance and prolong its own industrial failure.
Socialists wholly overlook the importance of these considerations. Many of them, for example, in the case of the London County Council's steamboats, defended that enterprise in spite of its financial failure, on the ground that the steamboats were a convenience to certain travellers at all events, who in all probability were persons of modest means, while the loss would be made good out of the pockets of the ratepayers who were presumably rich. But even if this argument were plausible as applied to a state of society in which the incomes of some men were greater than those of others, it would be absolutely inapplicable to conditions such as those desired by socialists, under which the incomes of all would be fractions, approximately equal, of a common stock to the production of which all contributed. For it must surely be apparent to even the meanest intelligence that whatever diminished the aggregate amount to be divided would diminish the fraction of it which falls to the share of each; and it ought to be equally apparent, though to many people it is not, that the labour of any labourer which is directed in such a way that the men consume more articles of utility than they produce, or fail to produce as many as they would do if directed better, has this precise effect of diminishing the divisible total, by making it either less than it has been or less than it would be otherwise.[10]
Thus, in cases such as that of the London County Council's steamboats, the efficiency of labour is so lessened by incompetent direction that the labourers employed can only perform for society one-half of the services which society must perform for them. For every hour which they spend in conveying ten men on the river, twenty men must work to provide them with food and clothing. So long as fortunes are unequal, and depend on individual effort and enterprise, such losses may be localised and obscured in a hundred different ways; but the moment all fortunes, as they would be under the régime of socialism, were reduced to specific fractions of the aggregate product of the community, any decline in the efficiency of the labour of any single group would result in a diminution of the income of every member of all the others. Wherever ten men were employed to do what might have been done by nine, the contribution to the general stock would be less by ten per cent. than it might have been. If ten men were employed in making chairs, which might have been made by nine had their labour been better directed, the community would lose the cushions which in that case would have been made by the tenth. And what holds good of labour in respect of its productive efficiency holds good of it also in respect of the character of the goods produced. If ten men were employed in producing forty loaves when all that could be eaten was twenty, not only would the remaining twenty be wasted, but the community would lose the butter which might have been made instead of them. The importance, therefore, to the community as a whole of having every branch of its labour directed by those men, and by those men only, whose ability would raise it to the highest pitch of efficiency, and cause it to produce only such goods and such quantities of them as would satisfy from moment to moment the needs and tastes of the population, would, under a régime of socialism, be even more general and immediate than it is at the present day; and yet at the same time, for reasons to which we will now return, the difficulty of securing the requisite ability would be increased.
It is impossible to illustrate in detail the situation which would thus arise; for the state, as sole capitalist and sole director of labour, is an institution which imaginably might take various forms; and socialists, in this case exhibiting a commendable prudence, have refrained from committing themselves to any detailed programme. The socialistic state, however, having to perform a double function—namely, that of political governor and universal director of industry—would necessarily be divided into two distinct bodies. One of these, consisting of statesmen and legislators, would, we may assume, be elected by the votes of the people. But the other, consisting of industrial experts—the inventors, the chemists, the electricians, the naval engineers, the organisers of labour—might conceivably be in the first or the second of the two following positions: They might either be left free, as they are under the existing system, to do severally the best they can, according to their own lights, in estimating what goods or services the population wants, and in satisfying these wants with such increasing economy that new goods and services might be continually added to the old. They might be left free to promote or dismiss subordinates, to fill up vacancies, and take new men into partnership, very much as the heads of private firms do now. Or else they might be liable, in greater or less degree, to removal or supersession, and interference with their technical operations, on the part of the political body, whose members, while representing the general ideas of the community, would presumably not be experts in the direction of its particular industries.