Socialism as it is

by William English Walling

There is no doubt that the principle of the new taxes and the new expenditure these statesmen are introducing is radical, and that it marks a great stride towards a collectivist form of capitalism. Let us assume that development continues along the lines of their present policies. In a very few years the increased expenditure on social reform will be greater than the increased expenditure on army and navy, and the increase of direct and graduated taxes that fall on the upper classes will be greater than that of the indirect taxes that fall on the masses. We will assume even that military expenditure and indirect taxes on articles the working people consume will begin some day to decrease, while graduated taxes directed against the very wealthy and social reform expenditures rise until they quite overshadow them. There is every reason to believe that the social reformers of the British and other governments hope for such an outcome and expect it. This would be in no way inconsistent with their policy of subordinating everything, to use one of their expressions, to "that trade and commerce which constitutes the source of our wealth."

For the collectivist expenditures, intended to increase the national product through governmental enterprises for the promotion of industry, and for raising the industrial efficiency of the workers, would be introduced gradually, and would soon be accompanied by results which would show that they paid financially. And finally, even if railways and monopolies were nationalized and their profits as well as all the future rise in land value went to the State to be used for these purposes, as Mr. Churchill hopes, and even if a method could be found by which a large part of the income of the idle rich would be confiscated without touching the active capital of the merchant and manufacturer, the position of the latter classes, through this policy, might become still more superior relatively to that of the masses than it is at present. The industrial capitalists might even control a larger share of the national income and exercise a still more powerful influence over the State than they do to-day.

The classes that the more or less collectivist budgets of 1910 and 1911 actually do favor, those whose economic and political power they actually do increase, are the small and middle-sized capitalists and even the larger capitalists other than landlords and monopolists. The great mass of income taxpayers, business men, farmers, and the professional classes with incomes from about £200 to £3000 ($1000 to $15,000) are given every encouragement, while those with somewhat larger incomes are only slightly discriminated against on the surface, in the incidence of the taxes, and not at all when we inquire into the ways in which the taxes are being expended. Certainly nothing is being done that will "appreciably affect the status or style of living of any class in the United Kingdom," or that will check materially the enormous rise of this "upper middle" class both in wealth and numbers—for the income tax payers have doubled their income in a little more than a decade, until it has reached the total of more than a billion pounds a year. And surely no tendency could be more diametrically opposed to a Socialism whose purpose it is to improve the relative position of the "lower middle" and working classes.

While the new reform programs of the various parties are in general agreement in all countries, in that they are all collectivist, and favor as a rule the same social classes, there is much controversy as to names, whether they shall be called Socialistic or merely radical or progressive. The question is really immaterial.

"Capital, divested of its perversions, would be natural Socialism," says one of Henry George's most prominent disciples.[26] Whether the proposed reforming is done with a purified and strengthened capitalism in view, or in the name of "natural Socialism" or "State Socialism," the program itself is in every practical aspect the same.

If a contrast formerly appeared to exist between "Individualist" and "State Socialist" reformers, it was never more than a contrast in theory, quickly dispelled when the time for action arrived. The individualist radical would have the State do as little as possible, but still is compelled to resort to an increase of its powers at every turn; the "State Socialist" would have the State do as much as practicable, but would still retain State action within the rigid limits imposed by the need of gaining capitalist support and the desire for immediate political success. In economic policy the Individualist is for checking the excess of monopoly and special privilege in order to allow "equal opportunity" or a free development to whatever competition or "natural Capitalism" remains, while the "State Socialist" is more concerned with protecting and promoting the natural checking of the excesses of competitive capitalism and private property that comes with "natural monopoly" and its regulation by government. The "State Socialist," however critical he is towards competition, recognizes that the first practical possibility of putting an end to its excesses comes when monopoly is already established, and when it is relatively easy for the State to step in to nationalize or municipalize; the Individualist reformer who wishes to preserve competition where practicable, at the same time recognizes that it is impossible to do so where monopolies have become firmly rooted in certain industries, and he also at this point proposes nationalization, municipalization, or thoroughgoing governmental control.

Henry George himself recognizes that "State Socialism," which he called simply "Socialism," and the "natural Capitalism" he advocated, far from being contradictory, were complementary and interdependent. Mr. Louis Post says:—

"Even in the economic chapters of 'Progress and Poverty' its author saw the possibility of society's approaching the 'ideal of Jeffersonian Democracy, the promised land of Herbert Spencer, the abolition of government. But of government only as a directing and repressive power.' At the same time and in the same degree of approach, he regarded it as possible for society also to realize the dream of Socialism."[27]