Already the majority of the Labour Party voters are undoubtedly working people. When it takes a definite position on the land question, favoring one-family farms and short leases or else coöperative, municipal, or national large-scale operation, and states clearly that it intends to use compulsory arbitration to advance wages indefinitely, including those of farm laborers, there is every probability that, having lost the support of the employing farmers, it will gradually take its place as a party of permanent opposition to capitalism, like the Socialist parties of Europe—until industry finally and decisively surpasses agriculture, and the industrial working class really becomes the most powerful element in society.
Space does not permit the tracing of the "State Socialist" tendency in other countries than Great Britain, the United States, and Australasia. Originally a brief chapter was here inserted showing the similar tendencies in Germany. This is now omitted, but the frequent reference to Germany later in dealing with the Socialist movement makes a brief statement of the German situation essential. For this purpose it will be sufficient to quote a few of the principal statements of the excellent summary and analysis by William C. Dreher entitled "The German Drift towards Socialism":
"The German Reichstag passed a law in May, 1910, for the regulation of the potash trade, a law which goes further in the direction of Socialism than any previous legislation in Germany. It assigns to each mine a certain percentage of the total production of the country, and lays a prohibitory tax upon what it produces in excess of this allotment. It fixes the maximum price for the product in the home market, and prohibits selling abroad at a lower price. A government bureau supervises the industry, sees that the prices and allotments are observed, examines new mines to determine their capacity, and readjusts allotments as new mines reach the producing stage....
"But the radical features of the law are not completed in the foregoing description. The bill having reduced potash prices, the mine owners threatened to recoup themselves by reducing wages. But the members of the Reichstag were not to be balked by such threats; they could legislate about wages just as easily as about prices and allotments. So they amended the bill by providing that if any owner should reduce wages without the consent of his employees, his allotment should be restricted in the corresponding proportion....
"While the law is indeed decidedly Socialistic in tendency, it is not yet Socialism. It hedges private property about with sharper restrictions than would be thought justifiable in countries where, as in the United States, the creed of individualism is still vigorous; and yet it is, in effect, hardly more than a piece of social reform legislation, though a more radical one than we have hitherto seen....
"In Germany, 'the individual withers' and the world of State and Society, with its multifarious demands upon him, 'is more and more.' This is, of course, a Socialistic tendency, but the substitute that the Germans are finding for unlimited competition is not radical Socialism, but organization....
"The State, of course, takes hold of the individual life more broadly, with more systematic purpose. The individual's health is cared for, his house is inspected, his children are educated, he is insured against the worst vicissitudes of life, his savings are invested, his transportation of goods or persons is undertaken, his need to communicate with others by telegraph or telephone is met—all by the paternal State or city.
"Twenty-five years ago the Prussian government was spending only about $13,500 a year on trade schools; now it is spending above three million dollars on more than 1300 schools....
"The Prussian State had also long been an extensive owner of coal, potash, salt, and iron mines. In 1907 a law was passed giving the State prior mining rights to all undiscovered coal deposits. In general, however, it must cede those rights to private parties on payment of a royalty; but the law makes an exception of 250 'maximum fields,' equal to about 205 square miles, in which the State itself will exercise its mining rights. It has recently reserved this amount of lands adjacent to the coal fields on the lower Rhine and in Silesia. The State has already about 80 square miles of coal lands in its hands, from which it is taking out about 10,000,000 tons of coal a year. Its success as a mine owner, however, appears to be less marked than as a railway proprietor; experienced business men even assert that the State's coal and iron mines would be operated at a loss if proper allowances were made for depreciation and amortization of capital, as must be done in the case of private companies. The State also derives comparatively small revenues from its forest and farming lands of some 830,000 acres, which were formerly the property of the Crown....
"The most important State tax is that on incomes, which is in all cases graduated down to a very low rate on the smallest income; in Prussia there is no tax on incomes less than $214. The cities also collect the bulk of their revenues from incomes, using the same classification and sliding scale as the State.
"A highly interesting innovation in taxation is the 'unearned increment' tax on land values, first adopted by Frankfort-on-the-Main in 1904, and already applied by over 300 German cities and towns....
"The bill before the Reichstag [since become a law—W. E. W.] extends sick insurance to farm laborers and household servants, a change which will raise the burden of this system for employers from $24,000,000 to $36,000,000. The bill also provides for pensioning the widows and orphans of insured laborers at an estimated additional expense of about $17,000,000....
"A better result of the insurance systems than the modest pensions and the indemnities that they pay is to be found in their excellent work for protecting health and prolonging life. Many offices have their own hospitals for the sick, and homes for the convalescent....
"All these protective measures have already told effectively upon the death rate for tuberculous diseases. In the three years ending with 1908, deaths from pulmonary tuberculosis dropped from 226.6 to 192.12 per 100,000.
"The accident system has also had a powerful effect in stimulating among the physicians and surgeons the study of special ways and means for treating accident injuries, with reference to preserving intact the strength and efficiency of the patient....
"Bismarck once, in a speech in the Reichstag, explicitly recognized the laborer's right to work. Some twenty German cities have given practical effect to his words by organizing insurance against nonemployment; and the governments of Bavaria and Baden have taken steps to encourage this movement. Under the systems adopted, the laborer pays the larger part of the insurance money, and the city the rest; in a few cases money has been given by private persons to assist the insurance."[82] [N.B. The word "Socialistic" is used by Mr. Dreher in the sense of "State Socialism," as opposed to what he calls "radical Socialism.">[
FOOTNOTES:
[78] Special Correspondence of New York Evening Post, dated Sidney, Dec. 12, 1909.
[79] The data upon which this chapter is based is also obtained chiefly from Mr. Victor Clark's "Labour Movement in Australasia," and "State Socialism in New Zealand," by Stewart and Le Rossignol.
[80] Victor S. Clark, op. cit.
[81] Stewart and Rossignol, op. cit.
[82] The Atlantic Monthly, July, 1911.