Socialism as it is

by William English Walling

Mr. Wells in his "New Worlds for Old" also claims that the new policy of having the State do everything that can promote industrial efficiency (which, unlike Mr. Webb, he persists in calling Socialism) is to the interest of the business man.

"And does the honest and capable business man stand to lose or gain by the coming of such a Socialist government?" he asks. "I submit that on the whole he stands to gain....

"Under Socialist government such as is quite possible in England at the present time:—

"He will be restricted from methods of production and sale that are socially mischievous.

"He will pay higher wages.

"He will pay a large proportion of his rent-rate outgoings to the State and Municipality, and less to the landlord. Ultimately he will pay it all to the State or Municipality, and as a voter help to determine how it shall be spent, and the landlord will become a government stockholder. Practically he will get his rent returned to him in public service.

"He will speedily begin to get better-educated, better-fed, and better-trained workers, so that he will get money value for the higher wages he pays.

"He will get a regular, safe, cheap supply of power and material. He will get cheaper and more efficient internal and external transit.

"He will be under an organized scientific State, which will naturally pursue a vigorous scientific collective policy in support of the national trade.

"He will be less of an adventurer and more of a citizen."[13]

Mr. Churchill while denying any sympathy for Socialism, as both he and the majority of Socialists understand it, frankly avows himself a collectivist. "The whole tendency of civilization," he says, "is towards the multiplication of the collective functions of society. The ever growing complications of civilizations create for us new services which have to be undertaken by the State, and create for us an expansion of the existing services. There is a growing feeling, which I entirely share, against allowing those services which are in the nature of monopolies to pass into private hands. [Mr. Churchill has expressed the regret that the railways are not in the hands of the State.] There is a pretty steady determination, which I am convinced will become effective in the present Parliament to intercept all future unearned increment, which may arise from the increase in the speculative value of the land."[14] (Italics mine.)

Mr. Churchill's declared intention ultimately "to intercept all future unearned increment" of the land is certainly a tremendous step towards collectivism, as it would ultimately involve the nationalization of perhaps a third of the total wealth of society. With railways and monopolies of all kinds also in government hands, a very large part of the industrial capital of the country would be owned by the State, and, though all agricultural capital, and therefore the larger part of the total, remained in private hands, we are certainly justified in calling such a state of society capitalist collectivism.

But not one of the elements of this collectivism is a novelty. Railroads are owned by governments in most countries, and monopolies often are. The partial appropriation of the "unearned increment" is by no means new, since a similar policy is being adopted in Germany at the present moment, and is favored not by the radicals alone, but by the most conservative forces in the country; namely, the party of landed Prussian nobility. Count Posadovsky, a former minister, has written a pamphlet in which he urges that the State should buy up the land in and about the cities, and also that it should fix a definite limit beyond which land values must not rise. Nearly all the chief cities of Prussia, more than a hundred, are enforcing such a tax in a moderate form, and the conservatives in the Reichstag proposed that the national government should be given a right to tax in the same field. Their bill was enacted, and, in the second half of 1911, the German government, it was estimated, would raise over $3,000,000 by this tax, and in 1912 it is expected to give $5,000,000. This tax, which is collected when land changes hands by sale or exchanges, rises gradually to 30 per cent when the increase has been 290 per cent or more. Of course this scale is likely to be still further raised and to be made more steep as the tax becomes more and more popular.

Mr. Churchill's defense of the new policy of the British government is as significant as the new laws it has enacted:—

"You may say that unearned increment of the land," he says, "is on all-fours with the profit gathered by one of those American speculators who engineer a corner in corn, or meat, or cotton, or some other vital commodity, and that the unearned increment in land is reaped by the land monopolist in exact proportion, not to the service but to the disservice done. It is monopoly which is the keynote; and where monopoly prevails, the greater the injury to society the greater the reward of the monopolist will be....

"Every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream off for himself, and every where to-day the man, or the public body, who wishes to put land to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an inferior use, and in some cases to no use at all.... If there is a rise in wages, rents are able to move forward because the workers can afford to pay a little more. If the opening of a new railway or a new tramway, or the institution of an improved service of workmen's trains, or the lowering of fares, or a new invention, or any other public convenience affords a benefit to the workers in any particular district, it becomes easier for them to live, and therefore the landlord and the ground landlord, one on top of the other, are able to charge them more for the privilege of living there." (Italics mine.)[15]

But we cannot believe that the government of Great Britain, which draws so much of its support from the wealthy free trade merchants and manufacturers has been persuaded to adopt this new principle so much by the argument that a land rent weighs on the working classes, though it is true that the manufacturer may have to pay for this in higher money wages, as it has by that other argument of Mr. Churchill's that it weighs directly on business.

"The manufacturer proposing to start a new industry," he says, "proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs around the neck of his whole business, hampering his competitive power in every market, clogging far more than any foreign tariff in his export competition; and the land values strike down through the profits of the manufacturer on to the wages of the workman. The railway company wishing to build a new line finds that the price of land which yesterday was only rated at its agricultural value has risen to a prohibitive figure the moment it was known that the new line was projected; and either the railway is not built, or, if it is, it is built only on terms which largely transfer to the landowner the profits which are due to shareholders and the privileges which should have accrued to the traveling public." (My italics.)[16]