Unfortunately, many working men know to their cost that the arguments given above are absolutely untrue. Whilst their wages have remained stationary, their expenditure for rent has greatly increased owing to municipal enterprise carried on by Socialists regardless of expense, which has greatly increased rates. At West Ham "Local government was to be carried on in a way regardless of expense, and under the compounding system the vast majority of the electors were not to realise that there were such things as rates at all. One member of the Socialist party publicly declared that it did not matter to the working men of the borough how high the rates were. But the 'people' got to see in course of time that there were drawbacks, even for them, in unrestricted Socialism. They found that, because of the increased rates, house rents were going up twelve and a half to twenty per cent., notwithstanding the threats of the Socialists that every landlord who raised his rents should have his assessments increased."[678]

Owing to municipal enterprise directed by Socialists, "The sum-total of the rates, which stood at 6s. in the pound in 1890 and at 8s. 1d. in 1896, rose to 8s. 10-1/2d. in the pound in 1900 and 9s. 5-1/2d. in the pound in 1901. From that figure it advanced to 9s. 8d. in the pound,"[679] and to 10s. 8d. a little later. It is an impudent misstatement of fact when Socialist leaders tell the workers, "We are not killed by rates, we are killed by rent."[680] "The whole of our municipal expenditure is only a paltry 110 millions a year. What do we pay in rent? Two hundred and seventy-five millions!"[681] After all, people in other countries, where the blessings of Socialist local government are unknown, and where poverty is much rarer than in Great Britain, also pay rent. On an average the rates are 150 per cent. higher in Great Britain than in Germany.[682]

Whilst the national Government endeavours to diminish the dead weight and the heavy yearly charge of national indebtedness, Socialist local authorities vie with each other in piling up local indebtedness as fast as possible with a reckless disregard of the future. The increase of the municipal debt, the increase of local taxation, like the increase of national taxation, has no terrors for Socialists. On the contrary, "Municipal debt is not a burden. It is a splendid investment. We 'owe' 370 millions. Do we 'own' nothing? The municipalities own all the roads, drains, sewers, public buildings, parks, libraries, a thousand waterworks, two hundred and sixty gasworks, three hundred and thirty-four electricity undertakings, one hundred and sixty-two tramways, two or three hundred markets, a hundred and fifty cemeteries, forty-three harbours, piers, and docks, numerous baths, washhouses, and working-class dwellings, thousands of schools, and thousands of acres of land."[683] Since these words were written local indebtedness has increased. "We owe" now 470 millions.

Unfortunately, many of the splendid assets enumerated possess no realisable value whatever, and many municipal enterprises are run without an adequate profit or with a loss.

The Socialist views and aims regarding local indebtedness are well summed up as follows by Suthers: "The 'municipal debt' argument is a bogey. The greater the municipal debt, the less private enterprise there will be. The greater the municipal debt, the cheaper and better the public services will be. The less private capital, the less profits going into a few pockets, the richer the general public will be. Up, then, with municipal debt."[684] These are principles which threaten to make Great Britain bankrupt. "The annual report of the work of the Local Government Board for 1907 shows that the local debt of England and Wales, from being 17 per cent. of the National Debt in 1879-80, has grown to 58.5 per cent. of the National Debt in 1904-5. The National and Local debts have grown as follows:

1879-80 1904-5 Increase National Debt L770,604,774 L796,736,491 L26,131,717 Local Debt 136,934,070 466,459,269 329,525,199"[685]

Unless the Imperial Government interferes, the local debt will soon be larger than the National Debt.

We have seen in the beginning of this Chapter that, as regards local government, the Socialists pursue a twofold aim: (1) To level up their districts; (2) To urge their districts to launch out into something new. Therefore we find, as Mr. John A. Fairlie says in his book on "Municipal Administration," that "the danger of excessive debt is most serious in the smallest cities. The largest cities, while they have the largest debts, have also the largest resources, and also the best-developed financial administration. The cities of modest size, however, which attempt to equal the works of the metropolis without its available sources of revenue, are very likely to find themselves in serious difficulties."

The time may come, and it may come soon, when British local indebtedness will become greatly reduced by local bankruptcy and repudiation. That process would have no terrors for Socialists. They ought rather to look forward to it. As they demand the repudiation of the National Debt (see Chapter IX.), they should logically also strive to repudiate the local debt. A general repudiation of local debt would be the fitting and logical aim and end of municipal enterprise. Municipal enterprise aims at expropriating private property-owners, who, rightly considered, are paid not in cash but in debt certificates. The repudiation of all local debts would convey gratis to the municipality the municipally managed undertakings which, rightly considered, belong to the stockholders, and would at the same time ruin the capitalists who have advanced the money for acquiring those undertakings. The Socialist policy would triumph. This would be the fitting end of a rule by irresponsible and penniless demagogues.

To the Socialist there is no limit to municipal enterprise. Not some branches of private trade and production, but all private trade and production are to be taken over by the municipalities. Private enterprise is to be extinguished altogether. The municipalities are to be universal owners, manufacturers, and providers. Among the first things which Socialist municipalities wish to control are the supply of bread, milk, coal; hospitals and public-houses, banks, fire insurances, and pawnshops.[686]

All workers are to be municipal officials. Stretching out beyond their borders, the municipalities are ultimately to absorb the country, and to bring it under Socialist management and government.[687]

Some of the more immediate aims of Socialism as regards London are expressed by Sydney Webb, the brilliant, but unfortunately somewhat over-imaginative, leader of British scientific Socialism, as follows:

"We see in imagination the County Council's aqueducts supplying London with pure soft water from a Welsh lake; the County Council's mains furnishing, without special charge, a constant supply up to the top of every house: the County Council's hydrants and standpipes yielding abundant cleansing fluid from the Thames to every street. When every parish has its public baths and washhouses open without fees, every Board school its swimming-bath and teacher of swimming, every railway station and public building its drinking-fountain and basin for washing the hands, every park its bathing and skating ponds—then we shall begin to show the world that we do not, after all, fall behind Imperial Rome in this one item of its splendid magnificence. By that time the landlord will be required, as a mere condition of sanitary fitness, to lay on water to every floor, if not to every tenement, and the bath will be as common an adjunct of the workman's home as it now is of the modern villa residence. And just as in some American cities hot water and superheated steam are supplied in pipes for warming purposes over large areas, we may even see the County Council laying on a separate service of hot water to be drawn at will from a tap in each tenement. Why should London's million families waste their million fires every time hot water is needed?

"The economy of fuel leads, indeed, to the municipalised gas-supply, then laid on, as a matter of course, to every tenement, and used, not only for lighting, but still more largely for cooking in the stoves supplied at a nominal charge.

"In order to relieve the pressure of population in the centre, and reduce the rents of the metropolitan "Connaughts," the County Council tramways will doubtless be made as free as its roads and bridges. Taxes on locomotion are universally condemned, and the economic effects of a penny tram-fare are precisely the same as those of a tax on the trip. The County Council will, however, free its trams on the empirical grounds of economy and the development of its suburban estates of artisans' dwellings, built on land bought to retain the unearned increment for the public benefit. Free trams may well imply free trains in the metropolitan and suburban area. Does not the Council already run a free service of steamboats on the Thames at North Woolwich—eventually, no doubt, to be extended all along the stream?

"Public libraries and reading-rooms in every ward are nearly here already, but we may expect that the library and the public hall will go far to cut out the tavern (at present our only 'public' house) as the poor man's club. As for bands of music in the parks, municipal fetes, and fireworks on 'Labour Day,' and other instances of the communalisation of the means of 'enjoyment,' all this is already common form in France. The parks, indeed, will be tremendous affairs. But when London's gas and water and markets are owned and controlled by its public authorities; when its tramways, and perhaps its local railways, are managed like its roads and parks, not for private profit, but for public use; when the metropolis at length possesses its own river, and its own docks; when its site is secure from individual tyranny, and its artisans' dwellings from the whims of philanthropy; when, in short, London collectively really takes its own life into its own hands, a vast army of London's citizens will be directly enrolled in London's service."[688]

The foregoing political and economic programme would be more creditable to an imaginative schoolgirl ten years old than to a man of science and a politician. How are all these wonderful and almost miraculous changes to be financed? Quite simply and very easily—by plunder. Mr. Sidney Webb, like most "scientific" Socialists, is a loose and shallow thinker. He forgets in his calculations that stubborn little item—human nature. He forgets that nobody can become richer by transferring money from the right pocket to the left. If you plunder all capitalists and all middlemen, the workers will certainly not be better off. Owing to the absence of direct self-interest, the management by salaried officials will be inefficient. All experience of management by public bodies through officials shows that public enterprise is far more wasteful and far less efficient than private enterprise; that in official management routine, sloth, waste, irresponsibility, nepotism, favouritism, and often peculation too, become supreme. Besides, far more money than is wasted now by capitalists on themselves will be wasted by politicians hankering after popularity, and after jobs for themselves and their followers and dependents. The greatest wasters in the poorest districts are the irresponsible Socialist authorities. In palatial town halls sumptuously furnished, in magnificent public libraries, in marble baths, and other outlets of civic magnificence, money wrung from the hard-worked wage-earners is wasted in far greater sums than could possibly be spent by the most reckless capitalist on his private amusement. The most magnificent town halls, &c., are to be found in the poorest districts. Besides, "salaries must be liberal enough to attract the best men to the public service."[689] It is a matter of course that the rule of irresponsible Socialist agitators, that a system of local government whereby those who have no money are enabled to spend lavishly by drawing upon those who have money, will not make for efficiency and economy, and the end will be the Poplar-ising of Great Britain. There is a generally accepted principle, "No taxation without representation." That principle requires as a supplement, "No representation without taxation." Otherwise Great Britain will be ruled by a mob headed by imaginative and dishonest demagogues.

No enterprise is too large or too costly for the Socialists. Quite recently the Fabians recommended in a leaflet that Glasgow should acquire the whole built-over ground of the city at a cost of 24,000,000l., issuing against that sum Corporation Bonds bearing 3-1/4 per cent. interest. Provided that everything should be settled according to expectations, and supposing that Glasgow should be able to borrow 24,000,000l. at 3-1/4 per cent., which seems extremely unlikely, there would accrue, on the most favourable showing, a net profit of 200,000l. per annum to Glasgow, if nothing be allowed for the cost of management.[690] The possibility that that gigantic speculation might prove a failure is not even considered. On the contrary, it is assumed as certain that Glasgow will greatly profit by the growing value of land. Now if through natural economic development, or through the rule of a Socialist national or local administration, Glasgow should decline and land in Glasgow should fall in value, the town might be ruined. Of course that would not hurt the penniless Socialist agitators. Besides, there would always be the sovereign remedy of repudiation.

According to the fundamental Socialist doctrines which condemn profit,[691] "Municipal trading does not seek profit. To the private trader the making of profits or losses is a vital matter. He makes the mistake of thinking the same motives induce a municipality to provide a public service."[692] To the Socialist administrators it is quite immaterial whether their enterprises are run at a profit or at a loss, so long as they can draw freely on the rich and well-to-do to pay for their extravagance. "The Socialist view of the fair way of dealing with profits on trading concerns is to have none—if one may be excused so paradoxical a statement. Fair wages and good conditions generally for the employees, and selling at cost so that all may use freely the commodity or service, is the nearest approach to justice in respect to such municipal concerns as are incapable of being used with equal freedom by all."[693] "The only sound principle of municipal management is to run all these things primarily for use, with no idea of making profit at all, and as far as possible at a price to the user covering the cost of the production only. Such profits as are made should be used either to extend municipal enterprise or be utilised for what in Scotland is known as "the common good," that is, in the provision of instruction, amusements, parks and open spaces, helpful and beneficial to all."[694]

"Municipalisation or nationalisation must proceed on the right lines and for a practical object. What should be the object of municipalisation and nationalisation? The primary object should be the most economical provision of the best possible public services. The general well-being should be the first consideration to be served, having due regard to the welfare of each and all engaged in these services. The idea of profit either in the shape of interest on loans, or of reduced rates and taxes, should be eliminated altogether."[695] "The private trader always pursues profits. That is why he is such a dreadful failure. The motive of municipal trading, on the contrary, is public welfare—the benefit of all the citizens. That is why it is such a tremendous success. No one ever thinks of criticising a town council because they make no profits on these services. Now when we consider the question of municipal trading in gas, tramways, and electricity, is the principle involved any different? Not at all. The provision of gas, trams, and electricity is inspired by just the same motives as inspired the provision of roads, parks, libraries, sewerages, police, and education. That is to say, the benefit of all the citizens."[696] "The day may come when municipal trams and municipal light will be just as free as municipal streets and municipal libraries. That is to say, a rate will be levied on the citizens for their upkeep, and everyone will be free to use them as required."[697]

Such an ideal state of affairs, as pictured by scientific Mr. Webb and his rapacious followers, would be most desirable from the point of view of the town loafer. He would no longer monopolise the free library, the lodging-house, and the public-house corners, as he does at present. He would vary the monotony of the reading-room and the street corner by free rides up and down the town and into the country. In the evening he would take a hot bath in the free public baths recommended by Sidney Webb, sit for a while in the free clubs recommended by the same gentleman, and then stroll out to the free public park to view the free fireworks and listen to the free music. Free meals and lodgings will no doubt follow in due course. Great Britain will be ruled for the benefit of the tramp. Why should anybody work in such a "free" country? Who would not be a loafer or a tramp under these conditions—especially as the "vice" of work, to use a Socialistic expression, would speedily be visited by punishment in the shape of confiscatory taxation, if not of direct confiscation? The populace of decaying Athens and Rome lived under those conditions which are the ideals of British Socialists. The citizens lived by their votes for a time in idleness. They were fed and clothed by slaves and subject nations. But the end was starvation.

To provide all these free benefits for those unwilling to work, the owners of property would of course have to be taxed out of existence. "There is no limit to the present rating powers of the local authority, nor to the taxing powers of the State. The recognised limits to local and national taxation are the needs of the respective authorities. Though not perhaps clearly or generally understood, the taxing powers of the community are based upon the principle that private property is only permitted to be held or enjoyed by individuals so long as that private possession is not opposed to the general welfare, and so long as the community does not require the property or the income for public purposes. The Socialist accepts the principle of taxation—taxation 'according to ability derived from the profits of stock-in-trade and other property'—but desires deliberately to incorporate another idea and purpose in taxation, namely, the taxation of the rich to secure such socially created wealth as is now taken in rent, interest, and profit, and to use this revenue for social reform purposes. In other words, we would by that means compel 'the rendering unto Caesar the things that are Caesar's.'"[698] Municipal funds would be provided, not only by local rates, but also by a local income and land taxes.[699] In other words, Socialism would eat the goose that lays the golden eggs.

According to leading Socialists, municipal enterprise is preferable to private enterprise, not only for economic but also for moral reasons. "The system of private enterprise and competition reeks with corruption. Honesty under it is impossible. Municipal Socialism, on the contrary, would provide an environment which would encourage and promote the growth of moral activities. Instead of leading to corruption it would lead away from it."[700] "Private enterprise must lead to fraud, deceit, bribery, corruption, and even murder, in the struggle for existence. Municipal Socialism would entirely remove any temptation to commit these immoral actions. Why? Because, under municipal Socialism, every person who worked would be sure of a living."[701] We have seen some samples of the moral and purifying influence of municipal Socialism in the investigations recently made by the Board of Trade. Unfortunately these have revealed the fact that, in many of the most advanced Socialist corporations, fraud, bribery, intimidation, favouritism, and common theft are of daily occurrence. What else can be expected when men of predatory instincts, who preach the gospel of idleness and confiscation, who live not by work but by talk, who have been accustomed to handle pence, and who have to be taught by the town clerk how to sign a cheque, are suddenly enabled to dispose of thousands of pounds and to negotiate loans?

The general public takes little interest in local elections. Most citizens abstain from voting. Therefore the numerous corporation employees often have the decisive vote in local elections, and they will support only a candidate who promises shorter hours or higher pay. Municipal employees sitting in the public galleries will even dominate the council chamber, intimidate councillors, and shout down those of whom they disapprove. Besides, they may strike and disorganise the public services, and make the Socialistic authorities look ridiculous. Therefore it is better to humour and to obey them than to oppose them. The Fabian Society demands for municipal servants "full liberty of combination," because "the servants of the public may often need protection against the public, as in the Post Office."[702] The results of Socialist teachings are to be seen in many municipalities. "The servants of the public" are already, and will in an increasing degree become, the masters of the public.

Under municipal Socialism the wages of tramway-men have increased as follows: "In Sheffield, where the private company paid 100l. for labour, the Corporation pay 165l. for the same amount of work. In Bolton, where the private company paid 100l., the Corporation pay 137l. In Wallasey, where the private company paid 100l., the District Council pay 185l. In Northampton, where the private company paid 100l., the Corporation pay 120l. In Birkenhead, where the private company paid 100l., the Corporation pay 315l. In Portsmouth, where the private company paid 100l., the Corporation pay 130l. In Sunderland, where the private company paid 100l., the Corporation pay 145l. When the Manchester Corporation took over the trams they paid increased wages amounting to 60,000l. a year."[703]

The foregoing information is given by a Socialist. Some of the advances may be justified, but others, and probably the majority, have been made with that fine disregard of economy which is commonly found among men who can afford to be generous at other people's expense. Municipal Socialism is an ever-growing cancer which is rapidly exhausting the country.

"Half the municipal debt is of a nature which can never yield a profit."[704] The other half is invested in enterprises many of which are run regardless of economy and of expense, regardless of profit and loss, in accordance with the Socialistic principles stated in this Chapter. The policy of deliberate waste and of constant increase of debt, the principles of "launching out into something new" and "levelling up their districts," perhaps also the fear of eventual bankruptcy and repudiation, have at last frightened the investor. Corporation stocks can no longer be considered as safe first-class securities. Besides, the banks have begun to refuse to accommodate Socialistic municipalities with the necessary funds by overdrafts, short loans, &c. Socialists have therefore begun to complain when they saw that the unlimited supply of other peoples' money was diminishing. They consider it a grievance that they can no longer arbitrarily squander on fantastic undertakings what is not their own. "The hostility of the banking interest to municipal borrowing, and the threat to 'cut off supplies' has at length taken practical form. Disappointed in their attempt to secure sufficiently favourable treatment from their bankers (Parr's), the Chester Corporation applied to four other banks in the city, viz. Lloyds, North and South Wales, National Provincial, and Liverpool Banks. All refused to tender for the account. The banks are not run for the public, the public are run for the bankers."[705] Also, the banks, instead of lending their funds gratis to Socialist corporations, are heartless enough to demand interest "usury" on their loans. "Unfortunately at present public bodies must pay heavy tribute as interest on borrowed money."[706] "Our embryo Socialistic enterprises are even now suffering from the toll of interest which a restricted credit and currency permit the money lords to exact."[707]

Has the attitude of the investing public and the banks caused the Socialist municipalities to restrain their insane expenditure, and to keep it within legitimate bounds? No, they have tried to obtain money by borrowing it in small sums directly from the public. "The Corporation of Bolton, the Boroughs of Heywood, Middleton, and others, invite the investment of small sums of money in municipal enterprise, offering a higher rate of interest on deposits than the banks can supply."[708]

Many Socialists advocate that the municipalities should raise money by issuing paper-money in unlimited quantities or that they should become bankers, pay interest on deposits, and invest the savings of the poor in highly speculative enterprises carried on without regard to economy and expense, or to profit and loss. "Why pay in usury at all? Abolish the gold monopoly by demonetising metals, and the sole remaining argument against municipal trading disappears along with the most crippling restriction under which public enterprise labours."[709] "Credit notes would be of little use were the city's credit gone, because the people would be afraid to take them. However valuable the assets of a municipal authority might be—and municipal concerns are usually far more substantial and sound than banking companies are—it is public confidence that constitutes the first requisite, and this it is the duty of all reformers to establish and maintain against the assaults of those whose interest it is to break it down. The institution of municipal savings banks under the protection of, and subject to inspection by, the State would assist public authorities and render them less dependent on the bankers; then when people had become accustomed to thinking their city's credit at least equal to that of the leading banks, a limited issue of notes might be allowed."[710] Further proposals for "demonetising" gold and issuing unlimited amounts of unconvertible notes, on the model of the assignats of the French Revolution, will be found in Chapter XX. "Some Socialist Views on Money, Banks, and Banking."[711]

These and many other dangerous experiments could easily be undertaken by needy demagogues with fantastic ideas, if the supervision of municipalities by the national Government were abolished. Therefore the Independent Labour Party passed at the last Annual Conference the following resolution: "That this Conference urges the Labour party in Parliament to secure the extension of power to municipalities, enabling them to undertake trading and the development of existing municipal concerns, without the sanction of the Local Government Board, and to use any profits accruing from same in such manner as may be decided by the municipality, without the necessity of promoting Parliamentary Bills."[712]

No administration can continue for long a financial and general policy of waste and pillage, such as that followed by the Socialist municipalities of Great Britain, without diminishing not merely private wealth but also the national wealth. The British Socialists seem determined to do all they can to destroy as fast as possible the accumulated wealth of the country and its productive power.

FOOTNOTES:

[668] The Advance of Socialism, p. 2.

[669] Keir Hardie, From Serfdom to Socialism, pp. 27, 28.

[670] Snowden, Straight Talk to Ratepayers, p. 8.

[671] Suthers, Mind your own Business, p. 148.

[672] Fabian Essays in Socialism, p. 157.

[673] Blatchford, Competition, p. 4.

[674] Suthers, Mind your own Business, pp. 93, 94.

[675] Suthers, Mind your own Business, pp. 87, 88.

[676] Suthers, Mind your own Business, p. 88.

[677] Bax and Quelch, A New Catechism of Socialism, p. 42.

[678] The Times, Municipal Socialism, p. 43.

[679] Ibid.

[680] Suthers, Killed by High Rates, p. 12.

[681] Ibid. p. 11.

[682] Ellis Barker, Modern Germany, p. 552.

[683] Suthers, Killed by High Rates, p. 9.

[684] Suthers, Municipal Debt, p. 4.

[685] Daily Mail, November 26, 1907.

[686] See A Municipal Bread Supply; Municipal Bakeries; Municipal Drink Traffic; Municipal Fire Insurance; Washington, Milk and Postage Stamps, &c.

[687] Municipalisation by Provinces.

[688] Sidney Webb, The London Programme, 1892, pp. 208-213.

[689] Jowett, Socialism and the City, p. 17.

[690] Forward, October 12, 1907.

[691] See Chapter IV.

[692] Suthers, Mind your own Business, p. 14.

[693] Jowett, The Socialist and the City, p. 40.

[694] Irving, The Municipality, p. 6.

[695] Bax and Quelch, A New Catechism of Socialism, p. 42.

[696] Suthers, Mind your own Business, p. 9.

[697] Ibid. p. 8.

[698] Snowden, The Socialist's Budget, pp. 3, 4, 6.

[699] Jowett, The Socialist and the City, p. 38; Snowden, The Socialist's Budget, p. 83.

[700] Suthers, Mind your own Business, p. 119.

[701] Ibid. p. 122.

[702] A Labour Policy for Public Authorities, p. 19.

[703] Suthers, Mind your own Business, p. 103.

[704] Snowden, A Straight Talk to Ratepayers, p. 8.

[705] McLachlan, The Tyranny of Usury, p. 15.

[706] Jowett, The Socialist and the City, p. 42.

[707] McLachlan, The Tyranny of Usury, p. 11.

[708] McLachlan, The Tyranny of Usury, p. 13.

[709] Ibid. pp. 13, 14.

[710] Jowett, The Socialist and the City, pp. 45, 46.

[711] See p. 281 ff.

[712] Independent Labour Party Report, Annual Conference, 1907, p. 50.



CHAPTER XVIII

SOCIALISM AND AGRICULTURE

In one of his books Mr. Blatchford gives prominence to the following statement contained in Prince Kropotkin's book, "Fields, Factories, and Workshops": "If the soil of the United Kingdom were cultivated only as it was thirty-five years ago, 24,000,000 people could live on home-grown food. If the cultivable soil of the United Kingdom were cultivated as the soil is cultivated on the average in Belgium, the United Kingdom would have food for at least 37,000,000 inhabitants. If the population of this country came to be doubled, all that would be required for producing food for 80,000,000 inhabitants would be to cultivate the soil as it is now cultivated in the best farms of this country, in Lombardy, and in Flanders."

Commenting on this statement Mr. Blatchford says: "Why, indeed, should we not be able to raise 29,000,000 quarters of wheat? We have plenty of land. Other European countries can produce, and do produce, their own food. Take the example of Belgium. In Belgium the people produce their own food. Yet their soil is no better than ours, and their country is more densely populated, the figures being: Great Britain per square mile, 378 persons; Belgium per square mile, 544 persons. Suppose wheat will cost us 2s. a quarter more to grow it than to buy it. On the 23,000,000 quarters we now import we should be saving 2,000,000l. a year. Is that a very high price to pay for security against defeat by starvation in time of war?"[713]

Many Socialists very wisely demand that everything possible should be done to bring about a revival of our agriculture. They point to the agricultural prosperity of Belgium, France, and Germany, and they would be quite ready to sanction the re-introduction of Protection, as will be seen in Chapter XXI. Nevertheless they absolutely and unconditionally oppose the creation of a class of peasant proprietors, although the intensive agriculture of France, Belgium, and Germany is founded upon the system of peasant proprietorship, and although general experience, both in Europe and on other continents, has proved the great superiority of peasant proprietors over large farmers in intensive culture. "No Socialist desires to see the land of the country divided among small peasant freeholders, though this is still the ideal professed by many statesmen of 'advanced' views."[714] "Socialism is hostile to small properties."[715]

Socialists pretend to be opposed to the creation of peasant proprietors either on scientific grounds or for ethical reasons. "As a matter of economic evolution, small properties will have to go. But viewed from an ethical standpoint, surely nothing has been more conducive to the development of the worst side of human nature—of 'hatred, malice, and all uncharitableness' than the system of small properties."[716] "If England were cut up into small allotments, the general state would be harder and leaner than before."[717] "Would Socialists take away the land from the landlords and let it out in little plots? No. Because that would make a lot of little proprietors as selfish as the landlords."[718] "Divide the land into small allotments and very soon the cunning and rapacious would 'acquire' the estates of other men, and so we should come back to the present state of chaos. In fact, the parcelling out of the land means putting back the clock of civilisation about one thousand years."[719]

The real reason which prompts Socialists to oppose by all means the creation of peasant proprietors is to be found neither in the realm of political economy nor in that of abstract ethics, but in that of party politics. The peasant proprietor, like every sensible owner of property, is hostile to Socialism. "The peasant has nothing else in the world but his farm, and that is one of the reasons why it is so very difficult to win him over to our cause. He is, indeed, one of the last bulwarks of private property."[720] The philosopher of British Socialism frankly confesses: "On the Continent the peasant proprietor, who may now be reckoned as part of the petite bourgeoisie, just as the large landlord with us may be reckoned as part of the big capitalist class, is a potent factor in retarding the process of Socialisation."[721]

The experience of Socialists in Germany, Austria-Hungary, France, Belgium, Holland, Denmark, and Switzerland shows that Socialism finds practically no adherents among the land-owning peasants. At the German Reichstag elections of 1903, for instance, the Social-Democrats received almost 60 per cent. of the votes in the large towns as compared with less than 20 per cent. of the votes in the country. Of the latter, the vast majority was given by artisans and landless rural labourers. The peasant, like every property-owner, is an enemy of fantastic schemes of confiscation and of general plunder lavishly embellished with promises of Utopia. Therefore Social-Democrats will rather see the countryside of Great Britain turned into a wilderness than see it peopled by peasants.

Desperately anxious lest the Government of Sir Henry Campbell-Bannerman should create a British peasantry, the Socialist press opposed the creation of a British peasantry as unscientific and certain to lead to disaster. The people were told in countless articles that peasant proprietorship had proved a failure everywhere. Under the heading "The Small-Holding Fraud" the "Social-Democrat" showed the true motive of the Socialist agitation by expressing the hope that "The Government will assuredly fail in their attempt to erect a peasant proprietary barrier against the rising proletariat"[722]—Has the Socialist outcry against creating peasant proprietors influenced Sir Henry Campbell-Bannerman's Government in its land-settlement policy? Did Sir Henry Campbell-Bannerman wish to satisfy the Socialists by rather creating small leaseholders than small freehold farmers?

The positive proposals of Socialists for bringing about a revival of agriculture are frankly Utopian. Their proposals can of course not be practical, because they object to the present agricultural arrangements of Great Britain and to those prevailing on the continent of Europe. Many Socialists desire the towns to control and resettle the country. "The towns should claim the right of dictating to England the way in which the land should be put to profit. The great majority of the classes nearest the land, squires and farmers and parsons, are disqualified respectively by self-interest, by religious prejudice that scruples at anything that may lead to the mental enfranchisement of the poor, and by sheer sluggishness of intellect joined to a blind selfishness without parallel in any class of English society. The land and the labourer have hitherto been left to them. And we want a change of management."[723]

Socialists want a "change of management" in agriculture, replacing the expert by the amateur in accordance with their general policy of turning everything upside down. Their ideal would seem to be that the owners of land should be dispossessed and driven into the towns, and be replaced by Socialistic town officials who would exploit the country in the interest of the town.

The tenants whom the Socialists would like to create would, rightly considered, be merely wage-earners in the pay of the Socialistic administration, who, living from hand to mouth, would not be able to put anything by. With that object in view, rents would apparently be adjusted by Socialist administrations. "Tenancies would be granted for seven years or for twenty-one years revisable at periods of seven years, so that the tenant might not be able to appropriate the unearned increment of the land; but it should also be clearly understood that a satisfactory tenant would not be arbitrarily disturbed in his holding. At the same time no mercy would be extended to a bad cultivator; and when a tenant left his holding, either by the efflux of time or for any other reason, he would have no tenant-right to dispose of, but would only be entitled to compensation for unexhausted improvements and to a fair settlement of accounts as between himself and the committee. Rents would be fixed and disputes settled by the independent agricultural court, which would also continue the regulation of agricultural wages. Exploitation of the economically weak must not be permitted, even to a communal authority. It would be within the power of the committee to rent farms to co-operative associations of labourers if satisfied as to their industrial and financial capacity. Arrangements might also be made whereby a town could run its own dairy-farm or farms, since this is probably the only way in which a municipality can be sure of an uncontaminated supply of milk."[724]

Many Socialists would like to resettle the country with colonies of town unemployed, but these proposals are opposed by some as impractical. "To imagine that any such colony could be self-supporting, that the land which no capitalist will now till with expert farm labourers at ten shillings a week would yield trade-union rates of wages to a mixed crowd of unemployed townsmen, that such a heterogeneous collection of waifs and strays, without a common acquaintanceship, a common faith, or a common tradition, could be safely trusted for a single day to manage the nation's land and capital; finally, to suppose that such a fortuitous agglomeration of undisciplined human atoms offers 'the most suitable and hopeful way of ushering in a Socialist State'—all this argues such a complete misconception of the actual facts of industrial and social life, such an entire misunderstanding of the process by which a democratic society passes from one stage of its development to another, that I feel warranted in quoting it as an extreme instance of Utopia-founding."[725]

Whilst the various Socialist schools propound different Utopian schemes for the resettlement of the land in the future, their immediate aim is of course not so much to benefit agriculture, as they profess, but to gain adherents among the rural labourers. With this object in view they are urged to agitate for, and are promised to be given by the Socialists, better wages, safe and healthy homes, more powers for the parish councils, which are to be used for the restoration of common lands, real free schools and better ones, cheap and good allotments, pensions for the old people, reform of taxation, &c. The rural labourers are urged to form trade unions, and they are told, "All these things you can get for yourself by your trade union and your vote if you and all the other labourers in the district will join the union and will agree to vote only for those who will promise to help to get them for you."[726]

In other pamphlets specially addressed to the rural labourers they are told how to get allotments, how to force the district councils to build good cottages for them, &c.[727]

Many Socialists propound the doctrine that the first and the principal object in re-creating the rural industries must be the bettering of the wages of rural labourers, and that the State should secure them better wages by arbitrarily reducing rents. The object, it need hardly be mentioned, is rather to destroy private capital in accordance with the Socialists' tenets than to benefit the labourers. The Fabian Society, for instance, claims, "It is necessary for the State to interfere, partly to secure the better utilisation of our national resources, partly to increase our agricultural population. The class most needing protection, the labourers, must be dealt with first in order to raise them to a decent level of comfort. A living wage must be secured to them, and, as a consequence, the farmers' rents must be fixed at a fair level. An agricultural court must be set up in each county to regulate wages and fix rents. Continental success in agriculture depends on co-operation, and that in turn is associated with the peasant-proprietor system. That system for sundry reasons cannot be adopted here, but its advantages can be obtained through security of tenure. The small farm system should, therefore, form the basis of our reconstruction, free play being left for a graded system of farms where possible. In each county an agricultural committee should have compulsory power to acquire land and let it out to tenants, chiefly smallholders. It should have power to advance capital to individuals on the collective guarantee of its tenants, and it should be its duty to organise the collection of farm produce and its disposal in the market."[728]

FOOTNOTES:

[713] Blatchford, Britain for the British, pp. 111, 112.

[714] Socialism True and False, p. 18.

[715] Some Objections to Socialism Considered.

[716] Ibid.

[717] Blatchford, The Pope's Socialism, p. 8.

[718] Hazell, The Red Catechism, p. 11.

[719] Blatchford, The Pope's Socialism, p. 9.

[720] Kautsky, The Social Revolution, p. 30.

[721] Bax, Essays in Socialism, p. 41.

[722] Social-Democrat, November 1907.

[723] Pedder, The Secret of Rural Depopulation, p. 18.

[724] The Revival of Agriculture, p. 17.

[725] Sidney Webb, Socialism True and False, p. 12.

[726] What the Farm Labourer Wants, p. 4.

[727] Allotments and How to get Them; Parish Council Cottages and How to get Them.

[728] The Revival of Agriculture, p. 22.



CHAPTER XIX

SOCIALIST VIEWS ON BRITISH RAILWAYS AND SHIPPING

Many Socialists complain, and they complain with good cause, about the railways of Great Britain. All the British railways are in private hands, and they are very inefficient. They are in many respects very backward, badly equipped, and badly managed. They have wasted their capital, watered their stock, and have paid dividends out of capital; their freight charges are exorbitant; besides, they give habitually and by various means, with which it would lead too far to deal in this book, preferential treatment of a very substantial kind to the foreigner.

Many Socialists have extracted from British Government publications instances of such preferential treatment. One of the most widely read Socialist writers, for example, gives among others the following freight charges favouring the foreigner:

"Carriage of a ton of British meat, Liverpool to London, 2l.: Carriage of a ton of foreign meat, Liverpool to London, 1l. 5s.: Carriage of a ton of eggs Galway to London, 4l. 14s.: Carriage of a ton of eggs Denmark to London, 1l. 4s.: Carriage of a ton of plums, apples, and pears, Queenborough (Kent) to London, 1l. 5s.: Carriage of same from Flushing (Holland), 12s. 6d.: Carriage per ton of English pianos Liverpool to London 3l. 10s.: Carriage as above of foreign, 1l. 5s.: British timber per ton Cardiff to Birmingham, 16s. 8d.: foreign as above 8s. 10d. In the carriage of iron ore and steel rails the American railways charge 6s. 3d. where the British charge 29s. 3d."[729]

"The real enemy are the monopolists of land and locomotion—the landlord and the raillord who are uprooting the British people from their native soil. It is in fact by no means easy to say which is the greater malefactor of the two."[730] Such differential charges are bound to cripple the British industries, and in view of the harm which is thus being done to British farmers, manufacturers, and traders, it is only natural that British Socialists are unanimous in condemning the anti-British freight policy of the railways and in recommending that they should be taken over and managed by the State.

"There are nearly 24,000 miles of railway in the kingdom, the greater part of which is owned or controlled by a dozen great companies, who, moreover, have standing conferences through which they exercise a virtual monopoly against the public, although they have all the expenses of competing concerns. The public bears the costs and inconveniences of competition without many of its benefits. The total capital of the companies is 1,300,000,000l. of which 200,000,000l. is nominal or 'watered' stock. A very large part of the rest was for extravagant sums paid to great landowners for their land and another large part for legal expenses. On this huge capital a sum of 44,000,000l. has to be earned in dividends. If the State bought out the railways, it could borrow this necessary sum for at least 5,000,000l. to 8,000,000l. a year less than this, and at once effect enormous savings resulting from the present competitive and chaotic methods of the companies. Despite the virtual monopoly, there are over 3,000 railway directors drawing fees or salaries amounting to nearly 1,500,000l. Of the principal of these there are eighty in the Lords and twenty-five in the Commons. Mr. Gladstone predicted that if the State did not control the railway companies, they would control the State, and this has come to pass. Their servants are overworked and underpaid, extortionate freights are charged on the carriage of goods, unfair preferences are given, but Parliament is powerless to check this."[731]

"The railway system to-day is the greatest protection ever heard of in favour of the foreigner, and neither Mr. Chamberlain nor Mr. Balfour, nor any other man makes a single proposal to touch the railway question. Why? Because the House of Commons is dominated by the railway interest."[732] "Our railway experience proves that it is not enough to make preferential rates illegal. They reappear too easily in the form of rebates and even of allowances which belong to the more private chapters of capitalist history. The attempt of the Railway Commission to abolish preference in railway rates has left us with a system which could not be much worse from the national industrial point of view."[733]

"Imperial trade suffers no more serious handicap than that imposed upon it by shipping rings and railway companies, which exploit the Imperial needs of transport for their own purposes, which hamper the ready flow of Imperial trade, and, for an insignificant percentage, turn the British seamen off the water in favour of the Lascar."[734]

"The railways of India, which yield a great portion of our Indian revenue, are owned by the Indian Government. The well-managed and prosperous systems of Australasia, with the best conditions of labour and the lowest freights of any railways in the world, are State owned. Why, then, should not the British Government own and control in the public interest the systems which are so wastefully and inefficiently managed by the present companies?"[735]

The last Annual Conference of the Independent Labour Party resolved: "That in the opinion of this Conference the time is ripe for the nationalisation of the railways of the country, and that our representatives be asked to urge forward a measure to that effect in Parliament."[736] The Fabians think that "An equitable basis of purchase may be found in Mr. Gladstone's Act of 1844, which enables the Treasury to buy out the shareholders of lines built since that date at twenty-five years' purchase, calculated on the earnings of the previous three years. The price of the railways need not be an insuperable, or even a serious, difficulty in the way of national possession of the means of transit."[737]

The demand of the Socialists that the Government should acquire the railways would perhaps be reasonable if that demand was not coupled with extravagant and fantastic ideas regarding their future management. The different Socialistic views as to the proper management of State railways are summed up as follows by Mr. Blatchford: "The railways belong to railway companies, who carry goods and passengers and charge fares and rates to make profit. Socialists all say that the railways should be bought by the people. Some say that fares should be charged, some that the railways should be free—just as the roads, rivers, and bridges now are; but all agree that any profit made by the railways should belong to the whole nation, just as do the profits now made by the Post Office and the telegraphs."[738]

One Socialist writer modestly proposes that the fare anywhere in Great Britain should be a shilling. "Look at our railroads—might they not be the property of the community at large as well as the high roads, instead of being a monopoly in the hands of private persons whose sole object is to enrich themselves at the cost of their fellow citizens? If so, it has been proved that you could go to any part of these islands with a shilling ticket."[739]

Other Socialists advocate that railway travelling should be made absolutely free to all, and that the costs of running the railways free of charge should be borne exclusively by the rich. "The blessings of free travel are too many by far for enumeration, but one stands out. It is the only effective means yet suggested for the extirpation of our vile city slums. At present the sweated must live near their work."[740] "Overcrowding can only be cured outright by one sovereign remedy—by giving the toiler a home in the country; and free travel alone makes this possible. There is no reason why a 'docker' should not grow his own vegetables and be his own dairyman at the same time. Free travel would in a few years change the whole face of society."[741] "A nation that can afford to spend 140,000,000l. a year on strong liquors might not unreasonably be asked to strike even the forty odd millions off its drink-bill—about half that amount would suffice for the purpose—and take them out in free ozone."[742] "Then would rise the question how to make up for the abolition of passenger fares. The answer, it seems to me, is not far to seek. The substitute tax must be levied on the 'unearned increment' of land, urban and rural. The people must therefore unfalteringly press for the reassessment of the 'land-tax' by gradual increase up to 20s. in the pound, and in the meantime procure any further funds necessary from our surplus capital by a graduated income-tax. Personally I abhor usury, whether in the shape of railway dividends or Government Consols, as alike contra naturam and contra Christum."[743]

In order to further the policy of free travelling by railway, Socialists appear to have founded a "Free Railway Travel League," domiciled at 359 Strand, London, W.C. I am not aware whether the Free Railway Travel League—every tramp should join it—exists still.

It is only logical that, if the railways should be made free for the carriage of people, they should likewise be made free for the transport of goods. "It is obvious that if railways can be worked free for passengers they may be made free for goods as well. Free goods traffic would everywhere equalise the price of commodities, be they the produce of sea or land, mine or manufacture, and equal wages in town and country would speedily follow equal prices with beneficial results to the people altogether incalculable. Granted free passes, free freights will doubtless in time follow almost as a matter of course."[744]

When free travel by railway has been established, free travel by tramway, which has already been demanded by municipal reformers (see Chapter XVII.), will necessarily also be introduced. A publication issued by the most scientific body of British Socialists, the Fabian Society, urges: "There is only one safe principle to guide the reformer. The tramways, the light railways, and the railways must be regarded as the modern form of the king's highway. Our fathers spent time and trouble ridding the roads of tolls; and railway rates and passenger fares are merely modern tolls. Their abolition must come sooner or later."[745] "We have abolished the turnpike gate and the toll-collector, and our highways are free in the sense that they are maintained by general assessment. And if the turnpike gate was an odious obstruction to the traveller, how much more obnoxious to him, or her, is the railway ticket-box?"[746]

Railways may be made free before the ideal Socialist State of the future has been created, but they will certainly be free as soon as the Socialist commonwealth has been established. "Railways will play a very great part indeed in the Socialist State, They will be absolutely 'free' for every purpose. The cost of actual working is comparatively inconsiderable, while the benefits of free transit are incalculable. To decentralise the population so as to efface the distinction between dwellers in town and country is to renovate humanity physically and morally."[747]

After travel and transport has been made absolutely free on land throughout the length and breadth of Great Britain, the free travel and transport principle will of course be extended to travel and transport by sea, and free travel and transport by sea will better bind the Empire together than a Pan-Britannic Customs Union. The most scientific body of British Socialists, the Fabian Society, says: "A logical consequence of the national management of internal means of communication will be the completion of the State control of our oversea transit. It is impossible here to go into details. Let it suffice to remark that already the nation has a direct financial interest in the great steamship lines, through its mail subsidies and Admiralty loans with corresponding claims for service in war; that intellectually the nation, by its pride in its magnificent mercantile fleet, regards it as a national possession, and declines to consider our shipping as the mere private property of the shareholders of the steamship companies; and finally, that our navy is maintained at enormous public expense expressly to protect the mercantile fleet, which at present is mainly private property."[748] "The notion that the forces making for disintegration can be neutralised by 10 per cent. preferential duties is not worth discussing; indeed, the raising of the fiscal question seems at least as likely to reveal our commercial antagonisms as our community of interests. And the huge distances will be mighty forces on the side of disintegration unless we abolish them. Well, why not abolish them? Distances are now counted in days, not in miles. The Atlantic Ocean is as wide as it was in 1870; but the United States are four days nearer than they were then. Commercially, however, distance is mainly a matter of freightage. Now it is as possible to abolish ocean freightage as it was to make Waterloo Bridge toll-free, or establish the Woolwich free ferry. It is already worth our while to give Canada the use of the British Navy for nothing. Why not give her the use of the mercantile marine for nothing instead of taxing bread to give her a preference? Or, if that is too much, why not offer her special rates? It is really only a question of ocean road making. A national mercantile fleet plying between the provinces of the Empire, and carrying Empire goods and passengers either free or at charges far enough below cost to bring Australasia and Canada commercially nearer to England than to the Continent, would form a link with the mother-country which once brought fully into use could never be snapped without causing a commercial crisis in every province."[749]

The purchase of the whole British mercantile marine by the Government would incidentally have the effect of abolishing the British shipping rings, which, like the British railways, frequently penalise with discriminating rates the British producer and shipper. "Of the real conditions of ocean traffic, at present, the public has no suspicion. All our lines of communication are controlled by shipping rings which carry preferential rating (an illegal practice in our inland transit) to an extent that would shock Mr. Chamberlain back again to Free Trade if he realised it; for their preferences are by no means patriotic; they have helped Belgium into our Indian market, and Germany and America into South Africa and New Zealand. The cotton conference of Liverpool directly assisted the American exporters of cotton to China by the heavy charges they made against the Lancashire manufacturer—charges which were modified only after repeated protests. These rings and rates constitute the most dangerous disintegrating force we have to face."[750]

There is much justification in the complaints of the Socialists with regard to British railways and shipping, but their proposals are, as usual, quite Utopian. For all ills of the body politic and economic, the Socialists have only one remedy, and that an infallible one—nationalisation, or rather Socialisation.

The policy of the British railway and shipping rings is no doubt a national scandal, but their defects and delinquencies may no doubt be counteracted by appropriate Government action and legislation. It is probably now too late for the State to acquire the railways. The State cannot afford to risk a large capital loss. Railway purchase would apparently be too speculative an undertaking.

If the State should acquire the railways, they would certainly be run at a profit. The sooner the Socialists abandon their fixed idea that profit on private and national undertakings is immoral, the better will it be for them. So long as they decry profit and propose to work State undertakings without a profit, so long can they not be taken seriously. Profit consists in part of the salary of direction, in part of the earnings set aside for effecting the necessary alterations, improvements, and extensions, and for forming a reserve fund for making losses good, &c. Therefore abandonment of profit would mean the decline and decay of the national capital.

FOOTNOTES:

[729] Davidson, Free Trade v. Fettered Transport, p. 9.

[730] Ibid. p. 7.

[731] Reformers' Year Book, 1907, pp. 119, 120.

[732] Hyndman, Real Reform, p. 14.

[733] Fabianism and the Fiscal Question, p. 17.

[734] Macdonald, Labour and the Empire, p. 96.

[735] Reformers' Year Book, 1907, p. 120.

[736] Independent Labour Party Report, Annual Conference, 1907, p. 50.

[737] Socialism and Labour Policy, p. 14.

[738] Blatchford, Britain for the British, p. 86.

[739] Sorge, Socialism and the Worker, p. 13.

[740] Davidson, Free Trade and Fettered Transport, p. 17.

[741] Davidson, Free Rails and Trams, p. 9.

[742] Ibid. p. 13.

[743] Davidson, Free Rails and Free Trams, p. 7.

[744] Ibid. p. 14.

[745] Public Control of Electric Power and Transit, p. 10.

[746] Davidson, Free Rails and Trams, p. 5.

[747] Davidson, The Old Order and the New, p. 158.

[748] Public Control of Electric Power and Transit, p. 14.

[749] Fabianism and the Fiscal Question, p. 16.

[750] Fabianism and the Fiscal Question, p. 16.



CHAPTER XX

SOME SOCIALIST VIEWS ON MONEY, BANKS, AND BANKING

All Socialists wish to abolish private capital. Money embodies private capital in its most portable form. It can easily be hidden, and as the Socialists wish to prevent the re-accumulation of new private capital, the abolition of money, and especially of gold and silver, has prominently figured in all Socialistic programmes since the time of Protagoras and of Plato. Socialists wish to effect the exchange of commodities, the payment of labour, and the settlement of accounts mainly by book-keeping.

"As there are no wares in the new community neither will there be any money."[751] "In the Social-Democratic State the citizen will be granted an income, which will be indicated by labour checks or credit cards, as advocated by Gronlund, Bellamy, and John Carruthers."[752] "Under ideal Socialism there would be no money at all and no wages. The industry of the country would be organised and managed by the State, much as the Post Office now is; goods of all kinds would be produced and distributed for use and not for sale, in such quantities as were needed. Hours of labour would be fixed, and every citizen would take what he or she liked from the common stock. Food, clothing, lodging, fuel, transit, amusement, and all other things would be absolutely free, and the only difference between a Prime Minister and a collier would be the difference of rank and occupation."[753]

"How will exchange then be carried on? By account facilitated by some such contrivance as labour checks. When in the Co-operative Commonwealth money becomes superannuated we shall have nothing but checks, notes, tickets—whatever you will call them—issued by authority."[754] And how will international exchange be carried on? Very simply and easily. By barter. "So much tea is wanted from China. The Chinese Government is advised of the quantity and asked what British goods will be acceptable by the Celestials in exchange. There will be international barter on a grand and equitable scale."[755] It is quite logical that the Socialists who wish to introduce the primitive Communism of the prehistoric ages (see Chapter XXIX.), wish also to reintroduce the aboriginal system of barter.

However, the contemplated form of "international barter on a grand and equitable scale" will have its difficulties. China, for instance, may sell much silk and tea to England and take in exchange mostly foreign manufactured goods from America, Germany, Belgium, and Japan, as she does at present. It is to be feared that the "grand and equitable system of international barter" will prove impracticable even if, as most Socialists somewhat rashly assume, all States should become Socialistic commonwealths, or if the grand Socialist Republic of the world should actually be created. We have at present an international currency, Gold. The contemplated creation of unlimited paper issues in lieu of gold, the fulfilment of the ideal of many Socialists, would have a very simple, a very certain, and a very unpleasant consequence. Foreign merchants, doubting the value of the new paper currency and the stability of the new Socialist Government, would of course refuse to part with their goods. Not a pound of cotton, not a bushel of wheat would reach England from abroad. The nation would be starving, and Socialist deputations would hasten to search out Lord Rothschild in the workhouse, where no doubt he would reside, and implore him to reintroduce capitalism and food into Great Britain.

Some Socialists of the saner kind fear that it will not be possible to abolish money. Kautsky, for instance, writes: "To abolish money I consider impossible. Money is the simplest means as yet known which renders it possible in a mechanism so complicated as the modern system of production, with its enormously minute subdivision of labour, to arrange for the smooth circulation of products and their distribution among the individual members of society; it is the means which enables everyone to satisfy his needs according to his individual taste (naturally within the limits of his economic power). As a medium of circulation, money will remain indispensable so long as nothing better is found."[756]

Socialists declaim against the immorality of charging interest—"usury" as they call it (see Chapters IV., IX., and XVII.), and they are indignant that the banks are unwilling to advance gratis unlimited funds to Socialist town councils to be wasted as fancy may direct (see page 258). Therefore they wish to abolish "that most costly of all modern parasites, the banker."[757] Some very irreligious, if not atheistic, Anarchist-Socialists, such as Mr. Morrison Davidson, pretend to object to interest on religious grounds because, "the Way, the Truth, and the Life said, 'Lend hoping for nothing again.'"[758] Other Socialists wish to abolish the banks and the charging of interest for the benefit of the people and of the Socialist municipal and other councils. "Usury—in that offensive pregnant little word is contained the secret of Society's worries and Man's woes. Abolish usury: that is the true Fiscal Reform Policy."[759]

"Usury can be arrested at present by nationalisation of exchange. The nationalisation of exchange must be undertaken. Metal must be demonetised and reduced to the ranks. Banking must be undertaken by the municipalities and county councils, and by these elective bodies only, while a durable paper currency issued on the basis of the ascertained wealth of the nation, and maintained in true relation to it, shall supersede gold. Then we arrive at a scientific solution of the question of exchange and put in operation the currency and credit system of Socialism."[760]

When the banks and the gold currency have been abolished and when "exchange has been nationalised" the Socialist local authorities will no longer have any difficulty in procuring the unlimited funds they need for the execution of their boundless plans. They will raise the money by the printing of practically unlimited quantities of paper money issued against the security of "the ascertained wealth of the nation." If they wish to spend money, they simply "make it" by means of an ordinary printing press. Could a simpler and more ingenious system for making money be devised?

"Recently notice has been given by leading bankers of their intention to discriminate against municipal loans. And as things now stand, it is certain that, if an organised effort is made generally by the bankers throughout the country by advising clients against such investments and by refusing to accept municipal bonds as collateral security for overdrafts, &c.—a serious check will be put upon public enterprise. Those who imagine bankers either impotent or incapable of such treason against the public interest should remember what took place in the United States in 1893.

"The natural suggestion to be offered as a counter-move to the threat of the bankers and their Industrial Freedom League is to add to those enterprises now under municipal control that of banking. And surely there is nothing which lends itself more easily to municipalisation! If the credit of a banking house can be employed for promoting enterprise and earning dividends, why cannot municipalities employ their own credit directly? In others words, why cannot the credit of a city be utilised to carry on its municipal works instead of it having to borrow the credit of a bank and pay interest charges? Consider how public works are now financed. The London County Council decides to build decent and respectable houses in some locality for the working classes. It requires, we will say, 500,000l. with which to build dwellings for 2,000 families. Bankers are invited to tender for the loan, and finally the Council gets this advance on a guarantee of 3 per cent. per annum, the principal being repayable at the end of thirty-three and a third years. At the end of this period the Council will have paid the bank 500,000l. in interest as well as the 500,000l. original loan. The charge for the loan is equal to the entire cost of the whole undertaking; the result is that each family must pay about twice the amount of rent that it would otherwise have to pay if the Council had not incurred interest charges through borrowing other people's credit. Was there ever greater lunacy in public affairs?

"Suppose that instead of issuing credit in the shape of bonds of large denomination, the Council issued it in notes of small denominations of pounds and shillings. Does anyone mean to assert that that credit which is eagerly purchased by a banker would be refused by a bricklayer or stonemason? Supposing the London County Council was empowered to issue its credit in one-pound notes, as well as large amounts, and supposing it was compulsory that these notes were good in payment of rates. Is there any question as to their being acceptable? The plan is so simple and so safe that at first it seems amazing it should have been so long out of employment."[761]

"Of course gold will drain off abroad—if the foreigners don't follow in our footsteps at once. If the demonetised gold is withdrawn—well, we can have a new currency by nationalising the railways and paying the shareholders 'in current coin'" (which means in unconvertible notes), "not in redeemable, interest-bearing bonds. So long as solid wealth rests behind our issue, our financial policy is sound. Of course, the railway and other shareholders will want fresh investments; they won't find them, because no man will pay interest to usurers when he can monetise his credit at the mere cost of banking and exchange. They must therefore spend it, and the currency will never be restricted henceforward. And this national ownership of exchange can be operated to compel every monopolist to sell his monopoly to the nation."[762]

This insane project is called by the writer, "A scientific way to Socialism."[763]

Surely science is the most abused word in modern language. The creation of money by unlimited issues of paper secured by the national possessions was tried on the grandest scale at the French Revolution. The "assignats" were secured on the national domains, and their security seemed absolute to the revolutionaries. The great Mirabeau had stated on September 27, 1790: "Our assignats are not ordinary paper money. They are a new creation for which there is no precedent. What constitutes the value of metal money? Its intrinsic value. Now I ask you: Does paper which represents the foremost of the possessions of a nation such as France not possess all the characteristics of intrinsic and generally accepted value which metal money possesses?"[764] The "assignats" speedily fell to a discount, although dealing in them at a discount was made punishable with twenty years' imprisonment with hard labour,[765] and they fell ultimately to waste-paper value. A pair of boots worth thirty francs in gold cost 10,000 francs in paper. On paper all were immensely rich. Yet the masses were starving. Unfortunately people cannot live by consuming unlimited quantities of credit notes. They can become prosperous neither by robbing the rich nor by calling a shilling a sovereign, but only by producing more. Greater wealth means simply increased consumption, and increased consumption, unless based on increased production, can only be effected by intrenching upon and diminishing the national capital, the national reserve store of food, clothing, tools, &c., and thus causing widespread misery and starvation.

FOOTNOTES:

[751] Bebel, Woman in the Past, Present, and Future, p. 192.

[752] Leatham, Socialism and Character, p. 90.

[753] Blatchford, Merrie England, p. 100.

[754] Gronlund, Co-operative Commonwealth, p. 103.

[755] Davidson, The Old Order and the New, p. 157.

[756] Kautsky, The Social Revolution, p. 14.

[757] Jowett, The Socialist and the City, p. 44.

[758] Davidson, The Old Order and the New, p. 57.

[759] McLachlan, The Tyranny of Usury, p. 1.

[760] Ibid. pp. 10, 17.

[761] How to Finance Municipal Enterprises, pp. 3-5.

[762] McLachlan, The Tyranny of Usury, p. 20.

[763] Ibid.

[764] Nouvelle Biographie Generale, vol. xxxv. p. 39.

[765] Roscher, System, p. 227.



CHAPTER XXI

SOME SOCIALIST VIEWS ON FREE TRADE AND PROTECTION

In his thoughtful book on Socialism, Mr. Ramsay Macdonald, M.P., the Socialist leader, attributes the rise of the Socialist movement in great Britain to various causes, one of which is "the reaction against Manchesterism."[766]

Socialists, generally speaking, are opposed to Free Trade. Neither the moderate nor the revolutionary sections of British Socialism have a good word to say for it. The Socialist leaders, looking at the question of Free Trade and Protection from the worker's point of view, have arrived with Lecky at the conclusion that the whole Liberal Free Trade agitation is one of the greatest political impostures which the world has witnessed,[767] a view which, by the by, was also expressed by Bismarck.[768]

Socialists are not under any illusion as to the causes which led to the introduction of Free Trade into Great Britain, and they sneer at the humanitarian cant with which its promoters successfully surrounded it. One of the leading Socialist books states with regard to this point: "Protection was no longer needed by the manufacturers, who had supremacy in the world-market, unlimited access to raw material, and a long start of the rest of the world in the development of machinery and in industrial organisation. The landlord class, on the other hand, was absolutely dependent on Protection. The triumph of Free Trade therefore signifies economically the decay of the old landlord class pure and simple, and the victory of capitalism. The capitalist class was originally no fonder of Free Trade than the landlords. It destroyed in its own interest the woollen manufacture in Ireland, and it would have throttled the trade of the colonies had it not been for the successful resistance of Massachusetts and Virginia. It was Protectionist so long as it suited its purpose to be so. But when cheap raw material was needed for its looms, and cheap bread for its workers; when it feared no foreign competitor, and had established itself securely in India, in North America, in the Pacific; then it demanded Free Trade."[769] "Protection at home was needless to manufacturers who beat all their foreign rivals, and whose very existence was staked on the expansion of their exports. Protection at home was of advantage to none but to the producers of articles of food and other raw materials, to the agricultural interest, which, under the then existing circumstances in England, meant the receivers of rent, the landed aristocracy."[770]

The Free Trade manufacturers, who were chiefly interested in cheapness of production, cared little what became of the workers. "The individualist devotees of laisser faire used to teach us that when restrictions were removed, free competition would settle everything. Prices would go down, and fill the 'consumer' with joy unspeakable; the fittest would survive, and as for the rest—it was not very clear what would become of them, and it really didn't matter."[771]

The doctrines and the boasts of the Free Traders are usually treated by the Socialists with contempt. "Cobdenites ascribe every known or imagined improvement in commerce, and the condition of the masses, to Free Trade. Things are better than they were fifty years ago: Free Trade was adopted fifty years ago. Ergo—there you are. There is not a word about the development of railways and steamships, about improved machinery, about telegraphs, the cheap post and telephones, about education and better facilities of travel."[772]

The unsoundness of the fundamental doctrine of Free Trade, "Buy in the cheapest and sell in the dearest market," has frequently been exposed by Socialists. Mr. Blatchford, for instance, in a book of his of which more than a million copies have been sold gives prominence to Cobden's pronouncement in the House of Commons in which he expounded the celebrated maxim: Buy in the cheapest and sell in the dearest market: "To buy in the cheapest market and sell in the dearest, what is the meaning of the maxim? It means that you take the article which you have in the greatest abundance and with it obtain from others that of which they have the most to spare; so giving to mankind the means of enjoying the fullest abundance of earth's goods."[773] Mr. Blatchford then comments upon Cobden's doctrine as follows: "Let us reduce these fine phrases to figures. Suppose America can sell us wheat at 30s. a quarter, and suppose ours costs 32s. 6d. a quarter. That is a gain of 1/15th in the cost of wheat. We get a loaf for 3d. instead of having to pay 3-1/4d. That is all the fine phrases mean. What do we lose? We lose the beauty and health of our factory towns; we lose annually some twenty thousand lives in Lancashire alone; we are in constant danger of great strikes; we are reduced to the meanest shifts and the most violent acts of piracy and slaughter to 'open up markets' for our goods; we lose the stamina of our people, and we lose our agriculture."[774]

Most Socialists recognise that under the Free Trade regime Great Britain has sacrificed her safety and her strength to profit. "Did you ever consider what it involved, this ruin of British agriculture? Don't you see that if we lose our power to feed ourselves we destroy the advantages of our insular position?"[775] "Don't you see that the people who depend on foreigners for their food are at the mercy of any ambitious statesman who chooses to make war upon them? And don't you think that is rather a stiff price to pay to get a farthing off the loaf? No nation can be secure unless it is independent; no nation can be independent unless it is based upon agriculture."[776] "We must buy wheat from America with cotton goods; but first of all we must buy raw cotton with which to make those goods. We are therefore entirely dependent upon foreigners for our existence."[777]

"The present national ideal is to become 'The workshop of the world.' That is to say, the British people are to manufacture goods for sale to foreign countries, and in return for those goods are to get more money than they could obtain by developing the resources of their own country for their own use. My ideal is that each individual should seek his advantage in co-operation with his fellows, and that the people should make the best of their own country before attempting to trade with other people's."[778] "The Free Traders tell me that under their glorious system of free exchange nations naturally occupy themselves in those industries which produce the most wealth. Thus, if Great Britain, by employing a million men in growing corn, can produce 50,000,000l. a year, while she can produce 51,000,000l. by employing the men in getting coal. Great Britain will 'naturally' employ those men in getting coal! Sending her coal abroad, Great Britain can get 1,000,000l. a year more wealth. What a beautiful doctrine! Enormous increase in wealth. Foreigners can send us 51,000,000l. of corn for our coal, while Great Britain could only grow 50,000,000l. Free Trade for ever! It never occurs to the Free Traders to ask: 'Is it better to have a million men working in the bowels of the earth, or a million men tilling the surface?"[779]

"The idea is, that if by making cloth, cutlery, and other goods we can buy more food than we can produce at home with the same amount of labour, it pays us to let the land go out of cultivation and make Britain the 'workshop of the world.' Now, assuming that we can keep our foreign trade, and assuming that we can get more food by foreign trade than we could produce by the same amount of work, is it quite certain that we are making a good bargain when we desert our fields for our factories? Suppose men can earn more in the big towns than they could earn in the fields, is the difference all gain? Rents and prices are higher in the towns; the life is less healthy, less pleasant. It is a fact that the death-rates in the towns are higher, that the duration of life is shorter, and that the stamina and physique of the workers are lowered by town life and by employment in the factories. And there is another very serious evil attached to the commercial policy of allowing our British agriculture to decay, and that is the evil of our dependence upon foreign countries for our food. The plain and terrible truth is that even if we have a perfect fleet and keep entire control of the seas, we shall still be exposed to the risk of almost certain starvation during a European war. As I have repeatedly pointed out before, we have by sacrificing our agriculture destroyed our insular position. As an island we may be, or should be, free from serious danger of invasion. But of what avail is our vaunted silver shield of the sea if we depend upon other nations for our food? We are helpless in case of a great war. It is not necessary to invade England in order to conquer her. Once our food-supply is stopped, we are shut up like a beleaguered city, to starve or to surrender. Stop the import of food into England for three months and we shall be obliged to surrender at discretion. And our agriculture is to be ruined and the safety and honour of the Empire are to be endangered that a few landlords, coal-owners, and moneylenders may wax fat upon the vitals of the nation."[780] "For over half a century we have been committing industrial suicide. By laying waste our own land and throwing ourselves upon the mercy of the foreign food-producers, we have been deliberately sacrificing the millions and the future to the millionaires and the moment."[781]