THE CAPITALIST STATE
The Capitalist State is that one in which though all men are free (that is, though no one is compelled to work for another by law, nor anyone compelled to support another), yet a few owners of the land and capital have working for them the great mass of the people who own little or nothing and receive a wage to keep them alive: that is, a part only of the wealth they produce, the rest going as rent and profit to the owners.
The Capitalist State is a recent phenomenon compared with the great length of known recorded history. It is a modern phenomenon produced by our white race alone, by no means covering the whole of that race, nor the most of it, but of great interest to us in England because we alone are, of all nations, an almost purely capitalist society.
Here again we can tabulate the advantages and disadvantages.
The chief moral advantage of Capitalism as compared with the Slave-owning State is that every man, however poor, feels himself to be free and to that extent saves his honour. He may be compelled by poverty to suffer a very hard bargain; he may see himself producing wealth for other men, of which wealth he is only allowed to keep a portion for himself. To that extent he is “exploited,” as the phrase goes. He feels himself the victim of a certain injustice. He remains poor in spite of all his labour, and the man for whom he works grows rich. But, after all, it is a contract which the free workman has made, and he has made it as a citizen. If those who own nothing, or next to nothing, in a capitalist state (this great majority is technically called in economic language “the proletariat”) organise, they can bargain, as our great Trade Unions do, with the few owners of their means of livelihood and of production, and be fairly certain, for some little time ahead, of a reasonable livelihood.
Another advantage of Capitalism, purely economic, is the effectiveness of human energy under this system, at least, in the first part of its development. We spoke of this in the last section.
But the disadvantages are very grave indeed.
Under Capitalism the capitalist himself acts competitively and for a profit. He does not, like the slave-owner, direct a regular, simple machine which works evenly year in and year out. He is perpetually struggling to rise; or suffering, through the rise of others, a fall of fortune. He is always on the look-out to buy labour as cheaply as he can and then to sell the product as dearly as he can. There is thus a perpetual gamble going on, the owners of Capital rapidly growing rich and poor by turns and a general insecurity gradually poisoning all the owning part of society. A far worse insecurity affects the propertyless majority. The Proletariat—that is, the mass of the State—lives perpetually under the fear of falling into unemployment and starvation. The lash urging the workman to his fullest effort is this dread of misery. At first that lash urges men to intense effort, but later it destroys their energy. Capitalism was marked by nothing more striking when it first arose than by the immense expansion of wealth and population which followed it. In every district which fell under the capitalist system this expansion of total wealth and of total population could be observed; and England, which has become completely capitalist, had in the hey-day of its Capitalism—up to the present generation—a more rapid rate of expansion in wealth and population than any other ancient people. But already the tide has turned, and the inhumanity of such a life is beginning to breed everywhere an ill-ease and revolt which threaten our civilisation.
The disadvantages of Capitalism are, in the long run, so great that now, after not more than a lifetime of complete Capitalism, and that in only one State—the English State—nearly everybody is profoundly discontented with it and many people are in violent rebellion against it. This grinding and increasing insecurity which attaches to the Capitalist system is killing it. No one is safe for the morrow. Perpetual competition, increasing with every increase of energy, has led to a chaos in human society such as there never was before. The mass of the people, not being slaves, cannot be certain that they will be kept alive. They live in a state of perpetual anxiety as to whether their employment will continue; while among the owners themselves the same anxiety exists in another form. The competition among them gets more and more severe. The number of owners gets less, and even the richest of them is more insecure than were the moderately rich of a generation ago. All society is like a boiling pot, with individuals suddenly coming into great wealth from below and then dropping out again; the whole State suffers from an increasing absence of leisure and an increasing turmoil.
There is, then, this very grave disadvantage of insecurity everywhere, and particularly for the mass of the people, who live under permanent conditions of insecurity; nearly all the wage-earners have had experience at some time, longer or shorter, of insufficiency through unemployment. Capitalism leaves free men under a sense of acute grievance (which they would not feel if they were slaves, accustomed to a regular and fixed status in society), and, what is worse, Capitalism in its later stages need not provide for the livelihood of the mass of citizens, and, in effect, does not so provide.
The magnitude of these evils is obvious. A man who is a free man, a citizen, able in theory to take part in the life of the State, equal with the richest man before the law, yet finds himself living on a precarious amount of necessaries of life doled out as wages week after week; he sees his labour exploited by others and suffers from a sense of injustice and oppression. The wealth of the small, owning, class does not seem a natural adjunct to its social position, as it does in the slave-owning state; for there is no tradition behind that class; it has no “status,” that is, no general respect paid to it as something naturally—or, at any rate, traditionally—superior to the rest of men. Many a modern millionaire capitalist, exploiting the labour of thousands of his fellows, is of a lower culture than most of his labourers; and, what is more, he may in a few years have lost all his economic position and have been succeeded by another, even baser than himself. How can the masses feel respect for such a man in such a position of chance advantage?
It is inevitable that a moral evil of this sort should make the whole State unstable. You cannot make of great differences in wealth between citizens a stable state of affairs, save by breeding respect for the owners of great wealth. But the more the turmoil of Capitalism increases the less respect these owners of great wealth either deserve or obtain: the less do they form a class, and the less do they preserve traditions of any kind. And yet it is under these very conditions of Capitalism that there is a greater disparity of wealth than ever the world knew before! It is clear that society in such a condition must be as unstable as an explosive.
So much for the first great disadvantage of Capitalism, chaos. But the second main disadvantage—the fact that Capitalism in its later stages ceases to guarantee the livelihood of the people—is a little less easy to understand. Indeed, most people who discuss Capitalism, even when they strongly oppose it, seem unable to grasp this second disadvantage—so let us examine it closely.
I have said that Capitalism, in its later stages, does not provide for the maintenance of the mass of the people.
To see how true this is, consider an extreme case.
Supposing one man were to own all the means of production, and supposing he were to have in his possession one machine which could produce in an indefinite amount all that human beings need in order to live. Then there would be no economic reason why this one man should provide wealth for anyone except himself and his family. He might turn out enough things to support a few others whom he wanted for private servants or to amuse him, but there would be no reason why he should support the masses around him.
Now it is true that we have not yet come, under Capitalism, to so extreme a case. But the moral applies, though modified, to Capitalism in its last stages, when very few men control the means of production, when machinery has become very efficient, and when the great mass of people are dependent upon employment by the capitalist for their existence.
Consider that it is of the essence of Capitalism to keep wages down, that is, to buy labour cheap. Therefore, the labourer who actually produces, say, boots cannot afford to buy a sufficient amount of the boots which he himself has made. The capitalist controlling the boot-making machinery, when he has provided himself with a dozen pair of boots, and the working classes of the community with such boots as their wages permit them to buy, must either try to sell the extra boots abroad (and that outlet can’t last long) or stop making them. He has restricted the home market by the necessity of cheap labour, and you have the absurd position of men making more goods than they need, and yet having less of those goods available for themselves than they need: the labourer producing, or able to produce, every year enough clothing for ten years, and yet not being able to afford sufficient for one: the labourer producing or able to produce ten good overcoats, yet not able to buy one.
So under Capitalism in its last stages you have the abnormal position of millions of men ready to make the necessaries of life, of machinery ready to produce those necessaries, of raw material standing ready to be worked up by the machinery if only labourers could be put on, and yet all the machinery standing idle, the wealth not being produced, and the mass who could produce it going hungry and ill-shod and badly clothed. And the more Capitalism develops the more that state of things will develop with it.
Now this gradual lessening of purchasing power on the part of the working masses under Capitalism is the destruction of the home market. Low wages make great masses of English bootmakers unable to buy all the boots they would. Therefore the capitalist who owns the boot-making machinery must try to sell his surplus abroad. But the foreign countries, as they grow capitalist, suffer from the same trouble: property being badly distributed and the wage-earners kept as low as possible, their power to buy foreign goods also diminishes. Thus you have gradual destruction of the foreign market. You get in the long run the full working of what we will call the “Capitalist Paradox,” which is that Capitalism is a way of producing wealth which, in the long run, prevents people from obtaining the wealth produced and prevents the owner of the wealth from finding a market.
There is no doubt that, on the balance, the disadvantages of Capitalism have proved, even after its short trial, overwhelmingly greater than the advantages.
Capitalism arose in small beginnings rather more than 250 years ago. It grew strong and covered the greater part of the community (in England, at least) about 100 years ago. It came to its highest development in our own time; and it is already doomed. People cannot bear it any longer. Future historians looking back upon our time will be astonished at the immense productivity of Capitalism, the enormous addition to wealth which it made, and to population, in its early phases; but perhaps they will be still more astonished at the pace at which it ran down at its end. Urged by the extreme human suffering, moral and material, which capitalism now produces, remedies have been proposed, the chief of which is generally called Socialism, or, in its fully developed form, Communism.
But before we talk of this supposed remedy, which has never been put into practice (it is an imaginary state of things) we must describe the third form of state—the Distributive State.