THE DISTRIBUTIVE STATE
A state of society in which the families composing it are, in a determining number, owners of the land and the means of production as well as themselves the human agents of production (that is, the people who by their human energy produce wealth with those means of production), is probably the oldest, and certainly the most commonly found of all states of society. It is a state of society which you get all through the East, all through Asia, and in all the primitive states we know. It is the state to which men try to return, as a rule, after they have blundered into any other, though the first state we described—the Servile State—runs it very close as a thing suitable to human nature; for we know that the Servile State did also last for centuries quite normally and stably in the Pagan past.
The reason men commonly adopt the Distributive form of society, and tend to return to it if they can, is that the advantages it presents seem greater in most men’s eyes than its disadvantages.
The advantages are these:—
It gives freedom: that is, the exercise of one’s will. A family possessed of the means of production—the simplest form of which is the possession of land and of the implements and capital for working the land—cannot be controlled by others. Of course, various producers specialise, and through exchange one with the other they become more or less interdependent, but still, each one can live “on his own”: each one can stand out, if necessary, from pressure exercised against him by another. He can say: “If you will not take my surplus as against your surplus I shall be the poorer; but at least I can live.”
Societies of this kind are not only free, but also, what goes with freedom, elastic—that is, they mould themselves easily to changed conditions. The individual, or the family, controlling his or its own means of production, can choose what he will do best, and can exercise his faculties, if he has sufficient knowledge, to the best advantage.
This arrangement also gives security, though not as much security as the Servile State. Men in this position of ownership are not in dread of the immediate future. They can carry on. They may, if they choose, make a reserve of their produce to carry them over moments of difficulty. For instance, they will probably have each a reserve of food to carry them over a bad harvest or some natural disaster. Further, it is found in practice that societies of this kind continue for centuries without much change. They go on for generations with a property well divided among them and everybody free, so far as economic situation is concerned. No such society has ever been destroyed except by some great shock; and so long as every shock can be warded off, this system of having the land and the means of production controlled by the mass of the citizens as private owners is enduring. There are districts of Europe to-day where the system has continued from beyond the memory of man. Such a little state as Andorra is an example, and many of the Swiss valleys. Further, when the system has been laboriously reconstructed, when the mass of families who used to be dispossessed have been again put into possession of land and the means of production, we find that the state arrived at is stable.
The best example of that sort of reconstruction to-day is to be found in Denmark, but you have it also in a less marked fashion in most parts of France and in most of the Valley of the Rhine, in Belgium and Holland, in Norway, and in many other places. Wherever it has been settled it has taken root firmly.
The disadvantages of such a system are, first, that though in practice it is found usually stable, yet in theory it is not necessarily stable, and in practice also there are some communities the social character of which is such that the system cannot be established permanently.
It is obvious that, with land and the means of production well distributed among the various families, a few may by luck or special perseverance and cunning, tend to buy up the land and implements of their less fortunate neighbours, and nothing will prevent this but a set of laws backed up by strong public opinion. In other words, people must desire this state of society, and desire it strongly in order to maintain it; and if the desire for ownership and freedom is weak this distributive arrangement will not last.
In the absence of special laws, and a public opinion to back them, the idler or the least competent or least lucky of the owners will gradually lose their ownership to the more industrious or the more cunning or more fortunate.
Another disadvantage which has often been pointed out is that a state of society of this sort, though usually stable and enduring, falls into a routine (that is, into a traditional way of doing things), which it is very difficult to change. The small owner will not have the same opportunities for travel and for wide experience as the rich man has, and he will tend to go on as his fathers did, and therefore when some new invention arises outside his society he will be slow to adopt it. In this way his society becomes less able to defend itself from predatory neighbours and goes under in war. For a society of this kind is unfitted to the discovery of new things. Contented men feel no special spur to discover or to act on such discovery. That is why we find societies in which land and all the other means of production are well distributed among the greater part of the families of the State becoming too conservative—that is, unwilling to change even for their own advantage.
This, of course, is not universally true. For instance: no society in Europe has made more progress in agriculture than the Danish society of small owners. But, take the world all over, this kind of state is usually backward, that is, slow to take up improvements in production and to avail itself of new discoveries in physical science.
There is also another disadvantage which the Distributive State has when it is in competition with a Capitalist State, or even a Servile State, and that is the difficulty of getting a very large number of small owners to put their money together for any great purpose. The small owner will probably have less opportunities for instruction and judgment than the few directing rich men of a Capitalist or Servile State, and even if he is, on the average, as well educated as these rich men in neighbouring states, it will be more difficult to get a great number of small owners to act together than to persuade a few large owners to act together. Therefore highly Capitalist States, such as England, will be found more enterprising than less Capitalist States in their investments and commerce. They will open up new countries more rapidly, and will get possession of the best markets.
Lastly, this disadvantage attaches to the Distributive State—that it is not so easy in it to collect great funds for war or for national defence, or for any other purpose, as it is in a Capitalist or Servile State. You cannot tax a Distributive State as highly as you can tax a Capitalist State. The reason is obvious enough. A family with, say, £400 a year finds it terribly difficult—almost impossible—to pay out £100 a year in taxation. They live on a certain modest scale to which all their lives are fitted, and which does not leave very much margin for taxation. If you have a million such families with a total income of £400 millions you may collect from them, say, a tenth of their wealth in a year—£40 millions—but you will hardly be able to collect a quarter—£100 millions.
But another society with exactly the same amount of total wealth, £400 millions a year, only divided into very rich and very poor, a society in which there are, say, 1,000 very rich families with £300,000 a year each, and a million families with rather less than £100 a year each, is in quite a different situation. You need not tax at all the million people with a hundred a year each, but the rich people, who between them have £300,000,000 a year, can easily be taxed a quarter of their whole wealth; for a rich man always has a much larger margin, the loss of which he does not really feel.
By a very curious paradox, which it would take much too long to go into in detail, but which it is amusing to notice, this power of taxing a very highly capitalist community is one of the things which is beginning to handicap our Capitalist societies to-day against the Distributive societies. It used to be all the other way, and it seemed common sense that countries where you could levy large sums for State purposes of war or peace would win against countries where you could not levy such sums for public purposes. But the fact that you can tax so very highly a society of a few rich and many poor has been shown in the last few years to have most unexpected results. The very rich men pay all right; but the drain on the total resources of the wealth of the State weakens it.
The money raised by taxation is spent on State servants—many of them inefficient and idle.
Since it is so easy to raise large sums, there is a temptation to indulge in all sorts of expensive State schemes, many of which come to nothing. And this power of easy taxation, which was a strength, becomes a weakness.
No one suspected this until taxation rose to its present height, but now it is clearly apparent; and we in England might perhaps be in a better way later on if there had been as much resistance to high taxation here as there has been in countries where property is better distributed.