29
YOUR SHOPPING
ASK yourself this question: “Where does unequal distribution of the national income hit me in my everyday life?”
The answer is equally plain and practical. When you go out to do your marketing it hits you in every purchase you make. For every head of cabbage you buy, every loaf of bread, every shoulder of mutton, every bottle of beer, every ton of coals, every bus or tram fare, every theatre ticket, every visit from your doctor or charwoman, every word of advice from your lawyer, you have to pay not only what they cost, but an additional charge which is handed over finally to people who have done nothing whatever for you.
Now though every intelligent woman knows that she cannot expect to have goods or services for less than they cost in education, materials, labor, management, distribution, and so on, no intelligent woman will consent, if she knows about it and can help it, to pay over and above this inevitable cost for the luxuries and extravagances of idlers, especially if she finds great difficulty in making both ends meet by working pretty hard herself.
To rid her of this overcharge, Socialists propose to secure goods for everyone at cost price by nationalizing the industries which produce them. This terrifies the idlers and their dependents so much that they do their best to persuade the Intelligent Woman in their newspapers and speeches and sermons that nationalization is an unnatural crime which must utterly ruin the country. That is all nonsense. We have plenty of nationalization at present; and nobody is any the worse for it. The army and navy, the civil service, the posts and telegraphs and telephones, the roads and bridges, the lighthouses and royal dockyards and arsenals, are all nationalized services; and anyone declaring that they were unnatural crimes and were ruining the country would be transferred to the county lunatic asylum, also a national institution.
And we have much more nationalization than this in the form called municipalization, the only difference being that instead of the central Westminster Parliament owning and conducting the industry for the nation, as it does the Post Office, the industry is owned and conducted by City Corporations or County Councils for the local ratepayers. Thus we get publicly owned electric light works, gas works, water works, trams, baths and washhouses, public health services, libraries, picture galleries, museums, lavatories, parks and piers with pavilions and bands and stages, besides many other public services which concern the maintenance of the Empire, and of which the public knows nothing.
Most of these things could be done by private companies and shops; indeed many of them are done at present partly by private enterprise and partly by public: for instance, in London private electric lighting companies supply light in one district whilst the Borough Councils provide a municipal supply in others. But the municipal supply is cheaper, and with honest and capable management always must be cheaper than the private company’s supply.
You will ask, why must it? Well, shortly, because it pays less for its capital, less for its management, and nothing at all for profits, this triple advantage going to the consumer in cheapness. But to take in the whole scope of public enterprise as compared with private, let us begin with the nationalized services. Why is it that the nationalized Post Office is so much cheaper and more extensive than a private letter-carrying company could make it, that private letter-carrying is actually forbidden by law?
The reason is that the cost of carrying letters differs greatly as between one letter and another. The cost of carrying a letter from house to house in the same terrace is so small that it cannot be expressed in money: it is as near nothing as does not matter: to get a figure at all you would have to take the cost per thousand letters instead of per letter. But the cost of carrying the same letter from the Isle of Wight to San Francisco is considerable. It has to be taken from the train to the ship to cross the Solent; changed into another ship at Southampton or perhaps at Liverpool after another train journey; carried across the Atlantic Ocean; then across the continent of North America; and finally delivered at the opposite side of the world to the Isle of Wight. You would naturally expect the Postmaster-General to deliver a dozen letters for you in the same terrace for a penny, and charge you a pound or so for sending one letter to San Francisco. What he actually does for you is to deliver the thirteen letters for three-halfpence apiece. By the time these lines are in print he may be charging you only a penny apiece, as he used to before the war. He charges you less than the cost of sending the long-distance letter, and more than the cost of sending the short-distance letters; but as he has thousands of short-distance letters to send and only dozens of long-distance ones he can make up for the undercharge on the long by an overcharge on the short. This charging the same for all letters is called by economists averaging. Others call it gaining on the swings what we lose on the roundabouts.
Our reason for forbidding private persons or companies to carry letters is that if they were allowed to meddle, there would soon be companies selling stamps at threepence a dozen to deliver letters within a few miles. The Postmaster-General would get nothing but long-distance letters: that is, the ones with a high cost of carriage. He would have to put up the price of his stamps; and when we found that the advantage of sending a letter a mile or two for a farthing was accompanied by the disadvantage of paying sixpence or a shilling when we wanted to write to someone ten miles off, we should feel that we had made a very bad bargain. The only gainers would be the private companies who had upset our system. And when they had upset it they would raise their short-distance prices to the traditional penny, if not higher.
Now let us turn from this well-established nationalized service to one that might be nationalized, and that concerns every housekeeper in the country very intimately. I mean the coal supply. Coals have become a necessary of life in our climate; and they are dreadfully dear. As I write these lines it is midsummer, when coals are cheapest; and a circular dated the 16th June offers me drawingroom coal for thirty-six and threepence a ton, and anthracite for seventy shillings. That is much more than the average cost. Why must I pay it? Why must you pay it? Simply because the coal industry is not yet nationalized. It is private property.
The cost price of coal varies from nothing to a pound a ton or more, without counting what it costs to carry and distribute the coal throughout the country. Perhaps you do not believe that coals can be had for nothing; but I assure you that on the Sunderland coast when the tide is out coals can be picked up on the shore by all comers as freely as shells or seaweed. I have seen them with my own eyes doing it. A sack and a back to carry it on is all that anybody needs there to set up as a hawker of coals in a small way, or to fill the cellar at home. Elsewhere on our coasts coal is so hard to reach that shafts have been sunk and mines dug for miles under the sea, the coal not having been reached until after twenty years work and a heavy expenditure of money. Between these two extremes there are all sorts of mines, some yielding so little coal at such high cost that they are worked only when the price of coal rises to exceptional heights, and others in which coal is so plentiful and easily got at that it is always profitable to work them even when coal is unusually cheap. The money they cost to open up varies from £350 to over a million. But the price you have to pay never falls below the cost from the very dearest mines.
The reason is this. What makes prices high is scarcity: what brings them down is plenty. Coals rise and fall in price just like strawberries. They are dear when scarce, cheap when plenty.
Now an article can become scarce in several ways. One is by reducing the quantity in the market by slackening or ceasing to manufacture. Another is to increase the number of people who want to buy the article and have money enough to pay for it. Yet another is to find out new uses for it. A scarcity of coal can be produced not only by the increase of the population, but by the people who formerly wanted only a scuttle of coals for the kitchen fire wanting thousands of tons for blast furnaces and ocean steamers. It is the scarcity produced in these ways that has raised the price of coal to such a point that it is now worth while to tunnel out mines under the sea. The cost of such mines is heavy; but it is not incurred until the price of coal has gone up sufficiently to cover it with a profit. If the price falls enough to cut off that profit the mine stops working and is abandoned. And what is the consequence of that? The stopping of the mine cuts off the supply of coals it used to send to the market; and the scarcity produced by the stoppage sends the price up again until it is high enough to restart the mine without losing money by it.
In this way the Intelligent Woman (and also the unintelligent one) finds herself condemned always to pay for her coals the full cost of getting them from the very dearest mines in use, though she may know that only the fag end of the supply comes from these mines, the rest coming from mines where the cost is much lower. She will be assured, if she remonstrates, that the price is barely sufficient to enable some of the collieries to continue working; and this will be quite true. What she will not be told, though it also is quite true, is that the better mines are making excessive profits at her expense, to say nothing of landlord’s royalties.
And here comes in another complication. The miners who hew out the coal for wages in the better mines are paid no more than those in the worse ones which can barely afford to keep going, because the men, unlike the coal, can go from one mine to another, and what the poorest miner must accept all must accept. Thus the wages of all the miners are kept down to the poverty of the worst mines, just as the coal bills of all the housekeepers are kept up to their high cost. The dissatisfied miners strike, making coals scarcer and dearer than ever. The housekeepers grumble, but cannot bring down prices, and blame “the middleman”. Nobody is satisfied except the owners of the better mines.
The remedy here is, of course, the Postmaster-General’s plan of averaging. If all the coal mines belonged to a Coalmaster-General he could set off the good mines against the bad, and sell coal for the average cost of getting the whole supply instead of having to sell it for the cost of getting it in the very worst mines. To take fancy figures, if half the supply cost a pound a ton to raise and the other half cost half a crown a ton, he could sell at eleven and threepence a ton instead of at a pound. A Commercial Coal Trust, though it might come to own all the mines, would not do this, because its object would be to make as much profit as possible for its shareholders instead of to make coal as cheap for you as possible. There is only one owner who would work in your interest, and not want to make any profit at all. That owner would be a Government Coalmaster-General, acting for the nation: that is, acting for you and all the other housekeepers and users of coal.
Now you understand why you have the miners and the intelligent users and buyers of coal demanding the nationalization of the coal mines, and all the owners of the mines and the sellers of coal shrieking that nationalization would mean waste, corruption, ruinously high prices, the destruction of our commerce and industry, the end of our empire, and anything else they can think of in their dismay at the prospect of losing the profits they make by compelling us to pay a great deal more for our coal than it costs. But however recklessly they shriek, they are careful never to mention the real point of the whole business: that is, the procuring of coal for everybody at cost price. To keep the attention of the public off that, they will declare that nationalization is a wicked invention of the Bolshevists, and that the British Government is so corrupt and incompetent that it could not manage a baked potato stand honestly and capably, much less a coal mine. You may read ten debates in the House of Commons on coal nationalization, and a hundred newspaper articles on those debates, without ever learning what I have just told you about the difference between the mines, and how by averaging the cost of working them the price of your coals could be greatly reduced. Once these facts are known and understood there is no room for further argument: every purchaser of coal becomes a nationalizer at once; though every coal proprietor is ready to spend the last penny he can spare to discredit and prevent nationalization.
You see then how separate private property in coal mines hits a woman every time she buys coals. Well, it hits her in precisely the same way every time she buys a pair of scissors or a set of knives and forks or a flat-iron, because iron mines and silver mines differ like coal mines. It hits her every time she buys a loaf of bread, because wheat farms differ in fertility just like mines: a bushel of wheat will cost much more to raise on one farm than on another. It hits her every time she buys anything that is made in a factory, because factories differ according to their distance from railways or canals or seaports or big market towns or places where their raw materials are plentiful, or where there is natural water power to drive their works. In every case the shop price represents the cost of the article in the few mines and factories where the cost of production is greatest. It never represents the average cost taking one factory and one mine with another, which is the real national cost. Thus she is kept poor in a rich country because all the difference between the worst and the best in it is skimmed off for the private owners of the mines and factories by simply charging her more for everything she uses than the things cost. And it is to save her from this monstrous imposition that the Socialists, and many people who never dream of calling themselves Socialists, propose that the mines and factories shall be made national property instead of private property. The difference between the Socialist and non-Socialist nationalizers is that the non-Socialists aim only at cheap coal, whereas the Socialists have the ulterior object of bringing the mines into national ownership and control so as to prevent their remaining an instrument of inequality of income. On the immediate practical question of nationalization they are agreed. That is how Socialism can advance without a majority of professed Socialists in Parliament, or even without any.
Note that the difference between the highest cost of production under the worst circumstances and the lower costs under more favorable circumstances is called by economists rent. Mining rents and rents of copyrights and patent rights are called royalties; and most people call nothing rent except what they pay for house and land. But rent is part of the price of everything that has a price at all, except things that are communized, and things that are produced under the most unfavorable conditions.