66
SHAM SOCIALISM
THE example of the war shews how easy it is for a government to confiscate the incomes of one set of citizens, and hand them over to another without any intention of equalizing distribution or effecting any nationalization of industries or services. If any class or trade or clique can obtain control of Parliament, it can use its power to plunder any other class or trade or clique, to say nothing of the nation as a whole, for its own benefit. Such operations are of course always disguised as reforms of one kind or another, or as political necessities; but they are really intrigues to use the State for selfish ends. They are not on that account to be opposed as pernicious: rogues with axes to grind must use popular reforms as bait to catch votes for Acts of Parliament in which they have some personal interest. Besides, all reforms are lucrative to somebody. For instance, the landlords of a city may be the warmest supporters of street improvements, and of every public project for making the city more attractive to residents and tourists, because they hope to reap the whole money value of the improvements in raised rents. When a public park is opened, the rents of all the houses looking on that park go up. When some would-be public benefactor endows a great public school for the purpose of making education cheap, he unintentionally makes all the private houses within reach of it dear. In the long run the owners of the land take from us as rent in one form or another everything that we can do without. But the improvements are none the less improvements. Nobody would destroy the famous endowed schools of Bedford because rents are higher there than in towns which possess no such exceptional advantage. When Faust asked Mephistopheles what he was, Mephistopheles answered that he was part of a power that was always willing evil and always doing good; and though our landlords and capitalists are certainly not always either willing evil or doing good, yet Capitalism justifies itself and was adopted as an economic principle on the express ground that it provides selfish motives for doing good, and that human beings will do nothing except for selfish motives. Now though the best things have to be done for the greater glory of God, as some of us say, or for the enlargement of life and the bettering of humanity, as others put it, yet it is very true that if you want to get a philanthropic measure enacted by a public body, parliamentary or municipal, you may find it shorter to give the rogues an axe to grind than to stir up the philanthropists to do anything except preach at the rogues. Rogues, by which perhaps rather invidious name I designate persons who will do nothing unless they get something out of it for themselves, are often highly effective persons of action, whilst idealist talkers only sow the wind, leaving the next generation of men of action to reap the whirlwind.
It is already a well-established method of Capitalism to ask the Government to provide for some private enterprise on the ground of its public utility. Some good has been done in this way: for instance, some of our modern garden cities and suburbs could not have been built if the companies that built them had not been enabled, under the Industrial and Provident Societies Act, to borrow a large share of their capital from the Government on the understanding that the shareholders were poor people holding no more than £200 capital apiece. But this limitation is quite illusory, because, though the companies may not issue more than £200 in shares to any individual, they may and do borrow unlimited sums by creating what is called Loan Stock; and the very same person who is not allowed to have more than £200 in shares may have two hundred millions in Loan Stock if the company can use them. Consequently these garden cities, which are most commendable enterprises in their way, are nevertheless the property of rich capitalists. As I hold a good deal of stock in them myself I am tempted to claim that their owners are specially philanthropic and public-spirited men, who have voluntarily invested their capital where it will do the most good and not where it will make the most profit for them; but they are not immortal; and we have no guarantee that their heirs will inherit their disinterestedness. Meanwhile the fact remains that they have built up their property largely with public money: that is, by money raised by taxing the rest of the community, and that this does not make the nation the owner of the garden city, nor even a shareholder in it. The Government is simply a creditor who will finally be paid off, leaving the cities in the hands of their capitalist proprietors. The tenants, though led to expect a share in the surplus profits of the city, find such profits practically always applied to extending the enterprise for the benefit of fresh investors. The garden cities and suburbs are an enormous improvement on the manufacturing towns produced by unaided private enterprise; but as they do not pay their proprietors any better than slum property, nor indeed as well, it is quite possible that this consideration may induce the future owners to abolish their open spaces and overcrowd them with houses until they are slums. To guarantee the permanence of the improvement it would be safer for the Government to buy out the shareholders than for the shareholders to pay off the Government, though even that would fail if the Government acted on Capitalist principles by selling the cities to the highest bidders.
A more questionable development of this exploitation of the State by Capitalism and Trade Unionism is the subsidy of £10,000,000 paid by the Government to the coalowners in 1925 to avoid a strike. The coal miners said they would not work unless they got such and such wages. The employers vowed they could not afford to keep their mines open unless the men would accept less; and a great press campaign was set up to persuade us that the country was on the verge of ruin through excessive wages when as a matter of fact the country was in a condition that at many earlier periods would have been described as cheerfully prosperous. Finally the Government, to avert a strike which would have paralyzed the main industries of the country, had either to make up out of the taxes the wages offered by the employers to the wages demanded by the men, or else nationalize the mines. Being a Capitalist Government, pledged not to nationalize anything, it chose to make up the wages out of the taxes. When the £10,000,000 was exhausted, the trouble began again. The Government refused to renew the subsidy; the employers refused to go on without it unless the miners worked eight hours a day instead of seven; the miners refused to work more or take less; there was a big strike, in which the workers in several other industries at first took part “sympathetically” until they realized that by using up the funds of the Trade Unions on strike pay they were hindering the miners instead of helping them; and many respectable people were, as usual on such occasions, frightened out of their wits and into the belief that the country was on the verge of revolution. And there was this excuse for them: that under fully-developed Capitalism civilization is always on the verge of revolution. We live as in a villa on Vesuvius.
During the strike the taxpayer was no longer exploited by the owners; but the ratepayer was exploited by the workers. A man on strike has no right to outdoor relief; but his wife and children have. Consequently a married miner with two children could depend on receiving a pound a week at the expense of the ratepayers whilst he was refusing to work. This development of parochial Communism really knocks the bottom out of the Capitalist system, which depends on the ruthless compulsion of the proletariat to work on pain of starvation or imprisonment under detestable conditions in the workhouse. Thus you have had the Government first giving outdoor relief (the ten million subsidy) to the owners at the expense of the taxpayers, and then the local authorities giving outdoor relief to the proletariat at the expense of the ratepayers, the Government being manned mostly by capitalists and the local authorities by proletarians.
It was in the proletarian quarters of London, notably in Poplar, that the Poor Law Guardians first claimed the right to give outdoor relief at full subsistence rates to all unemployed persons, thereby freeing their proletarian constituents from “the lash of starvation”, and enabling them to hold out for the highest wages their trades could afford. The mining districts followed suit during the coal strike of 1926. This right was contested by the Government, which tried to supplant the parochial authorities by the central Ministry of Health. The Ministry, through the auditors of public accounts, surcharged the Guardians with the part of the outdoor relief which they considered excessive; but as the Guardians could not have paid the surcharge even if the proceedings taken against them had not failed, the Government took the administration of the Poor Law into its own hands, and passed Acts to confirm its powers to do so. This was essentially an attempt by the Capitalist central Government to recover the weapon of starvation which the proletarian local authorities had taken out of the owners’ hands. But the day had gone by for the ultra-capitalist relief rules of the nineteenth century, when, as I well recollect, the Registrar-General’s returns of the causes of the deaths during the year always included starvation as a matter of course. The lowest scale of relief which the Government ventured to propose would have seemed ruinously extravagant and demoralizing to the Gradgrinds and Bounderbys denounced by Dickens in 1854.
As to the demoralization, they would not have been very far wrong. If mine-owners, or any other sort of owners, find that when they get into difficulties through being lazy, or ignorant, or too grasping, or behind the times, or all four, they can induce the Government to confiscate the taxpayers’ incomes for subsidies to get them out of their difficulties, they will go from bad to worse. If miners, or any other sort of workers, find that the local authorities will confiscate the incomes of the ratepayers to feed them when they are idle, their incentive to pay their way by their labor will be, to say the least, perceptibly slackened. Yet it is no use simply refusing to make these confiscations. If the nation will not take its industries out of the hands of private owners it must enable them to carry them on, whether they can make them pay or not. If the owners will not pay subsistence wages the nation must; for it cannot afford to have its children undernourished and its civil and military strength weakened, though it was fool enough to think it could in Queen Victoria’s time. Subsidies and doles are demoralizing, both for employers and proletarians; but they stave off Socialism, which people seem to consider worse than pauperized insolvency, Heaven knows why!
Still, governments need not be so shamelessly unbusinesslike as they are when subsidies are in question. The subsidizing habit was acquired by the British Government during the war, when certain firms had to be kept going at all costs, profit or no profit, because their activities were indispensable. It was against all Capitalist principles; but in war economic principles are thrown to the wind like Christian principles; and the habits of war are not cured instantly by armistices. In 1925, when the Government was easily blackmailed into paying the mine-owners ten millions of the money of the general taxpayer (your money and mine), it might at least have secured for us an equivalent interest in the mines. It might have obliged the owners to mortgage their property to the nation for the means to carry on, as they would have had to do if they had raised the money in the ordinary commercial way. As to the miners, they felt no responsibility, because, as the owners bought labor in the market exactly as they bought pit props, there was no more excuse for asking the miners to admit indebtedness for the subsidy than the dealers in pit props. On every principle of Capitalism the Government should either have refused to interfere, and have let the comparatively barren mines which could not afford to pay the standard wage for the standard working day go smash, or else it should have advanced the millions by way of mortgage, not on the worthless security of the defaulting mines, but on that of all the coal mines, good and bad. The interest on the mortgage would in that case have been paid to the nation by the good mines, which would thus have been compelled to make up the deficits of the bad ones; and if the interest had not been paid, the Government could finally have nationalized the mines by simple foreclosure instead of by purchase.
But capitalists are by no means in favor of having Capitalist principles applied to themselves in their dealings with the State. Besides, why should the fortunate owners of solvent mines subsidize the owners of insolvent ones? If the Government chooses to subsidize bad mines, let it be content with the security of the bad mines. It ended in the Government making the owners a present of the ten millions. The owners had to pass it on to the miners as wages: at least that was the idea; and it was more or less the fact also. But whether we regard it as a subsidy to the miners or to the owners or to both, it was none the less confiscated from the general taxpayer and handed as alms to favored persons.
The people who say that such subsidies are Socialistic, whether with the object of discrediting them or recommending them, are talking nonsense: they might as well say that the perpetual pensions conferred by Charles II on his illegitimate children were Socialistic. They are frank exploitations of the taxpayer by bankrupt Capitalism and its proletarian dependents. Socialist agitators, far from supporting such subsidies, will shout at you that you are paying part of the men’s wages whilst the mine-owners take all the profits; that if you will stand that, you will stand anything; that you are paying for nationalization and not getting it; that you are being saddled with a gigantic system of outdoor relief for the rich in addition to their rents, their dividends, and the doles they have left you to pay to their discarded employees; that the capitalists, having plundered everything else, land, capital, and labor, are now plundering the Treasury; that, not content with overcharging you for every article you buy, they are now taxing you through the Government collector; and that as they will have to hand over a share of what they take from you in this way as wages, the Trade Unions are taking good care to make the Labor Party support the subsidies in Parliament.
Meanwhile you hear from all quarters angry denunciations of Poplarism as a means by which the rate collector robs you of your possibly hardearned money, often to the tune of twentyfour shillings for every pound of the value of your house, to keep idle ablebodied laborers eating their heads off at a higher rate of expenditure than you, perhaps, can afford in your own house.
All this, with due allowance for platform rhetoric, is true. The attempt to maintain a failing system by subsidies plus Poplarism burns the candle at both ends, and makes straight for industrial bankruptcy. But you will not, if you are wise, waste your forces in resentful indignation. The capitalists are not making a conscious attempt to rob you. They are the flies on the wheel of their own system, which they understand as little as you did before we sat down to study it. All they know is that Trade Unionism is playing their own game against them with such success that more and more of the overcharges (to you) that formerly went to profit are now going to wages. They cry to the Government to save them, and it saves them (at your expense) partly because it is afraid of a big strike; partly because it wants to put off the alternative of nationalization as long as possible; partly because it has to consider the proletarian vote at the next general election; and mostly because it can think of nothing better to do in the rare moments when it has time to think at all. The British employers, the British Trade Unionists, and the British Government have no deep designs: so far it is just hand to mouth with them; and you need not waste any moral indignation on them. But please note the word British, thrice repeated in the last sentence, and also the words “so far”. The American employers and financiers are far more self-conscious than our business men and working men are; and the Americans are teaching our people their methods. Modern scientific discoveries have set them dreaming of enormously increased production; and they have found out that as the world depends on the people who work, whether with head or hand, they can by combining prevent idle and incapable owners of land and capital from getting too much of the increase. They know that they can neither realize their dream nor combine properly by using their own brains; and they are now paying large salaries to clever persons whose sole business is to think for them. Suppose you were the managing head of a big business, and that you were determined not to tolerate Trade Unionism among your workpeople, and therefore had to treat them well enough to prevent them feeling the want of a union. In England your firm would be called “a rat house”, in America simply a non-union house. Imagine yourself visited by a well-dressed lady or gentleman with the pleasant nonchalance of a person of proved and conscious ability and distinction. She (we will assume that she is a lady) has called to suggest that you should order all your workpeople to join the union of their trade, of which she is the pampered representative. You gasp, and would order her out if you dared; but how can one shew the door to a superior and perfectly self-confident person. She proceeds to explain whilst you are staring at her. She says it will be worth your while: that her union is prepared to put some new capital into your business, and that it will come to a friendly arrangement with you as to the various trade restrictions to which you so much object. She points out that if instead of working to increase the dividends of your idle shareholders you were just to give them what they are accustomed to expect, and use the rest of the profit for bettering the condition of the people who are doing the work (including yourself), the business would receive a fresh impulse, and you and all the really effective people in it make much more money. She suggests ways of doing it that you have never dreamt of. Can you see any reason except stupid conservatism for refusing such a proposal?
This is not a fancy picture. It has actually occurred in America as the result of the Trade Unions employing first-rate business brains to think for them, and not grudging them salaries equal to the wages of a dozen workmen. When English Trade Unions become Americanized as English big business is becoming Americanized they will do the same. Our big businesses are already picking out brainy champions from the universities and the public services to do just such jobs for them. Both big business and skilled labor will presently be managing their affairs scientifically, instead of dragging heavily and unimaginatively through the old ruts. And when this is accomplished they will enslave the unskilled, unorganized proletariat, including, as we have seen, the middle-class folk who have no aptitude for money making. They will enslave the Government. And they will do it mostly by the methods of Socialism, effecting such manifest improvements in the condition of the masses that it will be inhuman to stop them. The organized workers will live, not in slums, but in places like Port Sunlight, Bournville, and the Garden Cities. Employers like Mr Ford, Lord Leverhulme and Mr Cadbury will be the rule and not the exception; and the sense of helpless dependence on them will grow at the expense of individual adventurousness. The old communal cry of high rates and a healthy city will be replaced by Mr Ford’s cry of high wages and colossal profits.
Those profits are the snag in the stream of prosperity. If they are unequally distributed they will wreck the system that has produced them, and involve the nation in the catastrophe. In spite of all the apparent triumphs of increased business efficiency the Socialists will still have to insist on public control of distribution and equalization of income. Without that, capitalist big business, in league with the aristocracy of Trade Unionism, will control the Government for its private ends; and you may find it very difficult, as a voter, to distinguish between the genuine Socialism that changes private into public ownership of our industries, and the sham Socialism that confiscates the money of one set of citizens without compensation only to hand it over to another set, not to make our incomes more equal, but to give more to those who have already too much.