Shaw saw plainly enough that the theory of value did not matter in the least so far as the soundness of Socialism was concerned. For, as he once expressed it in a letter to me, “if you steal a turnip the theory of the turnip's value does not affect the social and political aspect of the transaction.” But, of course, Hyndman and the few Socialists who had read Marx and nothing else, were furious over Shaw's iconoclastic articles in the National Reformer. In view of the fact that the opponents of Socialism continually damaged the cause of the Socialists by alleging that the Socialists' economic basis was Marx's theory and was untenable, with the result that the Socialists persisted in accepting the allegation and defending Marx, Shaw resolutely forced the quarrel into publicity as far as he could. His prime object was to make it clear that the Fabians were quite independent of the Marxian value theory. A heated controversy on the subject in the Pall Mall Gazette of May, 1887, engaged in by Shaw, Hyndman, and Mrs. Besant, did not down the ghost of the value theory; for the controversy was reopened in To-Day two years later. An Economic Eirenicon, by Graham Wallas, was followed by Marx's Theory of Value, contributed by H. M. Hyndman, in which, it seems, he merely repeated the old Marxian demonstration without making any attempt to meet the Jevonian attack. Whereupon Shaw “went for” Hyndman in his most aggravating style in an article entitled Bluffing the Value Theory, which finished the campaign except for a series of letters in Justice by various hands, the tenth of which, in July, 1889, was written by Shaw. There were other letters by Shaw on the same subject, written at different times, which appeared in the Daily Chronicle. William Morris never made any pretence of having followed the controversy on its abstract technical side; and perhaps the most amusing feature of the entire campaign was a sort of manifesto which Belfort Bax induced Morris to sign, in which Hyndman, Bax, Aveling and Morris declared that all good Socialists were Marxites! Shaw was once denounced in public meeting by a Marxian Socialist for pooh-poohing Marx as an idiot. His own position, as he himself once remarked to me, lay somewhere between this and that of worshipping Marx as a god. In one of the most remarkable essays ever written by Shaw, entitled The Illusions of Socialism, Shaw pointed out why it was that a difficult and subtle theory like that of Jevons could never be as acceptable as a crude and simple labour theory like that of Marx, which seemed to imply that wealth rightly belonged to the labourer.[76]

From the standpoint of the Marxian religionist, the second heresy of which Shaw is guilty consists in his recognition of the Class War doctrine as a delusion and a suicidal political policy. To Shaw, the form of organization deduced from the Class War doctrine is always the same. “All you have to do is to form a working-class association, declare war on property, explain the economic situation from the platform and at the street corner, and wait until the entire proletariat (made 'class-conscious' by your lucid lectures) joins you. This being done simultaneously in London, Paris, Berlin, Madrid, Rome, Vienna, etc., etc., nothing remains but a simultaneous movement of the proletarians of all countries, and the sweeping of capitalism into the sea because 'ye are many: they are few.' What can be easier or more scientific?” But a study of the history of Socialism led Shaw to the discovery that the Class War theory had gone to pieces every time it had been invoked. Lassalle attempted to organize the imaginary class-conscious proletariat, only to be disillusioned before the end of the first year by the “damned wantlessness” of the real proletariat. Owen before him likewise had failed, after apparently converting all Trade-Unionism to his New Moral World. When Marx planned the Socialist side of “The International” in the sixties, he showed his contempt for the trade-union side, with the result: “On the trade-union side a great success.... On the Socialist side, futility and disastrous failure, culminating, in 1871, in one of the most appalling massacres known to history.” Marx can scarcely be said to have tried to organize the class-conscious proletariat; but the moment his useless vituperation of Thiers, “brilliant as a sample of literary invective, but useless for the buttering of parsnips,” made known to English workmen his real opinion of bourgeois civilization, they abandoned him in horror and left the International memberless. In Germany, “Liebknecht made no serious headway until he became a parliamentarian, playing the parliamentary game more pliably than Parnell did, though always 'old-soldiering' his way with the greenhorns by prefacing each compromise with the declaration that Social Democracy never compromised.” In France, Jaurès and Millerand have not so much abandoned the Class War doctrine as wholly neglected and ignored it, thus reducing the old Guèsdist Marxism to absurdity. In England, “the once revolutionary Social-Democratic Federation has been forced by the competition of the quite constitutional Independent Labour Party to give up all its ancient Maccabean poetry, and, after a period of uselessness and surpassing unpopularity as an anti-Fabian Society with a speciality for abusing Mr. John Burns, to settle down into a sort of Ultra-Independent Labour Party, ready to amalgamate with its rival if only an agreement can be arrived at as to which is to be considered as swallowing the other.”

Not merely a study of the Class War doctrine from the historical standpoint, but also an examination into the assumptions upon which it rests, have thoroughly convinced Shaw that Socialists have for long been making overdrafts upon their Capital. Shaw has never sought to shirk the real point at issue by the quibble of substituting the sort of class-consciousness called snobbery, mighty as is that social force, for the economic class-consciousness of the German formula. In Shaw's interpretation, Hyndman and the Marxists use the term “Class War” to denote a war between all the proletarians on one side and all the property-holders on the other—in Schaeffle's phrase “a definite confrontation of classes”—which will be produced when the workers become conscious that their economic interests are opposed to those of the property-holders. Shaw's position is effectively summed up in his words:

In Shaw's opinion, the social struggle does not follow class lines at all, because the people who really hate the capitalist system are, like Ruskin, Morris, Tolstoy, Hyndman, Marx and Lassalle, themselves capitalists, whereas the fiercest defenders of it are the masses of labourers, artisans, and employees whose trade is at its best when the rich have most money to spend. Socialists like Shaw, who “do not accept the class war,” are simply expressing “first, a very natural impatience of crying 'War, War!' where there is no war; and, second, their despair at seeing Socialism, like Liberalism, perishing because it is trying to live on the crop of home-made generalizations so plentifully put forth during the great Liberal boom of 1832-80 by middle-class paper theorists like Malthus, Cobden, Marx, Comte and Herbert Spencer—fine fellows, all of them, but stupendously ignorant of the industrial world.” The basic divergence between the Fabian and the “S. D. F.” policy is epitomized in Shaw's words: “There is a conflict of interests between those who pay wages and those who receive them; and this is organized by the trade unions. There is another conflict of interests between those workers and proprietors whose customers live on rent (in its widest economic sense), and those whose customers live on wages; but the lines of this conflict run, not between the classes, but right through them, and do not coincide with the lines of the trade union conflict. And any form of Socialist organization, or any tactics toward the trade union movement, based on the theory that the lines of battle do run between the classes and not through them, or do coincide with the trade union lines of battle, will prove, and always has proved, disastrously impracticable.” Shaw exasperatingly said in a recent article[78] that he refused to agree with anybody on any subject whatsoever. “Let them agree with me if my arguments convince them. If not, let them plank down their own views. I will not have my mouth stopped and my mind stifled.” And those mystic forces—historical development and Progress with a large P—in which the Marxists rest their firmest hope, Shaw regards in the spirit of Ingoldsby's sacristan:

There are two factors which strongly militate against the progress of Socialism; the resolute adherence of Socialists to those theories and policies of Marx which time, experience, and modern economic science have combined to discredit; and the tendency of the popular mind to confuse Socialism with Anarchism.[79] Shaw's most important negative and destructive achievements consist in those amazingly clever and interesting papers in which he attempts to expose Marx's theory of value as an exploded fallacy, to show that the Class War will never come, and to demonstrate the impossibilities of Anarchism. In the technical sense of Socialist economics, Shaw occupies the opposite pole to Individualism and Anarchism. And yet in a very definite and general sense, Shaw is a thorough-paced individualist and anarchist. If individualist means a believer in the Shakespearean injunction “To thine own self be true!”, in the Ibsenic doctrine “Live thine own life!”, then Shaw is an individualist heart and soul. If anarchist means an enemy of convention, of tradition, of current modes of administering justice, of prevailing moral standards, then Shaw is the most revolutionary anarchist now at large. If, on the other hand, Individualist means one who distrusts State action and is jealous of the prerogative of the individual, proposing to restrict the one and to extend the other as far as is humanly possible, then Shaw is most certainly not an Individualist. If Anarchist means dynamitard, incendiary, assassin, thief; champion of the absolute liberty of the individual and the removal of all governmental restraint; or even a believer, as Communist, in a profound and universal sense of high moral responsibility present in all humanity, then Shaw is a living contradiction of Anarchism.

Shaw opposes Individualist Anarchism since, under such a social arrangement, the prime economic goal of Socialism: the just distribution of the premiums given to certain portions of the general product by the action of demand, would never be attained. As this system not only fails to distribute these premiums justly, but deliberately permits their private appropriation, Individualist Anarchism is, in Shaw's view, “the negation of Socialism, and is, in fact, Unsocialism carried as near to its logical completeness as any sane man dare carry it.” The Communist Anarchism of Kropotkin, Shaw also opposes because of his own lack of faith in humanity at large, in the present state of development of the social conscience. If bread were communized, the common bread store obviously would become bankrupt unless every consumer of the bread contributed to its support as much labour as the bread he consumed cost to produce. Were the consumer to refuse thus to contribute, there would be two ways to compel him: physical force and the moral force of public opinion. If physical force is resorted to, then the Anarchist ideal remains unattained. If moral force, what will be the event? The answer reveals Shaw as a confirmed sceptic in regard to the value of public opinion as a moral agent. “It is useless,” he avers, “to think of man as a fallen angel. If the fallacies of absolute morality are to be admitted into the discussion at all, he must be considered rather as an obstinate and selfish devil who is being slowly forced by the iron tyranny of Nature to recognize that in disregarding his neighbours' happiness, he is taking the surest way to sacrifice his own.” Under Anarchistic Communism, public opinion would no doubt operate as powerfully as now. But, in Shaw's opinion, public opinion cannot for a moment be relied upon as a force which operates uniformly as a compulsion upon men to act morally. Keen, incisive, pitiless, his words descriptive of public opinion show how little he is tinged with the poetry, the passion, and the religion which are the very life blood of Socialism.

When Shaw attended the International Socialist Congresses in Zurich and in London, he reported them in the Star as unsparingly as he would have reported a sitting of Parliament. The Socialists, amazed and indignant at their first taste of real criticism, concluded that Shaw was going over to the enemy. This Fabian policy of unsparing criticism, inaugurated and carried out ruthlessly by Shaw, ended in freeing the Fabians, in great measure, from the illusions of Socialism, and in imparting to their Society its rigidly constitutional character. An incident, which Mr. Shaw once described in a letter to me, gives one some insight into the causes of his reaction against the German Socialists' policy of playing to the galleries by spouting revolutionary rant and hinting catastrophically of impending revolutions.

After 1875, let us recall, the old pressure and discontent of the eighteen-thirties descended upon England with renewed force. In 1881, “as if Chartism and Fergus O'Connor had risen from the dead,” the Democratic Federation, with H. M. Hyndman at its head, inaugurated the revival of Socialist organization in England. Like those other haters of the capitalist system—the capitalists Ruskin, Morris, Tolstoy, Marx and Lassalle—Hyndman “had had his turn at the tall hat and was tired of it.” Shortly after the formation of the Democratic Federation, the Fabian Society, a revolting sect from the Fellowship of the New Life, founded by Professor Thomas Davidson, came into being. Hyndman and his Marxists, Kropotkin and his Anarchists, did not realize, with Shaw, that the proletariat, instead of being the revolutionary, is in reality the conservative element of society. They refused to accept this situation, not realizing that they were confronted by a condition, not a theory. “They persisted in believing that the proletariat was an irresistible mass of Felix Pyats and Ouidas.” On the point of joining the Democratic Federation, Shaw decided to join the Fabian Society instead. He did accept the situation, helped, perhaps, as he once said, by his inherited instinct for anti-climax. “I threw Hyndman over, and got to work with Sidney Webb and the rest to place Socialism on a respectable bourgeois footing; hence Fabianism. Burns did the same thing in Battersea by organizing the working classes there on a genuine self-respecting working-class basis, instead of on the old romantic middle-class assumptions. Hyndman wasted years in vain denunciation of the Fabian Society and of Burns; and though facts became too strong for him at last, he is still at heart the revolted bourgeois.” Prior to the year 1886, there had been no formal crystallization of the Fabian Society into a strictly economic association, avowedly opportunist in its political policy; after September 17th of that year the thin edge of the wedge went in. The Manifesto of the Fabian Parliamentary League contains the nucleus of the Fabian policy of to-day.[81] The Fabian Society was a dead letter until Shaw, Webb, Olivier and Wallas joined it; from that moment, it became a force to be reckoned with in English life. Almost from the very first, as Mr. Sidney Webb once wrote me, the Society took the colour of Shaw's mordantly critical temperament, and bore the stamp of his personality. The promise of the Fabians lay in their open-mindedness, their diligence in the study of advanced economics, and their resolute refusal of adherence to any formula, however dear to Socialist enthusiasts, which did not commend itself unreservedly to their intelligence. By 1885, it had only forty members; and in 1886, it was still unable to bring its roll of members to a hundred names. In 1900, it boasted a membership of eight hundred, and at present about twenty-six hundred names are found upon its rolls.[82] It is neither possible nor advisable for me to record the history of the Fabian Society—that may be found in the numerous publications of the Society. But I cannot refrain from stating that the membership increased by forty-three per cent, in the year 1906-7, that this was a year of unprecedented activity; and that the Society has recently been greatly strengthened by the accession of many well-known men in English public life. There were then eight Fabians in the London County Council; and in Parliament, Labour and Socialism have in the last five years been better represented, I believe, than ever before in the history of that body. I have recently talked at length with many of the ablest Socialists in England. The remarkable growth of the Fabian Society and the Socialist representation in English literature, I was told again and again, is not due to any sudden and untrustworthy inflation of Socialist values, but is largely due to the fact that Bernard Shaw, Sidney Webb, Hubert Bland, and their coterie have been planting the seeds for twenty years. Such ideas as are embodied in Mr. Lloyd George's budget and the Old Age Pension Bill are unmistakable marks of that gradual Socialist leavening of English political thought upon which the Fabians have been engaged ever since 1884. “The recent steady influx into the Fabian Society,” Mr. Bland said to me energetically, “is a clear proof to my mind that the ideas which have been lurking in the air for a long, long time are at last taking definite shape simultaneously in the minds of a great many people. Such men as Bernard Shaw have brought this thing to pass.”[83]

During the years from 1887 to 1889, the years we are especially concerned with at present, compensation for its paucity of numbers was found not only in the intellectual capacity, but also in the economic inquisitiveness and acquisitiveness of the leaders in the Fabian Society. This is best revealed in Shaw's sketch of this period:

Not without reason have the Fabians been called the Jesuits of the Socialist evangel in England. The “waiting” of the Fabian motto is synonymous, not with inaction, but with unflagging energy.[85] The Fabians eschewed pleasures and recreations of every kind in favour of public speaking and public instruction; their policy has always been one of education and permeation. In the year ending April, 1889, to take a single example, the number of lectures delivered by members of the Fabian Society alone was upwards of seven hundred. In addition to writing or editing many publications of the Fabian Society, Shaw has delivered, in the last twenty-odd years, considerably more than a thousand public lectures and addresses. Until the close of 1889, the Fabians had confined their propagandist campaign to three directions: publication of manifestos and pamphlets; delivery of public addresses and holding of conferences, and exciting efforts towards the permeation of the Liberal party. In December, 1889, the Fabian Society published the well-known book, Fabian Essays in Socialism, edited by Shaw, and containing, in addition to two essays of his own, essays by Sidney Olivier, William Clarke, Hubert Bland, Sidney Webb, Annie Besant and Graham Wallas.[86] The authors, constituting the Executive Council of the Fabian Society, made no claim to be more than communicative learners: the book was the outcome of their realization of the lack of anything like authoritative, and at the same time popular, presentations of the political, economic, and moral aspects of contemporary Socialism.