CONFISCATION WITHOUT COMPENSATION

OUR study of nationalization by compensated or distributed confiscation has no doubt relieved you from all anxiety as to the need for nationalization without compensation. But there is always a loud-mouthed, virtuously indignant political group, still saturated with the revolutionary traditions of Liberalism, which opposes compensation. If the property owner is, in effect, a thief, they say, why should he be compensated for being compelled to cease to do evil and learn to do well? If by taxation we can make the whole capitalist class find the money to buy out the coalowners, and thus transfer their property to the nation to that extent, why not take the rest of their property simply for the sake of transferring it also to the nation? Our joint stock companies work as well with one set of shareholders as with another: in fact their shares change hands so continually in the Money Market that they never have the same set of shareholders from one working day to the next. If all the railway shares in the country were held on Monday by the inhabitants of Park Lane, and on Tuesday by the British Government, the railways would go on just the same. In like case so would any other of the great industrial services now in joint stock ownership. If a landlord had to hand over the title-deeds of half a dozen farms and an urban street to the Exchequer, the farmers would go on farming, and the tenants go on living in the street, unaffected by the obligation to pay their rents in future to an agent of the Government instead of to the agent of a duke or any other plutocrat. The business of a bank would proceed just as smoothly after as before the owners had handed over their claims on its profits to the Chancellor of the Exchequer. Then why not at once push taxation of capital to the point at which the capitalist taxpayer, unable to find the money, will be forced to surrender to the Government his share certificates, his War Loan interest, and his title-deeds? The share certificates would not be worth a farthing on the Stock Exchange, because there would be all sellers and no buyers there; but none the less each certificate would, like the title-deeds to the land, carry the right to an income out of the future harvests of the country; and if the Government could immediately use that income for the benefit of the nation, it would be extremely well worth its while to get hold of it by accepting the certificates at their face value.

It could even do so with a show of generosity; for it could say to the capitalist, “You owe the tax collector a thousand pounds (say); but instead of selling you up we are authorizing him to give you a clean receipt, not for the money, but for ten paper certificates marked a hundred pounds each, for which the cleverest stockbroker in London could not get you twopence”. “But”, exclaims the cornered capitalist, “what becomes of my income? What am I to do for a living?” “Work for it, as others have to do”, is the reply. In short, from the point of view of its Socialist advocates, taxation of capital, though absurd as a means of raising ready money for the expenses of Government, is a way of confiscating without compensation the title-deeds of, and thereby nationalizing, the land and the mines and the railways and all the other industries which the capitalists now hold as their private property.

The scheme is plausible enough.