THE DECAY OF CAPITALIST CIVILISATION.
BY SIDNEY
AND BEATRICE WEBB
THIRD EDITION
PUBLISHED BY
THE FABIAN
SOCIETY,
TOTHILL STREET, WESTMINSTER AND BY GEORGE ALLEN AND UNWIN, LIMITED. 25
1923.
;
PREFACE WE
may
as well forestall the obvious criticism
book
little
a
supply
is
not " constructive."
plan of reconstruction.
considerable detail, the reader
is
It is
that this
not intended to
For such referred
a
plan,
to the
in
works
A
advertised in the final pages ; and particularly to Constitution for the Socialist Commonwealth of Great Britain, and,
on another plane, The Prevention of Destitution or, in the form of a political programme, the pamphlet of the ;
Labour Party, Labour and the New Social Order Price Threepence). (33 Eccleston Square, London. British
We who
gratefully acknowledge the help of various friends,
will
excuse the omission of their names.
But we
cannot refrain from expressing our deepest gratitude to our oldest friend and comrade, Mr. Bernard Shaw, who kindly undertook the revision of the proofs in the midst of a General Election when we were otherwise engaged. 41
GROSVENOR ROAD,
WESTMINSTER, January
1923.
Second Impression has been taken to correct various verbal and literal errors, principally
[The opportunity of
in the
a
quotations and references.]
CONTENTS
.......
PREFACE
INTRODUCTION
OF THE POOR
.....
CHAPTER INEQUALITY OF INCOME
.
.
IN
PERSONAL FREEDOM
INITIAL SUCCESS op
II .
.
.
.
.16
III .
CHAPTER THE
I
.
CHAPTER INEQUALITY
v
.
CHAPTER THE POVERTY
NM
45
IV
THE CAPITALIST SYSTEM
63
.
.
.
.8$
.
'47
CHAPTER V THE EVENTUAL
FAILURE OF THE CAPITALIST SYSTEM
CHAPTER THE
INDEX
CAPITALIST SYSTEM AS A CAUSE OF
... vii
VI
WAR
.
INTRODUCTION one of the illusions of each generation that the social which it lives are, in some peculiar sense, " natural," unchangeable and permanent. Yet for countless thousands of years social institutions have been IT
is
institutions in
successively arising, developing, decaying and becoming gradually superseded by others better adapted to contemporary needs. This book shows how we, the nations
claiming to be the most advanced in civilisation, are no subject than our predecessors to this process of Just as the Sumerian, the Egyptian, perpetual change. the Greek, the Roman and the Christian mediaeval civilisations have passed away, our present capitalist civilisation, as mortal as its predecessors, is dissolving " " before our eyes, not only in that septic dissolution diagnosed by the Dean of St. Paul's, brought upon us by war, and curable by genuine peace, but in that slower changing of the epochs which war may hasten, but which The question, neither we nor anything else can hinder. then, is not whether our present civilisation will be It may, transformed, but how it will be transformed. and made to be considerate gradually pass by adaptation, Or, if there is angry resistpeacefully into a new form. ance instead of adaptation, it may crash, leaving mankind from the lower painfully to build up a new civilisation in which not disorder and level of a stage of social chaos and intellectual the material, only the abuses but also lost. been have will order moral gains of the previous less
Unfortunately
many who
assent to this general pro-
INTRODUCTION
2
inevitable change, fail to realise what the position of are to which this law of change applies. institutions social
To them property
the basis of
all
in a sense in
possible civilisation is private it is so bound up with
which
nature, that whilst men remain men, it is no more than the rotation of the capable of decay or supersession But they misunderstand the position. earth on its axis.
human
It is not the sanction and security of personal possessions that forms the foundation of our capitalist system, but
the institution of private ownership of the means by which the community lives. At the risk of pedantry we define our meaning. By the term capitalism, or the capitalist system, or as we we mean the particular -pfeferptne capitalist civilisation, and legal institutions of in the industry development stage in which the bulk of the workers find themselves divorced
from the ownership of the instruments of production, in such a way as to pass into the position of wage-earners, whose subsistence, security and personal freedom seem dependent on the will of a relatively small proportion of the nation ; namely, those who own, and through their the organisation of the land, legal ownership control, the labour-force of the community, and the machinery and do so with the object of making for themselves individual and private gains. That the land and the other instruments of wealth production should be the private property of a relatively small class of individuals, with hardly more public responsibility attached to it than to the possession of a watch or walkingstick
;
that this private ownership should constitute the
arrangement on which the rest of the comtheir livelihood ; and that it should carry obtain munity with it the control and organisation of the production and distribution of the commodities and services that are and this is what is meant by the very life of the nation
basis of the
this amazing arrangement, far from being capitalism eternal and ubiquitous throughout human history, has
WHAT
CAPITALISM
IS
3
become the characteristic feature of the civilisation of the United States only within three or four generations ; and of Europe only within the last few centuries, through the unregulated squattings of commercial adventure on the derelict sites left by the gradual failure of the feudal system of land tenure and agriculture in the country, and of a relatively less important gild organisation of manufacture and trading in the towns. know that, in the feudal before and the craft gilds system Europe, existed, civilisations were based on different forms of These in slavery or serfdom, the family or the caste. their times seemed as rooted in human nature and as
We
unchangeable as capitalism does. What is more, they many centuries, and were thought out and organised in States and Churches as divine orders of society in which every man, from Emperor and Pope to serf and slave, was responsible to God for the use he made of his The commercial squatting which, though opportunities. it began in England under Henry VII., did not come into power until George III. was king, has never been lasted
authorised and organised politically and religiously in the The sages who thought it out as old enduring fashion. declared that it had no concern with economists political the Churches, and that the lawgivers must not meddle its it operations were to be godless and they were be lawless. On these frankly buccaneering terms it undertook to secure the livelihood of the people, not as its aim, but as an incident of its devotion on principle to Its sole claim to tolerathe art of getting rich quickly. tion, was its success in fulfilling that cardinal condition.
with
:
to
the thesis of this book that though it never the condition completely, and in many places violated it with every circumstance of outrage, yet there was a moment, roughly placeable at the middle of the nineteenth century, when it could claim that, in a hundred years, it had produced, on balance, a surprising advance It
is
fulfilled
in material civilisation for greatly increased populations.
INTRODUCTION
4
But we must add that from that moment to the present it has been receding from defeat to defeat, beaten ever more and more hopelessly by the social problems created by the very civilisation it has built up and the very In short, that it began to fecundity it has encouraged. reached it maturity, and that history will decay before as an not epoch but as an episode, and regard capitalism, a main the in tragic episode, or Dark Age, between two And, seeing that no individual owner recognises epochs. himself as a dictator, let it be at once added that, as will the dictatorship is a class dictatorpresently be explained, and each separate capitalist is as helpless in the face ship, of the institution of ownership for private profit as are the His control of the forces of wage-earners themselves. at bottom, no greater than a competitive capitalism is, But as the institution makes sailor's control of the wind. each owner a member of a privileged class, and could be superseded by more advantageous arrangements if the class would give up its privileges, it is not altogether unfair to hold each and every member of the class responsible for the results of these privileges. The labour and socialist movement of the world is essentially a revolt against the capitalist system of society. believe that the most advanced races are to-day, in knowledge, character and intelligence ripe for dispensing with this relation ; for the supersession of industrial
We
oligarchy by industrial democracy, and of the motive of pecuniary self-interest by that of public service. realise that there have been, and over the greater part of the globe still are, other dictatorships more vicious in their motives and more disastrous in their results than the dictatorship of the owners of the instruments of Such are the coercion production over the wage-earners. of slaves by their proprietors, of vanquished races by their conquerors, of whole peoples by autocrats or oligarchies, basing themselves on a monopoly of political power by an individual or by a restricted aristocracy or
We
OTHER DICTATORSHIPS
5
other minority of race, class or creed. Running in and out of all these systems of oppression, sometimes waning, sometimes waxing, are the domestic tyrannies of the man over the woman, and of the parent over the child. Each of these separate and distinct forms of coercion of one human being by another has been embodied in peculiar economic, political or social laws and conventions each has provoked, among virile races, its comSocialists, plementary movement of revolt and reform. so long as they are true to the democracy in which socialism is rooted, are in sympathy with all these movements and are desirous of promoting them. They realise that, in the normal development of society, the abolition of chattel slavery, the establishment of political democracy, and the emancipation of women, must precede any general adoption of democracy in industry. The existence of one or other of these more obvious despotisms masks the despotism of the owners of the instruments of production over those who are dependent for their livelihood on being permitted to use them, and necessarily diverts attention from the specific evils of But the primary purpose of the socialist is capitalism. to focus attention on the peculiar kind of tyranny now exercised even in the most advanced political democracies, by a relatively small class of rich men over a mass of :
poor men.
The
socialist
indictment of the capitalist system of it, has four main
industry, and the society based upon
History proves that, whilst national poverty have other causes, whenever and wherever the may greater part of the population are divorced from the ownership of the instruments of production, even where the aggregate production is relatively enormous, the bulk counts.
of the people live in penury, and large numbers of them In the second are perpetually threatened by starvation. place, this
penury and
its
accompanying insecurity are
rendered more hideous and humiliating by the relative
INTRODUCTION
6
comfort and luxury of the proprietary class, and by the The worst shameless idleness of some of its members. circumstance of capitalism is, however, neither the poverty of the wage-earner nor the luxury of the property owner, but, thirdly, the glaring inequality in personal freedom between the propertyless man and the member " Hour by hour, lives by owning." of the class that of the the two-thirds in and out, day by day, year year nation who depend for their daily or weekly housekeeping on gaining access to the instruments of production find themselves working under the orders of the relatively restricted class of those who own these instruThe sanction for the orders is not legal punishments.
ment, but, ultimately, a starvation which is supposed to be optional. That is what is meant by the wage-earners when they complain of " wage slavery." Fourthly, the socialist believes that the very basis of the capitalist system is scientifically unsound, as a means of organising the production and distribution of commodities and services, and fundamentally inconsistent with the spiritual advancement of the race.
We
shall examine successively the four distinct evils that socialists believe to be demonstrably inherent in the
We
shall deal first capitalist organisation of society. with three of them the poverty of the poor, the inequality of incomes, and the disparity in personal freedom, all of which are invariably found associated with the divorce of the mass of the people from the ownership of the instruments of production. shall then show that, whilst the capitalist system achieved an initial success in increasing the wealth of the nation, it has been eventually found to fail even in maximising the production of commodities and services ; and thus not only to defeat its own professed object but also, by its exclusive reliance on the motive of pecuniary gain to individual owners, to be inimical to national morality and international :
We
peace
;
in fact, to civilisation itself.
CHAPTER
1
THE POVERTY OF THE POOR
THE
outstanding and entirely unexpected result of the capitalist organisation of society is the widespread penury that it produces in the nation. whole century of in the most advanced civilisations of Europe experience,
A
and America
alike, reveals this widespread penury as the or least the invariable concomitant, of the at outcome, divorce of the mass of the people from the ownership of the instruments of production ; and of the aggregation, which has everywhere occurred, of this ownership in a It is of course not relatively small propertied class. that a low standard of livelihood and the suggested imminent peril of starvation is peculiar to capitalism. In more primitive communities, in which the instruments of production are held in common, or are widely distributed among those who gain their livelihood by using
them, chronic poverty and recurrent famines have been in the past, and are to-day, by no means uncommon.
But
in
these
backward
societies
the meagreness and
insecurity of livelihood is attributable either to man's incapacity to control the forces of nature, as manifested in droughts, floods and diseases ; or to the paucity of
natural resources, such as the lack of fertile land and minerals, or the severity of the climate ; or else to the
absence of applied science enabling men to use with efficiency the sources of wealth that exist. --But the us with a capitalist organisation of industry confronts 7
THE POVERTY OF THE POOR
8
The countries in which it has been developed most complete form enjoy great natural resources and have made great use of science in turning them to the service of man. Taking these nations as wholes, the thus wealth produced is relatively enormous. aggregate paradox.
in its
Notwithstanding these favourable conditions, the material circumstances of the people, so far as the bulk of them are concerned and taking all things into account, have scarcely been bettered ; they have been, sometimes, under There is unrestrained capitalism, actually worsened. reason
to
cultivator
and of
all
suppose that the England of the yeoman and the master craftsman, with all its privations
its
drawbacks, yielded to an actual majority
inhabitants
more
more
serviceable clothing, pleasanter surroundings, and, be light, purer even a greater degree of personal it added, in practice freedom, than did the far more productive England of its
more
food,
air,
"
half of the nineteenth century, when the free " of the owners and organisers of the instruenterprise ments of production was at its zenith.
the
first
THE RESULTS
OF THE INDUSTRIAL REVOLUTION
tragic process of this worsening of the conditions described in every account of the industrial revolution, when the enthronement of the capitalist as the unrestrained exploiter of land, machinery and human labour was accompanied by results to the common people more terrible in prolonged agony than those of any war. \ So far as Great Britain is concerned, the account of what happened between 1760 and 1850 has, during the present generation, become a wearisome platitude of the history text-books, not only of the workman's tutorial class but even of the girls' high
is
school.
But
if
we
realise
what happened
it
is
difficult
write about it without passion, Relays of young children destroyed in the cotton factories ; men and to
j
THE INDUSTRIAL REVOLUTION women, boys and toil
9
weakened and brutalised by mines and iron-works ; whole
girls,
in
promiscuous degraded by the indecent occupation of the tenement houses of the crowded slums ; constantly families
recurrent periods of under-employment and unemployment, and consequent hunger and starvation ; food adulterated, air poisoned, water contaminated, the sights and sounds of day and night rendered hideous : these are the commonplace incidents of the industrial Britain of the beginning of the nineteenth century, discovered and re-discovered, not by sentimental philanthropists and sensational newspaper reporters, but by departmental inspectors and parliamentary inquiries. J It is usually forgotten that essentially similar evils are continuing to-day among the industrial populations in the slums of the great cities in America as well as in Europe to an is positively greater in volume than existed under analogous conditions between 1800 and 1840. Further, the physical suffering, the accidents and the diseases that have been the concomitants of the capitalist It is not in system have not been its biggest evil.
extent that
"
the destruction of the poor material things only that the hero on the ice-field or the To is their poverty."
means of subcombined with the utmost hardship, may be
saint in the desert, the lack of adequate sistence,
compatible with spiritual exaltation, individual development, and the continuous exercise of personal initiative and enterprise. To the peasant cultivator and mastercraftsman of primitive communities, a flood, a drought, an epidemic, the murrain or the blight, though it produces devastation and famine, may create fellowship and stimu-
But what modern industrialism destroyed, energy. after generation, in those who succumbed to generation There is a moral miasma of the people. was the soul it, as deadly as the physical. Right down to our own day the dwellers in the slums of the great cities of Europe late
and America, actually
in
increasing
numbers
as
one
io
THE POVERTY OF THE POOR
generation follows another, find themselves embedded, whether they will it or not, in all the ugliness, the dirt and the disorder of the mean streets. Breathing, from infancy up, an atmosphere of morbid alcoholism and furtive larceny and unashamed mendacity though here and there a moral genius may survive, saddened but unscathed the average man is, mentally sexuality,
as well as physically, poisoned.
The
destitution against
thus a degradation of which the socialist protests character, a spiritual demoralisation, a destruction of is
human
personality
itself.
THE
EVILS NOT INTENDED
In the opening sentence of this chapter we described those appalling results of capitalism as unexpected. They are, in fact, too bad to have been intentionally brought about by human beings at any stage of civilisation, much less at a period so full of humanitarian and sentiment and of intelligent progressive libertarian as the period extending from the careers of aspiration Voltaire and Rousseau to those of Shelley and Cobden. " As the judge in Ibsen's play remarks, People don't do such things." That nevertheless those things were done, and are still in the doing, is explained by the fact that the first effects of capitalism correspond to certain natural consequences which have an air of justice and propriety agreeable to the uninstructed moral sense of mankind, and are accompanied by the breaking down of restrictions on enterprise the reasonableness of which If becomes is apparent to trained statesmen only. poor and B becomes rich, other things remaining equal, our sense of justice is shocked and our compassion and But if simultaneously with the indignation aroused.
A
income A and his family become drunken and ignorant, and B becomes repulsively dirty, attractively well-groomed and invites us to share a change
in
relative
THE
EVILS
UNINTENDED
u
.
hospitality at the hands of his charmingly dressed wife and daughters ; and if this state of things is is clearly and directly traceable to the fact that
delightful
A
income and B saving money living recklessly beyond nine hundred and every year, ninety-nine men out of a thousand will conclude that poetic justice demands this very retribution and reward that A has himself to thank for his poverty, which is a socially wholesome deterrent from his vices ; and that all can be as prosperous as B his
;
And if, in addition, they will follow his example. breaks down a very obvious feudal tyranny, and wins for all persons like himself the political predominance their apparent virtues seem to deserve, an overwhelming impression of progress and enlightenment will be if
B
produced. It is not until the inequalities have gone so far that they are beyond all reason that people begin to suspect that A's degradation is effect and not cause, and B's When a baby in one prosperity is cause and not effect. street owns a million pounds actually before it is born, and a woman who has worked hard from her eighth year to her eightieth is removed from another to die in
the workhouse, eighteenth-century optimism begins to lose confidence.
BUT PRESENTLY CONDONED But even when the optimism is staggered, it does not It changes its ground, and begins to argue surrender. that the poverty of the poor is the inevitable price of a general improvement in the condition of mankind. There seems to be no limit to the willingness of fortunate men even men of high ideals and great devotion to of other people, so long accept excuses for the suffering as this suffering seems to be necessary to the maintenance of the position or the interests of their class or race. There were men of exceptionally fine character and
12
THE POVERTY OF THE POOR
among the slave -owning legislators of the Southern States of America who were, right down to Lee's surrender at Appomatox Court House, passionately convinced that slavery and the slave market formed the only possible basis for the social order that seemed to intellect
In the universities in 191418 there were men of high morality and trained intelligence who honestly regarded the invasion of neutral Belgium, the devastation of occupied areas, the enforcement of labour on civilians, and the sinking of passenger ships, as regrettable necessities incidental to the fulfilment of Germany's civilising mission as the dominating worldIn like manner we watch such patriots as power. and Cobden, with their following of wellBright intentioned capitalists, condoning and justifying conditions of employment and housing which were almost as degrading as the chattel slavery they were denouncing,
them indispensable
to civilisation.
as well as in the armies of
Germany
resulted, in England alone, in far more and deaths in a single year than all disease preventible And it was not the casualties of the Crimean war.
and which
only the business
and defended
this
men and slum
landlords
who
tolerated
mass of misery and degradation.
In
England of the first half of the nineteenth century, as in the Germany of the Great War, men of science and men of God " instructors and chaplains of a pirate " justified the actions of the practical men of their ship own world. The horrors of the unregulated factory, the
made abstract in what was called the mine and slum " " were defended by Ricardo the natural rate of wages and Nassau Senior among the intellectuals, by the Rev.
Thomas Malthus and Archbishop Whately among
the of the science of political economy, and part and parcel of the Law of God as manifested in the doctrines of the Christian Church. " Without a large proportion of poverty," England was told by the inventor of the modern police system and last discoveries priests, as the
THE APOLOGIA FOR CAPITALISM
13
" on the resources of the British authority " there could be no riches in any country, Empire," since riches are the offspring of labour, while labour can leading
from a state of poverty. Poverty is that state and condition of society where the individual has no surplus labour in store, or, in other words, no property or means of subsistence but what is derived from the
result only
constant exercise of industry in the various occupations of life. Poverty is therefore a most necessary and indispensable ingredient in society, without which nations and communities could not exist in a state of civilisation. It is It is the source of wealth, since without the lot of man. poverty there could be no labour, there could be no riches,
those
no refinement, no comfort, and no benefit possessed of wealth, inasmuch
who may be
to as,
without a large proportion of poverty, surplus labour could never be rendered productive in procuring either the conveniences or luxuries of life." *
THE MODERN APOLOGIA It must not be that this callousness to the "imagined common people," on the part of suffering of the kindly natures and otherwise good citizens, is merely
an incident of the past. 1
Any one who
takes the trouble
A
Resources of the British Empire, by Patrick Colquhoun, p. no, 1814, quoted in M. Beer, vol. i. p. 145 ; ee also his Treatise on Indigence,
History of 'British Socialism, by
1806. " The palm in who wrote under
this line belongs to the English economist, the
the
name
'
The Well-wisher
of
Mankind
A
'
Rev.
J.
Townsend, Law.
against the Poor Dissertation on tht Poor
Lawi In his masterpiece, which lived to see a second edition he explains (London, 1817), pp. 39-41, quoted by Marx, Capital, vol. i. pp. 602, 603 to us that the poor are improvident and multiply rapidly in order that there may always be some to fulfil the most servile, the most sordid and the most ignoble office* in the community. The stock of human happiness is thereby much increased, whilst the more delicate are not only relieved from drudgery . . . but arc left without interruption to The Poor Law pursue those callings which are suited to their various dispositions.' tends to destroy the harmony and beauty, the symmetry and order of that system which " God and Nature have established in the world (Marxism v. Socialism, by Vladimir G. Simkovitch, 1913, p. 107). The reverend author was "rector of Pewsey, Wilts, and chaplain to Jean, Duchess Dowager of Atholl." His Dissertation on tkt Poor Z-jtri was first published in 1786, and was more than once reprinted during the ensuing thirty '
'
'
years.
i
4
THE POVERTY OF THE POOR
minds of the people around him, of the " or comfortable class, in Britain or France, well-to-do Australia or the United States, whether manufacturers or mere dividend -receivers, statesmen or professors,
to observe the
"
will easily discover
a matter of course,
how complacently first,
they assume, as
that the relative position of the
property owners and the propertyless has some real though undefined relation to their several deserts or racial qualities ; and secondly, that, whether or not this is the case, the existence of an extensive propertyless class is a necessary condition of their own exemption
from manual
toil
personal initiative,
and
and their wide opportunities which are deemed indispensable
for for
Thus
a tacit acceptance of the the continuing privations, and, as regards a penury, large proportion of the wage-earners, the always imcivilisation
culture.
peril of want, as the lot of the bulk of the populaeven in the richest countries, has survived the full tion, realisation both of the existence of these evils and of their causal connection with capitalism. remember being startled by an astute Japanese statesman casually observ" the introduction of the capitalist system into ing that had brought in its train an ever-growing class of Japan a class quite unknown in the old destitute persons Japan of the daimio and the rice cultivator." This is the destitution," he added, with a philosophic smile, price which Japan has had to pay for increasing the I personal wealth of her leading citizens, and for becoming \a world power." It is unnecessary to dwell in greater detail upon the of the poor as the most obvious evil result of poverty " " the free enterprise of the profit-making capitalist. Thinkers and statesmen of all shades of opinion nowadays recognise this poverty, and with more or less alacrity apply the remedial measures in limitation of the freedom of capitalist enterprise which they have learnt from the socialists of the past two or three generations, in an
minent
We
1
POLICY OF NATIONAL
MINIMUM
15
But these mitigate what they deplore. do not exhaust the It is mitigations problem. only the first achievement of socialist thought to have got accepted in Great Britain and Australasia, and, in all that has followed from Robert Owen's plea for factory legislation,
attempt
to
some extent
applied, the essentially socialist policy of deliberately maintaining by law a national minimum of civilised life throughout the whole community. By a
to
full
adoption of this policy, as
is
now widely
recognised, chooses, prevent the recurrence of It can even an end, any widespread destitution. put so far as it is a case of a whole class, to the insecurity of
the nation can, if
it
which verges on destitution. 1 To accomplish even so much, if the statesmen would only take the task But this process in hand, would be an enormous gain.
livelihood
of levelling up, within the capitalist system, all sections of the community to a prescribed minimum standard of life say to that of the skilled engineer in regular employment, or that of the assistant teacher in a public elementary will not, in itself, diminish, and, as we shall school out, may in the long run even increase the inpoint and in personal equality, alike in material circumstances small class of persons freedom, between the relatively instruments of the who own and organise production and the mass of people whose livelihood depends on being permitted to use them. 1 For a full exposition of this policy and its application in practical detail, tee Tht Prevention of Destitution, by S. and B. Webb, 1920.
CHAPTER
II
INEQUALITY OF INCOME
WE
believe that, apart from the poverty of the poor, so gross a disparity between the income of one citizen and another as is inherent in the present advanced stage of
.
'
I
\
the capitalist organisation of industry, is in itself injurious The extremes of inequality are to the commonwealth. known to all men. In every newspaper, capitalist or labour, we find now and again sensational paragraphs drawing attention to the gross disparity in the incomes between the few shillings or of selected individuals dollars a week of the labouring man or woman, and the hundreds of thousands of pounds or millions of dollars a year credited to the super-capitalists of Great Britain and the United States. But a more significant fact is
the inequality in the way in which the national income is shared between one class of society and another. 1 To take, as a leading instance, the United Kingdom at its the years immediately preceding the wealthiest period The inhabitants of this country were then Great War. producing, in the aggregate, each year, commodities and priced at a total, in round numbers, of two thousand million pounds, besides drawing a couple of services
" 1 " of income may, of course, be understood in several ways (as to which Inequality ee Some Affects of the Inequality of Incomes in Modern Communities, by Hugh Dalton, As to the statistics, see the estimates of various authorities quoted in Fabian 1920). Tract No. 5, Facts for Socialists ; Riches and Poverty, by Sir Leo Chiozza- Money, 1905 ;
and Property, second edition, 1921, and Wealth and Taxable Capacity, 1922, both by Sir Josiah Stamp ; and Changes in the Distribution of Income, iSSoiyij t 1918, and The Division of the Product of Industry, 1919, both by A. L. Bowley.
British Incomes
16
HOW THE PRODUCT
IS
SHARED
17
hundred millions of pounds a year from investments in other countries. One half of this aggregate of commodities and services, out of which the whole people had to live, was taken by the one-ninth of the community which was at that date liable to income tax, comprising, 160 a therefore, all the families that had as much as year income. Nearly one-third of the remaining half (say, three hundred millions sterling) fell to the share of that nouvelle couche sociale, the black-coated proletariat of humble clerks and teachers and minor officials, along with the smallest shopkeepers and traders comprising, with their families, the two-ninths of the population who were not manual working wage-earners, but who nevertheless did not get for their work as much as 160 There remained, out of the aggregate a year per family. product, for the two-thirds of the population who were
manual working wage-earners and their families, somewhere about eight hundred millions, which, after making the necessary deductions for sickness and other spells of unemployment, worked out, for the adult male worker, at an average weekly income throughout the year of something like twenty-five shillings on which to maintain his family. And this glaring inequality in the distribution of the national income was not peculiar to It the United Kingdom, or to those particular years. is
The statistics characteristic of every capitalist society. France, so far as they can be ascertained, were no
"or
less
extreme
Those
in their inequality.
Empire were apparently much
German Even in the
for the
the same.
States, with all the boundless resources of North America, there stood revealed, so far as the statistics
United
extend,
a parallel
inequality in
the
way
the national
income was shared. To put it another way in 1890 the total income of that country was so divided that 40 per cent was received as the reward of owning, and 60 per cent as the reward of doing. 1 :
1
Americanised Socialism, by James Mackayc, 1918.
C
1
INEQUALITY OF INCOME
8
THE NATION
"
CHOOSES INEQUALITY
"
It is therefore clear that a nation, in deciding to establish or to continue the private ownership of land and capital as the basis of the industrial organisation of
people, deliberately chooses inequality. The face this now with our eyes open.
its
We
must
outrageous
disparity in capitalist countries between one man and another, and between one class and another, independently of their merits, and often in the inverse ratio of their
industry and social utility, is not produced by any defect working of capitalism, but is inherent in its very It is not a transient phenomenon, but a per\nature. feature. By leaving in almost unrestrained \manent in the
^ ownership practically all such portions of its land and production capital as are for the time being more advantageous we cause the resultant than the worst in economic use e
"
"
or surplus value, to the extent, as the statistics indicate, of at least a third of the aggregate product, to into the lap of the more fortunately situated members rent
jfall
pf the property-owning class, irrespective of their render" to the community. The ingjmy, sprvi re. whatsoever " is widow," says Carlyle, gathering nettles for her a perfumed seigneur, delicately children's dinner in the CEil de lounging bceuf^ has an alchemy whereby he will extract from her the third nettle, and name it " " Rent and Law." A similar over and surplus value above the maintenance conceded to the workers con:
cerned
is
being produced, year in, year out, throughout capitalist industry down to the marginal cultivation " in each case. This statement does not imply that all all
created by labour," meaning manual labour. engineer, the captain of the merchant ship, the passenger superintendent of the railway, the bank manager, the literary or scientific writer or teacher, the inventor, the designer, the organiser, and those who
wealth
is
The mining
WE " CHOOSE "
INEQUALITY
19
under various names actually spend their lives in initiating and directing enterprises of social utility, together with " " the innumerable other brain-working participants, may all be assumed to be co-operating in the making of the product, and to be legitimately earning a maintenance for their families and themselves. How far their several incomes bear any relation to the social values of their respective services is a disputable question, to which no convincing answer has been found. But, apart from all
these incomes, there
is
normally a surplus accruing
to the class of legal owners of the instruments of production, merely as a consequence of this ownership,
irrespective of whether or not they are the organisers or directors, or are otherwise co-operating in production in
This surplus goes, in fact, in very largely, and as it seems, even
any way whatsoever. capitalist societies,
who
are not, in respect of this It will be obvious that v income, producing anything. this inciaent~of the individual ownership of the differ-
increasingly, to persons Iall
ential factors in
wealth production^-of the
soils,
sites,
mines, factories, and shops superior in productivity to the worst in economic use, or, where agreements or amalgamations among most of the separate proprietors have led to monopoly, of the tribute on the consumers is not that this monopoly permits dependent on the lowit remains unaffected by the remedial ness of wages expedient of raising every member of the community to In so far as any such a prescribed national minimum. mitigation of the poverty of the poor increases their and thereby the aggregate efficiency in wealth production, " " rent may even be increased. If output, the total of is to the widow enabled gather seven nettles instead of the three, seigneur lounging in the (Eil de bceuj may from her more nettles than find himself :
extracting
before.
INEQUALITY OF INCOME
20
THE LAW
OF INHERITANCE .
And
the effect of this diversion of a large part of the national product to the mere payment for ownership is The small rentier may consume all his cumulative.
dividends in supporting himself and his family, but the larger the rent-roll or dividends the greater is normally the balance over personal expenditure, a balance automatically invested, through the highly organised banking and financial system, in additional instruments of proThe possessor duction, yielding still further dividends. of what may be deemed a moderate fortune may lose it or dissipate it ; but nearly all the super-capitalists know how to secure themselves and their heirs against any such Hence it is now axiomatic that, under the calamity. of reign capitalism, those who own the most, not those who work the most, get, in fact, the largest incomes ; and those who own the least get, in fact, the smallest ] iac^me^ howevej_Jiard_ they work. And the gulf is It is^his_^ulomatic_heaping up of always widening. jndividual fortunes- by the older economists termed, " the reward of apparently with unconscious irony, abstinence" that accounts for that ever-multiplying the millionaire. IA monstrosity of capitalist civilisation Moreover, under the laws of inheritance that all capitalist nations have devised or developed, the payment for ownership not only intensifies the inequality of income between contemporaries, but also creates an hereditary class of property owners, the members of which find themselves legally entitled to levy, generation after generation, to the end of time, a tribute upon the toil of their contemporary fellow-citizens. It is necessary to emphasise this point. The ownership of land and capital by private individuals, coupled with the legal institu'
tion of inheritance, is
bound
to result,
be humanised by philanthropy excesses by
and
however much
it
may
restrained from the worst
a systematic application of the Policy of the National
THE EARTH
AS
BEDLAM
Minimum, in a division of the community and largely hereditary castes a nation
21
two permanent
into
of the rich
and a
nation of the poor.
The evil effects of this gross inequality between the incomes of individuals and of classes are manifold. They may be summarised under four main heads an altogether inefficient consumption of the commodities and services annually available for the nation's maintenance ; the :
encouragement of parasitic idleness ; and, consequent on these, a widespread lack of good manners and a constantly operating dysgenic influence on the race.
THE
INEFFICIENT CONSUMPTION OF
WEALTH
"
For anything I know," wrote the second President " of the United States to Jefferson, this globe may be the Bedlam, le Bicetre, of the universe." J The events of the last hundred years almost seem to strengthen the suggestion that, in a universe of transmigrating souls, our particular planet may have been assigned to be the asylum for the solar system. At least, the way_ which the most civilised communities upon our globe consume or use the^ commodities and services produced r by the arduous daily toil ftf thH r"^*"^ of men anf be with this hypothesis. to consistent women, appears lunatic in
^
We
are not referring to the delirium of social lunacy of the four years of the Great War of 191418, during which nearly all capitalist governments of the world used up the entire product of the labour of their respective nations, devastated fertile land, burnt innumerable buildings, and deliberately destroyed plant and machinery, in order to kill and maim some thirty millions of the youngest and strongest of their male adults. Let us
think, rather, of the normal consumption of the annual product in peace time a consumption which is taken 1
John Adams
to
Thomas
by C. F. Adams, 1851-6, vol.
Jefferson, July 16, x. p. 103.
1814
;
in
The Worit of Jt,kn Adamt,
INEQUALITY OF INCOME
44
for granted, and accepted by the well-to-do citizen with the same sort of self-complacency as is the illusion of being God Almighty by the peaceful lunatic.
THE REPORT
OF THE COSMIC INSPECTOR
Imagine the report of the Spirit Expert in Scientific Consumption deputed by the government of the ALL
GOOD
to investigate the progress towards sanity of the " I cannot inmates of the planetary lunatic asylum. " the Inspector with he writes, my colleague, agree," of Scientific Production, that the inhabitants of the Earth I need not discuss are showing any approach to sanity. what is sanity. It will be remembered that we are forbidden, by our instructions, to inquire into the ultimate aims or ideals of the Earthians, seeing that the Tightness of ends as distinguished from means has always been a matter of controversy even in the Court GOOD. I take as the test of the Circle of the or races, sanctioned by the law of individuals of sanity the universe, the capacity of selecting the appropriate means to a given end, as verified by the subsequent The end or ideal of the Earthians is not in event. They are never tired of asserting to each other, dispute. with fatuous smiles, that the end they have in view is the health and happiness of the whole community. They
ALL
admit place,
that, in the earthly state, this depends, in the first on the effective application of the necessary com-
modities and services. colleague tells me that, in the production of most commodities and of some services, they are showing signs of increasing intelligence in the use of materials and the organisation of manual labour and brainwork. In the consumption of wealth they
My
4
seem
to
me
to
be going from bad to worse.
Former
generations produced less, but what they did produce they seem to me to have consumed Take the three primary necessaries of earthly life food,
THE COSMIC
INSPECTOR'S REPORT
23
shelter and clothing. I first made it my business to review the consumption of clothing. In the Idle Quarter, there were a number of women, each of whom prided herself on consuming in the manufacture of her garments the whole year's toil of from one hundred to two hundred garment workers. I overheard one of them say, in a debate on possible economies, that the whole annual
prnHiit_nf one worker wnuM barely siifflr* fn supply a hat and^_a nightgown A younger woman, lj Eerjwith about to be married, had provided herself, for her exclusive use, of no fewer than seventy-nine nightgowns, besides other garments on which many hundreds of In order persons had worked for more than a year. to consume the toil of one or two hundred persons on the garments of one woman, labour had to be wasted in barbaric decoration, in using materials which would '
^
and
for each occasion (ITobserved
in providing separate suits
one woman, closely attended
by a worker, changing her clothes five times in the day) ; and, most idiotic of all, in discarding whole wardrobes of garments once or twice a year in order to
,
: i
As Earthians are apparently introduce a new fashion. valued according to their capacity to Consume without this inefficient consumption of the garment ^producing, j worlcers ~toirwas imitated by women of more limited .means, so that the clothing of the whole population r reflected the fantastic and unhygienic habits of the wealthy V
members. Passing from the Idle Quarter to the homes of the garment workers themselves, I found these persons same clothes ugly, badly living day and night in the children were attending Their foul. and fitting, scanty school in leaky boots ; and, in hot weather and cold same thickness and alike, were wearing rags of the texture.
The
explanation was simple.
These makers
of garments were each of them restricted, for the whole a single person year, to what could be produced by three weeks, as against the or for two, one, working
INEQUALITY OF INCOME
24
hundred or two hundred persons working for fifty-two weeks to equip each woman of the Idle Quarter. This example is typical. Hence, as a means to attain the end of the health and happiness of the whole community, the consumption of clothing on Earth cannot but be
symptom of insanity. as to the shelter which the climate of these
considered as a "
Then
The homes
parts of the Earth makes essential. Idle Quarters are often so large, and contain so
empty rooms,
that the constant labour of
from
in the
many five to
twenty-five persons is required merely to keep them clean, and to serve the daily needs of the so-called occupiers, who might or might not have wives and children to share them. Meantime, even in the wealthiest
20 per cent of the total population are herded I actually together in one- or two-roomed tenements. discovered a number of cases of two or more families working and living in a single room, the resulting and disease being unfit for publication. indecency " in the matter of food the one absolute Even I for continued existence on Earth, the confl necessary cities,
is madly inefficient. It is noteworthy that the Earthians have now discovered the facts with regard to the consumption of food. They know, within a narrow margin, exactly the quantity and quality of food required for healthy, human existence ; they know that less than this means starvation and more than this means disease. And yet, if we compare the normal consumption of foodvalues of the bulk of the inhabitants with the normal consumption of food-values in the Idle Quarters, measured in the labour required for their production, we find it ranging in the proportion of something like one to twenty, with the result that the mass of the people, and those who are working hardest, are habitually under-
sumption
nourished, whilst a select few, who are very often absolutely l e., are not only wasting food, but are actually themselves inert and deformed in consuming it." making
WHAT
IS
EFFECTIVE
DEMAND
?
25
So far the imaginary report of the Spirit Inspector on Earthian Consumption. The mundane economist not merely confirms this criticism but even pushes it further. The present inequality of income conspicuously leads, not only to inefficient consumption, but also to the The power of com\production of wrong commodities. manding from the world just what commodities and services the several owners of the unequal incomes elect to enjoy, vitiates, at a blow, all the assumptions of the earlier economists that production would, on the whole, be automatically directed to the satisfaction of human It gives us the state needs, in the order of their urgency. of things in which a vast amount of labour is lavished on the most futile luxuries, whilst tens of thousands of ^infants are perishing from lack of milk, innumerable children are growing up without adequate nurture, millions of men and women find themselves condemned I
I
to starved. and joyless lives, and the most urgent requirements of the community as a whole to say nothing of
the essentials to the well-being of future generations remain unprovided for. Under a system of private " effective of in means the production, the property " demand of individuals affords no sort of assurance of the fulfilment of the most indisputable national needs.
THE
VITIATION OF EFFECTIVE
DEMAND
Unfortunately this is as true of the one-third or the two-fifths of the total income which makes up the expenditure of the toiling masses, as of the vastly larger incomes dispensed by the middle and upper classes. " Under To quote the words of an American writer rich the of i 3 present conditions the bad example because it spreads greater evil than their indulgence, The effort to imitate or keep inefficiency so widely. is infectious and demoralises rich pace with the idle luxurious habits, not only breeds It even the poor. :
\^
INEQUALITY OF INCOME
26
among those who can who cannot. Obviously on consumptive
afford them, but among those this has a very depressing effect
efficiency
throughout the community."
THE WASTEFULNESS
*
OF CONSUMPTION
indeed, amazing that there should have been study of the means of increasing the aggregate production of commodities and services, and so little attention to the manner in which they are consumed or Yet the very utility of any commodity depends used. It is on the way in which it passes into consumption. obvious that a given aggregate of commodities and It
is,
much
so
services
may
result in
much more
one way than in another. as the organisation of an industry
used
in
administrator. his enterprise
The
if it is
This
consumed and is
plain, so far
concerned, to every " of industry," applying to captain "
what he
calls
is
scientific
management,"
keenly aware that his task is so to direct motive and stimulus in the whole staff, and so to apply to his processes all the resources of science, as to secure that the raw is
material, the various components, the sources of power, and the available labour-force shall be employed in such
a
way
that the greatest possible total result is produced But he will return after his day's " " to his well appointed home the appoint-
from a given supply. " -
work " ment of which probably all
labour-saving
consists essentially in avoiding appliances and making necessary a
whole group of domestic servants to eat an unwholesome dinner on which ten times as much labour has been expended as on the meal by which his labourers maintain their health ; and to encourage his wife to crowd his house with indiscriminate articles of furniture and ornamentation which have no merit beyond the amount " of labour that has been wasted on them. In good times," he will respond to every caprice of his wife and 1
Americanised Socialism, by James Mackaye, 1918.
WASTE
IN
CONSUMPTION
27
"
Get it, it only costs money." The contrast " " between the economical towards maximum routing production of every item in his factory, and the thoughtless children,
application of the products themselves, when they come before him as, within the limits of his own income, a
cheque-writing director of consumption, can only be
characterised as extraordinary. To any observer of the operations of a factory, it will be obvious that five tons of coal wastefully consumed do not constitute so large an item in the national wealth as three tons used in such
way as to produce a larger product. What is true of the consumption of fuel in a factory is equally true of the consumption of individual consumers of the factory's a
Thus, even with regard to national wealth, products. is quite incorrect to say that its amount depends The aggregate wealth wholly on national production. of the nation can be as much augmented by an improvement in consumption as by a mere increase in production. " The introduction of summer time " to give only one is instance roughly estimated to have represented to the United Kingdom the equivalent of twenty million pounds annually ; or as much as the whole product of one of its it
coalfields.
THE EFFECT
OF
"
RATIONING
"
That the great inequality of incomes, which is an inevitable result of private ownership in the means of leads, in itself, to a flagrantly wasteful production,
consumption of the aggregate product, has now been from Quite recognised by the modern economist. " apart
the fact that it destroys all possibility of marshalling the assets," in such a way that all the most urgent needs of the community may be supplied before the less urgent, the very glorification of expenditure as expenditure leads to the purchase and consumption of commodities merely What is even of greater because they are costly.
permanent importance
is
that
there
is
practically
no
INEQUALITY OF INCOME
28
to discover in what way the available production can be employed to greatest advantage. Hence, until the stress of the Great War drove our statesmen temporarily to think, there was, in Britain as in the United States, neither research nor education in the In Britain, the temquestion of efficient consumption. and poor alike, so of rich the rationing porary system far as regards some essential foodstuffs, had as one of its great advantages, that persons with leisure, training and opportunity devoted themselves to discovering, not only the obviously useful facts as to food values and food
inducement
preparation, but also labour-saving appliances in homes, a more economical and hygienic fashion in clothes. " It is suggested that an equally stringent rationing,"
and
not of meat and sugar, but of family incomes, would have had even more useful results. All the ingenuity and devotion of the wealthy women housekeepers might then have been diverted from a rivalry in conspicuous expenditure to an emulation in discovery of how to maintain the most charming home on the prescribed suggest, indeed, to those to whom equal incomes art is foremost, that an entirely new aspect would be given to design and workmanship, and to the construction and furnishing of homes, if every consumer, the most gifted and fastidious as well as the most reckless in expenditure, could escape the temptations of lavish cost and transient fashion, and found himself confronted with the problem of how to get the necessary utility and the greatest beauty out of the expenditure of the 1
We
socially prescribed
income available
THE ENCOURAGEMENT
for every family.
OF PARASITIC IDLENESS
In times of unemployment and increasing vagrancy " the wage-earners are perpetually reminded that it is a law of nature and morality that if a man does not work neither shall he eat."
To
enforce this law of nature
PARASITIC IDLENESS
29
and morality we see the country studded with such brutalising institutions as the Able-bodied Test WorkWard, and, in the last resort, the gaol. With characteristic modesty the spokesmen of the
house, the Casual
insurgent unemployed have hitherto replied that the work on the part of an individual citizen
obligation to
must
necessarily depend on his being granted the opportunity ; and, greatly daring, the Labour Party has introduced into the British Parliament a " Right to Work The socialist declares that a more correct answer Bill." to the middle-class criticism would be the enactment of
an
"
Obligation
to
Work Law,"
providing that any
adult able-bodied person who was discovered not actively engaged in work of national importance should be
not cruelly punished by imprisonment in an Able-bodied Test Workhouse, a Casual Ward, or a gaol but, with all courtesy, deprived of the income which enables him to
live
in
idleness.
The
socialist
believes
that
the
establishment by law of a class legally enabled to live idly on rent and dividends amounts to the establishment in the community of a set of persons who are privileged, and thereby almost irresistibly tempted, to place them" selves habitually above the law or nature and morality The that if a man does not work neither shall he eat." loss to the community which such social parasitism entails is serious enough, but the effect on the parasites them" Those who are above selves is even more disastrous. " do not, as we have already seen, escape an the law extraordinary callousness and insolence, none the less injurious because they are usually themselves unaware of it, which makes the sufferings of those who do not belong to their own class seem as unreal and as unsubstantial as if they were the sufferings of another The crippled conscience of the propertied class species. is blind to the truism that the man or woman who consumes without personally contributing to the world in the production of services or commodities is a social
INEQUALITY OF INCOME
30
whose very presence the world
is the poorer. such a or unconsciously person, not being Consciously infirm or superannuated, is, as Ruskin vainly taught, a thief ; and a thief whose depredations are none the less real, and nowadays none the less resented, in that they Even the are made with the sanction of the law. This may be intellect of the parasitic class is affected. seen, not merely in the fact that it is not the families
parasite for
which have inherited millions that usually produce either scientific discoverers or
geniuses in art or literature. Only intellect can it be explained why it is almost impossible to make the average wealthy person even understand, still less believe, the obvious economic truth that the world is actually the poorer, not merely by the amount of the food and clothes that
by a subtle deadening of
he consumes without equivalent personal production, but also by all that he spends on his personal desires " " and caprices ; that, in his case, is spending money " not only not for but trade," good actually represents the abstraction from the world's stock of the services and commodities maintaining all those whom, by his pur" " commandeers to his behests, which might chases, he otherwise have been devoted to the improvement of the narrow circumstances of the average citizen or to the advancement of science and the cultivation of the arts. It needed all the shock of the Great War to open the intellects of a small proportion of the wealthy to this truth ; and they, it is to be feared, have now let it pass out of their minds.
THE This
life
LIFE OF UNCONSCIOUS THEFT
of unconscious theft, of which the idle class have an uneasy suspicion,
members of the propertied
together with the callousness and insolence that it breeds, as regards the sufferings of any but those who belong to their own class subtly degrading as it is to the rich,
THE
LIFE OF UNCONSCIOUS
THEFT
31
has its obverse in its effect on the minds and characters of those who have not been able, in the same way, to The resulting place themselves above the world's law. servility, on the one hand, and on the other, the envy, or even the simple-minded admiration for a life which essentially contrary to all principles of morality, is as The bounties demoralising to the poor as it is to the rich. is
of the rich to the poor actually make matters worse for All charity both of them. apart from personal friend-
demoralising to giver and receiver alike ; and gifts among those who feel themselves socially unequal carry with them, however well-intentioned and wellThe devised, the poisons of patronage and parasitism. habitual respect and deference given to men and women who are wealthy, merely because of their wealth irrespective of goodwill, personal charm, or artistic or intellectual achievements is as damaging to those who are thus respected and deferred to, as it is to those who pay this homage to riches. Not the least of its evils is ship
is
that it falsifies social values, and actually obstructs the recognition, and therefore the imitation, of the qualities of character and intellect that are in themselves admirable.
not too much to say that, in the Britain or the United States of to-day, the very existence, in any neighbourhood, of a non-producing rich family, even if it is what It is
calls well-conducted, is by its evil example a blight on the whole district, lowering the standards, corrupting the morality, and to that extent counteracting the work alike of the churches and the schools. it
"
" ABOVE THE LAW
If the man himself works for a living, in business or finance, law or administration, but receives for his services an income which places him among the wealthy, he may, by the daily service that he renders, be saved from some of the personal demoralisation ; though the
INEQUALITY OF INCOME
32
exaggerated respect which he is paid by reason of his But his wife and large income brings its own perils. children can hardly escape the various results of their own habitual over-consumption and under-employment. The occupation of the wife will almost certainly be climate of servility socially unproductive, whilst the which she meets in household and shop is dangerously
The
enervating.
children
in
grow up
a
corrupting
atmosphere of material luxury. They cannot escape the feeling, though it may never actually come into their intellectual consciousness, that they are, in the sense " above the law." The formal schoolalready explained, receive is itself perverted by the class atmoing that they
Such of them as are not quite exceptionally sphere. with ambition, with a passion for self-sacrifice, or gifted with that intellectual curiosity which is the well-spring of science, almost inevitably content themselves, if they take " walking through the up any occupation at all, with "
part
which the family position has obtained
for
them
;
achieving with a demoralising mediocrity of effort only
mediocre results a policy of
life,
be ashamed. shift
"
Nor
occupations
and
;
ca'
in fact, throughout practising, " of which a craftsman would canny
are matters improved by the makephilanthropic, artistic or merely social
which untrained and undisciplined men and women of leisure miscall their work. intellectual
What
is
required for
and moral hygiene, "
that, in return for all the
as well as for equity, is " orders on the world that any
person gives by the expenditure of his income in a particular way, he should set himself, by his own personal " " orders that other members of service, to fulfil the give, or would give if they had at their fair shares of the national disposal their reasonably " live his own life," not income. If he prefers to obeying
the
community
own
other people's orders, let him at least refrain from giving orders ; that is, from consuming more than he himself
produces.
Other economic
relations
between one man
THE THEORY OF THE LEISURE
CLASS
33
and another mean a self-deception and a self-complacency which is nauseous. 1 It is extraordinary that the individualist philosophers who are always dilating on the bracing effects of competition for a livelihood, as tested by market values, should accept with equanimity the demoralisation and degradation which, on their own showing, a life of parasitism imposes upon the offspring of those whom these same philosophers regard as having It is proved themselves to belong to the finest stocks. not easy to see how such reasoners escape the inference that the progress of the community and of the race imperatively demands the abolition, as regards dividendof the right of inheritance, and with producing wealth, it the opportunity of living without work ; if only in order that the young people of each generation even not be their own children of the beneficent may deprived results of the competitive struggle. 1 The ablest monograph on this subject has been produced in the United State* (The Theory of the Leisure Class, by Thorstein Veblen, 1899), tracing the origin of a leisure class from ancient civilisations based on a double method of acquiring wealth, " honourable method of seizure and conversion," i.e. hunting, war, predatory viz. the " " raids on and oppression of inferior races ; and the dishonourable method of pcmonal toil (agriculture and manufacture) enforced on women and on slaves. This tradition was carried on, with modifications, through feudal civilisation, the wives and daughter* of the nobles (themselves still engaged in the honourable method of seizure and con" " ladies." From version) being exempt from all useful occupations, and becoming
this point on, the characteristic feature of leisure-class life
from
is
a
conspicuous exemption
useful employment. . . . Abstention from labour is the conventional evidence of wealth, and is therefore the conventional mark of social standing ; and this insistall
ence on the meritoriousncss of wealth leads to a more strenuous insistence on leisure. . . . Prescription ends by making labour not only disreputable in the eye* of the comand incompatible with a munity, but " morally impossible to the noble, frecborn man, In modern capitalism the male pursue* gain, not by worthy life (ibid. pp. 40-41). manual labour, which remains dishonourable, but by direction, organisation, bargaining, and speculation all expressions of the conqueror or exploiter but he insist* on the vicarious leisure of his womenkind, and sometimes of his sons, a* the hall-mark of hi* The utility of conspicuous leisure, and consumption for the purpose of social position. the ability to bear pecuniary lews. establishing social status lies in the element of waste " Time is consumed non-productively (i) from a sense of the unworthiness"of productive work, and (2) as an evidence of pecuniary ability to afford a life of idleness (ibid, p. 43). " To this was added luxurious expenditure. Conspicuous consumption of valuable good* A* wealth accumulate* on hi* is a means of reputability to the gentleman of leisure. hands, his own unaided effort will not avail to sufficiently put his opulence in evidence by
method. The aid of friends and competitors is therefore brought in by resorting to " the giving of valuable presents and expensive feasts and entertainment* (ibid. p. 75). " " The The chapter* on " Conspicuous Leisure," Conspicuou* " Consumption," " Drew a* an of Ta*te," Expression Pecuniary Canons Pecuniary Standard of Living," this
D
INEQUALITY OF INCOME
34
THE LACK
OF
GOOD MANNERS
another and quite opposite justification income and personal freedom, which often is nowadays more pertinaciously held than openly It is very widely felt that good manners, a expressed. high standard of refinement, personal charm and even human dignity, are dependent on the existence of a set " above of families, all the better if hereditary, who are " of nature and morality that he who does not the law " work shall not eat. The very hall-mark of the gentle" " " man and the lady of to-day is the absence in their daily lives of any need for personal drudgery, for obedience to the commands of others, and for incessant regard to pecuniary considerations ; the whole resulting in a freedom to develop new faculties of social advantage, though not productive of exchangeable commodities or services. Combined with this is the attraction, as an individual quality, of an easy habit of command, a form of personal dignity often accompanying the habitual utilisation, virtually coercive, of other people's services.
But there
is
for inequalities in
THE COROLLARY
OF BAD
MANNERS
We
note in passing that those who advertise the an aristocracy of good manners, to be based, as an indispensable foundation, on wealth and freedom from any enforceable obligation of service, seem to regard as of no consequence the deterioration of manners brought about by the combination, in the daily lives of the vast majority of the race, of poverty and In the modern industrial state, whether of servility. the Old World or of the New, we see the obverse of " " " " the gentleman and the lady in the typical denizens social benefit of
"
of the Pecuniary Culture," The Conservation of Archaic Traits," and " Modern " Survival* of Prowess are full of significance as illustrating the culture of a leisure class in a capitalist state.
BAD MANNERS OF THE WEALTHY
35
The brutality, the coarseness, the inconsiderate noises, the mean backbiting and quarrelsomeness that characterise no small proportion of all the residential quarters open to the of the urban slum.
as
wage-earning popula-
"
" compel the" more respectable of their inhabitants, they say, to keep themselves to themselves," because
tion
It is a they find social intercourse impossible. pathetic " " incident of the bad manners that far more than characterise selfishness, cruelty or failure of mutual help the slums that every one insists on being termed a " "gentleman or "lady" ; whilst the honourable appellation of man or woman is used only, with an adjectival swear-word, as a term of abuse But the fact we want to emphasise is not the brutalisation of the poor but the vulgarisation of the rich. deny that the leisure class of the modern industrial state On the contrary, supplies any standard of good manners. as the elder aristocrats themselves deplore, one of the specific evils of the modern capitalist community, with its apotheosis of profit-making, on the one hand, and of luxurious idleness on the other, is a degradation of manners, more pernicious because more exemplary, than the coarse brutalities of the slum. 1
We
THE EFFECT
OF Loss OF FUNCTION
It is interesting to notice that, in the history of the world, the class of persons who were, by the coercive utilisation of other people's labour, themselves relieved
from
industrial
toil,
had originally "
their
own
distinctive
social function, other than that of existing beautifully." They hunted for the food of the tribe ; they fought in its defence ; they performed the priestly offices on
in Greece they which its well-being seemed to depend were the philosophers and artists, in Republican Rome the statesmen and the jurists, and often the conquerors ;
or administrators of subject-peoples.
It
has been reserved
INEQUALITY OF INCOME
36
for the century of capitalism to produce an extensive class of persons, absolved from productive work, of a large proportion of the men, and nearly all the women,
whom
have no specific function, and disclaim the obligation have already comof any social service whatever. mented on the degradation of manners and morals, and the subtle corruption of other people's manners and morals, which is involved in the existence of a functionless But there is another cause for the deteriorarich class. tion, among the wealthy families in our modern societies of advanced capitalism, of what used to be counted as
We
These social graces the social graces of a leisure class. went best, it will be admitted, with such aristocracies as those of the Court of Louis the Fourteenth, the old landed families of Carolina or Virginia, or the Samurai of Japan, the very essence of whose lives was a personal abstention from the conscious pursuit of pecuniary gain, and the maintenance of a rigidly defined caste system. It is evident, however, that such a division of activities cannot endure, because it has no root in nature. If the capitalist class would breed true to feudalism by only statesmen
producing
or
soldiers,
dilettanti, a stable mediaeval inequality But Nature takes no notice tained.
Statesmen and dilettanti are as rare
sportsmen or might be mainof
among
capitalism. scions as
its
which produced Wolsey and have for the most part vulgar ambitions, vulgar capacities, and vulgar tastes in they are
in
Richelieu.
the
class
Its energetic spirits
excitement.
They
are
competitive
rather
than
co-
success, which means moneyoperative they and the making personal power and prestige that moneyleads to and the gambling element in big making like
:
;
The specially attractively for them. in old the families arising nowadays vie with of the newly enriched in the making of profit
business flavours active
men
it
crowd by the organisation and administration of the instruments of production. This influence becomes, even in the the
VULGARISATION richest
circles, all-pervasive. to-day, in Britain and France, and Australia far from
The
"
37
leisure
class
"
of
no less than in America being above and beyond the of is dominated pursuit pecuniary gain by the desire for amassing more wealth, without any very nice discrimination between the different forms of production and the various kinds of profit-making that the law permits. There is no longer an aristocracy, a bourgeoisie, and a working class. There is a plutocracy and a proletariat ; and it is in the proletariat that the old distinctions survive as ideals, and are miserably aped in practice
dines
;
whilst in the plutocracy the big shopkeeper and all are rich tradesmen
with the viscount,
together.
The outcome of the attempt to combine the aristocratic ideal of a leisured class with the bourgeois pursuit of at least to pecuniary gain is a state of manners which is The ostentaunlovely to the last degree. of leisure, the choice of conspicuous and futile expenditure, the estimation of everything by its price, the measured appreciation of every person according, not to his quality or his achievements, but to his wealth, " the consequent uncertainty as to everybody's social the the almost towards millionaires, position," sycophancy irresistible arrogance given by the consciousness of
our
1
taste
tion
1
As has been pointed out by Veblen, the aristocratic or barbarian idea of a governing depended on complete abstinence, not only from manual labour but more especially from the brainworking process of profit-making, whether in manufactures, commerce or If the aristocrat was idle and luxurious, he was at least free from the active speculation. On the other hand, Werner Sombart shows that the old bourgeois pursuit of gain. class
governing class is seen at its best in the early stages of capitalism when idleness and extravagance are the two deadly sins, and personal industry and personal thrift are " ' Take as your model the ant*,' wrote the exalted as the holiest of moral virtues. who the most eminent bourgeois of his time father of Leonardo da Vinci (1339) " Be thrifty and moderate to-day already have a care for the needs of the morrow. Franklin 1 1 1). Werner Sombart, p. Benjamin 1915, (The Quintessence of Capitalism, by " ' writes In order to secure my credit the founder of the American bourgeois ideal and character as a tradesman, I took care not only to be in reality industrious and frugal I dressed plain, and was teen at no place* but to avoid the appearance to the contrary. Thr of idle diversion: I never went out a-fishing or shooting'" (ibid. pp. 123-4). leisure class of modern capitalism has lost the good and retained the bad feature* ol Loth the aristocratic and the bourgeois ideal*. ideal of a
'
'
:
INEQUALITY OF INCOME
38
possessions, and the subtle insolence that is involved in the conception that other persons with whom you all these characterhabitually consort are social inferiors istics of the society of all capitalist countries appear to us to reduce to an absurdity the claim that, in the present of a leisured capitalist civilisation, it is upon the existence
class that
good manners depend.
THE EMERGENCE The
socialist
criticism.
" is
He
OF REALLY
GOOD MANNERS
does not restrict himself to this negative new conception of what "
believes that a
good manners
is
emerging
in the
modern demo-
When
cratic state, as an outcome of its democracy. a definite system of social castes ceases to be maintainable,
and
becomes general and membership of democratically elected bodies, or in the common use by all classes of the omnibus, the tramway, the American '* " third class railway car, and now the British compartment there is only one alternative to bad manners, and social intercourse necessarily as in the common
promiscuous
common
standard of mutual courtesy. This, fact, good manners of the remoter parts of contemporary Japan, where the nobleman or the millionaire uses the same ceremonious politeness to the porters as these do to him, and the great landlord to every one of his hundreds of peasant cultivators of rice and radishes, as his tenants themselves employ to the superior that they recognise. similar extension of the conception of mutuality in a humane courtesy " " lies at the root of the civilisation or urbanity typical in which modern France, owing to the traditions of the Revolution, is seen to excel, let us say, the Prussia of
that in
is
the
constitutes the
A
18711918. It will be remembered that, already in 1879, Matthew Arnold took, for the text of his criticism of both the aristocracy of birth and the aristocracy of " wealth of the Britain of his time, a striking maxim,
"
CHOOSE EQUALITY
"
39
not alien certainly to the language of the Christian religion, but which has not passed into our copybooks : '
Choose equality and
flee
socialists believe in
"
greed.' "
l
With Matthew "
as the choosing equality essential element in good manners. This fundamental condition of good manners was accepted by those who have, from time to time, been recognised as exemplars in the matter ; but only as regards such as were admitted to membership of their
Arnold,
own
At all times, in wellthe set have been expected, in social intercourse, to treat each other as equals. Already we extend this conception of social equality to the dinner table. do not, when there is only just of to anything go round, seek to take for ourenough particular
mannered
social
sets, all
caste.
who were in
We
We
more than an equal share. do not, nowadays, think it compatible with the manners of a gentleman to give the governess a cheaper wine than is served to the other persons at table, nor even to put off the servants' But towards the great unknown hall with inferior meat. mass of our fellow-citizens, who are really sitting down with us to eat at the world's table, this principle of good manners is observed only by a tiny minority, even among And this again those who think themselves well-bred. is inevitable, because Nature still obstinately refuses to co-operate by making the rich people innately superior It is quite easy for the natural to the poor people. aristocrat to be exquisitely courteous to poorer mortals. His privilege is not challenged : the common man is touched by his condescension and eager to show that selves
he knows how to respect genuine worth that, as he sees one. phrases it, he knows a gentleman when he But the rich are not born with this natural superiority they are in the lump as other men are ; and their up:
make them bringing in comparative luxury tends to characters their to which petulant, and expect a precedence 1
"Equality," by Matthew Arnold, in Mixtd Etujt, 1879.
INEQUALITY OF INCOME
40 do not
entitle
them.
Having no
they are forced to assert their insolence,
and
to demonstrate their
natural superiority,
artificial
privilege by power by expenditure.
Without such insolence and
such expenditure, they parlour-maids and butlers, who are often better looking and better mannered, and indeed could hardly obtain good situations if they were not. Under such conditions it is useless to preach good manners and reasonable economy to people who combine average character with exceptional riches, not to mention those who are below the average, and are born mean, loutish, selfish, stupid, as happens just as often to those who count their incomes in thousands as in shillings. Bad manners become, if not literally compulsory, at and as in each class the least practically inevitable ; is of manners standard simply what everybody accepted in that does class,the great majority of people habitually come to think it no more a breach of good manners to be insolent and extravagant than to spend and consume, by themselves and their families, and thus to abstract from the world, just whatever income the accident of fortune gives them, irrespective of whether or not the consumption is necessary for the fullest performance of their duty to the community. What stands in the way of the universal adoption of the democratic conception of good manners in the United States as well as in the Britain of to-day is, in fact, the inequality of material circumstances and personal freedom among the families which are, in our modern promiscuity of intercourse, driven into personal contact. It is for this reason that the best manners are to be observed we venture to record what is our own opinion not in " the Ten Thousand " of Britain or the " Four Upper " Hundred of New York, but in certain strata of society where a practical equality of material circumstances
might
as well be their
own
happens to prevail, and where social position depends on quite other circumstances than relative possessions.
THE DYSGENIC INFLUENCE We
41
instance
the academic families resident in the still university centres, surviving skilled handicraftsmen of old-fashioned vocations, and the ministers of
may
religion in denominations
lowly.
The
socialist
which have remained poor and
contention
is that,
if
we
are to be
gentlemen, not only must we intuitively refrain from taking more than our equal share of the good things of
we must
life,
but
and
especially in the
embody, in our social institutions, way in which we collectively allocate the means of among the whole of our fellow-countrymen " civilised life, that fundamental maxim, choose equality and flee greed." also
THE DYSGENIC
INFLUENCE
There remains yet another indictment of the social stratification resulting from the inequality of personal riches, and the dominance given to it in capitalist society. Mr. Bernard Shaw, who more than any other socialist has brought into prominence both the evils resulting from disparity of personal riches and the ideal of equality of income as a fundamental part of the socialist creed, has given expression to this indictment in a character" I do not believe," he says, istically challenging form. " will ever have that any improvement in the human you race until you greatly widen the area of possible sexual selection ; until you make it as wide as the numbers of the community make it. Just consider what occurs at
I walk down Oxford Street, let me the present time. I see a woman who takes my fancy. a man. as say, young It would seem very sensible, in I fall in love with her. an intelligent community, that I should take off my hat Will you excuse me ; but you and say to this lady attract me very strongly, and if you are not already would you mind taking my name and address '
:
engaged,
and considering whether you would care to marry me ? Now I have no such chance at present. Probably when
'
INEQUALITY OF INCOME
42
I meet that woman, she is either a charwoman, and I cannot marry her, or else she is a duchess, and she will I have not marry me. purposely taken the charwoman and the duchess ; but we cut matters much finer than that. cut our little class distinctions, all founded upon inequality of income, so narrow and so small that I have time and again said in English audiences of all
We
*
throughout the kingdom, You know perfectly well that when it came to your turn to be married, you had not, as a young man or a young woman, the choice practically of all the unmarried young people of your own age in our forty million population to choose from. You had at the outside a choice of two or three ; and classes
you did not like any of them very particularly as compared to the one you might have chosen, if you had had a That is a fact which you gentlemen larger choice.' with your knowledge of
life
cannot deny.
The
result
you have, instead of a natural evolutionary sexual selection, a class selection which is really a money selection. Is it to be wondered at that you have an inferior and miserable breed under such circumstances ? I believe
is
that
home more to the people than any other can I have impressed argument bring forward. audiences with that argument who were entirely unable to grasp the economic argument in the way you are able to grasp it, and who were indifferent to the political I say, therefore, that if all the other arguments. arguments did not exist, the fact that equality of income would have the effect of making the entire community intermarriageable from one end to the other, and would that this goes I
young man and young woman his or choice right through the population I say that that argument only, with the results which would be likely to accrue in the improvement of the race, would l carry the day." practically give a
own
her
"
1 The Cue for Equality," a lecture delivered at the National Liberal Club, London ; reported in The Metropolitan (New York), December 1913, and also published in London in pamphlet form.
"
We
MONEY SELECTION "
43
differ in the present state of our of knowledge eugenics as to the weight to be given to this plea for perfect freedom of sexual selection according to momentary impulse. But we must remember that, a generation before Mr. Bernard Shaw, it had been
may perhaps
pretty conclusively demonstrated by Francis Galton that the introduction of the motive of pecuniary gain what Mr. " " Bernard Shaw calls resulted in the money selection progressive sterilisation of the most promising stocks.
"
To
MONEY
Francis Galton's
SELECTION
"
demonstration of the socially disadvantageous consequences of the preference for heiresses of the most successful men of each generation, we may now add the adverse influence upon the birth-rate of the selection by the French peasantry, and generally by the petite bourgeoisie, of an only daughter as the wife for an only son, in order to accumulate the In Britain and the United States we petty inheritances. " see this as the tendency to marrying in," among wealthy " families, in order to keep the money in the family."
Akin
to this
who
are
is
the very
statistical
common
preference by parents daughters* pecuniary for of sons-in-law means, even with superior advantage the drawbacks of age, weak health, lack of will-power, or see this deflection deficiency in mental attainments. of sexual selection in its gravest form when the search for a husband or a wife endowed with the desired fortune and low, to the acceptance of some leads, in circles
keenly
alive
to
their
We
high
one who is physically disqualified for healthy marriage, and even the morally degenerate, or the feeble-minded. "
The
obverse of this
money
selection," in
all its
forms,
which no one can believe to be other than eugenically the least disadvantageous, is the intensification, among all classes, notably in the of casual most and provident labourers of our poorest stratum of irregularly employed
INEQUALITY OF INCOME
44
great cities (who are to a large extent condemned to a perpetual interbreeding), of a reckless propagation that may well be eugenically as adverse in its consequences to the community as the exceptional restriction of the birth-rate
The
among
the provident and the prudent.
reaction of
money selection on politics must be but we may quote here the epigram
treated separately ; made by Stuart Glennie at the expense of a gentleman
who
obtained the means of entering parliament by of a rich manufacturer. He marrying the daughter " M.P. by sexual selection." The described him as
gentleman, as it happened, justified his success at the poll ; but that entirely accidental fact does not diminish the intensity of the flashlight thrown by the sarcasm on the power of inequality of income to corrupt the House " members by of Commons, which contains not a few sexual selection," and in like manner the whole system of representative government.
CHAPTER
III
INEQUALITY IN PERSONAL FREEDOM
THERE
another inequality in the capitalist state, which perhaps more intensely resented by the modern artisan, and is more difficult to bring to the comprehension of the governing class than the inequality of income ; Freedom is, namely, the disparity in personal freedom. of course, an elusive term, with various and conflicting is
is
To some simple minds freedom appears To them any one is free who only a negation of slavery. is not the chattel of some other The shipperson. wrecked mariner on a barren island and the destitute meanings.
vagrant wandering among an all-powerful police, are " call no man master." little more than freedom
property-owners protected by " free men," seeing that they But this sort of freedom is to die. \ln the modern industrial community, in which no man is able to produce for himseTFall that he .nggds_for life, personal freedom is necessarily bound up with the ability to obtain~commodities and services produced by other_persons. Translated ihT6~th"e terms of daily lite^ personal freedom means, injact, the power ofthe individual to buy sufficient food, shelter
and clothing
to
keep his body in good
healthTand to gain access to sufficient teaching and books to develop his mind from its infantile state. Moreover, jas_w_e_
cannot regard as a free
man any one
with none
.but vegetative experiences, freedom involves the cpmmanql at some time, of at Jgast^somemoney to spend on 45
\
46
INEQUALITY IN PERSONAL FREEDOM
holidays and travel, on social intercourse and recreation, on placing one's self in a positiotPEo~en}oy nature" and We can, in fact, best define jpersonai freedom as art. the possession of opportunity to develop our faculties and satisfy our desires. Professor Graham Wallas " the possibility- of continuous suggests the definition of is a relative term. freedom this sense initiative." Jn It is only the very rich man who has freedom to consume all that he desires of the services and commodities produced by other persons, and also the freedom to abstain from all personal toil that would stand in the " continuous initiative," and stop it by way of his his Any poor man has absorbing energy and his time.
To the propertyless wagea very limited freedom. earner freedom may mean nothing more than the freedom, by dint of perpetual toil, to continue to exist on the very brink of starvation.
Hence
itself entails inequality in
"
inequality
in
income
in
personal freedom.
" EQUAL BEFORE THE LAW
We
have grown so accustomed, under the reign of capitalism, to the grossest disparity in personal freedom
among nominally free citizens, that we fail to recognise how gross and how cruel is the inequality even where we profess to have adopted equality as a principle. Both Britain and America are proud of having made all men equal before the law. Yet no one can even ask for in the law-courts without paying fees which (though the statesmen and the wealthy refuse to credit the fact) do, in actual practice, prevent the great mass of the population from obtaining legal redress for the wrongs that are constantly being done to them. The very the tribunals with which are established is legal object to give men security for their personal freedom to
justice
prevent this being impaired by assaults, thefts, extortions, defalcations
and
failure to fulfil contracts
and pay debts.
INEQUALITY IN THE LAW COURTS
47
In every city of Britain and America the vast majority of the population never appear as plaintiffs in the civil courts, not because they are not assaulted and robbed, cheated and denied payment of what is due to them
every one must know that these evils happen much more frequently and, at one time or another, much nearer universally, to the poor and friendless than to the rich but because they cannot afford, out of their scanty earnings, even the court fee, let alone that of the lawyer. But the disparity in personal freedom between the rich and the poor is seen most glaringly when the one and the other are charged in the criminal court with an The rich man, except in offence against the law.
extreme cases such as murder, practically always receives summons ; the poor man is still often, for the same offence, peremptorily arrested, as was formerly always a
the case, and taken to prison to await trial. On a remand, the rich man easily procures bail, whilst quite a large proportion of propertyless defendants find themselves returned to the prison cells, a procedure which, coupled with their lack of means, does not, to say the least, facilitate their
hunting up of witnesses who might prove
their innocence, or their obtaining help in their defence. It is needless to recount the further advantages of the
rich
man
witnesses
remands,
When
in
engaging the ablest lawyers and expert
in obtaining a change of venue, and successive ; or in dragging the case from court to court.
sentence
is
imposed,
it is,
in the vast majority of
cases, a pecuniary fine, which means practically nothing to the rich man, whilst to the poor man it may spell ruin
and his household. To the average police magistrate or clerk to the justices, it of is quite a matter of course that a positive majority those whom they sentence to small fines go to prison for Ruinous one, two or six weeks, in default of payment. as prison is known to be to the family of the prisoner as well as to the prisoner himself, the poor are sent to for himself, his little business
48
INEQUALITY IN PERSONAL FREEDOM
United States as in Britain, by thousands because they cannot immediately merely every year, or dollars that they are fined the few shillings produce for minor offences, which rich men commit daily with No inequality in personal freedom practical impunity. could be more scandalous than this practical inequality of rich and poor before the law courts, which characterises prison, in the
every capitalist community, and which, though known to every judge and every practising lawyer for a century, has remained unredressed. 1
THE PSYCHOLOGICAL REACTION from the disparity in this springs directly a material incomes, interpretation of personal freedom which does not exhaust the question. There is a psychoBut
all
freedom which arises merely one man and another. Even when the wage-earner is getting what he calls " good " money and steady work, he resents the fact that he, like the machine with which he works, is bought as an logical aspect of personal from the relation between
instrument of production ; that with as a means to another's end. his class always
his
daily life
Why
is
dealt
should he and
obey orders, and another, and a much
smaller class, always give them ? It is this concentration of the function of command in one individual, or in one
with the correlative concentration of the obligation in other individuals of another class, which constitutes the deepest chasm between the nation of the In one of his novels rich and the nation of the poor. Mr. Galsworthy vividly describes the contrast between the daily life of the English country house and the daily life of the labourer's cottage. The rich man, and his wife and children, get up in the morning at any time " " work they please ; they eat what they like ; they and they play when they like and how they like ; their class,
to
obey
1
Sec The Laio and the Poor, by E. A. Parry, 1914..
THE whole day
CLASS
is
WHICH HAS TO OBEY
49
controlled by the promptings of their own is determined by their own reason
instinct or impulse, or
or will.
From morning
till night they are perpetually pleasant to them. They fulfil their what Professor Graham personality, and they exercise "
doing what
is
Wallas rightly calls their continuous initiative," by giving, day in day out, year in year out, orders to other The labourer and his family are always obeying people. orders
getting up by order, working by order, in the are ordered, leaving off work by order, occupying way they one cottage rather than another by order of the farmer, ;
being ejected from home by order of the landowner, attending school by order, sometimes even going to church by order ; relying for medical attendance on the " " order of the Poor Law Relieving Officer, and in some cases ordered into the workhouse to end a life which, under the British Constitution, has always been From morning legally and politically that of a freeman. " " till save in rare hours of night expansion usually " " the working class find themselves expiated painfully doing what is irksome or unpleasant to them. What is
called in Britain the governing class (which includes many more persons than are engaged in political
a great
is, typically, the class that passes its life in giving orders. What are called the " lower classes " are those that live by obeying orders.
government)
WHEN
AUTHORITY
is
ACCEPTABLE
Now let no one imagine that these lower classes, or the socialists who champion them, or indeed any persons with common sense, object to one man exercising authority What is resented in the capitalist organisaover another. tion of industry is both the number and the kind of the orders given by the rich to the poor, by the owners of land and capital to the persons who gain their livelihood by using these instruments of production. The authority I
$o
INEQUALITY IN PERSONAL FREEDOM
of the capitalist and the landlord has invidious characterIt is continuous over the lives of the individuals istics. who are ordered ; it is irresponsible and cannot be called to account ; it is not in any way reciprocal ; it does not involve the selection of the person in command for his capacity to exercise authority either wisely or in above all, it is designed to promote, the public interest not the good of the whole community, but the personal pleasure or private gain of the person who gives the order. No one but an anarchist objects to the authority of the policeman regulating the traffic in the crowded street ; to the authority of the sanitary inspector compelling the occupier of a house to connect his domestic pipe with the main drain ; to the authority of the Medical Officer of Health enforcing the isolation of an infectious person ; or even to the demand note of the tax-collector. No " one resents the commands of the railway guard take " " all or change here." All these orders your seats are given in respect of particular occasions in the citizen's :
life,
and by persons assumed
to
be selected for their
duty of giving these particular orders. The persons exercising command are themselves under orders ; they are responsible to superior authority ; and may be called to account for bad manners or for they " Moreover, their orders are, exceeding their powers." in the best sense, disinterested, and have no connection with their personal gain or convenience. may complain that the official is going beyond his function or is unmannerly in his methods. may object to the policy of the national executive, or deplore the But in obeying these legislation enacted by Parliament. orders all men are equal before the law ; and all men have the same right of appeal to the superior authority. Finally, in political democracy, the persons who are subject to the authority are exactly the persons who have created it ; and they can, if and when they choose, sweep it away. In their capacity of citizen-electors they fitness
for the
We
We
IRRESPONSIBLE AUTHORITY
51
may exercise collectively, through the parliament and the government of the day, an ultimate control over the stream of orders they are called upon as individuals to obey. In
this
connection
socialist interpretation
it
is
interesting
to
notice
the
of a phrase much in vogue in the often hear at labour meetings "
We
twentieth century. of the desirability of a life."
But
this
man
own working man or woman
controlling his
does not mean that each
to be free to work at starvation wages, or for excessive This hours, or under the most unpleasant conditions. is the freedom demanded for the worker the by capitalist. Against it the socialists and the organised workers have carried on a war of attrition for a century, the victories is
that war being factory laws, mines and railways regulation laws, minimum wage laws, "and the like. What the insurgent worker means by the worker's " control over his own life is, on the contrary, the sort of control exercised by means of his trade union, through an executive council and officials, whom he and his in
These agents of fellows have elected, and can depose. the workers stand or fall, paradoxical as it may sound
who
ignorantly regard trade unions as tyrannies, according to their ability to maintain and increase the personal freedom of the persons who elect them. The revolt of theworker is not against authority^ as such,"out against the continuous and irresponsible Where is the authority of the profit-making employer. \ owners of factories of fofthe the he warrant, asks, power and mines, land and machinery, to dictate the daily life land the weekly expenditure of hundreds of their fellowto
those
still
'
to withdraw from them fmen, and even, at their pleasure, This power is not derived Ithe means of life itself? from popular election. It has no relation to the ascerIt is, tained merit or capacity of those who wield it. in many cases, not even accompanied by any consciousness of responsibility for the moral or material well-being of
52
INEQUALITY IN PERSONAL FREEDOM
Not only is there no those over whom it is exercised. between the orders which connection particular necessary the workers find themselves compelled to obey, and the there is security or prosperity of the commonwealth often a great and patent contradiction, orders to adulterate and cheat being quite common. From the standpoint of labour the authority of the capitalist and landlord is used for a corrupt end to promote the pecuniary gain of the person in command. :
DICTATION AS TO ENVIRONMENT persons who have not deliberately analysed the which the wage-system is organised have any way adequate conception of the continuity and the dictatorial character of the stream of orders by which the workman But this stream of is called upon to direct his life. orders is not the only way in which the property-owning class directs the daily life of those who are dependent on their toil. Even more dangerous, because more subtle, and less obviously an outcome of the inequality in wealth, is the power possessed by the propertied class
Few in
for many years at a stretch, what shall be the physical and mental environment, not only of the manual labourer, but of all the local inhabitants. The most striking manifestation of this power is the " "
to determine,
steadily increasing industrialising ending in the creation- of an urban
of a countryside,
slum area, by the continuous pollution of the water and the atmosphere, the destruction of vegetation, the creation of nuisances, " " the erection of back to back dwellings, in row after row of mean streets. The devastation wrought in this
way, in some of the most fertile and most beautiful parts of England and Scotland, as also in the United States,
is,
as
we now know, comparable
only to that
by long-drawn-out modern war. In peace times the community as a whole fails to realise, in time, effected
a
DICTATION OF ENVIRONMENT
53
the catastrophe that is being caused by the private ownership of land and capital in the establishment and growth of an industrial centre. By the time that the evil is recognised, the health and happiness of whole generations
have been
Belated statutes and tardy vitally affected. at lessen the pollution, abate best, may then,
by-laws the darkening of the atmosphere by noxious gases and coal smoke, perhaps even save the last surviving vegetaBut nothing can bring back the lives the dictatortion. of the capitalist has wasted. The leisured rich are ship able to escape from the noise, the gloom, the dirt, the smoke, the smells that their power has created ; but the wage-earners, the industrial brain- workers, and all their retinue of professional men and shopkeepers find themselves compelled to dwell, and to rear their families, in the graceless conditions unconsciously determined for them by the industrial and financial organisers in their When the city dweller escapes pursuit of private gain. into the still unspoilt countryside on a scanty holiday, it comes as a new insult to find himself and his children barred from the pleasant park, excluded from the forest, and warned off the mountain and the moor by the property rights of the very class of persons who have rendered In the end he is his place of abode abhorrent to him. forced in self-defence to form a perverse habit of liking grimy streets, blackened skies, and the deafening clatter of dray-horses' shoes on stone setts, on the principle
you cannot have what you what you have.
that if
like
you must
like
DICTATION OF THE MENTAL ENVIRONMENT
Nor
unconscious determination by the of the material environment of property-owning the mass of the community, for the sake of its own private in personal gain, the worst form taken by the inequality It has been reserved to our own time for the freedom. is
even
this
class
54
INEQUALITY IN PERSONAL FREEDOM
also the mental enprofit-making capitalist to determine Who can estimate the effect on the mind of vironment. the incessantly reiterated advertisements that hem us in on every side ? It is, moreover, the capitalist who directs the character of the recreation afforded to the mass of It is the brewery company and the distillery people. that give us the public - house ; other capitalists, conhall and the cinematograph, may trolling the music of Fletcher with Saltoun, that they care not who say, makes the laws as long as they provide the songs and But the most glaring instance of the capitalist films. direction of our mentality, and perhaps, ultimately, the most pernicious, is the modern system of ownership of Here we have even a double the newspaper press. first by the millionaire proprietors of capitalist control, whole series of journals, daily, weekly, and monthly, under autocratic control, and secondly, by the great dispensers of lucrative advertisements to these journals. The combination of the colossal expense involved in the successful conduct of a modern daily newspaper, and the natural reluctance of the wealthy advertisers to support any publication adverse to the system, if not even to the particular business, by which they obtain their own fortunes, have made it almost impossible for the propertyless wage-earners, even in co-operation with each other, to establish, either in Britain or the United States, any organ of their own at all comparable in circulation and influence with those of the millionaire proprietors. Thus, the mass of the population is quite unable to protect itself against the stream of suggestion, biassed informa-
and corruptly selected news that 1 the giant circulation of the press. by
tion
is
poured on them
1 For accounts of the manner and extent to which the newspaper press, and behind the possessors of wealth, now control the mental environment, as well as the local and central government of the United States and Britain, the student should consult The Press and the Organisation of Society, by Norman Angell, 1922 j and Liberty and the Newt, 1920, and Public Opinion, 1922, both by Walter Lippman, himself the editor of a great Neve York newspaper { the more lurid descriptions given from personal experience it
THE CAPITALIST GOVERNS
55
Lastly, we have the control insidiously exercised by the owners and organisers of the instruments of production, by means of their wealth, over the working of
municipal government and parliamentary institutions.
DICTATION IN GOVERNMENT
Of this control, the direct power of the proprietors of the newspaper press which, in Britain, goes far to make a Prime Minister, and in the United States not only to elect a President but also to go far to select his chief ministers is only the most obvious example. The influence, not only upon elections and legislatures, but also upon national and municipal executives, of the great financial, shipping, manufacturing, and trading amalgamations and combinations, in which the power of wealth is cast defiantly into the scale as the sword of
Brennus, has, in recent decades, become notorious and It is, we suggest, to the suspicion, followed scandalous. the detection of this far-reaching coercive guidance by of national and local government by the property-owners and profit-makers, large and small, more than to any other cause, that is to be ascribed the sudden and rapid decay of the confidence of the wage-earning class in these institutions, manifested not in this country alone, but throughout the Continent of Europe and North America. Unfortunately, one invidious feature of the Great War, so far as the United Kingdom is concerned, has been the extension of a similar capitalist control to the national
ways not previously open. The temporary handing over of various government departments to executive, in
leading representatives of the business interests concerned, and the shameless use of the influence thus acquired for as journalists, on the one hand, by Hilaire Belloc in The Free Press, 1918, and by Upton Sinclair in The Brass Check, 1919 ; and, incidentally, in the technical account of how a modern newspaper is run, by G. B. Dibblee in Tht Newspaper, 1913 (London), and by
John La P. Given
in
Mating a Newspaper, 1913 (New York).
56
INEQUALITY IN PERSONAL FREEDOM
the promotion of the private profits of those branches of business, represents, so it is felt by the British workman, the final degradation of the state to be the hand-
maid and accomplice of the
THE BRAIN-WORKERS
profiteer.
IN CAPITALIST SERVICE
This control of the physical and mental environment, which, in a capitalist society, the property-owning class progressively and almost automatically accomplishes (for all those effects are mere incidents in the pursuit of private gain, and are no more consciously aimed at than the devastation caused by the trampling of a herd in pursuit of food), brings into prominence the instrument of far-reaching dominance. The deep-seated intolerance by the more ignorant manual workers of the very existence of the professional brain-workers is not due solely to the its
difficulty a navvy finds in believing that a man who sits in a comfortable chair by a cheerful fire in a carefully sound-proofed room is doing any work at all, much less
work or
him hungry and exhausted in three Many wage -workers are sufficiently
that will leave
four
hours.
educated to
know
better
;
and others are employed
in
occupations quite as sedentary and even less apparently active than those of the financier or mathematician.
Their share in the prejudice
is explained, if not justified, fact that the the brain-workers, in every capitalist by find themselves state, attracted, and economically comtake service under the property -owners. to pelled, the Historically professions emerge as the hirelings of In the modern the governing class for the time being. industrial system they naturally serve the proprietors of the instruments of production, who alone can ensure to the vast majority of them a secure and ample livelihood, with some prospect of climbing up to the eminence of " The lawyers, the engineers, the living by owning." architects, the men of financial and administrative ability,
THE BRAIN-WORKERS
57
the civil servants, the authors and journalists, the teachers of the schools beyond the elementary grade, the whole class of managers, the inventors, even the artists and the men of science not altogether excluding, in spite of their long charitable service of the poor, the medical profession and the ministers of religion, nor yet, for all their devotion to the children of the masses, even the are almost inevitably reelementary school teachers or tained, consciously unconsciously, in the maintenance and defence of the existing social order, in which the private ownership of the instruments of production is Is it surprising that the manual workers the corner-stone. of the world should be tempted to regard, not science, art or religion (as is often ignorantly asserted), but the brain-workers who have been trained under the capitalist
and enlisted in its service, as being as much the system, " " " '* as the enemies of the people idle rich ? But The brain- workers themselves, especially this is not all. those who are poorly paid and socially segregated, are beginning to rebel openly against this all-pervading coercive guidance of national policy and national culture by wealthy men and a wealthy class. As school teachers, municipal officials, as civil servants, as scientific workers, as journalists and editors, sometimes even
as
(notably in the United States as under the German Empire) as university lecturers and professors, they find their freedom of thought and expression strangled by the fear of dismissal, or at any rate by that of losing all chance of promotion, should they dare to oppose not merely the political party or the pecuniary interests of influential patrons, but even the current principles of social organisation to which nearly all rich men cling. Moreover, the majority of the situations of authority and affluence are still habitually reserved, in most countries, either by administrative devices or through
who have qualified as personal influence, for persons brain-workers though belonging to the class of those
INEQUALITY IN PERSONAL FREEDOM
58
who
live
by owning or organising the instruments of
of attainments production, irrespective of their inferiority or inability to render, in the posts to which they are It is assigned, the highest service to the community. here that we find the fundamental cause of the prevailing unrest in all countries in practically all the brain-working leading in many cases to the adherence of professions, the younger professionals to the socialist
movement, and
nowadays even inclining some of the professional organisations to make common cause with the trade unions and the labour and socialist parties in resisting the dominance of the property-owners.
WHY
We
LIBERALISM DECAYED
suggest that the foregoing analysis incireveals the root-cause of the universal failure dentally of the political parties styled Liberal, which were so
may
advanced thought of European nations the nineteenth notably at the zenith of century during to retain, in the twentieth unrestrained capitalism century, their hold of a wage-earning class that has become conscious of its citizenship. To the political Liberals, personal freedom actually meant the personal power of the man of property ; just as political progress typical of the
meant the
abolition of feudal, ecclesiastical
and
syndicalist
small upon the right of the property-owner, " " with his own as well as large, to do what he liked his own land and capital no less than his own personality. Down to the present day the unrepentant Liberal refuses cannot even be made to understand to recognise that, in the modern industrial state, a man who is divorced from the instruments of production cannot, as we have shown, even live his own life, let alone do what he likes Even to the political Liberal with his own personality. who is not a capitalist, such as the young barrister or doctor, artist or author, the conception that the labourer's
restrictions
THE DECAY OF LIBERALISM
59
"
" wage-slavery is unintelligible. To him it seems, on the contrary, that the typical engagement for hire of the propertyless " but earning professional, "calling no man master his livelihood by fees from a succession of clients, upon no one of whom is he specially dependent, constitutes the very perfection of honourable service which is perfect freedom. What even this highly educated Liberal fails
engagement
for hire is of the nature of
understand is that, whatever may once case, the industrial revolution has made to
the
freedom
of
professional
life
have been the
anything like impossible for the
or the factory operative, the labourer or the The fact that the ordinary manual worker or minor clerical employee has not the ownership, and, therefore, not the control of the instruments of production, or of the complicated industrial or financial organisation by which he can earn a livelihood, and cannot support himself on a succession of fees from a multitude of clients, compels him, whether or not he desires this, to artisan clerk.
obtain his food by placing himself under a master whom he cannot call to account ; whose orders he has to obey ; whose interests he has to serve ; who, in fact, possesses him and uses him, during the greater part of his waking He cannot choose life, for ends which are not his own. where he will live, and in what environment his children He finds himself restricted in the amusewill grow up. ments and even in the literature to which he has access, to that which it suits the pecuniary interests of the
He finds, as it seems to him, retained against brain-worker nearly every professional him and his class. And through this control over his working life and his leisure hours, over his physical and mental environment, the propertyless worker, by hand or by brain though conscious that he and his fellows discovers that constitute a majority of the electorate is he even with the widest suffrage unable, in fact, to state. of his control the government Accordingly, once capitalist class to supply.
60
INEQUALITY IN PERSONAL FREEDOM
he has been admitted to voting citizenship, the liberty which Liberalism offers him seems a hypocritical pretence. He finds in the creed of Liberalism no comprehension either of the nature of the servitude in which the capitalist system has engulfed the great bulk of every industrial community, or of the need for an application to industrial Now organisation of the first principles of democracy. this comprehension is the very atmosphere of socialism. The socialist is out to destroy the dictatorship of the
And
capitalist.
as
that
dictatorship
is
the grievance
which the worker is never allowed to forget for a single working day from his cradle to his grave he naturally turns to socialism the moment he begins to connect politics with his personal affairs and perceives that his vote is an instrument of political power.
A
LIBERAL APOLOGY FOR CAPITALISM
The honest defenders of capitalism admit, in substance, the truth of this criticism ; but they allege, in reply, that without the potent stimulus of private profit it would have been impossible to have effected the Industrial Revolution, or to have secured the vast increase in the production of commodities and services, on which, it It was not suggested, modern civilisation depends. there even in that the foremost was, nations, merely between the seventeenth and the nineteenth centuries, no practicable alternative to the dictatorship of the capitalist. is
The
very inequality in riches and in personal freedom, by the prospect of which he was incited and stimulated, seemed to have an economic advantage of its own
its social drawbacks. As it has been economist, in the course contemporary " of the nineteenth century, Europe was so organised socially and economically as to secure the maximum accumulation of capital. While there was some con-
which obscured
well put
tinuous
by
a
improvement
in
the
daily
conditions
of
life
THE CAPITALIST BLUFF
61
of the mass of the population, society was so framed as to throw a great part of the increased income into the control of the class least likely to consume it. The new rich of the nineteenth century were not brought
up
to large expenditures,
and preferred the power which
investment gave them to the pleasures of immediate In fact, it was precisely the consumption. inequality of the distribution of wealth which made possible those vast accumulations of fixed wealth and of capital improve-
ments which distinguished that age from all others. Herein lay, infact the main justification of the capitalist If the rich hadf spent their new wealth on their iystenj. "own enjoyments, the world would long ago have found such a regime intolerable. But like bees they saved and accumulated, not less to the advantage of the whole ?
community because they themselves held narrower ends in prospect.
"
The immense accumulations
of fixed capital which, mankind, were built up during the half-century before the war, could never have come about in a society where wealth was divided equitably. The railways of the world, which that age built as a monument to posterity, were, not less than the pyramids of Egypt, the work of labour which was not free to consume in immediate enjoyment the full equivalent of to the great benefit of
its efforts.
"
Thus this remarkable system depended for its growth on a double bluff or deception. On the one the labouring^lasses accepted from, ignorance or Jiand powerlessness, or were compelled, persuaded, or cajoled by custom, convention, authority, and the well-established order of societyinto accepting, a situation in which they pgnlffSll tfrMf jffl^jy'ry little of the cake, that they and nature and the capitalists were co-operating to produce. And on the other hand the capitalist classes were allowed .JtQjcall-the-best part of the cake theirs and were theoreticthe tacit underlying condition ally free to consume it, on
62
INEQUALITY IN PERSONAL FREEDOM
The that they consumed very little of it in practice. * duty of '"saving became nine-tenths of virtue, and the growth of the cake the object of true religion. There grew round the non-consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts And so of production as well as those of enjoyment. the cake increased ; but to what end was not clearly l
contemplated." need not demur to this candidly realistic apologia Of course it was for nineteenth - century capitalism. not the whole, or even the bulk of their vast share of the national income that the capitalist classes abstained from consuming year by year, in order to transform it into new instruments of wealth production ; but only in the United Kingdom of the a fraction of their share nineteenth century, scarcely a quarter of it And of this quarter, how much was invested in instruments for the production of what Ruskin called illth, of gluttony, For, under extravagance, waste and demoralisation ? is counted in a false wealth But it capitalism, currency. admitted with all its drawbacks, the be that, may freely dictatorship of the capitalist scored an initial success.
We
1
It delivered
the goods.
It
created the highly efficient
machinery of ever-increasing production. And, gruesome as were the accompanying social results, we may, perhaps, allow that, on balance, down to a certain date, the With this initial advantages exceeded the drawbacks. success 1
we
deal in the next chapter.
The Economic Contequtncet of the Peace, by John
M.
Keyne*, 1920, pp. 16-17.
CHAPTER
IV
THE INITIAL SUCCESS OF THE CAPITALIST SYSTEM
WE
can imagine the impatience of some of our readers with the foregoing description of the evils accompany-
The enlightened upholder ing modern industrialism. of capitalistic business enterprise will accuse us of the common fallacy of the agitator the fallacy of concentrating attention on the black patches of an existing order, without taking account, either of its achievements, or of the fact that all qualities and all successes must have their defects and their shortcomings. The philosophical adherent of the dictatorship of the capitalist profit-maker will have felt that our criticisms centre round what he may admit to be a regrettably unequal distribution of wealth, and an unscientific consumption of commodities and services. But he will retort that commodities and It is fair to argue services have first to be produced. that the poverty of the poor, the inequalities within capitalist communities in incomes and in personal freedom, the control over the environment and the coercive guidance of national policy exercised by the in so far capitalist because of his status and his wealth,
as these are evils at
good
l ;
that
they
all,
are only incidental to a greater
may
possibly
be
remediable
by
1 It may be noted that the most skilful defenders of capitalist civilisation argue in defence of the gains of the entrepreneur, organiser or director of industry ; tacitly ignoring the tribute that mere ownership levies in rent and interest, and quietly assuming the very point at issue, by implying that in no other way than by extending the conthe services of the ception of private property to the instruments of production, can
63
INITIAL SUCCESS OF CAPITALISM
64
appropriate reforms within the capitalist system ; but that in any case they are of trifling account in comparison with the benefit the community derives from the enormous increase in national wealth and national power directly attributable to the business enterprise of the capitalist
To such a person what seems essential profit-maker. the organisation of the instruments of production in the manner that is continuously the most efficient in maximising output. This continuous increase in the is
production of commodities and services is, it is claimed, what distinguishes a progressive from a stagnant or a decadent civilisation. Such a continuous advance of wealth production, in quantity, quality, and variety, Thus, an entrepreneur, organiser or director "be obtained. the capitalist system remarks that land, capital and labour in the sense of being the means by which those who assume The entrepreneur bility of industry carry on production.
able
American defender of
are only productive factors the direction and responsi-
or enterpriser
is
the only
wages are what the enterpriser has to pay to obtain the privilege of controlling and utilising these three means. . . . Just as there would be no advantage to the human body in diverting blood from the brain real productive factor.
Pure
rent, pure interest, and pure
part that receives only one-tenth as much blood as the brain, so there result a loss rather than a gain from any such equalisation of income as would more efficient members of society of the incentive to the utmost exercise of the deprive to
some other
would
their productive power, or of the ability to fit themselves for, and perform successfully, the important duties that devolve upon them as the undertakers of enterprises, the dis" coverers and appropriates of opportunities, and the accumulators of capital (Enterand the Productive Fred B. Process, by Hawley, 1907, pp. 85, 122-3). prise
"
Profit is acknowledged to be a peculiar form of income, differing essentially from rent, wages, or interest, and entitled to rank with them as a fundamental form of equal, but only equal, theoretic importances. It is also identified with the residue of the '
And
product,' after the fixed claims of land, labour, and capital are satisfied.
it is looked the income peculiar to the entrepreneur, who is regarded as the co-ordinator of land, capital and labour, without furnishing either in his own capacity. . . . The peculiar function of the economic entrepreneur is the assumption of responsibility in industrial undertakings. . . . Strictly speaking, a co-ordinator is not only the one who plans, but also the one who intelligently executes a plan, and the two may be, and usually The executant, in carrying out the original plan, has to adjust are, different, persons. details, and this involves a certain amount of subsidiary planning on his part, but his function in the economic productive process is universally recognised as labour, and the income obtained by him as wages. ... It is only when the co-ordinator subjects himself to the result of his own co-ordination, or of the co-ordination of others, that he becomes the recipient of profit. ... If the co-ordinator should be exclusively defined as the one who subjects himself to the results of co-ordination, the person at whose risk and for whose benefit co-ordination is effected, it would be synonymous with the term
upon
'
as
'
'
enterpriser
as I
have employed
it
"
(Ibid. pp. i i-i 3).
This, however, leaves undefended what John Stuart Mill described (Principles of " Political Economy, p. 477 of edition of 1865) as the enormous share which the possessors of the instruments of industry are able to take from the produce," in the rent and interest payable to functionless shareholders and landlords.
THE NATURE OF PROFIT-MAKING
65
can be achieved, it is assumed, only by evoking in men continuous initiative, industry, persistence, courageous adventure and thrift, for which the one known stimulus is pecuniary gain ; by securing to them unfettered freedom of enterprise, subject to the check of personal loss of wealth whenever they fail, for which there is only one known expedient namely, private ownership of the :
instruments of production united with their organisation
and administration.
THE CORE
We
shall not
OF THE CASE
understand the clash of views, nor do
justice to the position on each side, unless we realise that, in this controversy the defenders of the capitalist
system and the labour and socialist movement of the twentieth century join issue on the very core of the case. The modern controversy between the believers in a new order of social democracy and the most enlightened adherents of the capitalist system turns, in fact, on the efficacy or indispensability of the motive of profit-making
and
its
defects
;
upon the
relative
advantages and dis-
advantages, to the community as a whole, of leaving the control of the nation's land, machinery, labour and brains to the profit-making manufacturer,
THE NATURE
merchant or
financier.
OF PROFIT-MAKING
What is profit-making, and what is the vocation of the profit-maker ? According to the economists, profit-making satisfies " a certain propensity in human nature, the propensity to It truck, barter and exchange one thing for another." is a natural development from the higgling that takes between individual proplace in the primitive market The producers of different commodities or services. ducer of one article seeks, by the art of bargaining, not F
66
INITIAL SUCCESS OF CAPITALISM
only to exchange the surplus of the commodity which he himself makes, for a commodity which he desires but is unable to produce, but to exchange it to the greatest advantage to himself so as to get the product of more labour for the product of less labour. 1 As Adam Smith rightly observes, the art of bargaining is a distinct advance on the animal's art of seizing without giving " anything in" return. Nobody ever saw one animal," its he writes, by gestures and natural cries, signifying I am to another this is mine, that yours willing to this for that.' The seizes the bone from the dog give The Western tourist, other dog and runs away with it. observing the chaffering of an Eastern bazaar, has some difficulty in distinguishing the art of bargaining from the art of cheating, that is to say the art of getting something for nothing by false pretences and fraud, and not by force. The distinction seems to be more a matter of degree than of kind. The famous Hindu poetof our own day, surveying the larger transphilosopher actions of the capitalist profit-maker in the money, stock, labour markets of Western civilisation, finds produce and " 2 a similar stop in his mind." The transaction of the capitalist profit-maker is distinguished from the bartering between individual pro*
:
'
1 In an address to Japanese students Sir Rabindranath Tagore gives us the criticism " of an Eastern philosopher of Western commercialism. You had your own industry in Japan ; how scrupulously honest and true it was, you can see by its products by their grace and strength, their conscientiousness in details, where they can hardly be But the tidal wave of falsehood has swept over your land from that part of observed. the world where business is business, and honesty is followed merely as the best policy. Have you never felt shame when you see the trade advertisements, not only plastering the whole town with lies and exaggerations, but invading the green fields, where the peasants do their honest labour, and the hill-tops, which greet the first pure light of the morning ? . . . This commercialism with its barbarity of ugly decorations is a terrible menace to all humanity, because it is setting up the ideal of power over that of perfection. It is making the cult of self-seeking exult in its naked shamelessness. ... Its movements are violent, its noise is discordantly loud. It is carrying its own damnation because it is trampling into distortion the humanity upon which it stands. It is strenuously turning out money at the cost of happiness. . . . The vital ambition of the " civilisation of is to have the exclusive of the devil present Europe possession (Nationalism, pp. 85-86, 129, 128, 82). 1 " The foremost truth of political economy," observes Nassau Senior, is " that every one desires to obtain individual wealth with as little sacrifice as possible."
HOW
PROFIT-MAKING AROSE
67
ducers by the fact that he exchanges the product, not merely or mainly of his own activity but of that of countless other persons. Hence he conducts a double transaction he first buys the labour, or the product of the labour, of other persons at the cheapest rate, and then sells the resultant commodity or service at the highest It is exactly this element in capitalist price. enterprise " which is termed the exploitation of labour," or, more " The capitalist's profit is found, recently, profiteering." essentially, in the margin between the price he gives for other men's services and the price which he gets in selling the product of these services in the markets of The capitalist profit-maker may (and usually the world. to add the function of profit-making some other does) such as that of organising and sometimes function, the technical directing processes of agriculture, mining, :
manufacture, transport, banking, warehousing or shopBut all these services can be and are inkeeping. creasingly performed, notably in the fully developed capitalist system, by salaried professionals who are not themselves profit-makers, but merely wage-labourers of a high grade, having no personal interest in the margin obtained between the act of buying and the act of selling.
How
PROFIT-MAKING AROSE
Now we
must always remember that profit-making, method of remunerating the directors of industry and commerce, was not adopted out of malice. It was as a
not intended to produce masses of destitute persons. It was not designed to diminish personal freedom and to lead to class oppression. It was not even devised for of an creation the hereditary class which lives by owning. The economic institutions necessary to the vocation of private property in the instruments of profit-making and free enterprise in the use of such instruproduction, ments were maintained and developed by British and
INITIAL SUCCESS OF CAPITALISM
68
American statesmen and legislators during the eighteenth and nineteenth centuries, with the approval of the economists, because these men honestly believed that unrestricted profit-making by manufacturers, traders and financiers was the most effective way of increasing the There has never been, at any period national wealth. 1 of British history, a more unanimous verdict from the
most intelligent and public - spirited leaders and instructors of the governing class than that which acclaimed the industrial revolution of the eighteenth and nineteenth
The most
learned philosophers, the most the most enlightened authors, all progressive politicians, their different in ways the following series of repeated which seemed to them to condogmatic propositions,
centuries.
of reasoning, and which have, in the so axiomatic as to be taken The happiness of the comits wealth ; the wealth of the nation on munity depends depends on maintaining and increasing its annual product ; the best way of doing this is by letting each citizen make himself as rich as he can in his own way ; the quickest stitute
a
train
States, become habitually for granted.
United
personal riches is profit-making in a free market ; hence unrestricted profit-making by individual capitalists is the best way of securing the welfare and happiness
way to
of the nation. 2
This plea of the
capitalist had,
at the
time
it
was
"
1 The institutions of private property and individual competition are based, not on blind traditionalism or class oppression but on the experience which all the progressive races of mankind have attained of their social utility and their flexible adaptability to
and one
"
A
Critical Analysis, by O. D. Skelton, 1911, (Socialitm : " inability or unwillingness to distinguish between private property," " Paradoxical as it may seem, private property in the instruments of production." " of the principal objects of the socialist is greatly to increase the amount of private
changing social needa p. 45).
Note the
property," but to concentrate it entirely on the forms of wealth for which the institution Constitution for the Socialist Common-wealth of Great Britain, is fitting. (See by S. and B. Webb, 1920, pp. 340-47.) ' " ' * " The to make the nation as rich as possible," question is still the same, ' but as the answer now is By letting each member of it make himself as rich as he can in his own way,' that portion of the old art of Political Economy which professed to teach ' a statesman how to provide a plentiful revenue or subsistence for the people becomes " almost evanescent (The Principles of Political Economy, by H. Sidgwick, 1883, p. 18).
A
How
'
THE NEED FOR PRODUCTION
69
Even to-day socialists formulated, much to be said for it. are apt to ignore the cogency of the argument for the profit-maker as a factor in the production of wealth, and to concentrate their attack on the assumption that the welfare and happiness of the nation depend on an actual increase of the national product. Confronted with the actual results of the capitalist organisation of industry in the parts of the world and under all conditions
all
it poverty of" the poor and the gross inequality which " life, liberty and the pursuit of happiness the socialist finds it easy to argue that the welfare of a community depends only to a small extent on the amount of its annual product, and much more on the efficient distribution and efficient consumption of such commodities and services as are produced. There are,
creates in
indeed,
some
socialists
who have gone
so far as to deny
any increase of productivity is required for an increase in human happiness. They maintain that the that
present national product of Britain or France, Australia or the United States, if equally distributed and efficiently consumed, is amply sufficient to secure all the consumption that is good for all the inhabitants of those This is not our own view of the situation. countries.
THE
We
EFFICACY OF THE PROFIT-MAKING MOTIVE think the present output of commodities and
services, relatively to the efforts and sacrifices of those who co-operate in production, is disastrously small ; and that, assuming that there is leisure for full citizenship,
no overwork, and
sufficient
every increase in the pro-
duction of commodities and services distributed
and
efficiently
may mean, if fairly consumed, additional personal
freedom for each individual
citizen, as well as a progressBut the socialist, when of the race. ive improvement increased that he asserts productivity is not necessary or is not even desirable, squarely meeting the case against
70
INITIAL SUCCESS OF CAPITALISM
The capitalist retorts that, unless the organisers him. of industry are remunerated by the process of profitmaking, and permitted to enjoy
all the advantages that even the existing wealth of the nation will not be maintained ; and that it may easily be so much
this involves,
diminished, and so rapidly, that the whole community promptly come to the very brink of starvation. " Inequalities" in wealth," sums up an American critic which correspond to differences in enterof socialism, prise, in industry, in thrift, can be levelled only at the cost of paralyzing production, and plunging the whole of society into an equality of misery." * The making of profit," we are told by a great British capitalist, " decides whether labour has been wisely applied or material rightly used. Men will not pay for what they do not want, nor on the other hand continue to supply will
'
by which they gain nothing. Thus we have in profit the final economic justification of expenditure in trade. Every transaction comes to be tried in the court of profit or loss, and no business enterprise, unless it be experimental or educational or philanthropic in its character, which does not respond to this guidance can be perma2 nently either successful or useful." No competent observer of the business world will deny the efficacy of profit-making as a way of stimulating and canalising the energies of those who practise it. Uncertainty as to the end to be pursued is perhaps the commonest cause of paralysis of will ; it leads both to delay in the execution, and to a wavering uncertainty as to the direction of a given undertaking. may admit that pecuniary gain the fact of finding more money in your pocket at the conclusion than at the opening of a transaction is an end that is understood by practically that
We
all
human
1 Socialism *
:
8
beings.
The motive
A Critical Analysis, by O. D.
of pecuniary gain
is
Skelton, p. 58. " InLife and Labour of the People in London, by Charles Booth, second scries ; dustry," vol. 5, 1903, p. 77. " The beginning and the end of capitalist economic activities is a sum of money.
THE
"
COURT OF PROFIT
'
71
by the common run of men ; it is usually sometimes abnormally present, in the make-up present, of mental defectives and degenerates ; and it may even be discovered in many popular artists and some men of
vividly felt
Further, in the profession of profit-making, the of success is identical with the end pursued. The
science. test
who becomes a millionaire adds, personal satisfaction with every increase of his gains, the high reputation which he comes to enjoy, because of his wealth, among his fellow business exactly " men. Good " business means big profits ; " bad " business means small profits ; whilst bankruptcy spells 1 disgrace, however innocently it may have been incurred. realise the truth of this analysis when we compare the business world with that of the learned professions. The great lawyer, the great surgeon or physician, or the great civil engineer may derive the most solid of his secret satisfactions from the magnitude of his income and the growth of his fortune. But among the members of his own profession his prestige will rest, not on the size of his banking account, but on the quality of his work, successful profit-maker
to his
We
whether as counsel or as judge
in diagnosis or in ; or the ; complexity importance of the that he has It is exactly this engineered. enterprise and of the end simplicity uniformity pursued, and its as the test of success, acceptance by public opinion
treatment
in the
Consequently, calculation forms an important element in the capitalist spirit, and this early in the history of capitalism. By calculation I mean the the capacity, to think of the universe in terms of tendency, the habit, perhaps more figures, and to transform these figures into a well-knit system of income and expenditure. The figures, I need hardly add, always express a value ; and the whole system is intended to demonstrate whether a plus or a minus is the resultant, thus showing whether the " undertaking is likely to bring profit or lost (The Quintessence of Capitalism, by Werner
was recognised quite
Sombart, 1915, p. 125). 1 " When do we speak of having accomplished a successful piece of business ? But what is meant precisely by Surely when the contract-making has ended well. ' 1 well ? It certainly has no reference to the quality or to the quantity of the goods or services given or received ; it refers solely and only to the return of the sum of money It is the aim of the undertaker expended, and to a surplus over and above it (profit). " so to manipulate the factors over which he has control as to bring about this surplus and Modern Werner Sombart, 1913, p. 161). (The Jews Capitalism, by
INITIAL SUCCESS OF CAPITALISM
72
which transforms the profit-maker from a puzzled human being, grappling with ever new ends or aims, into an -1 C automaton working without friction on a repetition job. But this is not all. The process of profit-making calls to its aid all the more primitive and commoner passions of I
men the instinct of acquisition, the instinct of fighting or domineering over other men, the instinct of obtaining for wife and children a position of security or privilege. Moreover, the combination of the process of profitmaking with the law of inheritance brings into play one the desire to of the strongest of all civilised instincts " " that to secure to one's descendants a : found family is, to live and for all time thus be the right by owning, need for or of the The ability industry. independent adherents of the capitalist system are therefore justified in asserting that the process of profit-making is a sort of alchemy for getting the largest output in the way of continuous and concentrated effort from even the dullest intellect and the meanest character that can be brought No vocation that has ever existed has into its crucible. been so absorbing and so transforming to the man who All the common instincts, impulses and practises it. " " sensual man faculties of the are, to use an average " " American expression, routed to a given end. Through the intense concentration of the whole of their thought :
:
and feeling on
this
one narrow
issue,
men who would
not otherwise be distinguished become prophets and " smell of the market" seers, and develop an almost animal which enables them to foretell with amazing exactitude what transactions, in all types of enterprise, among all
and throughout all continents, will, as they say, There is probably no efficiency so great as pay." Of all the efficiency of the successful profit -maker. most perfect. specialists he is the In justice to Adam Smith and his immediate followers, it is worth remembering that the efficacy of the process of profit-making was far greater in the first stages of races
"
1
TO GET RICH QUICKLY
'
73
the capitalist system than it is to-day. For a very good reason. Before the rise of joint-stock enterprise on a huge scale, still more before the rise of the modern amalgamation, and trust, the profit-maker was a free He was able agent, a man who called no man master. to act quickly without waiting for the decision of any other mind. If he failed in intelligence or character he alone had himself to thank, and he knew it. If he
succeeded,
He
all
the profits were his, and
worked day
all
the prestige.
and day out with this consciousness of the hell of penury on one side, and the paradise of huge possessions on the other. If we think of the life of the modern manager of the joint-stock bank or railway in
salaried agent of the typical world-wide with his subordination to a board of directors, his
company, or the trust,
obligation to fulfil his prescribed function according to definite rules laid down for him by Company Acts, by
by the technique of v/hole series of experts, by arrangements with allied or amalgamated companies ; and on the other hand, secured in his salary, and bearing none of the loss of failure, always able to leave one company and go to another, one realises the superior incentive to the brain-worker, and the superior freedom to the entrepreneur, of the period of industrial revolution to that of established and developed capitalism. auditors' requirements,
**
To
GET RICH QUICKLY
"
Thus, we must admit the accuracy of one among the series of propositions constituting the plea of the " that the quickest way to personal namely, capitalist To which we may add that riches is profit-making." that is to it is a all, whether they be Fords or way open who can it single-mindedly, and are pursue Fledgebys, " " as to allow themselves to be unbusinesslike not so And the efficiency of distracted by unselfish interests. :
profit-making as a means to an end
a hard fact for the
INITIAL SUCCESS OF CAPITALISM
74
is proved, not only by observing the characterof the profit-maker, but also by the statistical result Those nations which have adopted the of the process. in its most complete capitalist organisation of industry form have both the richest individuals and the largest class of persons who are rich enough to live by owning and not by working. If personal riches be the test of national wealth we are a long step forward towards accepting the plea of the capitalist. But the profit-maker does not work in a vacuum. He is made by and he makes the political, social and
socialist
istics
economic environment in which he functions. the character of this environment that we must
It is to
now
turn
our attention.
THE
CAPITALIST ENVIRONMENT
no more fascinating historical study than to emergence of a new type of human being in response to new circumstances ; to watch the individuals of this incipient subspecies coalesce into a group with the common purpose of self-preservation against hostile If the group is successful in its conservative forces. defensive phase it presently becomes openly aggressive.
There
is
trace the
Recognised as a reputable profession, it seeks to alter and political institutions so as to give fresh scope for the exercise of the new vocation. For instance, we see the present medical profession in Great Britain originating in the humble apothecaries' and barbersocial
surgeons' shops of mediaeval times ; working in the seventeenth and eighteenth centuries through chartered colleges and companies towards corporate influence as a self-governing profession ; gradually entrenching itself in the hospital system of the last quarter of the eighteenth century, and reaching its present position through the Medical Act and the General Medical Council of 1858, consolidated by the ever-widening development of public
THE CAPITALIST
AS REBEL
75
health and physical education, of medical registration and national insurance. To-day, it is not too much to say, the
medical profession in Great Britain, relatively
insignificant in
numbers, exercises greater power
in the
machinery of administration and the counsels of the legislature than even the formally established Anglican
Church : rivalling the equally influential legal profession in its implicit claim to direct the destinies of the community and the race.
THE COMING But the
OF THE CAPITALIST
power of the medical profession has not been accompanied, taking the profession as a whole, by any considerable acquisition exhibits none of the revolutionary of personal wealth romance and political glamour, the mass and the momentum, of the rise, during the eighteenth and nineteenth centuries, of the class of capitalist entrepreneurs to a position of predominance in the modern industrial The unlicensed profit-maker, or " new capitalist," state. appears first as the rebel of his time, flying the flag of personal freedom as the arch -destroyer of existing The reason for his conventions, institutions and creeds. is The fervour vocation of the revolutionary plain. rise to
perhaps because
it
profit-maker, as we have already described, is always to buy in the cheapest and to sell in the dearest market. Clearly, his first requirement is free access to at home and abroad, whether for the purchase of raw materials, the hiring of labour, or the sale of his At the beginning of the eighteenth century product. in England, this freedom of enterprise was hampered and barred in all directions. Hence the incipient class of capitalist profit-makers, aided by their allies in Parliament, in the university lecture-room and in the press, proceeded ruthlessly to smash up the existing social see them institutions that stood in their way.
markets
We
76
INITIAL SUCCESS OF CAPITALISM
smashing up the Tudor and Stuart regulation of wages and prices ; smashing up the manor, its courts and its common - fields ; smashing up the chartered national companies with their monopolies of mining and manufacturing, or of foreign trade and overseas jurisdiction ; smashing up the municipal corporations with their gilds, their systems of apprenticeship, and their prohibition of " " trade by the (who was only the immigrant foreigner from the next town or the adjacent countryside) ; smashing up the old Poor Law with its archaic system of settlement and its stagnant pools of rate-aided under-employed labourers smashing up the home and the family, with immemorial domestic manufactures, in order to its scatter its members, women as well as men, children as ;
well as adults, in the
new
factories in distant counties.
They even smashed up, in 1832, the British Parliament, based on the pocket-boroughs of the Crown and the feudal lords, and the obsolete vocational franchise of In fact the capitalist entrethe ancient municipalities. for the better part of two centuries, the preneurs were, to use the famous Bolshevists of their time, believing words of the petition of the Liverpool merchants of 1834 " that all in equal station should enjoy equal privileges," 1 and rigidly excluding from participation in the government of the country the propertyless wage-earners who were driven into their employment. It is, indeed, scarcely too much to say that the government of Great 1 799 and 1832, intoxicated by the growth of national wealth under the new capitalism, established a reign of terror over the manual workers. The employers' law," to" quote the historians of the workingwas to be the public law. Workmen class of these years, were to obey their master as they would obey the state, and the state was to enforce the master's commands as it would its own. This was the new policy behind the Combination Laws of 1799 and 1800. These two
Britain between
'
1
The Manor and
the Borough, by S. and B.
Webb, 1908,
p.
701.
THE CAPITALIST
AS ANARCHIST
77
the second modifying the first, prohibiting all action in defence of their common interests by workmen, remain the most unqualified surrender of the state to the discretion of a class in the history of J One only of the ancient institutions of England." the realm the capitalist oligarchy clung to and developed the law of private property, with its adjunct in legally protected inheritance of wealth by the living from the dead. Acts,
common
:
THE RUTHLESSNESS
OF THE CAPITALIST DESTRUCTION
worth notice that the insurgent
capitalist entrein of their the were in exuberance, century preneurs, another respect analogous to Bakunin, the Anarchist, It is
and Lenin, the Communist, who in the Russia of 19181919 had the opportunity of putting in practice so much of the spirit of Bakunin's teaching. They were absolutely ruthless in the clearance that they made of everything that stood in the way of the carrying out of their ideas
neither weighing in the balance of social reorganisation the incidental advantages of the system that they considered obsolete, nor heeding the suffering that their revolution caused to individuals without number and, what should never be forgotten, making no compensation " established exwhatsoever for the breach of legally " uncounted multitude to the of innocent pectations
persons whose incomes were annihilated and whose very livelihood was destroyed by the revolution that they brought about. The craftsman who had gained his the labourer who had a ; qualification by apprenticeship " " work to be set to by the Overseers of statutory right the Poor in the parish in which he possessed a legal settlement ; the little copyholder relying on his immemorial right of common pasture ; the freeman of the ancient who had a legal right to be proMunicipal Corporation, " " the member of the Craft tected against the ; foreigner 1
The Town Labourer, 17 60-1 8J2, by
J. L.
and Barbara
Hammond,
1917,
p.
113.
INITIAL SUCCESS OF CAPITALISM
78
Gild, enjoying a corporate monopoly of the trade, all enjoyed legally established vested interests, which formed as validly part of their personal estates as the forests and noble, and the factories and shops steppes of the Russian " of the Russian bourgeoisie." l To the British capitalist
entrepreneurs of 17501850, as of 1918 19, all these but obsolete wreckage impeding more profitable (or, as they chose shevists
the Russian Bol" seemed legalisms the inauguration of a to consider it, a more to
"
equitable) social order.
THE ACHIEVEMENTS
Much
OF THE CAPITALIST
subsequently forgiven to a revolution which or ; which, to the active spirits of the rising It is generation, appears to satisfy the national needs. therefore worth inquiring whether the dictatorship of the in Britain, came to its zenith in the capitalist, which, middle of the nineteenth century, fulfilled any wider is
succeeds
purpose than
its
immediate one of enriching the pro-
We may say at once that,
in our opinion, of the on the balance, did, capitalist dictatorship in spite of the atrocious debit account for which Ruskin coined the word " illth," more good than evil ; at any rate, from the latter part of the eighteenth to about the middle of the nineteenth century. During the latter part of the nineteenth century its success, on balance, was doubtful ; and in the twentieth century, even in respect of the
prietary
class.
this
increase in national figures (we purposely, like Ruskin, hesitate to use the word "wealth"), its drawbacks out-
weigh
its
advantages.
To the peasant cultivator and master craftsman, " the original idea, essence and " " to quote an American writer was to secure to a person or purpose of property group of persons the use and control of the "things which that person or group needed for his or its own subsistence and welfare (American Socialism, by James Mackaye, To the individual producer of the pre-capitalist era, owning his instruments pp. 34-5). of production and pursuing his own vocation, the Industrial Revolution seemed wholly inconsistent with the rights of property, not only as he understood them, but also as they had been interpreted by Common Law and local custom from time immemorial. 1
GROWTH
BY "LEAPS AND BOUNDS"
79
There can be no doubt
that, in the Britain of the of the eighteenth and the beginning of the nineteenth century there was a sudden, an enormous and a continuous increase in production and productivity, whether measured in the quantity and range of the generally useful commodities consumed or in the amount of plant made available for their production. The very latter part
increase in population, which was so marked a feature of this period, in contrast with any previous century, and which was itself a direct result of the dislocation of
domestic agriculture and manufacture, represented a The continuous great growth of productive power. of of the raw materials and of the imports expansion of manufactured meant a goods exports widening of the range and an increase in the amount of the consumable commodities that constituted the nation's income.
THE The
INCREASE IN PRODUCTION
extension of British trade to all countries, the of British shipping, the rise of British banking and growth insurance, in a world in which British capitalists found themselves in a position of commercial dominance with the very minimum of foreign competition, all co-operated to produce a golden stream of almost boundless profits, taking the form of constantly swelling incomes for the capitalist class, a heaping up of all the accompaniments of luxurious living, and a perpetual investment of the surplus in additional instruments of wealth production, from the sinking of more mines and the erection of new factories to the launching of ships, the building of railways, the multiplication of machinery and the opening up of ever-widening markets. And this unprecedented increase in production is not demonstrated only by the can trace every stage in the process. statistics. The passing away of domestic manufacture and peasant cultivation, together with the silent abandonment of the
We
80
INITIAL SUCCESS OF CAPITALISM
habit of
"
living in
"
of individual
by the farm labourer, and the factory operatives in crowded
massing urban slums, produced a reckless unrestrained breeding, which placed at the capitalist's disposal a rapidly increasThe ing and economically defenceless labour force. autocratic power of those who could offer, in wages for
new
processes, practically the only available means of subsistence, almost automatically set each man, woman and child to the tasks for which they were best fitted,
the
for the longest possible hours, in return for the lowest Presently, the substitution, for the possible wages. laxity of the old Poor Law, of the ruthlessly deterrent workhouse system brought actual hunger to the fortifying of the power of the employer, and made the entry into his service as compulsory as it would have been under
If we think of human conscription. of as instruments merely production, there can beings be no hesitation in ascribing to the capitalist organisation direct industrial
of Britain, at its most glorious period, an unprecedented success, in harnessing to production the greatest amount of labour-power at the least relative cost in maintenance, a success demonstrably superior to that of the most efficient system of chattel slavery and the slave trade that the world has known. Moreover, the capitalist a evoked and utilised great increase of mental system The shattering of as well as of manual productivity. the old order opened a career to acquisitively inventive brains of every grade and enlisted them in the new industrial organisation. There were endless opportunities made for the capable and adventurous. Large numbers
of craftsmen and peasants escaped from the common fate of being pressed down by under-employment and declining earnings to become foremen and managers, and eventually independent capitalist entrepreneurs. It may well be that it was at this period that the largest number and the greatest proportion of persons rose from The stimulus the lower ranks into the governing class.
GREAT INCREASE
IN
WEALTH
81
as great as the opportunities were numerous ; and the selection was in some respects dysgenic, it was concentrated on the one quality of ability to increase
was
if
It was, above all, production and diminish its cost. an age of mechanical contrivance, in which an unprecedented amount of mental energy was put into improving industrial processes. And the demand for commodities was boundless. The whole world was hungering for
the textile fabrics, the hardware, the porcelain, the arms and ammunition, the clothing, the leather goods, that were being produced by the new processes at ever lower Meanwhile the British manufacturers themprices.
were insatiable in their demand for ever-increasing quantities of raw materials from the ends of the earth to convert into the commodities of which the other countries seemed never to have had enough. The selves
British profit-makers spent their days, not in
means of competing
devising
successfully against each other, or
with foreign rivals, but in coping with new demands ; searching for new materials ; creating new products ; adventurously opening up new markets ; risking fortune, and sometimes even life, in commercial ventures, from China to Peru, from the wilds of Western America to The prizes the primitive barbarism of the Antipodes. " It was not five per cent were, of course, colossal. " but thousands or ten per cent," it has been observed, per cent," that made the fortunes of the Britain of this glorious time. It must, drawbacks,
we
repeat,
be admitted
that,
despite
all
enormous development of successful profit-making meant, at any rate for the time being, this
a vast increase in that part of the nation's earnings which may fairly be called its wealth. If wages were low, and the conditions of labour so bad as to be destructive of the people, the continual pressure for a cheapening of production especially after the general removal of taxes upon commodities of common use largely benefited
82
INITIAL SUCCESS OF CAPITALISM
The profit -makers themselves found the consumer. their greatest gains in increasing output and consumption by a continuous lowering of the price of commodities that every one consumed and of services that every one Combination among capitalists, in such a way used. as permanently to maintain prices above the cost of The whole nation production, was practically unknown. shared, through declining prices, combined with a reasonably stable currency and, on the whole, stable or even slightly rising rates of wages, in the ever-growing stream of commodities, and steadily widened the range and increased the quantity of its consumption. To those who regard an immediate increase in national income as, if not the only, at least the main condition of social progress and well-being, it will seem fortunate that British capitalism for the time being attained its end, for there was, in the century of the Industrial As has been Revolution, no available alternative. "
economic activities in remarked by Werner Sombart, the pre-capitalist period were regulated solely in accordance with the principle of a sufficiency for existence and peasant and craftsman looked to their economic activities to provide them with their livelihood and 1 The vast majority of these independent nothing more." had no ambition to heap up riches. producers They raised their crops and made their wares largely for their own use ; and their strongest impulse was to live their own life in their own way, working when they liked, sleeping when they liked, eating when they liked, and The best of them were playing when they liked. not the desire for by gain but by the instinct inspired, of workmanship. It must, however, always be remembered that, with regard to their surplus output, the peasant cultivator and the master craftsman were " as truly profit-makers," with the shortcomings and defects of the profit-maker, as the capitalist entrepreneur. :
1
The Quintessence of Capitalism, by Werner Sombart, 1915,
p.
171.
NO ALTERNATIVE "
83 "
In many cases they were themselves of exploiters other people's labour, of the labour of their apprentices and journeymen, and of their own families. Whatever may have been the virtues of such an order of society, it did not, as a matter of fact, develop either the large outlook or the self-control requisite for directing enterNor did it produce either the prise on a large scale. of association or the spirit capacity for representative institutions, which lie together at the base of modern political
and
industrial democracy. 1
THE ABSENCE
OF ALTERNATIVE
Hence
in the eighteenth and even in the early part nineteenth century, no public or collectivist There was no organisation was practicable in Britain. officials who were even of supply moderately honest. The records of central departments and of such con-
of the
temporary local government as existed in Britain show that it was impossible to get a class of civil servants
who
did not take bribes, directly or indirectly, or who could be depended on to do a day's work ; whilst most minor officials were addicted to drink and did not scruple Posts in the public service were to steal the petty cash. of and asked for as sinecures. There was no spoken body of knowledge as to the processes or methods of administration on a large scale, no way of testing the abilities of the candidates for appointment, no system of professional training, so that every public position
was
either hereditary or inevitably jobbed, falling often
competent members of the governing class. nascent professions of mining, of civil and mechanical
to the least
The
1 The incapacity for democratic institutions for the trade union or professional is seen in the special liability to the organisation as well as for political democracy disease of bureaucracy of countries like Japan, Russia, and even modern France the explanation being, we think, that a community of individual producers is, through lack
of large outlook and the capacity for association, compelled to leave the government of such centralised institutions as are requisite in the modern world to a hierarchy of officials, whom they are alike unable and unwilling effectively to criticise and control.
84
INITIAL SUCCESS OF CAPITALISM
engineering, of industrial chemistry, of architecture and itself, proceeded building" construction, of" administration " and trial and error." There rule of thumb only by was no efficient book-keeping, no system of audit, even in its rudimentary form of an audit of cash accounts ; " " and the very idea of costing was undreamt of. The intensity of the motive of profit-making as a means of personal gain supplied the only stimulus and test by which men could be selected, processes invented, manage-
ment conducted, methods cheapened and markets
dis-
And the capitalist system had, incidentally, covered. the merit of training the nation in the science and art of co-operative working in manufacture, transport, commerce and finance. Even its oppressions and its frauds had their uses, in that they drove the proletariat of manual-working wage-earners which capitalism created, to combine in trade unions and co-operative societies,
and and
to develop their
own
faculties for free association
industrial representative institutions. Profit-making was, in fact, at the opening of the nineteenth century,
the world's substitute for qualities which did not at the time exist, for self-discipline, for professional technique, for scientific knowledge, for public service, for the spirit of free association, for common honesty itself.
CHAPTER V THE EVENTUAL FAILURE OF THE CAPITALIST SYSTEM
How
long did
it last,
this initial success
of the reign of
?
capitalism
It is, of course, impossible to assign to any one year the date at which capitalism, in all its manifold developments in agriculture, in mining, in manufacture, in finance
and transport and trading at home and abroad, changed, in any particular country, from being a national advanMoretage, to being, on balance, a national drawback. over, there
and
it
is
is
of
a relative as well as an absolute efficiency ; use estimating the absolute efficacy of
little
profit-making as a method of stimulating and remunerating industry before alternatives became available. Roughly, it was not until the middle of the nineteenth century that the more penetrating observers began to urge that the dictatorship of the capitalist had not only hopeless
limitations
in
wealth
production,
but
was
actually producing a great deal that was the very reverse From about that time onward, as is now of wealth.
profit-making became increasingly subject to malignant growths and perverted metabolisms, which created their own poisons and lessened the advantages of the system itself. It is only within the past halfthat alternative methods of organising industry, century in the equitable distribution and demonstrably superior efficient consumption of wealth, and, as we should evident,
85
86
EVENTUAL FAILURE OF CAPITALISM all
things considered, equal, production of wealth, have and applied. claim, the
in
THE ADVERSE DEVELOPMENTS
if
not
been
superior,
discovered
OF CAPITALISM
This failure of modern business enterprise can be traced to certain inherent defects in the motive of profit-
making, and to certain inevitable developments in the
We
shall leave out of profession of the profit-maker. consideration such obvious anomalies as the interests created by capitalism in destruction by accident, catastrophe, and the utmost acceleration of wear and tear in From the interest of the glazier in the all commodities. hailstorm to the interest of the wayside garage in accidents
and of the huge railway waggon repairing most destructive and wasteful methods of are more examples to hand than we have there transport, to
motor
cars
industry in the
room
to describe, or even enumerate, of the fact that it is impossible to create an interest in
under capitalism
not also an interest in decay and propose to describe this The profit-maker failure under the following heads only. is, by the nature of the case, led to damage and destroy, not only the most valuable of the instruments of production, but also some of those that are irreplaceable ; he tends to adulterate (or to produce inferior substitutes
production that destruction.
is
We
therefore
commodities he often employs his own and other people's labour in producing commodities and services of no social value sometimes, indeed, ruinously and he is found eager to use his own and pernicious other people's capital and credit in ways productive of for) necessary
;
;
but of nothing else. Even in the early the of simple fact that when competitive stage capitalism the community wanted one pair of new boots a hundred boot manufacturers made a pair in the hope of catching that single customer caused industry to proceed in a profit to himself,
SINISTER
DEVELOPMENTS
87
and depressions which were demoralising disastrous financially. Crises were as matter of course as cholera epidemics. But now
series of gluts
personally and
much a that we have
survived this phase, the perpetual pressure increased output and larger transactions leads to periodical depressions in the markets of the world, which may even become chronic, with a consequent hypertrophy of the organisation for sale as compared with the organisa" tion for production, so that, as is currently said, it costs more to sell an article than it does to make it." Although within each country the principle of free comfor
petition
among
capitalist profit-makers, which was to the consumer the lowest price is superseded, in industry after
assumed to guarantee and the best quality,
by combinations among capitalists to secure monopoly prices and to compel consumers to accept
industry,
standardised in the interests of the profit-maker, the separate industries and combinations of industries, freed as they are from internal competition, are still driven fatalistically to compete with one another for the fresh capital that never ceases accumulating, and, when they get it, to launch into increased production to employ it and earn dividends on it, without regard to the demand articles
for its products, which they accordingly must excite by the arts of advertisement and commercial travelling,
all
the political intrigues of the hunt for foreign " markets, sometimes poetically called places in the sun." markets and the greed to hold old the desire to Thus of the on the new ones capitalist manupart acquire of in each the and financier trader facturer, great European states, reveals itself as the fundamental cause of the
and
all
catastrophic world war of 191418, with its twenty millions of dead, and its unexampled devastation of Finally, the growing territory and destruction of wealth. hatred of the capitalist dictatorship, and the increasing
anger of the proletariat at the permanent inequality in income and personal freedom which the capitalist system
88
EVENTUAL FAILURE OF CAPITALISM
culminating in a suicidal class war within each the of great industrial states. entails, are
THE DAMAGE AND DESTRUCTION
OF THE INSTRUMENTS OF PRODUCTION BY CAPITALIST PROFIT-MAKERS
The
discoverer of this evil was the fouft4er-of Owen), who insisted, at the of the nineteenth century, that the very beginning in ruinous its effects on the instruis capitalist system first
British socialism (Robert
ments of wealth production with which it works. Owen, himself a capitalist, was the first of his class to understand that his instruments of production were, as Bismarck said of the instruments of diplomacy, blood and iron, and that, as another famous German had pointed out, " Let us work out his blood is a quite peculiar juice." thesis.
All instruments of production except living ones wear out by use ; and, the faster they produce, the sooner they The capitalist employer has therefore to are worn out. solve two problems as to his tools and machines. First, how much shall he allow in his yearly balance sheet for their depreciation by wear and tear ? Second, as the wearing out of a machine may be described as working it to death, and as the length of time occupied by the process varies with the speed at which it is driven, what The length of life can he most profitably allot to it ? initial factor in the calculation is the cost of the machine. savage, whose hammer is a stone and whose lever a stick, costing him only the trouble of picking them up, need not consider whether they will last him ten minutes or ten years there are plenty more where they came
A
:
from
and destructive as he But if he uses an a to which him takes make, and wears it day implement out or breaks it in half a day, he will be bankrupt and destitute before the end of the week. In the same way, ;
so he
may be
as careless
likes as far as they are concerned.
SPOILING
THE INSTRUMENTS
89
an employer pays 5000 for a machine, and wears it out before it has produced 300 worth of goods or will machine ruin him instead of enriching the services, him. On the other hand, if the machine is used so sparingly that it becomes obsolete before it has paid for its cost, or produces so slowly that the loss of time costs more than the wear and tear of working it harder, it will It may be a delicate pay the employer to speed it up. matter to ascertain the precise point at which the profit is the greatest ; but the delicacy is not sentimental machine be left of the of out account because may feelings it has none ; and the interest of the community may be left out of account because it does not clash with that of And about scrapping the machine the the producer. moment a better one can be procured there is no compunction whatever. But if the instrument of production is not a machine, but a living organism, the problem becomes sentimentally If the savage, instead of spending complicated at once. a day to make an implement, has to spend ten days catching a wild horse and breaking it in, and he proceeds to overwork, ill-treat and starve that horse to death before it has repaid the ten days' work with something to boot, then clearly he will share the horse's fate presently. .Like the employer with the machine, he has to ascertain how long he should let the horse live in order to get the slave-owner has to make utmost profit out of him. as his calculation to slaves. Such calculations the same are made quite cold-bloodedly as a matter of capitalistic Before slavery was abolished in the southern JDUsiness, States of North America it had become accepted on certain plantations that the most profitable system was to wear out the negroes in eight years. Before horse if
:
A
had given way to electric traction for tramways in London, it was calculated that the greatest profit was made traction
in four years. of hired white labour for the substitution Obviously
by using up the horses
EVENTUAL FAILURE OF CAPITALISM
90
enslaved black labour, or the substitution of hired horses for owned horses by the tramway company, does not change the nature of the calculation. When the Lancashire factory owners were reproached with using up nine generations of men in one generation, their reply,
when they were imprudent enough to reply frankly, was that the calculation worked out that way whether they or not, and that business is business. calculations are not admissible in the interest of In spite of the political power of the the community. Parliament was forced by the atrocity _oTthe employers, results to intervene with Factory Acts, the beneficent
liked
it
Such
effect of which, not only on the factory employees, but on the employers' profits, proved that the calculation .Had been not only inhuman but so ignorantly and inaccurately made that the employers had been led by it into killing
the goose that laid the golden eggs. Nevertheless, the corrected calculation is as irreconcilable finally with human welfare as the inaccurate one. It is not possible to prove that a quite unrestrained and unscrupulous sacrifice of humane considerations to the single aim of
maximum profit for each particular employer not at may any moment in any industry lead to higher dividends than those attained under the Factory Acts. There is an economic as well as a vital difference between the mechanical and human instruments of The capitalist has production employed in capitalism. - to the whole cost of machine and even more, the pay whilst the human instrument, though much more costly to produce, can be had for nothing. His mother's pains attaining the
and
risks and housekeeping, his father's labour, his education at the cost of the ratepayers, the common resources placed at his disposal by municipal and national Communism, the wastage of human life which goes with the successful survival of each able-bodied worker all these are the prime cost of the man before he presents himself at the factory gate begging for a job ; but the :
HUMAN WRECKAGE
91
employer acquires him as an instrument of production for nothing, his only expense being the bare cost of maintaining his power of working from week to week by food, clothing and lodging, precisely as if he were acquiring a steam engine for nothing, and supplying it with oil and fuel at its own expense. If, by abusing this gratuitous living instrument of production by overhe damages it, or uses it up so driving or underfeeding, " fast that it is too old at forty," all he has to do is to throw it back into the street on to the hands of the ratepayer, and pick up a new human instrument on the same terms.
Against so outrageous an incentive to abuse and human stock an individual
deterioration of the national
may
stand out here and there either by a self-impoverishengage in business at all, or by a personal
ing refusal to
generosity supported by exceptional organising powers in certain special departments of business ; but capitalist Under employers as a class cannot stand out against it.
pressure we have not only what is called a submerged tenth of the population, but eight tenths who can barely keep their heads above very dirty water, the remaining tenth having to spend the resultant profits mostly in keeping out the sea of misery which surrounds them. It makes wholesale degradation of the nation inevitable, because four out of every five of its adult heads of families have no other means of livelihood than to sell themselves as instruments of production, and those to whom they its
sell themselves have no uncommercial interest in them, and no public responsibility for them. That such a system should endure as the basis of a high civilisation is The colliery owner has unconceivable. Just think of it. to buy another pony for the one he kills in the mine, or do He has not to buy another boy for the one without it.
that gets killed with the pony.
The
very next morning
his agent finds at the gate another boy, or perhaps many other boys, standing, ready-made, to be taken on for
EVENTUAL FAILURE OF CAPITALISM
92
one who has been the why typical entrepreneur in all has remained so indifferent to the discountries capitalist " " hands that he employs ease and death rate among the as, in the first instance, intuitively to oppose every measure But accidents are the introduced for their protection. need not again recite the tragic least of the evils. story of abject poverty, brutal demoralisation and premature death wrought among millions of families by the unrestrained capitalism of the first half of the nineteenth weekly subsistence killed.
That
in the place of the
is
We
century, through underpayment and overwork, through the formation of stagnant pools of casual labour and the creation of recurrent periods of unemployment without
And let us not flatter ourselves that this is wages. merely an incident of the past. The evils of low wages, long hours and insanitary conditions still drag on in every industry in which the dictatorship of the capitalist has not been limited by the authority of the law or the rival command of the trade union ; whilst the slow starvation due
under-employment or unemployment is still only mitigated by costly and demoralising doles at the public This damage and destruction of the human expense. instrument of production cannot be regarded as a mere to
It is now seen to be perversion of the capitalist system. an inevitable incident of the profit-making process itself. Indeed, in the final analysis it is obligatory on the in-
dividual profit-maker by the nature of his being ; for unless in exploitation he keeps up with the most ruthless of his competitors, the very profit by which he lives, dependent as it is on the margin between cost and selling
By the end of the third nineteenth of the century, this side of the failure quarter of capitalism had become recognised by candid students all over the world. later discovery was the ruin which capitalism brought on those common resources which were not reduced to private ownership, such as the air which the price, eventually disappears.
A
DEFILEMENT OF NATURE
93
industry contaminates with smoke and noxious fumes ; the running streams which it pollutes ; the thoroughfares and waste spaces which it befouls. Any respect for these common requisites of healthy existence is an impediment to individual profit-making, and hence under its dictatorship cannot be maintained. Who can measure the diminution in health, in happiness, profit-maker's
all factors in human morality and in intelligence caused through the profit-maker by the productivity defilement of air, water and land, and the destruction of all amenity and beauty in the surroundings of countless millions of his fellow-citizens ?
in
THE RUIN Nor
OF NATURAL RESOURCES
man and man's environment
alone that the the not older civilisaonly profit-maker destroys In pursuit of the limitless tions that he contaminates. natural wealth of new and slightly peopled lands the profit-maker proceeds with his destructive process from Natural resources are abundant continent to continent. in many places they are costless. Hence and cheap are in and food animals season and killed, fur-bearing out of season, to the point of extermination of the species primeval forests are levelled to the ground ; natural is it
:
it is
:
;
pastures are denuded ; virgin soils are defertilised ; coal and metals, oils and gases all reserves of potential the rivers are dried power are wasted and exhausted is No one will the climate and very impaired. up, accuse the government of the United States of being ;
anti-capitalist,
or of having any theoretical
prejudice
But no Bolshevik against the process of profit-making. agitator could denounce the devastation and destruction of the natural resources of the American continent, in
more unmeasured terms than President Roosevelt and
" I have the governors of the separate states have done. Roosevelt President to the asked you," gravely stated
94
EVENTUAL FAILURE OF CAPITALISM
" conference of governors in 1908, to come together now, because the enormous consumption of these resources, and the threat of imminent exhaustion of some of them, due to reckless and wasteful use, once more calls for
common
effort,
common
action.
...
It is
equally clear
that these resources are the final basis of national
power
and perpetuity.
Finally, it is ominously evident that these resources are in the course of rapid exhaustion." J
"
To-day
as
J. J. Hill,
you ride through the South," asserted Mr. one of the greatest of America's industrial
" magnates, you see everywhere land gullied by torrential rains, red and yellow clay banks exposed where once were fertile fields, and agriculture reduced, because its main Millions of acres, in support has been washed away. of the entire arable area, to the extent of one-tenth places have been so injured that no industry and no care can There is no doubt," said James of the restore them." 2 " that we have in many directions University of Illinois, In our haste to get rich we have wasted our patrimony. overreached ourselves and undermined the very basis on '
which a permanent national industry and a permanent " national life must rest." 3 Prodigious waste has accomuse of the forest," report the government panied our "
The chief causes are fire, wasteful methods of logging and turpentining, waste in the mill, and waste similar tale of destruction is in the use of wood." * " the percentage of told about the mineral products experts.
A
:
1
May
Proceedings of the Conference of Governors on the Conservation of Natural Resources, 13-15, 1908 (House Documents, vol. 128, No. 1425), 2nd Session, 1908-9^. 67).
Ibid. p. * Ibid. p. 4 "
67.
174. experience of half a century has clearly shown in Virginia, the Carolinas and Georgia that turpentining under present methods renders a permanent naval-stores These methods usually render the forest industry in the South utterly impossible. unproductive in four or five years. They have so greatly reduced the long-leaf pine forests available for turpentining that in some localities trees 4 or 5 inches in diameter This generally means an exceedingly low return in turpentine are now being boxed. and the death in a year or two of trees which would otherwise have grown to make lumber. . . . And year by year, through careless cutting and fires, we lower the capacity of existing forests to produce their like again, or totally destroy them. ... By wasteful
The
logging,
fire,
and general failure to provide for a second crop,
we have made
our forests
EXHAUSTION OF RESOURCES coal left in the
95
an American
ground beyond recovery," " varies from expert told the conference of governors, 40 to 70 per cent in the different fields, to say nothing of the wasteful and extravagant use of the portion extracted ; while the waste of natural gas, the most precious fuel of all, is so vast that no one can even approximate the percentage. . . . The forces of greed and selfishness are so entrenched behind corporate power and influence that to attack them may often appear to you useless as the labours of Sisyphus ; but as you love your states and country, I adjure you to take up this fight for the conservation of our fuel resources with the determination never to surrender until the forces of greed and avarice which are so rapidly sapping the very foundations of our country's greatness capitulate, and agree to end the wild riot of destruction that has characterised the past." l The capitalist in Canada is no better than the capitalist " At Calgary just before the war," in the United States. " we are told, they discovered petroleum in an indifferent Within forty-eight hours land quantity at a single well. in the neighbourhood was changing hands at between 1 0,000 and 12,000 an acre, and companies had been floated with a capital of 12,000,000 ; concessions were leases and signed at machine-gun speed ; being granted
if a true oilfield had been revealed it would have been quickly drained and devastated by a mob of 2 Once promiscuous, unregulated, competitive drillers."
and even
productive than any others of similar area in the world, in spite of the remark" ably quick growth of most of our timber trees (Report of the National Conservation Commission, vol. i., Senate Documents, vol. 10, No. 676 : Sixtieth Congress, 1908-9,
less
Statement by the Secretary of Forests, pp. 57-9). 1 No. 1425, Proceedings of the Conference of Governor! on tht Conservation of Natural Resources, May 13-15, 1908 (House Documents, vol. 128), p. 36. " 1 That has been the history of almost every oilfield The Observer, June i, 1919. " A strike, a rush of speculators, opened on the American continent," the writer adds. a great boom in the price of land, indiscriminate drilling on plots so small that the derricks, as one catches sight of them, seem to be literally touching one another, a dozen wells sunk in an area that can barely support three, each frenzied small-holder drilling as fast
he can to prevent the oil beneath his plot of ground from being drained away by his neighbour and rival, no scientific precautions to conserve the gas which will alone force the flow of oil, a feverish higgledy-piggledy of cut-throat, beggar-my-neighbour competition, as
EVENTUAL FAILURE OF CAPITALISM
96
more we must emphasise the fact that the cause of all this devastation and destruction is not the malice of man, even of capitalist man, but the inevitable result of profit" Before the older states," summed making enterprise. " realised the value of their one of the governors, up mines and minerals, they their their forests, waterways, had allowed all to slip from their hands and into private The same thing is now going on in the ownership. states and soon there will be left nothing to younger conserve of what we received from our forefathers as a " l The pecuniary demands of magnificent heritage." those directly interested and occupied in such industry," ;
" be they promoters, explained a contemporary economist, and the or are immediate ; settlers, usually capitalists rewards of their enterprise must be had in quick profits. Their economic interests are, for the time, confined to 2 With future values, the rightful inpresent values." heritance of future generations, the capitalist is naturally interests wholly unconcerned. "In all that relates to the " not only of future generations, the making of profit " whether labour has been wisely applied does not decide or material rightly used," but it actually inclines the mind of the director of enterprise to use labour for the destruction of the material necessary for future production. have next to notice the progressive deterioration in the quality of commodities brought about by the
We
which anywhere from half to three-quarters of the petroleum is left ground and rendered for ever irrecoverable it is so that America, the richest and the most wasteful and negligent of all lands, has set the classic example of how an in the course of in the
" should not be developed (ibid.}. Proceedings of Joint Conservation Conference, Senate Documents, voL 10,
oilfield 1
No. 676. National Conservation Committee Report, p. 135. 1 The Foundation* of National Prosperity, edited by Professor R. T. Ely, 1918, "That Smith's [Adam Smith's] school teaches nothing else than the pp. 100-101. theory of values. ... It is ... that science which teaches how riches, or exchangeable values, are produced, distributed and consumed. This is undoubtedly not the science which teaches how the productive powers are awakened and developed, and how M'Culloch calls it explicitly the science of they become repressed and destroyed. ' ' " values,' and recent English writers the science of exchange (ibid. p. 74). '
DETERIORATION OF QUALITY
97
apotheosis of profit-making as the sole and sufficient method of organising industry. It used to be axiomatic that capitalist competition led to improvements in production. What we now see, however, is that it leads no less certainly to deterioration in the products. When the sole measure of efficiency, and the only test of success, is the making of profit, the motto of the dictatorship of the capitalist is non olet. Whatever yields profit is good ; and the larger the profit the greater the assumed advantage If the stimulus of gain has led to to the community. discoveries and inventions, by which the wealth of the nation has been largely increased, we see the same
stimulus positively worsening the quality of the output.
THE WORSENING
OF COMMODITIES
substitution, and all forms of short false and to use measure, tend to be regarded weight " classic as methods of John Bright's phrase, merely 1 It was not until the middle of the competition." nineteenth century that the public became aware of this and it was the microscope that form of competition Until the microscope was brought it to light. brought
Adulteration,
;
'
to bear
upon the subject," we
are told in the First Report
of the Select Committee on Adulteration of Food,
existed
the
"
no means
of adulterations
whereby great majority could be discovered, and the parties producing them little dreamt that an instrument existed capable of bringing to light even these secret and guilty proceedings. Adulteration was then practised in security, and with comparative immunity ; now this feeling of security has A
"
1 If you contemporary of John "Bright explained this defence of adulteration. of adulterated commodities, the Select Committee on could destroy the competition Adulteration of Food was informed by the chairman of the Leamington Local Board of " instead of working a benefit to the public, you would be working the greatest Health, of small monopolies in genuine injury, because you would be creating a whole host which would so increase the price of those articles that it would place them articles, " reach of one-third of the the (Second Report of the Select Committee population beyond on Adulteration of Food, August 1855, No. 480, Q. 2535).
H
98
EVENTUAL FAILURE OF CAPITALISM
been destroyed, and the adulterator knows that at any The leading medical time he is liable to discovery." witness demonstrated to the ordinary citizen the baneful effects of the much admired principle of free competition. " It may so happen, and it doubtless does sometimes occur, that the same person, in the course of a single day, receives into his stomach some eight or ten of the articles which I have enumerated. Thus, with the red or cayenne and meats fish, anchovies, sauces, potted
taken at breakfast, he would consume more or less bole Armenian, Venetian red, red lead, or even bisulphuret At dinner, with his curry or of mercury or cinnabar. would run the chances of a second dose he cayenne, of lead or mercury ; with the pickles, bottled fruits, or vegetables, he would be nearly sure to have copper administered to him ; while if he partook of bon-bons at dessert, there is no telling what number of poisonous
pigments he might consume. Again, at his tea, if mixed or green, he would certainly not escape without the administration of at least a little Prussian blue, and it might be much worse things. Lastly, if he was a snuff taker, he would be pretty sure to be putting up his nostrils, from time to time, small quantities of either some ferruginous earths, chromate of potash, chromate of lead, or red lead. If an invalid, his condition would be still worse ; for then, in all probability, he would be deprived of much of the benefit of the skill of his physician, through the dilution and sophistication to which the remedies administered for his relief were subjected. This, I would remark, is no fanciful or exaggerated picture, but one based upon the legitimate conclusions derived from the analysis of different articles as sold to the
From this first inquiry in 1855 down to the present day, we watch, in all capitalist countries, a rising tide of indignation against the complicated
consumer."
1
1 First Report from the Select Committee on Adulteration of Food, of Evidence and Appendix, July 27, 1855, No. 432, Q. 150.
etc.,
with the Minutet
ADULTERATION
99
systems of adulteration and substitution practised by the profit-maker, with a continually elaborated code of If the law for the purpose of detection and restraint. microscope enabled the public analyst to discover adulterations, the progress of chemistry has enabled the profitmaker to use science to dodge the microscope. The detection of adulteration," states a medical officer in 1915, "is becoming more and more difficult, and is due, in the first place, to the astuteness of the vendors of the adulterated articles, and, in the second, to the more highly scientific means now practised. It has been pointed out in preceding reports that the vendors of milk tone it, or, in plain English, adulterate it with separated milk ; but they take great care that they do not tone it below the standard set up by the Board of Agriculture. The addition of separated milk to new milk has become almost a fine art with some milk purveyors, who, although they are known to receive large quantities of separated milk, which they do not sell, yet mix it so skilfully that it is impossible to bring them within the four " corners of the Acts. ." l The chief difficulty is with meat, the signs of disease in which are difficult *
'
'
*
.
'
.
for the ordinary person to detect they are frequently very easily removed ; and as a last resort the sausage machine, spices, and a final attractive dressing as potted meat, pastes, sausages, or other delicacies, put an effective disguise upon food which may be totally unfit The only place and time at which for the purpose. meat can be efficiently inspected is at the slaughterhouse, just after slaughter, before any of the offal has been removed. The circumstances at Grimsby are of quite typical provincial towns ; 'there are fifty-four :
.
.
.
scattered all annually licensed slaughter-houses over the town ; and slaughtering may be in progress at all of them simultaneously at any hour of the day or .
1
Quoted
Part III.
p.
in
hvi.
Forty-second
Annual Refort
.
.
of thi Local Government Board, 1912-13,
EVENTUAL FAILURE OF CAPITALISM
ioo
Sunday included.' From the point of view of those whose care is for the wholesomeness of the meat constitute the justification for local supply, these facts the abolition of private slaughterand abattoirs public The demand, in short, is for the supersession houses." * night,
of capitalist by municipal enterprise.
The
elaborate regulations
which
all
civilised countries
have had to adopt for the detection and punishment of the profit-maker in his tricks and counter-tricks in worsening production, have been, in the main, restricted It has become recognised and drugs. " means the gradual form of adulteration
foodstuffs
to
that
this
poisoning of a people, the lowering of the physique of whole nation, the stunting of our growth, the rapid deterioration of our constitution ; while morally it means a daily and constant fraud practised by the seller on the a cheating which, begun with the smallest trifle, buyer makes us so callous that it is applied with equally soon comfortable conscience to things of greater importance." a The same process of worsening production is seen at work in all sorts and kinds of commodities and services : in the over-sizing of cotton cloth ; in the manufacture of rickety furniture and of shoddy woollens for slop clothing; and in the "jerry-building" of the homes of all but the richest persons. Indeed, much of the a
:
1
"
Here English Public Health Administration, by B. G. Bannington, 1915, p. 1 60. by a recent writer on the subject : often hemmed in by dwelling-houses on all sides, through ventilation in them is wellnigh impossible, the light sometimes can, but with difficulty, penetrate ; the floor is often altogether unpaved, or so badly paved that the ground becomes sodden with blood and ordure ; the walls are often made of wood that becomes saturated with filth ; and To this might be the lairs are frequently insufficient to accommodate the animals.' added a large midden-stead into which, through a hole in the wall of the slaughter-room, the manure, offal and blood are swept, the floor level being specially arranged for this Around this sweltering mass of corruption the blue fly is present in myriads, purpose. and it is busy plying its deadly mission between the midden-stead, the slaughter-room, and " the butcher's shop, as for the sake of convenience, they are all attached to each other " of Meat : a paper read by William W. Kelso, Chief (" Municipal Inspection Sanitary Inspector, Paisley, in Glasgow University at the Annual Congress of the British Institute is
a description of the private slaughter-houses given
of Public Health, July 27, 1896, p. 3). 1 Transactions of tht National Association for the Promotion of Social Science, 1870 What Legislative Measures ought to be taken to prevent (Nevocastle-on- Tyne Congrest). the Adulteration of Food, Drink, and Drugs t by Phillips Sevan, p. 391.
SHODDY PRODUCTION
101
odium which has been attached to machine production compared with the more costly handicraft is due to the ease with which the former can be made to simulate soundness in commodities which have lost the largest There is no reason why the part of their value in use. machine-made chair or window-frame, or the machineas
made even
dress material or boot, should be less durable, or designed, than the analogous handBut division of labour and machine commodity.
less artistically
made
production, carried on by immediate gain, lends itself
capitalist profit-makers for to, and in the end requires
kinds of petty deceptions, many of which, like the " of separate parts in slop clothing, soaping together are actually performed by hand. Here again the capitalist is aiming only at short-term success, and will often supply to the new markets which he has acquired by the most all
"
for selling, commodities which will expensive machinery " " found out as essentially uneconomical be quickly " " not even so that all his occasionally up to sample in the his and even own firm, will business, compatriots in a few years' time lose the market to the traders of some other nation, who begin by supplying a better article, but, because they too are seeking only profit, end by descending as low as the first. This constant shifting of particular export trades from nation to nation is one of the factors in the new desire of the traders in each country for the use of political influence to "secure" their markets. Profit-making enterprise, we are told by an American critic, "is in the hands of men who are single-minded in their competitive conduct of affairs. They neither are inclined, nor will business competition permit them, to neglect or overlook any expedient that may further their own l advantage or hinder the advantage of their rivals." 1
Tfie
Theory of Burnett Enterprise, by ThorUein Vcblcn, 1904, pp. 292-3.
102
EVENTUAL FAILURE OF CAPITALISM THE SUPPLY
OF PERNICIOUS COMMODITIES AND SERVICES
To the capitalist profit-maker positive evil may be a The stimulus of profit-making works as potently good. in building up the vast industry of supplying futile or deleterious patent medicines, medicated wines, and proprietory
cures
for
cancer,
consumption,
venereal
disease, gout or rheumatism, not to mention abortifacients for the prevention of child-birth, as in that of feeding the hungry and clothing the naked. The rate of profit '*
in this business
high because
embark on boxes of
it.
pills,
" [quack remedies]," we are told, remains decent do not choose to many people
... A man
will
which can and do
buy only two or three really cure him of an
but he will continue to buy for years those remedies which never do him any good. This is quite
ailment,
It is calculated that, in this business a usual practice." x over three million alone, pounds a year is extracted from the public in return for an expenditure of two millions
on puffing advertisements an expenditure which effectually silences the press with regard to this iniquitous A mere fraction of the sum collected from the trade. consumers -possibly 100,000 is cost of production, " the remainder of the 3,000,000 being a profit on " 2 which builds fortunes. The price up great private profitable industry of
Tono Bungay
is
rivalled
by
that
The Laws of Supply and Demand, G. B. Dibblee, 1912, p. 113. House of Common! Select Committee Report^ 1914., 414, pp. ix-x. Two remarkable publications by the British Medical Association on Secret Remedies, 1909 and 1912, This analysis reveals give a series of analyses of all the principal proprietary remedies. 1 1
some of these patent medicines are positively injurious, the bulk of them are merely valueless, and are only distinguished by the enormous disproportion of the cost of production plus the government stamp, to the price paid by the consumer. The ingredients of a cough mixture at 2s. gd. cost one-third of a penny ; a shilling bottle of another remedy costs one-thirteenth of a farthing; an electric fluid advertised as a cure for cancer yielded nothing to analysis, whilst another mixture was water diluted with that whilst
impure alcohol. Following on these revelations a Select Committee of the House of Commons was set up in 1914 which reported in favour of government analysis and control a measure not yet adopted, and not even within sight of adopof all patent medicines tion (1923).
GAMBLING AND USURY
103
which Mrs. Warren was engaged. In all the great capitals of the world millions of pounds are invested some contributed by quite innocent rentiers in dwellingin
houses, tea shops, massage establishments, concert rooms, dancing halls, and other convenient covers for the profitable business of first decoying, and then interning girls and boys for the purpose of sexual vice. With this the economist must rank the promotion and organisation of gambling in all its forms. Private gambling may or not be a desirable But the deliberate may pleasure. stimulation and exploitation of the gambling instinct in men, women and young persons, for the purposes of an industry employing vast capitals can private gain hardly be accepted as a legitimate utilisation of the Another instance nation's capital, brain and labour. " " of lending money at hundreds per cent is the service to minors and to temporarily distressed landlords or incompetent business men, or to foolish clerks who
have overspent their "
the fact that, as
salaries. 1
civilisation
"
Finally,
we have
to note
advances, more and more
of the land, machinery and labour of advanced industrial more and more of the vaunted business ability nations 1 The parliamentary secretary of" the Local Government Board, in introducing the Money Lending Bill in 1900 cited two illustrations that came before the committee An unfortunate Irish landowner of the system against which the Bill is directed. named Finlay borrowed a sum of 300 from a money-lender, for which he gave a promis-
Mr. Finlay 4.56, the money being repayable in monthly instalments. sory note for paid several instalments regularly, and then for a subsequent instalment the cheque was The cheque was returned and the whole amount claimed. sent a single day late. Default interest was charged, and when Mr. Finlay came before the court he had been for the 114 in instalments, a sum of 600 714- in all compelled to pay, besides loan of 300 from November 13, 1890, to February 20, 1892. ... In the other an English fanner named Adams borrowed 50 from Isaac Gordon in November, Further advances were made of 50 in 200. 1892, and signed a promissory note for Between November, 50 in November, 1893. February, 1893, of 20 in June and of 461, and in October, 1894, Gordon 1892, and September, 1894, Mr. Adams paid 220. . . . Gordon claimed that ,500 was still owing in respect to an advance of " took proceedings in the County Court at Birmingham on one promissory note The Bill had been considered by a strong legal (Hansard, June 21, 1900, p. 681). " after carefully considering the evidence . . . your Committee who reported, that Committee have unhesitatingly come to the conclusion that the system of money-lending case,
by professional money-lenders at high rates of interest is productive of crime, bankruptcy, unfair advantage over other creditors of the borrower, extortion from the borrower's " (ibid. p. 682-3). family and friends, and other serious injuries to the community
IO4 are diverted, first that the all-powerful stimulus evokes to the incitement, and then to the satisfaction of the " " for alcoholic drink of various effective demand world's
not to say for the production of, grades of harmfulness and the secret traffic in opium, cocaine and other which now account for so large a deleterious drugs of the fortunes on which families are founded proportion and country houses maintained. Is it suggested that if the savings of each year were deliberately allocated to the extension and development of those branches of if production which seemed most to need increasing these savings were administered by the democratically organised co-operative movement, by municipal enter-
through nationalised industries under the of Parliament, we should find anything like authority so large a proportion of the national dividend being used for these invidious, if not actually pernicious, prise,
or
purposes
?
GAIN WITHOUT PRODUCTION one of the ironic incidents in the enterprise of owner or organiser of the instruments of that the accumulated capital of the nation production can be used for securing large profits on price without whatsoever, producing any services or commodities " whether useful or deleterious. The capitalist underIt is
the private
taker of old,"
we
by the German exponent of bore a technical impress. The
are told "
modern capitalism, modern undertaker
is
quite
colourless."
He may
decide to use the credit and capital which he owns or controls in the manufacture of commodities or services, or he may find it more profitable to use it in manufactur" " securities which represent no assets at all, but ing
and boommerely extravagant expenditure in advertising " what exists on Henceforth, stocks ing only paper. and shares come into being, not because of the needs of
PROMOTION OF COMPANIES those
who
105
require money, and depend on credit, but
quite independently, as a form of capitalistic enterprise." The promotion of " wild-cat " companies is in fact as perennial and as unfailing a source of profit as the toill
some organisation of
useful enterprises.
"
This
class
of fraud," solemnly explained our greatest Lord Chief Justice in 1898, at the reception at the Law Courts of " the Lord Mayor of London, is rampant in this coma fraud of most munity dangerous kind, widespread in
touching all classes, involving great operation loss to the community loss largely borne by pecuniary And even, much those who are least able to bear it. more important than this, fraud which is working insidiously to undermine and corrupt that high sense of public morality which it ought to be the common object of all interested in the good of the community fraud blunting the sharp edge of honour to maintain its
'
There was and besmirching honourable names." 2 " in which one case," continued the Lord Chief Justice, a property was sold, or at least purported by the vendor a property on the West Coast of Africa for to be sold the sum of 48,000, when there was no property in But an agent was sent out after this existence at all. fictitious sale had been effected, whose report recorded the purchase of a property for the sum of 140 from a native chief, which the agent thought would nearly answer the description given of the fictitious property In another case a business, having been bought a few weeks before the formation
described in the prospectus.
1
*
The Jevit and Modern Capitalism, by Werner Sombart, 1913, p. 101. of nobles, and other socially eminent persons who are without business
The buying
training or capacity, as decoy-ducks to simple-minded investors is the converse to the public scandal of selling titles to wealthy parvenus who are without manners or morals.
The 586 members of the House of Lords (including spiritual Lords) of 1900 shared " among them no fewer than 435 directorships or chairmanships of commercial concerns. On the list of peer directors of companies there are two bishops, nine dukes, eight all members of the marquises, fifty-three carls, nine viscounts, and eighty-one barons " House of Lords (" Company Fraud and Parliamentary Inactivity," by J. G. Swift MacNeill, Q.C., M.P., in the Annual of the Co-operative Wholetale Societies, Lta". t
1900,
p. 174).
106
EVENTUAL FAILURE OF CAPITALISM
of a company for a sum of 637, was sold to the public, who subscribed something like 76,650. These are the Another mode of fraud which is practised grosser cases. Courts of I am speaking from my experience in is this going to allotment on insufficient Justice The public did not subscribe as was hoped, capital. and there was but a small amount of money from them. :
An honest, independent, then, is to be done ? disinterested board of directors, who knew their business, would say that it was impossible to go to allotment upon What,
But they are not their own masters ; the cases which I have been supposing, they are, creatures of the promoter, who pays them ; they are not in a position to form an independent judgement. What is the result ? The promoter gets hold of what money there is ; and to carry on the company's miserable weak existence the directors issue debentures which are largely unregistered, and of which the creditors have no notice. They get an apparent amount of business carried on by the company ; tradesmen and merchants deal with them ; and, when the crash comes, down come the debenture-holders and sweep away their stock every and the creditors stick that belongs to the company are left without remedy." more subtle form of gainful enterprise is over" concern which is honestly worth capitalisation. " and 100,000," we are told by the Lord Chief Justice, which upon that capital value might well pay a decent return for investment, becomes an imposition if inflated to satisfy the greed of the middleman and promoter to such a subscription. in
A
A
cover extravagant advertising charges, extravagant fees for expert reports, gifts in money or in shares to procure directors, aye, and even to procure the introduction of directors. By these means it is offered to the public at two or three times its actual value. at an inflated price
Need
I
say that in such cases loss and failure are certain, called upon to pay fees for the deception
and the public are
SPECULATION
107
which has been practised upon them ? Even if it could be said that the boards of directors brought actual knowledge of business or strength of government to the concern it might at least mitigate the evil. But it is notorious that in too many cases they bring neither one nor the other
neither knowledge nor strength that they are chosen because it is supposed that their names or their J titles Indeed, it has might be attractive to the public." been discovered that business failures, with all the depreciation and loss of capital that they cause, and the tragedies of bankruptcy,
2 unemployment, and family ruin
1
The Times, November 10, 1898. Lord Russell stated that the Official Receiver him that from 1 890 to 1897 " there had been lost to the community and gone into the 28, 1 59,482 made up of losses of creditors pockets of the unworthy no less a sum than told
;
dealing with companies, 7,696,848 ; and of loss to the wretched contributories or *' shareholders, (These figures relate only to companies wound up com20,462,634. The loss of permanent situations by pulsorily, and exclude case* of reduced capital.) bankruptcies was pointed out by the Minority Report of the Poor Law Commission, It was found by investigators into the causes which had brought men down to 1909. that bankruptcy or reconstruction of their employers' business held a unemployment " In 1899, a year of good trade, there were in England and Wales, 7085 high pkce.
In 1904, in the trough of the bankruptcies and deeds of arrangement with creditors. number was 8631, or 22 per cent more (Twenty-fifth Annual Report by the Hoard of Trade on Bankruptcies, House of Commons, No. 254 of 1908). If we assume that, on an average, only ten men lose their employment in each case, though the business does not always cease altogether, the statistics imply the loss of situations, through no fault of their own, by 70,000 men in a good year, and 86,000 men " bad small concerns formal
cyclical depression, the
And many fail and cease without year. bankruptcy (Minority Report, p. 572). 1 We have omitted, because of its controversial aspect, the vast subject of speculation on the stock exchanges and the produce markets of the world. Some part of this speculation may be defended as an indirect, but we think cumbersome, way of equalising But legitimate speculation has in recent years been submerged underneath an prices. elaborate superstructure of commercial gambling, not only in securities, but in essential " " " " and in wheat, food-stuffs and raw materials ; the dealings in futures options " " " " " and and cotton, etc. ; the practices of short-selling rigging," bolstering " " " " " and hammering," unloading switching," in gambling on specified margins," without producing anything else are all ways of getting rich often fabulously rich but the maximum amount of uncertainty in the earnings of all classes of producers and " in the prices paid by all classes of consumers. The point of chief attention for the " business man," says Professor Veblen, has shifted from the old-fashioned surveillance and regulation of a given industrial process, with which his livelihood was once bound up, to an alert redistribution of investments from less to more gainful ventures and to a strategic control of the conjunctures of business through shrewd investments and coalitions with other business men " (The Theory of Business Enterprise, Professor Veblen, pp. 24-5). Moreover, this activity involves an actual increase of the risk and " of class business in so far as in a
of men, uncertainty productive processes. Broadly this they have no ulterior strategic ends to serve, have an interest in making the disturbances of the system large and frequent, since it is in the conjunctures of change that their " gain emerges (ibid. p. 29).
io8
EVENTUAL FAILURE OF CAPITALISM
that they involve, may be, for whole classes of capitalists, from the firms who make a business of supplying the
perpetual crowd of venturous dupes who start little shops, up to the promoters and furnishers of mammoth hotels owned by companies destined to early " reconstruction," are as profitable as the laborious foundation of a flourishing new industry. are never " " allowed to forget the losses incurred by the London retail
We
County Council
in organising its
"
own works department "
of contractors), and (to defend itself against a ring in taking up an enterprise in which private capitalism
had
failed
miserably,
service on the Thames
many thousands of heard, under
'*
namely, (to
running
a
steamboat
the health and enjoyment of
passengers)
;
whereas nothing
is
private enterprise," of the deliberate and continued abstraction from useful service of all the enormous amount of capital, ability and labour that is being used, in the ways mentioned above, for socially
unprofitable profit-making.
THE HYPERTROPHY
OF SELLING AGENCIES
One of the most significant, and assuredly the least foreseen and least recognised, of the results of the profitmaking impulse is the excessive development which it has brought about in the machinery of selling for selling's sake as distinguished from that of the production and The hyperlegitimate distribution of commodities. of mere and as sources of trophy trading financing tier the of after tier of growth profit ; parasitic middlemen ; the expenditure, not only in one but in all highly organised capitalist states, of hundreds of millions of pounds
and mostly mendacious has already gone so far as to cause it to
a year in competitive 1
advertising, 1
G. B. Dibblec, in The Laws of Supply and Demand (p. 1 8 3), quotes Mr. Thomas Russell, president of the Incorporated Society of Advertisement Consultants, as estimating that a hundred millions sterling are spent annually on advertising in this country. "
That is a very considerable figure, and it appears still larger when we note that the total engineering industries of this country, including shipbuilding and motor factories, had
WASTE
IN SELLING
109
be said that it often costs more to sell an article, after has been produced, than the manufacture of all its materials and all its component parts has required from end to end of the process, from plantation or " " mine to loading the finished product free on rail It is scarcely an exaggeration at the factory siding. to say that the dictatorship of the capitalist, under it
of private profit, has brought us to in the Britain of to-day a quarter of all the land, machinery, labour, possibly even a half and business ability of the nation is taken up merely in the profitable industry of putting into the hands of ourselves as consumers the commodities that we, as the
stimulus
this
pass,
that
producers, have created. It may be asked,
not on the surface more than the more concentrated process of production. An obvious example is the water supply, in which the production costs nothing and the distribution is enormously exAny one who has witnessed the production pensive. of pins and steel pens by machineryj or even of the cloth-bound sevenpenny book, will have no difficulty in believing that the conveyance of the finished article from the machine to the consumer is a far more lengthy and laborious task than its production from the raw material. Again, as the product might as well not exist if its existence and uses are not brought to the knowledge of the consumer, advertisement has a legitimate function in national industry. But the process of distribution developed by the profiteering system might more fitly be described as an The elaborate system of interception and blackmail.
Why not
?
It is
surprising that distribution should cost
an output for 1909 in round figures of 70,000,000 was due 150,000,000, of which Their net output of 80,000,000 is less than the advertising to the cost of material. The United States and Canada together would spend bill of the United Kingdom." at least 250,000,000 ; Germany with Switzerland and industrial Austria about equal to this country ; therefore we may reckon that the gross expenditure on advertising for Europe and North America is 550,000,000.
no EVENTUAL FAILURE OF CAPITALISM open road from the producer to the consumer becomes obstructed by a series of piratical turnpikes set up by persons who have neither made the road nor mended it, but predatorily squatted on a portion of it and set up a trade in wayleaves. Perhaps a more exact illustration would be a canal on which a number of unnecessary locks had been imposed, alternately raising and lowering the barges until they were finally delivered at the level at which they started and which they need never have
And the profiteering advertisement gives information only as an incident of misrepresentation and For example, when the citizen has become seduction. of an instrument, such as a sewing-machine or possessed motor car or what not, capable of doing or typewriter
left.
him
efficient service for ten years, extraordinary efforts
made by means of advertisement to induce him to purchase a new model every year and changes are made
are
;
in the instrument to persuade for better, for worse him that it has been improved, the change being as often
as not either a matter of indifference or a positive dis" "
It is the mass of dead wood or of actively ablement. cancerous tissue thus carried by the departments of distribution and publicity developed by the pursuit of profit that makes those departments so costly and so mischievous, and accounts for that hypertrophy of the selling part of the system of which we have given such
unequivocal examples. The cause of this hypertrophy is the perpetual anxiety of manufacturers and wholesale traders to obtain profit on an output which they are forced to increase conIn the initial stages tinually without regard to demand. of capitalism, more particularly in the period when Great Britain had almost a monopoly of the machine process and the use of power, the output of commodities habitually failed to exhaust the effective demand of home and foreign markets. The world was still hungry for commodities. When Europe became satiated, eager merchants " had
THE MYSTERY OF OVER-PRODUCTION
1 1 1
some pleasant years chasing the remaining hunger of the world and its attendant security of profit for themselves So long as selling was a into odd corners of the East." straightforward process, conducted by merchants whose main business was actually to transport commodities to places in which there was an effective demand for them at a higher price literally to buy in the cheapest in order the axiom of the old to sell in the dearest market economists that prices, in the long run, oscillated closely about the cost of production under the worst conditions worth facing at all, including the cost of transport, had some sort of meaning, the point being that any increased efficiency in the processes of manufacture, or any increased facility in the transport of commodities from the place of manufacture to the place of consumption, was followed by a decrease in the price to the consumer.
How
"
OVER-PRODUCTION
"
OCCURS
But with the extension of manufacturing enterprise on a large scale to all civilised countries this connection between increased efficiency and low price came to an end.
Profit-making manufacturers and merchants, in
their pursuit of increased profits through ever-increasing transactions, overreached themselves. They produced in all the markets of the world temporary gluts of commodities, which they had either to retain at great cost
"
And here we come to the edge of the of our gigantic industrial system," we great problem are told by the acutest observer of this general over" If we open development of the selling organisation. the sluices of modern productive resources, developed under the factory system in the last seventy years, goods pour out at an amazingly cheap and ever cheaper rate, and the market is flooded beyond any possibility of commercial remuneration. The analogy is eminently No barriers of appropriate without any labouring.
or
sell at
a loss.
ii2
EVENTUAL FAILURE OF CAPITALISM
price could withstand the outflow ; and the resulting inundation would mean the waste of the product and the Modern probable destruction of the means of supply. besides the of necessity lowering industry, therefore, the cost of production by a great expenditure of capital, has had to devote an even greater aggregate capital to a
The productive machinery for marketing the goods." of modern is so tremendous," industry explains power " '
Mr. Dibblee, capital laid down and
that a comparatively small amount of some dozen suitable English, German,
in
American towns with a will
well -trained
industrial
be able to produce most kinds of goods
population capable of indefinite multiplication, sufficient for the whole world. But we are now talking of such large quantities, as without further mercantile organisation " It is not," he could never be profitably absorbed." " sums up, but that is production costly, marketing. Since apparently the greater part of the rewards of industry go to those members of our commercial organisation who are
engaged in the adjusting duties of selling, buying, and selling again, we have also to infer that there is some corresponding difficulty in these tasks which enables those engaged in them to gain their great rewards. It cannot be all chicanery and thievery." J 1
The Laivi of Supply and Demand, G. B. Dibblee, M.A., 19 12 (pp. 43, 47, 52). of the most interesting corollaries of this process of increasing price by diminishing cost of production, is the high salary earned by the expert seller of an article as compared " with the expert producer of an article. Take, for instance," remarks Mr. Dibblee, ' ' " the universally current expression of getting business ; that does not mean making or but or marble clocks It shoes cocoa, finding customers for shoes, clocks, and cocoa. shows the prevailing mental preoccupation of every one that a man who is reputed to ' ' be good at getting business has ipso facto a ready market for his services in any line of commerce that he cares to undertake. The man who has that capacity and can plan It is the to make production subservient to it has an easy road to fortune before him. most valued talent in business, and no one can be entirely without it who wishes to " avoid failure (ibid. p. 180). " What the economists have not so clearly brought out is the fact that on market* the middlemen owe their strength largely to their position at the centre of exchange. They can take toll of the producer on the one side and of the consumer on the other ; and (subject to extraneous competition or internal dissension) they have only to form a
One
What ring to manipulate both sides at once to their own advantage. it* tightening of organisation and its urgent need for production, has
clearly
than the economist*,
is
war again, with shown up more
not merely the effect of bad or overpaid distribution on
THE REIGN OF THE MIDDLEMAN How
113
CAPITALISM INCREASES COST
This conclusion, as thus baldly stated, is not entirely The fact that an operation requires genuine convincing. The burglar may ability does not guarantee its honesty. But it is sound in be more skilful than the locksmith. its essential contention, which is, that the business of selling more products than the consumers really need, and of discovering fresh reserves of consumers, is a more difficult one than the business of production, and also It thus becomes a an entirely different one. separate And because it absorbs branch an industry in itself. and retains a special class of profiteering ability, with:
from production, and from simple direct distribution, it finally creates a class of middlemen who, from being at first indispensable to the manufacturers drawing
it
for the disposal of their surplus products, soon become indispensable for the disposal of all products by setting
up a financial and- commercial machinery of distribution which the producers and shopkeepers do not understand and cannot work. Thus the middlemen become masters of the situation. They will not allow the producers and to compete and thus fix prices by the old shopkeepers consumption and prices, but its reaction on production. Before the war the middleman was allowed to kill the goose that laid the eggs he dealt in ; and nobody cared ; food But war has raised the status of the goose. not produced at home could be imported. ... It should now be more evident where the money goes and why. Most fish markets are more or less close corporations ; and the newcomer is not exactly received with open arms. But once he has Prices, in fact, are usually skied against him. achieved his footing, then it is to the interest of the older merchants to allow him to hang together with them as against the producer on the one side and the consumer on In virtue of their position at the centre of exchange, dealing on either hand the other. with scattered and comparatively unorganised producers and retailers, the merchants and thus we find in nearly every port are masters of the situation " and, (i) That the salesmen and merchants are too many for the fish "(2) That the accepted scale of charges and profits is keyed up, not according to distributive services rendered, but so that each one of the too many can draw a livelihood from his share of the fish passing through. " If the small and inefficient merchant can charge the small amount of fish he handles with his livelihood, it is plain that, on the same scale of profit, the big and more efficient " firm can draw a fortune from its larger quantity (evidence given before the Committee on Trusts, 1916-17, "Rings among Fish Middlemen," Memo, by Stephen Reynolds, not published by the government). ;
:
;
I
n 4 EVENTUAL FAILURE OF CAPITALISM higgling of the market. in a position to
command)
Their argument " is,
That way
(until they are ruin for us
lies
prices themselves with an eye to their own profit, limited only by the point at which the consumers will go without rather than pay, and thus levying all."
They
fix
It is highest toll on the most vital necessaries. a half since the American economist, century hardly F. A. Walker, declared that the manufacturer as entreBut preneur was supreme in the industrial situation. the entrepreneur has lived to see his mastery pass to the
the
financial
middleman, who produces nothing, distributes
nothing, but
Thus
sells
everything.
lower the cost of production of an article, including the cost of transport, the higher may be its price to the consumer, owing to the greater difficulty and expense of selling it. Or, in other words, increased competition means increased cost of selling, and this has to be added to the price charged to the consumer. The greater the competition, the higher becomes the retail price arises the paradox, that the
!
THE GROWTH
OF MONOPOLY AND THE NEGATION OF INDIVIDUAL FREEDOM OF ENTERPRISE
The more astute or powerful of the organisers of the means of production in the United States of America, Germany, and the United Kingdom were the first to discover the fallacy of free competition, and the disto the profession of profit-making of each man in his own way." When letting get rich " had become common and the form," production markets had been all explored, this competition in cheapness, which was perpetually grinding, not merely the faces of the poor but also the margin of the capitalist,
astrous "
results
naturally failed to commend itself to business man as the short cut to riches.
the
up-to-date
The
powerful
GROWTH OF MONOPOLY
115
profession of profit-makers, in spite of their mutual discould not fail to realise that combination would " " cut-throat competition pay them better than the
trust,
which was always leading each of them to magnify his output, and to seek to dispose of it by an indefinite We lowering of price, or by raising the cost of selling. need not dwell on the recurrent cycles of inflation and " " over-production that marked the British and American business world from 1825 to 1887; or upon the genesis,
own
"
during the past half-century, of the gentlemen's agreements," rings, associations, cartels, trusts, consolidations, and amalgamations by which, in Germany and the United Kingdom as in the United States, whole industries have passed into the control of little groups of capitalist The most sensational examples of the monopolists. inevitable tendency to consolidate the interests of all profit-making capitalists within a single trade or industry Both are to be found in the United States of America. official reports and American fiction resound with the iniquitous doings, first of the American railway kings, and then of the great American trusts in oil, in meat, in copper, in steel and in innumerable other comThe growth of the German cartels, extolled modities. economists as the last word of Teutonic German by for has been denounced by British organisation, capacity business men who have been continually engaged, especially during the Great War, in imitating them
American
!
There
is
to-day, indeed,
no hesitation among the captains
of industry of any country in admitting the existence, in justifying the working, of these legalised con*' Prior to the formaspiracies against free competition. tion of the Salt Union," stated its representative to the " there had British Government Committee on Trusts, been a period of very keen competition, with the result that most manufacturers were making little, if any, profit. 1 The cause of the Many were practically ruined."
and
'
1
Statement by Salt Union Limited, September
n,
1918.
n6 EVENTUAL FAILURE OF CAPITALISM formation of the association," stated the chairman of an " was important metal company to the same committee, the fact that this industry in Great Britain had been very un remunerative for many years, and had stood in danger of being crushed out of existence by foreign competition, and by too much competition among manufacturers at home ; and it was realised that, if the industry was to be saved at all, the manufacturers would have to come together and form an association. ... By securing remunerative prices in the home market they could make a successful bid against foreign competition in the export trade. They had a fund, a righting fund, for the special purpose of subsidising members who found it necessary to sell at less than an economic price in order to cut out l Trade organisations have in foreign competitors." the past," testified the chairman of the Sheet Makers Conference to the same tribunal, "in many cases, put restrictions upon output ; they have realised that if more of an article is produced than can be sold, unprofitable The problem we have to solve, prices must result. is how to therefore, produce the maximum output and maintain profitable prices, and in my opinion the only way is to adopt the methods employed in the past with '
much
so
success by
must become
Germany.
selling
agencies.
The trade organisations They then eliminate
competition amongst themselves, in those markets where profitable prices can be obtained they get them, in other markets where competition from other countries is severe at a loss if they must sell at the best prices obtainable the and so maximum amount of trade is necessary done, and the burden of the unprofitable business is In the past it has spread over the whole of the trade. to a Germany handsomely large part of her paid export In the future it will pay this steel products at a loss. " In the modern industrial country to do the same." 1
p. 5.
Report of Committee on Trusts (Ministry of Reconstruction), 1919 (Cd. 9236),
DISAPPEARANCE OF COMPETITION
117
and commercial world," summed up the Secretary of the Committee on Trusts in his learned memorandum, " comfree,' is bepetition, which indeed never was wholly *
coming less free with each passing year. In very many branches of trade and industry, business concerns whose inter-competition is conventionally supposed to maintain prices at a competitive level have, in fact, working arrangements of one kind or another which prevent competition. Again, in some branches of trade, amalgamation of erstwhile rival firms have taken place, with the result that in some cases so large a proportion of the whole trade is in the hands of one firm, or financially interwoven group of 1 firms, that an effective monopoly is obtained." Indeed, all the facts of modern industry that conclusively prove the competitive management of property invested in industrial enterprise, and its management in detail individual owners, lead to hopeless inefficiency. 2 1
on Trusts (Ministry of Reconstruction), 'Report of Committee
1
Ibid.
by
1919 (Cd. 9236), p. 5. of employers in each industry to the Board of Trade (1916-1918) demonstrate the gross inefficiency in processes, This is shown, mechanical plant and organisation within each of the staple trades. states the Departmental Committee on the Position of the Engineering Trades after " the War, by the very large number of relatively small firms that exist each with a
The
interesting reports
made by committees
separate organisation, separate establishment charges, separate buying and selling arrangeSome of them seemed to take a ments, and each producing a multiplicity of articles. special pride in the number of things they turn out ; whilst few of them seemed to be willing to contemplate buying at a cheaper price a component part from a rival manufacturer, even if they were permitted to do so by that rival. system of exclusiveness
A
and
marked the Engineering Trades before the war. Each manufacturer own secrets, and if he has any special method of manufacture, he, somewhat
aloofness
keeps his
desirous of retaining that process for himself rather than of adding it to the of the country. The result of many firms being employed upon producing a large number of articles in common use is the causing of confusion in the types of articles produced, so that no two manufacturers seem intennaturally,
is
common manufacturing knowledge
tionally to produce precisely the same articles . . . there amount of unnecessary stock of different patterns carried
is consequently a very large throughout the country and
Workmen are constantly diverted from the at a higher cost than is necessary. manufacture of one article to the manufacture of another ; much time is thereby wasted, and the change over from machines entails a considerable amount of machinery standing idle when the special article for which that tool is required is not at the moment being This is a wasteful and costly process, which limits output and therefore produced. decreases possibility of profit and high wages, whilst the absence of much repetition made
work prevents
a system of payment by piece being largely introduced." Indeed, the confessions and mutual accusations of employer and employed show that, in the " " ca' canny alike among engineering industry at any rate, there was a persistence of
capitalist
brain-workers and
all
grades of
mechanic of deliberately restricting
his
workmen
output
"
the employers accusing the British below that which represents a reasonable
EVENTUAL FAILURE OF CAPITALISM We need not ignore the industrial advantages of
ii8
these successive concentrations, with their production of standardised articles on the most gigantic scale, and But their progressive elimination of unnecessary costs. in them, it is clear, the world loses a great deal of the individual initiative, the personal risk, and the freedom of enterprise with which the capitalist system started, and by which it achieved its greatest triumphs. What is more serious is that the consumer loses that security against excess of price over cost ; that guarantee of variety and quality ; and even that assurance of abundance which free competition was assumed to afford him.
THE DRAWBACKS The
OF INDUSTRIAL CONCENTRATION
though masked, usurpation of power becomes a dictatorship indeed, against
progressive,
by the capitalist which not the trade unionists alone, nor the socialists, The first remedy to but the whole world is in revolt. which American, Colonial, or British statesmen have turned has been the construction of complicated legal machinery, either for preventing trusts and combinaor for controlling their pernicious of But restricting output and raising prices. practices hitherto all attempts to police the capitalist monopoly In all capitalist countries rings, price have failed.
tions
altogether,
associations, cartels, trusts, and amalgamations, some national and some international, extend from industry day's work, and that this deliberate restriction does ultimately have a serious effect on his character and makes him physically incapable of producing a reasonable day's work through habit which this restriction engenders." On the other hand, the workers
attribute this restricted output to the employer's practice of cutting piece-work rates, the workers' fear of unemployment, and the belief that the older or less experienced
hands must not be handicapped by the superior productive powers of their fellow-workmen. Departmental Committee on the Electrical Trades (See also reports by the " The Evidence before the Sub-Committee of the and Electric Power Supply, and for securing Advisory Committee of the Board of Trade on Commercial Intelligence " These the Position after the War of Certain Branches of British Trade (Cd. 8275). committee* of capitalists had one remedy only to suggest, namely combinations among British capitalists, supported by the political and military power of the British Empire.
APOTHEOSIS OF MONOPOLY
119
to industry, the aggregations of capital becoming ever larger, and their tentacles creeping upwards and down-
wards, monopolising natural resources, integrating manufacturing processes, controlling transport, and more and more dominating the markets of the world by their of prices and their regulation of output. manipulation " 1
Competition is growing more and more feeble and ephemeral," summed up Professor Lester Ward: "combination is growing more and more powerful and permanent. The co-operative tendencies of the rule of mind which destroy competition can only be overcome by that higher form of co-operation which is able to stay the lower form and set the forces of nature free once more." 8 .
.
.
THE APOTHEOSIS
Now
it
is
OF INDUSTRIAL CONCENTRATION
beyond" dispute that the Great
resulted alike in Britain
and above than
all
in
War
has
and the United
Germany,
States, France, in accelerating, even more
yet commonly realised, the process of amalgamahorizontal and vertical, of the separate capitalist tion, each industry or group of industries, within enterprises for the express purpose of putting an end to free competition for both the home and the foreign market. Nor is
can the economist complain of
this.
For one of the
The trusts are already reaching out to the control t>f what may be the next great " An Investisource of mechanical power in industry, namely, hydro-electric energy. gator has recently published convincing evidence that two great public utility organisations, the Stone and Webster and the General Electric groups, are systematically The acquiring control of the undeveloped water power resources of the nation. . . rapidly increasing dependence of industrial and commercial activities upon hydro-electric values at an sites. upon water-power energy will, early date, place magnificent know that tremendous speculative profits are assured by the acquisition and holding of such properties without the expenditure of a dollar of capital in their development. know that the sources of industrial energy are so limited that the centralised and unregulated control of water power in the hands of a few private corporations would soon become the basis of one of the most powerful natural monopolies which may " (The Foundations of National Prosperity, by R. T. Ely, etc., 1918, possibly be conceived " Conservation and Economic Evolution," Ralph Hess, p. 1 59). 1
.
We
We
*
Annals of American Academy of
January 1893
;
Political
and
Social Science, vol.
Psychologic Basis of Social Economics, L. F.
Ward,
pp. 89-90.
iii.,
No.
4,
120
EVENTUAL FAILURE OF CAPITALISM
administrative discoveries under the stress and strain of the struggle for national existence was the failure, the almost sensational failure, of competitive profit-making to attain the maximum productivity, either in quality In one industry after another, in all the or in quantity. various countries, it was found that the more effective the competition among rival profit - makers the less efficient and economical was the process of production Hence, in spite of the overregarded as an aggregate. bias of capitalist
governments against intercompetitive profit making, government were driven to compel the capitalists to departments one with another, and to combine in stop competing
whelming ference
with
gigantic organisations or associations, so as to utilise their undertakings in the manner found to be most
all
maximising the total supply. That is to say, the governing class in each nation became really " concerned for output, the Court of Profit," with its
effective in
when
juries of consumers, was set on one side ; unorganised " and the Court of Public Audit," served by new classes of costing experts, uninterested in private profit, was On the given jurisdiction over capitalist industry. cessation of hostilities, governments bent on maintaining the reign of capitalism precipitately abandoned their new discovery of control. But whilst the " Court of " " " Public Audit was abolished, the Court of Profit was not re-established. As the economists have not " failed to observe, the habit of working together by standard methods for a common purpose has disclosed so many economies of business administration that, taken in conjunction with the obvious interest of price control in a period of grave financial and commercial
has given a very important impetus to the It pre-war tendency towards capitalist combinations. is idle to that the quite suppose big combinations, especially in the metal and machinery trade, chemicals, and some branches of textiles and pottery, many trades
insecurity,
it
EVEN LORD HUGH CECIL AGREES
121
!
supplementary to building, the railroad and shipping l conferences, are likely to return to free competition." "
THE
FORCED ALTERNATIVE "
Thus
the modern capitalist profit-makers, by eliminatthe ing simple freedom of competition, have confronted the community with a forced alternative either passively :
submit to this capitalist dictatorship, now recognised and on the point of completion, or else establish without delay whatever social machinery may be required to enable the community to control the industries and services by which it lives. Either the trusts will own the nation to
or the nation must
own
the trusts.
And
this
forced
even by clear-sighted Con" recognised servatives. It would be very difficult to argue," " writes Lord Hugh Cecil, that it was more dangerous and mischievous to place all the means of production in the hands of the state itself than to have them monoIt is polised by a number of private combinations. alternative
is
certainly true that the practical alternative before us is competition (at any rate among our own countrymen), or the control of the state, and that any effort to limit
competition in the interests of any group of private persons, or anything less than the state, would be speedily 2 judged to be intolerable."
THE DIVORCE
OF THE BRAIN-WORKERS FROM THE INSTRUMENTS OF PRODUCTION
The industrial revolution which took place in Britain during the last decades of the eighteenth, and the first decades of the nineteenth century, and, in the course of that century, in the
parts of Europe, 1
Incentives in the 1
United
divorced,
New
States as
and the industrialised
we commonly
Industrial Order, by J. A.
Conservatism, by Lord
Hugh
Hobson, 1922,
Cecil, 1912, p. 194.
say, p. 16.
the
122
EVENTUAL FAILURE OF CAPITALISM
manual workers from the ownership of the instruments of It was left to the growth of joint-stock production. in the nineteenth century and the merging enterprise of firms and companies in gigantic rings, trusts and amalgamations, the capital resources of each of which are counted in tens, and even in hundreds of millions of pounds sterling, to carry to an extreme the divorce of the brain-workers from the ownership of the instruments of production, and to reduce them also to the position The past three-quarters of a of salaried employees. century in Great Britain, the past half-century in the United States, the last three or four decades in Germany and France, have witnessed a rapidly increasing separation of the great majority of the organisers and managers of industry from the ownership of the bulk of the material wealth embodied in the land and buildings, the minerals, the machinery and plant, and the means by which the product is transported. This has come about by gradual stages, as a mere In the management consequence of private ownership. and direction of industry, the operation of the law of " inheritance progressively interfered with the selection of the fittest." Sons reared in luxurious homes, and, to say the least, not picked out for their profit-making ability, succeeded to their fathers' businesses, which gradually ceased to be marked by those qualities of initiative, discovery and enterprise which had served as a justification for the dictatorship of the capitalist. And the businesses did not, as may once have been the case in the eighteenth century, usually go into bankruptcy.
What has proved more and more practicable is the introduction of the hired brain - worker. Generation after generation saw an increasing number of enterprises directed by salaried administrators, on whom their otiose The development of joint -stock proprietors relied. enterprise in banking and in the larger forms of transport,
and presently
also in mining,
manufacturing and
THE
RISE OF A SALARIED CLASS
123
trading on a considerable scale, revealed the unexpected management, under the supervision of boards of directors who were themselves more and more divorced from the dominant ownership of the fact that salaried
concern, and were in fact only paid professionals in directorship, was quite capable of maintaining in existence, with reasonable dividends to the shareholders, In some large, varied and widely ramifying businesses. directions, such as banking, joint-stock enterprise under salaried management has, in nearly all countries, actually
beaten the individual capitalist entrepreneur out of the field. In Britain the growth of mining royalties, the decline of the squirearchy, and the great development of house property in towns, have led to the substitution, for the active agricultural landowners, of a class of rent-receivers taking no more part in the management of real estate than the dividend-receivers in the management of industry, the two forming the rentier class now representing private property in France and Germany no less than in the United Kingdom and the United States. In this way ownership of the instruments of wealth producin Britain to the extent tion has accordingly now passed of probably one-half of the whole wealth to a steadily of functionless shareholders and rentclass increasing receivers,
men, women and children, numbering possibly
not more than 2 per cent of the population, who take no part in industry and mostly do not even know whence The aggregate income of their incomes are derived. " live by owning," these persons, who unashamedly amounts, apparently, to something like a fifth or a fourth of the entire product of the advanced industrial com-
munity.
THE GROWTH
OF THE PROFESSIONAL CLASS
But the enormous growth of what John Stuart Mill " called, three-quarters
of a century ago,
the great social
i2 4 evil
EVENTUAL FAILURE OF CAPITALISM of an idle rich class,"
feature of the situation.
is
not the most significant
Parallel with this
development
has been the growth, in all advanced industrial countries, of a still more numerous class of salaried brain-workers of all grades, who, without the stimulus of profit-making, " or any prospect of making a fortune," beyond such modest provision for their old age and for their dependents as their savings may permit, are engaged, for the most part, all their lives, in different kinds of industrial and professional service. tiny percentage of this class receive large salaries and other emoluments, and may be classed with the capitalist directors of industry themselves, into whose ranks a certain number of them But the vast majority of them serve all actually pass.
A
their lives long in such capacities as foremen, managers,
accountants, scientific workers, and technicians of various kinds^-even as designers, authors and inventors for quite modest remuneration ; whilst associated with them are an unnumbered host of clerks, salesmen, travellers and
Along professional subordinates of every description. with these must be ranked the rapidly increasing army of public officials of every kind, from the teachers of the publicly maintained schools and the various functionaries of the municipalities up to the highest administrators of the services that pass into State management. Already before the war it could be said (without counting the army and navy) that more than a million persons in the United Kingdom were in the direct employment of either the central or local government, whilst cities like Glasgow or Manchester had as many as 20 per cent of 1 all their households on the municipal pay roll. It is the upgrowth and the ubiquitous service of this nouvelle couche sociale, comprising now the vast majority of the active brain-workers in each country honest, 1 In such countries as Germany and France as also in Australia and New Zealand the proportion was even before the Great War considerably greater ; although in the United States, owing to the continuance in capitalist hands of the railways, telegraphs and most of the tramway, gas and electricity services, it was smaller.
THE
LOSS OF
THE WHIP
125
diligent, highly qualified for their work, and eminently their function which has reduced to
successful in
the absurdity the claim of the capitalist that only " by stimulus of profit-making and the ambition to found a " could efficient service of the community in the family industrial realm be obtained. At the same time this " " intellectual proletariat discovers that the capitalist system has, for the great mass of brain-workers, practically no prizes. In many cases they find themselves pecuniarily worse off than the manual workers. They often earn less ; their livelihood is sometimes more insecure ; and
they are in most cases subject to greater personal tyranny. More and more they are seeking a remedy in organisation of the nature of trade unionism ; and, like the
manual workers, they are increasingly demanding
for
their professions the dignity and security of a public service. It is a significant fact that neither of them demands property as the remedy for their poverty. In
what is called The Distributive which would abolish State, poverty by making every man an owner, the workers, whether by hand or brain, are practically unanimous in demanding honourable service It is this development of as their means of livelihood. " " an honest, an efficient, and an instructed salariat which not only emphasises the steadily narrowing sphere spite of an agitation for
of the profit-making motive, but also, as we shall see, makes practicable an alternative system of industrial organisation.
THE Loss
We
OF THE
WHIP
OF STARVATION
now
pass to the most potent, though hitherto the recognised, factor in the progressive decay of In the political capitalist civilisation that has now set in. least
democracies of the twentieth century it has become more and more impossible to apply the whip of starvation. Now it was by the whip of starvation brought to bear
126
EVENTUAL FAILURE OF CAPITALISM
on the mass of manual workers, more than by the incentive of profit-making (which could, in practice, only
become
effective in a tiny minority of entrepreneurs), that the capitalist system achieved its initial, almost automatic, That is why the separation of the workers success. from the ownership of the instruments of production rather than the series of technological discoveries that transformed industrial processes, is, to the scientific economist as well as to the socialist, the essential feature The power with which of the Industrial Revolution.
the new capitalist entrepreneur found himself endowed, of suddenly and simultaneously throwing out of employment hundreds and even thousands of operatives, having no alternative means of gaining a livelihood for themselves and their families, was a new dictatorship, unknown in mediaeval society, or even in the Britain or the North American Colonies of the beginning of the eighteenth 1 The alternate inflations and depressions of century. each industry, the successive revolutions in industrial acting processes and the ups and downs of foreign trade 1 It is important to recollect that not only in mediaeval England but in the England of the seventeenth and early eighteenth centuries, the majority of workers owned their The yeoman cultivator, instruments of production and the product of their labour. the domestic manufacturer, the craftsman of the corporate towns, with his journeyman
and apprentice, might find himself and his family on the verge of starvation through a bad harvest, an epidemic or a great fire, a foreign war or the introduction of a substitute All these temporary disturbances to the accustomed livelihood seemed trade or process. to him the Act of God, in no way altering his relation to the other members of the community in which he lived. So long as the head of the little industrial group owned the instruments of production and the product of his labour and produced food or other commodities for his own family and for his fellow-citizens, the fear of starvation through continuous unemployment, and more particularly unemployment deliberately caused by an economic superior, was practically non-existent. Moreover, what the peasant cultivator or master craftsman lost by ill luck he more than made up by the slow but continuous improvement in the processes of production characteristic of nascent capitalism. Thus
we
find during the first half of the eighteenth century a stationary population of turbulent workers, drinking heavily, eating largely of meat, rollicking in the streets, betting and fighting at the fairs, occasionally recruiting the much-admired profession of highwaymen, more often touring the country as professional vagrants, and generally behaving so as to shock the pious justices into forming Societies for the Reformation of Manners whilst giving endless opportunities of illicit gains to the notorious trading justices who For a detailed description of the growth of destitution sprang up in urban districts. and pauperism coinciden tally with the Industrial Revolution see English Local Government : Statutory Authorities for Special Purposes, by S. and B. Webb, 1922 ; and Tht Parish and the County, 1907, by the same.
A CHARITABLE POOR
LAW
127
on populations newly herded together in the expanding urban districts, where multiplication was unrestricted burnt into the minds of successive generations of the wage-earners that only by obedience to the capitalist could the propertyless man obtain a livelihood for himself and his family. But, in England and Wales at in the first there was, least, half-century of the machineof this new dictatorship. one The mitigation industry, able-bodied man to whom the capitalist could or would not give employment at the subsistence wage a wage class
which might be, and indeed, legally ought to have been, could, under prescribed by the Justices of the Peace the Elizabethan Poor Law, demand to be set to work by the parish overseers, or to have his scanty earnings made up from the Poor Rate to the amount required to maintain himself and his family, whilst full maintenance had to be provided as a matter of course for all the nonhave described elsewhere how the overable-bodied. seers of parish after parish of England found themselves
We
confronted with hundreds, and sometimes thousands, of men, women and children, rendered destitute by the capitalist refusal to continue them in employment, whilst new Local Authorities were established under separate " set the poor to statutes to establish workhouses, and to " in the vain hope of enabling them to produce work It is not their own maintenance. surprising to find that as the capitalist system spread, the total expenditure on poor relief, by which the stroke of the whip of starvation was to some extent broken, increased by leaps and bounds. At the beginning of the eighteenth century the total levied throughout England and Wales scarcely reached one million pounds. During the ensuing threeof a it rose century very slowly to a million and quarters Between 1776 and 1785 it suddenly three-quarters. bounded up by 25 per cent. At the beginning of the nineteenth century it had risen to over four million pounds, by 1813 to nearly seven millions, and by 1818
Poor Rate
128
EVENTUAL FAILURE OF CAPITALISM
The peace of 1815, like the with it social conditions far worse of 1918, brought peace From the beginthan those of the two decades of war. was visited of 1816, England by an unexampled ning The of trade. poor," said Brand in the stagnation House of Commons on March 28th, 1816, "in many to nearly eight millions.
'
Whole have abandoned their own residences. and the crowd of been deserted have ; paupers parishes
cases
increasing in
numbers
spread wider and wider
THE EPISODE By 1832
it
as they go from parish to parish this awful desolation." *
OF A PENAL
had become
POOR LAW
as clear as
noonday
to every
enlightened person that the Elizabethan Poor Law inconsistent with the capitalist system of industry.
was
How
could vast multitudes of men,
made
women and
children be
strain for twelve, fourteen and sixteen out of every twenty-four, frequently for less than a
to toil
and
hours bare subsistence, and under wretched and insanitary conditions, so long as there was always open to the able" set to bodied man and woman the alternative of being " work on the parish stock, and to the non-able-bodied the indiscriminate idleness of the parish workhouse if not the freedom of outdoor relief ; whilst for adventurous " " of being and passed spirits there was the opportunity repassed at the public expense from county to county in need not search of the parish of their settlement. here repeat the oft-told tale of the wholesale pauperisation of England under the reign of capitalism tempered by the carelessness of the parish officers, and the benevolent 'but misguided attempts of the Tory Justices to secure, by means of the allowance system, the national minimum of subsistence demanded and enforced by Tudor and Stuart legislation. Some way of escape from
We
1
Hansard,
Wallas, 1898,
vol. p.
33, 114.
p.
671
;
The Life of Fraacit
Place,
1771-1854, by Graham
THE PENAL POOR LAW
129
to be found. Hence the achievement of the reformed Parliagreat legislative ment of 1833, following on the enfranchisement of the new middle class of capitalist manufacturers, with their retinue of large and small traders and shopkeepers, was the famous Poor Law Amendment Act of 1 834, expressly " less designed" to make the condition of the pauper than that of lowest the of sweated worker. eligible grade Every unemployed able-bodied man, whatever might be the cause of his unemployment, found himself confronted with the alternative, either of working at any wage and under any conditions offered by the capitalist profit-maker, or being incarcerated with scanty fare under a studiedly offensive penal discipline. The helpless rage of the British wage -earners against being thus handed over without appeal to the capitalist dictatorship found
the horns of this
dilemma had
first
violent expression in the Chartist Movement ; whilst the Trade Unions grew apace with their double purpose
of meeting capitalism by combination with regard to the conditions of employment, and of insuring the members against unemployment. But there was another force at work. The slow but persistent pressure of the wage-earners, through their Trade Unions and political organisations, for their political enfranchisement, led, in the United Kingdom,
between 1867 and 1918, and in other countries during the same half-century, to the adoption of manhood, and eventually even of adult suffrage, with political consequences of which we are only gradually becoming aware.
THE REPUDIATION
OF THE PENAL
POOR LAW
What has become apparent is that, just as a capitalist franchise proved incompatible with the Elizabethan Poor Law, a democratic franchise is incompatible with the Right down to the replaced it. penal Poor Law which " twentieth century enlightened public opinion," whether
EVENTUAL FAILURE OF CAPITALISM
130
that of bishops or professors, of business men or civil servants, of devoted district visitors or able adminis" workhouse trators of poor relief, still adhered to the test
"
and
only
way
ment
to
"
less eligibility," as the to the principle of of inducing men to prefer capitalist employ-
Poor
Law
relief.
Over and over again
it
was
proved that, if the unemployed were given maintenance on a reasonably adequate scale, whether in the form of relief works or in them would refuse
that of the pauper dole, numbers of work on the only terms offered
to take
by employers, and many of them would become unemployable through being maintained for long periods without work. Over and over again it was proved that any attempt to supplement, by outdoor relief or even by temporary sojourn in the workhouse, the sweated wage of the worst-paid workers, would increase the area of sweating and act as a subsidy to the most ruthless employers, who would immediately reduce wages by the amount of the supplement. But in spite of the continuous demonstration that disaster must follow any attempt to combine the capitalist system with a return to the " Elizabethan conception of the right to work or maineach successive Liberal whether tenance," government, or Conservative, found itself compelled to whittle away
" the principle of less eligibility." It was expressly to stop this rot in the Poor Law and its administration that the great Poor Law Commission of 1905-9 was set up, under the confident assumption that the Commission could not do otherwise than recommend a return to the principles of 1834. But here again the unseen forces of political democracy were at work ; and not only the Minority but also the Majority Report of the Commission (signed by the representatives of the Local Government Board and the Charity Organisa" tion Society) expressly repudiated the principle of less But eligibility," and denounced the workhouse test. both reports coupled this repudiation of the principle of
THE SLUMP OF "
1920
131
"
by some provision for an adequate of the willingness of unemployed persons to accept employment when it could be found for them, and less
eligibility
testing
such a manner that their services would be This is not the place to discuss continuously required. or criticise these suggestions. What matters here is that public opinion, expressed not only through the Labour Party, but equally through the Liberal and Conservative Parties, flatly refused to supply the indispensable fulcrum for the capitalist lever by making the acceptance of capitalist employment virtually compulsory. to
work
in
All proposals to register, destitute persons
test,
and
who demanded
if
necessary train,
to be maintained,
all
and
could not under the law be denied, were repudiated. In vain did the Guardians of the Poor point to able-bodied paupers who lived cynically on the rates, demanding their discharge only to go out and earn enough for a debauch before returning to the workhouse gate as destitute persons,
and resuming
their residence there.
The
ratepayers clamoured, the employers clamoured, even the socialists (drawing a wide moral) clamoured against supporting men without obliging them to produce what they were consuming ; but the mass of workers knew that capitalism had them with their back to the wall,
there
and that if the wall, stony as it was, were demolished, would be nothing behind them but the abyss.
During the years 1905-14 the machinery sistence to the able-bodied
for giving sub-
unemployed, without
tests,
was enormously multiplied. In 1920, capitalist industry, which had been virtually superseded as a system during the war (otherwise the war could not have been carried on), failed to keep the machinery of production going, and completed the destruction of the semi-nationalised form which had just saved the country. The consequence was that the means of livelihood were withdrawn from millions of British wage-earners through no fault of their nor did they go into the own. But they did not starve ;
1
32
EVENTUAL FAILURE OF CAPITALISM
workhouse.
In spite of every desire to curtail public
expenditure, and of an openly avowed intention of forcing down wages, the British Government found itself driven in 1921-3, to provide maintenance for every unemployed worker, either by way of Outdoor Relief on what would at any previous period have been deemed an extravagant scale, or else by weekly doles direct from the Ex-
chequer at rates actually exceeding the wages offered by employers in some counties to the agricultural labourers. Something like a hundred million pounds a year were thus distributed among a couple of million families This completed the demonstration for years together. of the incompatibility of capitalism with democracy. It is impossible not to see in this the warding off, as regard the one -fifth of the entire population who would otherwise have felt the lash, of the capitalist whip of starvation.
The
inevitable conclusion
is
that, if
demo-
political " the adoption of the policy of work or cracy endures, " at the public expense is henceforth maintenance And this work or maintenance, afforded by certain. central or local governments to all who claim to be un-
employed, will, we predict, necessarily have to be free from penalisation and from the stigma of pauperism. Even the tests of destitution, with which the Poor Law experts of 1834-1900 thought it essential to load the For to any such clogging public succour, are doomed. of the provision for those to whom, through no fault of their own, the capitalist system fails to find employment
adequate wages, the great majority of the electorate So long as the community notoriously strongly objects. " above the law of nature and allows a minority to be morality that if a man does not work neither shall he at
"
that is to say, so long as a definitely parasitic class of idle rich is permitted its habit of" conspicuous waste," the representatives of the wage-earning class are justified (and will be upheld in their contention at the polls) in eat
:
THE PERIL OF "DOLES"
133
objecting to the law being applied to the most innocent of the non-workers, namely, those prevented from working by the capitalists' failure to perform the task they have
undertaken. It will be said here, and said very cogently, that democracy may say what it pleases and vote how it pleases, but that any system under which a large section of the population can obtain maintenance for themselves and their families without being required to accept work at such jobs and at such wages as are actually obtainable then and there, must lead to national bankruptcy ; and that if it be an objection to the capitalist system that it enables thousands of the population to live in idleness, a system which enables millions to live in idleness is in This that respect an intolerable aggravation of the evil. is true and it was this consideration that carried the Poor Law of 1834 into effect in spite of a popular hatred of it which, though not at first enfranchised, would nevertheless have wrecked the measure, had the Chartists been able to convince the nation that there existed a then Nowadays the alternative is practicable alternative. was so even before the war had given quite familiar, and a stupendous proof of the possibility, and even of the necessity, of superseding capitalism and substituting Even those public organisation and control of industry. who in defiance of the experience of the war believe that this is a dream, cannot deny that the people are dreaming it, and no longer fear that pulling the linchpin out of the capitalist apple-cart is pulling the linchpin out of human :
society.
Besides, the capitalist, to whom access to virtually compulsory labour is a matter of life or death, is forced to resist any legal compulsion to labour. His whole
make himself and his family and descendants independent of their own exertions by establishing them
object
is
to
When he and asked bluntly whether he in genteel idleness.
is
brought to the point
is
in favour of
making
labour legally compulsory, he cannot say yes, because the " next question from his workmen will be, Is it to be " on sons as ? That is checkon ours your compulsory if there is to be mate work to the withby compulsion drawal of supplies or by any other method * it must clearly apply to all able-bodied idle persons without distinction of birth or education ; for equality before the law is, under political democracy, an essential condition of its enforcement. Take as an example of this the extraordinary obedience of the vehicular traffic of London to the rule of the An observer standing at Piccadilly Circus policeman. during the busiest hours will fail to discover a single instance in which the authority of the constable directBut ing the traffic is defied, evaded or even resented. what would if the occur law all imagine privileged persons of title, or all payers of supertax, or all owners of motor cars to defy the rule of the road, and go right or left at what speed they chose. At once, at least in the Britain of the twentieth century, every other person would claim for himself a like privilege ; and the enforcement of any rule would become impracticable. During the war of was more remarkable than the very 1914-18, nothing near approach to universality with which the nation accepted the various disciplinary measures that were :
deemed necessary. But imagine how impossible it would have been to have enforced, on the four-fifths of the population who are wage -earners, either military 1 It is needless to remind the reader that in previous periods of depression accompanied by a penal Poor Law, large masses of vagrants have sprung up and have been dealt with not by the withdrawal of supplies but by penal imprisonment. One of the
apparently good results of universal maintenance for unemployed persons under the Insurance Act and the lax administration of outdoor relief has been the relative absence " " of vagrancy : few unemployed men being willing to take to the road at the cost of It is not so universally recognised that any withgiving up unemployment benefit. drawal of this maintenance would mean an immediate recrudescence of vagrancy with a demand for the prosecution and punishment of any person found wandering " without the means of subsistence." But this would be countered by an immediate agitation for the prosecution and imprisonment of all persons without the method of subsistence, i.e. without a recognised way of earning their livelihood by producing commodities or services for other people to consume.
REVIVAL OF "ALLOWANCE SYSTEM" "
gentlemen and of property had been exempted from the law. service or food-rationing, if the
135
ladies
"
Democapitalism finds itself in a cleft stick. its hand ; and the has taken its out of cracy only whip other instrument of compulsion available to make men Thus
it would be laid across its own back, and would withdraw from it the peculiar privilege and sole thereby reason for existence of the whole rentier class, of living " above the first law of nature and morality, that if a man will not work, neither shall he eat." Its sole consolation is a rather dangerous one socially. When the unemployed were left to starve, or to face the misery and contempt deliberately inflicted on them by the 1834 Poor Law, the peril of insurrection was so obvious that it had to be staved off in times of special stoppages of trade, as .in the case of the cotton famine caused by the civil war in America, by huge public This peril did not subscriptions and relief funds. " " hands prevent lock-outs and wholesale discharges of
work
in
for
slack
capitalist
times,
for
commerce
;
these
but
it
are
essential
had some
features
effect in
of
making
the employers think twice before they produced desperate Tosituations without absolute commercial necessity. day, owing to the almost universal provision of a weekly income for every unemployed man, the employers can
indulge their caprices and make speculative changes without the risk of finding their factories besieged and their houses burnt by starving rioters. Even the com" discredited Allowance System," by which the pletely insufficient earnings of men actually in employment are brought up to something like subsistence level, was, in 1922, beginning to be reintroduced in England ; either in the form of alternate weeks of wage-earning and unemployment benefit, or, in cases of continuously employed agricultural labourers and sweated womenworkers, by weekly supplement from the Poor Rate. Now is it really necessary to repeat once again the
136
EVENTUAL FAILURE OF CAPITALISM
old truth always being reinforced by events without equivalent production means distribution that The pernicious anaemia of a ruin through exhaustion ? but continuously increasing area of maintenance slowly without work may well prove a more deadly disease than the destruction of capital and the capitalists by a bloody revolution. There can be no permanence in a situation old,
which we abandon production to capitalism, and yet give the workers the political power to enforce demands on the national income which capitalism has neither the in
ability
nor the incentive to supply.
It is
a situation in
which those before cry Forward and those behind cry Back. This incompatibility of political democracy either with a landed aristocracy or a trading autocracy was prophetically perceived by no less stalwart a squire than Oliver Cromwell, to whom, significantly enough, the Liberal Ministry of 1894 erected a statue paid for by its wealthiest member. Poring over those illuminating debates in the Council of War at Reading in 1 647, we watch Cromwell and Ireton spending day after day in " That trying to persuade their officers and men that which is most radicall and fundamentall, and which if you take away there is noe man hath any land, any goods, (or) any civil! interest, that is this : that those that chuse the Representors for the making of Lawes by which this State and Kingedome are to bee govern'd, are the persons who, taken together, doe comprehend the locall interest of this Kingedome ; that is, the persons in whome all land lies, and those in Corporations in whome all trading If wee shall goe to take away this fundamentall lies. . of the civill constitution, wee shall plainly goe to parte take away all property and interest that any man hath, either in land by inheritance, or in estate by possession, or any thinge else." 1 It was useless for the protagonist .
1
.
The Clarke Papers : Selections from the Pafen of William Clarke, edited by C. H. And see English Democratic Firth, for the Camden Society, 1891, vol. i. pp. 302-3. Ideas in the Seventeenth Century, by G. P. Gcoch, pp. 202-226.
CROMWELL
WHIG
AS A
137
of the contemporary radicals, Colonel Rainborow, to " I doe nott finde assert, anythinge in the law of God, that a Lord shall chuse twenty Burgesses, and a Gentleman butt two, or a poore man shall chuse none. I finde noe such thinge in the law of nature, nor in the la\s^of nations. Butt I doe finde, that all Englishmen must bee subject to English lawes, and I doe verily believe, that there is noe man butt will say, that the foundation of all law lies in the people. . . . Therefore I doe [think] and
am
still of the same that every man born in opinion England cannot, ought nott, neither by the law of God nor the law of nature, to bee exempted from the choice of those who are to make lawes, for him to live under, and for him, for ought I know, to loose his life under." l " Again and again Cromwell and Ireton reiterate that if one ;
man
hath an equall right with another to the chusing of that shall governe him by the same right of nature, hee hath an equal right in any goods hee sees meate,
him
:
drinke, cloathes to take and use them for his sustenance. ... If the Master and servant shall bee equall Electors,
then clearlie those that have noe interest in the Kingedome will make itt their interest to chuse those that have
noe
/// may happen, that the majority may, by a confusion, destroy propertie ; there may bee a law enacted, that there shall bee an equality of goods and estate." 2 (The italics are"ours.) At last Colonel Rainborow ironically retorts Sir, I see that itt is impossible to have liberty butt all propertie must be taken away
interest.
law, nott in
:
If itt be laid downe for a bee soe." 3
rule,
THE ECONOMIC CASE
and
if
you say
itt, itt
must
AGAINST CAPITALISM
We
can now sum up the strictly economic case against the continuance of profit-making capitalism as the sole, 1
Tkr Clarke Tapers
Camden
:
Selections from the
Society, 1891, voL Ibid. p. 315 (Col. Rich).
Firth, for the
i.
Papers of William Clarke, edited by C. H.
pp. 304-5. Ibid. vol.
i.
p.
325.
138
EVENTUAL FAILURE OF CAPITALISM
method of owning and directing the instruments of wealth production, before we proceed to the last count in the indictment, the relation of the process of profit-making to wars between nations and classes. In the first three chapters we described the adverse results on the mass of the people of the dictatorship In spite of an enormous increase in of the capitalist. the aggregate production of commodities and services, due to the application of physical science under the potent stimulus of the desire for profit, capitalism has been everywhere accompanied by persistent insecurity and chronic penury among the wage-earners, together with a widespread morass of destitution. And although the rise and growth of a new wealthy class may not, in itself, have increased either the insecurity and penury of the mass of the people, or widened the surrounding or even as the main
destitution, the contrast adds a further grievance, whilst the encouragement of parasitic idleness, the sterilisation of intellect and the decay of manners among the newly enriched, are social evils paralleled only by the servility, the envy, and the corruption of ideals manifest in the slum population. Besides, the inequality in personal
which
admittedly inherent in capitalism, proIn all comseen, an evil of its own. munities where division of labour has developed from the domestic division of the primitive farmhouse to generally organised industrialism, the great majority of the workers are necessarily wholly occupied in performing technical operations which transform materials into products or rendering services which are part of organised They must therefore be at the orders systems of service. of the relatively few persons whose business it is to buy fortune,
duces, as
is
we have
materials, to sell products, and to organise services. This natural necessity places a power in the hands of these few persons which, unless it is controlled in the
general interest, as it is in the public services, can and does become a tyranny compared to which the worst
CAPITALIST DICTATORSHIP political tyrannies are negligible.
When
it is
139
wielded by
the irresponsible private owners of the sources of production, or by their agents, the disparity of effective " " freedom the opportunity for continuous initiative is such as to amount to the practical subjection of This subjection disguises itself the mass of the people. as subordination ; but in genuine social ordination the director is no more free to give orders as he pleases than his subordinates are to work as they please. The capitalistic owner and director is entirely insubordinate, whilst his employees are helplessly subordinate ; and thus the necessary and beneficent subordination becomes a mischievous and oppressive subjection. tremendous is the new power over other people, which capitalism thus gives to the propertied class, is seen, for instance, in
How
the peremptory closing-down of works or mines, as a means of starving the workers of whole districts into submission, and in the irresponsible determination, by this class, through the decisions of the directors whom it supplies for the industry of the nation, of the physical environment in which millions of their fellow-citizens in the devastation of the pleasant shall pass their lives the countryside, pollution of the streams and the atmoin the slums of the new urban centres the creation sphere, of all the conditions of disease and premature death, which have everywhere accompanied the mining, metal:
lurgical
and manufacturing enterprises of capitalism
the pursuit of private gain.
And
in
the social result is made no better is even made worse by the fact that alike in Britain and France, the United States and Australia, the propertied class has known how to escape from the adverse environment which without, as is only fair to say, being fully conscious of what it was doing it has created for its wage slaves. Equally unexpected, either by the economist or the moralist advocates of the unrestricted enterprise of the owners of the instruments of production a century ago, and
1
40
EVENTUAL FAILURE OF CAPITALISM
perhaps until our own generation seldom consciously sought by the capitalists themselves, is the typical phenomenon of twentieth-century democracy, in which private wealth, concentrated as to direction into relatively few hands, is seen very largely to control, by its dominion over the newspaper press, the mental environment of the whole population ; and by its power in this and various other ways, even to nullify universal suffrage, and dangerously to influence, in the interests of private gain, the executive government and the legislation of
every advanced industrial community.
THE
" FALSE JUDGEMENTS OF THE " COURT OF PROFIT
In the present chapter
we have brought
into view
some of the developments of capitalism itself, which seem to us, from the outset, to undermine the economic arguments by which the dictatorship of the capitalist was supported.
The
experience of the world, whether in those newly has revealed that the to capitalist enterprise, opened tremendous stimulus of profit-making is undiscriminating. If the capitalist finds that he can enrich himself more quickly by a reckless consumption of the irreplaceable mineral resources of the community, by the most wasteful utilisation of its forests and by the exhaustion of its ruinous as this may be to the agricultural fertility of the community economic interests there permanent is nothing to prevent, or even to dissuade, such a use of the dictatorship involved in the private ownership " In the Court of Profit," of the means of production. it so Booth which Charles thought satisfactory that by was the wideall tested, necessarily capitalist enterprise forests the world's for the of advantage spread stripping of a single generation ; the waste of its accessible resources in coal, oil and gas ; the exhaustion of its virgin soils, by which, as we now see, the United States in countries of
advanced industrialism or
THE "COURT OF PROFIT' and Britain have shown themselves
as
14
1
as
improvident " the barbarians were approved and applauded as good " business even from an actuarial standpoint. In like manner, the insidious worsening of commodities, so long as the consumer could still be induced to buy, might be, and was frequently proved to be, productive of a greater percentage of profit, and often of a greater aggregate income to the individual profit-maker, during the whole continuance of his business, than the supply Not even the most of articles of a better quality. defender of capitalist enterprise has been able optimistic " " Court of Profit to allege that the verdict of the coincides with that of any judge of soundness of material, artistic
excellence, perfect adaptation, durability, or, things into account, even cheapness to the
all
taking purchaser.
Much more
serious, however, has
been the
discovery, to which the economists and moralists were for a whole generation astonishingly blind, that, when capitalism brings its enterprises for judgement into the " Court of Profit," that court can pay no heed to evidence that
the profit-making enterprise
is
entirely
divorced
from any public service. Within the wide scope given by the penal code all pursuits are alike valid, all saleable commodities and services equally permissible. The destruction of commodities, whether fish or a bumper crop of cotton, in order to maintain prices is no less a
" enterprise than adulteration or substituproductive tion in order to lessen cost. The smuggling of opium into China or whisky into the United States, like the manufacture of cocaine in a foreign factory, or the both organisation of gambling in another country in in the crimes that which being capitalist happens to reside are as legitimate sources of gain as the growing of wheat. The whole industrial organisation may, as "
we have seen, be can be made by
by the fact that greater profits the financing, and even by the selling of commodities than by their production, in such a way distorted
142
EVENTUAL FAILURE OF CAPITALISM
an altogether disproportionate machinery of middlemen for the mere in commodities, to which both producers and dealing distributors find themselves paying unnecessary or ex" " the mere In the Court of Profit cessive tribute. fact that any profit is actually made, without demonstrated transgression of the criminal law, is accepted as as to lead to the creation of
amount of
social
conclusive proof of equivalent social service.
THE FUNDAMENTAL FALLACY "
OF LAISSEZ FAIRE
" Court of Profit does the give, in all these now sees what the world to be false cases, judgements ? It is because the basic assumption, which commended capitalism to the moral conscience of the nineteenth The century, is now seen to be without foundation. world no longer believes that, if every person without exception, capitalist or wage-earner, rigidly pursues his own pecuniary gain and even pursues it with knowledge and wisdom this will necessarily coincide with the greatest aggregate pecuniary advantage of the community know now that personal and corporate as a whole. interests not infrequently conflict, even within the sphere the individual may make profit by of pecuniary gain all sorts of manipulation without rendering service ; whole classes may live by mere tribute, whether the fruit of commercial monopoly, or of more reputable rents, royalties and dividends ; finally, the entire population of one generation may, as we have seen, with the full approval of capitalist ethics, for its own gain waste There is no such the substance of all future generations. " invisible hand," as Adam Smith romantically suggested, always guiding the dictatorship of the capitalist, even without his being aware of it, so that it promotes the economic welfare of the community. Let us avoid any appearance of overstating the case. Though the existence of profit is, as we have seen, no
Why
We
:
THE
"
EFFICIENCY AUDIT
proof that social service has been rendered, to note within
"
'
it is
143 instructive
what limitations the judgement of the "
Court of Profit may afford a test of business enterAs between one profit-maker and another, for prise. the instance, judgement of the court may have a certain It validity. may be a test of relative efficiency in human labour and of the ability exercised in its direction and in the purchase and sale of materials with a view to the But it does not, and by its greatest commercial profit. nature decide between rival enterprises one cannot, very of which aims at profit and the other at something else.
COMPARISON OF COST There can be no comparison
in that court between a medicine manufacturer, making profits by the patent million pounds, and a public hospital making none. It can never be an effective tribunal as between enterprises What is needed for this purpose having different ends. is not a skilled and impartial assessment of profits, which one of the parties (say a private electric lighting company)
maximising whilst the other (say a municipal must minimise on pain of being convicted of malversation, but that objective measurement and publicity which is the method of science. And is
aiming
at
electric supply)
here
we
see
that
the very divorce,
not only of the
manual workers but also of the great mass of brainworkers, from the ownership of the instruments of production, to which the further development of capitalism has led the rise in advanced industrial communities of whole classes of independent experts, from physicists and engineers, chemists and biologists, to analysts and is creating an surveyors, accountants and auditors alternative court of appeal. During the Great War, the costing expert determined, not which process yielded the greatest profit, but which produced the goods at the And here we see how it is that the superleast cost.
i
44
EVENTUAL FAILURE OF CAPITALISM
session of the test of relative profit-making by that of relative cost and relative production implies a stride
onward in knowledge as well as in organisation. This enables us to understand why it is that, in the Britain of to-day, it is the Labour Party with its socialistic aims, and not the Liberal Party or the Conservative Party, as adherents of the capitalist system, which deliberately puts in its programme the advancement of science.
THE PROBLEM
OF AUTHORITY
For without the application of the scientific method to social organisation the crucial problem of democracy, how we can obviate the the problem of authority of one man's will over another Hitherto it has always seemed, to the vital question in social the that organisation wage-earner, is who should give orders and who should obey them " whether the government of industry shall be from " " or from below." Experience shows that both above these ways of exercising authority have their special In the ensuing years of ever-increasing drawbacks. arbitrary
exercise
cannot be solved.
socialisation this controversy will become largely meanStrange as this may seem to-day, we venture ingless. that, from the standpoint of personal matter far less than at present exactly how the executive command is apportioned. In industry no less than in political administration, the combination of measurement with publicity is to-day
on the prediction authority,
it
will
The deliberate already undermining personal autocracy. intensification of this searchlight of published ^towledge^ we regard as the corner-stone of successful democracy. The need for final decision will remain, not merely "in emergencies but also as to policy ; and it is of high importance to impose heavy responsibility for a decision, according to the nature of the case, on the right people. How, for this purpose, those democratic institutions
THE PROBLEM OF AUTHORITY
145
have been for a whole century encroaching on capitalism, whether central or local government, consumers' co-operation or vocational organisation, can be that
further developed and co-ordinated, so as to provide for the exercise of ultimate authority in industry, we have
described in another book. 1 What we want here to point out is that, owing to the advance of science, a great deal of the old autocracy, once deemed to be indispensable
government departments and capitalist industry alike, ceasing to be necessary to efficiency, and will, accordingly, as democracy becomes more genuinely accepted, gradually be dispensed with. The stream of decisions or orders by which the wheels of industry are kept going will cease to be the exercise of one man's arbitrary will over other men's actions. The in is
independent professional, whether costing auditor or efficiency engineer, medical man or educational adviser, will report according to his knowledge; but he will give no orders and exercise no authority. His function is His personality will exhausted when his report is made. find expression, and his freedom will be exercised without limitation, in the process of discovery and measurement, and in the fearless representation of whatever he finds without regard either to the amour propre of the manage-
ment or
to
the
rebellious
Those who
instincts
"
of any grade of
authority," whether or trade union executives foremen, directors, managers or shop stewards, will give their instructions with these They will exercise their expert reports before them. the under authority searchlight of published knowledge ;
employees.
are
in
a searchlight which will encourage, if not compel
them
to feel their responsibility, not merely to sections, but to the whole community. steadily increasing sphere will, except in matters of emergency, be found for
A
consultation 1
among
all
grades and sections concerned,
A Constitution for the Socialist Commonwealth of Great Britain, by S.
and B. Webb,
1920.
L
146
EVENTUAL FAILURE OF CAPITALISM
emerge judgements and decisions This arrived at, very largely, by common consent. the will be reached consent common by cogency of and ascertained authoritatively reported facts, accurately
out of which will
home by
the silent persuasiveness of the public those concerned. Under any genuine demoof opinion it is, in the last resort, public opinion that decdes ; cracy and the more effectively public opinion is educated and the more weight is given to the findings of science, the In greater will be the success of any administration. in which of rival of the thousands jealous secrecy place engineering establishments at present enshroud their operations, and of the bureaucratic concealment which to-day marks alike the Post Office and the government dockyards, we foresee the administration of each national
driven
industry and service, no longer concerned for magnifying the private gains of particular capitalist groups, or enhancing the net revenue of the Exchequer, but merely for increasing the efficiency of the service to the public, in the glare of a whole series of searchlights, impinging different angles
at
problem, namely,
upon what
how
is essentially the same to obtain for the community as
a whole the greatest possible efficiency in relation to the efforts and sacrifices involved. To quote the words
with which we end our Constitution for the Socialist Common" wealth of Great Britain, What we visualise is a community so variously organised, and so highly differentiated in function as to be not only invigorated by a sense of personal freedom, but also constantly swept by the fresh air of experiment, observation and verification. ' want to get rid of the stuffiness of private interests
We
'
which now reign of 1
A
'
infects
our institutions
Measurement and
Constitution for the Socialitt
1920, pp. 355-6.
;
and "
to usher in a
*
Publicity.'
Commonwealth of Great
Britain, by S.
and B. Webb,
CHAPTER
VI
THE CAPITALIST SYSTEM AS A CAUSE OF WAR IN the foregoing analysis of the morbid growths insidious diseases to which capitalist enterprise is
and
now
seen to be increasingly prone growths and diseases which lead to the inference that profit-making capitalism, with all its initial advantages, has now ceased to be, on we have dealt balance, profitable to the community exclusively with its effect upon the aggregate production There still remains to be considered of material wealth. an even graver indictment of the capitalist organisation of industry, and of the profit-making motive on which
depends, namely that this system has, in modern times, become increasingly the cause of disastrous wars between nations. Indeed, if we limit our survey to the
it
most advanced it
half-century, for pecuniary
industrial communities, during the past is not too much to say that the struggle
among rival groups of capitalist be recognised as having been the entrepreneurs may most potent cause, though usually an underlying and partially hidden cause, of recent international conflicts, including, in particular, the culminating calamity of 191418. What with these national wars, and, as we shall describe, what with the equally injurious class war that capitalism so obviously provokes, it becomes a matter profit
for the gravest apprehension whether, if it is not immediately controlled in the public interest, and progressively replaced by some better organisation of industry, with 147
i
THE CAPITALIST SYSTEM AND WAR
48
some other capitalism
is
incentive than profit-making, the reign of not destined to destroy civilisation itself.
WAR
BETWEEN NATIONS
consider the close connection between the highly developed capitalist system, with its increasing hypertrophy of trading and financing and concentration of production in little monopolist groups controlling a colossal output, and the growth, during the last few decades, of a predatory imperialism among the great powers, at last issuing in the Great War of 191418.
Let us
first
manufacturers and merchants had " monopoly of the raw materials and markets of the world, they were indifferent to the growth of the British Empire, and regarded even territories colonised by British people as almost useless encumbrances involvBut with increasing ing expense to the British taxpayer. and with the entry into competition among themselves, the world-markets of the manufacturers and merchants of the United States and of the German Empire, not " " of Japan, the political to mention the rising sun faith and economic doctrine of the British profit-makers gradually changed to suit their altered circumstances. To ensure the continued profitable disposal of the huge output of commodities characteristic of these world-wide trusts and amalgamations, there was needed, not only command of the sources of supply of raw materials, but also a position of dominance in foreign markets, free a
"
So long
as British
natural
hostile protective tariffs, and able to forestall, by protective tariffs of their own, the potential competition of producers in other nations who were outside the
from
from being convinced free traders, Hence, " and anti- militarists, the British Englanders
combination. "little
capitalists
of the
last
decades of the nineteenth century
became increasingly distrustful of their old creed, and more and more sympathetic to Protection, and to the
CAPITALIST IMPERIALISM
149
extension of the Pax Britannica to all corners of the earth by a powerful navy and a costly expeditionary army. John Bright, the cotton manufacturer of the middle of the nineteenth century a period when British
cotton goods held the markets at home and abroad was the protagonist of cosmopolitan pacifism. Joseph Chamberlain, his great successor in the leadership of the Radicals, fresh from establishing in the United Kingdom what was practically a monopoly in the manufacture of screws, became convinced by the end of the century " that the Empire ... is commerce. ... It was created by commerce, it is founded on commerce, and it could not exist a . For day without commerce. . these reasons, among others, I would never lose the hold which we now have over our great Indian dependency by far the greatest and most valuable of all the customers we have or ever shall have in this country. For the same reasons I approve of the continued occupation of Egypt ; and for the same reasons I have urged upon .
government, and upon previous governments, the necessity for using every legitimate opportunity to extend our influence and control in that great African continent which is now being opened up to civilisation and to commerce and, lastly, it is for the same reasons that I hold that our navy should be strengthened until its supremacy is so assured that we cannot be shaken in any of the possessions which we hold or may hold hereafter. ... If the little Englanders had their way," " not only would they refrain from he added with scorn, the legitimate opportunities which offer for taking the empire and for securing for us new extending markets, but I doubt whether they would even take the pains which are necessary to preserve the great heritage which has come down to us from our ancestors." * The powerful but crude imperialism of the leading this
;
1
pp.
Foreign and Colonial Speeches, by the Rt. Hon. Joseph Chamberlain, M.P., 1897,
101-102, 131-3.
THE CAPITALIST SYSTEM AND WAR
150
British statesmen
was reinforced by the more polished
but more pointed utterance of the leading British pro" You cannot have prosperity without power," consul. stated Lord Milner in an address to the Manchester Conservative Club in 1906, "you, of all peoples, dependent for your very life, not on the products of these islands alone, but on a world-wide enterprise and comThis country must remain a great Power or merce. she will become a poor country ; and those who in seeking, as they are most right to seek, social improvement, are tempted to neglect national strength, are These simply building their house upon the sand. '
ought ye to have done, and not to leave the other undone.' But greatness is relative. Physical limitations alone forbid that these islands by themselves should retain the same relative importance among the vast empires of the modern world which they held in the days of smaller
before the growth of Russia and the United Germany made those giant strides in and commerce which have been the direct result prosperity 1 of the development of her military and naval strength" (The italics are ours.)
states
States, before united
THE TRAIL
manufacturers
After the Britain
OF THE FINANCIER
came the
and merchants of Great
When
capital has acin large fortunes, when the rate of interest begins to fall, the discovery is made that there
financiers.
cumulated
home many
at
are
uncivilised races,
and some races whose ancient
does not permit them to defend themselves, who can be more easily exploited than fellow " The maximum amount of harm," we are citizens. " is told by Lord Cromer, probably done when an Oriental ruler is for the first time brought in contact with the European system of credit. He then finds that he can
and
1
pacific civilisation
The Nation and
the
Milner, G.C.B., 1913,
Empire
p.
140.
:
Being a Collection of Speeckss aitJ Addrttta, by Lord
THE TRAIL OF THE FINANCIER
151
sums of money with the utmost apparent His personal wishes can thus be easily gratified. facility. He is dazzled by the ingenious and often fallacious schemes for developing his country which European adventurers will not fail to lay before him in the most obtain large
He is too wanting in foresight to light. appreciate the nature of the future difficulties which he The temptation to avail himself is creating for himself. to the full of the benefits which a reckless use of credit seems to offer to him, are too strong to be resisted. He will rush into the gulf which lies open before him, and attractive
inflict
an injury on his country from which not only
his contemporaries but future generations will suffer." l Hence the export of capital becomes even more attractive
to the profit-making capitalist than
its utilisation in the extension of manufacturing facilities at home, or the provision of the most urgently needed public services. If trade follows the flag, the flag has to reciprocate by following the money-lender in order that it may protect
him from
his disappointed
and enraged
creditors.
More-
over, there are always the traders and financiers of the other great capitalist Powers, equally anxious to exploit There is commonly a handsome the barbaric man. in of doing business with these pecuniarily margin profit American critic unregenerate populations," explains the " in the Theory of Business Enterprise, particularly when '
But, also adequately backed with force. do not these enter peoples willingly into commonly, relations with civilised mankind. It is business lasting therefore necessary, for the purposes of trade and culture, that they be firmly held up to such civilised rules of the traffic
is
conduct as will make trade easy and lucrative. To this end armament is indispensable. 2 But in the portioning 1
Modem
the Earl of Cromer, vol. i., 1908, pp. 58-9. Egypt, by The Imperial Drug Trade, by Joseph Rowntree, 1905, reminds us that one of the most glaring instances of capitalist influence on Imperial policy has been afforded " It is in relation to the Opium story of the forcing of opium on China. by the " War " of 1839-4.2 that Dr. Arnold wrote to a friend, Ordinary wars of conquest arc *
THE CAPITALIST SYSTEM AND WAR
152
out of the trade perquisites that fall to the proselytisers any business community is in danger of being overNo recourse but reached by alien civilising powers. force is finally available in disputes of this kind, in which the aim of the disputants is to take advantage of one warlike front is therefore another as far as they can. and armaments and warlike demonstrations necessary ; have come to be a part of the regular apparatus of business, so far as business is concerned with the world market." J " " state of commerce we are told by a leading German " has industrialist, always been in a certain sense a state a peaceful state of war, if one may use the word, of war which served peaceful ends as long as peace lasted, but which always lent itself to warlike designs, whether
A
A
there was a war or not."
2
THE UNASHAMEDNESS Thus we
see in
all
OF IMPERIAL CAPITALISM
capitalist countries the
armament
makers, often using subsidised newspapers, pressing close behind the peaceful penetration of the capitalist profitmaker. There is, however, one refreshing feature about the manufacturers of and the traders in the weapons for to me far less wicked than to go to war in order to maintain smuggling, and that smuggling consisting in the introduction of a demoralising drug which the Government of China wishes to keep out, and which we, for the lucre of gain, want to introduce by
The policy of the Chinese government was expressed by the Emperor's "I cannot," he said, "prevent the introduction of the flowing manifesto in 1847. poison ; gain-seeking and corrupt men will, for profit and sensuality, defeat my wishes ; but nothing will induce me to derive a revenue from the vice and misery of my people " The capitalist traders, shipowners and (Parliamentary Report, China, 1847, p. 292). " bankers interested in the China trade had their way, and the drug sold as a poison in England, specially prepared to minister to the weakness of the Chinese, has been poured into their country at the rate of a ton per hour for the twelve hours of every day for some sixty years ; whilst, to add to the irony, the great Dependency which reaps the immediate revenue is united and emphatic in its condemnation of the particular vice from which " it draws its profit (The Imperial Drug Trade, by Joshua Rowntree, 1905, p. 268). The Chinese revolution in 1911 at last brought the system to an end, the British and Indian governments agreeing to stop the export of opium. Unfortunately, with the anarchy into which China has fallen, the capitalists have again begun this lucrative force."
traffic. 1 The
*
Theory of Business Enterprise, Thorstein Veblen, 1904, pp. 295-6. Circle : The Future of German Industrial Exports, pp. 46-7.
The Iron
HOW WARS OCCUR
153
human slaughter. Their vocabulary contains no cant about humanitarianism ; they are not even guilty of The manufacturers using the cloak of patriotism. of warships and torpedoes, of rifles and cannon, of shrapnel and high explosives, are completely indifferent as to the character and nationality of their customers.
The same amalgamation countries,
and on
magnates of
its
will have factories in different board there will sit the industrial " "
nationalities.
rival
They
do business
impartially with the government of their own country or with the governments of allies or potential enemies. What suits them is not a League of Nations, nor even " a balance of power," but an unstable equilibrium,
one country after another, so as to world expenditure on armaments. who can blame them ? Did not Adam Smith
producing scares lead to the
And
in
maximum "
the natural effort of every individual condition, when suffered to exert itself with freedom and security, is so powerful a principle that it is, alone and without assistance . . . capable of carrying on a society to wealth and prosperity." What Adam Smith did not foresee was that this same teach us that to better his
own
self-regarding principle, abnormally intensified and distorted by the international scramble for neutral markets, is equally potent in dragging society into the most
devastating of wars, and likewise, as may now be added, into the most disastrous of all recorded international settlements after war, exactly because this Treaty of Versailles was based on the fundamental principle of " the profits to the victors." commercial capitalism :
How WARS The moral
OCCUR
not possible to confine the effect of great armaments, patrolling the globe for the protection of profit-making enterprises, to the intimidation of half-civilised debtors, the enforcement of comis
that
it
is
154
THE CAPITALIST SYSTEM AND WAR
mercial
and the defence of factories and " If what is called peaceful garrisons.
contracts,
commercial
" results in the presence of a foreign warship penetration in a national harbour, a fort will inevitably be built capable of sinking that warship lest it should be made the instrument not only of commerce but of dynastic Such a fort will lead to another ambition and conquest.
and such another ship and more heavily armed ship The same to another fort with guns of longer range. Its a strain is set up by purpose military expedition. may be to enforce the payment of interest on a foreign ;
loan in an imperfectly commercialised country, or to But the inevitable clear desert trade routes or what not. result is the appearance of another military expedition to keep the first one within bounds, as, for example, when Kitchener, having secured the interest on the " Egyptian loan and smashed the Mahdi," found himself suddenly under suspicious observation by a French expedition under Major Marchand, with the immediate
between France and England became dangerously strained, and France, getting the worst ot result that relations
it
for the
moment,
set to
position in Africa very
work
to reinforce her military
markedly.
capitalism could control the diplomatic and military situations it thus inevitably creates, Cobden's dream of a universal peace founded on foreign trade If
might not have been wholly
illusory.
But
it is
impotent
the face of the national passions, the international jealousies and terrors, the romantic pugnacities roused by its attempts to use national armaments as a trade It cannot even pursue these attempts with police. the establishment of an effective police pacific integrity in its completeness means nothing short of conquest and annexation ; and these mean war, which, though colossally profitable to certain trades for the moment, involves an appalling destruction of capital and thrusts a ramrod into the financial machinery on which the whole in
:
"GOD'S
LAW
155
business of foreign trade, and consequently of much domestic trade, depends. Hence, though the great world war of 191418 was an inevitable incident in the pursuit of outlandish markets by capitalism, the capitalists, when the fatal hour struck, recoiled from the war as sincerely as the conscientious objectors themselves,
and had
to
be swept into
it
by
entirely
uncommercial
romantically patriotic considerations and passions, knowing that the destruction of capital, the dislocation of commerce, the diversion of labour on a gigantic scale from production to slaughter and ruin would overwhelm all their best-laid schemes. Thus it is equally true to war and that the City was that the made the City say the In in war. short, against diplomacy and war, the profiteer hegemony is omnipotent for evil and impotent for good. It can bind ; but the sword has to loose.
BRITAIN'S SHARE
We
may now summarise
the relation between the and of the the nearly continuous dictatorship capitalist warfare that followed the inauguration of world peace by the London Exhibition of 1851, and culminated in the monstrous catastrophe of 191418. It was the British capitalist who, fortified in his faith by the early political economists, first made of the pursuit of pecuniary gain what we may not unfairly call a national religion. It British publicists who provided a rational basis for the callousness of the big manufacturer in his slaughter of children and his maiming of young people of his own
was
race through the early factory system. It was a priest of the Established Church of England, the Rev. Thomas
Robert Malthus, who declared that death by starvation who were thrown out of work and deprived of wages by the ups and downs of foreign trade was not " " " " natural law God's law for adjusting but also only a for those
the population to the
means of
subsistence.
It
was, in
156
THE CAPITALIST SYSTEM AND WAR
commercialism that prepared the moral mankind for the German theory of world Bismarck and Treitschke were the spiritual power. descendants of Ricardo and Nassau Senior. In the last quarter of the nineteenth century we watch the conscious fact,
British
conscience of
extension of this idealisation of profit-making to national statecraft, by the deliberate moulding of a nation's foreign policy to the purpose of augmenting the profits of its
entrepreneurs ; profits to be derived, be it not from a common international progress in production and exchange, but specifically, from the, 1 pecuniary loss of the business men of other nations. capitalist
noted,
1 The rapid extension of " Imperialism " is definitely ascribed, by a competent " " " French authority, to the of industrialism. The prodigious expansion " European put into the hands of the capitalist application of steam to industrial purposes," he says, an incomparable force, greatly multiplying his power, but at the same time as the several nations saw their productive power and their riches increase, they found their wants also increase, so as to become imperious. They presently became aware of the narrowness of the boundaries within which they had formerly lived at their ease ; and they demanded for their industries ever more raw materials and ever larger markets. To secure materials, to conquer markets became vital to nations and governments. Economic rivalries took the place of merely political quarrels 5 and behind the Colonial ambitions
there lurked always the imperative requirements of the struggle for existence.
It
becomes daily more clear that the strength of any State is to be measured entirely by its The trader has become the monarch financial, industrial and commercial resources. In olden times the Christian nations appeared to savage peoples in the all the world. guise of the Conquistador, clad in armour, marching with the sword in one hand and the in the other. To-day it is the trader who is the pioneer of civilisation. He Gospels He precedes the missionary and the soldier. Our utilitarian time finds goes ahead. of
The proudest glory only in the number, the intrepidity and the wealth of its traffickers. apostle of Divine Right, the Emperor William II., did not shrink, on one memorable occasion, from the following utterances, which would have remarkably surprised his ' ' ' whose memory he is so fond of recalling. Let all my unforgettable ancestors '
that the German Michael has firmly placed upon traders out there realise,' he said, that land his buckler bearing the German Eagle, in order to assure them of his protecAll these territorial rivalries, all these diplomatic quarrels are at bottom nothing tion.' It was a trading company, the Chartered but the competitive struggles of rival traders.
(South African Company) which came near, a few years ago, setting South Africa in It was another trading company, the Niger, that, more recently, sowed disflames. It was, they say, a trading syndicate that brought sension between France and England. about the Cuban war. Finally, the iniquitous war, which, at the moment of writing, is being waged between a handful of stout fighters and the whole force of the British Empire was caused if London phariseeism will permit to say by the insatiable men. Cecil Rhodes himself has acknowappetites of a band of financiers and business ' This war,' he says, ' is a just one, because ledged as much with cynical frankness. it has for object the protection of the British flag, -which represents to-day the great commercial impulse in the world.' Everywhere the trader is in front ; the governments " re his obedient servants ; and soldiers go to their dea hs to fill his coffers (La Conqultt de PAfritjue t par Jean Darcy, 1900, pp. 3-5).
THE ETHICS OF THE PACK
157
This identification of motive in the individual capitalist and the state was openly proclaimed in the policy of The one sound the German Empire after 1871. basis of a great Power which differentiates it essentially " is from the petty state," declared Bismarck, political not romanticism and is and it ; unworthy of a egoism great state to fight for what is not connected with its interest." x The moral philosopher may question whether the German version of the struggle for existence was not '
less ignoble,
than
its
though possibly more dramatically dangerous "
English forerunner.
My
country, right or a less debased think, guide to feeling, " than own action, pecuniary interests,
we
wrong," is, thought and right or wrong." from analogy may in the relative
And
my
those
who
delight in
argument
find justification for this preference
psychology of the dog and the
cat.
The
we
are told by the experts of the new psychology, dog, derives its descent from an animal that hunts its prey in packs and possesses in a highly developed form the
herd instinct ; whilst the cat is related to the tiger that kills for himself alone, and is therefore incapable of the impulsive self-devotion which the dog habitually shows as the
companion of the man.
The
followers of
Adam
Smith, like the tiger and the cat, left no place for selfdevotion and self-sacrifice, seeing that it was the pecuniary interest of the individual, or at best of the individual and his family, that was to be alone considered. The passionate patriotism of the German race, however distorted by dog-like devotion to the Fatherland, had, at any rate, the quality of the voluntary self-sacrifice of the individual to the power and wealth of the community But this distinction between to which he belonged. British and German morality does not complete the
The German people had some justification in that feeling equity as well as national self-interest was picture.
1 Bismarck may have been the first Bismarck, by C. Grant Robertson, 1918, p. 66. statesman of the nineteenth century who was frank in his avowal of egoism as the
principle of national policy.
THE CAPITALIST SYSTEM AND WAR
158
When the German an aggressive policy. traders and financiers came into the manufacturers, world market they discovered, or thought they discovered, that at least a quarter of the trade of the world had followed the flag of the British Empire, 1 whilst the United States of America and the Russian Empire dominated more than half of the remaining territories and populations. Was it surprising that the German government, and even the German people, sincerely believing with Joseph embodied
in
Chamberlain and Lord Milner that profitable commerce with the undeveloped countries was dependent on " " and fiscal national prestige, on spheres of influence protection, felt that they were hemmed in, and deprived of their legitimate share of the profits to be derived from the exploitation of the labour and resources of The Court, the General Staff, the civil other races ? administration, the bulk of the university professoriate, and the leading industrial and financial magnates, became obsessed with the desire to augment the German export trade at the expense of the export trades of other nations. If peaceful means did not prevail, rapidly and completely, why should not they call in aid the power created by the Prussian capacity for military organisation ? Had not the British government, time after time, called in the British fleet to round off and complete the encircling
Empire ? It was in this way, we suggest, that the apotheosis of individual profit-making led inevitably to the Great War. British
1
The
universality
among
other nations of this feeling of resentment against the
Empire had been admitted two years before the war, by
a leading British of the Coalition and of the Unionist governments of Meanwhile a great change was taking place in Europe. By 1870 the long 192023. struggle for German and Italian unity had been achieved and an internal equilibrium
British
imperialist, successively
member
"
A
which has now lasted for over a generation. great expansion of European industry followed, and with it a desire for territorial expansion and naval But in its efforts to extend its territories or acquire a colonial empire, every power. power found itself confronted with the British government, either in actual political possession, or jealously watchful of the vested interests of a commerce spread all over established in Europe
the world, and acutely alive to the menace implied in the steady closing of every market controlled by protectionist rivals "\Union and Strength, by L. S. Amery, M.P., 1918, p. 91).
THE WORKMEN'S REVOLT THE
CLASS
159
WAR
But incalculably grave
as is the indictment of capitalism the constituting underlying cause of war between is a further there count. War between nations, nations, even on so great a scale as that of 1914-18, is only
as
More continuous and universal, and therefore more potent in its effects on society, is the probably class war which the capitalist organisation of industry,
episodic.
with
profit-making
motive,
has
gradually
created
in
We now see every advanced industrial community. the Owenite Trade Unionism of 1834, the. Chartist Movement of 183748, the uprising of the workmen of Paris and Lyons, Dresden and Vienna in 1848, the violent outburst of the Paris Commune in the defeated France of 1871, together with the abortive Russian revolution of 1905, as only the precursors of a movement of revolt by the manual workers, which to-day extends to nearly every nation, and, in countries of advanced industrialism, falls not far short of being co- extensive For as the capitalist with the whole wage-earning class. system became dominant, in one country after another, the wage-earners had burnt into them, generation after generation, the doom of perpetual penury, varied only by recurrent destitution through unemployment, to which, as a class, they were condemned. They necessarily realised far more keenly than any other section of the community the deprivation of personal freedom that a deprivation all the more their poverty involved :
contrast with the almost boundless increase of freedom which the new wealth production brought galling in
to those
who
reaped the swelling
manual workers, and
profits.
It
was the
whom
their children, on fell the toll of accidents industrial and industrial ever-increasing diseases, which the capitalist system brought in its train. It was their class that suffered the physical and moral
degeneration, the sickness and premature old age that
THE CAPITALIST SYSTEM AND WAR
160
resulted, in Britain, from the unrestrained profit-making of the early-Victorian mines and factories, and from the The long unregulated urbanisation of the countryside. of the characteristic recurrent of unemployment spells modern machine industry, in the United States as well as in Britain, which seemed to an enlightened capitalist " the orderly beating of a heart, causing the blood like each throb a cycle," 1 may possibly mean to circulate
to the successful brain-working entrepreneurs a greater stimulus to exertion and inventiveness : to millions of
manual workers they mean involuntary idleness with insufficient food, and with this food obtained, if obtained Not at all, through the demoralising process of doles.
until the later part of the nineteenth century
were the
bulk of the manual workers sufficiently educated to organise an industrial and political revolt against a system of conducting industry, against which their The twentieth leaders had never ceased to protest. class war of an irreconcilof a century found the feeling " " the two nations between of interest able cleavage in each land rapidly spreading to nearly every section of the wage-earners, in practically all countries in which the capitalist system had become dominant. 1 It is a
curious example of vocational bias that so enlightened and public-spirited a Booth could deliberately summarise die effect of recurrent and long-continued spells of unemployment on the life and labour of the people in the follow-
man ing
as the late Charles
way
:
" Looked at from near by, these cycles of depression have a distinctly harmful and ' even a cruel aspect ; but from a more distant point of view, afar from the sphere of our sorrow they seem less malignant. They might then, perhaps, with a little effort of the imagination, be considered as the orderly beating of a heart causing the blood to Even in the range of our lives, within easy grasp of each throb a cycle. circulate human experience, whether or not men suffer from these alternations depends on the Those who live from day to day, or from unit of time on which economic life is based. week to week, and even those who live from year to year, may be pinched when trade some of them must be. There are some victims, but those who are able contracts and willing to provide in times of prosperity for the lean years which seem inevitably to follow, do not suffer at all ; and, if the alternations of good and bad times be not too sudden or too great, the community gains not only by the strengthening of character As to character, the effect, under stress, but also by a direct effect on enterprise. a population by the recurrence especially on wage-earners, it very similar to that exercised on (The italics are ours.) of -winter as compared to the enervation of continual summer." (Life and Labour of the People in London, by Charles Booth, 1903, Second Series ; '
Industry, vol. 5, pp. 73-4.)
BOLSHEVISM
161
Let us note that this secular struggle of the wageearners against the capitalists has varied, in its capacity for sheer destructiveness and its incapacity for social reorganisation, according to whether the dictatorship of the capitalist has or has not been tempered by the reign of democracy within the state. Under the ruthless and
corrupt autocracy of Russia with its complete exclusion of the town workers and peasants from participation in " " the government, the leaders of the Bolshevik or " " section of the socialist when movement, majority suddenly loaded with the responsibilities of government to abandon all by the revolution of 1917, were forced " and of establish the democracy, pretence dictatorship of the proletariat," which was certainly a dictatorship, but under it, as before, the proletariat was dictated to, and the government prisons were as full, and its rifles as active, as those of the Tsardom, in spite of the sincerity In the well-ordered of its aim at the common good. and highly-civilised autocracy of Germany, tempered as this was by a wide suffrage and a semblance of parliamentary institutions, the rapidly growing socialist party accepted the Marxist shibboleth of dictatorship of the proletariat without deciding whether it meant, as Marx meant by it, a phase of martial law ruthlessly administered by the victorious revolutionists, or government by the representatives of the people as a whole, the majority of whom would necessarily belong to the manual working wage -earning class. This ambiguity of phrase, and failure to think out clearly the steps to be taken, involved a disastrous division of opinion in the workers' ranks, and sterilised, for the first years after 1918, the otherwise
powerfully organised Labour and Socialist movement. In Britain, Sweden, Denmark and Belgium, and in
Anglo-Saxon Australasia, countries in which political democracy had been firmly established, the first decades of the twentieth century saw the rise in the legislatures of a definite Labour and Socialist Party, demanding, and
M
1
62
to
THE CAPITALIST SYSTEM AND WAR
some
the reconstruction of slight extent beginning, socialist basis, but avowedly limiting itself, democratic party, to constitutional methods of
society on a as
a
political
Even
democracy.
Labour and
these
in
countries,
the
Socialist parties bear the stigmata, in the
of democratic infantilism from which they of the environment in which they have been
diseases suffer,
bred.
We
must therefore solemnly warn our
capitalists
and
they are well advised they will no longer dare to say, "After us the deluge," or to depend on its fury spending itself in Russia and sparing us The to muddle through without unpleasant incidents. have been even more comclasses deeply working mercialised in some respects than the capitalists, because the capitalists become rich enough to follow the ancient " First gain an independent income, and Greek precept, The late Andrew Carnegie practhen practise virtue." tised virtue, even civic virtue, on a stupendous scale when he had built up a colossal fortune on the ruthless But the working classes exploitation of Pittsburgh. never reach the turning-point they are struggling all the time, and cannot exercise for an income desperately the Carnegian virtues, or acquire the moral amenities Thus the capitalist, ever thinking which go with them. of the rate of profit instead of social service, is reflected in the workman thinking only of wages and hours ; selling himself to the highest bidder ; and, on business principles, assuming that he should give as little as possible, for as short a time as possible, in return for This sort of sale is in its essence as much as possible. and it cannot be ; imposed on generation prostitution after generation of workers without finally disabling them from regarding their emancipation in any other light than that of a fight for mastery of the sources of " " production in which they must win by downing in short, of class war. their present masters Thus the
governments that
if
:
:
GENERAL SABOTAGE evil fate
affairs
163
which we have seen dogging capitalism
pursues it
compels
to
it
pitilessly in
imbue
its
home
affairs
in foreign
also
;
and
slaves with the very instinct of
plotting, outwitting, overreaching, grasping and fighting that makes revolution as inevitable as war. All the more
reason for a vigorous disowning and discrediting of the profit-seeking motive, before its prevalence makes reasonable and peaceful social solutions impossible.
UNIVERSAL SABOTAGE For consider what commercialisation means. capitalist,
The
without the slightest hesitation, will destroy
masses of useful products, or close down his works and his employees to starvation in order to keep up and sabotage is a force That is flat sabotage ; prices. that now threatens the existence of civilisation. It is idle for the capitalist press to reserve the odious term for the parallel retaliations of the working class. In the between at more running fight profit, Capital grasping
abandon
and Labour grasping
at higher wages or desperately no moral distinction can be shown between the colliery owner who locks out his workmen from their livelihood and the workman who takes care that the locked-out mine shall be flooded for want of labour to pump it dry. The conspiracies by which the Trusts undersell and ruin small competitors until they have swallowed up a whole trade, and have the public
staving off a reduction,
at their
mercy
as to prices,
are object-lessons to the
combinations by which workmen make life impossible for the blackleg who takes less than the Trade Union rate of wage, or who sets a rate of working which gives The the employer more than the market value for it. authors of the silly jokes in our comic papers about bricklayers who lay two bricks a day forget that it is just as good business on capitalist principles for a bricklayer to reduce his tale of bricks as for his employer to cut
1
THE CAPITALIST SYSTEM AND WAR
64
The
wages.
limits to waste, to ca' canny, to sabotage, in
doing one's worst, are not moral limits in they are economic limits set by the fact that capitalism short,
to
:
the ultimate consumer does not receive some value for his money he will not buy, and both employer and workman will be left destitute. But the demoralisation of the if
none the less complete because circumstances from reducing their immorality to absurdity. them prevent The habit of sabotage which it creates is growing on both of them with alarming rapidity. Sensational instances will be found in the war of 1914-18, when successful invasion was accompanied as but there was a matter of course by senseless sabotage of sabotage new in this. The form peculiar nothing which consists in simply burning the houses of economic parties
is
;
opponents was practised in the peasant wars of the fourteenth and sixteenth centuries, and revived with most dangerously suggestive success in the French Revolution and the establishment of the Irish Free The Luddite riots were so called, we are told, State. "
after
Ned Lud,
a Leicestershire imbecile,
who
in a
fit
But the of passion demolished two stocking-frames." men of the German staff of 1811, 1914, general working and the Irish leader Michael Collins in 1920, did not regard Ned Lud as an imbecile, but as a strategist worthy must face the practical certainty of all imitation. that if the transition from capitalism to socialism is not intelligently anticipated, planned and guided by the rulers of the people, the people, when the breaking strain
We
is
reached, will resort to sabotage to force whatever
government may be left to tackle the job of reconstrucand the danger is that the sabotage may go so tion ;
make
the job impossible. Consider, too, the unanswerable arguments placed by the war in the mouths of the saboteurs. They are told that trade is bad ; that public enterprise is inefficient, far as to
corrupt, impossible
and does not pay
;
and that they
CALLING THE BLUFF
165
must tighten their belts and starve as best they may until trade revives. Their reply is crushing. They point out that when the government was confronted with the and clothing them better than most of them had ever been fed and clothed in their lives before for four years, besides equipping them at enormous expense with instruments of destruction and slaughter, all out of the resources of the country, and yet retaining financial credit enough to borrow huge sums to lend to its allies, or else of having its throats cut by German bayonets, it discovered at once that all this was easily and alternative of feeding
lavishly possible. conclude that the
And they naturally, and
quite soundly,
government could, a fortiori, feed and clothe and house and equip them for peaceful and fruitful production if the same steely incentive were To this the constitutional parliamentary Labour applied. leader has absolutely no reply except that as the saboteurs are incapable of organising the throat -cutting as
the the would general organised it, attempt Which again only throws the saboteur necessarily fail. back on sporadic unorganised sabotage, wrecking of machines, blowing up of trains, burning of chateaux. Moral remonstrance and virtuous indignation are useless ; if the game is to be one of pull-devil-pull-baker, and trading without conscience is to be the order of the day, capitalism need not hope to die quietly in its bed ; it will die by violence, and civilisation will perish with it, from exhaustion. It may be said that the capitalist system has survived But it did so because, as Mr. Maynard worse times. said has in ringing phrases, it bluffed the people Keynes " I seek morally. only to point out," said the Cambridge " that the principle of accumulation based on economist, inequality was a vital part of the pre-war order of society and of progress as we then understood it, and to emphasise that this principle depended on unstable psychological
German
staff
conditions which
it
may be
impossible to re-create.
It
THE CAPITALIST SYSTEM AND WAR
166
for a population, of whom so few enjoyed The war of the comforts life, to accumulate so hugely. all and the of to disclosed has consumption possibility Thus the bluff is the vanity of abstinence to many. discovered ; the labouring classes may be no longer willing to forgo so largely, and the capitalist classes, no longer confident of the future, may seek to enjoy more fully their liberties of consumption so long as they 1 last, and thus precipitate the hours of their confiscation." It is time to realise that the great significance of Karl Marx, of whom so much ignorant nonsense is still current, is not that he revolutionised economics and he called the moral bluff of political science, but that The theoretic mistakes of Marx are as capitalism. as the mistakes of Moses ; but nobody patent nowadays who has ever read the historical chapters of Das Kapital can ever again fall under the illusion that capitalists, as such, are morally respectable. Marx, in spite of all his pretentious blunders in abstract economic theory blunders which were not even favourable to socialism succeeded magnificently in suddenly turning the banners of capitalism with their seamy sides to the audience, and presenting the drama of modern civilisation with the In our intercourse bourgeois as the villain of the piece. with the Soviet Government of Russia nothing puzzles and scandalises our diplomatists more than the assumption of the Communists that the advantage of moral prestige is on their side, and the impossibility of impressing any sort of respect on the attitude of ironic tolerance
was not natural
which
is
their nearest
approach to international courtesy.
To the British Foreign Office this seems mere impudence. No more dangerously misleading mistake could be made, now generically capitalist (bourgeois, as he is described on the Continent) does actually stand convicted of moral inferiority before the working classes ; and neither the constitutional socialist nor the gunman 1
The Economic Consequences cf the Peace, by
J.
M.
Keynes, 1920,
p.
19.
THE WAR OF ECONOMIC CREEDS
167
saboteur has any for him, or any belief in his respect necessity as a pillar of society. Thus the class war has come to be regarded as a holy war, not without strong grounds, as this book has shown. To assume, as our capitalist statesmen and their journalists commonly do, that the proletarian combatants must know themselves to be criminals, and are mere looters of society without any conscientious sanction, can only lead to a most perilous undervaluation of the strength and persistence of the revolutionary forces at work in the world It leads directly to the careless and uppish conclusion that the remedy is simply an increase in the police force and in the stringency of the criminal law. Such measures can inflame and exasperate a popular moral force they cannot control it. If the people are not convinced that the police are morally right, they will finally burn down the police station, and nobody will give evidence against them. :
THE ARMAGEDDON
we would desire is to play the alarmists ; a bad But counsellor, panic is a worse. anger cannot shut our eyes to the fact that worse things
The for if
we
OF ECONOMIC CREEDS
last
thing is
than any sensible citizen thought possible ten years ago have happened and are still happening daily, because our obsolescent institutions have been allowed to strain human endurance to breaking -point instead of being modified to suit contemporary demands and conditions. The state of things in many other countries is much worse than as yet in Great Britain. Large stretches of Central Europe are reverting to the pre-capitalist stage of a sparsely populated agricultural country, dotted with industrial centres in rapid disintegration, destitute, diseased and disorderly, and with a violent antagonism growing up between their industrial proletariats and the peasants who are now not masters of the situation, which is unfortunately unmastered (that is the whole
1
68
THE CAPITALIST SYSTEM AND WAR
and consequently of the This seems to be of the town subsistence proletariats. in and it in Russia and Austria the case ; may become the case in a much more threatening way in Germany. Now we have seen that even when capitalism is at the height of its productivity, the slum centres of its activity are foci of disease, of disablement for agricultural life, If even their and of unemployable destitute persons. is wrecked, the result is the state of things productivity that existed in Germany after the Thirty Years' War, when bands of famishing persons were plundering trouble), but of the food supply
enraged peasants and being massacred by them. These rather have we elaborated them horrors are not extinct the by pogrom, which, being an economic phenomenon, strikes the Christian Armenian as mercilessly as the Jew. To stave off this extremity of social disaster the Italian bourgeoisie are arming themselves to subjugate the proletariat by open violence. For some years past the capitalists of the United States have been waging In quite extensive wars against the labourers' unions. the latest dictionaries such words as Fascisti and Pinkertons have to be defined as the mercenary soldiers of And this is at a moment when the capitalist capitalism. recruiting sergeants find the world full of young men who have learnt no trade but the trade of the trenches, who are experts with the bomb and the rifle, and who have been broken in to hold human life cheap and the value of :
property negligible.
As against these private troops of private capitalism the proletarians and the revolutionary intellectuals are advising and carrying out wholesale sabotage of the capitalist system, precisely as the republicans in Ireland, when they were united against English rule, sabotaged their country gentlemen and the industrial proprietors into forcing the government to make Ireland a Free State, and as the republicans who dissent to that settlement are now continuing the sabotage in an effort to
THE WAR OF ECONOMIC CREEDS
169
from the British Nations. The sabotage may fail in the one case as it has succeeded in the other ; but either way it is so destructive that it must recoil ruinously on all The instance is menacingly close to our the parties. own doors. The example of Ireland is much talked of on the Clyde, the Tyne, the Tees, the Taff and other And if men who build ships centres of unemployment. and hew coal are ripe for sabotage, men who build houses and factories, and make machinery, are not likely to be more scrupulous in making jobs for themselves by destroyforce a complete detachment of Ireland
Commonwealth of
ing their
own work.
We
must not console ourselves by saying, as both the Marxist and capitalist doctrinaires do, that all wars are economic wars, and that economic wars soon blow That is so far true that very few men not enough over. will fight for an economic to count against the police when are they advantage given enough to live on as well as they have ever been accustomed to live. But as we have already shown, Communism is a religion, and belief The conflict between them is in property a creed. inspired by moral abhorrence as well and the press on both sides appeals to rence, and says as little as possible motive. Just as it would have been induce the English people and the
as
by cupidity
;
moral abhorabout the selfish this
very
difficult
German
folk
to to
slaughter one another for those economic considerations which were the real grounds of the war, and each had therefore to be persuaded that the other was not human but fiendish, so there would be little reason to fear a class war of any formidable extent if the combatants could not be persuaded that they were engaged in a righteous This percrusade against the enemies of mankind. suasion is already in full swing in the columns of the we are all conscious of it. What our capitalist press :
governing classes are not conscious of is that exactly the same persuasion, backed by terrible evidence, is at work
i
yo
THE CAPITALIST SYSTEM AND WAR
on the other side
;
and that the
class war, if
and when
be one of the wars of a be on and scale, and with a ferocity, waged may religion, battle
is
joined in earnest, will
a self-sacrifice,
and a persistence which
will
make
the
religious wars of the seventeenth century seem mere riots by comparison. They may begin by attempts at an international boycott of persons professing particular economic views. The United States already excludes
Bolshevists who are truthful or simple enough to announce Russia excludes professed Hundredthemselves as such. This is boycotting, the most Americans. per-cent If it spreads from country form of sabotage. oppressive to country it may prove the beginning of a conflict in which nationalism, freedom of travel and settlement, liberty of opinion, racial equality, and many other war cries, may serve as pretexts for drawing of the sword for the Armageddon between the dogmas of Com-
munism and Property
dogmas
as
irrelevant to
any
sane reconstruction of the industrial order as were Free Will and Necessity to the growth of the religious spirit.
THE MORAL
ISSUE
LWe are thus brought to the conclusion that the failure of the reign of capitalism, as the principal form of the nation's industrial and social organisation, must now be recognised and admitted^] It is not merely this or that
condemned by the world's of pecuniary profit has proved experience. to be a socially injurious and even a dangerous stimulus The very motive of pecuniary gain, on which to activity. Adam Smith taught the whole world to rely, is not one by which human action can be safely inspired. After .a whole century of trial, the dictatorship of the capitalist for the purpose of private gain has failed to commend itself to the judgement of democracy throughout the world. And to-day the Christian Church is driven to excess or defect that stands
The making
THE MORAL proclaim
its
ISSUE
171
agreement with democracy.
Addressing
the English Church Congress in 1922, the Archbishop of York thus delivered the Christian judgement on the " vast system of beliefs and practices and policies, industrial,
. international, political, call Western civilisation.
may roughly
.
.
It
which
we
reached
its
zenith in the last century. It was admirably contrived for the production of wealth and power. With magnificent enterprise it yoked to its service the discoveries of science. It created and satisfied a thousand new demands of comfort and convenience. It called into It stimulated patriotbeing a vast industrial population. ism by its belief in the survival of the strongest. But its motives, governing individuals and classes and states, were non-Christian self-interest, competition, the struggle of rival forces. Now- these motives have overreached themselves. They are breaking the fabric which they built. Surely the truth of this is writ large in the outbreak of the Great War and the perils of Europe to-day.
The
overthrown without disaster. be a blessing, not a blight, to mankind, its motives must be transformed." l We suggest that as with the last great aggression of the Hohenzollerns and their military advisers it would have been a lasting calamity had the result been
But
fabric itself cannot be
if it is to
The failure of humanity. The victory
is a good thing of irresponsible power over the lives of the mass of the people, even if it were confined " " to economic power, would have been a moral cataWhatever strophe. may be thought as to the indisof the motive of profit -making, no one pensability ventures to assert that it is a high motive, or a noble It admittedly does not lead to the production aspiration. of art and beauty ; it is a mockery of justice ; it is inimical to friendship ; it is not the parent of love. Even the keenest profit -maker instinctively resists the
otherwise. for
1 "
Congress Sermon
"
at the English
capitalism
Church Congress, Times, October n, 1922.
THE CAPITALIST SYSTEM AND WAR
172
introduction of this all-powerful motive into his own opposite set" of family relations, in which a diametrically " truce is This of God to prevail. principles is allowed relations between conto pecuniary popularly extended nections, between personal friends, and even to some
occupation slight extent between members of the Whole professions, indeed, make a social class. of repudiating the profit-maker's creed as regards
same
or
pride
own services. The army, the navy, the doctors, the clergy, the teachers, the judges, the fire brigade, all the salaried officers of the compolice, and, in fact, at no time have accepted the making of profit as munity Morethe guide to conduct in their own vocations. their
over,
by a peculiar
illogic,
the motive of securing personal
in Britain at any rate, never been supposed profit has, to govern those who directed the affairs of state ; and
the cabinet minister, the colonial governor, the ambassador, the member of Parliament, the town councillor, or the justice of the peace who has aimed at the .making of has always profit for himself out of the public service, not like Simon earned, Magus, public approval but No doubt the opposite taste can be public contempt. recall the remark of a commerciallyacquired. minded youth who was temporarily acting as secretary to
We
one of these devoted and entirely unpaid county administrators on whom so much of our social organisation He disliked, he said, " this morbid atmosphere depends. of public work, with its everlasting thinking of other He longed to get back to the more people's needs." satisfying occupation of totalling up the weekly profits of his
The
father's shop.
despising
full
socialist,
whilst
by no means
maintenance for himself and
his
family
(and, in fact, demanding it for every one), feels a profound dislike for greed of gain as the dominant motive ; he
"
"
shall no longer be the basis of our statecraft, no longer preached to the young as the guide to conduct, no longer applauded
demands
made
that the
desire for riches
LIVING BY and honoured
as
OWNING
173
conducive to the commonwealth.
believes that in the countries advanced in civilisation
He man-
kind is ready for a change of heart, for the substitution of the motive of fellowship and public service for that of pecuniary self-interest and the craving for riches. He does not thereby demand any fundamental change in human nature. What the establishment of a genuine co-operative commonwealth requires in the way of an advance in morality is no more than that those who have the gift for industrial organisation should be, not saints nor ascetics, but as public-spirited in their work, and as modest in their claims to a livelihood, as our quite normally
human
scientific
workers, teachers in schools and
colleges, our whole army of civil servants of every degree and kind, municipal officers of every grade, the administrators of the consumers' co-operative movement, and And this substituthe officials of the trade union world. tion of the motive of public service for the motive of self-enrichment will be imposed on our consciences by " the moral revolution, which will make living by " as shameful as the pauperism of the wastrel ; owning
exceptionally gifted man the community the full " " as a mean fellow as mean as the rent of his ability who refuses to for the highest operate except surgeon
and
who
will, moreover, regard the insists on extorting from
Even among the socially unthe scrupulous, perception that the idle or useless life is neither healthy nor happy ; that the amusements substituted for work are mostly devices for pillage by tradesmen ; and that the troubles brought by property would be unendurable if the alternative were not poverty fee that
he can extract.
and degradation, seems to be growing. However that may be, there is abundant evidence that the necessary tasks of the world will get done, that inventions will be made, improvements introduced and duty performed, even if no man can hope, by persistently getting the better of his fellow-men, to accumulate a fortune.
Owing
i
74
THE CAPITALIST SYSTEM AND WAR
to the
advance of science and the growth of professional
ethics
it
is
now
practicable
it
is,
indeed, essential
if
be saved from disaster to substitute for the Court of Profit the twin Courts of Efficiency Audit
civilisation is to
and Professional Honour. But even if the evidence on this point were not yet complete, the socialist would still strive for the substitution of fellowship for fighting, of professional ethics for
competitive trading, of scientifically audited vital statistics for the test of pecuniary profit, because to him the state of mind that is produced by fellowship and the pursuit of knowledge, the society in which fellowship is the dominant motive, and scientific method the recognised way, is whether or not it is materially better provided infinitely preferable to that produced by the economic war of man against man, and the social rancours, national and international, which are the outcome of such warfare.
Here we break capitalist
off our diagnosis
of the decay of
Though we have been active Labour and Socialist movement for over
civilisation.
members of the thirty years, we have never before framed an indictment of the capitalist system. Our time and energy have been
devoted to municipal administration, to research into the facts of social organisation, and to devising and advocating measures by which the existing profit-making friction system may be replaced, with the least political " and the most considerate treatment of established expectations," by a scientific reorganisation of industry as a democratically controlled public service. have we this course because have no mind for denials pursued
We
that carry no affirmations, for demolitions that provide no constructions. have never felt free to preach
for
an ideal until
We
we have found
the
way towards
its realisa-
But having done our best to survey the path to within sight of the goal, we may, without misgiving or malice, tell capitalism plainly what History will think of tion.
WHY when
THIS INDICTMENT?
175
the demagogues of our day are dead and Those who will take the trouble to follow the rise and growth of the industrial and social institutions which, we believe, should and will gradually supersede the reign of capitalism can do so in our other writings, it
all
forgotten.
whether relating to the development of local government, to the organisation and functions of trade unionism and the consumers' co-operative movement, to the increasing elaboration of factory legislation, and the enforcement of the policy of a National Minimum, or to the systematic prevention (as distinguished from the mere relief) of And we think we may fairly claim that the destitution. 1 careless accusation that socialists avoid details, and fail to work out in practicable projects the alternatives which
they desire, does not apply to us, to the publications of the British
any more than it does Labour Party and the
Fabian Society. But our former abstention from a moral judgement of capitalism can be justified only by belief that those who are in control of the government and the legislation of the country are aware of the gravity of the social diseases is
no
from which we are
less
important
are regarded
of the
all
way
what suffering, and in which these evils
by the wage-earners, who
Britain, four-fifths of the population. there seemed to be a substantial
War
constitute,
in
Before the Great measure of consent
had to be gradually changed, in the direction of a greater equality in material income and personal freedom, and of a steadily increasing participation, in the control of the instruments of wealthproduction, of the wage-earning producers and the whole body of consumers. This acquiescence in the progressive that the social order
development of political and industrial democracy was manifested, during the generation that preceded 1914, not only in the extension of the suffrage to the wageearning
class,
the abolition of the absolute veto of the 1 See the pages at the
end of this volume.
176
THE CAPITALIST SYSTEM AND WAR
House of Lords and
the successive legislative affirmations of the right of free association, but also in the effective democratisation of local government ; in the
steady extension of municipal services ; in the systematisation and nearly universal extension of factory and mines legislation ; in the establishment, for millions of workers, of a legal minimum of wages as of a legal maximum of hours of labour, and last and perhaps most important of all in the progressive allocation of a steadily increasing share of the national income to the needs of the children, the sick and infirm, and the aged through old-age pensions and the public services of education, health and recreation. thought, perhaps
We
wrongly, that this characteristic British acquiescence on the part of a limited governing class in the rising claims
who had found
themselves excluded from both would continue and be extended, control, still further from the or reluctantly, political into willingly the industrial sphere ; and that whilst progress might be But apparently slow, there would at least be no reaction. the immense destruction of wealth by the war, and the helpless position into which the wage-earners throughout of those
enjoyment and
the world have been brought through the unemployment caused by the nature of the Peace, has both incited and encouraged the capitalists and landowners of Britain, as of the United States, some of them excited beyond all prudence by enormous war profits, to make a deliberate attempt to drive back the mass of the population,
always on the most plausible commercial grounds, behind the positions gained during the last half-century. Not only have wages been drastically reduced and hours of labour increased, even in establishments continuing to make exceptional profits ; but the proportion of the national income allocated to such vital communal services as health and education has been diminished in order to reduce the income tax. In every industrial district the overcrowding of families in insanitary and
CATASTROPHIC REACTION
177
is becoming more Lord Shaftesbury. The definite promises of Cabinet Ministers in 1918-19 to nationalise the railways and mines have been shame-
often indecently occupied tenements scandalous than even in the days of
lessly
broken.
Instead of extending, according to the
policy of the National Minimum, the operations of the highly successful Wages Boards, these bulwarks of
the basic
wage
are being
powers undermined.
silently attenuated, is in preparation popular liberties ;
There
or their
an even
attack on we are one with the on the re-establishment hand, threatened, of the veto of an effective Second Chamber, expressly "
more
invidious
" concessions to labour order to resist further 4 and, on the other, with the practical withdrawal from the trade unions of their statutory right to determine by in
majorities their industrial and political activities. Up and down the country, in factory, shipyard and mine, it is being said and believed that these two measures are intended to "torpedo" both political and industrial
thus driving the wage-earners to resort to " direct action " on an Such a unprecedented scale. counter-revolution, in the long run even more dangerous to those who are engineering it than inhibitive to the oceanic moral tide it vainly dreams of turning back,
democracy
is made possible, we believe, partly by the ignorance of the British capitalist entrepreneur as to the strength of the case that can be made out against the continuance of his dictatorship, and partly by the blindness of the resentment which drives the proletarian to seek his remedy in the ruin of his economic antagonist and the destruction of the machinery which has enslaved him, rather than in the recognition that there is a better way for both. In an attempt, possibly vain, to make the parties understand their problem and each other better in the hope that it is not always inevitable that Nature should harden the hearts of those whom she intends to we offer this little book. destroy
N
INDEX Adams, C. F., 21 Adams, John, 21 Adams, Messrs., 103 Adulteration as a form of competi-
Belgium, Labour and in, 161-2
97-101 Advertisement
Birmingham,
tion,
Incor-
Consultants, porated Society of, 108 Africa, 105, 154-6 Board of, 99 Agriculture, "
Allowance System," the, 135 America, capitalism in, 7, 9, 17, 67-8, 112,
118
;
War
Civil
135
in,
;
manners ,
in, 38, 40 North, advertising
in,
109
5
in
126 ; slave eighteenth century, trade in, 89 , Southern, slave trade in, 12 , Western, British markets in, 81 Amery, L. S., M.P., 158
AngeU, Norman, 54 Anglican Church, 75 Antipodes, British markets at the, 81
Appomatox Court House, 12 Armageddon of economic
pro-
Bevan, Phillips, too ceedings
at,
County 103
Bismarck, Prince, 88, 156-7 Bluff, the capitalist, 60-63 Bolshevists, 93, 161, 169, 170 Booth, Charles, 70, 140, 160
Bowley, A. L., 16 Brain -workers, position of the, 56-8 ; as salaried servants, 121-5 Brand, , M.P., 128 Brennus, the sword of, 55 Bright, John, 12 British Commonwealth of Nations, 167 British Constitution, the, 49 British Economic Imperialism, 154-8 British Empire, the, 148, 158 British Medical Association, 102 British socialism, 88
Camden
Society, 136-7
Canada, 95, 109 Capitalism, adverse developments of, ;
govern-
124 ; social conditions in, 14-15, 37, 69 ; Labour and Socialist parties in, 161-2 Austria, 109, 166 in,
of,
Court
Belloc, Hilaire, 55
Calgary, 95
Australia, capitalism in, 139
Authority, principle lem of, 144-6
Party
creeds,
166-175 Arnold, Dr., 151 Arnold, Matthew, 38-9 Atholl, Duchess of, 13
ment employees
Socialist
49-52
;
prob-
initial success of, 63, 85-146 ; 137-42 ; destruction of the means of production by, 88-92 ; ruin of resources by, 93 ; case against,
137-42 Capitalist system, definition of, 2
Carlyle, Robert, 18
Carnegie,
Bakunin, 77 Bannington, B. G., too Bedlam, 21 Beer, M., 13
Andrew, 162
Carolinas, the, 36, 94 Cecil,
Lord Hugh, 121
Chamberlain, Rt. Hon. Joseph, M.P., 149, 158
178
INDEX Charity Organisation Society, 130 Chartered South Africa Company,
179
East, trading in the, 1 1 Eastern civilisation, 66
1
'5* Chartist Movement, 129, 133, 159 China, British markets in, 81 ; opium
trade with, 141, 151-2 Christian Church, doctrines of,
12,
Clyde, the, 168
Government of 1920-23, 158 10, 12,
Board
Poor
of
154
127-9.
-
121-3, ,
Colonies, trade combination in the, Colquhoun, Patrick, 13
1
5%i credit system of, 150-51}
1 1
8
in,
55
Central, disintegration of, 166-7
European
civilisation, 3, 7,
9
Combination Laws, the, 76 Common Law, the, 78
Fabian Society, publications of, Factory Acts, 90
Communism, 90, 165, Company Acts, 73
Fascist!, the,
168, 169
Conquistador, the, 1 56 Conservative Party, the, 121, 131, 144 as seen
22-4 Co-operative Wholesale Costs increased
21
of,
inefficiency
by the Cosmical
;
Inspector,
Societies,
105
capitalism, 113-14 Court of Profit, 120, 140, 143-4, 174 " Court of Public Audit," the, 120. 1 74 Crimean war, 12
by
Cromer, Lord, 150-51 Cromwell, Oliver, 136-7
Cuban war,
$ee
Law
newspaper press
Collins, Michael, 164
Consumption,
Trade
Report on, 117-18 Environment, dictation of the, 52-4 Equality before the law, 46-8 Europe, capitalism in, 9, 87, 109, in,
i
Clarke, William, papers of, 136-7 Class war, the, 159-171
Cobden, Richard,
trades,
Reports on, 1 1 8 Elizabethan Poor Law,
Ely, Professor R. T., 96, 119 Engineering trades, Board of Trade
39 ?55' 6 Christian mediaeval civilisation, i Civilisations, the passing away of,
Coalition
Electrical
16,
1
75
168
Financier, the trail of the, 150-52 , 103 Finlay, Firth, C. H., 136-7 Fletcher of Saltoun, 54
Foreign Office, the, 165 France, bureaucracy of, 83 ; capitalism in, 119-20, 122-3, r 39> *54 5
economic imperialism
of,
154-6 124
j
Government employees
in,
social conditions in,
17, 37-8,
14,
;
69 Franklin, Benjamin, 37 French Revolution, the, 38, 163
the, 156
Gain without production, 103-8 Dalton,
Hugh,
16
1
Darcy, Jean, 56 da Vinci, Leonardo, 37 Daylight saving as scientific consumption, 27 Demand, vitiation of effective, 25-8
Denmark, Labour and in,
Socialist
Party
161-2
Georgia, 94
Dibblee, G. B., 55, 102, 108, 112-13 Dictatorship of the capitalist, 45-62 ; in government, 53-6 Distributive State, the, 125 Divine Right of Kings, principle of,
156 Dresden, 159
Dysgenic
effect of inequality,
Galsworthy, John, 48 Galton, Francis, 43 Gambling as part of capitalist enterprise, 102-4 General Electric Company, 119 General Medical Council, 74 George III., England under, 3
41-4
148, 150, 163-4, 167, 168 ; capitalism in, 104, 109, 112, 114-16, 119-20, 122-3, *5 2 > x s6-7 > eco-
Germany,
nomic imperialism of, 12, 157-8 Government employees in, 124 of income in, 17 inequality position of brain -workers in, 57 trade combinations in, 114-16
N2
; ;
; ;
INDEX
i8o Gilds, craft, 77-8
Given, John La P., 55 Glasgow, 100, 124 Glennie, Stuart, 44 Gooch, G. P., 136 Gordon, Isaac, 103 Greek civilisation, i, 35, 162 Grimsby, slaughter-houses at, 99-100
and Barbara, 77 64 Henry VII., England under, 3
Hammond,
J. L.,
Hawley, Fred
B.,
Hess, Ralph, 119
Hill,J.J., 94
Hobson, J. A., 121 House of Commons, the, 44, 107, 128 House of Lords, composition of, 105 }
Lancashire Factory owners, 90 Law Courts, proceedings at the, 105 League of Nations, 153 Leamington Board of Health, 97 Lee, Robert E., 12 Leicestershire, 163
Leisure class, 37
Lenin, , 77 Liberal Party, 59-61, 131, 136, 144 Liberalism, why it has decayed, 58-62 Walter, 54 Lippman, " Little Englanders," 148 Liverpool merchants, petition of, 76 Local Authorities, 127 Local Government Board, 99, 103, 130 London County Council, 108 London Exhibition of 1851, 155
London
veto of, 177
traffic,
Lord Chief
134
Justice, 105-6
Ibsen, 10
Louis XIV., Court
94 Immorality
Ludd, Ned, 163-4
Illinois,
as
of
part
capitalist
enterprise, 102-4
Imperialism and capitalism, 152-8 Industrial Revolution, the, 8-9, 78, 82, 126 in Inequality of income, 16-44 > personal freedom, 45-62 Inge, Dean, i Inheritance, 20-21 Insurance Act, unemployment under the,
134
Ireland, 167-8 Ireton, General, 136-7
M'Culloch,
J. R.,
Mackaye, James, MacNeill, J. G.
96 17, 25-6,
78
Swift, Q.C.,
M.P.,
105 Malthus, Rev. Thomas Robert, 12, 155 Manchester, municipal enterprise in, 124 Manchester Conservative Club, 150 Societies for the
Manners,
Reforma-
tion of, 126
Irish Free State, the, 163
James, President, of Illinois, 94 Japan, bureaucratic government of, 83 ; capitalism in, 14, 66, 148 ; manners in, 38 ; Samurai of, 36 Jefferson,
of, 36
Luddite Riots, 163 Lyons, 159
Thomas, 21
Jews and capitalism, 71, 167 Justices, Courts of, 106 ; Courts ; of the Peace, 127
see
Law
Manners, what are good ? 38-40 effect of inequality upon, 34-41 Marchand, Major, 154 Marx, Karl, 13, 161, 166, 169 Mediaeval England, 126-7 Medical Act of 1858, 74 Medical Officer of Health, 50
Kelso, William W., 100
John Stuart, 64, 123-4 Milner, Lord, 150, 158 Money Lending Bill 1900, 103 Money, Sir Leo Chiozza, 16
Keynes, John Maynard, 62, 165 Kitchener, Lord, 154
Monopoly
Mill,
"
Money
Selection," 43-4 resulting
from capitalism,
114-21
Labour Party, the, v, and Right to Work
131, 144, 175;
29 142
Bill,
Laissez. fairs, fallacy of,
5
Moral
failure of capitalism, 172-5 Moses, 165 Municipal Corporation, the, 77
INDEX National Liberal Club, 42 Nationalism, 169 100Newcastle-on-Tyne, " New York, the " Four Hundred of,
40
New
Zealand, Government employees 124 Newspapers, 54-5 Niger Trading Company, the, 156 in,
(Eil de boeuf, the, 18-19 Official Receiver, the, 107
Over-production, 111-12 Overseers of the Poor, 77 Owen, Robert, 88, 159
181
Rationing, economic effect of, 27-8 Reading, Council of War at, 136-7 Reconstruction, Ministry of, 116-17
Reynolds, Stephen, 113 Rhodes, Cecil, 156 Ricardo, David, 12, 156 Richelieu, Cardinal, 36 Right to Work Bill, 29 Robertson, C. Grant, 157 Roman civilisation, i, 35 Roosevelt, President, 93-4 Rousseau, Jean-Jacques, 10 Rowntree, Joshua, 152 Ruskin, John, 30, 62, 78 Russell, Lord, 107 Russell, Thomas, 108
Paisley, Sanitary Inspector of, 100 Parasitic idleness, effect of, 28-30 Paris Commune, the, 159
Russia, 77-8, 83, 150, 158, 161, 162, 166, 169; Soviet Government of, 165
Parliament, 50-51, 75-6, 98, 102-5 5 and Factory Acts, 90 ; and Poor
Sabotage, universal adoption of, 162-9
Law, 129 Bill,
;
and Right to Work
democracy, 83 Peru, British markets
in,
Selling of,
for
hypertrophy
principles of, 68
Guardians, 131 the, 13, 49, 76,
127-35
Law Amendment Act, Law Commission, 107,
129, 133
130-31
Simkovitch, Vladimir G., 13 Simon Magus, 172 Sinclair, Upton, 55 Skelton, O. D., 68, 70 Smith, Adam, 72, 96, 142, 153, 170 Social Science, National Association for the Promotion of, 100
Rate, 127, 135 Post Office, 146 Poverty as result of capitalism, 7-10
Socialist indictment, the, 5
Production of pernicious commodities, 102-104 Profit-making, nature of, 65-8 motive, 69-74 ; efficacy of, as ruthlessness of, 79-83
Starvation, the whip of, 125-8 State ownership, 124
Prussia, 38, 158
Sumerian civilisation, Sweden, Labour and
Sombart, Werner, 37, 70-71, 82, 105 Stamp, Sir Josiah, 16
;
Public
Health, British
Institute
of,
Stone
and Webster Amalgamation,
119 Stuart legislation, 76, 128
in,
i
Socialist
161-2
Switzerland, advertising in, 109 Radicals, 149 Rainborow, Colonel, 137
of,
Sheet Makers' Conference, 116 Shelley, 10 Sidgwick, H., 68
Pinkertonism, 168 Pittsburgh, 162 Place, Francis, 128
Law,
agencies,
108-11 Senior, Nassau, 12, 66, 156 Shaw, Bernard, v, 41, 43
81
Piccadilly Circus, 134
economy,
in,
5 2 '3
Pewsey, 13
Poor Poor Poor Poor Poor
Salt
Scotland, capitalist environment
29
Parry, E. A., 48 Pax Britannica, the, 149 Peasant state, incapacity
Political
Dean of, i Union Limited, 115
St. Paul's,
Taff, the, 168
Party
INDEX
182 Tagore, Sir Rabindranath, 66
rationing in, 28 ; social conditions in, 14, 16-17, 43, 48, 69, 123 } trade combinations in, 114-15, 119-20, 149
Tees, the, 168
Thames, steamboat
service
on
the, 108
Theft, idleness as, 31-3 Years' War, 168 Thirty " Tono Bungay," 102 Tory justices, 128
Veblen,
Townsend, Rev. J., 13 Trade Unionism, 129, 159, 163, 177 Trade, Board of, 107, 117-18
Versailles,
Trusts, 163 ; mittee on, 113, 115-17 legislation, 76, 128
167,
169
;
3,
33,
148,
brain-workers
Mrs.," 103 Wealth, distribution of, 16-17, 62, 69 Western civilisation, criticism of, 66
150,
57
in,
5
Whately, Archbishop, 12 William II. of Germany, 156 Wolsey, Cardinal, 36
in, 31, 93-4, capitalism 52-3, 121-3, 139, 140-41, 158, 1 60 ; conservation of Natural Resources in,
93-6 ; 124 ; 54-5 ;
Government employees the
newspaper
President
153
Ward, Lester, 119 " Warren,
449
States, the,
of,
1 14 Wallas, Professor Graham, 49, 128 War, the Great, 16, 21, 28, 30, 55, 115, 119, 143, 148, 158
Unionist Government of 1920-23, 158
United
Treaty
Walker, F. A.,
Tudor
area,
101,
Com-
Government
Union
37,
Virginia, 36, 94 Voltaire, 10
" Truce of God," 172
the, 168
33-4,
Victorian era, 160 Vienna, 159
Treitschke, 156
Tyne,
Thorstein,
107, 151-2
of,
War, capitalism
in,
in, press 21, 55 }
as a cause of, 147-78
York, Archbishop
of,
171
THE END
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&
R. CLARK, LIMITED, EdinlitrgM.
