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ized; and production, under Socialism, as conceived of by Mr. Sidney Webb, differs fundamentally from production under Individualism only in the fact that the men with the "scarce brains" -the active private employers of the present day-will be converted into an army of Government taskmakers, and will be plundered by the Government of almost everything they produce. The laborer will still be a wage-earner, who will have to work or starve; there will still be industrial discipline as rigid as any that now exists. The sole distinctive advantage held out to the laborers is that, by robbing the men with "the scarce brains" of what they produce as fast as they produce it, the Government will provide itself with a fund to increase the present wage of labor-a fund which, as I showed from the figures supplied by the Fabian essayists themselves would give each citizen an extra sixpence a day. But I am not going to dwell here on the inadequacy of this result, nor on what most people will consider the obvious character of the fact, that if the men with the scarce brains" are to be robbed of what they produce there is very little chance that they will go on producing it. The point on which I am now concerned to insist is, That it is the doctrine of Socialism that they will go on producing it-that a man, for instance, will be as anxious to make £100,000 if he is only allowed to keep £800 of it, and not even to employ that as he likes, as he would be were he allowed to keep £80,000, and spend or invest it according to his own judgment. And not only is this peculiar doctrine the doctrine of the Socialists, but it is-as will appear more clearly in the following pages-the only fundamental doctrine in which they are peculiar. It is the only fundamental doctrine taught by them which is not either actually in some way taught also by Individualists, or is else capable of being appropriated by them and used to strengthen Individualism. The Fabian essayists, though they are constantly losing sight of this fact in their arguments, are yet constantly proclaiming it; and to show the reader that I have not misrepresented the matter, I will quote the following words from the concluding essay: It is not so

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much to the thing the State does," says the writer, "as to the end for which the State does it, that we must look before we can decide whether it is a Socialist State or not. Socialism is the common holding of the means of production and exchange, and the holding of them for the equal benefit of all"i.e. in such a way that the man who produces most shall have as little as possible more than the man who produces least; and no one, says the writer, is a true Socialist "who hesitates to clamor his loudest against any proposal whose adoption would prolong the life of private capital [which means par excellence interest on private capital] for a single hour."

And now, having thus summed up for the reader the gist of my previous paper, and having shown him again what in its essence the Socialistic system is, I propose to examine those theories of history and evolution by which the Socialistic economists aim at convincing us that Socialism is the condition toward which all civilized society is working-a condition which is inevitably and rapidly being evolved out of the economic conditions that have preceded it. I pointed out in my former paper that the Socialistic economists had rendered an invaluable service to economic science by introducing into it the historical and comparative method, instead of doing as their orthodox predecessors had done, and treating the society existing round them as the only society requiring or deserving analysis, and as representing the sole form which industrial civilization could assume. What I shall now have to point out is that the service they have rendered by insisting on the necessity of applying the historical method, has been only equalled by the failure which has attended their own application of it; and I shall deal with their historical criticisms under two heads-first, those that refer to the present and that near past during which the capitalistic system, as we now know it, has developed itself; and secondly, those that refer to the four or five preceding centuries, during which the beginnings of this modern system were slowly evolved out of the medieval. The reader will see that there have been two distinct proposi

tions submitted to us. First, that out of Capitalism is being evolved Socialism; secondly, that out of medieval Individualism was evolved Capitalism. The historical order, as I have placed them, is inverted; but it is the order in which it will be most convenient to consider them.

II.

THE ALLEGED CONTEMPORARY EVOLUTION OF SOCIALISM AN APPEARANCE ONLY, NOT A REALITY.

The theory of the Fabian essayists as to modern and contemporary tendencies, forms, from their point of view, the best, and indeed a conclusive answer to the arguments of those who maintain that Socialism is unworkable; for it is a theory at once illustrated by, and based on, a number of industrial facts, which the essayists declare to be examples of Socialism already at work. I am going to take the principal examples cited by them, and to show the reader that not a single one of them is really Socialistic in the sense which the Socialists attribute to the term; but that the Fabian writers--no doubt with perfect honesty—have been playing fast and loose alike with their language and their thoughts; and that while defining Socialism as being in its essence one thing, when they are looking for realized examples of it they mean quite an

other.

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use of private capital are implied-that private capital used, or accumulated by private persons, is in each of these cases an essential factor, and in most of them a principal factor.

Let us begin with the Income Tax. Mr. Bernard Shaw declares that this is Socialism pure and simple-Socialism already in our midst. "It is the transfer," he says, "of rent and interest to the State by instalments." If this tax is not Socialism, it is, he declares, “an intolerable spoliative anomaly." But Socialism it is, he continues, absolute, although not complete; and all we have to do is to increase this tax gradually, and at last the Socialism will be complete as well as absolute. The State which at present Socializes a part of rent and interest will at last have Socialized the whole. It seems entirely to escape Mr. Shaw's mind, that if the State should attempt to socialize the whole, or even the larger part of this sum, the result would be that the sum would no longer be produced. With the exception of a very small part of it

namely, the prairie rent of the land the sum which he alludes to, and which he estimates at about five hundred millions, is an annual product of ability, new since the last generation; and were the conditions and influences which have stimulated its production withdrawn it would disappear far more quickly than it appeared. But I have dwelt on this point already, and I only mention it here in passing. What I want here to insist on is that, whatever might happen under other circumstances, the Income Tax as we know it. at present is actually a transfer to the State from a sum that is produced by individual enterprise by individual ability manipulating private capital; and that the amount transferred has been carefully adjusted with a view to taking as little as possible from the individual, not as much; in other words, to diminishing as little as possible the normal reward or incentive of those who save private capital, or who employ it. Instead, therefore, of being an example of Socialism, it is one of the most astonishing witnesses to the productive force of Individualism. The same criticism applies to Trusts and to Joint Stock Companies. I need not

repeat at length an observation I made in my former paper, that one of the greatest of existing Trusts, which the Fabians cite as a typical example, is as with a curious naïveté they tell usdirected by nine men, who own the larger part of the stock. Two far more important and more widely reaching facts to be noticed are, first, that the capital invested in these enterprises is the product of the previous application of other private capital, by the ability of individuals whose main motive in producing it was its future investment in enterprises of this very kind; and, secondly, that the men who direct these enterprises, even if their position be that of mere hired managers, enjoy the advantage which quintuples the moral value of their salaries, and which, as we have seen, it is the Socialist's primary aim to abolish-the advantage of investing whatever they may be willing to save, or, in other words, of converting it into private means of production, and thus hereafter reaping from it an independent or anti-Socialist income. Does Mr. Shaw imagine that the manager of any great railway company would consider his present salary to be as valuable a reward as it is, if one of the conditions of its payment to him were that he was at liberty to invest none of it, or that any investment he made were to be ipso facto confiscated?

The favorite, the proverbial example with the Socialists, of Socialism in operation-namely, the Post Office, and the municipal enterprises-distributive, as in the case of water, or distributive and productive both, as in the case of gas on which the Fabian essayists lay still greater stress, differ in one point from the companies I have just alluded to, and with this I shall deal presently. But in every other respect their position is the same. Every employé, either under the Government or the municipal authorities, can convert his savings into private means of production, and derive interest from them; and the rarer and more valuable his ability, and the larger his salary, the more important as a motive the hope of this saving is. And now let us look at the matter from another point of view, and we shall see that, on the admission of the Fabian writers themselves, what was said about

the Individualist foundation of all Trusts and Companies is even more strikingly illustrated by the enterprise of Municipal bodies. Municipal Socialism has been rendered possible only-to quote the distinct admission of Mr. Sidney Webb," by the creation of a local debt now reaching over a hundred and eighty-one million pounds." In other words, it has been rendered possible only by the fact that private ability had created all this capital, and created it -as the event shows-with the distinct object of employing it so that it should yield interest. If Mr. Sidney Webb doubt this, let him ask himself whether those millions would have been forthcoming, if the municipal authorities had not only promised no interest on them, but had distinctly declared that they bound themselves never to pay any -in fact, that whatever money was lent to them, they meant practically to confiscate. Mr. Webb knows, as well as anybody, that if municipal enterprise had attempted to establish itself on these Socialistic terms, or on any terms which did not call to its aid the normal and vital motives which have created private capital, municipal enterprise could never have established itself at all. I am not at this moment considering how it may extend itself in the future. I am doing what Mr. Webb does. I am speaking of it as it is; and certainly as we know it at present, it is so far from being an instalment of Socialism, that it is a mere extension of the immemorial functions of Government, which has been made possible only by the assistance of Individualism, and is, like the Income Tax, a witness to the forces which Individualism represents.

The case of the Post Office will enable us to see into the matter yet farther. I need hardly repeat, with reference to the Post Office officials, what I have said already about the employés of public bodies generally-namely, that no enterprise is really Socialistic which allows salaries to be saved and invested as private capital. I will merely point out the fact, to which I have drawn attention in my recent volume, Labor and the Popular Welfare, that the Post Office, even when regarded under its most Socialistic aspect, is merely a film

of Socialism supported on the sinews of Individualism. All the improved means of transport- the ocean steamers which go to America and back in twelve days now, whereas sixty years ago the same journey occupied a hundred and five-the development of railways and telegraphs, and more recently of the telephone-all of these are the children of private ability, allied with private capital; and the Post Office, as compared with these, is a child riding on the shoulders of a giant. And what holds good of the Post Office at the present moment, has been true of it, in a marked degree, throughout its entire history. The main improvements in its service have been due to private initiative, from the days when Murray and Dockwra, and after them Povey, started successively a penny and a halfpenny post for London, and when John Allen, who rented the cross-posts in the country, trebled the business by his organization of it, to the days when mail coaches were started by a private Member of Parliament.

And now, let us go back for a moment from Imperial enterprise to municipal; and take three of the special examples which Mr. Sidney Webb gives. "Bradford," he says, "supplies water below cost price." Mr. Webb entirely misses the meaning of this statement. It either means that the municipality makes a losing business of the watersupply; or else, that the loss is made good by a tax on incomes which are produced by Individualistic enterprise. Therefore the Bradford water-supply is either unsuccessful Socialism, or it is not Socialism at all. Secondly, Mr. Webb tells us that" Liverpool provides science lectures ;" and, thirdly, that "Manchester stocks an art gallery." The first statement really means that Liverpool secures the services of individual men of science, who give lectures. The municipality either pays the lecturers, or it does not. If it does pay them, it pays them out of a rate on Individualist incomes--so here again is another tribute to Individualism. Or, if it does not pay them, there is no municipal Socialism in the matter. We have simply an instance of the intellectual charity of the lecturers. And now, lastly, let us turn to the Manchester

picture-gallery. In a public gallery itself there is nothing new; and nothing more Socialistic than there is in a cathedral. All we need consider is the pictures; and do they represent Socialism? The pictures have been either bought by the municipality, or presented to it by persons who have bought them; or it is conceivable that some of them may have been the gifts of muniticent artists. But even these last-if such there are-represent, not Socialism, but private munificence. Mr. Webb will hardly maintain that there is no difference between Sir John Millais making Manchester a voluntary present of a great picture, and Sir John Millais having the same picture seized by two armed officers of a Socialist corporation, set to watch him as he worked, and to deprive him of it as soon as the last touch had been given. While if-to take the typical case--the pictures are bought and paid for, the money ultimately comes from an Individualist income on the one side, and goes to swell an Individualist income on the other. The production of pictures can be socialized in two ways only

either by depriving the artist of any property in his own work, by rendering it penal for him to possess his own pictures; or else by each hundred county or parish councillors setting to paint a masterpiece with a hundred brushes be

tween them.

The more we examine the instances given by the Fabians of the actual evoIution and development of Socialistic institutions, the more apparent does it become that these institutions represent no new Socialistic development at all; and that the only new feature or new vitality to be observed in them are due to the very forces which Socialism would supersede or smother. I am not forgetful of the fact that in institutions like the Post Office, or municipal gasworks, there is an element which in strict truth may be said to partake of Socialism. But as I shall show presently there is in none of these institutions anything which in any way points. to the evolution of Socialism as a working principle. There is an evolution of sentiment and of incomplete thought, which results in a belief among many that Socialism can be made to work.

But the actual evolution of events-and the class of events especially which the Fabian writers cite-proves the exact contrary of what the Fabian writers think. I shall make this presently far more clear, but I must first turn from the Socialists' misreading of modern history, to consider their treatment of the history of social evolution generally.

III.

MISCONCEPTION BY THE SOCIALISTS OF

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THE NATURE OF INDUSTRIAL EVOLU

TION GENERALLY.

Following the example of Karl Marx, the entire Socialist school begin their historical review of what they call the evolution of Socialism, with the state of society which prevailed in Europe, or rather in this country, five hundred years ago for it is to this country especially, which Marx called the "classic" example, that all their writers turn. Mr. Bernard Shaw, in the Fabian volume, treads in the exact foot-prints of his predecessors. "I shall," he writes in his essay on Historical Transition, begin at the beginning. I shall make no apology for traversing centuries by leaps and bounds at the risk of sacrificing the dignity of history to the necessity of coming to the point as soon as possible. Briefly, then," he continues, let us commence by glancing at the Middle Ages." And when he mentions the Middle Ages, what is he specially thinking of? His next sentence tells us. It is England. "There," he says, "you find, theoretically a much more orderly England than the England of to-day." Of no other country, of no other civilization, is there the smallest mention. This singular limitation of their historical vision is characteristic of the entire science of the Socialists. To whatever they give their attention they see only a fraction of it; and here, though they may be said to have actually pointed the way-as I have before observed-to the historical study of economics, they have been not only the pioneers of the true scientific method, but a warning example of the puerile and unscientific application of it.

The Socialistic theorists, with very great ingenuity, trace a whole series of historical steps in the history of this

country, such as the suppression of the monasteries, the growth of the wool trade and sheep-farming, which led to the development, on the one hand, of a class of landless laborers, and on the other of a capitalistic middle class, which hired these laborers as its instruments: and this process, as they point out, continued till the middle of the last century. Then the epoch of modern scientific inventions dawned, and the new motive powers and machinery introduced by men like Arkwright and Watt, acting on the industrial conditions which had by that time evolved, resulted naturally and inevitably in the modern factory system. In place of the old medieval organization, which at once secured and fixed each man in the position he was born to, industrial society had been at last metamorphosed into a small body of irresponsible employers, and a vast and fluid body of proletarian laborers, who could only live by working at the employer's bidding. From an historical analysis like this the Socialists argue that just as the social rule of Feudalism has given place to the individual rule of the capitalist, so the rule of the capitalist over the laborers will, by a process precisely similar in nature, give place to the rule, under Socialism, of the laborers over themselves.

The plausibility of this piece of philosophizing rests entirely, not on its inaccuracy, but on its superficiality and its incompleteness. Let us consider its incompleteness first. If we are to derive any profit from the historical study of economics, from the comparative method, and from the theory of evolution, it is absolutely useless to confine ourselves to a few isolated centuries in the life of an isolated nation. Our study must be extended, so far as our means permit, to the civilizations and barbarisms of the human race as a whole, and the most distant countries and the most distant periods must be compared. For any fragment of history, such as that to which the Socialists confine themselves, is not only a history of certain events, individuals and populations; it is a history also of human nature, human character, human capacities and it is only in so far as it throws light upon these that it can afford us any

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