Vw
 
 THE SOCIALIST STATE.
 
 THE SOCIALIST STATE 
 Its Nature, Aims, and 
 
 Conditions : Being an Intro- 
 duction to the Study of Socialism 
 
 E. C. K. CONNER, M.A. 
 
 BRUNNER PROFESSOR OF ECONOMIC SCIENCE, 
 UNIVERSITY COLLEGE, LIVERPOOL 
 
 LONDON: WALTER SCOTT. LTD 
 PATERNOSTER SQUARE 1895
 
 preface. 
 
 THE aim of this little book is chiefly expository. 
 It is an attempt to indicate, with due regard 
 to relative proportion, the various matters in- 
 volved in the discussion of Socialism, as to 
 which some opinion must be formed. In some 
 cases the materials for an equitable decision 
 lie ready to hand, recorded in the facts of 
 past experience or in the arguments which 
 have been set forth by the advocates or 
 opponents of the movement, but in other 
 cases we remain dependent on the conscious 
 and unconscious experiments which are being 
 wrought, or are to be wrought, in the sure 
 laboratory of Time. Of one thing we may 
 be certain ; the problem of Social Action and 
 Socialism cannot be ignored. And as it can-
 
 PREFACE. 
 
 not be ignored, it is surely not too much 
 to urge that it should be studied. This little 
 book will attain its object if it facilitate a 
 serious and fruitful study by a delimitation 
 of the ground it should cover, and by the 
 implied suggestion that a final judgment 
 must be arrived at, not on one aspect or 
 one presentment of the case, but after an 
 even-minded review of the whole complex 
 medley of interests, difficulties, dangers, and 
 advantages. 
 
 My thanks are due to two friends who 
 by their kind revision of the proof-sheets of 
 this book, have enabled me to remove cer- 
 tain obscurities and defects which might 
 otherwise have remained. 
 
 E. C. K, G. 
 
 UNIVERSITY COLLEGE, 
 Ofh May, 1895.
 
 TABLE OF CONTENTS. 
 
 THE SOCIALIST STATE: ITS AIMS AND 
 SCOPE. 
 
 I. 
 
 PAGE 
 
 NATURE AND AIMS OF THE SOCIALIST 
 
 STATE 13 
 
 1. Social Reform and Socialism Definition of 
 Socialism. 2. Agents and conditions of production. 
 3. Capitalistic production and profit. 4. Private 
 and social services. 5. The proposal of Socialism 
 The State as employer and producer. 6. The 
 Socialist state and private services. 7. The State as 
 landowner. 8. The State as capitalist. 9. General 
 functions of the State recognised in addition. 10. 
 Socialism positive, not destructive. 11. Practical, 
 not Utopian. 12. Restricted in scope, not indefinite. 
 13. Socialism and democracy. 14. Socialism and 
 social evolution. 15. The principles underlying 
 Socialism and individualism.
 
 CONTENTS. 
 II. 
 
 PAGE 
 
 EQUALITIES AND INEQUALITIES ... 34 
 
 1. Socialism and its aims. 2. The grounds of 
 equalities and inequalities. 3. Inequalities which it 
 would and inequalities which it would not remove. 
 
 4. Socialism and the doctrine of universal equality. 
 
 5. It would lessen inequalities. 6. Consequent 
 advantages considered. 
 
 III. 
 
 THE GROWTH OP MODERN INDUSTRIALISM 
 ... AND SOCIALISM 43 
 
 1. Systematic Socialism a remedy for modern not 
 ancient ills. 2. The division of labour and certain 
 results. 3. Consumption and production. 4. Com- 
 petition. 5. Economic interdependence. 6. Capital 
 and capitalism. 7. The chief gainers by the new 
 industrial system. 8. The sufferers from its dis- 
 advantages. 9. Indictment of present organisation 
 as harsh. 10. Of competition as wasteful. 11. Of 
 capitalism as unjust. 12. This description an indict- 
 ment, not an impartial judgment. 
 
 THE BASIS OF SOCIALISM. 
 
 IV. 
 
 THE THEORETICAL BASIS OF SOCIALISM . 62 
 
 1. The nature of theory. 2. The Socialist theory 
 of value and exchange value as occasioned by labour. 
 
 6
 
 CONTENTS. 
 
 PAGE 
 
 3. Its inaccuracy. 4. On " socially necessary " 
 labour. 5. Correspondence between value and cost 
 and its nature. 6. Difference between this and the 
 theory of Socialism. 7. Socialist theory of capital 
 and its remuneration. 8. Difference between a 
 certain sum in the present and in the future. 9. 
 Replacement tends to cost less than first prodtfction. 
 10. The position of interest. 11. Socialist theory of 
 the true law of wages. 12. Its two errors, as to 
 cost of production of labour and population, and as to 
 invariability of standard of comfort. 13. Possibility 
 that labour may get a smaller share than it should. 
 14. Socialist theory of crises and overproduction, and 
 its error. 15. The truth underlying it. 16. Weak- 
 ness of theoretical basis of Socialism Is it funda- 
 mental ? 
 
 V. 
 
 THE HISTORICAL BASIS OF SOCIALISM . . 90 
 
 1. Old and new methods of regarding social history. 
 2. The three great stages of economic development 
 The family or tribal stage. 3. The individualistic 
 stage. 4. Its growth and decay. 5. The dawn of 
 the socialist stage. 5. Criticism of the above sketch 
 Its value. 
 
 VI. 
 
 THE PRACTICAL BASIS OF SOCIALISM . . 100 
 
 1. Practical difficulties. 2. The "waste" of com- 
 petition. 3. How far waste is the necessary price of 
 progress. 4. Degeneration. 5. Want of work and 
 
 7 a-i
 
 CONTENTS. 
 
 PAGE 
 
 its causes. 6. Its position in the Socialist state. 7. 
 Uncertainty of employment in the past and the 
 present. 8. The " emergency " argument that things 
 are becoming worse. 9. By some this is attributed 
 to waste. 10. The division of wealth. 11. Wages in 
 the present and the past. 12. The result of statisti- 
 cal estimate of alterations in wages. 13. The shares 
 of capital and labour compared. 14. How far 
 " emergency " arguments are sound or necessary. 
 
 SOCIAL FEATURES OF THE SOCIALIST 
 STATE. 
 
 VII. 
 SOCIETY. THE FAMILY 120 
 
 1. Social organisation and its fundamental insti- 
 tutions. 2. The family. 3. Socialism does not pro- 
 fessedly contemplate interference with the family. 
 4. Danger of such interference. 5. Parental responsi- 
 bility. 6. Stability of marriage. 7. Extent to which 
 interference is probable. 
 
 VIII. 
 SOCIETY. PRIVATE PROPERTY . . . .131 
 
 1. Socialism not an attack upon the existence of 
 private property in wealth. 2. It allows it under 
 certain conditions. 3. This may extend to saving of 
 wealth or accumulation. 4. Socialism would how- 
 ever alter the conditions under which accumulation 
 would proceed. 5. Interest under Socialism. 6. 
 State annuities. 7. On the transfer of private pro- 
 
 8
 
 CONTENTS. 
 
 PAGE 
 
 perty by gift. 8. Bequests. 9. Private property 
 will be interfered with if the Socialist state assumes 
 the right of regulating consumption. 
 
 IX. 
 THE INDIVIDUAL 141 
 
 1. The importance of individuality. 2. Individual 
 distinctions and their material recognition. 3. Social- 
 ism not necessarily opposed to material inequality. 
 4. Socialist Regulation. 5. Socialist Bureaucracy. 
 
 6. The needed encouragement of energy and efficiency. 
 
 7. Encouragement and need of enterprise. 8. Indi- 
 viduality and enterprise. 9. Socialism and artistic and 
 intellectual ability. 10. The condition of the higher 
 abilities under the present system. 11. The encour- 
 agement of ability by the State. 12. Socialism and 
 Democracy. 13. The publication by the State of 
 criticisms on the State. 14. The effect of Socialism 
 in encouraging altruism and civic patriotism. 15. The 
 limitation of individuality. 16. Freedom under 
 Socialism. . 
 
 X. 
 
 ECONOMIC ORGANISATION. CAPITAL . .164 
 
 1. The accusation that Socialism will discourage 
 saving of capital. 2. Government as an accumulator 
 of wealth and capital. 3. Private saving not impos- 
 sible. 4. The position of private saving under 
 Socialism. 5. Future contingencies and pensions. 
 6. On the payment of interest. 7. The grant of 
 annuities to those who save.
 
 CONTENTS. 
 XL 
 
 PAGE 
 
 ECONOMIC ORGANISATION. PRODUCTION . 173 
 
 1. The aim of economic organisation and its present 
 conduct. 2. The productive system under Socialism 
 Price as a sign-post. 3. The present and the 
 Socialist productive systems compared. 4. Possible 
 defects in Socialist organisation. 5. Misproductioii 
 The importance of luxuries. 6. Centralisation and 
 monopoly. 7. On the truth of the assertion that the 
 present is an era of monopoly. 8. Aggregation under 
 one management of different branches of industry. 
 9. Different advantages of the different systems. 
 
 XII. 
 
 MONEY 189 
 
 1. Reasons for Socialist proposals to substitute 
 labour values for money. 2. The way in which 
 labour-money will be used. 3. Advantages and dis- 
 advantages of such a money. 4. Certain other objec- 
 tions. 5. Socialism has attached what seems to be 
 too great an importance to the change it advocates. 
 
 XIII. 
 
 FOREIGN TRADE 197 
 
 1. Difficulty in conducting the foreign trade of a 
 Socialist state. 2. This difficulty increased if trade 
 has to be conducted between two Socialist communi- 
 ties. 3. Expedients for meeting such difficulty. 
 4. In any case foreign exchange and trade will be a 
 matter of great complexity and difficulty. 
 
 10
 
 CONTENTS. 
 XIV. 
 
 PAGE 
 
 EXPERIMENTS IN SOCIALISM AND COM- 
 MUNISM 205 
 
 1. Nature of social experiments. 2. State manage- 
 ment of industries and its success. 3. The under- 
 taking of subsidiary industries. 4. Communities 
 Their main lesson. 5. Other lessons. 
 
 SOCIAL ALTERNATIVES AND SOCIALISM, 
 
 XV. 
 A REMEDY AND ITS COST ... .213 
 
 1. The difficulty of any final judgment. 2. The 
 appeals to the imagination by Socialism and Liberty. 
 3. Importance of ideal conceptions. 4. Advantages 
 offered under the Socialist state The question of 
 their fulfilment. 5. Difficulties of Socialism. 
 
 6. Difficulties which may prevent it from working. 
 
 7. A political danger. 8. A summary of certain 
 other disadvantages, mostly economic. 9. Social 
 disadvantages. 10. Relative importance of these 
 various disadvantages. 11. On the immediate in- 
 troduction of Socialism. 
 
 XVI. 
 
 MODERN STATES AND SOCIAL ACTION . . 229 
 
 1. Individualism and Socialism not the only alter- 
 natives. 2. If this were so, many might approve 
 Socialism who now deprecate its introduction. 3. 
 
 II
 
 THE SOCIALIST STATE. 
 
 i. 
 
 THE NATURE AND AIMS OF THE SOCIALIST 
 STATE. 
 
 i. AT a time like the present, of quick Social 
 
 Reform 
 
 sympathies and fertile inventions, it is necessary 
 to distinguish somewhat carefully between the 
 various movements in the direction of Social 
 Reform. Of these, some have the same end in 
 view, and only differ as to the means requisite 
 to its attainment; while others coinciding, at 
 any rate in their early stages, in their choice of 
 means differ greatly as to their ends and aims. 
 But neither a general belief in some future 
 economic condition, with a more equal distribu- 
 tion of wealth, nor an active desire to remedy 
 13
 
 THE SOCIALIST STATE. 
 
 certain particular grievances and to alleviate 
 certain hardships, can be said to necessarily 
 constitute Socialism. The people and parties 
 entertaining such beliefs and such desires 
 may, with some justification, be termed social- 
 istic; for in both cases, in the one instance 
 in the end, in the other in the means proposed, 
 they approximate to Socialism. This use of 
 terms cannot be called a fortunate one, but in 
 any case they are socialistic, not socialist. 
 Social Reform and Social Reformer are wide 
 terms. They include, indeed, Socialism and 
 Socialists, but they include other movements 
 and other people, whose aims and methods are 
 
 And very different. Socialism is something more 
 
 Socialism . 
 
 than either an earnest desire for the regenera- 
 tion of society or the approval of graduated 
 taxation and a system of factory legislation; 
 it is a definite scheme of economic organisa- 
 tion, or, as things stand at present, a demand 
 for a definite economic reorganisation, which 
 it is proposed to achieve by changes in a 
 particular branch of life. 
 
 Socialism aims at the substitution of a system
 
 NATURE AND AIMS. 
 
 of industrial production, collectively organised 
 and, with the exception of human activities, 
 collectively owned, for a system of production 
 individually organised and owned. 
 
 2. The introduction of such a system would in- Agents of 
 volve many and very considerable alterations, for 
 production affects all people, not merely because 
 of their interest as consumers, but because they 
 are, in most instances, occupied either directly 
 in producing and transferring goods, or in- 
 directly in developing and maintaining the 
 conditions which alone make possible their 
 production. To this end many agents and 
 varying forces are necessary. The main agents 
 of production are described as L/and, Labour, 
 and Capital; but these terms are capable of 
 wide definition. Thus, under Land must be 
 included not merely the soil but those various 
 conditions and forces of nature which are 
 employed in this particular direction. Labour 
 does not mean merely muscular exertion or 
 manual labour, it includes skill and the work of 
 organisation, superintendence, and direction. 
 Of Capital, also, there is more than one kind; 
 15
 
 THE SOCIALIST STATE. 
 
 there is remuneratory or maintenance capital as 
 well as auxiliary capital implements, machinery, 
 buildings, and the like. But in addition to 
 the agents which are capable of classification 
 under these headings there are many others, 
 both moral and intellectual, of great importance; 
 because deprived of their aid the conditions, 
 without which production cannot take place 
 safely or so advantageously, would be wanting. 
 Health must be preserved, security guaranteed, 
 general education given, and recreation pro- 
 vided. The efforts of those engaged in these 
 tasks are indispensable. It is true that these 
 can, as a rule, be included under Labour; but 
 as they result not so much in commodities 
 as in the conditions under which commodities 
 can be produced and consumed, some distinction 
 is advisable. A further distinction must be 
 made between those operations which are 
 involved in Capitalistic Production and those 
 which consist in the fulfilment of Private and 
 Social Services. 
 
 Capital- 3. Capitalistic Production is the system 
 
 Production according to which the production of most 
 
 16
 
 NATURE AND AIMS. 
 
 commodities or goods takes place, and in For Profit 
 accordance with which most Industrial Services 
 are rendered. It involves in nearly every 
 operation the possession of capital on the part 
 of some one in some one form or other. Some 
 one is an employer and some one is employed. 
 Even when a doctor pays an assistant to aid 
 him in his practice he is engaged in Industrial 
 Production, for he is paying wages or their 
 equivalent, and from the joint labour and skill 
 of himself and his assistants he is expecting 
 a private profit. Socialism would prohibit all 
 private profit. 
 
 4. Private and Social Services, on the other Private, 
 hand, are those which are rendered to the 
 individual or the State; but in the former 
 case they are such that no profit can be made 
 by the individual receiving them out of the 
 sale of their results or by their assistance. In 
 other words, they are services rendered to 
 individuals in their private capacity as con- 
 sumers and not as producers. They do not 
 imply the possession of capital on the part of 
 individuals. A domestic servant, in the first 
 
 17 2
 
 THE SOCIALIST STATE. 
 
 place, is paid not out of the fund used for pro- 
 moting future production or providing a future 
 revenue, but out of the income of the year, and, 
 in the second place, is not employed in order 
 that profit may be earned by his or her aid. A 
 doctor himself is paid by his patients out of their 
 net income, though he pays his assistants out 
 of his capital or out of his gross income. In 
 the case of services rendered to Society, State 
 and Municipal officials are paid by the Govern- 
 ment or the Municipality. 
 
 The Main 5. Socialism proposes that the organisation 
 Socialism of production, possibly only of industrial pro- 
 duction, should be in the hands of the State, 
 Municipality, or Community, according to the 
 particular type advocated. At the present 
 time the occupation taken up and pursued 
 by each depends, in the first place, on the 
 choice made by him or her, and secondly, on 
 the ability of the particular individual to make 
 good his position in the face of keen com- 
 petition and rivalry. With regard to the 
 choice of a calling or profession there are 
 many influences involved, some of which, 
 18
 
 NATURE AND AIMS. 
 
 indeed, go far to preclude it from being free 
 and intelligent. Though presumably deter- 
 mined by the prospect of success and the 
 possession of capacities, as discerned either 
 by the individual or his advisers, the preju- 
 dices of friends, the influence of local and 
 family customs, and lastly, the very powerful 
 force of circumstances prevent these considera- 
 tions from having their due place. The choice 
 once made, success or failure depends on the 
 competitive forces which reveal themselves. 
 Competition, by influencing choice and by deter- 
 mining success, is very often the arbiter of fate. 
 For competition Socialism would substitute 
 collective organisation by some public body, 
 whether State or Municipality is a matter of 
 degree, the latter being the more feasible, the 
 former the more truly Socialist type. The State The 
 alone would organise ; the State alone would 
 employ people in production. It would be 
 baker, brewer, cotton-spinner, iron-founder, 
 printer, chemist, and all else. Those who 
 wanted work would seek it at the factories 
 and offices of the State; those who wanted 
 19
 
 THE SOCIALIST STATE. 
 
 goods would seek them at shops owned 
 and conducted by the State. Competitors 
 need not be feared, because so far at least 
 as the great industries and trades and the 
 vast majority of callings are concerned, no 
 competition would be permitted. 
 
 As a necessary consequence of its mono- 
 poly position, the State would have to go 
 further than an employer, or than all em- 
 ployers together. It would have to guarantee 
 work to those who wanted it. The un- 
 employed could rightly require employment. 
 Of course it might happen that the employ- 
 ment offered would not be to their taste. In 
 such cases they must take it or leave it, and 
 leaving it would mean starvation. 
 
 The State would not compel any particular 
 person to do any particular work, but it could, 
 and of necessity would, renounce its obligations 
 to those who should refuse the employment it 
 offered. It would be a genuine attempt to 
 utilise the labour power put at its disposal, 
 not dictated by caprice but guided so far 
 as possible by a knowledge of the skill and 
 
 20
 
 NATURE AND AIMS. 
 
 strength, and, in general, of the capacity of the 
 applicant. 
 
 6. It would be difficult to determine how Socialism 
 
 and Private 
 far the Socialist State would control or direct Services 
 
 the Private Services which are rendered by one 
 individual to another who is desirous of them 
 for purposes of his own direct enjoyment or, 
 to use the technical term, consumption. Would 
 people be allowed to be private domestic 
 servants, or would they, granted that a class 
 of domestic servants should exist, be organised 
 by the State and hired out as policemen have 
 sometimes been hired out? Would artists be 
 permitted to sell their pictures without having 
 a government licence? In these cases, and 
 there are others like them, the same objections 
 do not exist which manifest themselves in the 
 more general industrial undertakings. There 
 is no ownership of capital, or very little, in- 
 volved. An artist would want brushes, paints, 
 and canvas ; but these he would equally 
 require if he were painting for his own pleasure 
 without any intention of sale. Furthermore, 
 and this is the critical point, there would be 
 
 21
 
 THE SOCIALIST STATE. 
 
 no capitalistic employment of others, and con- 
 sequently no private profits out of the services 
 of others. 
 
 The 7. In addition to being general organiser, 
 
 Landowner the Socialist State would be Landowner. It 
 would receive both ground-rent and house-rent. 
 Socialist ownership of land goes, it should be 
 noticed, much further than mere nationalisation, 
 inasmuch as it involves State management. 
 The State would not only receive the rents, but 
 it would be farmer just in the same way as it 
 would be manufacturer and merchant. 
 Capitalist 8. The State would be the Capitalist, and its 
 monopoly of capital would be absolute. It, and 
 it alone, would be permitted to use capital, and 
 in consequence to undertake enterprises requiring 
 capital for their development. On the other 
 hand, it by no means follows that it would be 
 owner of all the wealth of the country. Wealth, 
 which is the means of gratifying one's tastes, 
 and not of extending one's business, might 
 accrue to individuals, and be saved by them; 
 but if in the course of such process it should 
 assume the form of capital, its use in this form 
 
 22
 
 NATURE AND AIMS. 
 
 would be the right of the State. About this 
 there will be much more to say. It is not too 
 much to assert that its position as sole capital 
 user is of the essence of the Socialist State. 
 Individuals may save wealth, if they like, and if 
 they can, but the State alone may employ it as 
 Capital. 
 
 9. While undertaking the positions of indus- And 
 . . ... General 
 
 trial employer, landowner, and capitalist, the Admiuis- 
 
 Socialist State will not surrender those other r 
 functions relating to the performance of Social 
 Duties, which are to some extent or other per- 
 formed by most modern governments. Health, 
 Security, and Education will remain objects 
 of its watchful care. The extension, not the 
 relaxation, of measures on their behalf is rather 
 to be anticipated. The revenue which will 
 accrue from its new industrial position should 
 supply means for far greater social undertakings 
 than have been hitherto possible, and these 
 will be in the direction of " greater equality of 
 opportunities," to borrow a favourite expression. 
 The probability of such a development has led 
 many Socialists to represent " equality of oppor- 
 23
 
 THE SOCIALIST STATE. 
 
 Socialism 
 in 
 
 Positive 
 
 tunity " as a measure in the social programme 
 second only to collective organisation of in- 
 dustry. In reality, it is a feature which it 
 possesses in common with all governments 
 which have developed a social policy ; though, 
 in respect of its attainment, it offers the great 
 advantage of an additional revenue composed 
 of rent, interest, and industrial profits. 
 
 10. The possession of a policy such as the 
 above, as to both production and the end 
 which it would seek to achieve in the expendi- 
 ture of its new revenue, permits of certain 
 assertions with regard to Socialism in com- 
 parison with other movements and conceptions. 
 
 It is positive, not destructive. In this respect 
 it differs from Anarchism, which advocates 
 destruction, not construction. True, the latter 
 contemplates a future condition in which the 
 forces of peace would be predominant ; but this 
 is the dream, the other is the present reality. 
 Far otherwise with Socialism. It seeks to build 
 up a social fabric which, whatever its defects, 
 would, granted its initial success, abound in 
 opportunities for constructive organisation and 
 24
 
 NATURE AND AIMS. 
 
 strong government. The administration would 
 be more likely to be too strong than too weak; 
 the constructive mechanism too rigid than too 
 lax. Again, it does not necessarily involve out- 
 breaks of violence or revolution. To insist on 
 its connection with window-breaking and street- 
 looting is about as foolish as to imagine that 
 the Reformation found its truest expression in 
 the Anabaptist outbreaks. Every movement, 
 whether great or small, may be burdened with 
 discredit attaching to the acts of the disorderly 
 few hanging on to its fringes. 
 
 n. // t's practical, not Utopian. Whether Practical 
 practicable or not, its main suggestion is of a 
 purely practical nature. Human nature is not 
 supposed to have undergone a sudden and 
 decisive change, for Socialism assumes that men 
 will continue to be much as they have been and 
 still are good, bad, and indifferent. Some 
 change for the better there may be ; and it is 
 hoped that greater ease, more equal oppor- 
 tunities, and higher civic aims will work in this 
 direction; but great or small though it be, it 
 will proceed contemporaneously with, or follow 
 25
 
 THE SOCIALIST STATE. 
 
 
 
 subsequently on, the development of Socialist 
 organisation. The dreamy and ideal Socialism, 
 which required as its preliminary an entire 
 regeneration of the human spirit, is a thing of 
 the past, and has given way to more definite 
 and at the same time more practical, more 
 moderate proposals. The Millennium is good, 
 but its introduction may necessitate a great 
 deal of patience. One incurable defect of this 
 early Millennial Socialism lay in the superb 
 ease with which a few discontented people 
 would have been able to wreck the whole care- 
 fully adjusted organisation. 
 
 Definite 1 2. It is restricted in scope, and not indefinite. 
 
 The contrast between Socialism and Com- 
 munism consists chiefly in the fact that while 
 one would organise a part, the other would 
 organise the whole. So far from contenting 
 itself with the introduction of a certain order 
 into production, Communism passes on to the 
 consideration of what shall be done with the 
 goods when produced, and would organise 
 consumption as well as production. Equality 
 of some kind or other is prescribed. Each 
 26
 
 NATURE AND AIMS. 
 
 man to clean his own boots, and have lentils for 
 dinner, is the kind of order which might be 
 looked for in a Communist regime. This 
 passion for regulation found its most typical 
 expression in the parallelogram buildings in 
 which Fourier would have housed his unhappy 
 Communists. Communism, at its minimum, 
 means a community of goods and equality, 
 while Socialism need not involve anything of 
 the sort. Under the latter there is room for a 
 competition of energy and a rivalry of skill, for 
 the most active and the most able will produce 
 the most, and will be valued and paid at the 
 highest rate; but Communism withdraws the 
 ordinary motives of competition. 
 
 13. There are two further matters which Socialism 
 
 and 
 
 concern not so much the scope of Socialism as 
 the conditions attending its possible introduc- 
 tion. Socialism is not necessarily Democratic. 
 Socialism need not be capable of immediate 
 realisation. 
 
 The common belief, that Socialism is a Democracy 
 peculiar development of a Radical or Democratic 
 policy, has no foundation in fact. Democracy 
 27
 
 THE SOCIALIST STATE. 
 
 is a political condition. Socialism is a social 
 organisation. As such it must of course have 
 some connection with political organisation, 
 which is the mechanism whereby the people of a 
 country signify and attain their social aims. It 
 has, however, no necessary connection with any 
 one form which this mechanism may assume. 
 The one political condition on which it does 
 depend, and one there is, is the existence of a 
 strong, honest, and intelligent government. If 
 such is offered byan undemocratic form of govern- 
 ment, and not by a democratic form, Socialism 
 will have a better chance of success under the 
 former. Thus there is no essential connection 
 with Democracy, Republicanism, or Con- 
 servatism. Indeed, it has been asserted in 
 some quarters that an administration of the 
 latter type would be most favourable to its 
 introduction. This at least is true. Inasmuch 
 as Socialism, even in its early stages, involves a 
 wide extension of State action, it will make a 
 great demand on sound executive ability. A 
 crude and untrained democracy would be as 
 unfit as a selfish and prejudiced oligarchy for 
 28
 
 NATURE AND AIMS. 
 
 superintending a work of such great delicacy. 
 Strength and continuity in policy will be needed, 
 for the edifice of to-day cannot be pulled down 
 to-morrow and built again on the day after. 
 Honesty will be needed, for with the extension 
 of State action the opportunities for corruption or 
 for self-aggrandisement will be largely increased. 
 Intelligence will be needed, for the task of 
 organisation will be of too vital an importance 
 to be left to chance or ignorant heads. The 
 extent to which Democracy is a suitable com- 
 panion for Socialism depends on the extent to 
 which it presents or will present fitting condi- 
 tions, amongst which are the above. They may 
 be found in a trained, they will not be found in 
 an untrained Democracy. 
 
 14. It is not by any means essential to the It isEvolu- 
 ... . . ... , tionary 
 
 conception of Socialism that it should be deemed 
 
 capable of immediate and complete introduction. 
 The early notion that Socialism was a system 
 which could be readily transferred from a sheet of 
 paper to human society took to flight under the 
 scientific studies of the later Socialist thinkers 
 and writers, who realised that society was 
 29
 
 THE SOCIALIST STATE. 
 
 too delicate and too sensitive to be capable of 
 instant adaptation to a new form. The subtle 
 charm which constitutes its bond and its 
 support might evanesce under rude handling, 
 and society, deprived of life, would cease to be 
 more than a collection of disconnected and, 
 probably, discontented units. As an organic 
 entity, while training may do much, it must 
 grow into new forms. The length of time 
 required for this period of preliminary growth 
 has been very variously estimated. The more 
 sanguine may estimate it at fifty, while the less 
 sanguine may follow one of their great thinkers 
 and put it at five hundred years. Excessive 
 though this estimate may seem to some, there is 
 little or no doubt that Socialism, if ever suc- 
 cessfully introduced, will be the result of a slow 
 and gradual evolution. 
 
 A consistent Socialist does not necessarily 
 contemplate legislation on a cut-and-dry scheme. 
 He does two things. He looks forward to the 
 final realisation of Socialism, and he plays his 
 part by assisting its development where occasion 
 offers.
 
 NATURE AND AIMS, 
 i tj. The acceptance of Socialism as philo- Socialism 
 
 and Indi- 
 sophically feasible, entirely apart from any vidualism 
 
 considerations as to the mechanical difficulties 
 it may present, or the moral and social dangers 
 it may involve, depends upon the view taken 
 of the nature and functions of Society, regarding 
 which there are still, as there have been from all 
 time, two schools of thinkers. When contrasted 
 with Individualism, which in effect regards 
 society as a mere numerical aggregate of the dif- 
 ferent individuals which compose it, Socialism, 
 as a system of thought, premises that it has a 
 being, power, and functions apart. This con- 
 ception is common to the supporters of the 
 economic system of Socialism with all those 
 who advocate some measures of State action. 
 On the one side stand the advocates, on the 
 other the opponents of laissez faire. Socialism 
 then involves the belief that the State or Society 
 is to improve, benefit, or otherwise influence 
 the individuals that constitute it. As against 
 this, Individualists, including both laissez faire 
 thinkers and Anarchists, urge that the action of 
 Society is necessarily detrimental and futile, and 
 3 1
 
 THE SOCIALIST STATE. 
 
 that development must depend on the voluntary 
 acts of individuals. This leading conception 
 underlies many arguments, appearing some- 
 times in one, sometimes in another form. Thus 
 it is said that individuals must learn from their 
 own experience. In contradiction to this the 
 whole evidence of history has been adduced as 
 proving the great extent to which individuals 
 learn from the experience of others. Lessons 
 learned by society and embodied in its pre 
 cepts, either in public opinion or in laws, are 
 of use to its members, even though they do 
 not severally pass through the experience which 
 has led to the expression of these former. 
 
 Again, it is said that the progress of Society 
 depends on the action of the law of the Sur- 
 vival of the Fittest, and that consequently State 
 or social effort, as restricting the free operation 
 of this law, is either null and void or re- 
 trogressive. This biological analogy is wholly 
 inconclusive when thus applied to human society, 
 which is capable, it must be remembered, of 
 conscious development. Those who survive 
 are the fittest to the environment, whether that 
 32
 
 NATURE AND AIMS. 
 
 environment be good or bad. Human society, 
 however, can apply its accumulated experience 
 to the improvement of the environment or the 
 substitution of one which is more, for one which 
 is less worthy. It does not and cannot dis- 
 courage the survival of the fittest, but it rightly 
 determines what characteristics make the fittest. 
 Individualism, again, treats Society as a mere 
 addition sum of separate units, and ignores its 
 corporate existence. Socialism, at any rate, 
 officially recognises Society, though in its more 
 exaggerated forms it ignores the individual. It 
 is necessary to avoid either extreme. Both 
 Society and the Individual require acknowledg- 
 ment. 
 
 33
 
 It. 
 
 EQUALITIES ANT) INEQUALITIES. 
 
 Aims of i. THE project of Socialism, to substitute one 
 
 system of production for another, is dictated by 
 a desire to amend certain defects which present 
 themselves, or are thought to present themselves, 
 in the present competitive organisation of in- 
 dustry. Of these defects some are involved in 
 the industrial mechanism, others in the social 
 consequences which arise out of its operations. 
 Social inequalities will be affected by Socialism. 
 Indeed, Socialism would be a very futile scheme, 
 would not be Socialism in fact, did it not aim at 
 some amendment of the rules of Equality and In- 
 equality which govern present conditions. It is 
 exceedingly important to know in what directions 
 it proposes or suggests alterations. It is equally 
 34
 
 EQUALITIES AND INEQUALITIES. 
 
 important to consider whether the alterations 
 which it may occasion are likely to be restricted 
 to those which it avowedly seeks, or whether other 
 and more far-reaching changes may not accom- 
 pany its action. 
 
 2. Economic inequality is of two kinds, and Causes of 
 arises out of two sources the differences of 
 human activities and the existence of property 
 in land and capital. In the former case the 
 difference in wealth corresponds, though only 
 roughly and in the long run, with some differ- 
 ence in the powers and capacities of individuals. 
 In the latter case there is no such relation. 
 This distinction, according to Socialists, is im- 
 portant in every respect, and especially from the 
 point of view of a community which desires to 
 evoke the full efficiency of its members. It is 
 one thing, they would urge, that a man should be 
 richer than others because he is more indus- 
 trious or more able ; it is another thing that he 
 should be richer because he owns a large quantity 
 of acres or a number of shares in joint-stock 
 companies. Property of this kind has been 
 justified in comparison with that property 
 35
 
 THE SOCIALIST STATE. 
 
 which is the result of immediate exertion on 
 the ground that it too was once the result of 
 exertion, and has been handed down from one 
 generation to another; and with the exception of 
 that portion of land which is not due to improve- 
 ment the first portion of this statement is 
 approximately true. But while at some time 
 or other wealth was the result and did cor- 
 respond to a difference in personal power, 
 industry, or capacity, it is not with regard to 
 wealth in itself that the foregoing distinction 
 is drawn, but with regard to that portion of it 
 which serves as capital and yields an income. 
 This income comes to the individual not because 
 he produced the wealth, but because he permits 
 its employment as capital. However advisable 
 it may be to guarantee interest and the payment 
 of profits, so far as they arise out of the owner- 
 ship of capital, it is important to recognise thai 
 the differences occasioned by such payments 
 do not imply any corresponding differences in 
 human activities or efficiencies. 
 
 Socialism, by undertaking the organisation 
 of production, necessarily involves the abolition 
 36
 
 EQUALITIES AND INEQUALITIES. 
 
 of inequalities which arise out of property in 
 land and capital, and aims at the nationalisation 
 of the instruments of production (land, capital, 
 etc.), and of the income arising out of these. 
 
 3. As it does not, however, aim at the Removable 
 
 luequai- 
 nationahsation of human activities, it does not itie* 
 
 imply the removal of these inequalities, which 
 correspond to differences in them. It cannot be 
 too clearly recognised that Socialism does not 
 necessarily involve the abolition of inequalities 
 in wealth, save when these are due to the 
 possession of the means of production. It 
 may even, and quite logically, allow of differ- 
 ences in wealth (not capital) transferred either 
 by gift or by bequest And it certainly does 
 permit in principle variations in rewards, wages, 
 salaries, payments, or whatever they may be 
 called, according to the efficiency or usefulness 
 of the persons concerned. Communism does 
 aim at a dead level, but then in this respect it 
 is in direct antagonism to Socialism. 
 
 4. Opponents of Socialism urge, however. Does 
 
 Socialism 
 that, despite its profession, there is a strong imply ab- 
 
 tendency in the direction of actual equality. 
 37
 
 THE SOCIALIST STATE. 
 
 So far as certain bodies of Socialists are con- 
 cerned this is no doubt correct. Particular 
 manifestoes have given voice to such a demand, 
 though in so doing they are advocating not 
 essential Socialism, but Socialism with a certain 
 infusion of Communism. In some cases the 
 action of the advance guard of a movement 
 betrays its natural tendency, indicating in this 
 way the direction in which it will inevitably, 
 though at first unconsciously, be borne. Is it so 
 with the Socialist Left ? As yet it is impossible 
 to speak with decision. A large body of English 
 Socialists certainly do not acknowledge such a 
 feeling and such an aim, and in support of this 
 tacit disavowal it is just to say that the admix- 
 ture of Communistic sentiments in the main 
 Socialist propaganda has not grown stronger 
 as time has gone on. Many Socialists at 
 present see, as their critics see, not only that 
 inequality is inevitable, but that inequality 
 in wealth is good and desirable provided it 
 corresponds to true differences in efficiency. 
 To lose sight of this would be a danger, 
 and the danger, though perhaps not prob- 
 38
 
 EQUALITIES AND INEQUALITIES. 
 
 able, is one which must be taken into 
 account. 
 
 z. But Socialism will have certain other Its effects 
 
 in this 
 effects. The income received by the State, in its direction 
 
 threefold capacity of landowner, capitalist, and 
 employer will, it may be hoped, suffice for more 
 than its present expenses. In such case the 
 employment of the surplus in the public service 
 will be a matter of importance. There are 
 several things which may be done. It may be 
 used to reduce the price of commodities in 
 general, or of some commodities in particular, 
 with the result of benefiting consumers in 
 general, or a certain class of consumers. 
 Should this reduction be made on the articles 
 of greater necessity, the classes whose chief 
 expenditure is on such will be disproportion- 
 ately benefited. Those lower in the scale of 
 inequality will be raised. But the State may 
 equally well use such surplus revenue in the 
 provision of certain social advantages, recreative, 
 educational or miscellaneous. It might pro- 
 vide, for instance, gratuitous medical advice, 
 free concerts and theatres, and a system of 
 39
 
 THE SOCIALIST STATE. 
 
 education free in every branch for those with 
 even a modicum of aptitude. A great system 
 of national pensions would swallow up a large 
 sum of money. By such expenditure, as by 
 cheapening necessaries, while the whole com- 
 munity will be served, those having small means, 
 receiving lower payments, will be more par- 
 ticularly benefited. To such an extent is this 
 true that a very possible criticism of such 
 Socialism is that the general high level thus 
 produced by the action of the State would 
 render the inequalities caused by differences in 
 wages and salaries both unimportant, and in- 
 sufficient to stimulate exertion, activity, and skill. 
 But such a difficulty is one rather of appearance 
 than fact, and could easily be met by increasing 
 such differences until the desired result should 
 be produced. The main object of the Socialist 
 State in such expenditure would be rather the 
 provision of equal opportunities than the pro- 
 duction of generally equal conditions, following 
 in this respect the example of most modern 
 administrations which have undertaken any 
 social expenditure. 
 
 40
 
 EQUALITIES AND INEQUALITIES. 
 
 6. There is, it is true, some risk that the And 
 
 possible 
 new system of production may not result in so C ou- 
 
 great a total produce as that which it has dis- s " 
 placed, in which case better distribution, resulting 
 in less inequality, may be in part counterbalanced 
 by a reduced production. Granted this pos- 
 sibility, it is not unreasonable to prefer, as 
 Socialists probably would and certainly should 
 prefer, a condition of moderate total wealth, 
 together with moderate individual wealth, to 
 one in which there would be a larger total, 
 though owing to the existence of inequalities 
 great individual riches and poverty. Were 
 production too much lessened it would be 
 impossible to justify such a choice, but short 
 of a certain point, it would seem fairly de- 
 fensible. Inequalities of wealth are not, 
 Socialists may consider, in themselves a social 
 advantage. When due to personal inequalities 
 they are a social necessity, but only an ad- 
 vantage by reason of their connection with 
 these latter. So far from conferring benefits 
 upon society, habits of great luxury hamper 
 its free development, by causing, in the first
 
 THE SOCIALIST STATE. 
 
 place, jealousy and rivalries in display, in the 
 second place, continual efforts to maintain a 
 higher standard of material comfort than is 
 necessary, or even possible to many making 
 them. Much expenditure takes place not in 
 the least because it results in pleasure, but 
 because the action of others makes it a social 
 necessity.
 
 III. 
 
 SOCIALISM AND THE GROWTH OF MODERN 
 INDUSTRIALISM. 
 
 i. THE claim of high antiquity, so often and Systematic 
 
 Socialism 
 so emphatically advanced on behalf of Socialism, 
 
 is, as regards its more systematic organisation, 
 not only untenable, but misplaced. There is 
 no more effectual way to impair a rational 
 confidence in the efficacy of an institution as 
 of a remedy than the assertion of its universal 
 applicability. The panacea for all times, as for 
 all ills, is too often a cure for none. So far as 
 the underlying principle of Socialism, a belief in 
 the entity and action of the State, is concerned, 
 there is no doubt a certain validity in the 
 assertion; but in the case of systematic Social- 
 ism, its main claim consists in the fact that it 
 43
 
 THE SOCIALIST STATE. 
 
 Modem is of modern rather than of ancient origin. It 
 has been devised to meet modern and not 
 ancient difficulties and needs. Indeed, it is not 
 too much to say that, whatever its practicability, 
 it has grown up with and largely in response to 
 those difficulties and needs. 
 
 Its connec- 2. The critical distinction between the present 
 tii^Divi- system of Industry and those which preceded 
 Mon of j t was Drou ght into clear relief by Adam Smith, 
 when his fine and almost prophetic intuition 
 led him to place in the very forefront of his 
 book, and to treat as the key to modern In- 
 dustrialism, the Division of Labour. This had 
 existed before. Far back as history can go 
 there are traces of some division of labour 
 and some specialisation of functions. But 
 when the Wealth of Nations was published 
 (1776), it was rapidly becoming something 
 more than one element among many; it was 
 assuming the position of the central principle 
 of industrial organisation. The history of the 
 century and a quarter which have elapsed since 
 then has been a record of the increasing 
 prominence it has acquired, and of the manner 
 44
 
 INDUSTRIAL GROWTH. 
 
 in which it has permeated the different branches 
 of commerce and industry. Labour in all its 
 grades has become specialised; functions are 
 differentiated; industries have become localised. 
 In these words a broad distinction may be Modern 
 marked between the Present and the Past. 
 And with the change the nature and methods 
 whereby Production seeks to satisfy consump- 
 tion have been rendered clear and precise. 
 Certain features require particular notice. 
 
 3. Consumption and Production. The dis- Consumer 
 tance between Consumption and Production, Producer 
 or between Consumers and Producers, has been 
 augmented. In early stages of society, and the 
 earlier the more completely, consumption was 
 as it were a definite and constant demand, and 
 production a definite attempt adjusted to the 
 supply of those things which were demanded, and 
 so long as localities produced for their own needs, 
 so long, that is, as the producer was in close 
 personal touch with the consumer, some such 
 relationship was preserved. But of recent years 
 such connection has, it is urged, become so 
 attenuated that it has practically vanished. 
 45
 
 THE SOCIALIST STATE. 
 
 Articles are produced because it is thought thai 
 they will be required, while in many cases the 
 pushing of wares is effected with such dexterity 
 that their consumption is actually occasioned, 
 just as a conjurer forces his cards on innocent 
 members of his audience. Of course the work 
 of production is not undertaken unintelligently 
 and without reference to the probable needs of 
 the country, for a great element in business 
 success consists in the skill of gauging the 
 possible markets, and the intelligence brought 
 to bear on this task ranks very high. But 
 despite all efforts the fact remains that goods 
 are produced which are not wanted, at prices at 
 which they are not wanted, and in quantities in 
 which they are not wanted, since, however 
 correct the forecast of the need and demands 
 of society may have been, there is nothing to 
 prevent too many producers from simultane- 
 ously making this forecast in ignorance of each 
 other's intentions and of a threatening over-pro- 
 duction. This difficulty is one which even besets 
 the supply of the more necessary goods for which 
 the demand is fairly certain and regular. Too 
 46
 
 INDUSTRIAL GROWTH. 
 
 many people may rush into a trade through a 
 misplaced belief either in its possible extension 
 or in their own peculiar aptitude and advantages. 
 Cotton, for instance, is an article in fairly certain 
 demand; but the past and present conditions 
 of the cotton trade, with its fluctuations and 
 overstocking, show the great extent to which the 
 production of even a standard commodity may 
 be affected. The distance between consumer 
 and producer has been inevitably increased. 
 
 4. Competition. In a system such as that Competi- 
 which has been just commented on the one 
 guide is competition, which is and has to be 
 relied on for securing that each man is perform- 
 ing those functions for which he is best fitted 
 as compared with his fellows. In effect this 
 means that success alone can show whether a 
 man is doing what is wanted or what is not 
 wanted. If he has made a mistake either in 
 his vocation or his products he will be taught 
 by the result. Whatever view a critic may take 
 of the inevitability of this method he cannot 
 deny its possible and actual wastefulness. A 
 walk through a town street, and especially a 
 47
 
 THE SOCIALIST STATE. 
 
 suburban shopping street, with its multiplicity 
 of little boot and shoe shops, of shabby drapery 
 stores, of shops with mouldy sweetmeats, and 
 of obviously half-bankrupt stationers, is a pic- 
 torial illustration of the waste of competition in 
 one department of life. Discharged mill-hands 
 and failing businesses add their evidence. 
 
 But some have gone further, and supple- 
 mented their denunciations of the waste of 
 competition by the gravely expressed doubt as 
 to whether it is successful when most successful. 
 Paradoxical though this seems, the meaning is 
 quite simple. A few illustrations will help. Do 
 the best doctors get the best practices ? Do 
 the best articles command the largest sale ? 
 These and other questions touch the point at 
 issue, which resolves itself into the inquiry 
 whether purchasers, patients, clients, and the 
 like, are not often led into taking, not thai 
 which is best suited even for their purposes, 
 but something which wholly external circum- 
 stances force upon them. In the purchase of 
 a particular soap, however good it may be, it 
 would be difficult to estimate the degrees in 
 48
 
 INDUSTRIAL GROWTH. 
 
 which the purchase is due to the knowledge 
 that the soap will assist ablution and to the 
 effect of a judicious advertisement. With 
 regard to goods which are not what they pro- 
 fess to be owing to the addition of ingredients 
 which a private individual is incapable of detect- 
 ing, the purchasing public is protected by the 
 Adulteration Acts. These, it must be remem- 
 bered, relate to other instances than the admix- 
 ture of a harmful ingredient, for margarine, 
 however innocuous, may not be sold as butter. 
 But what is to protect the public from buying, 
 not that which is best fitted to its needs, but 
 that which is best pushed and advertised ? That 
 there is some force in the accusation thus 
 levelled against competition probably even 
 those will admit who deem that in the long run 
 the best article, as the best man, comes to the 
 front, for in the intervening interval there may 
 be a great waste, and, so far as men are con- 
 cerned, possibly an irretrievable waste. 
 
 While competition undoubtedly exerted con- 
 siderable force in earlier centuries, it has grown 
 much keener and extended over a much wider 
 49 4
 
 THE SOCIALIST STATE. 
 
 area since the introduction of the system of 
 great industries. So powerful has it become 
 that custom, which once was of chief, is now of 
 but secondary importance. Formerly custom was 
 powerful, and the competition which existed was 
 in the main local, but now it is competition that 
 is national, if not international, while custom 
 exerts, at the most, a local influence. 
 
 Economic e Economic Interdependence. A natural re- 
 Interde- 
 pendence suit of the great division and specialisation of 
 
 labour has been an increase in economic depen- 
 dence. A man is usually employed in the 
 production, not of things which he wants, but 
 of things which he imagines others to want. 
 They in their turn produce for him. But further 
 than this, complete production is rarely the per- 
 formance of one individual. It is the task of 
 many, working at different processes, performing 
 minute individual functions, which combine in 
 the completion of the article required. No 
 man produces a yard of calico; each man em- 
 ployed in weaving does a part of the weaving, 
 each spinner a part of the spinning; those 
 employed in and about the machinery must 
 5
 
 INDUSTRIAL GROWTH. 
 
 lend their aid; while over and above must be 
 taken into account the labour of those who 
 have prepared and brought the raw material, 
 made the instruments, and built the building 
 required for the production of calico. But 
 though no man produces a yard of calico any 
 more than any one man makes an entire pin, 
 the one, with his fellows, may make thousands 
 of yards, the other millions of pins. In each 
 and every case the harmonious performance of 
 many functions and processes is necessary. No 
 one can do without his fellows any more than 
 they can do without him. Without the aid 
 of others the labour of each solitary single 
 individual will be futile. This dependence or 
 economic interdependence has increased greatly 
 of late years, with the lapse of which man has 
 slipped more and more from the position of an 
 artificer, largely controlling and completing pro- 
 duction, to the position of a part, and a small 
 part, of a process. His individual share in the 
 manufacture of any single article has steadily 
 decreased. With this decrease his own 
 economic independence has, of course, dim- 
 Si
 
 THE SOCIALIST STATE. 
 
 inished. If the labour of one is to be of any 
 effect it must be knit in with that of others. 
 This new economic unity, with its correspond- 
 ing loss of individual independence, furnishes 
 what may be called the basis of the theory of 
 social claims against Society which we know 
 under the name of Socialism. Its plea may be 
 put in another way: Society should duly and 
 effectively recognise the claims which individuals 
 who have given up their economic independence on 
 its behalf have upon it. 
 
 Capitalism 6 Growth of Capital and Capitalism. Side 
 by side with the division of labour, partly as 
 consequence and partly as cause, capital has 
 grown into importance as a condition and 
 integral part of the system of Great Industry. 
 As the years have passed by in their measured 
 procession they have swept with them into the 
 irrevocable past the multitude of small craftsmen 
 and small masters, leaving Capital and Industrial 
 Capitalism in proud predominance. About the 
 use and importance of capital there is really 
 no dispute. It may be that Socialists are at 
 times anxious to minimise them, but even they 
 5 2
 
 INDUSTRIAL GROWTH. 
 
 vouchsafe to them a recognition as real, though 
 perhaps not as reverential, as that of the ad- 
 mirers of the present system. To underrate 
 them too much would be to strike the Socialist's 
 main argument out of his hand. He complains 
 of the force which private capital exerts at 
 present, and of the danger caused by its con- 
 centration into too few hands, so far as use is 
 concerned, even though it be true that its actual 
 ownership is more widespread than was formerly 
 the case. With regard to the manipulation or 
 use ot capital, it is urged that as great em- 
 ployers succeeded the small masters, they in 
 their turn are being displaced by great Com- 
 panies, Trusts, and Unions, with the natural 
 result that the direction of industry lies to 
 all intents and purposes in the hands of a 
 few 
 
 7. Is there nothing to write down to the Present 
 credit of the modern industrial system is a ys 
 question which may well be asked. Its main 
 
 advantage has been an immense increase in Its Advan- 
 tages 
 the productivity of effort, whether of labour 
 
 or capital need not matter for the minute. 
 53
 
 THE SOCIALIST STATE. 
 
 Society, to put the matter concisely, can gratify 
 more wants with less exertion and trouble. 
 
 But though both parties, Socialists and non- 
 Socialists, may grant this, they must part company 
 after this common admission, the former con- 
 sidering that the chief fruits of the increased 
 productivity have fallen into the laps of the 
 owners of land and capital who do nothing, or 
 have been picked up by the profit-mongers 
 (both speculators and employers), who play the 
 part of the intelligent vultures in human society. 
 They say further that as the increase is due 
 mainly, if not wholly, to Society, it belongs of 
 right to what they call the class of workers. 
 In opposition to this it is replied that the 
 increase is due to the saving of capital on 
 the part of some and the ingenuity and ability 
 of others, the organisers or employers; while it 
 is also alleged that the mass of the working 
 class has partaken far more freely than any 
 others of the benefit, which is mainly consequent 
 on the skill, etc., of others. The divergence is 
 one not of theory alone but of fact 
 
 Meantime, Socialism, fastening its gaze rather 
 54
 
 INDUSTRIAL GROWTH. 
 
 on the disadvantages than on the advantages of 
 the Industrial System, rests on them a sweeping 
 indictment. The present system, and with it 
 society, is arraigned on three counts, with refer- 
 ence, that is, to the Economic Dependence of 
 the Individual, Competition, and Capital. 
 
 8. Socialism correctly involves the assertion And Dis- 
 
 .,..,. advantages 
 that Society owes something to the individuals 
 
 who in her service have forfeited their economic 
 independence. Though some such duty is 
 always implied in the conception of Society, and 
 thus always incurred wherever organised society 
 exists, it is both greater and more pressing 
 when the various individual members have been 
 
 reduced to little more in their economic aspect Depend- 
 ence 
 than parts of an intricate mechanism. In a 
 
 system less highly developed, with, it is true, a 
 much smaller total production, conditions of 
 employment, save so far as weather and violence 
 were concerned, were fairly stable, and a man 
 could, as a last resort, undertake the production 
 of some of the things which he himself required. 
 But at present not only is the uncertainty 
 greater, but those thrown out of work, owing to 
 55
 
 THE SOCIALIST STATE. 
 
 changes in fashion and temporary alterations in 
 demand or supply, have nothing to fall back 
 on save casual work, in itself uncertain and 
 undesirable. Though it cannot be denied that 
 an increase in productivity has taken place, 
 it may be fairly argued that this has taken 
 place at the cost to the individual of his 
 economic independence or power of self- 
 maintenance. In addition, the question is 
 raised as to the extent to which specialisation 
 has restricted the individual within one narrow 
 channel, and thus deprived him of the ability 
 to perform other tasks when deprived of the 
 work to which he is accustomed, so special- 
 ised have become both labour and man. 
 
 9. Just as some idea of duty towards its in- 
 dividual members would seem to be involved 
 in the most elementary conception of Society, 
 some recognition of such has manifested itself 
 in the acts and policy of most modern states. 
 A sound society cannot allow of its members 
 being sorted out for existence or death by the 
 sieve of Competition. The Right to Exist is 
 guaranteed by legislative measures like the 
 56
 
 INDUSTRIAL GROWTH. 
 
 English Poor Law, though coupled with certain 
 and unpleasant conditions. To these condi- 
 tions, as entailing disgrace and great discomfort 
 on those who apply for assistance, Socialists, in 
 common with many others, object. They con- 
 tend that the action of the last two centuries 
 has been retrogressive, that the increase in 
 industrial complexity, in place of being accom- 
 panied by improvement in this respect, has 
 witnessed greater harshness introduced into the 
 conditions. The practicability of relaxation is 
 a question which Socialism only takes into 
 account in order to hurl an accusation of im- 
 potence against the existing organisation. In 
 addition to the Right to Exist, the State is 
 frequently called on to guarantee the Right to 
 Work. Some such idea would seem to have 
 been present in the minds of statesmen when 
 the English Poor Law was first drawn up; and 
 in certain other cases it has received, at any 
 rate, a theoretical recognition. 
 
 10. In the second place, Competition is in- Wasteful- 
 dieted as blind, wasteful, and destructive. Its 
 blindness as a guide is shown in the unin- 
 57
 
 THE SOCIALIST STATE. 
 
 telligent method it involves of allowing each 
 man to adopt what position he likes, with the 
 prospect of being disrated it he prove himself 
 less efficient, or in many cases less pushing or 
 specious than others. Wastefulness is a no less 
 inherent feature. Time is wasted, goods are 
 wasted, and men are wasted. In the last case 
 the destructive aspect of competition reveals 
 itself. In its course it has often occasioned a 
 loss not only in life but in efficiency, by reason of 
 the tendency towards degeneration when labour 
 has been commenced at too early an age, or 
 carried on under bad conditions. How con- 
 stant and clear has been the recognition of the 
 evils of competition by others than Socialists 
 the frequent efforts at its regulation show. 
 History is full of them. In many instances 
 these attempts have failed, bringing about, 
 indeed, more harm than good. In one direc- 
 tion only, that is so far as the conditions of 
 labour are concerned, can a large and constant 
 balance of benefit be claimed for state control 
 of Competition (Factory Acts, etc.). Partly in 
 consequence of the failure in other direc- 
 53
 
 INDUSTRIAL GROWTH. 
 
 tions, partly in consequence of the success 
 which has followed state action in this one, 
 Socialism advocates the supersession of the 
 present productive system by one entirely new. 
 It would substitute the conscious organisation 
 of industry for one which is unconscious and 
 which works its policy out through competition. 
 
 ii In the third place, Capitalism is sub- And ne- 
 
 sidedness 
 
 jected to criticism. With regard to the relative according 
 merits and demerits of Capitalism as apart from Socialists 
 the two preceding matters, there is considerable 
 room for difference of opinion. The accusa- 
 tion levelled by Socialism may be digested into 
 three assertions. Firstly, it is asserted that in 
 the struggle in which capital and labour, or 
 their owners, are involved, capital has undue 
 advantages, owing in the past to its greater 
 powers of combination, and in the past and 
 present alike to the fact that its possessors can 
 hold out longer than can those who depend 
 for their support on the earnings of labour. 
 Secondly, the share of capital in the product is 
 said to be largely increased. The increase of 
 production, according to Socialist theory, is 
 59
 
 THE SOCIALIST STATE. 
 
 mainly monopolised, or at any rate liable to be 
 monopolised, by interest and profits. This pro- 
 position underlies the so-called Iron Law of 
 Wages which has been enunciated by Socialist 
 writers, and incorrectly attributed to Ricardo. 
 It calls for subsequent examination (pp. 79-84). 
 Thirdly, it is contended that, inasmuch as the 
 increase of productivity is not due, or not mainly 
 due, to any incidents attending the private 
 ownership of Capital, the payment to such 
 owners of a large share, and particularly of an 
 increasing proportionate share, is unjustifiable. 
 It is a fraud on society as a whole for the benefit 
 of one class. This likewise requires examina- 
 tion. 
 
 Possible 12. In the above sketch certain grievances 
 
 tionf ger3 an d alleged grievances have been noticed. Of 
 
 these some may seem untrue or exaggerated in 
 
 the statements made, others inevitable. Again, 
 
 it may be considered that the counterbalancing 
 
 advantages should be more highly estimated 
 
 than is done by Socialists. With regard to this 
 
 general view two remarks may be made. On 
 
 the one hand, the fact that certain features seem 
 
 60
 
 INDUSTRIAL GROWTH. 
 
 or are inevitable, must not blind impartial 
 students to the evil they involve. They must 
 be faced, and their ill consequences must be 
 faced frankly and fully. On the other hand, 
 Socialism is rather an indictment than a judg- 
 ment against Society. It proclaims certain evils, 
 and it calls for a particular remedy. But 
 before this can be acquiesced in, the indict- 
 ment must be studied, evidence must be taken, 
 and Socialism, together with the object of its 
 accusation, must be judged. 
 
 61
 
 THE BASIS OF SOCIALISM. 
 IV. 
 
 THE THEORETICAL BASIS OF SOCIALISM. 
 
 Theories of i. THE theoretical basis of Socialism con- 
 Socialism . - , - . . , 
 
 sists of a number of propositions of an abstract 
 
 character, alleged in support of the proposed 
 system, and in condemnation of that which 
 exists at present. These propositions Socialist 
 writers and thinkers claim that they develop 
 either from close observation and generalisation, 
 or by deduction from the positions laid down by 
 classical economists, whose reasoning on these 
 points they themselves adopt. Though it must 
 not be supposed that Socialists are entirely in 
 harmony with regard to these propositions which 
 find different expression in the pages of different 
 62
 
 THEORETICAL BASIS. 
 
 writers, there are certain main features which 
 have won a fairly general acceptance. 
 
 The main propositions are four, treating 
 respectively of Value, Capital, ifie Law of 
 Wages, Crises, 
 
 z. With regard to the important subject of As to Value 
 Value, the main proposition of Socialism may be 
 formulated in the following words : 
 
 The original source of exchange value is labour, 
 and therefore commodities vary, or should vary, in 
 value according to the amount of labour expended 
 in their production. 
 
 Now, in essence this amounts to the assertion 
 that the value of a thing in exchange is given it, 
 or in a sound state of society would be given it, 
 by the quantity of labour it has cost in pro- 
 duction. But this deviates very widely from 
 that which it professes to represent, the classical 
 economic doctrine. Despite very loose expres- 
 sions and an unfortunate absence of precise 
 language that differed, and certainly now differs, 
 in two very important points. In the first 
 place, while the economist asserts a tendency 
 to correspondence between exchange value 
 63
 
 THE SOCIALIST STATE. 
 
 and cost, he does not necessarily state that the 
 latter is the determining feature. In the second 
 place, when he speaks of labour, he does not 
 ignore, or at any rate mean to ignore, capital 
 and what may be called its exertion. 
 Its Errors 3- 'L >et us P ut aside this second matter for the 
 time and turn to the consideration of the main 
 Socialist doctrine. If that be true, the exchange 
 value of a commodity should not, except tem- 
 porarily, be higher or lower than its labour cost 
 would place it in comparison with the labour 
 costs of other commodities. But is this so? 
 Take the case of articles which are naturally 
 scarce, of which the supply cannot be increased, 
 and for which there is a great demand. 
 Whether the economic system be Socialist or 
 Individualist, these articles will obviously have 
 an exchange value higher than is justified by 
 rule. The reverse illustrates the inadequacy of 
 the doctrine as clearly, even if not more clearly. 
 Supposing people to direct their efforts to the 
 laborious production of suits of chain armour. 
 These will, from what we know, necessitate a 
 great deal of labour and skill; but will they 
 64
 
 THEORETICAL BASIS. 
 
 exchange at a high value? According to the 
 earlier Socialist theory they should, because 
 their cost in labour is high, and their value 
 must correspond to the labour they represent. 
 
 4. The inaccuracy of the theory in this 
 latter case is so very apparent that an attempt 
 has been made to evade the difficulty without 
 impairing the original proposition, by the use of 
 qualifying terms. Thus it is premised that the 
 labour treated of is that which is socially 
 necessary, or exercised under socially necessary 
 conditions. So incompatible are its two aims 
 that this qualification, when it removes the 
 inaccuracy, destroys the proposition which it 
 alters so much as to convert it into one wholly 
 different. Of course some may hold that the 
 sole qualification intended is that an individual 
 who is slow or dilatory over his work shall 
 receive for it the equivalent, not of his own 
 labour measured in hours, but of the labour 
 which the commodity would have cost the 
 average man. This no doubt is right enough; 
 but if that is all, the maker of chain armour 
 rnay proceed with a clear conscience and good 
 6 5 5
 
 THK SOCIALIST STATE. 
 
 expectations. Otliers, however, would regard 
 socially necessary and socially useful as inter- 
 changeable. No production of an article 
 which is not wanted can be taken into 
 account. It is a waste, and it must be 
 treated as waste. This again is right; but 
 does it not hopelessly alter the original doc- 
 trine ? It is another instance of the subversive 
 efforts of commentators. Some labour is more 
 socially useful or socially necessary, and other 
 labour less, and that which determines its place 
 in the scale is the value of the commodity. 
 Take the case of carved ivory hair-brushes, 
 which cost a great deal of labour. They 
 possess a high value. Yes, a Socialist might 
 respond, because they cost a great deal of 
 labour in production. But if twice the number 
 of carved ivory brushes are put on the market, 
 each brush will have a lower value, despite the 
 fact that it has cost as much labour as those 
 which were originally made. To say that com- 
 modities will have an exchange value because 
 of the socially useful labour expended on them 
 amounts, it would seem, to the assertion that 
 66
 
 THEORETICAL BASIS. 
 
 commodities will derive their value from labour, 
 which derives its value from that of the com- 
 modities. It may be said that the introduc- 
 tion of collective production will so alter the 
 circumstances as to make the Socialist doctrine 
 of value truer and more accurate than it is, or 
 indeed can be, under competitive conditions, 
 since the State will then be able to indicate 
 the commodities that are to be produced and 
 the work which is necessary. But it will only 
 be able to indicate them through finding out 
 that they are required or demanded in certain 
 proportions. 
 
 5. But inaccurate though it is, to say that Relation 
 value is the result or the creation of labour, it is value and 
 none the less true that there is, or rather that Cost 
 there tends to be, in the case of most general 
 commodities, a certain relation between the cost 
 of production and value. Value, it must be 
 remembered, depends upon the extent of the 
 demand which there is for the commodity in 
 question, as well as upon the difficulties which 
 there are in the way of its supply. In 
 the case of most commodities the main con- 
 67
 
 THE SOCIALIST STATE. 
 
 dition of supply, and of increase of supply, 
 is the expenditure of labour, including with 
 it capital. But there is something more 
 to observe. The possessors of labour-force, 
 taken on the average, in their attempts to 
 employ their labour as profitably as they can, 
 will, if they find their labour more productive in 
 one direction than in another, gradually seek 
 employment in that direction. Taking the 
 community as a whole during a considerable 
 period, it is probably quite true to say that 
 labour flows into the channels and places where 
 it will receive the highest remuneration, that is, 
 where it will result in products of the greatest 
 value; for a man, if he can produce a product of 
 high value and a product of low value with the 
 same exertion, will in most cases choose the 
 former task. In this way then there tends 
 to be some relation between the values f 
 commodities and their respective costs of pro- 
 duction. The ratios of costs of production 
 and of values will tend to be the same. It 
 is sometimes said that articles tend to exchange 
 in the ratio of their costs of production; but this, 
 68
 
 THEORETICAL BASIS. 
 
 though not necessarily wrong, is misleading, in so 
 far as it suggests that values are accommodating 
 themselves to costs of production. It is more 
 accurate to say that the ratio of values and 
 the ratio of costs tend to be the same. 
 
 In this latter conception of cost the effort of 
 capital, as well as the effort of labour, must be 
 included. As this will be more fully discussed 
 hereafter (pp. 71-74), it is here only necessary to 
 note this point of difference between the con- 
 ception of value as related to cost given above 
 and that of labour value in Socialist theory 
 
 6. It may appear as though (with the ex- Fatal Error 
 
 ... of the 
 
 ception of this point with reference to capital) Socialist 
 there were but little difference of real im- 
 portance between the two conceptions. But 
 any such conclusion is entirely wrong, for the 
 difference is critical. According to both there 
 is some correspondence between value and 
 cost, but according to one only, the Socialist 
 labour-jelly* doctrine, is value occasioned by 
 
 * The doctrine, that is, which represents commodities 
 as being for purposes of value so much concentrated 
 actual labour. 
 
 69
 
 THE SOCIALIST STATE. 
 
 cost or, if we retain their expression, labour. The 
 difference is, it must be repeated, of critical 
 importance because of the objects for which 
 this doctrine has been employed. One of 
 these is theoretical, the other may be called 
 practical. The theoretical object is to demon- 
 strate the injustice of all claims made as interest 
 and rent. It is argued that the capitalist is 
 engaged in expropriating the labour out of a 
 share of value, it having originally possessed 
 all value, inasmuch as value is solely due 
 to its presence. Whatever the other grounds 
 are for holding that interest is an unnecessary 
 payment, this particular reason depends on a 
 theory of value which is inaccurate. To the 
 validity of the assertion of injustice, or want of 
 necessity, we shall return again. The practical 
 object is to establish the particular means 
 whereby services are to be estimated and prices 
 paid under Socialism. But inasmuch as labour, 
 or, to take the wider term, cost, does not create 
 or determine value, to assign this new function 
 to it is to expect the cart to direct and move 
 the horse. Labour hours may possibly be used 
 70
 
 THEORETICAL BASIS. 
 
 to express values both of labour and com- 
 modities that is, of wages and prices; but if 
 so, not only must different grades of labour be 
 differently rated, but likewise the same grade, 
 according as it is employed in the production of 
 commodities more or less in demand. By 
 this means an automatic and voluntary transfer 
 of labour will be induced from the channels 
 where it is less to those where it is more 
 wanted. 
 
 7. With regard to Capital and its rcmunera- As to 
 tion, the theoretical teaching is diverse, but its 
 most important element is that 
 
 Capital represents the labour involved in its 
 production, and nothing else ; and> therefore, if that 
 labour is remunerated by the production of the 
 wealth used as capital, it is equally so by its 
 reproduction; wherefore, interest is unnecessary. 
 
 It is with regard to Capital and the payment Error of 
 c . ., . ,, .. r , . . Socialist 
 
 of interest that the question of exploitation Theory 
 
 mainly arises. The expression of the Socialist 
 position is manifold, in its cruder forms lend- 
 ing itself to ready disproof. To assert that, 
 because at one time labour (being on hypothesis
 
 THE SOCIALIST STATE. 
 
 the only agent of production outside the land) 
 took as its share in remuneration the total 
 value ot products, capital, which has since 
 become a most efficient agent, can take no 
 share without expropriating labour, is as much 
 as to assert that, because at one time all labour 
 was rude and unskilled, skill should not now 
 be paid for. But this is not the position 
 indicated in the above statement That may 
 be held to raise two questions firstly, whether 
 there is a rate of interest, and secondly, whether 
 Interest that rate of interest need be paid to individuals. 
 The first, which is one of very high theoretical 
 importance, obviously rests on the efficiency of 
 capital and the sufficiency of its supply. The 
 remarkable efficiency of capital in reducing the 
 quantity of labour required to produce a certain 
 amount of commodity is probably not seriously 
 in dispute. That some writers seek to minimise 
 its worth is chiefly due to their wish to impress 
 on their readers the superior importance of 
 human physique and calibre to capital, and 
 also their difficulty of attainment. 
 
 The use of capital occasions more than its own 
 72
 
 THEORETICAL BASIS. 
 
 replacement. After that is accomplished there 
 is a fund left over, as it may be said, tor 
 division. But this surplus fund should, some 
 urge, find its way into the pockets of the public 
 by a general lowering of the prices of com- 
 modities as compared with wages. Now, even 
 in our present industrial system, and owing to 
 competition amongst those having or using 
 capital, a considerable effect has been produced 
 in this direction, but the extent to which the 
 utility of capital results in the lowering of prices 
 is limited by the relation which the supply of 
 capital stands in with regard to the demand for 
 it That determines the price which those 
 wanting capital offer for it; and the price is 
 its interest. Under present circumstances this 
 is the rate of interest. But it is urged that in Under 
 the Socialist State interest will not exist, as 
 there will not be individual competitors for it. 
 True though this may be, it makes no difference, 
 for the important thing is that there will be 
 opportunities and branches of industry competing 
 for it. Under Socialism a rate of interest and 
 a rate of profit will exist, but it will be paid all 
 73
 
 THE SOCIALIST STATE. 
 
 into one pocket that is, the pocket of the State. 
 It may be said, why should it not all go in 
 reduction of price? It may be applied in a 
 certain way to this purpose, as indeed to any 
 other ; but initially it will be paid into the 
 public treasury by those branches of industry 
 in which it is earned. Were every industry in 
 equal need of capital that is, were capital 
 equally needed in all departments all prices 
 might be reduced by the rate of interest 
 without evil results ; but while more capital 
 is used in some than in others, the reduc- 
 tion would be unequal, and so some consumers 
 would be more benefited than would others. 
 Its 8. But a review of the Socialist proposition 
 
 1 1 y from a wholly different point of view suggests a 
 reason for the existence of some payment in 
 addition to the mere replacement of capital. 
 According to it, replacement is to be deemed 
 sufficient because the labour occupied in pro- 
 duction was exerted in view of obtaining that 
 precise amount of wealth. So far as simple 
 quantity of substance is concerned, the two are 
 no doubt exactly equivalent; but the ultimate 
 74
 
 THEORETICAL BASIS. 
 
 object stimulating men to exertion of their 
 powers, and thus constituting their remuneration, 
 is not material substance, but the pleasure 
 derivable from it. Men work not to obtain a 
 certain number of yards of flannel and cloth 
 and of pounds of beef and bread, but 
 because they want subsistence, warmth, and 
 other kinds of satisfaction. This anticipation 
 of satisfaction, which affects the mind and 
 urges to new displays of energy, is more or less 
 effective in its promptings according as it is 
 likely to be experienced at a near or a remote 
 date. To a man working in 1895 it is one 
 thing to expect the reward of his labours during, 
 or at the end of, the year, and quite another to 
 expect it at the end of two, three, or a dozen 
 years. This amounts to saying, as has been 
 said, that a hundred pounds now and a hundred 
 pounds in ten years' time are two different 
 things so far as their utilities and stimulative 
 effects are concerned. But if this be so, it is 
 incorrect to urge that future replacement of a 
 certain quantity of commodity is a remunera- 
 tion equal to that given by the original sub- 
 75
 
 THE SOCIALIST STATE. 
 
 stance. Under certain conditions, of course, 
 it may be; but, on the average, the man who 
 will labour because he wants a thing, and knows 
 he can get it at the conclusion of his work, will 
 not labour so hard, not having the same incen- 
 tive, if he will not get it till two years hence. 
 It may be said that if he postpone consumption 
 he does so at his own option, and under no 
 form of coercion. This is true ; but the question 
 for the community to consider is whether it 
 wishes to stimulate saving and the formation, 
 not the private use, of capital. Will not the 
 conduct of the Socialist State itself be affected 
 by this consideration ? 
 
 9. But there is a second reason, which brings 
 us to a like conclusion. As the same quantity 
 of commodity or substance at different times 
 presents to the person contemplating the merits 
 of production, consumption, and postponement 
 different utilities, is it not also the result of 
 wholly different costs ? In a progressive state 
 of society and industry the advance is from a 
 less efficient to a more efficient condition of 
 production : a given amount of commodity is 
 76
 
 THEORETICAL BASIS. 
 
 the result of less exertion because of the econo- 
 mies and inventions brought into action. And 
 these, it must be remembered, would be im- 
 possible but for the use of capital. If labour 
 values be adopted, the mere replacement of a 
 certain quantity of commodity implies the sub- 
 stitution of that which has a lower for that which 
 has a higher labour value. And the two are to 
 be called, ironically let us hope, equal ! One 
 method of replacement, and that the most 
 authoritative method, avoids this difficulty satis- 
 factorily. It has been suggested that all post- 
 ponement shall be in labour value, and that 
 consequently the man who postpones will, if 
 labour become more efficient in the future, 
 receive more. In this case he will receive some- 
 thing closely akin to interest, though it may not 
 correctly correspond to that which would equate 
 the future with the present utility in the mind 
 of the man who ponders whether he shall post- 
 pone or not. 
 
 10. These considerations, which mainly 
 conduce to show that there is a necessary 
 interest, go some way to answering the second 
 77
 
 THE SOCIALIST STATE. 
 
 question proposed above, as to whether interest 
 need be paid to individuals. One thing is clear. 
 If individuals do not save, interest need not be 
 paid to them ; but this is insufficient. What if 
 they do save ? In a state of society, of course, 
 which allows of private employment of capital 
 and foreign investment, there is no doubt that 
 interest must be paid if the State wishes to borrow 
 capital ; but as these will be wanting under a com- 
 pletely socialised system, the payment of interest 
 will become a matter of expediency, and of the 
 extent to which the Socialist State contemplates 
 interference with private action. Under certain 
 conditions it is possible that saving may con- 
 tinue undeterred by the absence of interest ; 
 but then, under certain conditions, saving might 
 continue even if deliberately penalised by a 
 discount, and labour might be exerted as 
 efficiently if its rate of remuneration were 
 reduced. As to interference with private 
 liberty of postponement, it may be said that this 
 will not be prevented. That, of course, depends 
 on what is termed prevention. In effect the 
 Socialist State will say, you may save, but if you 
 78
 
 THEORETICAL BASIS. 
 
 do, you shall be mulcted of a portion. But 
 this latter criticism, of course, applies much less, 
 as has already been observed, to a system in 
 which the amount postponed will be measured 
 in labour value, inasmuch as that involves, as 
 it were, a share in the general fortunes of the 
 society. 
 
 n. Another proposition is laid down as to As to Law 
 
 of \VtlTCS 
 
 the Wages of Labour &s follows: Under the laivs 
 of competitive industry, in the progress of industry 
 labour successively receives, if not an absolutely 
 smaller amount, an actually smaller proportion 
 of the total product of the society. 
 
 The question is not one of amount, but one That they 
 
 - . , , . decrease in 
 
 of proportion ; and so the reply, sometimes proportion 
 
 attempted by means of a demonstration of the 
 general rise in wages, must be regarded as beside come 
 the mark. The argument by which it is sought 
 to establish the above position can be briefly 
 summarised. Owing to competition, it is said, 
 commodities and services alike tend to be 
 exchanged, or to have value in the same ratio 
 as that of their costs of production. To this 
 they are one and all forced down, because the 
 79
 
 THE SOCIALIST STATE. 
 
 labour or forces producing them are ever seek- 
 ing the best opportunity for the display of their 
 energies. A higher value merely attracts more 
 labour into a particular direction, and the new 
 supply reduces the price, until correspondence 
 between value and the cost of production is 
 once more attained. In the same way labour, 
 which, according to Socialists, is a mere com- 
 modity in a capitalist system, will obtain as its 
 reward that which the connection between its 
 supply and the demand will allot to it. In the 
 same way too, they urge, it is possible to go 
 further, and to say that labour will obtain as 
 remuneration that amount which corresponds to 
 its cost of production, and no more. The 
 cost of production of labour is that amount of 
 necessaries which constitutes what may be termed 
 the necessary standard of life. If, owing to 
 temporary circumstances, wages amount to 
 more, population will increase in due propor- 
 tion, and once again cost of production and 
 wages or price of labour come close together 
 and coincide. That effort and industry grow 
 more efficient, and issue in an increase of pro*
 
 THEORETICAL BASIS. 
 
 duction, is not to the point, and will not add 
 to the remuneration of labour, which consists 
 necessarily not of the amount of a certain 
 quantity of labour, but of a certain absolute 
 quantity of commodity. Even supposing this 
 be increased somewhat, it will not, owing to 
 the tyranny of capitalism, be increased so as to 
 hold its former proportion of the total products 
 of the society. 
 
 12. But the validity of this chain of reasoning Error of 
 
 ,.,./. this as 
 depends on a particular assumption which, if Theory 
 
 not suppressed, is often so treated as to seem 
 much less important and vital than it really is. 
 The general fact that, owing to competition on 
 the part of Labour, commodities will tend to 
 exchange in a ratio corresponding to that of 
 their respective costs of production, has nothing 
 to do with the wholly different statement that a 
 high rate of payment will lead to an increase of 
 population. Whether this be true or false, it 
 depends on altogether other grounds. This has 
 been largely obscured owing to the confusion 
 introduced by writers who have chosen to call 
 the labour which produces the commodities com- 
 81 6
 
 THE SOCIALIST STATE. 
 
 posing the so-called necessary standard, the cost 
 of production of labour. To give it this name 
 is to seek support for a doubtful case from a 
 doubtful analogy. The questions at issue are, 
 firstly, whether population does increase with 
 an increase above the customary standard of 
 necessaries ; and secondly, whether there is one 
 invariable standard. As regards the first there 
 is much doubt, some writers replying in the 
 affirmative, others alleging that there are other 
 factors of equal importance to be taken into 
 account in the law of population ; but a decision 
 in either sense will not affect our estimate of the 
 proportion which wages form of the total produce, 
 unless the so-called cost of production of labour, 
 that is, the necessary standard of life, be shown 
 to be fairly unvarying. If the necessary stan- 
 dard, or the standard of comfort, as most 
 classical economists term it, is variable, the 
 so-called cost of production of labour is always 
 changing, and it cannot be said that wages 
 necessarily tend to absorb a smaller proportion 
 of the whole. Critically examined, the proposi- 
 tion is hopelessly unsound. Its most obvious 
 82
 
 THEORETICAL BASIS. 
 
 inaccuracy consists in the want of proof that the 
 necessary standard is invariable or anything but 
 most variable. The extent of this variability 
 is a matter for actual inquiry; but the slow 
 increase of population in all developed countries 
 would seem to point in one direction namely, 
 that with development and growth of material 
 prosperity comes a certain and very great rise in 
 the standard of comfort. But this is a question 
 of fact, not a matter of theory, and must be 
 canvassed in another place (VI.). As theory, 
 the Socialist proposition is bad. 
 
 13. We may, however, take these several Advantages 
 
 ... . . of Capital 
 
 Socialist assertions as valuable, in so far as 
 
 they suggest the existence of a tendency antag- 
 onistic to the high payment of labour. Such 
 as it is, it consists in the greater advantages 
 which capital, by reason of concentration and 
 endurance, possesses over labour in any conflict 
 of interests. Though this has no doubt been 
 partly met by combination, with a consequent 
 rise in the standard of comfort, it is possible 
 that the dangers which this superiority involves 
 might require to be further guarded against 
 83
 
 THE SOCIALIST STATE. 
 
 At present, public sentiment is a powerful safe- 
 guard of the interests of labour. 
 
 As to 14. Another evil is, in the opinion of Socialists, 
 
 directly and solely traceable to the unnatural 
 separation which has taken place between 
 labour, in their view the cause of value, and 
 value. Crises are occasioned. 
 
 Owing to the separation between labour and 
 va/ue, and the consequent expropriation front 
 their due reward of those who possess and 
 exert labour, a commercial crisis is brought 
 about by reason of over-production and under- 
 demand. 
 
 Labour, which governs exchange value, and 
 which coexists in persons with demand, is 
 deprived of its power to demand commodities, 
 while those which it produces, or at any rate the 
 larger portions of them, are appropriated by 
 others. To the extent to which this proposi- 
 tion depends on the relation between value and 
 labour as its cause, it is open to the criticism 
 made on this specific point; but putting this 
 consideration aside, the position taken up is open 
 to question on entirely different grounds. At 
 84
 
 THEORETICAL BASIS. 
 
 one time the term over-production was used Over- 
 production 
 to mean universal over-production, or rather over- 
 
 production of all things. But in the above pro- 
 position, as in general usage, it is now held to 
 imply that, while most commodities are pro- 
 duced and stocked in great quantities, those 
 who should, and under sound conditions would, 
 purchase them, have no power of doing so. 
 Where demand should be there is only desire. So 
 far as abstract theory goes this condition would 
 seem to be rather one of misproduction than over- 
 production and under- demand. The power 
 of purchase, even if divorced from the force 
 which is its cause and appropriated by others, still 
 exists; though, of course, the nature of demand 
 on the part of the capitalist is different from 
 that on the part of the labourer. The only 
 assumption on which the Socialist interpretation, 
 as given above, of the causes of commercial crisis 
 can be correct is that those who appropriate the 
 power of demand, or the claim to purchase, do 
 so without having the desire of using it. If 
 
 that be granted, and it must be remembered Assump- 
 ... . , , . , , , tions made 
 
 that it is entirely unproved, the situation would 
 
 85
 
 THE SOCIALIST STATE. 
 
 present itself somewhat as follows: there 
 would be a class in the industrial society con- 
 stantly exploiting those below it, and in exchange 
 for a comparative pittance obtaining control of 
 the commodities which they produce. These 
 commodities constitute a power of purchase or 
 demand for other commodities. Now it is 
 suggested that the expropriating class obtains 
 these commodities and tries to sell them, 
 without any intention of completing their con- 
 version into other commodities. If they wanted 
 anything, whether immediately or in the future, 
 there would not necessarily be a commercial 
 crisis ; but the assumption is that they are play- 
 ing, or rather that the fate which controls them 
 is making them play, a dog-in-the-manger rdle, 
 But such a condition could be of but short 
 duration. As they cannot sell what they pro- 
 duce, and as they do not want to buy anything 
 with the proceeds, even if they sell, it would 
 seem, on abstract grounds, unlikely that they 
 would continue to employ, and so to expro- 
 priate. When they do this labour ceases to 
 be exploited by becoming unemployed, the 
 86
 
 THEORETICAL BASIS. 
 
 opportunities or means of employment being 
 monopolised. 
 
 15. But does not this point to the truth 
 that the evil is somewhat other than was 
 represented? The grievance against com- 
 petitive industrial organisation may be digested 
 into two charges ; firstly, that it leads to much 
 misproduction ; and secondly, that the oppor- 
 tunities for self-employment are limited. So 
 far as it really exists, this latter is owing to 
 the monopoly of the use of capital. In the 
 Socialist State there would of course be such 
 a monopoly, but it would be a public one and 
 for public purposes. 
 
 1 6. The theoretical basis of Socialism is an Theoretical 
 attempt to give a formal and precise expression 
 
 to the claims of Labour as against Land and 
 Capital. As such it does not deal with matters 
 of degree, of more or of less. It goes far 
 further. It places on one side Labour, on the 
 other Property, and seeks to show not that the 
 property owners of land and capital have had 
 too much, but that what they have had has 
 been appropriated from the rightful share of 
 8?
 
 THE SOCIALIST STATE. 
 
 Its labour. In some sense it is a response to the 
 
 Weakness ,.,.,, 
 
 theories laid down by certain writers on econo- 
 mics, which, while describing, seemed to justify 
 existing conditions; but unlike even these 
 economic writers, its advocates seek to establish 
 the claims of one factor of industry by the scien- 
 tific negation of those of all others. In their 
 endeavour to establish their whole position they 
 place their dependence on abstract propositions, 
 which rest on numerous and unproved assump- 
 tions, and contain inaccurate statements. 
 
 How far But it must be remembered that Socialism 
 does not necessarily depend upon the supports 
 with which some of its advocates have sought to 
 prop it up. In some cases they do indeed lend 
 it strength, because though wrong when taken in 
 their entirety, they contain elements of truth 
 which have been too long and too often neg- 
 lected. That labour has often received less 
 than its due share of the product, that capital 
 has tyrannised, that labour has been degraded, 
 that unnecessary convulsions have been caused, 
 are facts which all must recognise, though there 
 are many different views as to their extent and 
 88
 
 THEORETICAL BASIS. 
 
 causes. The propositions above stated and 
 criticised represent one of these views, and 
 when divested of their false appearance of com- 
 plete scientific accuracy contain much that is 
 important and suggestive- 
 
 89
 
 V. 
 
 Use made 
 of Social 
 History 
 
 THE HISTORICAL BASIS OF SOCIALISM. 
 
 i. THE attempt to obtain for Socialism the 
 evidence and support of history is something 
 quite distinct from the occasional efforts which 
 are made to illustrate this, as other movements, 
 by occasional parallels culled in indiscriminate 
 confusion from the record of centuries. Of 
 course the ardour of early advocates carried 
 them into that phase, with the usual result of 
 discrediting their own object by the use of 
 inaccurate analogies and misreported facts. 
 
 Of late years, however, a far broader method 
 has been employed. The effort is made to 
 trace the development of mankind in their in- 
 .dustrial relations as they pass through one 
 epoch into another, renewing the forms of their 
 90
 
 HISTORICAL BASIS. 
 
 relationships and adapting them to the new 
 necessities pressed forward by circumstances. 
 Society in any form is the work of slow evolution- 
 ary forces, which, once set in action, develop 
 in their inevitable course. Such a task as a 
 sketch of the history of human society in its 
 various phases makes considerable demands on 
 knowledge; and it must be confessed that, with 
 but few exceptions, these efforts at generalisa- 
 tion, whether in favour of Socialism or not, 
 have been crude and unsatisfactory. No doubt 
 much more sound information and much more 
 careful study will be required before the philos- 
 ophy of history can be regarded without suspi- 
 cion, at least by the historian. Still, the method 
 is infinitely truer and more reasonable than that 
 previously noticed. As it has its demerits, it 
 has its merits. Its principal demerit is perhaps 
 the very old failing of hasty conclusions; while 
 one of its merits certainly lies in its enforcement 
 of the truth, old as the failing, that society is not 
 made but grows; and the school of Socialists 
 who adopt it may be distinguished as Evolu- 
 tionary from those who are Revolutionary.
 
 THE SOCIALIST STATE. 
 
 Three 2. Without going back too far, the historical 
 
 Great 
 
 Epochs advocate of Socialism will point to three great 
 
 stages, through two of which society has passed 
 or nearly passed, and a third into which it is 
 Family entering. Of these, the first is the Family or 
 the developed patriarchal system, best typified 
 perhaps in the internal economy of Rome, with 
 its self-sufficing and widely developed house- 
 holds. In other countries systems similar in the 
 attributes of self-dependence and practical self- 
 support, though less definite in form, and by 
 no means so highly developed, have existed. 
 Various as these systems were, both in detail 
 and in many important points, there were things 
 which they had in common. They were self- 
 sufficient in the main, not necessarily in every- 
 thing; custom, and not competition, was their 
 chief guide; and lastly, the economic develop- 
 ment, with its apportionment of individual 
 function, was in part the basis, in part the co- 
 ordinate of a system of rights and duties. 
 
 3. With the course of the Middle Ages this 
 system gradually yielded. So far from suddenly 
 ceasing, sundry attempts were made, and some- 
 92
 
 HISTORICAL BASIS. 
 
 times with success or the appearance of success, 
 to preserve its more important characteristics. 
 But as the horizon of life broadened, a system 
 which was one of narrow horizon and limited 
 opportunities was outgrown, and sank through 
 weakness into desuetude. Guilds and muni- 
 cipal regulation maintained for a time some of 
 the bonds and supports which had constituted 
 the necessary organisation or expression of the 
 energy and powers of the earlier times. But the 
 temporary expedients, culminating as they did in 
 legislative attempts, were able to retard though 
 not to prevent the slow sweep of change. They 
 could and they did ameliorate the hardships 
 which all such economic alterations must inflict 
 upon certain classes of the community. Little 
 by little Individualism became dominant, bring- 
 ing with it the severing of ties, and basing itself 
 upon the inexorable forces of competition. 
 
 It may perhaps seem strange that the change 
 was so entire, that the better part of the 
 older organisation, with its system of economic 
 rights and duties, could not be preserved while 
 industry and commerce were set free from the 
 93
 
 THE SOCIALIST STATE. 
 
 trammels which undoubtedly obstructed them. 
 But this only brings into prominence the con- 
 tention that has been advanced by the evolution- 
 ary Socialists, to the effect that there is, and 
 must be, very close connection between the 
 form of the economic system and the rights and 
 duties which citizens display towards each other 
 in this, as in all other relations. Conditions 
 determine because they limit the opportunity for 
 the display of particular qualities. 
 
 Individ- 4. In the epoch of Individualism a particular 
 course of development may, it is held, be traced. 
 Guild regulations and State regulations broke 
 down one after the other, and the conditions 
 under which industry were carried on became 
 more completely competitive. But then another 
 tendency manifested itself. Competition grows 
 into monopoly. This direction was not sus- 
 pected during the earlier part of the period, for 
 then the opportunities for businesses and pro- 
 duction on a large scale were very limited, and 
 the consequent advantage was by no means 
 great, and certainly by no means obvious. The 
 first changes were the local separation of the 
 94
 
 HISTORICAL BASIS. 
 
 chief branches of manufacture and the com- 
 petition of small individual craftsmen or manu- 
 facturers, working with the aid sometimes of 
 their families and sometimes of three or four 
 assistants, journeymen or apprentices. But two 
 forces made a further change inevitable : the one 
 was the increasing division of labour, the other 
 the introduction of machinery and artificial 
 motor-power into manufacture. Henceforth the 
 development has been rapid. The small masters 
 succeeded the individual craftsmen, to be super- 
 seded in their turn by the great industrial 
 employers with their large command of capital. 
 And now it is added these are giving place to 
 Companies, Syndicates, Unions, Trusts, or, in a 
 few words, to more or less developed monopolies. 
 The epoch of Individualism is thus, by the 
 effect of the forces which it has generated, 
 bringing about its own end, and preparing the 
 opportunities and means for the commence- 
 ment of one that is new that is, the Socialist 
 Epoch. 
 
 5. The condition which necessitates Social- Socialist 
 ism is, according to this view, coming upon 
 95
 
 THE SOCIALIST STATE. 
 
 us inexorably, and the question is not whether 
 there shall be monopoly or not, but whether 
 the monopoly shall be public or private. In 
 this sense the establishment of the Socialist 
 State is not an innovation so much as an 
 attempt to remove the hardships involved in 
 the progress of events. There are other aspects 
 in the epoch of Individualism to which atten- 
 tion is directed, as the anarchy involved and 
 the separation induced between systems of 
 right and wrong and that of the economic 
 sphere, with the natural result of lessening the 
 force and sanctity of the former. But while 
 there is much to be deplored in its course, it 
 must be remembered that it was an inevitable 
 preliminary to the introduction of a better 
 state than that which previously existed. The 
 lessons it has impressed upon the minds of 
 men, of individuality, self-reliance, division 
 of labour, had to be realised before the 
 transition could be made from a country 
 composed of separate groups, self- organised 
 and semi -isolated, to a nation harmoniously 
 organised. 
 
 96
 
 HISTORICAL BASIS. 
 
 6. The above sketch, though it does not Possible 
 profess to include all the various elements of 
 proof which are brought together in the <effort 
 to construct what is here termed the historical 
 basis, may be taken as representing the method 
 of proof to which resort is had, and as pro- 
 viding some outline of the course which 
 economic development is alleged to have taken. 
 By way of criticism there is much to observe 
 in the details of fact adduced to support the 
 argument, and here of necessity omitted, as also 
 with regard to the nature of the particular 
 epochs themselves. No doubt much of the 
 generalisation is crude, the more particularly 
 so far as it premises such uniformity of type in 
 the various cases; but this does not warrant, it 
 must be observed, the denial that in economic 
 history there have been particular directions 
 which development has taken. On the other 
 hand, it may be urged that these, and the 
 nature and inward significance of these direc- 
 tions, are easily misunderstood. Thus by some 
 who have studied the history of the periods, 
 when self-dependent and self-sufficient organisa- 
 97 7
 
 THE SOCIALIST STATE. 
 
 tion in groups gradually yielded to competition, 
 it is argued that as that change was mainly one 
 from unconscious to conscious organisation, 
 the advent of Socialism cannot be compared 
 with the advent of competitive individualism. 
 Again, the facts of this tendency to monopoly 
 may be questioned. Both the extent of that 
 tendency and the success of such monopolies 
 are matters which are touched upon in an in- 
 sufficient way; and it may not unfairly be 
 suggested that impulses in this direction, even 
 if greater, may prove as temporary as they have 
 been at any former time. Even should the tend- 
 ency to monopoly and its advantages be proved 
 in certain instances, it is by no means assured 
 that the whole of future economic organisation 
 will wear one complexion and conform to one 
 law. Some degree of monopoly and some 
 degree of competition may quite conceivably 
 exist side by side. But these and other like 
 considerations, while they serve to diminish any 
 unreasoning confidence which might arise from 
 premature generalisation, do nothing to dis- 
 credit the manner in which it is sought to 
 98
 
 HISTORICAL BASIS. 
 
 demonstrate the present condition and future 
 probabilities of our social and economic de- 
 velopment. Nor is an argument of this kind 
 by any means of a purely academic character. 
 A due recognition of what may be termed the 
 historical drift is of grave importance, for the 
 very circumstances of the case make it possible 
 that concrete and collective action on the part 
 of the community may be necessitated. If the 
 alternative to a succession of private monopolies 
 be public monopoly, the choice which will have 
 to be made will be a conscious and deliberate 
 one. In certain cases the advantages of 
 monopoly and its necessary admission have 
 led municipalities and governments to take 
 upon themselves functions which in other 
 directions are performed by private energies, and 
 Socialists believe that these are but illustrations 
 of a system which will have to be universally, 
 if gradually adopted. To this conclusion they 
 are largely guided by what they consider the 
 correct reading of our social and economic 
 history. 
 
 99
 
 VI. 
 
 THE PRACTICAL BASIS OF SOCIALISM. 
 
 Practical i. DISTINCT from the positions considered 
 Evils 
 
 and respectively supported by what are termed 
 
 theoretical and historical arguments, the 
 former of which asserts the abstract correct- 
 ness, the latter the inevitableness of Socialism, 
 is the attitude of those advocates who, while 
 often accepting such conclusions, base their 
 demands mainly on present-day facts or alleged 
 facts. Competition in its working causes 
 certain evils, therefore away with it is their cry. 
 Logically, of course, the proof of the evils of 
 the competitive system is but one-half of the 
 case, since the efficiency of Collectivism or 
 Socialism still remains to be established; but 
 so far as effective attack is concerned, it is by 
 too
 
 PRACTICAL BASIS. 
 
 far the most important half. In this connec- 
 tion it is but natural that the grievances alleged 
 should be various, often indeed to the verge of 
 contradiction, since they are urged by different 
 people belonging to different places and having 
 different experiences. But such divergence 
 in certain particulars, if more than apparent, 
 and often it is not more, does not diminish the 
 cogency of the various grievances which exist. 
 2. In the forefront is the denunciation of the The 
 
 " 
 
 " waste " occasioned by competition. Those 
 
 who favour competition are apt, in speaking of 
 it, to disregard the inevitable consequences of 
 what is termed successful competition or super- 
 session. Even though it be quite true that it 
 issues as a rule in the establishment of different 
 branches of industry on the soundest and most 
 economical basis, this result, desirable though 
 it is, is not attained without cost, since neither 
 the people nor the plant superseded can be 
 automatically transferred to other employments. 
 They are largely wasted. Not only so, but 
 while the competition lasts there is a dupli- 
 cation or a multiplication of establishment 
 101
 
 THE SOCIALIST STATE. 
 
 expenses to an enormous extent. So apparent 
 is this in some instances that peremptory action 
 has been taken even in England by the Legis- 
 lature and Government to restrict competition 
 within certain bounds. Taken on a large scale, 
 typical instances of the waste during the work- 
 ing of competition are afforded by railways, 
 where, as in the United States of America, 
 development has extended practically at the 
 will of private rivals. A traffic enough to 
 maintain one line has been found to be insuffi- 
 cient, when divided, to maintain two or even 
 more. 
 
 So long indeed as improvement is possible 
 and inventions continue to be made, super- 
 session must continue. Old processes must 
 yield and give way to those which are better 
 and more economical. But it is the contention 
 of the believers in the Socialist State that 
 such supersession takes place at present irre- 
 spective of changes, and to a wholly unwarrant- 
 able extent. 
 
 How far 3. Though it is impossible to numerically 
 sary appraise the loss occasioned in this way, it must 
 
 102
 
 PRACTICAL BASIS. 
 
 evidently be very great. To this conclusion 
 the instances both of waste occasioned in 
 certain trades and of the saving effected by 
 amalgamation necessarily point. Further evi- 
 dence is supplied by the actual losses of capital 
 involved in the failure of private firms and of 
 companies, though it is to be regretted that 
 neither of these items comes within the range of 
 certain calculation. On the other hand, some 
 anti-socialist critic will remark that much of this 
 loss is the price of progress, and as such may be 
 worth paying or not, according to the estimate 
 to be placed upon the progress itself. So far 
 the matter would be one of degree. But, as 
 has already been pointed out, it by no means 
 follows that all the loss is the necessary price. 
 Under our present system it is no doubt neces- 
 sary; but Socialists contend that in a state of 
 collective production and sale the same rate 
 of progress might be attained at a much less 
 expense. In this way the matter at issue 
 resolves itself into a question as to the 
 efficiency of Socialism as a working system. 
 The nature of this question needs definition. 
 103
 
 THE SOCIALIST STATE. 
 
 It does not relate alone, if mainly, to the 
 efficiency of Socialism in certain instances. 
 Competition works well and economically in 
 certain instances. It relates to the efficiency of 
 Socialism as a whole, and as the one system of 
 production. 
 
 Danger of 4. In another direction an accusation similar 
 to the last is levelled against the existing system 
 of industry. It is alleged that through the 
 strain it involves, as also through the oppression 
 
 Degenera- to which it gives rise, it leads to Degeneration. 
 The grounds on which this complaint is based 
 are, it must be said, somewhat hypothetical and 
 indistinct in character. The system is accused of 
 producing that which it is considered, chiefly on 
 a priori reasoning, to be likely to produce. Over- 
 work and under-pay, with bad conditions, will 
 cause physique to degenerate. So far as the 
 fact of degeneration is concerned the evidence 
 seems contrary to that which might have been 
 expected from the standpoint from which we 
 set out. Physique does not appear to have 
 deteriorated in the way expected. To speak 
 with certainty on this subject is of course a 
 104
 
 PRACTICAL BASIS. 
 
 matter of considerable difficulty; but the facts 
 which have been adduced with regard to 
 mortality, together with the auxiliary evidence 
 collected from other sources, warrant such a 
 modified conclusion. This, however, does not 
 by any means constitute an answer to the 
 charge under consideration. For this there 
 are two reasons, of varying application and 
 validity. On the one hand, a time can be 
 pointed to when the forces of competition 
 under certain conditions were working con- 
 siderable havoc, and appeared to menace the 
 prospect of future developments. Before the 
 passing of the Factory Acts and the cheapening 
 of bread the condition of the working classes 
 was one of dire gloom and confusion. Chartism, 
 which, under the cloak of a political demand, 
 represented a strenuous outcry for social 
 reforms, may be taken as the index of the dis- 
 content, and of the causes which underlay it. On 
 the other hand, the improvements in physique 
 and other respects are due, it is urged, to the 
 various influences which have restricted the 
 true competitive forces ; they are as it were
 
 THE SOCIALIST STATE. 
 
 the first flowers brought into bloom under the 
 soft spring breath of Socialism. Such an impli- 
 cation seems nearly as untrustworthy as the 
 analogy itself. A little of a thing may be much 
 better than a great deal; and Socialism, like 
 some drugs, should perhaps be always admin- 
 istered homceopathically. And yet the other 
 possible conclusion is even more perilously 
 uncertain. It is that the present system is not 
 the present system, except in so far as it is 
 competitive. No doubt competition plays 
 an important part; but that it is the whole 
 being of the existing economic system is in- 
 correct. However essential, it is but one of 
 several elements which are alike essential. If 
 the charge of tending to Degeneration is made 
 against a system of unmitigated and unrestrained 
 competition, it may be valid; but that does not 
 prove that it is valid when applied as a criticism 
 to the present social organisation. 
 
 Chronic 5. Again, it is declared that under existing 
 Work conditions a greater amount of want of employ- 
 ment, both temporary and chronic, must be 
 experienced than would be the case in a 
 1 06
 
 PRACTICAL BASIS. 
 
 Socialist state. Let us see how the want of 
 employment arises. Putting on one side local 
 forces, which produce local complications, the 
 general causes which bring into existence the 
 unemployed may be briefly summarised under 
 the following headings: inefficiency, arising 
 from the fault of the individual; industrial 
 disputes; supersession, owing to improve- 
 ments and changes; commercial crises. In 
 the first case the removal of a very powerful 
 present cause of want of work will depend 
 obviously on the effect which the Socialist 
 system will produce on character; while 
 with regard to the second, it is obvious that 
 the pertinent change will consist in the sub- 
 stitution of one large employer for either a 
 disunited number or a combination. So far 
 as supercession of individuals, due to changes 
 in the direction of demand or alteration in the 
 methods of supply are concerned, there is 
 certainly a considerable probability that these 
 will be diminished, though in the interest 
 of progress it may be hoped that invention 
 will not be discouraged. Commercial crises, 
 107
 
 THE SOCIALIST STATE. 
 
 Unem- 
 ployed 
 under 
 Socialism 
 
 to take the fourth cause, will certainly not 
 exist in their present form, for whatever the 
 State does it will be obliged to continue work 
 and to distribute pay, though in self-defence 
 it may be compelled to largely diminish the 
 general rate of remuneration. 
 
 6. Want of Employment and the Unemployed 
 Question will not exist so long as the Socialist 
 State holds together, because it is among the 
 first conditions of its being that it offer work to 
 and employ its members; but unless the causes 
 which at present operate to produce them are re- 
 moved, this will often mean little more than that 
 the loss occasioned by inefficient labour, more 
 or less unwanted, will be cast on the whole 
 community and met chiefly by the labour of 
 those who are more efficient and in employ- 
 ment. In some cases this is, no doubt, amply 
 justifiable. If society wants to buy its goods 
 cheaper or better, owing to new methods, it 
 ought to be prepared to meet the cost. As 
 matters at present stand society gains, and 
 the discarded individuals pay. 
 
 In one respect the Socialist State will have a 
 108
 
 PRACTICAL BASIS. 
 
 great advantage in facing this pressing problem. 
 It will possess the necessary organisation for 
 employing labour, and will consequently have 
 comparatively little technical difficulty in pro- 
 moting any development that may be needed. 
 
 But the ultimate means by which the un- 
 employed will be brought into work, or at 
 any rate cease to be the unemployed, needs 
 a word. Work will be offered to all people 
 able to work; but if they refuse they will have 
 no further resource. They must starve. One 
 of the great difficulties of the present economic 
 system is that a primitive method of this 
 description cannot be applied, owing largely 
 to the uncertainty which exists as to whether 
 those out of work have had a fair chance of 
 work offered them. Now in a developed 
 system of Socialism it will be assumed that 
 they have had this. At any rate they will not 
 be allowed to question the fairness. 
 
 7. To compare the conditions of the past Want of 
 
 Work 
 with those of the present as regards the want p as t and 
 
 of employment would be a task of no little Present 
 magnitude. Though this has not been by any 
 109
 
 THE SOCIALIST STATE. 
 
 means adequately done, the researches and 
 considerations which have been published 
 at any rate serve to show the baselessness 
 of the notion that it is a phenomenon 
 of comparatively recent date. So far is 
 this from being the case that well-defined 
 attempts to deal with it are familiar to the 
 student of the past. In an intermittent form 
 it has been an obdurate and unwelcome 
 concomitant of the economic development of 
 this country; at times, indeed, lessening 
 with the increase of favourable conditions, at 
 times increasing. In the past no doubt it was 
 much more a local matter than is at present the 
 case, but this was due riot to any less severity, 
 but rather to the division of the country into dis- 
 tricts and localities almost entirely self-sufficing 
 and well-nigh isolated in their interests. The 
 contention sometimes raised, that with rapid 
 development more rapid fluctuation and greater 
 temporary uncertainty of work have taken place, 
 does not appear to be based as yet on well- 
 ascertained historical grounds. It may be said to 
 be probable; it can hardly be said to be proved, 
 no
 
 PRACTICAL BASIS. 
 
 8. But in addition to the foregoing, an issue Modern 
 
 , , , Estimates 
 of possibly greater importance is raised by the 
 
 contention that the wage-earning class as a 
 body is not so well paid now as formerly. 
 The distribution of wealth in the present 
 and the past is a subject which has attracted 
 considerable attention, and which from one as- 
 pect deserves the importance allotted to it by 
 Socialists. Notiring can better strengthen the 
 case of those who demand social change than 
 to show that the lot of a particular section of 
 the community is becoming more difficult and 
 more gloomy. It emphasises its necessity, and 
 makes necessity immediate. To paint the 
 whole condition in its most lurid light only 
 requires the additional statement that the 
 wealth which ought to have gone to the 
 benefit of the poorer class has been greedily 
 appropriated by the richer, with the result 
 of placing in still stronger antithesis increas- 
 ing wealth and increasing poverty. This high- 
 coloured representation of the condition of 
 society is still used, though, so far as the 
 prominent leaders of Socialism are concerned, 
 
 XII
 
 THE SOCIALIST STATE. 
 
 to a somewhat less extent than formerly. They 
 speak more about the waste, and the conse- 
 quent non-production of the wealth which might 
 have augmented wage payments. But the basis 
 of both positions consists obviously on the be- 
 lief that wage remuneration is less now than 
 formerly. 
 
 Deceasing There is yet a further attitude which has 
 Wages 
 
 been taken up by some Sociah.)ts. While they 
 
 grant that there has been a general increase in 
 the rate of wages, they contend that this has 
 not taken place in proportion to the increase 
 in the total income of the country, and that 
 wages are thus being continually forced down 
 below the proportion which they once reached, 
 and still should reach. Even in this case a 
 still more subtle position presents itself. It 
 might be alleged that wages in their increase 
 have not kept pace with the growth of pro- 
 ductive control over nature, owing to invention 
 and the like. This may arise either through 
 competitive waste or through exploitation by 
 owners or users of capital and land. 
 
 9. So far as waste is concerned, sufficient has 
 
 112
 
 PRACTICAL BASIS. 
 
 been said to indicate the manner in which it 
 may occur, and the probability that it has acted 
 as a very considerable discount on the advan- 
 tages which accrue from improvements in both 
 organisation and method. A numerical esti- 
 mate, even were it possible on other grounds, 
 would be rendered useless by the impossibility 
 of drawing a distinction between waste which 
 is unnecessary, and that which occurs through 
 the supersession of worse by better methods, 
 and which is therefore a legitimate condition 
 of progress. 
 
 10. But there are two matters much more Modern 
 
 . . ... , Earnings 
 
 capable of statistical inquiry, and approximately 
 
 of determination. In the first place, are average 
 wages less now than formerly ? In the second 
 place, which has increased more, the share of 
 the richer, or the share of the poorer that due 
 to those owning capital, or that to those owning 
 labour ? In this latter case, it must be remem- 
 bered, that the division between rich and poor 
 does not necessarily or actually correspond to 
 that between Capital and Labour. 
 
 11. In a comparison of present wage-earnings 
 
 113 8
 
 THE SOCIALIST STATE. 
 
 with those of the past many features have to 
 be taken into account, as, for instance, certainty 
 and continuity of employment and prices of 
 commodities. But when this is done, can 
 it be said that any decisive conclusions have 
 been reached ? So far as early and recent times 
 are concerned, the matter is excessively difficult, 
 inasmuch as the whole surrounding conditions 
 differ so widely. But taking average real wages, 
 that is wages as represented by the commodi- 
 ties and comforts supplied, and such as can be 
 earned by the very great majority, there seems 
 little doubt as to the much-improved condition 
 of the workman or labourer to-day. In the 
 case of wages obtained for somewhat skilled 
 employments there is a probable much greater 
 advance. On the other hand, it is urged 
 that in the Middle Ages, roughly let us say 
 till the sixteenth century, there was a much 
 greater certainty of what may be called rude 
 sufficiency than there is now. This is, however, 
 more uncertain. Work, and with it, almost ex- 
 clusively, food, depended then on the factors 
 of. individual willingness, good seasons, health 
 114
 
 PRACTICAL BASIS. 
 
 and peace. There were no doubt other elements, 
 but they were of minor import, for the large mass 
 of the population who were able bodied could, 
 without going far outside their own district, 
 provide themselves with the main neces- 
 saries of life. In the towns it was no doubt 
 otherwise, and there we do hear of clamouring 
 for high wages, and of want other than that 
 which came from famine, pestilence, and 
 war. But whilst modern progress has held 
 back the stroke of this three-fold scourge, it 
 has introduced a mechanism of industry so 
 intricate and delicate that want of work may 
 arise from causes other than disinclination or 
 inclement weather. So far were the labourers of 
 the Middle Ages from suffering in this way that 
 it may be safely said that a considerable part of 
 their liability to famine and scarcity arose out 
 of a want of organisation and capital. 
 
 12. The progress of the wage-earning classes Real 
 . - . Progress 
 
 during more recent years, as, for instance, the 
 
 past century and a half, can be treated in a way 
 
 quite other than the above. Various attempts 
 
 have been made to describe or estimate it from 
 
 "5
 
 THE SOCIALIST STATE. 
 
 statistical and other records, the more especially 
 with regard to the last fifty or sixty years. 
 Though there is considerable difference as to 
 degree, the most scientific and thorough of 
 various accounts are unanimous in regarding 
 this latter period as one of great general pro- 
 gress in earnings, a view which, to a less extent, 
 is taken of the past century and a half. Of 
 course there are considerable differences of 
 estimate which, in addition to the controversy 
 evoked by these various statements, render it 
 impossible to do more in a short space than 
 indicate the general bearing of scientific 
 historical and statistical investigations. The 
 accusation levelled against some of these as 
 having been conceived in the interests of 
 Capitalism only recoils to the discredit of those 
 making it, as it shows their unwillingness to 
 believe in the possibility of impartial study 
 unless it confirms their own prejudices. 
 Earnings of 13. A somewhat similar difficulty, if possible, 
 
 Capital and . .. 1f ., , 
 
 Labour one even greater, presents itself in the endeavour 
 to compress into a very few words the result of 
 the inquiries which have been made as to the 
 116
 
 PRACTICAL BASIS. 
 
 comparative growth of the remuneration of 
 Capital and Labour. If this subject be taken 
 in its most literal sense, the answer is not diffi- 
 cult, since the decline in the rate of interest shows 
 that the return appropriated by the Capitalist 
 for the success of a given quantity of capital is 
 decreasing, while, on the other hand, it is alleged 
 by statisticians that the return to a worker for a 
 certain amount of labour is, and continues to 
 
 be, greater. But the meaning usually applied Have 
 
 . . Wages 
 
 to the proposition relates not to the remunera- fallen com- 
 
 tion of any definite quantity, but of Capital interest' 
 as a whole compared with Labour as a whole, 
 irrespective of the fact that there may be 
 a disproportionate increase in either. This 
 meaning differs, as will be seen, from the 
 stricter one adhered to in the discussions on 
 the analogous theoretical problem. But even 
 adopting this view, and allowing the Capitalist 
 class to be represented by all the income paying 
 income-tax, the increase, as reckoned between 
 1851 and 1879-80, was reckoned as but slightly 
 greater than that of the total receipts of the 
 wage-earning class. Moreover, the great increase 
 117
 
 THE SOCIALIST STATE. 
 
 in the former wealth, according to the income- 
 tax return, has been among those receiving 
 small incomes, mainly between 200 and 
 ^400, which, it must be remembered, only 
 differ from wages in being called salaries. 
 They are paid for work. On the whole there 
 appears to be no statistical basis for the asser- 
 tion that Labour tends to obtain a less and 
 Capital a greater share of the total income. 
 
 14. It may indeed be urged, and with con- 
 siderable truth, that the cause of the increase, 
 both absolute and possibly proportional, of the 
 Labour income has been due to combinations 
 on the part of the workmen and interference on 
 the part of the Government. But, as already 
 pointed out, these must be regarded as part of 
 our present social industrial system. Were we 
 engaged in a contrast between a Socialist and a 
 purely competitive society, interferences by the 
 State at least, with their results, would not come 
 into the account. 
 
 Surely it is a matter for serious doubt if such 
 arguments as the two last of those which have 
 been instanced as forming part of the so-called 
 118
 
 PRACTICAL BASIS. 
 
 practical basis of Socialism are really essential. 
 If true, they form no doubt an argument of the 
 immediate-emergency type ; but the assumption 
 is so great a one, and at present so unsupported, 
 that for Socialists to rest their demand on them 
 is like placing the weight of a bridge on its 
 weakest piers, because they are most gaudily 
 painted. From its view of economic society, 
 Socialism claims that no radical and permanent 
 cure for its many evils can be effected without 
 the use of the remedy it advocates. Whatever 
 may be thought of its conclusion, its criticism 
 of so-called progress deserves most careful 
 attention. Granted that it be exaggerated, 
 granted that the condition of the working and 
 wage-earning class is bettered, and has been 
 much bettered, is the improvement anything 
 like so great as might be expected from a re- 
 view of the numberless inventions and advances 
 of the last few, and, in particular, of the last 
 two centuries? 
 
 119
 
 Organisa- 
 tion of 
 Society 
 
 FEATURES OF THE SOCIALIST 
 STATE. 
 
 VII. 
 
 SOCIETY THE FAMILY. 
 
 T. IT is proposed to examine Socialism with 
 regard to its probable or necessary effects on the 
 organisation of Society, and, in particular, on 
 those institutions which are deemed of funda- 
 mental importance to its well-being and continu- 
 ance. In this relation it will be necessary to 
 inquire not only what interference it intends, 
 but also what consequences it will occasion, 
 either of necessity or in all probability. Between 
 these a great distinction must be drawn. A 
 necessary alteration is one which arises out of 
 the due development of the essential principle or 
 120
 
 SOCIETY THE FAMILY. 
 
 principles of Socialism; a probable consequence 
 is one which is more or less likely to be caused 
 by the intrusion of other elements, or by 
 human weakness taking advantage of certain 
 new opportunities offered it. 
 
 Of all institutions there are two which are 
 generally deemed of fundamental importance to 
 Society the Family and Private Property. By 
 fundamental importance it is meant that they are 
 to be found in every organised and developed 
 society; that they appear to be inextricably 
 interwoven -with the course of its development; 
 to be, in fact, organic elements in its constitu- 
 tion ; that history and analysis reveal them as 
 supplying the formative and cohesive power to 
 its being. If this be so, it cannot be denied 
 that any interference with them in diminution 
 of their strength must be regarded very jeal- 
 ously, lest rash hands should destroy the 
 delicate life which makes society and the state 
 something more than a mere dead mechanism 
 or arithmetical computation of numbers. Hence 
 any proposed change must be zealously ex- 
 amined, with a view to ascertaining its limits. 
 121
 
 THE SOCIALIST STATE. 
 
 To say that a change is a small one is not 
 enough. It may seem small and yet grow to be 
 large. 
 
 The Family 2. The Family. In family life man first ceases 
 to be an individual, and comes to be a citizen. 
 Viewed in this aspect, the Family is the micro- 
 cosm of the macrocosm, the State. These few 
 words indicate some part of the importance 
 which it bears in the eyes of most sociologists. 
 How does Socialism propose to treat it ? 
 
 The chief essentials of the existence of the 
 Family and of Family Life would seem to be two, 
 Stability of Marriage and Parental Responsibility. 
 Unless these be maintained it is indeed diffi- 
 cult to understand how family life can exist, for 
 in their absence it is impossible to imagine any 
 adequate relations existing between husband and 
 wife, or parent and child. 
 
 Will 3. Socialism, it may be clearly said, does not 
 
 Socialism . 
 
 affect obviously involve any interference with the exist- 
 ence of the Family; it does not require any 
 relaxation of the marriage tie, or any diminu- 
 tion of parental responsibility, in order to bring 
 the institution into conformity with its prin- 
 122
 
 SOCIETY THE FAMILY. 
 
 ciples. These are best expressed and under- 
 stood in its projects, which, after all, are limited 
 to an alteration of the system of production and 
 productive ownership. Now there is no abso- 
 lute reason why collective ownership and collec- 
 tive employment and collective State expendi- 
 ture should bring with them changes in these 
 directions. Socialism, it must never be for- 
 gotten, unlike Communism, is restricted in scope, 
 and does not aim at a transfiguration of the 
 institutions governing the whole domain of 
 life. Of course there are bodies of Socialists, 
 just as there were bodies of Communists, who 
 urge great relaxations both with regard to mar- 
 riage and the custody of children ; in the former 
 direction sometimes going so far as to- advocate 
 Free Love; in the latter, State Nurseries as well 
 as State Infant and Adult Schools. But these 
 extremists cannot be held to commit Socialism 
 as a creed and Socialists as a party to their 
 peculiar doctrines. They are an offshoot. But 
 as an offshoot, it is worth considering whether 
 they do not represent an unfortunate tendency 
 or drift in Socialistic thought. The tendency is 
 "3
 
 THE SOCIALIST STATE. 
 
 that of regarding Society as something which 
 can be cut up, arranged, and remodelled at 
 will. Society, however, is not made, it grows. 
 From this weakness the majority of the scientific 
 advocates of Socialism are free, but it is doubtful 
 whether the same can be said of the rank and 
 file of the party. It may be answered that the 
 rank and file will have to do as they are told, 
 that they will follow their leaders, that they are 
 not more ignorant than the rank and file of other 
 parties. No doubt there is much that is true in 
 this; but it must be remembered that Socialism 
 is proposing a very great revolutionary change in 
 one department, and that it is all important to 
 make sure that it shall be able to restrict the 
 forces of change which it lets loose to that 
 particular sphere. Socialism, however, as a 
 system, does not propose to interfere with the 
 existence and importance of the Family. 
 
 4. But despite its proposal and professed 
 intentions there seem to be in Socialism cer- 
 tain opportunities for interference with the 
 Family which do not present themselves in 
 economic society as now constituted. It has 
 124
 
 SOCIETY THE FAMILY. 
 
 assumed new functions, in the performance of 
 which it may be brought seriously near the 
 danger which it declares itself even anxious to 
 avoid. 
 
 5. In respect of Parental Responsibility, the Parental 
 new educational powers of the State, and the 
 desire to provide an equality of opportunity, 
 may possibly operate adversely. The admissi- 
 bility of State control in the case of children is 
 chiefly a matter of degree. For certain pur- 
 poses it is no doubt desirable, and the advan- 
 tages gained in these directions may well out- 
 weigh certain disadvantages, provided that these 
 do not include the supersession of parental 
 control in the case of average parents. Some 
 parents indeed are absolutely disqualified by 
 their habits and vices from being allowed a voice 
 in the direction of a child's life, though even 
 in such instance it is a fair matter for doubt 
 whether they should be permitted to divest 
 themselves of their responsibilities without 
 punishment. But in these instances they are 
 unworthy of responsibility just because Family 
 Life with them is a mere mockery, because it is 
 125
 
 THE SOCIALIST STATE. 
 
 of too great rather than too little importance. 
 To deprive the ordinary parent of his responsi- 
 bility would need arguments of a wholly different 
 character. It will be said that Socialism does 
 not make any such proposals. This fact, though 
 very important, does not affect the precise 
 matter at issue. Again, it may be urged that 
 any new functions assumed by the Socialist State 
 will not include it. Is this so certain? Free 
 schooling, free breakfasts, and free boots seem 
 demands which, following one another in natural 
 sequence, are more likely to prove the starting- 
 point than the termination of the educational 
 policy of the Socialist State. There will be, if 
 means hold out, an undoubted temptation to 
 provide a complete system of gratuitous educa- 
 tion and its accessories, or, to use a comprehen- 
 sive word, up-bringing for children to end in 
 specialisation and employment. Equality of 
 opportunity, some may consider, would be im- 
 paired by the separate action of their parents. 
 Of course such a system of up-bringing, if intro- 
 duced, would be free, but it may be urged that 
 it would not be compulsory. Once again, is 
 126
 
 SOCIETY THE FAMILY. 
 
 this so certain? Why should not the argu- 
 ment that because a certain education is free it 
 should be compulsory, supersede its converse in 
 the popular esteem ? It might be declared that 
 if it is of sufficient importance to be made free, 
 it is of sufficient importance to be made com- 
 pulsory. 
 
 To say that such an assumption by the 
 community of far-reaching obligations towards 
 children is an avowed consequence of Socialism 
 would be inaccurate, but it does not seem to 
 lie outside probability. So far as socialistic 
 principle, in the strict sense, is concerned, it is 
 not necessary; but it is a possible danger, and 
 possible dangers must be reckoned with. 
 
 6. The menace to the Stability of Marriage is Or 
 of much the same character. Interference in 
 this quarter, too, is disavowed by scientific 
 Socialism; but in much the same way there are 
 certain reasons for doubting its power to main- 
 tain the impartial attitude thus betokened. 
 Take the test of practice. It is hardly to be 
 gainsaid that certain Socialist communities, as 
 certain Socialist bodies, have displayed a good 
 127
 
 THE SOCIALIST STATE. 
 
 deal of practical approval of laxity in this direc- 
 tion. Experimental marriages and free love 
 have been tried as matters of necessary social 
 experiment. But though the action of the ex- 
 tremists by itself perhaps need not be seriously 
 feared, it assumes a certain importance when 
 viewed in connection with certain opportunities 
 or encouragements which the exigencies of the 
 new State may provide. If the State undertake 
 the up-bringing of children, it may possibly wish 
 to be consulted as to the marriages which lead 
 J to their production. This seems to become 
 v more than possible, even probable, when the 
 State guarantees work and support for all its 
 members. Under these circumstances, unless 
 the State intervene, reckless and indiscriminate 
 procreation would very likely ensue on the 
 breaking down of the last barriers of prudent fore- 
 thought. Even were this not likely to take place 
 to the extent thus suggested, the demand on the 
 part of the State to interfere would not be 
 unnatural. Plato foresaw the difficulty, and 
 f\ Plato provided for it. But modern Socialism 
 
 seems to shrink, either out of delicacy or 
 128
 
 SOCIETY THE FAMILY. 
 
 caution, from the expression of views on the 
 subject. This is unfair, for the matter is of 
 such grave import that the action of the 
 Socialist State with regard to it demands 
 exposition. It may be answered that no action 
 is intended. Does this imply that the tempta- 
 tion to State interference has been duly con- 
 sidered? Does it mean that this negative 
 determination is definite, and something more 
 than a mere postponement or temporary evasion 
 of the matter ? May not such regulation prove 
 to be a necessary consequence of Socialism ? 
 
 The dangers are two, and though very different 
 in direction, not necessarily exclusive. On the 
 one side, Free Love ; on the other, State Regula- 
 tion of Marriage. They are not necessary, but 
 are they probable or even possible consequences 
 of Socialism ? 
 
 7. From the above considerations there is room The 
 for doubt as to the stable maintenance of the 
 family tie, and the preservation of the most valu- 
 able elements of family life under a Socialist 
 regime. These ends will certainly not be achieved 
 without trouble and considerable steadfastness of 
 129 9
 
 THE SOCIALIST STATE. 
 
 purpose. To the contention that these matters 
 of private arrangement must of necessity depend 
 on the wishes of the individuals concerned, the 
 fit rejoinder can be made that in subjects of 
 such delicacy divergent action by individuals 
 will give rise to licence and fatally wound the 
 life of Society. Marriage and Parental Respon- 
 sibility have grown up with the State, and form 
 a part of its civil constitution. The Socialism 
 which is not going to affect them is one thing, 
 that which is, another ; and the Qomplaint which 
 has often been made as to the want of openness 
 in Socialist propagandism on this subject is too 
 important to be put aside with the lightness 
 which is frequently shown. 
 
 130
 
 VIII. 
 
 SOCIALISM AND SOCIETY PRIVATE PROPERTY. 
 
 i. THE simple imposition of certain limita- Socialism 
 tions upon the right of private property is not 
 of necessity an attack upon its essence and 
 nature. If due care were taken and pitfalls 
 avoided, it would seem not impossible to re- 
 strict the development of private ownership in 
 certain directions without interfering in any way 
 with its value as a social institution. But the 
 conditions on which this may be achieved must 
 be carefully defined and scrupulously observed. 
 In the first place, the action of the State must 
 be equal and not differential. In the second 
 place, transferable property in one country must 
 not be subjected to restrictions from which it is 
 free in others. In the third place, the growth
 
 THE SOCIALIST STATE. 
 
 of private property in response to individual 
 activities and efficiencies must be permitted. 
 
 There is in Socialism nothing necessarily 
 antagonistic to these principles. 
 
 Private 2. Socialism as Socialism allows of private 
 
 Property 
 
 property. 1 he product which comes to a man 
 
 in virtue of, and as the consequence of his 
 efforts and action, becomes his to enjoy as he 
 likes, so long as it retains the character of 
 wealth and does not assume the character of 
 capital. Wealth is essentially an end in produc- 
 tion; capital, a means. In this there is no 
 necessary limitation of the amount which may 
 be received, nor any approach to the proposition 
 of an equal division of the produce of social 
 efforts. Were that attempted, it would, with- 
 out doubt, seriously assail the being of private 
 property, as it would run counter to the third 
 of the conditions suggested above. 
 
 Right of 3. There is, moreover, no reason why the indi- 
 vidual who is so disposed should not postpone 
 the consumption of his share, or some portion 
 of his share, to a future time. This would im- 
 ply the right of saving or accumulating his 
 132
 
 PRIVATE PROPERTY. 
 
 wealth. It will be urged that saving can only Methods o/ 
 take place in two ways, either by the actual 
 accumulation of the articles in question, or by 
 the process known as investment. In a country 
 like England the latter method is almost invari- 
 ably employed. Indeed, in all communities 
 save those in a very primitive stage, it is difficult 
 to understand how the actual saving of consum- 
 able wealth can take place. As a general rule, 
 the saving of wealth is bound up with and 
 dependent upon its investment and use as 
 capital. That which one individual saves is 
 embodied in certain articles, as machinery, etc., 
 required in the productive processes which 
 issue in much more wealth than that invested 
 in them. In return for his compliance with 
 this temporary transformation of his savings he 
 receives a certain claim on the goods produced. 
 This involved method of saving offers, or seems 
 to offer, three advantages as compared with the 
 simpler method of each individual saving what 
 he wants. In the first place, there is less risk of 
 deterioration, since much loss might be incurred 
 either through the perishable nature of some 
 133
 
 THE SOCIALIST STATE. 
 
 commodities, or through a difference between 
 the wants of the future and those of the present. 
 In the second place, greater individual security 
 is provided. In the third place, owing to the 
 efficiency of capital, there will take place more 
 than a replacement of the wealth invested. 
 Under our present system this, or a portion of 
 it, is distributed in the form of interest. So 
 far as the first two of these advantages are con- 
 cerned, the action of the industrial organism is 
 in some respects that of an insurance company. 
 It prevents all risks falling upon the individual. 
 To sum up: under modern industrial circum- 
 stances the man who saves and invests has 
 before him a prospect of its replacement ; a 
 greater security as to its replacement and 
 against its deterioration, than if he put it in a 
 box or in his cellars ; and lastly, the prospect 
 of a certain share in the increase of the product. 
 Under 4' How far would the introduction of Social- 
 
 Socialism j sm modify or alter these conditions? The 
 latter prospect would, it may be said, vanish, as 
 private profit and private employment are things 
 necessarily prohibited. In certain circumstances 
 134
 
 PRIVATE PROPERTY. 
 
 it is indeed conceivable that certain analogous 
 gains might be permitted, but gains obviously 
 obtained and individualised in a very different 
 way. Broadly speaking, then, interest as an 
 individual gain would be abolished, inasmuch 
 as there would be no individual capital. But 
 further than this Socialism need not go. There 
 seems no adequate obstacle to the custody and 
 employment by the Socialist State of individual 
 savings with the guarantee of a future replace- 
 ment claim. In other words, any one wishing 
 to save might bank his savings with the State on 
 the assurance that he could claim them not in 
 kind, but in value at some future time. It may 
 be said that the individual who accumulates 
 wealth, or postpones consumption, would in 
 one way be benefited by this arrangement, as 
 he would have good security. The State would 
 keep either deposits or running accounts, 
 probably the former, but would, according to 
 Socialistic theory, pay no interest. 
 
 5. Even on this latter point there is room for And 
 doubt as to its actual necessity. In consequence 
 of the importance which individual accumulation 
 135
 
 THE SOCIALIST STATE. 
 
 may conceivably hold, thrift and postponement 
 may be deemed qualities of such value as to 
 deserve particular encouragement from the 
 State, and a small rate of interest might be 
 allowed. It would constitute an addition on the 
 part of the State to that claim which it gives the 
 individual against itself in return for the use of 
 his savings. The difficulty involved in such a 
 payment would be, that unless duly limited, it 
 would, in cases where the bequest of savings 
 are permitted, lead to inequalities similar to 
 those against which Socialists raise their voice. 
 To obviate this it would be necessary either to 
 limit the interest to the lifetime of the original 
 accumulator, whatever may be said as to the 
 bequest of the principal sum, a matter of 
 almost practical impossibility, owing to the 
 facility with which an inheritor might withdraw 
 and then return any sum, or to grant annuities 
 for one or possibly two lives as total return for 
 the use of savings. Such annuities might be 
 calculated at a slightly higher rate than that 
 which could be given if interest were not taken 
 into account 
 
 136
 
 PRIVATE PROPERTY. 
 
 6. Annuities in themselves need not involve Possible 
 
 ^L. -j r i T^U r u Annuities 
 
 the idea of interest. They can of course be 
 
 granted on the mere actuarial probability of 
 life. As a chief motive in saving is the pro- 
 vision of certain comforts or necessaries for old 
 age, and as a mere limited credit to be drawn 
 against would never assure their continuance 
 until the end of life, it would be highly desirable 
 for the State to grant annuities, which would 
 be enjoyed in addition to the pensions secured 
 to incapacitated or superannuated workers, for 
 these would in all probability have to be of 
 small amount. Some would say, the smaller 
 the better, so long as indolence, thriftlessness, 
 and lack of energy and enterprise remain 
 human characteristics. 
 
 If the idea of interest were entertained, 
 annuities might be granted for a life, plus a 
 small term of years. 
 
 7. But just as private property in consumption Right of 
 would exist, so would the power of parting with 
 
 such by gifts to others. To interfere with such 
 freedom would be not only an intolerable in- 
 fringement on private property, but an exceed 
 137
 
 THE SOCIALIST STATE. 
 
 ingly ill-advised proceeding. What could be 
 said of a state of social organisation which 
 would allow a man to drink a bottle of cham- 
 pagne alone, but not to share it with a friend ? 
 This would be a beginning of the transfer of 
 private property. Up to a certain extent, the 
 social sentiment which Socialism would or 
 should aim at engendering, would directly 
 encourage willingness to share or transfer 
 enjoyments. It might be that in certain cases 
 where one man could by his wealth enable a 
 another and younger one to live in idleness, such 
 transfer would be disadvantageous. It is pos- 
 sibly true; but Socialism as a definite system 
 would not therefore involve interference, though 
 some Socialists might wish to interfere. It 
 must, however, be remembered that as the 
 great sources of large accumulations, rent, 
 profits, and interest are removed, such cases 
 would be of comparatively rare occurrence. 
 Right of 8. Connected with, though in very important 
 respects distinct from, the Right of Private 
 Property is the Right of Bequest and Inherit- 
 ance. This latter is not indeed necessarily 
 138
 
 PRIVATE PROPERTY. 
 
 negatived by the main proposition which 
 Socialism lays down with regard to industry. 
 The refusal to permit Individual Capitalistic 
 Employment or Individual Profit does not 
 carry with it a prohibition of the bequest of 
 rights to enjoyment, that is, rights in consump- 
 tion, which are the sole matter in point. Yet 
 should these become at all important, it is hard 
 to doubt that attempts would be made with a 
 view to their restriction. To some extent the 
 State no doubt already claims this power as 
 inherent in itself, and future action would 
 be largely a matter of degree. Even should 
 interest for certain reasons be temporarily per- 
 mitted, it could in no case carry with it the right 
 of inheritance or bequest. Private property is 
 not in its conception dependent on the right of 
 bequest. 
 
 9. In one respect, however, the mere acknow- Possible 
 ledgment of private property in consumable ti 
 commodities, or of claims capable of being 
 expressed in them, is insufficient. Certain 
 assurances are needed before it can be regarded 
 as satisfactory. The right of consumption will 
 139
 
 THE SOCIALIST STATE. 
 
 be guaranteed in vain if the Socialist State 
 extends its functions from the regulation of 
 production to that of consumption. And yet 
 such a course would not seem initially improb- 
 able. Among its effects would be an obvious 
 restriction on Private Property as regards the 
 meaning which that phrase usually bears. One 
 hand would be busily occupied in taking away 
 what the other might give. For what would be 
 the use of informing a man that he has the right 
 of demanding what he wants, while steadfastly 
 refusing to put in action the means whereby his 
 demands might be satisfied ? Those means will 
 all lie in the control of the State. 
 
 Though the control of consumption would 
 have many and serious consequences, of which 
 the above are but part, it does not require further 
 treatment, inasmuch as it is not an inherent por- 
 tion of the proclaimed principles of Socialism. 
 
 140
 
 IX. 
 
 THE INDIVIDUAL. 
 
 i. FROM the point of view of Society itself Value of 
 individuality is a matter of the highest moment. 
 A society which was but an aggregate of uni- 
 form units would soon weaken and die of 
 anaemia. It requires the individual for its 
 life and its salvation from the fatal precursor 
 of death, monotony, and it requires him because 
 of the very manifold variety of its own life 
 with its countless difference of function. Nor 
 is individuality less important in industry than 
 in society. Here too it is needed for well- 
 defined and obvious reasons. In its lowest form 
 it implies energy and verve, in a higher form 
 enterprise, and in the highest of all the assertion 
 of artistic and intellectual individuality in pro- 
 141
 
 THE SOCIALIST STATE. 
 
 duction. It is true, no doubt, that in certain 
 cases the free play of individual qualities may 
 require to be restricted on behalf of other needs 
 of the vital social organism, of which they are 
 part; but due regard being had for that, free 
 development is not only a matter for tolerance 
 but for positive encouragement. The com- 
 plaint has often been made that Socialists tend 
 to neglect the great importance of a varied 
 individual growth, and to this feeling Anarchism 
 no doubt owes a certain part of the attraction 
 which it has for some of those who deem that 
 the present state of Society, and especially of 
 economic Society, is doomed, and that it is 
 their duty to discover by what it may be 
 replaced. The development of individuality 
 implies two things the encouragement of 
 Individuality, and the assurance of Freedom. 
 
 If we take the former, the feeling of its import- 
 ance can be traced through the different econo- 
 mic systems. Under slavery the use of individual 
 variations were fully recognised, and though 
 regarded as existing for the benefit of others, 
 these were both encouraged and exacted. In 
 142
 
 THE INDIVIDUAL. 
 
 a competitive society the offer of higher rewards 
 for certain functions, and as a temptation to 
 greater efficiency, indicates a like recognition. 
 
 2. But need individual differences always Relation 
 be recognised by material distinction, is the Rewards 
 question often asked In reply to this, it must 
 be pointed out that an absence of some such 
 correspondence when the individual differences 
 result in material differences appears strangely 
 artificial and unreal. Historically, such a 
 connection has, as has been indicated, always 
 existed, and in the light of modern demands 
 and ambitions it is vain to deny its effect. At 
 the root of this desire lies a complex basis of 
 motive. There is the simple desire to get 
 more, which, selfish though it is called, does not 
 appear so selfish when the family and other 
 aims which the individual cherishes in harmony 
 with and as his own are remembered. In close 
 connection with this is the wish which well- 
 nigh every one has, to see the fruits of his labour 
 and in some measure to realise their existence. 
 No doubt this is related to the foregoing, but 
 it is related too to the impenetrable dislike of 
 143
 
 THE SOCIALIST STATE. 
 
 being cheated out of the product that has been 
 made, or of the marks which have been gained. 
 The somewhat casual mention which is some- 
 times made of the altruistic love of Society in 
 the Socialist State does not appear to meet the 
 whole difficulty, even were the probability of its 
 effective existence granted. But this requires 
 more proof than has been advanced. 
 
 Socialism 3. Socialism, however, does not necessarily 
 
 not 
 
 necessarily involve a denial of the force of the above- 
 
 istic S mentioned motives. It offers to take men as 
 they are, with motives as they are, merely limit- 
 ing differences in material payment to those 
 cases where such appear as the necessary correla- 
 tive of actual and individual differences. In 
 profession it is not antagonistic to enterprise 
 and freedom. And yet, despite this profession, 
 it is necessary to examine the principles on 
 which it is based, and the forces which it brings 
 into action in order to estimate the probability 
 of the due maintenance of those conditions of 
 * individual development. Socialism involves 
 Regulation and the existence of a Bureau- 
 cracy. 
 
 144
 
 THE INDIVIDUAL. 
 
 4. Regulation in some form or other attends It involves 
 every form of government, and has formed 
 part of the social policy of the last half 
 century. But between this and Socialism there 
 is this one important distinction, that it has on 
 the negative side confined itself to the pro- 
 hibition of certain separate methods and certain 
 separate conditions which are in themselves a 
 demonstrable menace to well-being and health, 
 while on the positive side it has likewise chosen 
 certain departments of activity for its own. For 
 each and every one of these a definite reason is 
 given and a definite defence made. But under 
 Socialism the position will be reversed, and it 
 will no longer be the instance of control by the 
 State which will require justification, but the 
 exception of particular cases from its wide and 
 far-reaching care. It is questionable if, with 
 the best intentions in the world, the Socialist 
 State will not soon find itself busily engaged, 
 not only in the regulation of Production, but in 
 the regulation of Consumption. It will lay down 
 rules and regulations which will display in full \ 
 flower the worst elements which germinated in 
 145^ 10
 
 THE SOCIALIST STATE. 
 
 the sumptuary laws of the past. Most people will 
 probably consider this intolerable. Some do 
 not. Why not, they ask, welcome State regula- 
 tion in matters of such trifling import ? Surely, 
 they say, individuality does not depend on 
 them ? There are several remarks to be urged 
 on these somewhat confident utterances. Sump- 
 tuary laws have been tried, and have proved 
 both bad and futile. Again, the kind of in- 
 dividuality which is bred and formed under 
 perpetual regulation will probably be very 
 different from the individuality which proudly 
 boasts its strength in opposition to the emascu- 
 lating effects of a system, which is always 
 saying what is to be done and how it is to be 
 done. It will in this respect be like a grown 
 man of weak intellect, tied to the apron strings 
 of a dictatorial nurse-maid. But even should 
 Socialism resist the obvious temptation to extend 
 its powers in this direction, it will obviously and 
 necessarily be occupied, so far as production is 
 concerned, in minute definition of the method 
 in which industrial undertakings are to be 
 carried on. Though, while doing this, it 
 146
 
 THE INDIVIDUAL. 
 
 will not be invariably necessary to instruct 
 individuals as to the functions which they are 
 to perform, some function like this will not 
 improbably devolve on the Socialist State by 
 reason of its guarantee of employment. As to 
 this latter two difficulties arise. The guarantee 
 is one of employment and not of suitable em- 
 ployment, a distinction which may lead to very 
 considerable misunderstandings and hardships. 
 To obviate these some individual supervision in 
 an early stage may become desirable. But 
 further, it may be inquired what a man can do 
 who refuses the particular form of employment 
 open to him. This question is peculiarly in- 
 teresting in view of the almost frantic haste with 
 which Socialists rush to deny any imputation of 
 slavery to their system. That, however, is a 
 mere matter of nomenclature. Socialism having 
 taken away from certain individuals those ad- 
 ditional alternative chances which are permitted 
 to him even by the present competitive system, 
 offers them the choice of work or starvation. 
 And this is not slavery ! On the whole starvation 
 is a fairly efficient substitute for the gang driver's
 
 THE SOCIALIST STATE. 
 
 whip. It is, of course, true that in many cases 
 the present competitive system results in much 
 the same issue, but it may be held to provide 
 more alternatives. Moreover, will the Socialist 
 State be prepared to offer the minimum guarantee 
 of existence to those who do not take its work ? 
 If it does, it will assuredly not dispense with a 
 labour test. 
 
 And 5. A system of regulation such as this must 
 
 cratic U ^ e under the control of a Biireaucracy . Though 
 ment^ 6 at one ** me a & rea * deal f suspicion used to 
 attach to officialism, the tendency of opinion 
 seems to incline to the opposite extreme. 
 Probably bureaucracies are neither so bad nor 
 so good as they have been painted. They 
 have certain virtues and they have certain 
 defects. On the one hand, they are stable and 
 admirably adapted for the conduct of routine 
 business; on the other hand, they are not par- 
 ticularly sanguine or particularly open-minded. 
 There are, of course, exceptions to these as to 
 other rules, but if we would reach a fair 
 conclusion care must be taken that we are 
 not unduly influenced by the action of those 
 148
 
 THE INDIVIDUAL. 
 
 bodies which are anxious to prove that there 
 are exceptions, and which consciously demean 
 themselves as such. 
 
 How far a system of bureaucratic regulation How it 
 
 . may affect 
 is calculated to promote the development of 
 
 individuality and enterprise is a consideration 
 which must have weight in any estimate formed 
 of the practicability of Socialism, for bureaucracy 
 must be faced as a consequence, and an un- 
 avoidable consequence. 
 
 6. Energy and efficiency in the performance Energy 
 of any particular work may be encouraged by 
 the simple expedient of difference in wages and 
 payments, which, regarded as premiums on 
 industry, integrity, and intelligence, may be 
 as fully and fairly regulated and bestowed 
 under Socialistic as under competitive con- 
 ditions. But even in this direction there 
 are certain difficulties to be faced which 
 do not present themselves so markedly at 
 present. Promotion must take place either by 
 merit or by seniority. Incapacity in one de- 
 partment must lead to transfer to another. 
 Now if the conduct of the administrative ser- 
 149
 
 THE SOCIALIST STATE. 
 
 vices is carefully observed it will be seen 
 that there are two opposite dangers. On the 
 one hand, inefficiency is often tolerated where 
 it would not be tolerated in a private office, 
 and dull seniority is promoted over the head 
 of more brilliant juniors. On the other hand, 
 excuses may be sought in fancied inefficiencies 
 for the advancement of private friends. On the 
 one hand promotion by seniority, on the other 
 hand by favouritism. In both cases there is 
 one prominent cause and one natural result. 
 The cause is that individual officials bestow 
 the favours, while the public pays. The con- 
 sequence is a risk or loss to the public. 
 Enterprise 7- Enterprise may be denned as the discovery 
 and utilisation of new directions for industry. 
 It instigates invention, adapts it for practical 
 use, and opens up and develops new channels 
 for trade. So fully is its importance recognised 
 that it is not necessary to inquire if Socialism 
 would desire to discourage or limit its growth. 
 But despite its obvious wishes, hostile critics assert 
 that the conditions of the Socialist State in this 
 respect will be anything but propitious. Let us
 
 THE INDIVIDUAL. 
 
 first consider the position which enterprise occu- 
 pies in the industrial world at the present time. 
 Its great risks must be set against its great 
 profits; and however great the waste occasioned 
 in trying new methods and attempting new 
 openings, this must be regarded as the necessary 
 cost of advance. Of course foolish experiments 
 should be discouraged, a matter of difficulty, as 
 it will be necessary to distinguish between what 
 is foolish and what is merely novel. The best 
 and only suitable discouragement is to place the 
 responsibility and risk on the shoulders of those 
 who make the experiment. Let theirs be the 
 venture, with its risks and its profits. In their 
 undertakings they are no doubt much influenced 
 by that mental condition which leads individuals 
 to under-estimate their particular chances of 
 failure, and to over-estimate their particular 
 chances of success. 
 
 8. But in the Socialist State the individual 
 risk will vanish, and with it will go, it may be 
 said, the need for individual profit. No doubt 
 this is so, and it would not matter were it not 
 for the fact that enterprise is essentially an
 
 THE SOCIALIST STATE. 
 
 individual characteristic, depending on individual 
 initiative. Some encouragement can be given 
 by the extension of a system of premiums 
 somewhat similar, though necessarily superior 
 to those offered to induce ordinary energy 
 and efficiency. But when these are great, 
 though of course not nearly as great as those 
 sought under present conditions, it is unfor- 
 tunate that the State, which will have to pay 
 them, and not an independent body, will have to 
 decide as to both their magnitude and their need. 
 So far as purely scientific invention is concerned, 
 this will probably not matter nearly so much 
 as in the case of the practical ability which 
 utilises these inventions and develops new 
 methods and other means of satisfying wants 
 hitherto ungratified. Moreover, in their treat- 
 ] mention ment of new inventions and new inventors State 
 departments have up to the present not set an 
 example which can be said to encourage their 
 investiture with the sole power of encouraging 
 enterprise. Central and Local Authorities 
 have indeed often taken over and carried 
 on inventions and businesses founded on 
 152
 
 THE INDIVIDUAL. 
 
 these when once started, but there are not 
 many instances in which they have undertaken a 
 new invention of any magnitude, or been first to 
 put such into practice. Many charges are made 
 against them. They are said not to be sanguine 
 or open-minded. Of course there is the opposite 
 danger. Extravagance is a feature of much 
 official management, mainly arising out of 
 the apparent magnitude of funds and the 
 absence of individual risk. The barque of State 
 industry sails between the Scylla of' routine 
 and the Charybdis of extravagance. As to the 
 encouragement or discouragement of individual 
 talent, one great advantage is claimed on behalf 
 of Socialism. Owing to the greater equality of 
 opportunity which it seeks to establish, it will, 
 it is said, place at the disposal of the State 
 many more individuals of ability than can 
 present themselves at present. In other words, 
 it will rescue from premature suppression a 
 great fund of possible inventiveness and enter- 
 prise. Some able men may be discouraged, is 
 the argument on one side; but there will be 
 many more able men to choose from is the 
 153
 
 THE SOCIALIST STATE. 
 
 fair retort. An ultimate judgment will depend 
 on the estimates formed respectively of these 
 two, that is, as to the extent to which enter- 
 prise will be discouraged, and as to the 
 amount of fresh ability brought into promin- 
 ence owing to the greater opportunities of 
 training which Socialism claims that it will 
 provide. 
 
 9. But the Socialist environment and organisa- 
 tion may have other effects upon ability than 
 those which can be treated of in relation to 
 industrial energy and enterprise, and here it is 
 that the opponents and advocates of Socialism 
 meet in direct conflict. The latter assert that, 
 by reason of the greater diffusion of comfort 
 which it will occasion, by reason, that is, of the 
 greater equality of opportunity, much ability 
 hitherto obscured in the hard struggle for mere 
 necessaries of life will be afforded oppor- 
 tunity for development; the former, that the 
 atmosphere of regulation and the greater 
 monotony of life will be fatal to the growth of 
 genius which requires freedom and implies 
 imagination. Like the wind, it bloweth where 
 154
 
 THE INDIVIDUAL, 
 
 it listeth and, unlike lesser accomplishments, it 
 cannot be acquired by diligent attention to 
 rules. Much depends upon the extent to which 
 regulation of life will be attempted. But 
 when it is said that the mere regulation of 
 industrial processes will not necessarily affect 
 the conditions under which genius and high 
 ability make their way, the assumptions are 
 made not only that State control can be 
 strictly limited to the one department, but 
 that its development there will not produce 
 either a feeling of regulation or a greater 
 monotony than at present exists. Monotony 
 rules at present through most classes and most 
 spheres, but there are certain classes and groups, 
 not probably the richest or the most honoured in 
 the world, which fence themselves in from its 
 disastrous sway. They are both allowed and 
 they are able to exist now. Will there be a 
 like immunity and possibility secured to them 
 under Socialism ? 
 
 10. As to the possibility, some suggestions Genius and 
 are offered by the comparison of what takes place 
 with what may take place. Genius and the 
 155
 
 THE SOCIALIST STATE. 
 
 higher intellectual developments rest on the 
 individual, and on those who appreciate him. 
 Few men can live by the production of master- 
 pieces, though many men have to make the 
 attempt. What encouragement and apprecia- 
 tion these receive proceeds from a minority, 
 who, actuated by motives of contrariety or by 
 good taste, act in opposition to the received 
 opinion of the time. In a plain material sense 
 their material support comes from a small circle. 
 But in the Socialist State the wealth of those 
 who can afford to give such assistance, to in- 
 dulge, for instance, in purchasing the works of 
 unpop-.ilar artists, will be sensibly diminished. 
 It is urged, however, that this loss will be amply 
 made up by the greater number of moderately 
 wealthy, and by the action of the State in 
 encouraging merit and genius. The value 
 attached to the former depends obviously on 
 the opinion which is formed both as to the 
 possibility of much appreciable increase in the 
 wealth of a large number and as to the prob- 
 ability that small increases will go in additions 
 to ordinary luxuries. 
 
 156
 
 THE INDIVIDUAL. 
 
 ii. But State management, conceived of in On State 
 the light of academies more or less governed by 
 a democratic vote, is a most insidious danger. 
 Books are written, pictures are painted, music 
 is composed for those who understand them, 
 and these in their turn will influence society. 
 It will be a terrible thing to limit production 
 in these arts to works which are understood 
 by a voting majority or by the permanent 
 officials solemnly installed as judges. In the 
 case of literature the difficulty of Socialistic 
 organisation is peculiarly marked. Unlike 
 other artists, the writer is essentially dependent 
 upon the auxiliary labour of others. As his 
 works must be printed, he must in some degree 
 come under the control of State organisation; 
 for however much private employments may 
 be permitted in instances where they do not 
 involve the employment of others, they cannot 
 be allowed where they do, as in publishing and 
 printing offices. So books, essays, and all 
 printed matter will practically pass under the 
 censorship of the officials of a monopoly. 
 There will be no competition and no appeal. 
 157
 
 THE SOCIALIST STATE. 
 
 The Effect 12. A statement such as the above of the 
 cracy effects and difficulties, and in the case of 
 Enterprise and Individuality mainly of the 
 difficulties, which are involved by the extension 
 of the functions of the State, is often met by 
 the assertion that though these are probable 
 with a state as at present organised, they need 
 not to be feared under a state both demo- 
 cratic and socialist. This is a mere assump- 
 tion. When put in extreme terms it means 
 the regeneration of the state, an assumption 
 which, though not quite as vast as that of the 
 regeneration of individuals, is not a whit less 
 unascertained. It only means the regeneration 
 of the majority in their voting, and also of the 
 officials, whom they elect, in their actions; and 
 so far as our knowledge of the past goes it 
 is essentially unlikely. There are particular 
 reasons for doubting its probability. It must, 
 it would seem, derive its new spirit from one or 
 other of its elements, Socialism or Democracy. 
 Now so far as Socialism is concerned there is no 
 necessary effect produced upon motives, unless 
 greater equality be taken to involve this, while 
 158
 
 THE INDIVIDUAL. 
 
 regulation cannot be expected to inspire even if 
 it does not destroy. Democracy, on the other 
 hand, as it has represented itself in history and 
 not in programmes, is by no means free from 
 selfishness, corruption, and instability. Per- 
 haps the union of the two is to effect that which 
 each in isolation essays in vain. Possibly it 
 may, but if it does, it will achieve its task under 
 circumstances of great difficulty. 
 
 13. It is asserted that the Socialist State will, Public 
 broadly speaking, act as it should under the 
 full glare of a searching and strong public 
 opinion. But here is the difficulty. Will it be 
 subject to free public criticism to the same 
 extent as a present everyday State? Spoken 
 criticism no doubt, but what of written criticism ? 
 It is a difficulty which has not escaped the view 
 of Socialists themselves, that inasmuch as all 
 capitalistic organisation will be taken over by 
 the State, there will be no private issue of news- 
 papers and other means of political criticism. 
 This is not likely to conduce to the publication 
 of outspoken attacks on what will then be the 
 constitution of things. A State, even if paid by 
 159
 
 THE SOCIALIST STATE. 
 
 subscriptions from the partisans of the writer, 
 will have to be inconceivably regenerated to 
 actually publish attacks on itself, particularly 
 if they happen to be well founded. Censorship 
 can always find excuses. Possibly a good deal 
 of newspaper criticism might be suppressed with 
 advantage so far as particular instances are 
 concerned ; but the work of discrimination is 
 too dangerous to be embarked upon. And yet 
 some means must be found. It is no use 
 assuming that Society will be regenerated under 
 the influence of criticism, and then instituting a 
 condition under which those interested in the 
 maintenance of the status quo will have every 
 interest and every reasonable opportunity for 
 interfering with the publicity of such criticism. 
 Matter of detail though this may seem, the 
 peril is so tremendous that a mode of obviating 
 it must be discovered. 
 Ethical 14. In the region of ethics Socialism will, in 
 
 tne anticipations of its advocates, produce a great 
 modification in the aspirations and motives 
 governing and directing the members of a 
 community. A higher civic patriotism will be 
 1 60
 
 THE INDIVIDUAL. 
 
 inspired by the example presented by the State, 
 and consolidated by the new habits of social 
 action enforced. In other words, while the 
 public conscience is aroused, the public energy 
 will be directed into channels of activity other 
 than those which have absorbed it in the past. 
 Usage has indeed a very powerful influence, 
 and it is by no means improbable that owing to 
 it, in conjunction with the loftier views taken of 
 public rights and public duties, some effect will 
 be produced on the action and thought of some 
 of the community. The extent of the change 
 cannot be estimated ; least of all can it be 
 expected that it will be rapid. It is question- 
 able, indeed, if much will be achieved unless 
 measures are taken to preserve a sufficient 
 individuality for the new influences to operate 
 upon. But this is what many critics tremble 
 for. They urge, and with good show of reason, 
 that individuality is necessary for moral as for 
 intellectual progress. 
 
 15. Though some limitation of individual Conclusion 
 growth is inevitable under Socialism, its extent 
 will depend upon the possession by the rulers 
 161 11
 
 THE SOCIALIST STATE. 
 
 of the State of sufficient resolution to refuse 
 any unneeded expansion of its functions. Thus 
 it certainly will bring a large department of 
 life, industrial production, under the regula- 
 tion of the State and state officials. Equally 
 surely will it limit the opportunities for the 
 display and development of individual powers 
 and activity. But it need not claim the con- 
 trol of any other department, of consumption 
 for instance. On the other hand, Socialists 
 urge that the acceptance of their system will 
 give opportunity for the development of some 
 individual character and qualities in large classes 
 of mankind, who have hitherto been absolutely 
 debarred from such by the unseen, but none 
 the less forcible, powers of the competitive 
 system. 
 
 1 6. Much, indeed, rests on the view which is 
 formed of Freedom, and on the particular form 
 which it will take in the Socialist State. If Free- 
 dom, both in action and atmosphere, be essential 
 to the development of life, and if such be 
 restricted by the new system introduced, oppor- 
 tunities for individual development will not avail 
 162
 
 THE INDIVIDUAL. 
 
 much. A slightly higher average may be attained. 
 But even if this be so, it will be dearly bought at 
 the expense of the originality which inspires, 
 and the individuality which directs the life of 
 people as units and as nations. It will be an 
 attempt to substitute the gentle warmth of hot- 
 water pipes for the fierce glow of the blast 
 furnace, with the result that warmth will be 
 more evenly distributed, and that a high degree 
 of heat will be unattainable. 
 
 One thing seems tolerably certain. Society 
 will not remain stationary. If it is to live, and 
 continue to live, it must unfold itself in due 
 organic growth. Will Socialism prevent, retard, 
 or assist such growth ? 
 
 163
 
 X. 
 
 ECONOMIC ORGANISATION CAPITAL. 
 
 Need of i. OF all the charges brought against Social- 
 
 ism as a working scheme, there is none more 
 frequent than that which asserts that it would 
 involve itself in disaster through discounten- 
 ancing saving. Some have embraced this 
 belief so warmly as to declare that it pre- 
 tends to develop industry, and undertake 
 economic enterprises without capital. What- 
 ever may have been the language and revolu- 
 tionary outcries of unthinking advocates who 
 have attached themselves to this movement, to 
 its obvious discredit, no such foolish notion has 
 anything to do with its proposals. It proposes 
 to organise collective industries, and to carry 
 them on by the collective use of capital. If this 
 164
 
 CAPITAL. 
 
 term is used in any strict sense as implying that 
 portion of accumulated wealth which is em- 
 ployed to promote and facilitate further pro- 
 duction, it is clear that in its use it will belong 
 to the State. Private industries, involving Private 
 capitalistic employment and private profit, are t b e 
 things absolutely forbidden. They are sins allowed 
 against the cardinal principle of Socialism. But 
 as has already been explained, there is no reason 
 whatever why the Socialist State should refuse 
 people permission to postpone the satisfaction 
 of the claims which they have for work per- 
 formed, or in other words, from saving as much 
 as they please, and as much as they can, pro- 
 vided only that neither they nor any other 
 individuals use these savings in industry, that is 
 as capital. What they own will be wealth; but 
 so long as it is in their hands it will not be 
 capital. Indeed, no individual will want capital, 
 for no individual will be given the opportunity 
 of using any such thing. 
 
 2. But the State will use it, and the State will state wUl 
 
 . , ru . , . , . . . use Capital 
 
 want it. 1 here are two ways in which its capital 
 
 can be obtained. It can be raised either from 
 165
 
 THE SOCIALIST STATE. 
 
 the private savings of individuals, or from the 
 savings which the State itself may make. In 
 the latter case the State, being engaged in 
 industry under conditions like any other body, 
 with the additional advantage of monopoly rights, 
 in place of spending all the revenue it receives on 
 public improvements and other advantages, will 
 carry forward such portion as may seem desirable 
 for extensions of branches already existing, or 
 for the establishment of new branches. In this 
 there is no other difficulty involved than that 
 which always besets the saving of money by a 
 public body. A large surplus usually leads to 
 extravagance, unless economy is the interest of 
 some particular person or small body of persons. 
 But even if such extravagance is kept within 
 reasonable limits, a task in which a strict ad- 
 ministration may succeed, there is always a 
 difficulty in meeting public demands for ex- 
 penditure. Taking governments as a whole, 
 they are not successful in saving; and so it 
 may, and probably will, happen that more 
 capital will be required than the State has 
 at its command out of its own accumulations. 
 166
 
 CAPITAL. 
 
 A loan must be raised; but the only fund out Others may 
 of which such a loan can be raised will be 
 private accumulations. A few words will 
 make the position clear. The Socialist in- 
 dustrial state will want a loan because it 
 wishes to engage in work which will yield no 
 immediate return in those consumable com- 
 modities which are desired for, and in, them- 
 selves. It wants machinery or buildings, etc., 
 in order that it may by the aid of these proceed 
 to further production. But whilst producing 
 commodities of this kind or second order, it 
 will not be producing goods which will meet 
 the wants of those whom it employs. Some 
 postponement of consumption, on the part of 
 those whom it either has employed or is 
 employing, is necessary. Recourse must be 
 had to private savings. This means that private 
 individuals, who might demand the satisfaction 
 of their demands, will postpone consumption, 
 with the result of placing at the disposal of the 
 Socialist State a certain amount of productive 
 force. 
 
 3. In this there is no essential difficulty. 
 167
 
 THE SOCIALIST STATE. 
 
 Government and municipal loans are matters of 
 every-day occurrence, and in many instances 
 they are incurred to meet what is called pro- 
 ductive expenditure. But there are two pos- 
 sible points of difference between the circum- 
 stances of a competitive system and of a Socialist 
 system. Under the former there are many very 
 large incomes out of which savings can be made; 
 and, in the second place, interest is always paid 
 for loans. Saving depends both on the fund 
 out of which it can be made, and on the 
 motives that exist for accumulation. 
 Oppor- 4. To some it has appeared certain that the 
 
 for saving fund out of which private savings will be made 
 will be sensibly diminished, and this for several 
 reasons. In the first place large incomes, which 
 give the opportunity for large savings, will be- 
 come scarce, and be clipped of their generous 
 proportions. In the second place, the State will 
 have to keep back a large share of the earnings 
 of its employees or subjects to provide for a 
 pension fund. In the third place, industry will, 
 it is assumed, be so much less productive that 
 the total revenue due to individuals, both in 
 168
 
 CAPITAL. 
 
 payment and by way of pension, will be much 
 smaller. The last assertion raises a question of 
 very vital importance, and one which will require 
 more detailed notice. But putting it aside for 
 the time, what sufficient ground is there for 
 assuming a possible decrease in the fund out of 
 which individuals can save ? It must be remem- 
 bered that the deductions for pension purposes 
 can be vested in the hands of commissioners, 
 and these lent to the industries of the State, 
 the pensions being made a first charge on the 
 revenue. As to the first objection, its validity 
 depends on the view taken as to the relative 
 proportion in which saving takes place amongst 
 the wealthy, the well off, and those but moder- 
 ately well off. It must not be forgotten that 
 considerable thrift is displayed by the better 
 working classes, and great thrift by those who 
 hold a position neither high nor low in the 
 middle class. 
 
 Socialists, on the other hand, urge that by the 
 abolition of competition much waste in produc- 
 tion will be saved, and by the discouragement 
 of speculation much loss of what is saved and 
 169
 
 THE SOCIALIST STATE. 
 
 sunk in unprofitable investments will be avoided. 
 It should not be forgotten, however, that this 
 loss may be regarded as a part of the price of 
 enterprise and industrial advance. 
 
 5. The extent to which the motive to saving 
 is affected by reliance on a future pension, if 
 such be granted, need not be taken into account, 
 as corresponding deductions will be made for 
 this purpose. The fund to which these are 
 passed must be regarded as sacred, a duty which, 
 though a little difficult at first, usage would 
 probably facilitate. Still there is some risk in 
 the matter. For other reasons, and especially 
 with the view of encouraging individual thrift 
 and responsibility, it would be well that the 
 pensions should secure little more than a 
 necessary minimum, to supplement which 
 would be the aim of the more prudent. In- 
 surance and provision for the early years of 
 children would also be guaranteed by the 
 State, and in the latter instance it may be 
 feared that insufficient care would be taken to 
 provide a special fund. But hitherto the ques- 
 tion of the payment of interest has been avoided. 
 170
 
 CAPITAL. 
 
 6. Can the Socialist State consistently pay The 
 
 . . ... Question 
 
 interest? So long, indeed, as foreign oppor- O f Interest 
 
 tunities for private investment present them- 
 selves, the State will be bound to offer interest 
 if it desire to raise a loan. Even if this be not the 
 case, there seems no absolute Socialist objection 
 against such a payment by the Government 
 to those who are willing to entrust it with their 
 money. Socialism objects to two things 
 private employment, because of the waste it 
 occasions and the hardships it inflicts, and 
 private profit, because that is held to imply a 
 monopoly of the advantages of industry. But 
 neither these nor their consequences would be 
 brought upon a Socialist country by the offer of 
 a rate of interest, granted that this were such 
 a rate as to permit the greater share of the 
 profits of industry to pass to the State. Against 
 the expediency of interest it is urged that 
 the State will be already benefiting those who 
 wish to save, by providing them with the 
 means of so doing at good security; that saving 
 will take place whether interest be offered or 
 not; and that the payment of interest will lead 
 171
 
 THE SOCIALIST STATE. 
 
 to the resuscitation of a wealthy and idle class. 
 In respect of all these assertions very diverse 
 views prevail. This is particularly the case with 
 the last, which is questioned both as regards its 
 probability and its alleged disadvantages. 
 
 7. One thing is certain. As one of the chief 
 motives of saving consists in the desire to make 
 provision for future years, and as these are of 
 necessity of unknown duration, some means 
 must be taken of guaranteeing certainty to the 
 individual that none of them shall be unpro- 
 vided for. A man does not save to have three 
 hundred a year for twenty years, and then to 
 find that he is without the comforts on which he 
 has been accustomed to rely and which he has 
 hoped for, a fact which obviously suggests 
 some form of annuities. As has previously 
 been urged, these might be granted either for a 
 life, or for life together with a small term of 
 years. If the latter, it implies the permission 
 by the State of bequests. 
 
 172
 
 XL 
 
 ECONOMIC ORGANISATION PRODUCTION. 
 
 i. As the aim of a system of Economic Organ- Aim of 
 
 i c. j j A j 1. ^ Economic 
 
 isation is to find out and to produce what organisa- 
 
 is wanted, the test of its efficiency is the tion 
 extent to which it does this. At the present 
 time the manner in which this work is done is 
 simple and comprehensible. The great busi- 
 ness world consists of people who, in their 
 different grades, are seeking to discover the 
 articles or services which are required, and to 
 supply them in their own persons, or in their 
 own products, to the exclusion of the products 
 and persons of others. Though the system is 
 very far from being a perfect one, on the 
 whole the work of society is done, its old wants 
 are regarded and new wants are discovered and 
 173
 
 THE SOCIALIST STATE. 
 
 in their turn satisfied. Possibly it is cruel, cer- 
 tainly it is wasteful; but despite all that is said 
 with regard to advertisements and pushing of 
 goods, it tends to the satisfaction of wants. If it 
 accomplishes this it is from the point of view 
 of productive mechanism satisfactory. 
 How 2. Socialist Production, too, must be looked 
 
 uSr Ved at from this standpoint. Will it tend to pro- 
 Socialism d uce what is demanded, or will it tend to make 
 people demand what it produces ? To answer 
 this inquiry at all sufficiently necessitates some 
 consideration of the particular form which 
 the mechanism of production will wear under 
 Socialism. It will not, it must be observed, be 
 the prime interest of anybody to discover either 
 new wants or new means of gratifying old wants. 
 In substitution for the competitive system, of 
 which this impulse is the spring, there will be a 
 vast complex of state departments, the duty of 
 which will be the ascertainment, estimate, and 
 supply of the wants of its members. In each 
 town there will be gigantic stores with subur- 
 ban and local branches ; in each village, smaller 
 stores, to which those who have economic
 
 PRODUCTION. 
 
 demands, that is, those who want things and 
 can pay for them, will resort. From the shops 
 news as to the condition of the market will be 
 transmitted to the factories where the goods are 
 manufactured. 
 
 Such a system, though it has difficulties, is 
 not initially impossible. When described, how- 
 ever, it appears more workable than it might 
 prove in practice; for what is there to pre- 
 vent the continued production of the things 
 that are not wanted in the place of those 
 that are? Under a competitive system the 
 failure of those who persist in their perverted 
 course is the check; under a Socialist system 
 the accumulation of unsaleable goods must 
 serve. When such occurs, either owing to 
 considerable overstocking, or to its correlative, 
 an alteration in demand, the labour of the 
 factories will have to be turned into other 
 channels. In all probability alterations in price 
 will be the means employed of effecting the 
 necessary change; the goods which are super- 
 fluous, in view of the quantity demanded, will 
 be offered for sale at a lower price, and the
 
 THK SOCIALIST STATE. 
 
 labour of all those engaged in their production 
 will be deprived of some portion of its remuner- 
 ation, that is, paid at disproportionately low 
 rates. On the other hand, there will be other 
 goods with prices disproportionately high, and 
 other labour with unduly high rewards. In this 
 manner, by the variation of price and the varia- 
 tion of wages and salaries, an index will be 
 furnished of the goods which are wanted, and 
 of the labour which is required for their produc- 
 tion. 
 
 3. In some respects such a system has advan- 
 tages as contrasted with competitive production, 
 in other respects it is at a disadvantage. As 
 regards the former, it will not, it is clear, be 
 entirely free from some of the losses which exist 
 now, though it may fairly be urged that consider- 
 able economies will be achieved by the unity of 
 management, and by the absence of recurrent 
 breakdowns. On the other hand, it is exceed- 
 ingly doubtful if it will have the same, or any- 
 Competi- thing like the same, elasticity. Competition 
 means trying experiments in countless direc- 
 tions. Lower prices are offered, to be com- 
 176
 
 PRODUCTION. 
 
 pensated for by larger sales, and by new 
 economies in manufacture. Slightly changed 
 goods are substituted, and perchance may be 
 found in ample demand, whereas those which 
 they resemble do not sell. The drawbacks 
 and grievances of the two systems are very 
 different. Against competition is alleged its 
 anarchical waste, and the methods of advertise- 
 ment whereby people are continually persuaded 
 to purchase new articles. But against Socialist 
 production the main allegation is that people 
 will not get what they want, that they will 
 have to put up with old methods of satisfying 
 their demands. Its critics urge that in this 
 department Socialism will not achieve what, after 
 all, competition, despite its waste, does achieve, 
 the development and satisfaction of wants and 
 demands. Looked at closely, their accusation 
 resolves itself into two charges: first, that the 
 total productivity of labour will be less; and 
 secondly, that supply will not adapt itself to 
 demand. Not only will there be less, but what 
 there is will be less adapted to develop and 
 satisfy needs. 
 
 177 12
 
 THE SOCIALIST STATE. 
 
 And 4. The productiveness of Socialist organisa- 
 
 Socialist . . . ., 
 
 Production tion is a matter of serious import, for while it 
 
 is true that a better distribution may be taken 
 as an ample counterweight to some diminution 
 in the total product, there will come a point 
 when total decrease will mean a decrease in 
 every or nearly every share. But even if such 
 compensation be admitted, it is but excellence 
 in one department social distribution, atoning 
 for what cannot but be a defect in another pro- 
 duction. A diminution in the productive power 
 of labour is then in itself a grave drawback. 
 As to the likelihood of such there is much 
 debate. Competitive waste, says one, will 
 vanish. To be replaced, is the reply, by social- 
 ist misproduction, and on the whole it seems 
 probable that there will be a certain lack of 
 the keen personal enterprise and the bracing 
 responsibilities of risk and adventure which 
 stimulate to new exertion and arouse to new 
 departures. This is indeed one of the dangers 
 which looms large under the regime of So- 
 cialism. 
 
 Misproduc- 5. Again, misproduction will not improbably 
 tion 
 
 178
 
 PRODUCTION. 
 
 be of frequent occurrence. Even though the 
 State do not wilfully produce something which 
 is not wanted, it will continue producing par- 
 ticular things long after they have ceased to be 
 required, and in quantities in which they are 
 not required. Any new development and new 
 developments are, it is remembered, matters of 
 momentary occurrence will have to pass under 
 the consideration of State officials, who will 
 have to alter in nature and in official training 
 and habit from what they are now if changes 
 are to be made when they are wanted, and not 
 after the need for them has lapsed. What if 
 industry become a trade in antiquities ! Mis- 
 production is not meeting people's needs, it is 
 meeting needs which only exist in lieu of those 
 which cannot be gratified. It is very possible 
 that this retarding influence will be of particular 
 effect in the case of luxuries, for luxuries to 
 many Socialists are little more than a matter 
 for abatement. No doubt they are not neces- 
 sarily obnoxious to Socialism when true to its 
 principles, but there are not wanting indications 
 that this is one of those occasions when it may be 
 179
 
 THE SOCIALIST STATE. 
 
 pressed beyond these limits. And yet in many 
 cases luxuries are but the necessaries of future 
 generations. Glass windows and stockings were 
 at one time luxuries and accounted as the sign 
 of great wealth. Their use has slowly broadened 
 down till now their absence is regarded as a 
 mark of the direst poverty. But if new methods 
 and new products are to be encouraged some 
 especial means will have to be taken on their 
 behalf. Perhaps the economic organisation will 
 be completed by the establishment of a Depart- 
 ment of Industries and Novelties, though it 
 might very well be objected that such an 
 expression of the value set upon advance might 
 lead to a too great willingness to experiment 
 in every direction, without much care for results, 
 as the experimental officials would have no 
 personal risk. Here again are the Scylla and 
 Charybdis which threaten the Socialist barque 
 of State. 
 
 Defects of 6. The two great defects of Socialist Produc- 
 
 Pnxluction ti n are intricate centralisation and monopoly, 
 
 neither of which makes unreservedly for economy. 
 
 About the first little need be said, but as to 
 
 1 80
 
 PRODUCTION. 
 
 monopoly, there is greater difference of opinion. 
 It has, for instance, been asserted that the 
 substitution of public monopoly for competition 
 will cause great saving and be free from danger. 
 The waste of competition is to vanish, new 
 methods, improvements, and energy are not to 
 be retarded. Sometimes it is urged that a 
 monopoly, being large, can easily be kept from 
 abuse : it will only have one neck, is the 
 common if picturesque phrase. Sometimes that 
 publicity in a democratic country will be a 
 sufficient safeguard. These, as cries, are very 
 old cries. They have probably been raised by 
 every monopolist since the beginning of the 
 world, and they show an entire misconception 
 of the charges brought against monopoly, which 
 consist mainly in an imputed lack of keenness 
 and a consequent lack of improvement. There 
 are thus two sides to them. They avoid 
 the waste of competition, but they display a 
 lack of the energy which competition naturally 
 evokes. The economic question concerns the 
 relative magnitude of the advantage and dis- 
 advantage. In some cases, as, for instance, in 
 181
 
 THE SOCIALIST STATE. 
 
 the Post Office, the advantages probably out- 
 weigh the disadvantages, but the less the 
 business consists in routine work the less 
 likely is this to be the case. Furthermore, it 
 is alleged by some that there will be much 
 wasteful management in public monopolies, due 
 to the fact that those who direct and control 
 will not be personally, or deeply, interested in 
 effecting economies, and this, though possibly 
 exaggerated, must be taken into account as one 
 of the disadvantages of state production. 
 
 Arguments 7. An additional reason for the state 
 
 in its . 
 
 favour monopolisation and management of industries 
 
 is found in the argument, that in the course of 
 historical development large industries supplant 
 small industries, and private monopolies the 
 same competitive large industries. 1 On the 
 truth of this the validity of the reasoning of 
 a certain school of Socialists largely depends. 
 Were it proved, their conclusion might well be 
 said to follow, for if there must be monopoly, 
 of which they seem well assured, it seems almost 
 undeniable that it is in most ways better that 
 1 Cf. V. 
 182
 
 PRODUCTION. 
 
 such a monopoly should be public rather than 
 private. The historical ground thus taken is 
 very interesting, and the facts brought forward 
 afford a certain, even if in the eyes of some an 
 insufficient, basis. In the gradual growth of 
 industry and commerce, the small men, makers 
 and traders, have been pushed to the wall. Of 
 this tendency the later eighteenth and the early 
 nineteenth century furnish many illustrations. 
 The factory and its triumph are the burden of 
 their song. In the textile, hardware, chemical, 
 and other branches large undertakings super^ 
 seded, and in effect crushed out, the small com- 
 petitive workshops where a master and a few 
 men and boys wrought. Another aspect of the 
 case is not without its importance. At one time 
 many of the wants of a district were largely 
 supplied by the work of that district. Now 
 demand has become, as it were, national, and 
 finds its satisfaction from the labour and skill of 
 those who supply the whole country, or any part 
 of that country. This phase, it is urged, is com- 
 plete, and the system of large industries having 
 triumphed over its weaker rival is now face to 
 183
 
 THE SOCIALIST STATE. 
 
 face with a greater development of its own prin- 
 ciples. Monopolies, Unions, Trusts, or what 
 not, are superseding competitive great industries 
 just as these latter superseded small industries. 
 In certain branches it is true that such attempts 
 have been made, though it may be doubted 
 if the result of these experiments is likely to 
 encourage further development along the same 
 lines. In one or two instances, indeed, it has 
 been such as to point the moral of those who 
 believe that monopolies mean bad management 
 and the other defects of organisation which 
 they anticipate from a Socialist regime. In 
 certain cases, moreover, they have been mono- 
 polies only within certain limits, having their 
 actions largely governed by the knowledge 
 that a rise of price consequent on expensive 
 management will serve to call out home or 
 foreign competition. But, of course, the 
 strength of monopolies and that of the system of 
 large industries lie in different directions. The 
 latter has succeeded because while presenting 
 opportunities of economy it maintained its giant 
 strength unrelaxed through constant struggle; 
 184
 
 PRODUCTION. 
 
 the existence of the former presupposes an 
 absence of this keen atmosphere. If events 
 tend inevitably to produce conditions in \vhich 
 the large branches of industry are of necessity 
 under the control of monopolies, it would 
 appear reasonable to desire that these should 
 be public rather than private ; for while in many 
 respects private monopolies are more dangerous 
 and harmful, in one respect only, in being more 
 obviously subject to external criticism, do they 
 appear to more advantage. And even this ad- 
 vantage may be more apparent than real. 
 
 The existence of many private monopolies Private 
 would greatly facilitate the change from in- f s t n e polie3 
 
 dividual to collective ownership. The transfer *? v y, ar< J? 
 
 Collectiv- 
 
 of gas works to a municipality, or the acquisition ism 
 of a trunk railway by the State, involve little 
 break of continuity. In this way the establish- 
 ment of private monopolies may be regarded as 
 one of the most important steps in the march 
 towards collectivism. 
 
 8. In much the same way the aggregation of 
 subsidiary branches of industry under the con- 
 trol of the company or employer who is engaged 
 185
 
 THE SOCIALIST STATE. 
 
 in the manufacture to which these are auxiliary 
 may be pointed to as indicative of the ease 
 with which a Socialist State or Community 
 might proceed tho satisfy te wants of its 
 members. That there is a general tendency 
 towards aggregation of several industrial opera- 
 tions is undoubted, despite the conflict of 
 evidence as to the limits within which it takes 
 place. So far as manufactures clearly sub- 
 ordinate to and conditioned by the main pro- 
 duct are concerned, the position seems to be 
 duly recognised. Their determination both as 
 to quality and quantity renders it very advan- 
 tageous to the manufacturer to undertake their 
 production, unless either they be wanted in 
 insufficient amount or their manufacture in- 
 volve peculiar difficulties. Large companies 
 will manufacture their own cases, etc., and 
 supply certain wants, as light, etc. Railways 
 will make the accessories needed for their 
 manufacture of carriages, supply gas to them- 
 selves, and sometimes perhaps furnish food 
 for their employees. But attempts to run two 
 such branches together as spinning and weaving 
 1 86
 
 PRODUCTION. 
 
 have usually been abandoned, and it must be 
 remembered that most railways find it better 
 to buy a good number of accessories. 
 
 9. Just because collective production has 
 certain advantages and individualistic pro- 
 duction certain others, different branches of 
 industry present themselves as peculiarly suited 
 for the one or other system. This suitability 
 depends in the main on the effect which com- 
 petition is likely to produce in their management. 
 In some it may on the balance occasion a 
 loss, in others a gain. In some it will issue 
 in tremendous duplication of cost and great 
 waste, while in others the waste it involves may 
 matter little by the side of the greater degree 
 in which it adapts products to wants and causes 
 reasonable development of these latter. There 
 are then certain conditions which point to the 
 advantages of collective ownership and manage- 
 ment in the case of particular businesses. 
 These are mainly twofold. In the case of 
 those businesses connected with the work of 
 locomotion, transport, and communication, pure 
 competitive waste is so obvious, and a certain 
 187
 
 THE SOCIALIST STATE. 
 
 degree of monopoly so clearly advantageous, 
 that collective management or control is the 
 general custom. To some extent the same rule 
 holds good with the supply of water and gas 
 (lighting power). But these latter are affected 
 by another series of circumstances. Collective 
 ownership and management seem peculiarly 
 suitable where demand is dependent for its 
 satisfaction on local supply, provided that the 
 article or commodity in question is one aptly 
 produced by large industries. These general 
 rules, for principles they can hardly be called, 
 probably cover most of the cases in which State 
 or municipal ownership and management have 
 been attempted, and they indicate certain ante- 
 cedent probabilities of success. 
 
 188
 
 XII. 
 
 MONEY. 
 
 i. THE use of metal money, and indeed of Socialist 
 
 Antipathy 
 all kinds of money save one, has been assailed to Money 
 
 by many Socialists with an acrimony that is at 
 first sight a little puzzling. That this is some- 
 what due to a misunderstanding of the monetary 
 function, and of the part which coins and notes 
 play in the determination of prices, is probably 
 true; but it is impossible to suspect writers who 
 , are skilled in economic literature, if not skilled 
 economists, to be guilty of the rudimentary 
 mistakes which vitiate the arguments of their 
 less fortunately situated followers. They at any 
 rate do not attack money from the vague stand- 
 point of those who claim that wages should be 
 made to regulate prices, as has been done by 
 189
 
 THE SOCIALIST STATE. 
 
 some who cherish the nai've fiction in their 
 minds, that wages can be raised all round with 
 universal advantage if only prices are raised. 
 They do attack it in part, because they consider 
 that labour cost and nothing else should deter- 
 mine values. But their position is a little more 
 complicated than this brief statement would 
 show. In the forefront of their objections 
 comes that which has been referred to. Its use 
 obscures the fact that articles should bear value, 
 or, in other words, exchange for each other, 
 according to their cost in labour, both direct 
 and indirect, capital being reckoned as so much 
 past labour, and as nothing more. But in 
 the second place they regard the use of money 
 as objectionable, because of the opening which 
 it gives for speculation; while in the third place 
 it is capable of receiving arbitrary additions, 
 and so of occasioning alterations in value 
 between the past and the present. Of these 
 two latter objects little notice need be taken, 
 the second indeed being one which would be of 
 no importance under a system of Socialism, 
 provided that that worked correctly ; for did it 
 190
 
 MONEY. 
 
 do so, speculation on the part of individuals 
 would be, or should be, impossible. As for the 
 third, would it not lie as cogently against labour 
 as against gold as a means of measuring values 
 between the past and the present? The question 
 to be considered is the feasibility of labour cost 
 as a means of measuring values, and of payment 
 and purchase. 
 
 2. But before doing this it will be well to Except 
 
 . . Labour 
 
 consider the way in which it is proposed to Money 
 
 employ labour money. Under Socialism it is 
 asserted that articles will necessarily exchange 
 in the ratio of their respective costs in labour. 
 This granted, nothing can be easier, it is deemed, 
 than to substitute for gold, or any other artificial 
 means of declaring the worth either of a com- 
 modity or of the services of a man, the reckoning 
 
 of them in hours of labour. To take the case Labour 
 
 Tickets 
 of wages first. At the end of the week or day 
 
 each man will receive a ticket or tickets equiva- 
 lent to the number of hours which he has 
 worked. This does not imply that all labour 
 shall be considered as qualitatively the same, 
 and that quantity shall be the only difference, 
 191
 
 THE SOCIALIST STATE. 
 
 for labour of higher grades can be reckoned as 
 time and a quarter, time and a half, two times, 
 or whatever may be the case. At first sight 
 this no doubt seems difficult, and to some hope- 
 less, but in reality there is no difficulty involved, 
 when once the system is in work, which does not 
 already exist, to some extent at least, in our 
 present system, when some labour is worth 
 nineteen shillings a week, other twenty-seven, 
 and other again three, four, or five pounds. 
 These tickets entitle the holder to a commodity 
 or commodities equal to them in the amount 
 of labour at which they are estimated. In 
 the second place these prices will be expressed 
 in hours of labour, taking into account that which 
 is indirect and mediate, as well as that which is 
 direct and immediate. The labour cost of raw 
 material, of the machinery, and of the capital 
 will be computed. Capital will be regarded 
 only as requiring replacement, and probably a 
 profit, not, of course, a private profit, but a profit to 
 the government, the sole owner or user, of the 
 nature of a tax. Subject to this deduction, 
 which will make the price somewhat higher than 
 192
 
 MONEY. 
 
 it need otherwise be, the labourer will receive for 
 his labour that which has been produced in an 
 equal number of " hours." Of course labour of 
 different grades will be allowed for in prices as in 
 wages. Now this method of determining price, 
 complicated though it seems, is in reality not 
 very different from that which already exists. 
 
 3. But now, like new hours-of-labour, ticket Will any- 
 money must be considered critically. Will any- gained by 
 thing be gained by it is the question which first tbeir use 
 occurs. That seems very doubtful, except in so far 
 as the cost of the production of gold is concerned. 
 That indeed would be saved; but this economy 
 might be achieved too dearly. Such labour- 
 hour-tickets would be open to certain obvious 
 disadvantages that attend the issue of paper 
 money. Counterfeiting might be encouraged, as 
 that almost inevitably occurs in the case of paper 
 money which has to serve as general tender. It 
 may be doubted, further, if they would be readily 
 accepted by one member of the community 
 from another; but this objection, fatal though 
 it would be in the case of a country individual- 
 istically organised, would not be of such grave 
 
 '93 13
 
 THE SOCIALIST STATE. 
 
 consequence in the Socialist State when pur- 
 chases and payments would take place chiefly, if 
 not entirely, between the government and its 
 subjects. But this fact only emphasises another 
 of the great disadvantages which occur in the 
 use of a paper money. It is a claim, and a 
 claim might be repudiated. However unlikely 
 this may be thought, its very possibility indicates 
 the extent to which the worth of this money is 
 based on a reliance on the good credit and fair 
 action of the Government. On the other hand, 
 it must be pointed out that the circumstances of 
 labour-hour tickets hardly permit of their issue 
 taking place in undue amounts, as is the case 
 with paper money at the present time, and in this 
 way one of the subtlest and most fatal dangers 
 is avoided. In international transactions such 
 a money would be worthless. 
 
 Objections 4- There are, however, certain specific objec- 
 tions to the use of labour-hours as a means of 
 measuring value, and so of labour-hour tickets as 
 a means of estimating wages and prices. In the 
 first place stands the difficulty, doubtless largely 
 exaggerated, of reckoning labour and efforts of 
 194
 
 MONEY. 
 
 different grades in amounts of hours of simple 
 (i.e., standard) labour. Secondly, labour cost 
 must be arrived at, and so labour-ticket wages 
 awarded in one of two ways. The basis of 
 both must be either the amount of labour which 
 has actually been incurred, or the amount which 
 should have been or ought to be incurred. 
 Now it must be remembered that labour cost 
 varies from day to day, as well as from man to 
 man. If the second way be adopted, the new 
 money will not vary essentially in this respect 
 from the present money; but then labour-hour 
 tickets will not be a record of the labour cost, 
 but of the estimate placed upon the labour cost. 
 If the first way be that determined on, it would 
 in principle be difficult, if not impossible, to 
 prevent labour from being equally remunerated, 
 whether rightly or wrongly directed. In the 
 practice of the Socialist State this would of 
 course be met by the control which the admin- 
 istration would exercise over the mode of employ- 
 ment. If labour in certain directions be not 
 wanted, or rather be less wanted, it may even 
 command it to be estimated, not in one hour 
 195
 
 THE SOCIALIST STATE. 
 
 ticket per hour worked, but, let us say, in seven 
 hour tickets for an eight hours da)'. But in 
 this case again the institution of the new 
 labour-hour money would appear of little effect, 
 and a great change would be undertaken for a 
 comparatively insignificant result. 
 
 5. On a survey of the uses of money, and of 
 the position which it is likely to occupy under a 
 Socialist regime, too great an importance would 
 seem to have been attached by Socialists to the 
 necessity of change. To some extent no doubt 
 this has been due to misunderstanding, but 
 there can be little doubt too that it has been 
 partly owing to the vagueness in which the 
 Socialist policy is involved with regard to the 
 respective payment of labour which is more or 
 less rightly, and labour which is more or less 
 wrongly directed. 
 
 196
 
 XIII 
 
 FOREIGN TRADE. 
 
 i A matter which every scheme of Socialism Difficulty 
 must take into account, and which will prob- Trade to a 
 ably prove one of not inconsiderable diffi- g 
 culty, is the organisation and conduct of Foreign 
 Trade. Foreign trade under its present con- 
 ditions will cease to exist. In most Socialist 
 considerations which touch on this matter it is 
 assumed, though not always directly stated, that 
 this branch of commerce will be confined to the 
 purchase by the State of those commodities 
 which it requires from other countries, some- 
 times, indeed, only of those which climate, soil, 
 or other natural conditions preclude it from pro- 
 ducing at home. The latter point, as to what 
 commodities it will or will not purchase, need not 
 197
 
 THE SOCIALIST STATE. 
 
 be enlarged upon, though it suggests a possible 
 danger and difficulty; but putting this aside, 
 can it be said that this plan is one easy of 
 adoption ? At first sight it may seem so; but 
 the inquiry as to the price at which the Socialist 
 State will purchase introduces an element of, 
 perhaps unforeseen, difficulty. It is very well 
 to talk of the State buying; but at what prices is 
 it going to buy ? Of course, it will not be able 
 to buy at all without some form of money 
 which will be received in the country which 
 is the seller or which contains the seller. But 
 money alone will not fix the prices. Some 
 think, no doubt, that foreign prices will be 
 determined in the case of Socialism in much 
 the same way as they are now; but that is 
 impossible. At present, foreign prices, in this 
 respect like domestic prices, are determined by 
 a competition between a concourse of buyers 
 and a concourse of sellers, both of which groups 
 are composed of members in active internal 
 competition. But even if Socialism be intro- 
 duced into one country alone, this internal 
 competition between the groups of buyers or 
 198
 
 FOREIGN TRADE. 
 
 the groups of sellers will obviously cease. The 
 Socialist State, if there be one, will have to 
 buy and to sell in markets individualistically 
 organised. In some instances this may operate 
 to its advantage, in others possibly, though not 
 so probably, to its disadvantage; but the 
 point which has to be insisted on here is that 
 price will have to be determined by means 
 other than those which exist at present. This 
 will, of course, be emphatically and more 
 obviously the case when both the trading 
 countries are socialised. Then there will be, 
 so to speak, one buyer and one seller. 
 
 2. If this be the case, that is if both trading Difference 
 countries are Socialist States, it may be thought Home ami 
 that it will be possible to arrange foreign 
 purchases and sales of commodities by the 
 same methods and on the same basis as home 
 purchases and sales. To some extent even 
 it may be when only one State is Socialist, 
 the same guiding principle will determine its 
 action both at home and abroad. But what 
 is this guiding principle and what are these 
 methods? The prices affixed to the goods 
 199
 
 THE SOCIALIST STATE. 
 
 which are produced in the service of the State 
 at home will be based on the amount of labour 
 which they respectively involve, or should on 
 the average involve. This at any rate is the 
 principle which can be taken as the basis of 
 prices, even though in practice its application 
 may be found impossible (pp. 191-196). But if 
 it be difficult to utilise this rule in the case of 
 goods produced and used at home, how in- 
 finitely greater are the obstacles in the way 
 of its employment as regards those produced 
 in one nation and wanted in another. This 
 arises, indeed, out of causes laid down in 
 nearly every treatise on economics. Whether 
 it be true or not that in the case of one country 
 goods tend to exchange in the ratio of their respec- 
 tive costs of production, it is at any rate obvious 
 that this is not the case in the international 
 exchange of goods. The tendency in the 
 former case rests on the unwillingness of those 
 engaged in industry according to Socialism of 
 those who labour to employ themselves in 
 less remunerative when there are open to them 
 more remunerative channels or productions. 
 
 200
 
 FOREIGN TRADE. 
 
 It is assumed that labour can transfer itself, 
 and thus take equal advantage, unless unjustly 
 prevented, of the opportunities for production. 
 But however true this may be of labour, or 
 to use the wider term of industry, within a 
 country or nation, it is not true of labour 
 between nations. This fact carries with it the 
 inevitable consequence that countries or nations 
 differ, and may differ very widely, in the general 
 circumstances attending production. In other 
 words, the unit of labour, owing to its partial 
 immobility, is different in productive power in 
 different countries. Labour, on the average, is 
 more productive, more efficient, and therefore 
 capable of producing more value and of earning 
 higher wages, to use a term of our present 
 system, in one country than in another. So long 
 as these countries be separate, even though both 
 be Socialist, prices between them cannot very 
 well be based on labour values. To the answer 
 that this difficulty will not exist under a system 
 of international Socialism, it must be rejoined 
 that international much more than national 
 Socialism is a matter of the very distant and 
 201
 
 THE SOCIALIST STATE. 
 
 indistinct future. It may be that some time 
 or other the world may be united in a common 
 system of economic and political government, 
 under which free mobility of labour will exist, 
 and in which the advantages of the most 
 different countries will be equally accessible 
 to all. But until this final consummation 
 some means will have to be employed for 
 regulating the exchange of the commodities 
 of one nation for those of another. Even 
 then, moreover, distance, which is of a certain 
 consequence in this instance, will not be 
 annihilated. 
 
 3. One of two ways can be adopted. The 
 various Socialist nations may agree, though this 
 seems chimerical, to regard one hour's labour 
 in one place as equivalent to one hour's labour 
 in another, in which case things of obviously 
 different productive powers will be regarded as 
 equal. Moreover, is it not possible that an 
 hour's labour in one place and in one climate 
 may, while more productive, represent infinitely 
 more toil, strain, and fatigue than in another? 
 On the other hand, some attempt may be made 
 202
 
 FOREIGN TRADE. 
 
 at an estimate of the difference in productive 
 power between the average labour of one 
 country and that of another, a method which 
 would seem to afford as good an opportunity 
 for quarrels and negotiations and ultimate dis- 
 sent, as could possibly be found. 
 
 4. In this way, and indeed in any case, an Foreign 
 
 Trade will 
 act of foreign exchange, either of the purchase become au 
 
 act of 
 
 of goods from foreign countries, or of the sale Diplomacy 
 of goods to them, will be, as it were, an act 
 of State diplomacy and policy. This, indeed, 
 is a further and very grave danger. Even 
 granted that the different countries be honest 
 in their intentions, the situation is no easy one, 
 but it is hard to say how difficult it may not 
 be made if even one country, or rather the 
 administration of one country, take it into its 
 head to try and outwit its neighbours by either 
 concealing its own demands or holding back 
 some of its produce in order to obtain ex- 
 ceptionally good terms. If there are only two 
 individuals concerned in an act of barter, it is 
 always hard to determine the rate at which 
 one commodity should exchange for another 
 203
 
 THE SOCIALIST STATE. 
 
 Each party will have a view favouring its own 
 circumstances and endeavour to sway the bar- 
 gain to its own advantage, and this it will do 
 often without either feeling or intention of dis- 
 honesty. Under Socialism, so far as inter- 
 national acts of barter or of buying and selling 
 are concerned, each nation will be an indi- 
 vidual, and will consist no longer of a group of 
 individuals competing with and against each 
 other, and thus revealing the nature and extent 
 of its requirements and of its possessions. 
 
 204
 
 XIV. 
 
 EXPERIMENTS IN SOCIALISM AND COMMUNISM. 
 
 i. THE many references which have been Experi- 
 made to experiments, either in Socialist organ- m 
 isation or by way of Socialistic undertaking, 
 lead almost necessarily to a short considera- 
 tion of their nature, and of the extent to 
 which they furnish grounds for expecting the 
 dangers, difficulties, and advantages which some 
 writers declare to be inherent in Socialism. 
 Certainty, or even a high degree of prob- 
 ability, is hardly to be expected, for as yet 
 experimental attempts have been few in num- 
 ber and very limited in scope. But they may 
 in some degree confirm or discountenance the 
 anticipations arrived at on other grounds. 
 
 A very clear distinction must be drawn 
 205
 
 THE SOCIALIST STATE. 
 
 between the two kinds of efforts which have 
 been made to realise Socialism in practice. 
 On the one hand are those which are limited 
 to the attempt on the part, as a rule, of local, 
 or to speak generally, of public bodies to under- 
 take branches of industry and trade usually 
 conducted by private enterprise. On the 
 other hand come those which consist in 
 efforts to establish fully-constituted Commun- 
 istic or Socialist communities. One important 
 difference between the two lies in the very 
 contrary effects which the consciousness of 
 the experimental nature of the proceedings 
 is likely to have. So far as the mere under- 
 taking of particular functions is affected it 
 will produce in all probability great keenness 
 and a more thorough care than might other- 
 wise be exhibited. In other words, it possibly 
 adds and certainly does not detract from the 
 probability of success. But the reverse is the 
 case with a fully-constituted community which 
 must exist on solid and real foundations, and 
 to which the suggestion of experiment imparts 
 a dangerous feeling that the conditions of life 
 206
 
 SOCIALISM AND COMMUNISM. 
 
 are artificial and can be easily altered at 
 will. 
 
 2. The management by public bodies of in 
 different branches of industry and commerce, Manage- 6 
 though by no means new, is at the present ment 
 time receiving a good deal of notice. In the 
 main it has been exercised where circumstances 
 have offered advantages of one or more of three 
 kinds : the supply of commodities uniform 
 in character and of nearly uniform demand; 
 the supply of commodities of general necessity; 
 the management of undertakings in which mono- 
 poly presents great and singular advantages. 
 In addition to certain public works 'which 
 must be undertaken by a public body, if 
 undertaken at all, because their performance 
 offers little chance of either individual or 
 immediate profit, public bodies may be said 
 to have embarked in some place or other on N 
 
 the management of nearly every means of 
 locomotion, transport, and communication, on 
 the production of the standard means of 
 lighting, on the supply of water, and in less 
 frequent cases on the provision of the means of 
 207
 
 THE SOCIALIST STATE. 
 
 satisfying a number of minor but fairly regular 
 needs. The degree of success attending these 
 efforts is so various, and where great has 
 been attributed to so many causes, that a 
 complete generalisation is hardly possible. At 
 the same time there are two things which can 
 And their be pointed out. The success has been such 
 as to induce a more general belief in the 
 capacity of corporations and other bodies for 
 such enterprises than prevailed a few years 
 ago. In one particular this is very important. 
 It is no longer considered a matter of almost 
 absolute necessity that public works should 
 be performed by contractors. Direct employ- 
 ment by public bodies has shown itself to be 
 feasible in certain directions. Whether it will 
 prove capable of very much extension is of 
 course a totally different matter. 
 
 3. In fulfilment of this purpose, the attempt 
 has been made by some few public bodies to 
 undertake the satisfaction of their own more 
 subsidiary and minor needs. Support has been 
 sought for their action in the example of many 
 large industries and businesses, as great manu- 
 208
 
 SOCIALISM AND COMMUNISM. 
 
 factories and railways, where a number of 
 auxiliary productions, required for the com- 
 pletion or dispatch of the main commodity, are 
 no longer brought from outside, but made under 
 the same management and in the same works. 
 So long as these are truly subsidiary, the de- 
 mand for them conditioned by the amount of 
 the main commodity produced and the pro- 
 cesses they involve not too highly complicated, 
 fairly uniform advantages have ensued, at least 
 in the case of the private or joint-stock under- 
 takings. So far as public bodies are concerned, 
 the evidence, though as yet unfortunately scanty 
 in amount, seems on the whole to be favourable. 
 But even were it fuller, though it would no 
 doubt be eminently valuable, it would not in 
 itself solve the mechanical economic difficulties 
 which beset the general undertaking by the 
 State or by local bodies of an aggregate of 
 industries, the mutual relations of which are not 
 certain, and the productions of which are not 
 obviously conditioned by one another. On this 
 subject much more knowledge is required, and 
 as such can be gained only by experiments, it 
 209 14
 
 THE SOCIALIST STATE. 
 
 must be regarded as a matter for serious regret 
 that the action of some of the bodies most 
 willing to attempt by these means more economic 
 production and more equable administration, 
 should be impeded by party spirit, anxious to 
 make political capital out of the success or 
 failure of each or any experiment. 
 
 In Com- 4. The many efforts to found Communistic 
 immistic . .. . . . , f . 
 
 Societies or Socialist communities can only be referred 
 
 to in the most general terms. That they 
 have, in the great majority of instances, been 
 unsuccessful has been variously accounted 
 for, causes of failure being sought by some in 
 the circumstances surrounding the experiments, 
 nnd the failures themselves adduced by others 
 as proof of the inherent impossibilities of Com- 
 munistic, or even of Socialistic, organisation. In 
 a modified sense both criticisms suggested would 
 seem to be true. They are not necessarily 
 contradictory. A sudden change from present 
 conditions to those involved in either the 
 Socialist State or the Communist State is 
 probably impossible, for one very powerful 
 necessary force in the constitution of society is
 
 SOCIALISM AND COMMUNISM. 
 
 custom or habit. Too much conscious action, 
 in addition to being wasteful of human force 
 and energy, is detrimental, inasmuch as it leads 
 to constant and restless revision of the social 
 
 constitution. Owing largely to this, Commun- Reasons for 
 . . ... . . Failure 
 
 istic communities in many instances were un- 
 able to persevere through such a short initia- 
 tory stage as five years. The consciousness 
 of one great change, and of the somewhat 
 experimental character of the proceeding, seems 
 to have generated a fatal readiness towards new 
 changes and a natural carelessness of the organic 
 life of the society. A ruinous spirit of " make- 
 believe" was in the air. That there was a 
 fundamental defect of this nature is shown by 
 the history of those societies which survived as 
 much as by that of those which failed. The 
 former were in nearly every instance dominated 
 by the influence of a strong religious creed 
 teaching community and enjoining brotherly life. 
 This supplied both the social sanction and the 
 motive for cohesion. In the one or two cases 
 where the religious bond was wanting, its place 
 was supplied by some particular form of social 
 
 211
 
 THE SOCIALIST STATE. 
 
 enthusiasm, as firmly believed in and, for the 
 time, as great an inspiration. But most of these 
 communities which were non-religious, and many 
 of those which were, gradually succumbed. 
 The general lesson to be drawn from their 
 history seems a very simple one. It is not that 
 a change in this particular direction cannot be 
 made, but that such cannot be made at once. 
 It must be a matter of long and steady growth. 
 Lessons 5. There are indeed certain other respects in 
 
 which these examples furnish corroboration to 
 certain of the criticisms which have been passed 
 on particular details. As most of the experiments 
 which have been made have been of the Com- 
 munistic and not Socialist character, equality 
 of remuneration was one feature and common 
 life another. The general result seems to 
 have been a dull monotony of content, without 
 distinguishing characteristics or much unusual 
 development. So far as Socialism is concerned, 
 they contain a most impressive warning against 
 contentment with a stationary condition of life, 
 and a powerful illustration of the importance to 
 the State of variety and individuality. 
 
 212
 
 SOCIAL ALTERNATIVES AND 
 SOCIALISM. 
 
 XV. 
 
 A REMEDY AND ITS COST. 
 
 i. A FINAL estimate of Socialism at the Impossi- 
 
 , . -- r bility of 
 
 present time would be that most difficult of Final Esti- 
 
 things, a successful attempt to balance advan- m 
 tages and disadvantages, all highly proble- 
 matical and none definitely ascertained. The 
 difficulty is not lessened by the fact that there are 
 many different standpoints for different people 
 to mount upon, in order to take their view in 
 the best possible manner. But even though the 
 great task be not essayed, a short summary of 
 certain of the main considerations which have 
 found expression in the foregoing chapters may 
 213
 
 THE SOCIALIST STATE. 
 
 be of use in correcting the immaturity of any 
 conclusion which may be found knocking for 
 admission to the mind through the advocacy of 
 some powerful and persuasive champion. 
 The 2 - To many of those who look for perfection, 
 
 Socialism Socialism has much that is alluring in its aspect. 
 To some it presents itself as a consummating 
 phase in the long evolution of society. First 
 the immature union in small groups, then 
 the training and teaching of the individual by 
 the sharp and stern lesson of competition and 
 internecine strife, to be followed by the welding 
 of the now perfected parts into a perfect whole. 
 By others it is positively needed to give any 
 meaning at all to that outward appearance of 
 mechanical, commercial, and industrial unity 
 which has emerged through the division and 
 specialisation of labour, whereby men have 
 become mutually dependent for the satisfaction 
 of their common needs. It is the revelation of 
 the hidden possibility of an inward union of 
 endeavour; impossible till the outward frame- 
 work of a new society had been achieved. But 
 there are yet others who make a further step, and 
 214
 
 A REMEDY. 
 
 demand not only a unity of form, not merely a 
 unity of conscious aim, but a moral unity. To 
 such as these the message of Socialism is as the 
 breath of life breathed upon the dry bones and 
 dead tissues. Society at last will be corporate, 
 and society will live for society. 
 
 On the other hand, the opponents of Social- The 
 ism are not without their imaginations, in which Freedom? 
 liberty plays the leading part They see, in 
 their fear, as it were, the soul of the individual 
 bound to the wheel of a tyrannous majority, and 
 they clamour for freedom to use their powers 
 unimpeded, with the desire, let us grant, that 
 they may benefit their fellows. 
 
 3. It may be said that the social future will 
 be determined by sterner considerations than 
 those which cumber the brain of dreamers and 
 enthusiasts. Like many other sayings which 
 sound wise enough at the moment, this is but 
 half the truth, and has but a partial application. 
 No statesman or thinker is wise who under- 
 values the power of ideal conceptions merely 
 on the ground that they are, or, to say more 
 truly, that they seem to him impracticable. So 
 215
 
 THE SOCIALIST STATE. 
 
 far as they are impracticable they will fail in 
 practice if attempted at once or in the whole. 
 But even unattempted they may do much to 
 direct the expedients to which society may 
 resort, and possibly to prepare the way for 
 some scheme bearing likeness to that which 
 they have foreshadowed. "Anarchy and Con- 
 fusion " is the description of existing society by 
 the Socialist, and his prayer is "give us order." 
 " Liberty, Liberty, Liberty," is the cry which 
 rises from the opposite ranks. 
 
 Both these aspirations represent needs strongly 
 felt, and so wide in their application that they 
 underlie respectively much that is said for and 
 against Socialism. They are, as it were, the 
 imaginative concepts which colour and give so 
 much force to the advantages and disadvantages 
 which at first sight and on enumeration may 
 seem matters of practice and of uninteresting 
 detail. 
 
 Advau- 4- The advantages which are offered by 
 
 Socialism Socialism are of very varying probability in 
 
 respect of their fulfilment. Among these 
 
 advantages the two most prominent are the 
 
 216
 
 A REMEDY. 
 
 prevention of the waste, or of a large portion of 
 the waste, which is at present incurred in pro- 
 duction; and secondly, the provision for all of 
 the means, by work, of procuring the necessaries 
 of life. On the one hand loss of material, on 
 the other loss of life, either positive or by 
 degeneration, is to be prevented. That the 
 administrators of the Socialist State will exert 
 their full energies to produce a considerable 
 effect in both these directions is certain, for 
 these are the most prominent points in the 
 appeal which their social creed makes to what 
 may be termed the practical feelings of men. 
 But there is another possible advantage which 
 is more uncertain by reason of a possible want 
 either of power or of will. Some economists 
 have been affected very powerfully by the pos- 
 sibility which the more sober Socialism offers 
 of a greater correspondence between labour, 
 skill, and ability, and their respective rewards. 
 A Socialism which insists on equality has, of 
 course, none of these attractions, and presents 
 what seem to be unsurmountable difficulties. 
 But, as has been repeatedly urged, equality in 
 217
 
 THE SOCIALIST STATE. 
 
 remuneration is by no means a necessary con- 
 cept of Socialism. No private profit can be 
 allowed, but granted this, equality is an alien 
 element grafted on to the necessary conditions, 
 and due, so far as it is potent, to the presence 
 of a large communistic admixture in the 
 socialist ranks. 
 
 Despite the great difference of opinion which 
 not unreasonably manifests itself as to the fulfil- 
 ment of the prospects held out by Socialism, 
 their enumeration is a matter of no little im- 
 portance as indicating the nature of the benefits 
 to be derived from it if successful. 
 
 Its Diffi- 5- In strong contradistinction come the dis- 
 eulties advantages which will, according to the views of 
 adverse critics, accompany Socialism. Though 
 a logical distinction is difficult, these may be 
 roughly divided into those which may affect 
 the working of the system and thus annul it, 
 together with its good and its evil, and those 
 which must be put into the opposite balance, 
 should Socialism be proved to be a working 
 system, as a counterpoise to the beneficial 
 results claimed by anticipation for its regime. 
 218
 
 A REMEDY. 
 
 From the most important point of view from 
 the point of view, that is, of a system of working 
 economy, defects of the former kind are of the 
 greater moment, for if Socialism is an un- 
 workable system, the whole discussion about 
 advantage and disadvantage, or benefits and 
 drawbacks, is a mere matter of interesting 
 theory. 
 
 6. The assertion that the Socialist system 
 will not work has been based on arguments 
 which may be grouped under^ three headings 
 In the first place, it is alleged that so great a 
 diminution in production will be occasioned as 
 to prevent the community sustaining itself save 
 on a very low level of general subsistence ; 
 that however equal the division, there will be 
 so much less to divide that the majority, and in 
 the view of some the vast majority, will be much 
 worse off than they are at present. In the 
 second place, bureaucratic administration will, 
 it is said, prove itself incapable of the tasks 
 entrusted to it. In the third place, it is argued 
 that there will be mechanical difficulties in the 
 way of procuring the production of the right 
 219
 
 THE SOCIALIST STATE. 
 
 commodities, or the performance of the right 
 services. These dangers are all of them, as has 
 been urged, very real, and by no means to be 
 set aside on the strength of mere optimistic 
 assertions. It is no answer, for instance, to the 
 first to say that a reduction of the general pro- 
 ductivity of the community will be compensated 
 for by a greater equality in distribution. To 
 make this rather light-hearted assertion really 
 forcible some means must be afforded of estimat- 
 ing the extent to which a diminution in pro- 
 ductivity is bearable and likely ; of course, direct 
 proof that any such is improbable would be the 
 most effective reply of all. Again, it is perfectly 
 useless to assume that bureaucratic administra- 
 tion, perhaps indeed an overrated bugbear with 
 many, will be rendered more efficient and less 
 dangerous by the introduction of universal 
 democracy. Society before making changes 
 requires not assertions but guarantees. Of these 
 most must be derived from experiments in 
 legislation and administration, though with 
 regard to one Socialists as teachers and writers 
 can do much. It is necessary to know whether 
 220
 
 A REMEDY. 
 
 the system proposed embraces or does not embrace 
 the notion of equality of remuneration. 
 
 7. Another danger almost equally funda- 
 mental in its nature is the strain to which 
 a completely socialised industrial system ex- 
 poses the political integrity and unity of the 
 State. One very obvious difficulty of tariff 
 legislation in some of those countries where 
 it has been attempted has been experienced 
 in the tendency which has arisen of voting by 
 Interests. The more democratic the country, 
 and the more complete the Socialist organisa- 
 tion, the more likely is it to occur that the 
 community will split itself into sections, which 
 will try to gain separate advantages by the use 
 of their voting power. The iron industry will 
 consider that owing to its more arduous con- 
 ditions it should receive either higher wages 
 or better regulations as to hours than the 
 joiners, for instance. This is perhaps one of 
 the strongest arguments that there is for an 
 absolute equality of remuneration and con- 
 dition. At the present time, with even the 
 limited opportunity which offers, there are in- 
 
 221
 
 THE SOCIALIST STATE. 
 
 stances in which it is commonly said that par- 
 ticular branches of industry have been able to 
 exert considerable pressure by the power they 
 possess over the voting strength of the locality. 
 It is no doubt quite right that a govern- 
 ment should be among the best employers 
 of labour. But it may be asked if the grant 
 of privileges obtained for dockyard employ has 
 not been influenced by considerations of parlia- 
 mentary support. If the coal-mines of the 
 country were nationalised, the miners' votes 
 would probably determine the election of thirty 
 or more members of parliament, and their 
 demand for an advance in wages would place 
 a government depending on the support of 
 their representatives in a position of great 
 difficulty. That these are dangers will be 
 readily admitted. They are used here as illus- 
 trations of a particular condition which might 
 possibly develop in the Socialist State. 
 
 8. The disadvantages which the members of 
 
 a Socialist State, well organised, and more or 
 
 less in working order, might suffer from are 
 
 many and various. Moreover, since that State 
 
 222
 
 A REMEDY. 
 
 will probably enjoy, as has been pointed out, 
 a partial immunity from printed criticism, they 
 will be much the less able to obtain a remedy 
 for minor grievances, without grave legislative 
 friction. 
 
 A very grave defect has revealed itself in the 
 constitution of such a State with regard to the 
 saving of capital. That there will be ample 
 methods of accumulation is true, but the action 
 of public bodies and states, so far as we have 
 experience of them, cannot be said to raise any 
 high expectation as to its readiness to avail 
 itself of them. This is certainly a danger, though 
 perhaps not a necessary one. Putting aside 
 these separate points, it will be found that most 
 of the criticisms relating to evils involved in 
 a socialist system refer more or less to its prob- 
 able or possible infringements on freedom. 
 In some cases the connection is so close that 
 they seem a necessary part of its being. So far 
 as men present themselves in the aspect of pro- 
 ductive agents, the exercise of some control over 
 their action both as regards the occupations 
 they choose and the methods in which they do 
 223
 
 THE SOCIALIST STATE. 
 
 their work, is obviously inevitable. Some choice, 
 no doubt all, or at any rate most, will have, but 
 in its anxiety to prevent waste, the Socialist 
 State will, it would seem, be bound to deter 
 men from entering occupations which possess 
 already their full complement of workers. In 
 other instances it will be unable to consult 
 individual idiosyncrasies, thus tending to restrain 
 any great deviation from the normal. In its 
 strongest sense this will mostly affect those higher 
 ranges of work in which artistic, intellectual, or 
 manual excellence display themselves. On the 
 other hand it is alleged, and not without some 
 ground, that so far as the majority are concerned 
 choice is now greatly limited, hardness of 
 circumstances playing, and playing unintelli- 
 gently, the part assigned to the State or its 
 officials by Socialists. But then individuals 
 can overcome circumstances : they will not, or 
 should not, be able to overcome the State. 
 Effect of 9- But such control is only part of the effect 
 which may be produced on liberty. There 
 are present in Socialism indications of the ex- 
 istence of tendencies towards regulation which 
 224
 
 A REMEDY. 
 
 may intrude even if discouraged, and unless 
 definitely provided against almost certainly will 
 intrude, into departments of life other than 
 that which deals with the production of goods. 
 Thus there may come about, as it were, a regula- Their 
 tion or direction of what people are to buy, Extension 
 what they are to wear, use, and eat. Even 
 the domain of family life may not, and very 
 likely will not, prove sacred from the assaults of 
 authority, and state control may be substituted 
 for the bonds and influences of family affection. 
 There may be state regulation of marriage. 
 Interference in these directions is not, as has 
 been said, necessarily involved in the nature of 
 Socialism, but as a danger not unlikely, it 
 deserves and must have weight and prominence 
 in any judgment as to the acceptability of 
 Socialism. It seems highly probable that what- 
 ever be the case in theory it will prove impossible 
 in practice to draw any rigid line of demarcation 
 between what comes within and what falls with- 
 out the sphere of the State. Should it be 
 argued that this, if true, is true of the present 
 system as well as of Socialism, it must be freely 
 225 15
 
 THE SOCIALIST STATE. 
 
 admitted; but one vast difference there is 
 between the two, that whereas under present 
 conditions such further extension of official 
 control must be accompanied by a specific 
 justification, under a Socialist rule it is rather 
 exclusion from than subordination to regulation 
 that will require defence. 
 
 Would I0> i n estimating Socialism as a possible 
 
 Socialism 
 
 work ! scheme of production and system of social and 
 
 economic life, one question ranks prior both in 
 importance and in order to all others. Will it 
 prove itself a working system, is an inquiry 
 which advocates and critics alike cannot too 
 often raise. That it should work, and that 
 under certain conditions it might work, is no 
 doubt true; but the question is one of fact, or 
 rather of high probability. For whatever be its 
 advantages there can be no more unwise course 
 than that of urging on the introduction of a 
 scheme which will break down in practice, and 
 which will bring about a long-continued course 
 of fiasco and disaster, from which any state, if 
 it emerge at all, will emerge maimed and weak. 
 It is only where some sort of probability is 
 226
 
 A REMEDY. 
 
 assured on this point that we can afford to pass 
 to the second issue, and to balance advantages 
 against disadvantages. 
 
 ii. Considerations such as these, so varying 
 in their importance, and relating to results of 
 a more or less hypothetical character, must 
 suggest as one conclusion the inexpediency of 
 forming a too final judgment. But economic 
 inquiries, as compared with investigation in the 
 physical and biological sciences, bring us face 
 to face with certain grave difficulties. Popular 
 clamour declares that a decision, one way or 
 another, is necessary, and many of those who 
 raise the cry think themselves fitted to give the 
 decision, especially if they have not studied the 
 subject. Above all things experiment is difficult. 
 Socialism in its different forms is very far from 
 being a simple question. It presents a very 
 complex problem, the solution of which will 
 come, if it comes at all, after long waiting and 
 much experimental legislation. Tn one aspect 
 alone is a simple issue raised. That is with 
 regard to the applicability of Socialism as a 
 present remedy. A decision on this point will 
 227
 
 THE SOCIALIST STATE. 
 
 depend mainly on the conclusions arrived at 
 with regard to the following matters, the feasi- 
 bility of a sudden change, the unseen and seen 
 risks involved in Socialism, and the alternatives 
 which are offered to it. 
 
 Of these three questions the first has been 
 repeatedly dealt with; the second, in addition to 
 forming the subject of a large portion of the 
 book, has been specifically treated of in the 
 present chapter; while the third is the subject 
 of the chapter immediately following. 
 
 228
 
 XVI. 
 
 MODERN STATES AND SOCIAL ACTION. 
 
 i. IN many discussions on Socialism and Alter- 
 the future development of Society it is a socialism 
 practice, and seems almost an uncontroverted 
 practice, to regard Socialism as the one alter- 
 native to unrestricted competition, and a con- 
 dition of unrestricted competition as the one 
 alternative to Socialism. Although such a 
 view is seldom if ever definitely laid down as 
 a condition on which argument is to proceed, 
 its acceptance has, so far as many combatants 
 are concerned, become a matter of habit. Like 
 the rules of fencing or boxing, it is an arbitrary 
 restriction of combat within certain limits, and, 
 as in this case too, is purely artificial in character, 
 and teaches nothing as to the prowess and 
 
 22Q
 
 THE SOCIALIST STATE. 
 
 forces which might be exerted but for its 
 existence. Whatever its dialectic value may 
 be, this method is anything but likely to lead 
 us to correct conclusions. It is indeed a 
 matter for surprise that it should have been so 
 universally adopted. Possibly it is an attempt to 
 make up for the extreme illogicality of mankind 
 in practice by an almost inhuman logic in 
 theory. 
 
 2. The truth would seem to be that there 
 are many intermediate positions between the 
 unpleasant extremes of a soulless Individualism 
 and the paralysis of Socialism. They are 
 looked on by some as mere resting-places in 
 the journey towards one or other ideal, and 
 from the point of view of the highly abstract 
 theory which regards men as made of one 
 motive and in one mould, this may be the case. 
 But then, it must be remembered that such a 
 theory rests on its peculiar assumptions; that 
 statesmanship, and with it applied social science, 
 is an art rather than a theory; and that the 
 journey towards the ideal may be one of many 
 hundreds, if not many thousands of years. 
 230
 
 SOCIAL ACTION. 
 
 What the realisable ideal of society may be 
 depends largely on what can be made out of 
 human nature, and so long as it is so variable 
 as it is, so long as it is so illogical as in 
 practice at least it is, just so long we must 
 be content with a State which occupies itself 
 in utilising so far as it can the good which 
 is to be found in opposing principles. In 
 point of fact, modern Socialism is anything but 
 logical. The earlier forms which Socialism 
 took founded themselves on certain definite 
 suppositions as to a self-sacrificing uniformity 
 in human nature. Modern Socialism does 
 nothing of the kind. It takes,, or professes to 
 take, human nature as it is, and proposes in con- 
 sequence a system of society and state organ- 
 isation which shall allow for variability of 
 moiive, though preventing development in 
 certain particular directions. So far as it goes 
 competition will exist, though it will be re- 
 stricted within certain definite limits. But 
 when such is the case it is open to the charge 
 that there are certain spheres in which its 
 restrictions and the action it proposes would 
 231
 
 THE SOCIALIST STATE. 
 
 produce more harm than good. Granted that 
 the State has to avail itself of all forces in 
 so far as they can be utilised for good, the 
 question at issue is that of the method whereby 
 this can best be done. In other words, it is 
 largely a question of means and not of prin- 
 ciple. 
 
 Of course^ had the choice to be made between 
 the proposal of Socialism and ihe practice of 
 an extreme competitive Individualism^ a very 
 large number of those who are now reckoned as 
 adverse to the former might rank themselves on its 
 side. But this they do not allow. When Paris 
 had to make his celebrated choice there were 
 three applicants for the apple. Let us hope 
 that their choice will be more fortunate than 
 his, if, passing over the claims of the Present 
 Socialism and the Past Individualism, they 
 bestow theirs on the third, the modern Social 
 State. 
 
 A Social 3. The Modern State as we know it has 
 
 elements of Individualism and elements of 
 
 Socialism. As yet these, or some of them, are 
 
 no doubt imperfectly developed; but their de- 
 
 232
 
 SOCIAL ACTION. 
 
 velopment is the work of the time in which we 
 live. The task, by no means an easy one, would 
 be much harder were it not for certain land- 
 marks, by means of which a course may be 
 steered. These rise up as a guidance and a 
 warning. One is the responsibility of society to 
 its members; the other, the need of free indi- 
 vidual growth. It may indeed pass the art of 
 statesmanship to avoid some disregard of one 
 or other of these; but even should this be so the 
 aim must be to keep them in view as much as 
 possible. 
 
 4. Though the condition of the Modern Suggested 
 State, as exemplified both in England and History 
 in other countries may be unsatisfactory, evi- 
 dences are not wanting of the existence, how- 
 ever unconscious and imperfect, of a policy 
 or tendency on the part of a large body of 
 men embracing both these aims. If our own 
 country be taken, the encouragement of indi- 
 vidual energy, and the guarantee within 
 limits of individual freedom, will probably be 
 admitted. To this point the condition of the 
 main industries, unfettered as they are by fiscal 
 233
 
 THE SOCIALIST STATE. 
 
 restriction, the great ease of transit and change 
 of abode, the inequalities of remuneration of 
 effort, the free saving and use of capital, and 
 many other features of common notoriety. When 
 the limits of individual freedom and competition 
 are spoken of some explanation is required. 
 Some limitation has always been regarded as 
 necessary, but of late years the principle accord- 
 ing to which restriction shall be imposed may 
 be said to have undergone a vital change. By 
 the utilitarian school, whose words and person- 
 ality had so much influence at the beginning of 
 the present century, the criterion of restriction 
 was the right of others to equally free competi- 
 tive action. But those who believe in what has 
 been termed the Modern Social State would 
 say, to use general terms, that individual free- 
 dom must be restricted by considerations of 
 the well-being of the State. 
 
 Such a statement, though general, perhaps 
 indeed because general, may be found subject 
 to attack from both Individualists and extreme 
 Socialists, the former contending that, as the 
 State is a synonym for all-of-us in distinction 
 234
 
 SOCIAL ACTION. 
 
 to some of us, this end can be best attained by 
 a fair and frank Individualistic policy, the latter 
 on the ground that, while denying the name, 
 it merely reaffirms the essential principle of 
 Socialism. But though the State may be, and 
 certainly should be all-of-us, there are state and 
 social ends to be sought which can be reached 
 only by the common and united action of the 
 State or all-of-us in contradistinction to the con- 
 flicting action of the various classes of society. 
 On the other hand, Socialism is, it must be re- 
 membered, not merely an aspiration, not merely 
 a principle, but a method. The Modern Social 
 State involves in its own well-being the growth 
 and the development of the individual character- 
 istics of self-reliance, energy, and independence. 
 To Socialist and to Individualist the members 
 of the State must say, we are men and women 
 with individual rights and individual duties, we 
 are citizens with common rights and common 
 duties. 
 
 5. Let us see how far any public recognition Social 
 
 ... Policy 
 of some position such as this can be traced in must 
 
 modern social history, and from what we find regau 
 235
 
 THE SOCIALIST STATE. 
 
 adumbrate, as it were, what might be done by 
 the conscious development of the principles 
 underlying it. In England, at any rate, much 
 advance has been made during the last half 
 century. 
 
 By legislative as well as by administrative 
 action, the State may be said to have acknow- 
 ledged its responsibility in securing fit con- 
 Social ditions of labour and life. Of this, the early 
 Factory Acts and Sanitary and Housing Acts 
 are but instances. With reference to these, it 
 must be remembered that the policy of late 
 years has been anything but stationary. There 
 has been almost constant progress. At the 
 present time hardly a year passes which is not 
 marked by some attempt to effect improvement 
 in directions fully regarded as matters of im- 
 portance, not only to the various classes most 
 immediately affected, but to the State which 
 comprises others as well as these. For the sake 
 of the whole, as well as for the sake of the part, 
 common conditions with regard to health and 
 well-being, both moral and physical, must be 
 established and effectively maintained. In the 
 236
 
 SOCIAL ACTION. 
 
 same direction operate Acts, at first sight so 
 diverse, which extend education and enforce the 
 liability of employers. 
 
 6. In the next place there is a formal recog- 
 nition of the duty incumbent on the State and TheirRight 
 of the claim which individuals have against it for 
 existence. At one time, indeed, there was a 
 tendency to regard the Poor Laws as a species 
 of unfortunate mistake which prevented natural 
 laws from eliminating the weaker and less fit in 
 the struggle for existence. But this terrible and 
 individualistic idea has rapidly withered and 
 failed when brought face to face with the con- 
 ception of the State as something more than a 
 supreme power controlling the strife between 
 warring units, as something other than the 
 representative of one aggregate of units suc- 
 ceeding to another aggregate of units, careless 
 of the life of those who are stamped out in the 
 rapid march. The true State is something more 
 real, and more organic, and more vital. Progress 
 it must have. Progress it will have. But if in 
 the course of that progress, and sometimes as a 
 condition of that progress, some labour becomes 
 2 37
 
 THE SOCIALIST STATE. 
 
 ineffective and some members of the society 
 become unfit, the cost must be borne by Society 
 and not by the Individuals. Not in the 
 triumphal march of victory, but in the panic of 
 retreat, are the weak and the wounded left to 
 die by the wayside. It is argued by some that 
 incompetence and inefficiency are the result 
 of individual fault. Even were this true, the 
 corporate humanity which is embodied in the 
 State will forbid the exaction of so terrible a 
 penalty as starvation. What the State and 
 its rulers have to do is to devise a method of 
 treatment which shall operate in relief and 
 improvement, and not in aggravation of the 
 malady which it sets out to cure. But it by no 
 means follows that the argument is wholly or 
 partially true. Partially true it is no doubt in 
 many and perhaps the majority of cases, but even 
 in these the effect of early social surroundings 
 and influences cannot be ignored as beside the 
 question. Again, it is said that this difficulty is 
 one inherent in all conditions, and not due to 
 existing forms of society. Even were this true, 
 it would none the less be the duty of a developed 
 238
 
 SOCIAL ACTION. 
 
 society and of a sensitive and corporate Social 
 State to strive towards its removal. But in earlier 
 forms of society it existed in a wholly different 
 form, for then there was a direct contact between 
 the individual and the conditions offered by 
 nature of obtaining a livelihood. He was not 
 a highly specialised part of the productive 
 machinery, and the difficulties which he en- 
 countered, and to which indeed he often 
 succumbed, were those of natural surroundings, 
 and not those incurred through his position 
 in society. Social organisation, while largely 
 relieving him from undue reliance on the 
 former, has imposed on him the latter. The 
 scheme of Socialism is an assertion that the 
 State should move in mitigation of these latter, 
 and that it should in all cases pay the cost of 
 the progress by which it benefits. But there is 
 of course a great difference between asserting 
 that a certain thing should be and providing 
 an adequate means for its fulfilment. 
 
 As a matter of fact there are signs in 
 abundance that this is recognised as a public 
 duty. The indirect aid given by the State to 
 2 39
 
 THE SOCIALIST STATE. 
 
 the great organisation of thrift, the suggestions 
 for pension schemes, are not solitary witnesses 
 to what has been described as a change of 
 attitude on this most important question. New 
 adaptations of the Poor Law System may be 
 introduced. What has been done as yet has 
 been very insufficient. Whether the State 
 operate directly, or assists other agencies to do 
 this work, on it lies the responsibility for the 
 work being done. One thing, however, must be 
 remembered, and that is the need of maintain- 
 ing independence while relieving or preventing 
 distress. 
 
 Right to 7. The provision of work for the unemployed 
 is closely connected with the foregoing. It is 
 in some ways a matter of even greater difficulty. 
 This difficulty, though in essentials inherent in 
 any social system which is progressive, would 
 seem to be aggravated by particular circum- 
 stances attending our present industrial and 
 commercial development. In other words, it 
 has assumed large dimensions. So far as 
 seasonal and other particular lack of employ- 
 ment is concerned there is much which can be 
 240
 
 SOCIAL ACTION. 
 
 done both by the central and by local bodies. 
 But here too we find evidence not only of an 
 awakened public attention, but of definite efforts 
 in its mitigation. Employment by public bodies 
 and the extension of allotments seem to show 
 that there is much that can be achieved without 
 involving what may be called structural altera- 
 tions. There are signs that the sphere of State 
 or municipal employment and industrial under- 
 takings will be largely extended within some 
 short time. 
 
 8. Lastly, many measures of recent years have Care of 
 evinced the strong desire animating the nation Genera- 
 for procuring a greater equality of opportunity. tlons 
 The more important among these are those 
 which deal directly or indirectly with children 
 or the young. Their protection and their 
 development is sought in different ways. Educa- 
 tional advantages, better administration of this 
 branch of the Poor Law System, and measures 
 taken in defence of the children of criminal 
 parents, co-operate with each other in opening 
 the avenues to success and merit, and in 
 mitigating the tyranny exerted by material 
 241 16
 
 THE SOCIALIST STATE. 
 
 surroundings. As yet little more than a com- 
 mencement has been made in this particular 
 direction. 
 
 Such a 9- Advocates of positive social reform such as 
 
 neither tnat suggested above, only in a more connected 
 vkhialist ^ orm anc ^ on a more extended scale, are met by 
 
 " or . ,, many objections and subjected to much criti- 
 Sociahst 
 
 cism, both friendly and unfriendly. They must 
 be prepared for this, because they have a social 
 policy which is an alternative to both Indi- 
 vidualism and Socialism. They are told, for 
 instance, that such reforms mean expense, and 
 that expense means taxation. Of course it will 
 cost money, though even from a purely pecuniary 
 view it is by no means certain that it will not 
 ultimately prove remunerative. Taxation, again, 
 must be endured if requisite for an important 
 social end. If necessary, such taxation must be 
 graduated so as to enable the richer to con. 
 tribute more in proportion to the surplus they 
 have over their needs than is at present the 
 case. It is said that graduated taxation dis- 
 courages energy and saving. A bad scheme 
 may do so, but need a wise scheme ? From 
 242
 
 SOCIAL ACTION. 
 
 certain aspects, this among the number, such 
 proportional or graduated taxes may be disadvan- 
 tageous; but if the satisfaction of the social 
 needs of the State is imminently necessary, the 
 issue raised is not of advantage or disadvantage, 
 but of greater or less disadvantage. 
 
 10. Once again, such a policy is deemed 
 Socialistic, even called Socialist, in opprobrium 
 from one side, and by way of friendly and 
 jealous taunt from the other. Etymologically 
 the designation would be correct. But the title 
 though not unwelcome, is inconvenient, because 
 it suggests too close a relationship with one par- 
 ticular method of Social Reform. So far as the 
 belief in the corporate unity of society and the 
 important responsibility of society towards in- 
 dividuals are concerned, the Modern Social State 
 and the Socialist State are at one; but though 
 in harmony in this point, as also with regard 
 to many necessary measures for enforcing it, a 
 policy for the former State, such as that sketched 
 above, differs from that of the latter in the 
 importance it attaches to two other principles 
 which are deemed fundamental. Individual 
 243
 
 THE SOCIALIST STATE. 
 
 action and energy must not only be permitted, 
 but within certain limits actively stimulated. 
 In the second place, on grounds similar to those 
 on which the State demands recognition, the 
 family life must be regarded as an institution 
 of fundamental importance. It is important 
 alike to the individual and to the State, because 
 in it the one is formed and on it the other is 
 based. 
 
 Socialism is not the only alternative to a 
 policy of rigid and unrelenting Individualism. 
 
 244
 
 XVII. 
 
 THE MAINTENANCE OF THE STATE. 
 
 i. IN common with political reformers, the The State 
 advocates of economic reorganisation require 
 to keep steadily before them one aim of 
 paramount importance. The maintenance and 
 development of the State should stand before 
 and extend beyond all the other various ends 
 and objects which so frequently occupy their 
 mind to its temporary and unintentional 
 exclusion. Such forgetfulness is hardly to be 
 wondered at, for as an object its well-being is 
 so much with us, and it itself as an entity seems 
 at times so far from us, and often so visionary, 
 that minor ends, if nearer and more unusual, 
 possess the power, which it does not, of striking 
 245
 
 THE SOCIALIST STATE. 
 
 the imagination and fixing the attention. But, 
 rightly conceived, these are strictly subordinate; 
 they are in effect mere means whereby the 
 great end of all may be attained. The well- 
 being of the State is a sort of touchstone 
 whereby we should try all plans of reform and 
 all schemes of life, whether economic or social, 
 Individualist or Socialist. Few people at the 
 present time seem disposed to question the 
 defects of the individualistic and utilitarian view 
 of the State which prevailed in many influential 
 quarters at the beginning of the century. It 
 erred just because it did not, in fact, recognise 
 the existence of anything that could justly be 
 called a state. It spoke of the State indeed, 
 but it meant something just as uninclusive, and 
 in the highest sense unrepresentative, of the 
 people as the policeman who patrols a street 
 is of the inhabitants who dwell in the houses 
 on each side of it. This mental solution of a 
 nation into disconnected units was a true 
 characteristic of the philosophy of the school. 
 In this aspect Anarchism, despite its many 
 absurdities of theory, contrasted favourably with 
 246
 
 THE STATE. 
 
 its earlier forerunner, Individualism. Its faith 
 in an ideal, in a time, that is, when the voluntary 
 action of individuals will supply the place of 
 coercive discipline, and provide strong and 
 enduring economic and social bonds, unfelt 
 because developed in the free individual will, 
 has rendered it, so far as fancy goes, less harsh 
 and less devoid of soul. The earlier Indi- 
 vidualism believed that the unimpeded action 
 of individuals was for the advantage of society, 
 because the weakest would go to the wall, while 
 the latest Individualism believes that there will 
 be few weak and no wall. 
 
 2. But what of Socialism ? Obviously it often for- 
 must be replied that, in so far as it weakens any 
 institutions on which the permanence of society 
 or of the State depends, it fails when brought to 
 this test. To dwell on this point is unnecessary, 
 as so much attention has been given elsewhere 
 to the possible dangers lurking in Socialist 
 schemes as regards both social and economic 
 institutions. There is, however, a further charge 
 brought against it which bears a curious resem- 
 blance to those urged against Individualism. 
 247
 
 THE SOCIALIST STATE. 
 
 Who are Roughly speaking, it is accused of Individual- 
 
 often too . . 
 
 Individual- ism, and in effect of saying not that the weakest 
 
 shall go to the wall, but that the weakest, at any 
 rate, shall not go to the wall. In one sense the 
 accusation lies less against the constructive 
 scheme on which the Socialist State will have to 
 be based than against the attitude of particular 
 people and parties, who demand that the griev- 
 ances of certain classes, or a certain class, shall 
 be considered, quite irrespective of the cost or 
 consequence to the community at large. In 
 another sense, however, and so far as equality 
 of remuneration figures in the programme, the 
 defect is one involved in the socialist scheme. 
 It is a sacrifice of the state or of society to 
 individuals or a class. The same defect, or 
 one very similar, presents itself when Socialists 
 speak with their singular and irresponsible light- 
 heartedness of the necessity of just altering this 
 or that institution, as if the organic State were a 
 boxwood hedge for their shears to experiment 
 upon, or when they advocate the suppression of 
 one class or the reduction of its rate of re- 
 muneration in the interests of another class or 
 248
 
 THE STATE. 
 
 set of individuals, and to allow of the augment- 
 ation of their remuneration. Such shocking 
 individualism requires correction. Socialists 
 are too often like travellers at a cross-road, who 
 need a large finger-post bearing on it the neces- 
 sary legend, To the well-being of the State. The 
 interests of individuals do and often will con- 
 flict with the interests of the State. It seems a 
 fatal mistake to consider, as many Socialists 
 apparently do, that all such opposition will 
 cease when once their own scheme of collective 
 production is operative. That is the very 
 question at issue. For, granted that Socialists 
 do not advocate equality, granted that they do 
 not seek in the mere interests of one group to 
 remove the conditions which surround, protect, 
 and give life to another group, there still remain 
 reasons for thinking that some such antagonism 
 will continue. 
 
 3. In the first place, the State is not merely 
 the corporate unity of all those living at one 
 time. It extends through time as well as over 
 space, and includes the interests of the future 
 generations which will arise within its domain 
 249
 
 THE SOCIALIST STATE. 
 
 with those of the generation now in existence. 
 The greatest happiness of the greatest number, 
 even were it a test capable of immediate appli- 
 cation, like instantaneous photography, would 
 mean little to the State, because the greatest 
 happiness in one generation may mean infinite 
 misery and suffering in others. Viewed in this 
 light, what aspect, it may be asked, does a 
 general existence of monotony deprived of en- 
 terprise, even if accompanied by sufficiency of 
 food, wear? Does it suggest a state renewing 
 itself from one generation to another with ever 
 fresh developments, and ever new sources of 
 vitality ? What aspect, it is asked, does regula- 
 tion wear? What, the removal of the restric- 
 tions on population ? 
 
 In the second place, it is contended by many, 
 and not alone by those wholly hostile to 
 Socialist developments, that the neglect of in- 
 dividuality, which they deem only too probable, 
 will be fatal to common social growth and well- 
 being. The State requires the existence of 
 different classes and different individualities. 
 It seems, indeed, far from proved that neglect 
 250
 
 THE STATE. 
 
 can be safely shown to any of these, and as yet 
 no attempt has been made to prove that the 
 conditions which foster their development are 
 the same for one and all. The State is made 
 up of different parts not of uniform material. 
 
 4. It would be presumptuous to say that no 
 Socialistic scheme will ever be realised in practice. 
 That none is capable of immediate realisation 
 probably most Socialists, certainly most Socialist 
 leaders, themselves believe. But this much 
 may be said: that any system which is to meet 
 with success will have to take into more vital 
 account than has yet been done, the variable 
 elements in human nature, and the subtle con- 
 ditions which are necessary to the orderly 
 constitution of society, the security of economic 
 progress, and the growth of the State. 
 
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 The Cossacks: A Tale of the 
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 Kreutzer Sonata and Family 
 Happiness. 
 
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 while "Family Happiness," though a work 
 which has hitherto received but little critical 
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 trating power and subtle observation the heart 
 of a young girl, and is probably the most artisti- 
 cally perfect of Tolstoi's shorter works. 
 
 Life. 
 
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 have been attracted by that powerful book, ' My 
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 The Long Exile, and other 
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 London: WALTER SCOTT, LIMITED.
 
 My Confession. 
 
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 My Religion. 
 
 " The spiritual autobiography of a remark- 
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 something like a new promulgation to the 
 fundamental doctrines of Christianity." Scots- 
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 The Physiology of War, and 
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 A Russian Proprietor, and 
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 Great Writers. 
 
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 Edited by E. ROBERTSON and F. T. MARZIALS. 
 
 Cloth, Uncut Edges, Gilt Top. Price 1/6. 
 Longfellow . By Professor Eric S. Robertson 
 
 Coleridge By Hall Caine 
 
 Dickens .... By Frank T. Marziala 
 Dante Gabriel Rossetti . . . By J. Knight 
 Samuel Johnson . . .By Colonel F. Grant 
 
 Darwin By G. T. Bettany 
 
 Charlotte Bronte . . . . By A. Birrell 
 Carlyle . . . . By R. Garnett, LL.D. 
 Adam Smith . . .By II. B. Hahlane, AJ.P. 
 
 ICeats By W. M. Rossetti 
 
 Shelley By William Sharp 
 
 Smollett By David Hannay 
 
 Goldsmith . . .By Austin Dobson 
 
 Scott By Professor Yonge 
 
 Burns .... By Professor Blackie 
 Victor Hugo ... By Frank T. Marzials 
 Emerson . . . . 15y R. Garnett, LL. D. 
 
 Goethe By James 'iiine 
 
 Congreve By Edmund Gosse 
 
 Bunyan By Canon Venables 
 
 Crabbe By T. E. Kebbel 
 
 Heine By William Sharp 
 
 Mill By W. L. Courtney 
 
 Schiller .... By Henry W. Nevinson 
 
 Marryat By David Hannay 
 
 Lessing By T. \V. Rolleston 
 
 Milton . . . . By R Garnett, LL.D. 
 Balzac .... By Frederick Wedmore 
 George Eliot . . . .By Oscar Browning 
 Jane Austen . . .By Goldwin .Smith 
 
 Browning .... By William Sharp 
 
 Byron .... By Hon. Roden Noel 
 Hawthorne . . . By Moncnre D. Conway 
 Schopenhauer By Professor Wallace 
 
 Sheridan By Lloyd Sanders 
 
 Thackeray. . By H. Mori vale and F. T. Marzials 
 
 Cervantes By H. E. Watts 
 
 Voltaire .... By Francis Espinasse 
 Leigh Hunt ... By Cosmo Monkhouse 
 
 Whittier By 'W. J. Linton 
 
 Kenan .... By Francis Espinasse 
 A Complete Bibliography to each Volume, by 
 
 J. P. ANDERSON, British Museum, London. 
 Library Edition of " Great Writers," Demy 8vo, 2/6. 
 
 London : WALTER SCOTT, LIMITED.
 
 The Canterbury Poets. 
 
 EDITED BY WILLIAM SHARP. 
 Cloth, I/- ; Art Linen, Gravure Frontispiece, 2/-. 
 Among the editors of these volumes are included 
 
 JOHN ADDINGTON SYMONDS; Sir GEORGE DOUGLAS, 
 
 Bart.; Hon. RODEN NOEL; ROBERT BUCHANAN, etc. 
 
 Christian Year 
 
 Irish Minstrelsy 
 
 Coleridge 
 
 Paradise Lost 
 
 Longfellow 
 
 Jacobite Ballads 
 
 Campbell 
 Shelley 
 
 Days of the Year 
 Australian Ballads 
 
 Wordsworth 
 
 Moore 
 
 Blake 
 
 Border Ballads 
 
 Whittier 
 
 Song-Tide 
 
 Poe 
 
 Odes of Horace 
 
 Chatterton 
 
 Ossian 
 
 Burns. Songs 
 
 Fairy Music 
 
 Burns. Poems 
 
 Southey 
 
 Marlowe 
 
 Chaucer 
 
 Keats 
 
 Golden Treasury 
 
 Herbert 
 
 Poems of Wild Life 
 
 Hugo 
 
 Paradise Regained 
 
 Cowper 
 
 Crabbe 
 
 Shakespeare's Poems, etc. 
 
 Dora Greenwell 
 
 Emerson 
 
 Faust 
 
 Sonnets of this Century 
 
 American Sonnets 
 
 Whitman 
 
 Lander's Poems 
 
 Scott. Lady of the Lake 
 Scott. Marmion, etc. 
 
 Greek Anthology 
 Hunt and Hood 
 
 Praed 
 
 Humorous Poems 
 
 Hogg 
 
 Lytton's Plays 
 
 Goldsmith 
 
 Great Odes 
 
 Love Letters of a Violinist 
 
 Meredith's Poems 
 
 Spenser 
 
 Imitation of Chris-t 
 
 Children of the Poets 
 
 Uncle Toby Birthday Bk. 
 
 Jouson 
 
 Painter-Poets 
 
 Byron. Miscellaneous 
 
 Women Poets 
 
 Byron. Don Juan 
 
 Love Lyrics 
 
 The Sonnets of Europe 
 
 American Hum'ous Verse 
 
 Ramsay 
 
 Minor Scotch Lyrics 
 
 Dobell 
 
 Cavalier Lyrists 
 
 Pope 
 
 German Ballads 
 
 Heine 
 
 Songs of Beranger 
 
 Beaumont and Fletcher 
 
 Roden Noel's Poems 
 
 Bowles, Lamb, etc. 
 
 Songs of Freedom 
 
 Sea Music 
 
 Canadian Poems 
 
 Early English Poetry 
 
 Modern Scottish Poeta 
 
 Herrick 
 
 Poems of Nature 
 
 Ballades and Rondeaus 
 
 Cradle Songs. 
 
 London: WALTER Scorr, LIMITED.
 
 COMPACT AND PRACTICAL. 
 In Limp Cloth, for the Pocket. Price Is. 
 
 The European 
 Conversation Books. 
 
 FRENCH ITALIAN 
 
 SPANISH GERMAN 
 
 NORWEGIAN 
 
 CONTENTS. 
 
 Hints to Travellers Everyday Expressions 
 Arriving at and Leaving a Railway Station 
 Custom House Enquiries In a Train At 
 a Buffet and Restaurant At an Hotel Pay- 
 ing an Hotel Bill Enquiries in a Town On 
 Board Ship Embarking and Disembarking 
 Excursion by Carriage Enquiries as to Dili- 
 gences Enquiries as to Boats Engaging 
 Apartments Washing List and Days of Week 
 Restaurant Vocabulary Telegrams and 
 Letters, etc., etc. 
 
 The contents of these little handbooks are so 
 arranged as to permit direct and immediate refer- 
 ence. All dialogues or enquiries not considered 
 absolutely essential have been purposely excluded, 
 nothing being introduced which might confuse the 
 traveller rather than assist him. A few hints are 
 given in the introduction which will be found valu- 
 able to those unaccustomed to foreign travel. 
 
 London : WALTER SCOTT, LIMITED.
 
 A 000 962 766 2
 
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