Part 23
The ordinary ratepayer, however, will not remain unaffected for long. At the very outset of the new extension of municipal industries, the question of wage will arise. A minimum wage must be fixed; and though at first, to avoid an overwhelming rush of applicants for employment, it must be made too small to tempt any decently employed laborer to forsake his place and run to the municipality, still, it will not be the frankly infernal competition wage. It will be, like mediæval wages, fixed with at least some reference to public opinion as to a becoming standard of comfort. Over and above this, the municipality will have to pay to its organisers, managers, and incidentally necessary skilled workers the full market price of their ability, minus only what the superior prestige and permanence of public employment may induce them to accept. But whilst these high salaries will make no more disturbance in the labor market than the establishment of a new joint-stock company would, the minimum wage for laborers will affect that market perceptibly. The worst sort of sweaters will find that if they are to keep their “hands,” they must treat them at least as well as the municipality. The consequent advance in wage will swallow up the sweater’s narrow margin of profit. Hence the sweater must raise the price per piece against the shops and wholesale houses for which he sweats. This again will diminish the profits of the wholesale dealers and shopkeepers, who will not be able to recover this loss by raising the price of their wares against the public, since, had any such step been possible, they would have taken it before. But fortunately for them, the market value of their ability as men of business is fixed by the same laws that govern the prices of commodities. Just as the sweater is worth his profit, so they are worth their profit; and just as the sweater will be able to exact from them his old remuneration in spite of the advance in wages, so they will be able to exact their old remuneration in spite of the advance in sweaters’ terms. But from whom, it will be asked, if not from the public by raising the price of the wares? Evidently from the landlord upon whose land they are organising production. In other words, they will demand and obtain a reduction of rent. Thus the organiser of industry, the employer pure and simple, the _entrepreneur_, as he is often called in economic treatises nowadays, will not suffer. In the division of the product his share will remain constant; whilst the industrious wage-worker’s share will be increased, and the idle proprietor’s share diminished. This will not adjust itself without friction and clamor; but such friction is constantly going on under the present system in the opposite direction, _i.e._, by the raising of the proprietor’s share at the expense of the worker’s.
The contraction of landlords’ incomes will necessarily diminish the revenue from taxation on such incomes. Let us suppose that the municipality, to maintain its revenue, puts on an additional penny in the pound. The effect will be to burn the landlord’s candle at both ends--obviously not a process that can be continued to infinity. But long before taxation fails as a source of municipal capital, the municipalities will have begun to save capital out of the product of their own industries. In the market the competition of those industries with the private concerns will be irresistible. Unsaddled with a single idle person, and having, therefore, nothing to provide for after paying their employees except extension of capital, they will be able to offer wages that no business burdened with the unproductive consumption of an idle landlord or shareholder could afford, unless it yielded a heavy rent in consequence of some marked advantage of site. But even rents, when they are town rents, are at the mercy of a municipality in the long run. The masters of the streets and the traffic can nurse one site and neglect another. The rent of a shop depends on the number of persons passing its windows per hour. A skilfully timed series of experiments in paving, a new bridge, a tramway service, a barracks, or a small-pox hospital are only a few of the circumstances of which city rents are the creatures. The power of the municipality to control these circumstances is as obvious as the impotence of competing private individuals. Again, competing private individuals are compelled to sell their produce at a price equivalent to the full cost of production at the margin of cultivation.[92] The municipality could compete against them by reducing prices to the average cost of production over the whole area of municipal cultivation. The more favorably situated private concerns could only meet this by ceasing to pay rent; the less favorably situated would succumb without remedy. It would be either stalemate or checkmate. Private property would either become barren, or it would yield to the actual cultivator of average ability no better an income than could be obtained more securely in municipal employment. To the mere proprietor it would yield nothing. Eventually the land and industry of the whole town would pass by the spontaneous action of economic forces into the hands of the municipality; and, so far, the problem of socialising industry would be solved.
Private property, by cheapening the laborer to the utmost in order to get the greater surplus out of him, lowers the margin of human cultivation, and so raises the “rent of ability.” The most important form of that rent is the profit of industrial management. The gains of a great portrait painter or fashionable physician are much less significant, since these depend entirely on the existence of a very rich class of patrons subject to acute vanity and hypochondriasis. But the industrial organiser is independent of patrons: instead of merely attracting a larger share of the product of industry to himself, he increases the product by his management. The market price of such ability depends upon the relation of the supply to the demand: the more there is of it the cheaper it is: the less, the dearer. Any cause that increases the supply lowers the price. Now it is evident that since a manager must be a man of education and address, it is useless to look ordinarily to the laboring class for a supply of managerial skill. Not one laborer in a million succeeds in raising himself on the shoulders of his fellows by extraordinary gifts, or extraordinary luck, or both. The managers must be drawn from the classes which enjoy education and social culture; and their price, rapidly as it is falling with the spread of education and the consequent growth of the “intellectual proletariat,” is still high. It is true that a very able and highly-trained manager can now be obtained for about £800 a year, provided his post does not compel him to spend two-thirds of his income on what is called “keeping up his position,” instead of on his own gratification.[93] Still, when it is considered that laborers receive less than £50 a year, and that the demand for laborers is necessarily vast in proportion to the demand for able managers, nay, that there is an inverse ratio between them, since the manager’s talent is valuable in proportion to quantity of labor he can organise, it will be admitted that £800 a year represents an immense rent of ability. But if the education and culture which are a practically indispensable part of the equipment of competitors for such posts were enjoyed by millions instead of thousands, that rent would fall considerably. Now the tendency of private property is to keep the masses mere beasts of burden. The tendency of Social Democracy is to educate them, to make men of them. Social Democracy would not long be saddled with the rents of ability which have during the last century made our born captains of industry our masters and tyrants instead of our servants and leaders. It is even conceivable that rent of managerial ability might in course of time become negative,[94] astonishing as that may seem to the many persons who are by this time so hopelessly confused amid existing anomalies, that the proposition that “whosoever of you will be the chiefest, shall be servant of all,” strikes them rather as a Utopian paradox than as the most obvious and inevitable of social arrangements. The fall in the rent of ability will, however, benefit not only the municipality, but also its remaining private competitors. Nevertheless, as the prestige of the municipality grows, and as men see more and more clearly what the future is to it, able organisers will take lower salaries for municipal than for private employment; whilst those who can beat even the municipality at organising, or who, as professional men, can deal personally with the public without the intervention of industrial organisation, will pay the rent of their places of business either directly to the municipality, or to the private landlord whose income the municipality will absorb by taxation. Finally, when rents of ability had reached their irreducible natural level, they could be dealt with by a progressive Income Tax in the very improbable case of their proving a serious social inconvenience.
It is not necessary to go further into the economic detail of the process of the extinction of private property. Much of that process as sketched here may be anticipated by sections of the proprietary class successively capitulating, as the net closes about their special interests, on such terms as they may be able to stand out for before their power is entirely broken.[95]
We may also safely neglect for the moment the question of the development of the House of Commons into the central government which will be the organ for federating the municipalities, and nationalising inter-municipal rents by an adjustment of the municipal contributions to imperial taxation: in short, for discharging national as distinct from local business. One can see that the Local Government Board of the future will be a tremendous affair; that foreign States will be deeply affected by the reaction of English progress; that international trade, always the really dominant factor in foreign policy, will have to be reconsidered from a new point of view when profit comes to be calculated in terms of net social welfare instead of individual pecuniary gain; that our present system of imperial aggression, in which, under pretext of exploration and colonisation, the flag follows the filibuster and trade follows the flag, with the missionary bringing up the rear, must collapse when the control of our military forces passes from the capitalist class to the people; that the disappearance of a variety of classes with a variety of what are now ridiculously called “public opinions” will be accompanied by the welding of society into one class with a public opinion of inconceivable weight; that this public opinion will make it for the first time possible effectively to control the population; that the economic independence of women, and the supplanting of the head of the household by the individual as the recognized unit of the State, will materially alter the status of children and the utility of the institution of the family; and that the inevitable reconstitution of the State Church on a democratic basis may, for example, open up the possibility of the election of an avowed Freethinker like Mr. John Morley or Mr. Bradlaugh to the deanery of Westminster. All these things are mentioned only for the sake of a glimpse of the fertile fields of thought and action which await us when the settlement of our bread and butter question leaves us free to use and develop our higher faculties.
This, then, is the humdrum programme of the practical Social Democrat to-day. There is not one new item in it. All are applications of principles already admitted, and extensions of practices already in full activity. All have on them that stamp of the vestry which is so congenial to the British mind. None of them compel the use of the words Socialism or Revolution: at no point do they involve guillotining, declaring the Rights of Man, swearing on the altar of the country, or anything else that is supposed to be essentially un-English. And they are all sure to come--landmarks on our course already visible to farsighted politicians even of the party which dreads them.
Let me, in conclusion, disavow all admiration for this inevitable, but sordid, slow, reluctant, cowardly path to justice. I venture to claim your respect for those enthusiasts who still refuse to believe that millions of their fellow creatures must be left to sweat and suffer in hopeless toil and degradation, whilst parliaments and vestries grudgingly muddle and grope towards paltry instalments of betterment. The right is so clear, the wrong so intolerable, the gospel so convincing, that it seems to them that it _must_ be possible to enlist the whole body of workers--soldiers, policemen, and all--under the banner of brotherhood and equality; and at one great stroke to set Justice on her rightful throne. Unfortunately, such an army of light is no more to be gathered from the human product of nineteenth century civilisation than grapes are to be gathered from thistles. But if we feel glad of that impossibility; if we feel relieved that the change is to be slow enough to avert personal risk to ourselves; if we feel anything less than acute disappointment and bitter humiliation at the discovery that there is yet between us and the promised land a wilderness in which many must perish miserably of want and despair: then I submit to you that our institutions have corrupted us to the most dastardly degree of selfishness. The Socialists need not be ashamed of beginning as they did by proposing militant organisation of the working classes and general insurrection. The proposal proved impracticable; and it has now been abandoned--not without some outspoken regrets--by English Socialists. But it still remains as the only finally possible alternative to the Social Democratic programme which I have sketched to-day.
FOOTNOTES:
[73] An address delivered on the 7th September, 1888, to the Economic Section of the British Association at Bath.
[74] Explained in the first essay in this volume.
[75] See page 57-61.
[76] “Principles of Political Economy,” chap. xxiv, p. 202.
[77] “Theory of Political Economy.” By W. Stanley Jevons (London: Macmillan & Co.). See also “The Alphabet of Economic Science.” Part by Philip H. Wicksteed. (Same publishers.)
[78] See pp. 7-9 _ante_.
[79] The general impression that the old Poor Law had become an indefensible nuisance is a correct one. All attempts to mitigate Individualism by philanthropy instead of replacing it by Socialism are foredoomed to confusion.
[80] See Final Report of Royal Commission on Trade Unions, 1869. Vol. i, p. xvii, sec. 46.
[81] See Mr. Robert Giffen’s address on “The Recent Rate of Material Progress in England.” Proceedings of the British Association at Manchester in 1887, page 806.
[82] See Mr. Robert Giffen on Import and Export Statistics, “Essays on Finance,” Second Series, p. 194. (London: G. Bell & Sons. 1886.)
[83] This same Government, beginning to realise what it has unintentionally done for Social Democracy, is already (1889) doing what it can to render the new County Councils socialistically impotent by urgently reminding them of the restrictions which hamper their action.
[84] The authority for this figure will be found in Fabian Tract, No. 5, “Facts for Socialists.”
[85] Mr. R. Giffen, “Essays in Finance,” Second Series, p. 393.
[86] Proceedings of the Pan-Anglican Synod: Lambeth, 1888. Report of Committee on Socialism.
[87] Finally, the Commissioner was superseded; and Mr. Burns was elected a member of the first London County Council by a large majority.
[88] It is due to the leaders of the Co-operative movement to say here that they are no parties to the substitution of dividend-hunting by petty capitalists for the pursuit of the ideal of Robert Owen, the Socialist founder of Co-operation; and that they are fully aware that Co-operation must be a political as well as a commercial movement if it is to achieve a final solution of the labor question.
[89] Ample material for a study of West End mob panic may be found in the London newspapers of February, 1886, and November, 1887.
[90] Lord Bramwell, President of the Economic Section of the British Association in 1888.
[91] See note, p. 171.
[92] The meaning of these terms will be familiar to readers of the first essay.
[93] See note, p. 16.
[94] That is, the manager would receive less for his work than the artisan. Cases in which the profits of the employer are smaller than the wages of the employee are by no means uncommon in certain grades of industry where small traders have occasion to employ skilled workmen.
[95] Such capitulations occur already when the Chancellor of the Exchequer takes advantage of the fall in the current rate of interest (explained on page 20) to reduce Consols. This he does by simply threatening to pay off the stockholders with money freshly borrowed at the current rate. They, knowing that they could not reinvest the money on any better terms than the reduced ones offered by the Chancellor, have to submit. There is no reason why the municipalities should not secure the same advantages for their constituents. For example, the inhabitants of London now pay the shareholders of the gas companies a million and a half annually, or 11 per cent on the £13,650,000 which the gas works cost. The London County Council could raise that sum for about £400,000 a year. By threatening to do this and start municipal gas works, it could obviously compel the shareholders to hand over their works for £400,000 a year, and sacrifice the extra 8 per cent now enjoyed by them. The saving to the citizens of London would be £1,000,000 a year, sufficient to defray the net cost of the London School Board. Metropolitan readers will find a number of cognate instances in Fabian Tract No. 8, “Facts for Londoners.”
THE OUTLOOK.
BY HUBERT BLAND.
Mr. Webb’s historical review brought us from the “break up of the old synthesis” (his own phrase), a social system founded on a basis of religion, a common belief in a divine order, to the point where perplexed politicians, recognising the futility of the principle of Individualism to keep the industrial machine in working order, with “freedom of contract” upon their lips spent their nights in passing Factory Acts, and devoted their fiscal ingenuity to cutting slice after slice off incomes derived from rent and interest. His paper was an inductive demonstration of the failure of anarchy to meet the needs of real concrete men and women--a proof from history that the world moves from system, through disorder, back again to system.
Mr. Clarke showed us, also by the historic method, that given a few more years of economic progress on present lines, and we shall reach, _via_ the Ring and the Trust, that period of “well defined confrontation of the rich and poor” upon which German thought has settled as the brief stage of sociological evolution immediately preceding organic change.
The truth of this postulate of Teutonic philosophers and economists no one who has given to it a moment’s serious thought is likely to call in question. Nor does anyone who has followed the argument developed in these lectures believe that the transition from mitigated individualism to full collectivity can be made until the capitalist system has worked itself out to its last logical expression. Till then, no political or social upheaval, however violent, nay, even though the “physical force revolutionists” should chase the Guards helter-skelter down Parliament Street and the Executive Committee of the Fabian Society hold its meetings in the Council Chamber of Windsor Castle, will be anything more than one of those “transient riots,” spoken of by Mrs. Besant, which “merely upset thrones and behead monarchs.”[96] All sociologists I think, all Socialists I am sure, are agreed that until the economic moment has arrived, although the hungry or the ignorant may kick up a dust in Whitechapel and make a bloody puddle in Trafalgar Square, the Social Revolution is impossible. But I, for my part, do not believe in the even temporary rout of the Household Brigade, nor indeed in any popular outbreak not easily suppressible by the Metropolitan police; and I shall waste no time in discussing that solution of the social problem of which more was heard in the salad days of the English Socialist movement--in its pre-Fabian era--than now, _viz._, physical force employed by a vigorous few. The physical force man, like the privileged Tory, has failed to take note of the flux of things, and to recognise the change brought about by the ballot. Under a lodger franchise the barricade is the last resort of a small and desperate minority, a frank confession of despair, a reduction to absurdity of the whole Socialist case. Revolutionary heroics, natural and unblameable enough in exuberant puerility, are imbecile babblement in muscular adolescence, and in manhood would be criminal folly.
Let us assume then that the present economic progress will continue on its present lines. That machinery will go on replacing hand labor; that the joint-stock company will absorb the private firm, to be, in its turn, swallowed up in the Ring and the Trust. That thus the smaller producers and distributors will gradually, but at a constantly increasing pace, be squeezed out and reduced to the condition of employees of great industrial and trade corporations, managed by highly skilled captains of industry, in the interests of idle shareholders.
In a parliamentarian State like ours, the economic cleavage, which divides the proprietors from the propertyless, ever growing wider and more clearly defined, must have its analogue in the world of politics. The revolution of the last century, which ended in the installation of the Grand Industry, was the last of the great unconscious world changes. It was helped by legislation of course; but the help was only of the negative and destructive sort. “Break our fetters and let us alone,” was the cry of the revolutionists to Parliament. The lawmakers, not knowing quite what they were doing, responded, and then blythely contracted debts, and voted money for commercial wars. Such a sight will never be seen again. The repeated extension of the suffrage has done more than make the industrial masses articulate, it has given them consciousness; and for the future the echo of the voices of those who suffer from economic changes will be heard clamoring for relief within the walls of St. Stephen’s and the urban guildhalls.
Thus the coming struggle between “haves” and “have nots” will be a conflict of parties, each perfectly conscious of what it is fighting about and fully alive to the life and death importance of the issues at stake.
I say “will be”; for one has only to read a few speeches of political leaders or attend a discussion at a workman’s club to be convinced that at present it is only the keener and more alert minds on either side which are more than semi-conscious of the true nature of the campaign of which the first shots may even now be heard at every bye-election.
But as nothing makes one so entirely aware of one’s own existence as a sharp spasm of pain; so it is to the suffering--the hunger, the despair of to-morrow’s dinner, the anxiety about the next new pair of trousers--wrought by the increasing economic pressure upon the enfranchised and educated proletariat that we must look to awaken that free self-consciousness which will give the economic changes political expression and enable the worker to make practical use of the political weapons which are his.