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Title: Socialism As It Is
       A Survey of The World-Wide Revolutionary Movement

Author: William English Walling

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Language: English

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SOCIALISM AS IT IS

A SURVEY OF THE WORLD-WIDE
REVOLUTIONARY MOVEMENT

BY

WILLIAM ENGLISH WALLING

New York
THE MACMILLAN COMPANY
1918

All rights reserved

COPYRIGHT, 1912,
By THE MACMILLAN COMPANY.

Set up and electrotyped. Published April, 1912. Reprinted October, 1912; January, 1915.

Norwood Press
J. S. Cushing Co.—Berwick & Smith Co.
Norwood, Mass., U.S.A.

[Pg v]

PREFACE

The only Socialism of interest to practical persons is the Socialism of the organized Socialist movement. Yet the public cannot be expected to believe what an organization says about its own character or aims. It is to be rightly understood only through its acts. Fortunately the Socialists' acts are articulate; every party decision of practical importance has been reached after long and earnest discussion in party congresses and press. And wherever the party's position has become of practical import to those outside the movement, it has been subjected to a destructive criticism that has forced Socialists from explanations that were sometimes imaginary or theoretical to a clear recognition and frank statement of their true position. To know and understand Socialism as it is, we must lay aside both the claims of Socialists and the attacks of their opponents and confine ourselves to the concrete activities of Socialist organizations, the grounds on which their decisions have been reached, and the reasons by which they are ultimately defended.

Writers on Socialism, as a rule, have either left their statements of the Socialist position unsupported, or have based them exclusively on Socialist authorities, Marx, Engels, and Lasalle, whose chief writings are now half a century old. The existence to-day of a well-developed movement, many-sided and world-wide, makes it possible for a writer to rely neither on his personal experience and opinion nor on the old and familiar, if still little understood, theories. I have based my account either on the acts of Socialist organizations and of parties and governments with which they are in conflict, or on those responsible declarations of representative statesmen, economists, writers, and editors which are not mere theories, but the actual material of present-day polities,—though among these living forces, it must be said, are to be found also some of the teachings of the great Socialists of the past.

[Pg vi]

It will be noticed that the numerous quotations from Socialists and others are not given academically, in support of the writer's conclusions, but with the purpose of reproducing with the greatest possible accuracy the exact views of the writer or speaker quoted. I am aware that accuracy is not to be secured by quotation alone, but depends also on the choice of the passages to be reproduced and the use made of them. I have therefore striven conscientiously to give, as far as space allows, the leading and central ideas of the persons most frequently quoted, and not their more hasty, extreme, and less representative expressions.

I have given approximately equal attention to the German, British, and American situations, considerable but somewhat less space to those of France and Australia, and only a few pages to Italy and Belgium. This allotment of space corresponds somewhat roughly to the relative importance of these countries in the international movement. As my idea has been not to describe, but to interpret, I have laid additional weight on the first five countries named, on the ground that each has developed a distinct type of labor movement. As I am concerned with national parties and labor organizations only as parts of the international movement, however, I have avoided, wherever possible, all separate treatment and all discussion of features that are to be found only in one country.

The book is divided into three parts; the first deals with the external environment out of which Socialism is growing and by which it is being shaped, the second with the internal struggles by which it is shaping and defining itself, the third with the reaction of the movement on its environment. I first differentiate Socialism from other movements that seem to resemble it either in their phrases or their programs of reform, then give an account of the movement from within, without attempting to show unity where it does not exist, or disguising the fact that some of its factions are essentially anti-Socialist rather than Socialist, and finally, show how all distinctively Socialist activities lead directly to a revolutionary outcome.

I am indebted to numerous persons, Socialists and anti-Socialists, who during the twelve years in which I have been gathering material—in nearly all the countries mentioned—have assisted me in my work. But I must make special mention of the very careful reading of the whole manuscript by Mr. J. G. Phelps Stokes, and of the numerous and vital changes made at his suggestion.

[Pg vii]

CONTENTS

PART I

"STATE SOCIALISM" AND AFTER

PART II

THE POLITICS OF SOCIALISM

[Pg viii]

PART III

SOCIALISM IN ACTION

[Pg ix]

INTRODUCTION

The only possible definition of Socialism is the Socialist movement. Karl Marx wrote in 1875 at the time of the Gotha Convention, where the present German party was founded, that "every step of the real movement is of more importance than a dozen programs," while Wilhelm Liebknecht said, "Marx is dear to me, but the party is dearer."[1] What was this movement that the great theorist put above theory and his leading disciple valued above his master?

What Marx and Liebknecht had in mind was a social class which they saw springing up all over the world with common characteristics and common problems—a class which they felt must and would be organized into a movement to gain control of society. Fifty years before it had been nothing, and they had seen it in their lifetime coming to preponderate numerically in Great Britain as it was sure to preponderate in other countries; and it seemed only a question of time before the practically propertyless employees of modern industry would dominate the world and build up a new society. This class would be politically and economically organized, and when its organization and numbers were sufficient it would take governments out of the hands of the old aristocratic and plutocratic rulers and transform them into the instruments of a new civilization. This is what Marx and Liebknecht meant by the "party" and the "movement."

From the first the new class had been in conflict with employers and governments, and these struggles had been steadily growing in scope and intensity. Marx was not so much interested in the immediate objects of such conflicts as in the struggle itself. "The real fruit of their victory," he said, "lies, not in immediate results, but in the ever expanding union of the workers."[2] As the struggle evolved and became better organized, it tended more and more definitely and irresistibly towards a certain goal, whether the workers were yet aware of it or not. If, therefore, we Socialists participate in[Pg x] the real struggles of politics, Marx said of himself and his associates (in 1844, at the very outset of his career), "we expose new principles to the world out of the principles of the world itself.... We only explain to it the real object for which it struggles."[3]

But the public still fails, in spite of the phenomenal and continued growth of the Socialist movement in all modern countries, to grasp the first principle on which it is based.

"Socialism has many phases," says a typical editorial in the Independent. "It is a political party, an economic creed, a religion, and a stage of history. It is world-wide, vigorous, and growing. No man can tell what its future will be. Its philosophy is being studied by the greatest minds of the world, and it deserves study because it promises a better, a safer, and a fairer life to the masses. But as yet it is only a theory, a hypothesis. It has never been tried in toto.... It has succeeded only where it has allied itself with liberal and opportunist rather than radical policies."[4]

As the Socialist movement has nowhere achieved political power, obviously it can neither claim political success or be accused of political failure. Nor does this fact leave Socialism as a mere theory, in view of its admitted and highly significant success in organizing and educating the masses in many countries and animating them with the purpose of controlling industry and government.

Mr. John Graham Brooks, in the Atlantic Monthly, gives us another equally typical variation of the same fundamental misunderstanding. "Never a theory of social reconstruction was spun in the gray mists of the mind," says Mr. Brooks, "that was not profoundly modified when applied to life. Socialism as a theory is already touching life at a hundred points, and among many peoples—Socialism has been a faith. It is slowly becoming scientific, in a sense and to the extent that it submits its claims to the comparative tests of experience."[5]

Undoubtedly Socialist theories have been spun both within and without the movement, and to many Socialism has been a faith. But neither faith nor theory has had much to do with the great reality that is now overshadowing all others in the public mind; namely, the existence of a Socialist movement. The Socialism of this movement has never consisted in ready-made formulas which were later subjected to "the comparative test of experience"; it has always grown out of the experience of the movement in the first instance.

[Pg xi]

Another typical article, in Collier's Weekly, admits that Socialism is now a movement. But as the writer, like so many others, conceives of Socialism as having been, in its inception, a "theory," a "doctrine" promoted by "Utopian dreaming," "incendiary rhetoric," an "anti-civic jargon," he naturally views it with little real sympathy and understanding even in its present form. The same Socialism that was accused of all this narrowness is suddenly and completely transformed into a movement of such breadth that it has neither a new message nor even a separate existence.

"It is merely a new offshoot of a very old faith indeed," we are now told, "the ideal of the altruistic dreamers of all ages, an awakened sense of brotherhood in men. Stripped of all its husks, Socialism stands for no other aim than that. All its other teachings, the public ownership of the land, for example, the nationalization of the means of production and distribution, the economic emancipation of woman, have only program values, as they lead to that one end. Whether, so stripped, it ceases to be Socialism and becomes merely the advance guard of the world-wide liberal movement is not, of course, a question of more than academic interest."[6]

The moment it can no longer be denied that Socialism is a movement, it is at once confused with other movements to which it is fundamentally and irreconcilably opposed. Surely this is no mere mental error, but a deep-seated and irrepressible aversion to what is to many a disagreeable truth,—the rapid growth and development, in many countries, of political parties and labor organizations more and more seriously determined to annihilate the power of private property over industry and government.

The radical misconceptions above quoted, almost universal where Socialism is still young, are by no means confined to non-Socialists. Many writers who are supposed, in some degree at least, to voice the movement, are as guilty as those who wholly repudiate it. Mr. H. G. Wells, for instance, says that Socialism is a "system of ideas," and that "Socialism and the Socialist movement are two different things."[7] If Socialism is indeed no more than a "growing realization of constructive needs in every man's mind," and if every man is more or less a Socialist, then there is certainly no need for that antagonism to employers and property owners of which Mr. Wells complains.

Mr. Wells himself gives the true Socialist standpoint when he goes on to write that political parties must be held together[Pg xii] "by interests and habits, not ideas." "Every party," he continues, "stands essentially for the interests and mental usages of some definite class or group of classes in the existing community.... No class will abolish itself, materially alter its way or life, or drastically reconstruct itself, albeit no class is indisposed to coöperate in the unlimited socialization of any other class. In that capacity of aggression upon the other classes lies the essential driving force of modern affairs."[8]

The habits and interests of a large and growing part of the population in every modern country are developing a capacity for effective aggression against the class which controls industry and government. As this class will not socialize or abolish itself, the rest of the people, Socialists predict, will undertake the task. And the abolition of capitalism, they believe, will be a social revolution the like of which mankind has hitherto neither known nor been able to imagine.

SOCIALISM AS IT IS

[Pg 1]

PART I

"STATE SOCIALISM" AND AFTER

CHAPTER I

THE CAPITALIST REFORM PROGRAM

Only that statesman, writer, or sociologist has the hearing of the public to-day who can bind all his proposed reforms together into some large and far-sighted plan.

Mr. Roosevelt, in this new spirit, has spoken of the "social reorganization of the United States," while an article in one of the first numbers of La Follette's Weekly protested against any program of reform "which fails to deal with society as a whole, which proposes to remedy certain abuses but admits its incapacity to reach and remove the roots of the other perhaps more glaring social disorders."

Some of those who have best expressed the need of a general and complete social reorganization have done so in the name of Socialism. Mr. J. R. MacDonald, recently chairman of the British Labour Party, for example writes that the problem set up by the Socialists is that of "co-ordinating the forces making for a reconstruction of society and of giving them rational coherence and unity,"[9] while the organ of the middle-class Socialists of England says that their purpose is "to compel legislators to organize industry."[10]

Indeed, the necessity and practicability of an orderly and systematic reorganization in industrial society has been the central idea of British Socialists from the beginning, while they have been its chief exponents in the international Socialist movement. But the idea is equally widespread outside of Socialist circles. It will be hard for British Socialists to lay an exclusive claim to this conception when comrades of such international prominence as Edward Bernstein, who holds the British view of Socialism, assert that Socialism itself is nothing more than "organizing Liberalism."[11]

Whether Socialists were the first to promote the new political philosophy or not, it is undeniable that the Radicals[Pg 2] and Liberals of Great Britain and other countries have now taken it up and are making it their own. Mr. Winston Churchill, while Chairman of the Board of Trade, and Mr. Lloyd George, Chancellor of the Exchequer, members of the British Cabinet, leaders of the Liberal Party, recognize that the movement among governments towards a conscious reorganization of industry is general and demands that Great Britain should keep up with other countries.

"Look at our neighbor and friendly rival, Germany," said Mr. Churchill recently. "I see that great State organized for peace and organized for war, to a degree to which we cannot pretend.... A more scientific, a more elaborate, a more comprehensive social organization is indispensable to our country if we are to surmount the trials and stresses which the future years will bring. It is this organization that the policy of the Budget will create."[12]

Advanced and radical reformers of the new type all over the world, those who put forward a general plan of reform and wish to go to the common roots of our social evils, demand, first of all, reorganization. But how is such a reorganization to be worked out? The general programs have in every country many features in common. To see what this common basis is, let us look at the generalizations of some of the leading reformers.

One of the most scientific and "constructive" is Mr. Sidney Webb. No one has so thoroughly mastered the history of trade unionism, and no one has done more to promote "municipal Socialism" in England, both in theory and in practice, for he has been one of the leaders of the energetic and progressive London County council from the beginning of the present reform period. He has also been one of the chief organizers of the more or less Socialistic Fabian Society, which has done more towards popularizing social reform in England than any other single educative force, besides sending into all the corners of the world a new and rounded theory of social reform—the work for the most part of Sidney Webb, Bernard Shaw, and a few others.

Mr. Webb has given us several excellent phrases which will aid us to sum up the typical social reformers' philosophy in a few words. He insists that what every country requires, and especially Great Britain, is to center its attention on the promotion of the "national efficiency." This refers largely[Pg 3] to securing a businesslike and economic administration of the existing government functions. But it requires also that all the industries and economic activities of the country should be considered the business of the nation, that the industrial functions of the government should be extended, and that, even from the business point of view, the chief purpose of government should be to supervise economic development.

To bring about the maximum of efficiency in production would require, in Mr. Webb's opinion and that of the overwhelming majority of reformers everywhere, a vast extension of government activities, including not only the nationalization and municipalization of many industries and services, but also that the individual workman or citizen be dealt with as the chief business asset of the nation and that wholesale public expenditures be entered into to develop his value. Mr. Webb does not think that this policy is necessarily Socialistic, for, as he very wisely remarks, "the necessary basis of society, whether the superstructure be collectivist or individualist, is the same."

Mr. Wells in his "New Worlds for Old" also claims that the new policy of having the State do everything that can promote industrial efficiency (which, unlike Mr. Webb, he persists in calling Socialism) is to the interest of the business man.

"And does the honest and capable business man stand to lose or gain by the coming of such a Socialist government?" he asks. "I submit that on the whole he stands to gain....

"Under Socialist government such as is quite possible in England at the present time:—

"He will be restricted from methods of production and sale that are socially mischievous.

"He will pay higher wages.

"He will pay a large proportion of his rent-rate outgoings to the State and Municipality, and less to the landlord. Ultimately he will pay it all to the State or Municipality, and as a voter help to determine how it shall be spent, and the landlord will become a government stockholder. Practically he will get his rent returned to him in public service.

"He will speedily begin to get better-educated, better-fed, and better-trained workers, so that he will get money value for the higher wages he pays.

"He will get a regular, safe, cheap supply of power and material. He will get cheaper and more efficient internal and external transit.

[Pg 4]

"He will be under an organized scientific State, which will naturally pursue a vigorous scientific collective policy in support of the national trade.

"He will be less of an adventurer and more of a citizen."[13]

Mr. Churchill while denying any sympathy for Socialism, as both he and the majority of Socialists understand it, frankly avows himself a collectivist. "The whole tendency of civilization," he says, "is towards the multiplication of the collective functions of society. The ever growing complications of civilizations create for us new services which have to be undertaken by the State, and create for us an expansion of the existing services. There is a growing feeling, which I entirely share, against allowing those services which are in the nature of monopolies to pass into private hands. [Mr. Churchill has expressed the regret that the railways are not in the hands of the State.] There is a pretty steady determination, which I am convinced will become effective in the present Parliament to intercept all future unearned increment, which may arise from the increase in the speculative value of the land."[14] (Italics mine.)

Mr. Churchill's declared intention ultimately "to intercept all future unearned increment" of the land is certainly a tremendous step towards collectivism, as it would ultimately involve the nationalization of perhaps a third of the total wealth of society. With railways and monopolies of all kinds also in government hands, a very large part of the industrial capital of the country would be owned by the State, and, though all agricultural capital, and therefore the larger part of the total, remained in private hands, we are certainly justified in calling such a state of society capitalist collectivism.

But not one of the elements of this collectivism is a novelty. Railroads are owned by governments in most countries, and monopolies often are. The partial appropriation of the "unearned increment" is by no means new, since a similar policy is being adopted in Germany at the present moment, and is favored not by the radicals alone, but by the most conservative forces in the country; namely, the party of landed Prussian nobility. Count Posadovsky, a former minister, has written a pamphlet in which he urges that the State should buy up the land in and about the cities, and also that it should fix a definite limit beyond which land values must not rise. Nearly all the chief cities of Prussia,[Pg 5] more than a hundred, are enforcing such a tax in a moderate form, and the conservatives in the Reichstag proposed that the national government should be given a right to tax in the same field. Their bill was enacted, and, in the second half of 1911, the German government, it was estimated, would raise over $3,000,000 by this tax, and in 1912 it is expected to give $5,000,000. This tax, which is collected when land changes hands by sale or exchanges, rises gradually to 30 per cent when the increase has been 290 per cent or more. Of course this scale is likely to be still further raised and to be made more steep as the tax becomes more and more popular.

Mr. Churchill's defense of the new policy of the British government is as significant as the new laws it has enacted:—

"You may say that unearned increment of the land," he says, "is on all-fours with the profit gathered by one of those American speculators who engineer a corner in corn, or meat, or cotton, or some other vital commodity, and that the unearned increment in land is reaped by the land monopolist in exact proportion, not to the service but to the disservice done. It is monopoly which is the keynote; and where monopoly prevails, the greater the injury to society the greater the reward of the monopolist will be....

"Every form of enterprise, every step in material progress, is only undertaken after the land monopolist has skimmed the cream off for himself, and every where to-day the man, or the public body, who wishes to put land to its highest use is forced to pay a preliminary fine in land values to the man who is putting it to an inferior use, and in some cases to no use at all.... If there is a rise in wages, rents are able to move forward because the workers can afford to pay a little more. If the opening of a new railway or a new tramway, or the institution of an improved service of workmen's trains, or the lowering of fares, or a new invention, or any other public convenience affords a benefit to the workers in any particular district, it becomes easier for them to live, and therefore the landlord and the ground landlord, one on top of the other, are able to charge them more for the privilege of living there." (Italics mine.)[15]

But we cannot believe that the government of Great Britain, which draws so much of its support from the wealthy free trade merchants and manufacturers has been persuaded to adopt this new principle so much by the argument that a land rent weighs on the working classes, though it is true that the manufacturer may have to pay for this in higher money wages, as it has by that other argument of Mr. Churchill's that it weighs directly on business.

[Pg 6]

"The manufacturer proposing to start a new industry," he says, "proposing to erect a great factory offering employment to thousands of hands, is made to pay such a price for his land that the purchase price hangs around the neck of his whole business, hampering his competitive power in every market, clogging far more than any foreign tariff in his export competition; and the land values strike down through the profits of the manufacturer on to the wages of the workman. The railway company wishing to build a new line finds that the price of land which yesterday was only rated at its agricultural value has risen to a prohibitive figure the moment it was known that the new line was projected; and either the railway is not built, or, if it is, it is built only on terms which largely transfer to the landowner the profits which are due to shareholders and the privileges which should have accrued to the traveling public." (My italics.)[16]

No doubt Mr. Churchill's failure to mention shippers was inadvertent.

It was a practical application of these business principles and chiefly in the interest of the employers, manufacturers, investors, and shippers, that the State decided, as a first step, to take 20 per cent of all the increase in land values from the present date and to levy an annual tax of one fifth of one per cent on all land held for speculation, i.e. used neither for agricultural nor for industrial nor building purposes.

The collectivist policy, that governments should undertake to reorganize industry and to develop the industrial efficiency of the population, is a relatively new one, however, and where non-Socialist Liberals and Radicals are adopting it, they do so as a rule with apologies. For while such reforms can be considered as investments which in the long run repay not only the community as a whole, but also the business interests, they involve a considerable initial cost, even beyond what can be raised by the gradual expropriation of city land rents, and the question at once arises as to who is to pay the rest of the bill. The supporter of the new reforms answers that the business interests should do so, since the development of industry, which is the object of this expenditure, is more profitable to them than to other classes. While Mr. Churchill declares that Liberalism attacks landlordism and monopoly only, and not capital itself, as Socialism does, he is at great pains to show that the cost of the elaborate program of social reform is borne not by monopolist alone, but by that larger section of the business interests vaguely known as those possessing "Special Privileges." In [Pg 7]distributing the new taxes in the House of Commons, the question to be asked of each class of wealth is, he says, "By what process was it got?" and a distinction is to be made, not between monopoly and competitive business, but "between wealth which is the fruit of productive enterprise and industry or of individual skill, and wealth which represents the capture by individuals of socially created values."[17]

"A special burden," says Mr. Churchill, "is to be laid upon certain forms of wealth which are clearly social in their origin and have not at any point been derived from a useful or productive process on the part of their possessors."[18] And since all income "derived from dividends, rent, or interest," is, according to Mr. Churchill, unearned increment, it is evident that nearly every business, all being beneficiaries, ought to share the burden of the new reforms.[19] At the same time he hastens to reassure his wealthy supporters, especially among merchants and shippers, on grounds explained below by Mr. Lloyd George that the new taxes will not rise faster than the new profits they will bring in, that they "will not appreciably affect, have not appreciably affected, the comfort, the status, or even the style of living of any class in the United Kingdom."[20]

Mr. Lloyd George in proposing the so-called Socialistic Budget of 1910 reminded the representatives of the propertied interests [he might have added "in proportion to their wealth"] that the State, in which they all owned a share, should not be looked upon so narrowly as a capitalistic enterprise. They could afford to allow the State to wait longer for its returns.

"A State can and ought to take a longer and a wider view of its investments," said Mr. Lloyd George, "than individuals. The resettlement of deserted and impoverished parts of its own territories may not bring to its coffers a direct return which would reimburse it fully for its expenditure; but the indirect enrichment of its resources more than compensate it for any apparent and immediate loss. The individual can rarely afford to wait; a State can; the individual must judge of the success of his enterprise by the testimony given for it by his bank book; a State keeps many ledgers, not all in ink, and when we wish to judge of the advantage derived by a country from a costly experiment, we must examine all those books before we venture to pronounce judgment....

"We want to do more in the way of developing the resources of our own country....

"The State can help by instruction, by experiment, by [Pg 8]organization, by direction, and even, in certain cases which are outside the legitimate sphere of individual enterprise, by incurring direct responsibility. I doubt whether there is a great industrial country in the world which spends less money on work directly connected with the development of its resources than we do. Take, if you like, and purely as an illustration, one industry alone,—agriculture,—of all industries the most important for the permanent well-being of any land. Examine the budgets of foreign lands,—we have the advantage in other directions,—but examine and compare them with our own, and Honorable Members will be rather ashamed at the contrasts between the wise and lavish generosity of countries much poorer than ours and the short-sighted and niggardly parsimony with which we dole out small sums of money for the encouragement of agriculture in our country....

"We are not getting out of the land anything like what it is capable of endowing us with. Of the enormous quantity of agricultural and dairy produce, and fruit, and the timber imported into this country, a considerable portion could be raised on our own lands."[21]

The proposed industrial advance is to be secured largely at the expense of capital, but for its ultimate profit. The capitalists are to pay the initial cost. Mr. Lloyd George is very careful to remind them that even if the present income tax were doubled, five years of the phenomenal yet steady growth of the income of the rich and well-to-do who pay this tax, would leave them as well off as they were before. He proposes to leave the total capital in private hands intact on the pretext that it is needed as "an available reserve for national emergencies." And as an evidence of this he refused to increase the existing rate of inheritance tax levied against the very largest estates (15 per cent on estates of more than £3,000,000). Though up to this point he graduated this tax more steeply than before, and nothing could be more widely popular than a special attack on such colossal estates, Mr. Lloyd George draws the line at 15 per cent, on the ground that a large part of the income from such estates goes into investments, and more confiscatory legislation might seriously affect the normal increase of the capital and "the available reserves of taxation" of the country.[22]

Mr. Lloyd George does not fail to guarantee to capital as a whole, "honest capital," that it will suffer no loss from his reforms. "I am not one of those who advocate confiscation," he said several years ago, "and at any rate as far as I am concerned honest capital, capital put in honest [Pg 9]industries for the development of the industry, the trade, the commerce, of this country will have nothing to fear from any proposal I shall ever be responsible for submitting to the Parliament of this realm." (My italics.)[23]

Mr. Lloyd George is well justified, then, in ridiculing the idea that he is waging war against industry or property or trying to destroy riches. He not only disproves this accusation by pointing to the capitalist character of his collectivist program, but boasts that the richest men in the House of Commons are on the Liberal side, together with hundreds of thousands of the men who are building up trade and business.

And the attitude of the Radicals of the present British government is the same as that of capitalist collectivists elsewhere. However certain vested interests may suffer, there is nowhere any tendency to weaken capitalism as a whole. Capitalism is to be the chief beneficiary of the new movement.

There are many differences of opinion, however, as to the ultimate effect of the collectivist program. In Great Britain, which gives us our best illustration, there are Liberals who claim that it is Socialistic and others who deny that it has anything to do with Socialism; Conservatives who accept part of the program, and others who reject the whole as being Socialistic; Socialists, who claim that their ideas have been incorporated in the last two Budgets, and other Socialists who deny that either had anything in common with their principles.

While it is certain that the present policy of the British government is by no means directed against the power or interests of the capitalist class as a whole, and in no way resembles that of the Socialists, were not Socialist arguments used to support the government's position, and may not these lead towards a Socialist policy?

Certainly some of the principles laid down seem at first sight to have been Socialistic enough. For example, when Mr. Churchill said that incomes from dividends, rent, and interest are unearned, or when Mr. Lloyd George cried out: "Who is responsible for the scheme of things whereby one man is engaged through life in grinding labor to win a bare and precarious subsistence for himself, and when, at the end of his days, he claims at the hands of the community he served, a poor pension of eight pence a day, he can only get it through a revolution, and another man who does not[Pg 10] toil receives every hour of the day, every hour of the night, whilst he slumbers, more than his poor neighbor receives in a whole year of toil? Where did the table of that law come from? Whose fingers inscribed it?"[24]

Lord Rosebery has pointed to the extremely radical nature of Mr. Lloyd George's arguments. The representatives of the Government had urged, he said, that the land should be taxed without mercy:—

"(1) because its existence is not due to the owner;

"(2) because it is limited in quantity;

"(3) because it owes nothing of its value to anything the owner does or spends;

"(4) because it is absolutely necessary for existence and production."[25]

Lord Rosebery says, justly, that all these propositions except the last apply to many other forms of property than land, as, for instance, to government bonds, and that it certainly would be Socialism to attempt to confiscate these by taxation.

Lord Rosebery's task would have become even easier later, when Mr. Lloyd George enlarged his attack on the landlords definitely into an attack against the idle upper classes, who with their dependents he reckoned at two million persons. He accused this class of constituting an intolerable burden on the community, said that its existence was the symptom of the disease of society, and that only bold remedies could help. The whole class of inactive capitalists he viewed as a load both on the non-capitalist, wage-earning, salaried and professional classes, and on the active capitalists. Mr. Lloyd George argues with his capitalist supporters that capitalism will be all the stronger when freed from its parasites. But Lord Rosebery could answer that the active could no more be distinguished from the passive capitalists than landowners from bondholders.

An article in the world's leading Socialist newspaper, Vorwaerts, of Berlin, shows that many Socialists even regarded these speeches as revolutionary:—

"The Radical wing of the British Liberals," it said, "is leading the attack with ideal recklessness and lust of battle. It is conducting the agitation in language which in Germany is customarily used only by a 'red revolutionist.' If the German Junker (landlord conservative) were to read these speeches, he would swear that they were delivered by the Social Democrats of the reddest dye, so [Pg 11]ferociously do they contrast between the rich and the poor. They appeal to the passion of the people; they exploit social distinctions in the manner best calculated to fire popular anger against the Lords.

"In the heart of battle the Liberals are employing language which at other times they would have considered twice. Their words will some day be assuredly turned against them, when more than the mere Budget or the existence of the Lords is at stake. When the Liberals, allied with the conservative enemy of to-day, are fighting the working classes, the Socialists will recall this language as proof that the Liberals themselves recognize the injustice of the existing order.

"Mr. Lloyd George made such a speech at Newcastle that the seeds he is planting may first bring forth Liberal fruit, but there can be no doubt that Socialism will eventually reap the harvest. His arguments must arouse the workingmen, and when they have accustomed themselves to look at things from this standpoint it is certain that once standing before the safes of the industrial capitalists they will never close their eyes."

It is perhaps true that the Socialists will at some future day reap the harvest from Mr. Lloyd George's and Mr. Churchill's campaigns, though a careful analysis of the expressions of these statesmen will show that they have said nothing and done nothing in contradiction to their State-capitalistic or "State Socialist" standpoint.

There is no doubt that the principle of the new taxes and the new expenditure these statesmen are introducing is radical, and that it marks a great stride towards a collectivist form of capitalism. Let us assume that development continues along the lines of their present policies. In a very few years the increased expenditure on social reform will be greater than the increased expenditure on army and navy, and the increase of direct and graduated taxes that fall on the upper classes will be greater than that of the indirect taxes that fall on the masses. We will assume even that military expenditure and indirect taxes on articles the working people consume will begin some day to decrease, while graduated taxes directed against the very wealthy and social reform expenditures rise until they quite overshadow them. There is every reason to believe that the social reformers of the British and other governments hope for such an outcome and expect it. This would be in no way inconsistent with their policy of subordinating everything, to use one of their expressions, to "that trade and commerce which constitutes the source of our wealth."

[Pg 12]

For the collectivist expenditures, intended to increase the national product through governmental enterprises for the promotion of industry, and for raising the industrial efficiency of the workers, would be introduced gradually, and would soon be accompanied by results which would show that they paid financially. And finally, even if railways and monopolies were nationalized and their profits as well as all the future rise in land value went to the State to be used for these purposes, as Mr. Churchill hopes, and even if a method could be found by which a large part of the income of the idle rich would be confiscated without touching the active capital of the merchant and manufacturer, the position of the latter classes, through this policy, might become still more superior relatively to that of the masses than it is at present. The industrial capitalists might even control a larger share of the national income and exercise a still more powerful influence over the State than they do to-day.

The classes that the more or less collectivist budgets of 1910 and 1911 actually do favor, those whose economic and political power they actually do increase, are the small and middle-sized capitalists and even the larger capitalists other than landlords and monopolists. The great mass of income taxpayers, business men, farmers, and the professional classes with incomes from about £200 to £3000 ($1000 to $15,000) are given every encouragement, while those with somewhat larger incomes are only slightly discriminated against on the surface, in the incidence of the taxes, and not at all when we inquire into the ways in which the taxes are being expended. Certainly nothing is being done that will "appreciably affect the status or style of living of any class in the United Kingdom," or that will check materially the enormous rise of this "upper middle" class both in wealth and numbers—for the income tax payers have doubled their income in a little more than a decade, until it has reached the total of more than a billion pounds a year. And surely no tendency could be more diametrically opposed to a Socialism whose purpose it is to improve the relative position of the "lower middle" and working classes.

While the new reform programs of the various parties are in general agreement in all countries, in that they are all collectivist, and favor as a rule the same social classes, there is much controversy as to names, whether they shall be called Socialistic or merely radical or progressive. The question is really immaterial.

[Pg 13]

"Capital, divested of its perversions, would be natural Socialism," says one of Henry George's most prominent disciples.[26] Whether the proposed reforming is done with a purified and strengthened capitalism in view, or in the name of "natural Socialism" or "State Socialism," the program itself is in every practical aspect the same.

If a contrast formerly appeared to exist between "Individualist" and "State Socialist" reformers, it was never more than a contrast in theory, quickly dispelled when the time for action arrived. The individualist radical would have the State do as little as possible, but still is compelled to resort to an increase of its powers at every turn; the "State Socialist" would have the State do as much as practicable, but would still retain State action within the rigid limits imposed by the need of gaining capitalist support and the desire for immediate political success. In economic policy the Individualist is for checking the excess of monopoly and special privilege in order to allow "equal opportunity" or a free development to whatever competition or "natural Capitalism" remains, while the "State Socialist" is more concerned with protecting and promoting the natural checking of the excesses of competitive capitalism and private property that comes with "natural monopoly" and its regulation by government. The "State Socialist," however critical he is towards competition, recognizes that the first practical possibility of putting an end to its excesses comes when monopoly is already established, and when it is relatively easy for the State to step in to nationalize or municipalize; the Individualist reformer who wishes to preserve competition where practicable, at the same time recognizes that it is impossible to do so where monopolies have become firmly rooted in certain industries, and he also at this point proposes nationalization, municipalization, or thoroughgoing governmental control.

Henry George himself recognizes that "State Socialism," which he called simply "Socialism," and the "natural Capitalism" he advocated, far from being contradictory, were complementary and interdependent. Mr. Louis Post says:—

"Even in the economic chapters of 'Progress and Poverty' its author saw the possibility of society's approaching the 'ideal of Jeffersonian Democracy, the promised land of Herbert Spencer, the abolition of government. But of government only as a directing and repressive power.' At the same time and in the same degree of approach, he regarded it as possible for society also to realize the dream of Socialism."[27]

[Pg 14]

The following passage leaves no doubt that Mr. Post is correct, and at the same time shows in the clearest way how the two policies of reform were interwoven in Henry George's mind:—

"Government could take up itself the transmission of messages by telegraph, as well as by mail, of building and operating railroads, as well as of the opening and maintaining common roads. With the present functions so simplified and reduced, functions such as these could be assumed without danger or strain, and would be under the supervision of public attention, which is now distracted. There would be a great and increasing surplus revenue from the taxation of land values for material progress, which would go on with great accelerated rapidity, would tend constantly to increase rent. This revenue arising from the common property would be applied to the common benefit, as were the revenues of Sparta. We might not establish public tables—they would be unnecessary, but we could establish public baths, museums, libraries, gardens, lecture rooms, music and dancing halls, theaters, universities, technical schools, shooting galleries, playgrounds, gymnasiums, etc. Heat, light, and motive power, as well as water, might be conducted through our streets at public expense; our roads be lined with fruit trees; discoveries and inventors rewarded, scientific investigation supported; in a thousand ways the public revenues made to foster efforts for the public benefit. We should reach the ideal of the Socialist, but not through government repression. Government would change its character, and would become the administration of a great coöperative society. It would become merely the agency by which the common property was administered for the common benefit." (Italics mine.)[28]

But the "State Socialist" and the Individualist reformer, who are often combined in one person, as in the case of Henry George, differ sharply from Socialists of the Socialist movement in aiming at a society, which, however widely government action is to be extended, is after all to remain a society of small capitalists.

Professor Edward A. Ross very aptly sums up the reformer's objections to the anti-capitalist Socialists. Capitalism must be "divested of its perversions," the privately owned monopolies and their political machines, primarily for the purpose of strengthening it against Socialism. "Individualism should make haste to clean the hull of the old ship for the coming great battle with the opponents of private capital...."[29] The reformers, as a rule, like Professor Ross, consciously stand for a new form of private capitalism, to be built up with the aid of the State. This is the avowed[Pg 15] attitude of the larger part of the "progressives," "radicals," and "insurgents" of the day.

The new reform programs, however radical, are aimed at regenerating capitalism. The most radical of all, that of the single taxers, who plan not only that the state shall be the sole landlord, but that the railways and the mines shall be nationalized and other public utilities municipalized, do not deny that they want to put a new life into private capitalism, and to stimulate commercial competition in the remaining fields of industry. Mr. Frederick C. Howe, for instance, predicts a revival of capitalistic enterprise, after these measures are enacted, and even looks forward to the indefinite continuation of the struggle between capital and labor.[30]

[Pg 16]

CHAPTER II

THE NEW CAPITALISM

President Taft says that if we cannot restore competition, "we must proceed to State Socialism and vest the government with power to control every business." As competition cannot be revived in industries that have been reorganized on a monopolistic basis, this is an admission that, in such industries, there is no alternative to "State Socialism."

The smaller capitalists and business interests have not yet reconciled themselves, any more than President Taft, to what the Supreme Court, in the Standard Oil Case, called "the inevitable operation of economic forces," and are just beginning to see that the only way to protect the industries that remain on the competitive basis is to have the government take charge of those that have already been monopolized. But the situation in Panama and Alaska and the growing control over railroads and banks show that the United States is being swept along in the world-wide tide towards collectivism, and innumerable symptoms of change in public opinion indicate that within a few years the smaller capitalists of the United States, like those of Germany and Great Britain, will be working with the economic forces instead of trying to work against them. Monopolies, they are beginning to see, cannot be destroyed by private competition, even when it is encouraged by the legislation and the courts, and must be controlled by the government. But government regulation is no lasting condition. If investors and consumers are to be protected, wage earners will most certainly be protected also—as Mr. Roosevelt advocates. And from government control of wages, prices, and securities it is not a long step to government ownership.

The actual disappearance of competition and the growing harmony of all the business interests among themselves are removing every motive for continued opposition to some form of State control,—and even the more far-sighted of the "Captains of Industry," like Judge Gary of the Steel [Pg 17]Corporation and many others, are beginning to see how the new policy and their own plans can be made to harmonize. The "Interests" have only recently become sufficiently united, however, to make a common political effort, and it is only after mature deliberation that the more statesmanlike of the capitalists are beginning to feel confident that they have found a political plan that will succeed. As long as the business world was itself fundamentally divided, small capitalists against large, one industry against the other, and even one establishment against another in the same industry, it was impossible for the capitalists to secure any united control over the government. The lack of organization, the presence of competition at every point, made it impossible that they should agree upon anything but a negative political policy.

But now that business is gradually becoming politically as well as economically unified, government ownership and the other projects of "State Socialism" are no longer opposed on the ground that they must necessarily prove unprofitable to capital. If their introduction is delayed, it is at the bottom because they will require an enormous investment, and other employments of capital are still more immediately profitable. Machinery, land, and other material factors still demand enormous outlays and give immediate returns, while investments in reforestation or in the improvement of laborers, for example, only bring their maximum returns after a full generation. But the semi-monopolistic capitalism of to-day is far richer than was its competitive predecessor. It can now afford to date a part of its expected returns many years ahead. Already railroads have done this in building some of their extensions. Nations have often done it, as in building a Panama Canal. And as capitalism becomes further organized and gives more attention to government, and the State takes up such functions as the capitalists direct, they will double and multiply many fold their long-term governmental investments—in the form of expenditures for industrial activities and social reforms.

Already leading capitalists in this country as well as elsewhere welcome the extension of government into the business field. The control of the railroads by a special court over which the railroads have a large influence proves to be just what the railroads have wanted, while there is a growing belief among them, to which their directors and officers occasionally[Pg 18] give expression, that the day may come, perhaps with the competition of the Panama Canal, when it will be profitable to sell out to the government—at a good, round figure, of course, such as was recently paid for railroads in France and Italy. Similarly the new wireless systems are leading to a capitalistic demand for government purchase of the old telegraph systems.

Mr. George W. Perkins, recently partner of Mr. J. P. Morgan, foreshadows the new policy in another form when he advocates a Supreme Court of Business (as a preventive of Socialism):—

"Federal legislation is feasible, and if we unite the work for it now we may be able to secure it; whereas, if we continue to fight against it much longer, the incoming time may sweep the question along either to government ownership or to Socialism [Mr. Perkins recognizes that they are two different things].

"I have long believed that we should have at Washington a business court, to which our great problems would go for final adjustment when they could not be settled otherwise. We now have at Washington a Supreme Court, composed, of course, of lawyers only, and it is the dream of every young man who enters law that he may some day be called to the Supreme Court bench. Why not have a similar goal for our business men? Why not have a court for business questions, on which no man could sit who has not had a business training with an honorable record? The supervision of business by such a body of men, who had reached such a court in such a way, would unquestionably be fair and equitable to business, fair and equitable to the public." (Italics mine.)

Mr. Roosevelt and Senator Root are similarly inspired by the quasi-partnership that exists between the government and business in those countries where prices and wages in certain monopolized industries are regulated for the general good of the business interests. In the words of Mr. Root:—

"Germany, to a considerable extent, requires combination of her manufacturers, producers, and commercial concerns. Japan also practically does this. But in the United States it cannot be done under government leadership, because the people do not conceive it to be the government's function. It seems to be rather that the government is largely taken up with breaking up organizations, and that reduces the industrial efficiency of the country."

As the great interests become "integrated," i.e. more and more interrelated and interdependent, the good of one [Pg 19]becomes the good of all, and the policy of utilizing and controlling, instead of opposing the new industrial activities of the government, is bound to become general. The enlightened element among the capitalists, composed of those who desire a partnership rather than warfare with the government, will soon represent the larger part of the business world.

Mr. Lincoln Steffens reflects the views of many, however, when he denies that the financial magnates are as yet guided by this "enlightened selfishness," and says that they are only just becoming "class-conscious," and it is true that they have not yet worked out any elaborate policy of social reform or government ownership. None but the most powerful are yet able, even in their minds, to make the necessary sacrifices of the capitalism of the present for that of the future. The majority (as he says) still "undermine the law" instead of more firmly intrenching themselves in the government, and "corrupt the State" instead of installing friendly reform administrations; they still "employ little children, and so exhaust them that they are poor producers when they grow up," instead of making them strong and healthy and teaching them skill at their trades; they still "don't want all the money they make, don't care for things they buy, and don't all appreciate the power they possess and bestow." But all these are passing characteristics. If it took less than twenty years to build up the corporations until the present community of interests almost forms a trust of trusts, how long, we may ask, will it take the new magnates to learn to "appreciate" their power? How long will it take them to learn to enter into partnership with the government instead of corrupting it from without, and to see that, if they don't want to increase the wages and buying power of the workers, "who, as consumers, are the market," the evident and easy alternative is to learn new ways of spending their own surplus? The example of the Astors and the Vanderbilts on the one hand, and Mr. Rockefeller's Benevolent Trust, on the other, show that these ways are infinitely varied and easily learned. Will it take the capitalists longer to learn to use the government for their purposes rather than to abuse it?

It is neither necessary nor desirable, from the standpoint of an enlightened capitalism, that the control of government should rest entirely in the hands of "Big Business," or the "Interests." On the contrary, it is to the interest of capital that all capitalists, and all business interests of any [Pg 20]permanence, should be given consideration, no matter how small they may be. The smaller interests have often acted with "Big Business,"—under its leadership, but as industrial activities and destinies are more and more transferred to the political field, the smaller capitalist becomes rather a junior partner than a mere follower. Consolidation and industrial panics have taught him his lesson, and he is at last beginning to organize and to demand his share of profits at the only point where he has a chance to get it, i.e. through the new "State Socialism." Moreover, he is going to have a large measure of success, as the political situation in this country and the actual experience of other countries show. And in proportion as the relations between large and small business become more cordial and better organized, they may launch this government, within a few years, into the capitalist undertakings so far-reaching and many-sided that the half billion expended on the Panama Canal will be forgotten as the small beginning of the new movement.

It is true that for the moment the stupendous wealth and power of the "Large Interests," already more or less consolidated, threaten to overwhelm the rest. Mr. Steffens does not overstate when he says:—

"To state correctly in billions of dollars the actual value of all the property represented in this community of interests, might startle the imagination to some sense of the magnitude of the wealth of these men. But money is no true measure of power. The total capitalization of all they own would not bring home to us the influence of Morgan and his associates, direct and indirect, honest and corrupt, over presidents and Congresses; governors and legislators; in both political parties and over our political powers. And no figures would remind us of their standing at the bar and in the courts; with the press, the pulpit, the colleges, schools, and in society. And even if all their property and all their power could be stated in exact terms, it would not show their relative wealth and strength. We must not ask how much they have. We must ask how much they haven't got."[31]

But over against this economic power the small capitalists, farmers, shopkeepers, landlords, and small business men, have a political power that is equally overwhelming. Until the "trusts" came into being, no issue united this enormous mass. Yet they are still capitalists, and what they want, except the few who still dream of competing with the "trusts," is not to annihilate the latter's power, but to share it. The[Pg 21] "trusts," on the other hand, are seeing that common action with the small capitalists, costly as it may be economically, may be made to pay enormously on the political field by putting into the hands of their united forces all the powers of governments.

If the principle of economic union and consolidation has made the great capitalists so strong, what will be the result of this political union of all capitalists? How much greater will be their power over government, courts, politics, the press, the pulpit, and the schools and colleges!

It is not the "trusts" that society has to fear, nor the consolidation of the "trusts," but the organized action of all "Interests," of "Big Business" and "Small Business," that is, of Capitalism.

A moment's examination will show that there is every reason to expect this outcome. Broadly considered, there is no such disparity between large capitalists and small, either in wealth and power, as at first appears. All the accounts of the tendency towards monopoly have been written, not in the name of non-capitalists, but in that of small capitalists. Otherwise we might see that these two forces, interwoven in interest at nearly every point, are also well matched and likely to remain so. And we should see also that it is inconceivable that they will long escape the law of social evolution, stronger than ever to-day, toward organization, integration, consolidation.

Messrs. Moody and Turner, for example, finished a well-weighed study of the general tendencies of large capital in this country with the following conclusion:—

"Through all these channels and hundreds more, the central machine of capital extends its control over the United States. It is not definitely organized in any way. But common interest makes it one great unit—the 'System,' so called.

"It sits in Wall Street, a central power, directing the inevitable drift of great industry toward monopoly. And as the industries one after another come into it for control, it divides the wealth created by them. To the producer, steady conditions of labor; to the investor, stable securities, sure of paying interest; to the maker of monopolies and their allies, the increment of wealth of the continent, and with it the gathering control of all mechanical industry."[32] (My italics.)

Certainly the fundamental social questions in any country at any time are: Who gets the increment of wealth? Who[Pg 22] controls industry? No objection can be taken to the facts or reasoning of this and some of the other studies of the "trusts"—as far as they go. What vitiates not only their conclusions, but the whole work, is that written from the standpoint of the small capitalists, they forget that the "trusts" are only part of a larger whole.

The increment of wealth that has gone to large capital in this country in the census period 1900-1910 is certainly less than what has gone to small capital. Farm lands and buildings have increased in value by $18,000,000,000, while the increased wealth in farm animals, crops, and machinery will bring the total far above $20,000,000,000. The increase in city lands and houses other than owned homes, which has not been less than that of the country in recent years, must be reckoned at many billions, and these, like the farm lands, are only to a small degree in the hands of the "Trusts." Even allowing for the more modest insurance policies, and savings bank accounts, as belonging in part to non-capitalists, small capitalists have piled up many new billions within the same decade, in the form of bank deposits, good-sized investments in insurance companies, in government, municipal, and railway bonds, bank stock, and other securities. No doubt the chief owners of the banks, railways, and "trusts" have increased their wealth by several billions within the same period, but this is only a fraction of the increased wealth of the smaller capitalists. It is not true, then, that "the increment of wealth of the continent" has gone to—"the makers of monopolies and their allies."

Let us now examine the question of the control of industry from this broader standpoint. It is admitted that the direct control of the "Interests" extends only over "mechanical industry"—not over agriculture. We have seen that it does not extend over the mine of wealth that lies in city lands, nor over large masses of capital more and more adequately protected by the government. It might be said that by their strategic position in industry the large capitalists control indirectly both agriculture, city growth, savings banks and government. This would be true were it not for the fact that as soon as we turn from the economic to the political field we find that not only in this country, but also in Europe nearly all the strategical positions are held by the small capitalists. They outnumber the large capitalists and their retainers ten to one, and they hold [Pg 23]the political balance of power between these and the propertyless classes. The control of industry and the control of government being in the long run one and the same, the only course left to the large capitalists is to compromise with the small, and the common organization of centralized and decentralized capital with the aid and protection of government is assured.

The fact that, for the masses of mankind, capitalism is the enemy, and not "Big Business," is then obscured by the warfare of the small capitalists against the large. Perhaps nowhere in the world and at no time in history has this conflict taken on a more definite or acute form than it has recently in this country. So intense is the campaign of the smaller interests, and it is being fought along such broad lines that it often seems to be directed against capitalism itself. The masses of the people, even of the working classes, in America and Great Britain have yet no conception of the real war against capitalism, as carried on by the Socialists of Continental Europe, and it seems to them that this new small capitalist radicalism amounts practically to the same thing.

The "Insurgents," it is true, differ fundamentally from the Populists of ten and twenty years ago, in so far they understand fully that in many fields competition cannot be restored, that the large corporations cannot be dissolved into small ones and must be regulated or owned by the government, because they have deserted the Jeffersonian maxim that "that government is best that governs least."

"With the growing complexity of our social and business relations," says La Follette's Weekly, "a great extension of governmental functions has been necessary. The authority of State and nation reaches out in numberless and hitherto unknown forms affecting and regulating our daily lives, our occupations, our earning power, and our cost of living. The need for this intervention, for collective action by the people through their duly constituted government, to preserve and promote their own welfare, is a need that is growing more and more important and imperative to meet the rapidly growing power of commerce, industry and finance, centralized and organized in the hands of a few men."

This is nothing more nor less than the creed of capitalist collectivism. The analysis of the present political situation of the Insurgents is not only collectivist, but, in a sense, revolutionary. After describing how "Big Business," controls both industry and politics, La Follette says:—

[Pg 24]

"This thing has gone on and on in city, State, and nation, until to-day the paramount power in our land is not a Democracy, not a Republic, but an Autocracy of centralized, systemized, industrial and financial power. 'Government of the people, by the people, and for the people' has perished from the earth in the United States of America."

An editorial in McClure's Magazine (July, 1911) draws a similar picture and frankly applies the term, "State Socialism," to the great reforms that are pending:—

"Two great social organizations now confront each other in the United States—political democracy and the corporation. Both are yet new,—developments, in their present form, of the past two hundred years,—and the laws of neither are understood. The entire social and economic history of the world is now shaping itself around the struggle for dominance between them....

"The problem presented by this situation is the most difficult that any modern nation has faced; and the odds, up to the present time, have all been with the corporations. Property settles by economic law in strong hands; it has unlimited rewards for service, and the greatest power in the world—the power of food and drink, life and death—over mankind. Corporate property in the last twenty years has been welded into an instrument of almost infinite power, concentrated in the hands of a very few and very able men.

"Sooner or later the so far unchecked tendency toward monopoly in the United States must be met squarely by the American people....

"The problem of the relation of the State and the corporation is now the chief question of the world. In Europe the State is relatively much stronger; in America, the corporation. In Europe the movement towards Socialism—collective ownership and operation of the machinery of industry and transportation—is far on its way; in America we are moving to control the corporation by political instruments, such as State Boards and the Interstate Commerce Commission....

"And if corporate centralization of power continues unchecked, what is the next great popular agitation to be in this country? For State Socialism?"

When a treaty of peace is made between "Big Business" and the smaller capitalists under such leadership as La Follette's, we may be certain that it will not amount merely to a swallowing up of the small fish by the large. The struggle waged according to La Follette's principles is not a mere bid for political power and the spoils of office, but a real political warfare that can only end by recognition of the small[Pg 25] capitalist's claims in business and politics—in so far as they relate, not to the restoration of competition, but to government ownership or control. As early as 1905, when governor of Wisconsin, La Follette said:—

"It must always be borne in mind that the contest between the State and the corporate powers is a lasting one.... It must always be remembered that their attitude throughout is one of hostility to this legislation, and that if their relation to the law after it is enacted is to be judged by the attitude towards the Interstate Commerce Law, it will be one of continued effort to destroy its efficiency and nullify its provision." Events have shown that he was right in his predictions, and his idea that the war against monopolies must last until they are deprived of their dominant position in politics is now widely accepted.

The leading demands of the small capitalists, in so far as they are independently organized in this new movement, are now for protection, as buyers, sellers, investors, borrowers, and taxpayers against the "trusts," railways, and banks. Formerly they invariably took up the cause of the capitalist competitors and would-be competitors of the "Interests"—and millionaires and corporations of the second magnitude were lined up politically with the small capitalists, as, for example, silver mine owners, manufacturers who wanted free raw material, cheaper food (with lower wages), and foreign markets at any price,—from pseudo-reciprocity to war,—importing merchants, competitors of the trusts, tobacco, beer, and liquor interests bent on decreasing their taxes, etc.

The great novelty of the "Insurgent" movement is that, in dissociating itself from Free Silver, Free Trade, and the proposal to destroy the "trusts," it has succeeded in getting rid of nearly all the "Interests" that have wrecked previous small capitalist movements. At the same time, it has all but abandoned the old demagogic talk about representing the citizen as consumer against the citizen as producer. It frankly avows its intention to protect the ultimate consumer, not against small capitalist producers (e.g. its opposition to Canadian reciprocity and cheaper food), but solely against the monopolies. Indeed, the protection of the ultimate consumer against monopolies is clearly made incidental to the protection of the small capitalist consumer-producer. The wage earner consumes few products of the Steel Trust, the farmer and small manufacturers, many. Nor does the new[Pg 26] movement propose to destroy the "trusts" by free trade even in the articles they produce, but merely to control prices by lower tariffs. With the abandonment of the last of the "Interests" and at the same time of the "consumers" that they use as a cloak, the new movement promises for the first time a fairly independent and lasting political organization of the smaller capitalists.

While Senator La Follette is the leading general of the new movement, either Ex-President Roosevelt or Governor Woodrow Wilson seems destined to become its leading diplomatist. While Senator La Follette declares for a fight to the finish, and shows that he knows how to lead and organize such a fight, Mr. Roosevelt and Mr. Wilson are giving their attention largely to peace terms to be demanded of the enemy, and the diplomatic attitude to be assumed in the negotiations. Perhaps it is too early for such peaceful thoughts, and premature talk of this kind may eliminate these leaders as negotiators satisfactory to the small capitalists. Their interest for my present purpose is that they probably foreshadow the attitude that will finally be assumed when the large "Interests" see that they must make terms.

Mr. Wilson's language is at times so conciliatory as to create doubt whether or not he will stand with Senator La Follette and the Republican "Insurgents" for the whole of the small capitalist's program, but it leaves no doubt that, if he lives up to his declared principles, he must aim at the government regulation, not of "Big Business" merely, but of all business—as when he says that "business is no longer in any sense a private matter."

"We are dealing, in our present discussion," he said in an address, delivered in December, 1910, "with business, and we are dealing with life as an organic whole, and modern politics is an accommodation of these two. Suppose we define business as economic service of society for private profit, and suppose we define politics as the accommodation of all social forces, the forces of business, of course, included, to the common interest." (My italics.)

It is evident that if the community gains by an extended control over business, that business gains at least as much by its claim to be recognized as a public service. And this Mr. Wilson makes very emphatic:—

"Business must be looked upon, not as the exploitation of society, not as its use for private ends, but as its sober service; and private[Pg 27] profit must be regarded as legitimate only when it is in fact a reward for what is veritably serviceable,—serviceable to interests which are not single but common, as far as they go; and politics must be the discovery of this common interest, in order that the service may be tested and exacted.

"In this acceptation, society is the senior partner in all business. It first must be considered,—society as a whole, in its permanent and essential, not merely in its temporary and superficial, interests. If private profits are to be legitimatized, private fortunes made honorable, these great forces which play upon the modern field must, both individually and collectively, be accommodated to a common purpose." (My italics.)

Business is no longer "to be looked upon" as the exploitation of society, private profits are to be "legitimatized" and private fortunes "made honorable"—in a word, the whole business world is to be regenerated and at the same time rehabilitated. This is to be accomplished, as Mr. Wilson explained, in a later speech (April 13, 1911), not by excluding the large capitalists from government, but by including the small, and this will undoubtedly be the final outcome. He said:—

"The men who understand the life of the country are the men who are on the make, and not the men who are made; because the men who are on the make are in contact with the actual conditions of struggle, and those are the conditions of life for the nation; whereas, the man who has achieved, who is at the head of a great body of capital, has passed the period of struggle. He may sympathize with the struggling men, but he is not one of them, and only those who struggle can comprehend what the struggle is. I would rather take the interpretation of our national life from the general body of the people than from those who have made conspicuous successes of their lives."

But the "Interests" are not to be excluded from the new dispensation.

"I know a great many men," Mr. Wilson says further, "whose names stand as synonyms of the unjust power of wealth and of corporate privileges in this country, and I want to say to you that if I understand the character of these men, many of them—most of them—are just as honest and just as patriotic as I claim to be. But I do notice this difference between myself and them; I have not happened to be immersed in the kind of business in which they have been immersed; I have not been saturated by the prepossessions which come upon men situated as they are, and I claim to see some things that they do not yet see; that is the difference. [Pg 28]It is not a difference of interest; it is not a difference of capacity; it is not a difference of patriotism. It is a difference of perception....

"Now, these men have so buried their minds in these great undertakings that you cannot expect them to have reasonable and rational views about the antipodes. They are just as much chained to a task, as if the task were little instead of big. Their view is just as much limited as if their business were small instead of colossal. But they are awakening. They are not all of them asleep, and when they do wake, they are going to lend us the assistance of truly statesmanlike minds.

"We are not fighting property," Mr. Wilson continues, "but the wrong conception of property. It seems to me that business on the great scale upon which it is now conducted is the service of the community, and the profit is legitimate only in proportion as the service is genuine. I utterly deny the genuineness of any profit which is gathered together without regard to the serviceability of the thing done.... Men have got to learn that in a certain sense, when they manage great corporations, they have assumed public office, and are responsible to the community for the things they do. That is the form of privilege that we are fighting." (Italics mine.)[33]

A second glance at these passages will show that Mr. Wilson speaks in the name rather of struggling small capitalists, business men "on the make," than of the nation as a whole. His diplomacy is largely aimed to move the "honest" large capitalists. These are assured that the only form of privilege that Mr. Wilson, representing the smaller business men, those "on the make," is attacking, is their freedom from political and government control. But the large capitalists need not fear such control, for they are assured that they themselves will be part of the new government. And as there is no fundamental "difference of interests," the new government will have no difficulty in representing large business as well as small.

No better example could be found of the foreshadowed treaty between the large interests and the whole body of capitalists, and their coming consolidation, than the central banking association project now before Congress. Originated by the "Interests" it was again and again moderated to avoid the hostility of the smaller capitalists, until progressives like Mr. Wilson are evidently getting ready to propose still further modifications that will make it entirely acceptable to the latter class. Already Mr. Aldrich has consented that the "State" banks, which represent chiefly the smaller capitalists, should be included in the Reserve Association, and that the[Pg 29] President should appoint its governor and deputy governor. Doubtless Congress will insist on a still greater representation of the government on the central board.

Mr. Wilson emphasizes the need of action in this direction in the name of "economic freedom," which can only mean equal financial facilities and the indirect loan of the government's credit to all capitalists, through means of a government under their common control:—

"The great monopoly in this country is the money monopoly. So long as that exists, our old variety and freedom and individual energy of development are out of the question. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved, and who necessarily by every reason of their own limitations, chill and check and destroy genuine economic freedom. This is the greatest question of all, and to this statesmen must address themselves with an earnest determination to serve the long future and the true liberties of men." (My italics.)

Undoubtedly this is a great question; the establishment of a political control over credit will mean a political and financial revolution. For it will establish the power of the government over our whole economic system and will lead rapidly to a common political and economic organization of all classes of capitalists for the control of the government, to a compromise between the group of capitalists that now rules the business world and that far larger group which is bound to rule the government. The financial magnates have seen this truth, and, as Mr. Paul Warburg said to the American Association (New Orleans, Nov. 21, 1911), "Wall Street, like many an absolute ruler in recent years, finds it more conducive to safety and contentment to forego some of its prerogatives ... and to turn an oligarchy into a constitutional democratic federation [i.e. a federation composed of capitalists]."

Mr. Roosevelt has announced a policy with regard to monopolies that foreshadows even more distinctly than anything Mr. Woodrow Wilson has said the solution of the differences between large and small capitalists. He urges that a government commission should undertake "supervision, regulation, and control of these great corporations"[Pg 30] even to the point of controlling "monopoly prices" and that this control should "indirectly or directly extend to dealing with all questions connected with their treatment of their employees, including the wages, the hours of labor, and the like."[34]

This policy is in entire accord with the declarations of Andrew Carnegie, Daniel Guggenheim, Judge Gary, Samuel Untermeyer, Attorney-General Wickersham, and others of the large capitalists or those who stand close to them. It is in equal accord with the declarations of La Follette's Weekly and the leading "Insurgent" writers.

It is true that the private monopolies, as Mr. Bryan pointed out (New York Times, Nov. 19, 1911), "will soon be in national politics more actively than now, for they will feel it necessary to control Colonel Roosevelt's suggested commission, and to do that they must control the election of those who appoint the commission."

But the private monopolies will soon be more actively in politics no matter what remedy is offered, even government ownership. The small capitalist investors, shippers, and consumers of trust products can only protect themselves by securing control of the government, or at least sharing it on equal terms with the large capitalists.

The reason that Mr. Roosevelt's proposal was hailed with equal enthusiasm by the more far-sighted capitalists, whether radical or conservative, small or large, was that they have an approximately equal hope of controlling the government, or sharing in its control. The unbiased observer can well conclude that they are likely to divide this control between them—and, indeed, that the complete victory of either party is economically and politically unthinkable. Already banks, railways, industrial "trusts," mining and lumber interests, are being forced to follow a policy satisfactory to small capitalist investors, borrowers, customers, furnishers of raw material, and taxpayers—while small capitalist competitors are being forced to abandon their effort to use the government to restore competition and destroy the "trusts."

In the reorganization of capitalism, the non-capitalists, the wage and salary earning class are not to be consulted. Taken together with those among the professional and salaried class who are small investors or expect to become independent producers, the small capitalists constitute a[Pg 31] majority of the electorate (though not of the population), or at least hold the political balance of power. It is capitalist interests alone that really count in present-day politics, and it is for capitalists alone that government control would be instituted.

Viewed in this light the statements of Mr. Woodrow Wilson that "business is no longer in any proper sense a private matter," or that "our program, from which we cannot be turned aside, is, that we are going to take possession of the control of our own economic life," and the similar statements of Mr. Roosevelt, are not so Socialistic as they seem. What their use by the leading "conservative-progressive" statesmen of both parties means is that a partnership of capital and government is at hand.

[Pg 32]

CHAPTER III

THE POLITICS OF THE NEW CAPITALISM

We are told that the political issue as viewed by American radicals is, "Shall property rule, or shall the people rule?" and that the radicals may be forced entirely over to the Socialist position, as the Republicans were forced to the position of the Abolitionists when Lincoln signed the Emancipation Proclamation. Mr. Ray Stannard Baker notes also that capital is continually the aggressor, as were the slaveholders, and that the conflict is likely to grow more and more acute, since "no one imagines that these powerful men of money will give up their advantage lightly" any more than the old slaveholders did.

Another "insurgent" publicist (Mr. William Allen White) says that the aim of radicalism in the United States is "the regulation and control of capital" and that the American people have made up their minds that "capital, the product of the many, is to be operated fundamentally for the benefit of the many." It is one of those upheavals, he believes, which come along once in a century or so, dethrone privilege, organize the world along different lines, take the persons "at the apex of the human pyramid" from their high seats and "iron out the pyramid into a plane."[35]

If the aim of the "progressives" is the overthrow of "the rule of property" as Mr. Baker claims—if, in the words of Mr. White again, "America is joining the world movement towards equal opportunity for all men in our modern civilization," then indeed the greatest political and economic struggle of history, the final conflict between capitalism and Socialism, is at hand.

But when we ask along what lines this great war for a better society is to be waged, and by what methods, we are told that the parties to the conflict are separated, not by practical economic interests, but by "ideas" and "ideals," and that the chief means by which this social revolution is to be accomplished are direct legislation and the recall and their use to[Pg 33] extend government ownership or control so as gradually to close one door after another upon the operations of capital until its power for harm is annihilated, i.e. democracy and collectivism. In other words, the militant phrases used by Socialists in earnest are adopted by radicals as convenient and popular battle cries in their campaign for "State Socialism," as to banking, railroads, mines, and a few industrial "trusts," but without the slightest attempt either to end the "rule of property" or to secure "equal opportunity" for any but farmers and small business men. They do nothing, moreover, to bring about the new political and class alignment that is the very first requirement, if the rule of property in all its forms is to be ended, or equal opportunity secured for the lower as well as the comparatively well-to-do middle classes.

Similarly the essential or practical difference between the "Socialism" of Mr. Roosevelt's editorial associate, Dr. Lyman Abbott, who acknowledges that classes exist and says that capitalism must be abolished, and the Socialism of the international movement is this, that Dr. Abbott expects to work, on the whole, with the capitalists who are to be done away with, while Socialists expect to work against them.

Dr. Abbott claims that the "democratic Socialism" he advocates is directly the opposite of "State Socialism ... the doctrine of Bismarck," that it "aims to abolish the distinction between possessing and non-possessing classes," that our present industrial institutions are based on autocracy and inequality instead of liberty, democracy, and equality, that under the wages system or capitalism, the laborers or wage earners are practically unable to earn their daily bread "except by permission of the capitalists who own the tools by which the labor must be carried on." He then proceeds to what would be regarded by many as a thoroughly Socialist conclusion:

"The real and radical remedy for the evils of capitalism is the organization of the industrial system in which the laborers or tool users will themselves become the capitalists or tool owners; in which, therefore, the class distinction which exists under capitalism will be abolished."[36]

And what separates the advanced "State Socialism" of Mr. Hearst's brilliant editor, Mr. Arthur Brisbane, from the Socialism of the organized Socialist movement? Has not Mr. Brisbane hinted repeatedly at a possible revolution in the future? Has he not insisted that the crux of "the cost[Pg 34] of living question" is not so much the control of prices by the private ownership of necessities of life (as some "State Socialist" reformers say, and even some official publications of the Socialist Party), as the exploitation of the worker at the point of production, the fact that he does not get the full product of his labor—phrases which might have been used by Marx himself?

The New York Evening Journal has even predicted an increasing conflict of economic interests on the political field—failing to state only that the people's fight must be won by a class struggle, a movement directed against capitalism and excluding capitalists (except in such cases where they have completely abandoned their financial interests).

Asked whether the influence of the Interests (the "trusts") would increase or diminish in this country in the near future, the Journal answered:—

"The influence of the interests, which means the power of the trusts, or organized industry and commerce, will go forward steadily without interruption.

"Just as steadily as early military feudalism advanced and grew, Until the People at last controlled it and owned it, just so steadily will To-day's Industrial Feudalism advance and grow without interruption Until the People control It and own it.

"The trusts are destined to be infinitely more powerful than now, infinitely more ably organized.

"And that will be a good thing in the long run for the people. The trusts are the people's great teachers, proving that destructive, selfish, unbrotherly competition is unnecessary.

"They are proving that the genius of man can free a nation or a world. They are saying to the people: 'You work under our Orders. One power can own and manage industry.'

"It is hard for individual ambition just now. But in time The People will learn the Lesson and will say to the Trust Owners:—

"'Thank you very much. We have learned the Lesson. We see that it is possible for One Power to own and control All Industry, All Manufactures, All Commerce, and we, the People, will be that One Power.'

"Just as the individual feudal lords organized their little armies in France, and just as the French people themselves have all the armies in one—Under the People's Power—so the industries organized Now by the barons of industrial feudalism, one by one, will be taken and put together by the people, Under the People's Ownership."[37]

[Pg 35]

Yet we find the Journal, like all the vehicles and mouthpieces of radicalism, other than those of the Socialists, unready to take the first step necessary in any conflict; namely, to decide who is the enemy. Unless defended by definite groups in the community, "the rule of property," could be ended in a single election. Nor can the group that maintains capitalist government consist, as radicals suggest, merely of a handful of large capitalists, nor of these aided by certain cohorts of hired political mercenaries—nor yet of these two groups supported by the deceived and ignorant among the masses. Unimportant elections may be fought with such support, but not revolutionary "civil wars" or "the upheavals of the centuries." In every historical instance such struggles were supported on both sides by powerful, and at the same time numerically important, social classes, acting on the solid basis of economic interest.

Yet non-Socialist reformers persist in claiming that they represent all classes with the exception of a handful of monopolists, the bought, and the ignorant; and many assert flatly that their movement is altruistic, which can only mean that they intend to bestow such benefits as they think proper on some social class that they expect to remain powerless to help itself. Here, then, in the attitude of non-Socialist reformers towards various social classes, we begin to see the inner structure of their movement. They do not propose to attack any "vested interests" except those of the financial magnates, and they expect the lower classes to remain politically impotent, which they as democrats, know means that these classes are only going to receive such secondary consideration as the interests of the other classes require.

Whether the radical of to-day, the "State Socialist," favors political democracy or not, depends on whether these "passive beneficiaries" of the new "altruistic" system are in a majority. If they are not in a majority, certain political objects may be gained (without giving the non-capitalist masses any real power) by allowing them all to vote, by removing undemocratic constitutional restrictions, and by introducing direct legislation, the recall, and similar measures. If they are a majority, it is generally agreed that it is unsafe to allow them an equal voice in government, as they almost universally fail to rest satisfied with the benefits they secure from collectivist capitalism and press on immediately to a far more radical policy.

[Pg 36]

So in agricultural communities like New Zealand, Australia, and some of our Western States, where there is a prosperous property-holding majority, the most complete political democracy has come to prevail. Judging everything by local conditions, the progressive small capitalists of our West sometimes even favor the extension of this democracy to the nation and the whole world, as when the Wisconsin legislature proposes direct legislation and the recall in our national government. But they are being warned against this "extremist" stand by conservative progressive leaders of the industrial sections like Ex-President Roosevelt or Governor Woodrow Wilson.

This latter type of progressive not only opposes the extension of radical democracy to districts like our South and East, numerically dominated by agricultural or industrial laborers, but often wants to restrict the ballot in those regions. Professor E. A. Ross, for example, writes in La Follette's Weekly that "no one ought to be given the ballot unless he can give proof of ability to read and write the English language," which would disqualify a large part, if not the majority, of the working people in many industrial centers; while Dr. Abbott concluded a lengthy series of articles with the suggestion that the Southern States have "set an example which it would be well, if it were possible, for all the States to follow."

"Many of them have adopted in their constitutions," Dr. Abbott continues, "a qualified suffrage. The qualifications are not the same in all the States, but there is not one of those States in which every man, black or white, has not a legal right to vote, provided he can read and write the English language, owns three hundred dollars' worth of property, and has paid his taxes. A provision that no man should vote unless he has intelligence enough to read and write, thrift enough to have laid up three hundred dollars' worth of property, and patriotism enough to have paid his taxes, would not be a bad provision for any State in the Union to incorporate in its constitution."[38]

Such a provision accompanied by the customary Southern poll tax, which, Dr. Abbott overlooked (evidently inadvertently), would add several million more white workingmen to the millions (colored and white) that are already without a vote.[39]

[Pg 37]

We cannot wonder, then, that the working people, who are enthusiastic supporters of every democratic reform, should nevertheless distrust the democracy of the new movement. It is generally supposed in the United States that the reason the new "Insurgency" is weaker in the East than in the West is because of the greater ignorance and political corruption of the masses of the great cities of the East. But when we see the radicalism of the West also, as soon as it enters the towns, tending to support the Socialists and Labor parties rather than the reformers, we realize that the distrust has no such local cause.

Perhaps the issue is more clearly seen in the hostility that exists among the working people and the Socialists towards the so-called commission plan of city government, which the progressives unanimously regard as a sort of democratic municipal panacea. The commission plan for cities vests the whole local government in a board of half a dozen elected officials subject to the initiative and referendum and recall. The Socialists approve of the last feature. They object to the commission and stand for the very opposite principle of an executive subordinate to a legislature and without veto power, because a board does not permit of minority representation, and because it allows most officials to be appointed through "influence" instead of being elected. They object also, of course, to the high percentages usually required for the initiative and the recall. It is Socialist and Labor Union opposition, and not merely that of political machines, that has defeated the proposed plan in St. Louis, Jersey City, Hoboken, and elsewhere, and promises to check it all over the country. As a device for saving the taxpayer's money, the commission plan in its usual form is ideal, as a means for securing the benefits of the expenditure of this money to the non-propertied or very small propertied classes, it is in its present form worse in the long run than the present corruption and waste. State legislatures and courts already protect the taxpayers from any measure in the least Socialistic, whatever form of[Pg 38] local government and whatever party may prevail. It has caused more than a little resentment among the propertyless that the taxpayers should actually have the effrontery to propose the still more conservative commission plan as being a radically democratic reform.

It is on such substantial grounds that the propertyless distrust the democracy of the progressives and radicals. They find it extends only to sections or districts where small capitalist voters are in a majority. The "State Socialist" and Reform attitude towards political democracy is indeed essentially opportunistic. Not only does it vary from place to place, but it also changes rapidly with events. As long as the new movement is in its early stages, it deserves popularity, owing to the fact that it brings immediate material benefits to all and paves the way, either for capitalistic or for Socialistic progress, robs capitalism of all fear of the masses, and is ready to remove all undemocratic constitutional barriers and to do everything it can to advance popular government. These constitutional checks and balances prevent the small capitalists and their progressive large capitalist allies from bringing to time the reactionaries of the latter class, while they are so many that, in removing a few of them, there is little danger of that pure political democracy which would alone give to the masses any "dangerous" power. At a later stage, when "State Socialism" will have carried out its program, and the masses see that it is ready to go only so far as the small capitalists' interests allow and no farther, and when it will already have forced recalcitrant large capitalists to terms, and so have reunited the capitalist class, we may expect to see a complete reversal of the present semi-democratic attitude. But as long as the "State Socialist" program is still largely ahead of us, the large capitalists not yet put into their place, and full political democracy—in spite of rapid progress—still far in the distance, a radical position as to this, that, or the other piece of political machinery signifies little. So many reforms of this kind are needed before political democracy can become effective—and in the meanwhile many things can happen that will give ample excuse to any of the "progressive" classes that decide to reverse their present more or less democratic attitude, such as an "unpatriotic" attitude on the part of the masses, a grave railroad strike, etc.

[Pg 39]

For there will be abundant time before democratic machinery can reach that point in its evolution, when the non-capitalist masses can make the first and smallest use of it against their small and large capitalist masters. If, for example, the Supreme Court of this country should ever be made elective, or by any other means be shorn of its political power, and if then the President's veto were abolished, and others of his powers given to Congress, there would remain still other alternatives for vetoing the execution of the people's will—and one veto is sufficient for every practical purpose. Even if the senators are everywhere directly elected, the Senate may still remain the permanent stronghold of capitalism unless overturned by a political revolution.

The one section of the Constitution that is not subject to amendment is the allotment of two senators to each of the States. And even if public opinion should decide that this feature must be made changeable by ordinary amendment like the rest, it might require 90 or even 95 per cent of the people to pass such an amendment or to call a constitutional convention for the purpose. For Connecticut, Rhode Island, Vermont, Delaware, are not only governed by antiquated and undemocratic constitutions, but are so small that wholesale bribery or a system of public doles is easily possible. The constitutions of the mountain States are more modern, but Utah, Wyoming, Nevada, and New Mexico, and others of these States are so little populated as make them very easy for capitalist manipulation, as present political conditions show. Now if we add to these States the whole South, where the upper third or at most the upper half of the population is in firm control, through the disfranchisement of the majority of the non-capitalistic classes (white and colored), we see that, even if the country were swept by a tide of democratic opinion, it is most unlikely that it will ever control the Senate. Moreover, if the capitalists (large and small) are ever in danger of losing the Senate, they have only to annex Mexico to add half a dozen or a dozen new States with limited franchises and undemocratic constitutions.

Either the President, or the Senate, or the Supreme Court might prove quite sufficient to prevent the execution of the will of the people, in any important crisis—they would be especially effective when revolutionary changes in property, and rapid shifting of economic and political power into the[Pg 40] hands of the people, are at stake, as Socialists believe they will be. But to resist such a movement, still another political weapon is available,—even if President, Senate, and Supreme Court fell into the hands of the people (and it is highly probable that the small capitalists, who themselves suffer under the above-mentioned constitutional limitations, will force the larger capitalists to fall back on this other weapon in the end),—namely, a limitation of the suffrage.

The property and educational qualifications for voting which are directed against the colored people in the Southern States are being used to a considerable degree, both North and South, against the poorer whites. While there is no likelihood that this process will continue indefinitely, or that it will spread to all parts of the country, it is already sufficient to throw the balance of political power in favor of the capitalists in the national elections. If we put the total number of voters in the country at 15,000,000, we can see how significant is the fact that more than a million, black and white, have already been directly disfranchised in the South alone.

In view of these numerous methods of thwarting democracy in this country (and there are others) there is no reason why the capitalists should not permit political leaders after a time to accept a number of radical and even revolutionary reforms in political methods. The direct election of senators, though it was bitterly opposed a few years ago, is already widely accepted; the direct nomination of the President has become the law in several States; Mr. Roosevelt threatens that the "entire system" may have to be changed, that constitutions may be "thrown out of the window," and the power of judges over legislation abolished, which, as he notes, has already been advocated by the Socialist member of Congress[40]; the Wisconsin legislature formally calls for a national constitutional convention and proposes to make the constitution amendable henceforth by the "initiative"; Governor Woodrow Wilson suggests that many of our existing evils may be remedied by national constitutional amendments[41], and two such amendments are now nearing adoption after forty years, during which it was thought that all amendment had ceased indefinitely.

Whether it will be decided to take away the power of the Supreme Court over legislation and make it directly responsible to Congress or the people, or to call a constitutional convention, is doubtful. A convention, as Senator Heyburn[Pg 41] recently pointed out in the Senate, is "bigger than the Constitution" and might conceivably amend what is declared in that instrument not to be amendable, by providing that the States should be represented in the Senate in proportion to population. Even then the existing partial disfranchisement of the electors would prevent a new constitution from going "too far" in a democratic direction. It is also true, as the same senator said, that the habit of amending the Constitution is a dangerous one (to capitalism), and that it might some day put the capitalistic government's life at stake[42]. But this after all amounts only to saying that political evolution, like all other kinds, is cumulative, and that its tempo is in the long run constantly accelerated. Certainly each change leads to more change. None of these proposed political reforms, however, even a constitutional convention, is in itself revolutionary, or promises to establish even a political democracy. All could coexist, for example, with a still greater restriction of the suffrage.

Nor do any of these measures in themselves constitute the smallest step in the direction of political democracy as long as a single effective check is allowed to remain. If there is any doubt on the matter, we have only to refer to other constitutions than ours which accomplish the same object of checkmating democracy without a Supreme Court, without an absolute executive veto, without an effective second chamber, and in one important case without a written constitution (England).

Or, we can turn to France, Switzerland, or New Zealand, where the suffrage is universal and political democracy is already approximated but rendered meaningless to the non-capitalist masses by the existence of a majority composed of small capitalists. And in countries like the United States, where the small capitalists and their immediate dependents are nearly as numerous as the other classes, a temporary majority may also be formed that may soon make full democracy as "safe" for a considerable period as it is in Switzerland or New Zealand.[43]

[Pg 42]

As soon as "State Socialism" reaches its point of most rapid development, and as long as it continues to reach ever new classes with its immediate benefits, it will doubtless receive the support of a majority, not only of the voters, but also of the whole population. During this period the "Socialistic" capitalists will be tempted to popularize and strengthen their movement not only by uncompleted political reforms, that are abortive and futile as far as the masses are concerned, but also by the most thoroughgoing democracy. For radical democracy will not only be without danger, but useful and invaluable in the struggle of the progressive and collectivist capitalists against the retrogressive and individualist capitalists. As long as there is a majority composed of large and small capitalists and their dependents, together with those of the salaried and professional classes who are satisfied with the capitalistic kind of collectivism (i.e. while its progress is most brilliant), it is only necessary for the progressives to hold the balance of power in order to have everything their own way both against Socialism and reaction. The powerful Socialist and revolutionary minority created in industrial communities by equal suffrage and a democratic form of government, as long as it remains distinctly a minority, is unable to injure the combined forces of capitalism, while it furnishes a useful and invaluable club by which the progressive capitalists can threaten and overwhelm the reactionaries.

In Great Britain, for example, the new collectivist movement of Messrs. Churchill and Lloyd George, basing itself primarily on the support of the small capitalist class, which there as elsewhere constitutes a very large part (over a third) of the population, seeks also the support of a part of the non-propertied classes. It cannot make them any plausible or honest promise of any equitable redistribution of income or of political power, but it can promise an increase of well-paid government employment, and it can guarantee that it will develop the industrial efficiency of all classes and allow them a certain share, if a lesser one, in the benefits of this policy.

If then "State Socialism," like the benevolent despotisms and oligarchies of history, sometimes offers the purely [Pg 43]material benefits which it brings in some measure to all classes, as a substitute for democratic government, it also favors democracy in those places where the small capitalists and related classes form a majority of the community. The purpose of the democratic policy, where it is adopted, is to stimulate new political interest in the "State Socialistic" program, and by increasing cautiously the political weight of the non-capitalists—without going far enough to give them any real or independent power—to check the reactionary element among the capitalists that tries to hold back the industrial and governmental organization the progressives have in view. It was in order to shift the political balance of power that the reactionary Bismarck introduced universal suffrage in Germany, and the same motive is leading Premier Asquith, who is not radical, to add considerably to the political weight of the working classes in England, i.e. not to the point where they have any power whatever for their own purposes, but only to that point where their weight, added to that of the Liberals, counterbalances the Tories, and so automatically aids the former party.

The Liberals are giving Labor this almost valueless installment of democracy, just as they had previously granted instead such immediate and material benefits as we see in the recent British budgets, as if they were concessions, only hiding the fact that they would soon have conferred these benefits on the workers through their own self-interest, whether the workers had given them their political support or not.

Mr. Lloyd George has said:—

"The workingman is no fool. He knows that a great party like ours can, with his help, do things for him he could not hope to accomplish for himself without its aid. It brings to his assistance the potent influences drawn from the great middle classes of this country, which would be frightened into positive hostility by a purely class organization to which they do not belong. No party could ever hope for success in this country which does not win the confidence of a large portion of this middle class....

"You are not going to make Socialists in a hurry out of farmers and traders and professional men of this country, but you may scare them into reaction.... They are helping us now to secure advanced Labor legislation; they will help us later to secure land reform and other measures for all classes of wealth producers, and we need all the help they give us. But if they are threatened with a class war, then they will surely sulk and harden into downright Toryism. What gain will that be for Labor?" (My italics.)[44]

[Pg 44]

The Chancellor of the Exchequer here bids for Labor's political support on the plea that what he was doing for Labor meant an expense and not a profit to the middle class, and that these reforms would only be assented to by that class as the necessary price of the Labor vote. I have shown grounds for believing that the chief motives of the new reforms have nothing to do with the Labor vote. However much Mr. Lloyd George, as a political manager, may desire to control that vote, he knows he can do without it, as long as it is cast against the Tories. The Liberals will hold the balance of power, and their small capitalist followers will continue to carry out their capitalistic progressive and collectivist program—even without a Labor alliance. Nor does he fear that even the most radical of reforms, whether economic or political, will enable Labor to seize a larger share of the national income or of political power. On the contrary, he predicted in 1906 that it would be a generation before Labor could even hope to be sufficiently united to take the first step in Socialism. "Does any one believe," he asked, "that within a generation, to put it at the very lowest, we are likely to see in power a party pledged forcibly to nationalize land, railways, mines, quarries, factories, workshops, warehouses, shops, and all and every agency for the production and distribution of wealth? I say again, within a generation? He who entertains such hopes must indeed be a sanguine and simple-minded Socialist."[45]

Mr. Lloyd George sought the support of Labor then, not because it was all-powerful, but because, for a generation at least, it seemed doomed to impotence—except as an aid to the Liberals. The logic of his position was really not that Labor ought to get a price for its political support, but that having no immediate alternative, being unable to form a majority either alone or with any other element than the Liberals, they should accept gladly anything that was offered, for example, a material reform like his Insurance bill—even though this measure is at bottom and in the long run purely capitalistic in its tendency.

And this is practically what Labor in Great Britain has done. It has supported a government all of whose acts strengthen capitalism in its new collectivist form, both economically and politically. And even if some day an isolated measure should be found to prove an exception, it would still remain true that the present policies considered as a whole[Pg 45] are carrying the country rapidly and uninterruptedly in the direction of State Capitalism. And this is equally true of every other country, whether France, Germany, Australia, or the United States, where the new reform program is being put into execution.

Many "Socialistic" capitalists, however, are looking forward to a time when through complete political democracy they can secure a permanent popular majority of small capitalists and other more or less privileged classes, and so build their new society on a more solid basis. Let us assume that the railways, mines, and the leading "trusts" are nationalized, public utilities municipalized, and the national and local governments busily engaged on canals, roads, forests, deserts, and swamps. Here are occupations employing, let us say, a fourth or a fifth of the working population; and solvent landowning farmers, their numbers kept up by land reforms and scientific farming encouraged by government, may continue as now to constitute another fifth. We can estimate that these classes together with those among the shopkeepers, professional elements, etc., who are directly dependent on them will compose 40 to 50 per cent of the population, while the other capitalists and their direct dependents account for another 10 per cent or more. Here we have the possibility of a privileged majority, the logical goal of "State Socialism," and the nightmare of every democrat for whom democracy is anything more than an empty political reform. With government employees and capitalists (large and small)—and their direct dependents, forming 50 per cent or more of the population, and supported by a considerable part of the skilled manual workers, there is a possibility of the establishment of an iron-bound caste society solidly intrenched in majority rule.

There are strong reasons, which I shall give in later chapters, for thinking that some great changes may take place before this day can arrive.

[Pg 46]

CHAPTER IV

"STATE SOCIALISM" AND LABOR

State Capitalism has a very definite principle and program of labor reform. It capitalizes labor, views it as the principal resource and asset of each community (or of the class that controls the community), and undertakes every measure that is not too costly for its conservation, utilization, and development—i.e. its development to fill those positions ordinarily known as labor, but not such development as might enable the laborers or their children to compete for higher social functions on equal terms with the children of the upper classes.

On the one hand is the tendency, not very advanced, but unmistakable and almost universal, to invest larger and larger sums for the scientific development of industrial efficiency—healthy surroundings in childhood, good food and healthy living conditions, industrial education, model factories, reasonable hours, time and opportunity for recreation and rest, and on the other a rapidly increasing difficulty for either the laborer or his children to advance to other social positions and functions—and a restriction of the liberty of laborers and of labor organizations, lest they should attempt to establish equality of opportunity or to take the first step in that direction by assuming control over industry and government. From the moment it approaches the labor question the "Socialist" part of "State Socialism" completely falls away, and nothing but the purest collectivist capitalism remains. Even the plausible contention that it will result in the maximum efficiency and give the maximum product breaks down. For no matter how much the condition of the laborers is improved, or what political rights they are allowed to exercise, if they are deprived of all initiative and power in their employments, and of the equal opportunity to develop their capacities to fill other social positions for which they may prove to be more fit than the present occupants, then the human resources of the community are not only left underdeveloped, but are prevented from development.

[Pg 47]

In the following chapters I shall deal successively with the plans of the "State Socialists" to develop the productive powers of the laboring people and their children—as laborers, together with the accompanying tendencies towards compulsory labor, and formation of a class society.

"Our Home policy," says a manifesto of the Fabian Society (edited by Bernard Shaw), "must include a labor policy, whether the laborer wants it or not, directed to securing for him, what, for the nation's sake even the poorest of its subjects should have." (Italics mine.)[46]

Here is the basis of the attitude of the "State Socialist" towards labor. Labor is to be given more and more attention and consideration. But the governing is to be done by other classes, and the foundation of the new policy is to be the welfare of society as these other classes conceive it,—and not the welfare of the masses of the people as conceived by the masses themselves.

Indeed, a government official has recently pleaded with capital in the name of labor that the time has come when it pays to treat labor as well as valuable horses and cattle. George H. Webb, Commissioner of Labor of Rhode Island, begins his report on Welfare Work by assuring the manufacturers that it is profitable. He says: "Mankind, at least that portion of it that has to do with horseflesh, discovered ages ago that a horse does the best service when it is well fed, well stabled, and well groomed. The same principle applies to the other brands of farm stock. They one and all yield the best results when their health and comforts are best looked after. It is strange, though these truths have been a matter of general knowledge for centuries, that it is only quite recently that it has been discovered that the same rule is applicable to the human race. We are just beginning to learn that the employer who gives steady employment, pays fair wages, and pays close attention to the physical health and comfort of his employees gets the best results from their labor."[47]

Mr. George W. Perkins, recently retired from the firm of J. P. Morgan and Company, who has managed the introduction of pensions, profit sharing, and other investments in labor for the International Harvester Company, has also expressed the view that these measures were profitable "from a pecuniary standpoint." A good illustration is the calculation of the Dayton Cash Register Company, which has[Pg 48] led in this "welfare work," that "the luncheons given each girl costs three cents, and that the woman does five cents more of work each day." Some such calculation will apply to the whole colossal system of governmental labor reforms now favored so widely by far-sighted employers.[48]

In order that the private policy of the more enlightened of the large corporations should become the policy of governments, which employers as a class know they can control, only two conditions need to be filled. Since all employers must to some degree share the burdens of the new taxes needed for such governmental investments in the improvement of labor, there must be some assurance, first, that all capitalists shall share in the opportunity to employ this more efficient and more profitable labor; and second, that the supply of cheap labor, which has cost almost nothing to produce, is either exhausted or, on account of its inefficiency, is less adapted to the new industry than it was to the old. The impending reorganization of governments to protect the smaller capitalists from the large (through better control over the banks, railroads, trusts, tariffs, and natural resources) will furnish the first condition, the natural exhaustion or artificial restriction of immigration now imminent together with the introduction of "scientific management," the second. From a purely business standpoint the greatest asset of the capitalists' government, its chief natural resource, the most fruitful field for conservation, and the most profitable place for the investment of capital will then undoubtedly be in the labor supply.

In presenting the British Budget of 1910 to Parliament, Mr. Lloyd George argued that the higher incomes and fortunes ought to bear a greater than proportionate share of the taxes, because present governmental expenditures were largely on their behalf, and because the new labor reforms were equally to their benefit.

"What is it," he said, "that enabled the fortunate possessors of these incomes and these fortunes to amass the wealth they enjoy or bequeath? The security insured for property by the agency of the State, the guaranteed immunity from the risks and destruction of war, insured by our natural advantages and our defensive forces. This is an essential element even now in the credit of the country; and, in the past, it means that we were accumulating great wealth in this land, when the industrial enterprises of less fortunately situated countries were not merely at a standstill, but their resources were being ravaged and destroyed by the havoc of war.

[Pg 49]

"What, further, is accountable for this growth of wealth? The spread of intelligence amongst the masses of the people, the improvements in sanitation and in the general condition of the people. These have all contributed towards the efficiency of the people, even as wealth-producing machines. Take, for instance, such legislation as the Educational Acts and the Public Health Acts; they have cost much money, but they have made infinitely more. That is true of all legislation which improves the conditions of life for the people. An educated, well-fed, well-clothed, well-housed people invariably leads to the growth of a numerous well-to-do class. If property were to grudge a substantial contribution towards proposals which insure the security which is one of the essential conditions of its existence or toward keeping from poverty and privation the old people whose lives of industry and toil have either created that wealth or made it productive, then property would be not only shabby, but shortsighted." (Italics mine.)[49]

The property interests should be far-sighted enough to support the present economic and labor reforms, not because there is any fear in Great Britain either from a revolutionary Socialist movement or from an organized political or labor union upheaval, for Mr. Lloyd George ridicules both these bogeys, but because such reforms contribute towards the efficiency of the people, even as wealth-producing machines—and increase the incomes of the wealthy and the well-to-do.

Mr. Lloyd George continued:—

"We have, more especially during the last 60 years, in this country accumulated wealth to an extent which is almost unparalleled in the history of the world, but we have done it at an appalling waste of human material. We have drawn upon the robust vitality of the rural areas of Great Britain, and especially Ireland, and spent its energies recklessly in the devitalizing atmosphere of urban factories and workshops as if the supply were inexhaustible. We are now beginning to realize that we have been spending our capital, at a disastrous rate, and it is time we should take a real, concerted, national effort to replenish it. I put forward this proposal, not a very extravagant one, as a beginning." (My italics.)[50]

In order to do away with the economic waste of profitable "human material" and the still more serious exhaustion of the supply, the propertyless wage earner or salaried man for the first time obtains a definite status in the official political economy; he becomes the property of the nation viewed "as a business firm," a part of "our" capital. His position was much like a peasant or a laborer during the formation of the feudal system. To obtain any status at all, to become[Pg 50] half free he had to become somebody's "man." Now he is the "man," the industrial asset, of the government. This paternal attitude towards the individual, however, is not at all similar to the paternalist attitude towards capital. While the individual capitalist often does not object to having his capital reckoned as a part of the resources of a government which capitalists as a class control,—roughly speaking in proportion to their wealth,—we can picture his protests if either his personal activity or ability or his private income were similarly viewed as dependent for their free use and development on the benevolent patronage of the State. However, for the workers to become an asset of the State, even while the latter is still viewed primarily as a commercial institution and remains in the hands of the business class, is undoubtedly a revolutionary advance.

Mr. Winston Churchill also gives, as the basis for the whole program, the need of putting an end to that "waste of earning power" and of "the stamina, the virtue, safety, and honor of the British race," that is due to existing poverty and economic maladjustment.[51] Mr. John A. Hobson, a prominent economist and radical, shows that the purpose of the "New Liberalism" is the full development of "the productive resources of our land and labor,"[52] and denies that this broad purpose has anything to do with Socialist collectivism.

Professor Simon Patten of the University of Pennsylvania writes very truly about the proposed labor reforms, that "they can cause poverty to disappear and can give a secure income to every family," without requiring any sacrifice on the part of the possessing classes. No one has shown more clearly or in fewer words how intimately connected are the advance of the worker and the further increase of profits. "Social improvement," Professor Patten says, "takes him [the workman] from places where poverty and diseases oppress, and introduce him to the full advantage of a better position.... It gives to the city workman the air, light, and water that the country workman has, but without his inefficiency and isolation. It gives more working years and more working days in each year, with more zeal and vitality in each working day; health makes work pleasant, and pleasant work becomes efficiency when the environment stimulates men's powers to the full.... The unskilled workman must be transformed into an efficient citizen; children must be kept from[Pg 51] work, and women must have shorter hours and better conditions."[53]

Professor Patten has even drawn up a complete scientific program of social reforms which lead necessarily to the economic advantage of all elements in a community without any decrease of the existing inequalities of wealth. "The incomes and personal efforts of those favorably situated," says Professor Patten, "can reduce the evils of poverty without the destruction of that upon which their wealth and the progress of society depend." (Italics mine.)

The reform program begins with childhood and extends over every period of the worker's life. Ex-President Eliot of Harvard and President Hadley of Yale and other leading educators propose that its principles be applied to the nation's children. Dr. Eliot insists that greater emphasis should be laid on vocational and physical training and the teaching of hygiene and the preservation of the health, which will secure the approval of every "State Socialist." Anything that can be done to elevate the health of the nation, and to increase its industrial efficiency by the teaching of trades, will pay the nation, considered as a going concern, a business undertaking of all its capitalists. It might not improve the opportunity of the wage earners to rise to better-paid positions, because it would augment competition among skilled laborers; while it would probably improve wages somewhat, it might not advance them proportionately to the general increase of wealth; it might leave the unequal distribution of wealth, political power, and opportunity even more unequal than they are to-day, but as long as the nation as a whole is richer and the masses of the people better off, "State Socialists" will apparently be satisfied.

President Hadley is even more definite than Dr. Eliot. The new educational policy so thoroughly in accord with the interests of the business and capitalist classes demands "for the people" every opportunity in education that will make the individual a better worker, while it allows his development as a man and a citizen to take care of itself. President Hadley urges that we follow along German lines in public education. What he feels we still lack, and ought to take from Germany, are the "industrial training and the military training of the people": the children are forced to go to the elementary schools for a time, and during that part of their education they are kept out of the shops and the factories. They,[Pg 52] however, receive instructions in the rudiments of shop and factory work."[54] In other words, the children are kept out of the factory, but the shop and the factory are permitted to enter the school. Doubtless an improvement, but not yet the sort of education any business or professional man would desire for his own children at twelve, fourteen, or sixteen years of age.[55]

"State Socialism" looks at the individual, and especially the workingman, almost wholly from the standpoint of what the community, as at present organized, the capitalists being the chief shareholders, is able to make out of him. Each newborn child represents so much cost to the community for his education. If he dies, the community loses so and so much. If he lives, he brings during his life such and such a sum to the community, and it is worth while to spend a considerable amount both to prevent his early death or disablement and to increase his industrial efficiency while he lives. According to this view, Professor Irving Fisher of Yale has calculated that the annual child crop in the United States is worth about seven billion dollars per annum, a sum almost equal to the annual value of our agricultural crops. In both cases great economies are possible. Professor Fisher has estimated that 47 per cent of the children who die in America less than five years old could be saved at an average cost of $20 per child, which means an annual loss to the nation of $576,000,000, according to Professor Fisher's calculation of what would have been the future[Pg 53] value of all the children now lost (above their cost of maintenance).

"We have counted it our good fortune," says Professor Fisher, "to dwell in a land where nature has been so prodigal that we have not needed to fear want. We are only beginning to realize that this very prodigality of nature has produced a spirit of prodigality in men.

"It is the purpose of the conservation movement to rebuke and correct this national trait, and the resources of science are now concentrated in this mighty effort in that direction.

"The conservation of human life will, I believe, constitute the grandest movement of the twentieth century.

"Not only do human beings constitute by far the greatest part of our natural resources, but the waste of human life and strength is by far the greatest of all wastes. In the report of President Roosevelt's conservation commission, although his commission was primarily appointed to conserve our natural rather than our vital resources, it was pointed out that human beings, considered as capitalized working power, are worth three to five times all our other capital, and that, even on a very moderate estimate, the total waste and unnecessary loss of our national vitality amounts to one and one half billions of dollars per year."[56]

When the "State Socialist" policy has taken possession of the world, which may be in the very near future, or, more correctly speaking, when the world's business and politics are so organized as to give this policy a chance for a full and free application, is it not evident that every advanced nation will consider it as being to its business interest to put an end to this vast, unnecessary loss of life? And if half a billion a year is lost through unnecessary deaths of very young children, is it not probable that an equal sum is lost through death later in childhood or early youth, another similar sum through underfeeding in later life, or through lack of sufficient exercise, rest, recreation, and outdoor life, and a far larger amount through lack of industrial training? Is it not certain that unnecessary industrial accidents, sickness due to overwork and early old age due to overstrain, are responsible for another enormous loss? And, finally, is not unemployment costing a billion a year to the "nation, considered as a business firm"? This last-named loss has been calculated, for the United States alone, as 1,300,000 years of labor time annually. If a round million of these years are saved—if we estimate their value in profits at the low figure of $1000[Pg 54] each,—we have another billion (even allowing for 300,000 unemployable).[57]

Is it not clear that nearly every element in the community will soon combine to do all that is humanly possible to put an end to such costly abuses and neglect; and that conscientious and wholesale efforts to preserve the public health and to secure industrial efficiency cannot be a matter of the distant future, when movements in that direction have already been initiated in Great Britain, Australia, Germany, and some other countries? Sir Joseph Ward, Premier of New Zealand, says that the people of that country have already calculated the value of each child—and, on this basis, made it the subject of certain governmental investments. He says:—

"To return to the annuity fund, apart from the assistance it gives to the wife and children if the father is sick, it also contributes the services of a medical man for a woman at childbirth, and the State pays $30 for that purpose. If all of this is not needed to pay the physician, the rest may be used for carrying on the home. This has all been done with the view to helping the birth rate and bringing into the world children under the most healthy conditions possible, so that they may have a free chance of attaining man's or woman's estate.

"We assess the value of an adult in our country as $1500. So, from a business standpoint and on national grounds, we regard the expenditure of a sum up to $30 as judicious, when the value of the infant to the country may be fifty times that sum. Thus the small wage earner's wife and children are provided for, and his fear about being able to provide for a large family is decreased." (Italics mine.)[58]

"I am of the opinion," declares Mr. Churchill, "that the State should increasingly assume the position of the reserve employer of labor," and that "the State must increasingly and earnestly concern itself with the care of the sick and aged, and, above all, of the children." He looks forward "to the universal establishment of the minimum standards of life and labor, and their progressive elevation as the increasing energies of production may permit."[59]

Mr. Churchill rejects the supposition that the government intends to stop with the extension of the eight-hour law to miners. "I welcome and support this measure, not only for its own sake," he said, "but more because it is, I believe, simply the precursor of the general movement which[Pg 55] is in progress, all over the world, and in other industries besides this, towards reconciling the conditions of labor with the well-ascertained laws of science and health."[60]

It might be supposed that this measure would prove costly to employers, but this is only a short-sighted view. In the first place, working for less hours, the miners will produce somewhat more per hour, but an even more important ultimate benefit comes from the fact that the most experienced miners, those who are most profitable, being subject to less overstrain, will have a longer working life.

Another measure already enacted towards establishing "a national minimum" applies to the wages in ready-made tailoring and some less important industries, to which shirt-waist making is soon to be added. These are known as the "sweated" trades, "where the feebleness and ignorance of the workers and their isolation from each other render them an easy prey to the tyranny of bad masters and middlemen one step above them upon the lowest rungs of the ladder, and themselves held in the grip of the same relentless forces,"—where "you have a condition not of progress but of progressive degeneration." Mr. Churchill asked Parliament to regard these industries as "sick and diseased," and "to deal with them in exactly the same mood and temper as we should deal with sick people," and accordingly boards were established for the purpose of setting up a minimum wage.[61]

But if employers are forced to pay higher wages, it may be thought that they will lose from the law. This Mr. Churchill effectively denies.

"In most instances," he says, "the best employers in the trade are already paying wages equal or superior to the probable minimum which the Trade Board will establish. The inquiries I have set on foot in the various trades scheduled have brought to me most satisfactory assurances from nearly all the employers to whom my investigations have addressed themselves.... But most of all I have put my faith in the practical effect of a powerful band of employers, perhaps a majority, who, whether from high motives or self-interest, or from a combination of the two—they are not necessarily incompatible ideas—will form a vigilant and instructed police, knowing every turn and twist of the trade, and who will labor constantly to protect themselves from being undercut by the illegal competition of unscrupulous rivals."

[Pg 56]

Mr. Churchill claims that employers who are trying to pursue such trades with modern machinery and modern methods are more seriously hampered by the competition of the "sweaters" than they are by that of foreign employers. "I cannot believe," he concludes, "that the process of raising the degenerate and parasitical portion of these trades up to the level of the most efficient branches of the trade, if it is conducted by those conversant with the conditions of the trade and interested in it, will necessarily result in an increase in the price of the ultimate product. It may even sensibly diminish it through better methods."[62] Mr. Churchill is able to point out, as with most of the other reforms, that in one country or another they are already being put into effect, the legislation against "sweating" being already in force in Bavaria and Baden, as well as in Australia, under a somewhat different form.

But the most striking of the British labor reforms has yet to be mentioned. Not only were the present old age pensions established by the common consent of all the political parties, but a law has now been enacted—also with the approval of all parties (and only twenty-one negative votes in Parliament)—to apply the same methods of state insurance of workingmen to sickness, accidents, and even to unemployment. The old age pensions were already more radical than those of Prussia in that the workingmen do not have to contribute under the British law, while the National Insurance Bill as now enacted surpasses both the former British measure and the German precedent in everything, except that it demands a lesser total sum from the government. In the insurance against accidents, sickness, and unemployment the government, instead of contributing the whole amount, gives from two ninths to one third, one third to one half being assessed against employers and one sixth to four ninths against employees. At first this reform, it is expected, will cost only about $12,500,000, and it will be several years before the maximum expenditure of $25,000,000 is reached. But the measure is radical in several particulars: it applies to clerks, domestic servants, and many other classes usually not reached by measures of the kind,—a total of some 14,000,000 persons; it provides $5,000,000 a year for the maintenance of sanatoria for tuberculosis and creates new health boards to improve sanitation and educate the people in hygiene; and it furnishes physicians and medicines[Pg 57] for the insured, thus organizing practically the whole medical force and drug supply as far as the masses are concerned.

In fact, the whole scheme may be looked on not so much as a measure to aid the sick and wounded of industry financially, as to set at work an automatic pressure working towards the preservation of the health, strength, and productive capacity of the people, and incidentally to the increase of profits. As Mr. Lloyd George said in an interview printed in the Daily Mail: "I want to make the nation more healthy than it is. The great mass of illness which afflicts us weighs us down and is easily preventable. It is a better thing to make a man healthy than to pay him so much a week when he is ill."

Mr. Lloyd George points out that the German employers have found that the governmental insurance against accidents has proved a good investment:—

"When Bismarck was strengthening the foundation of the new German Empire, one of the very first tasks he undertook was the organization of a scheme which insured the German workmen and their families against the worst evils arising from these common accidents of life. And a superb scheme it was. It has saved an incalculable amount of human misery to hundreds of thousands and possibly millions of people.

"Wherever I went in Germany, north or south, and whomever I met, whether it was an employer or a workman, a Conservative or a Liberal, a Socialist or a Trade-union Leader—men of all ranks, sections and creeds, with one accord joined in lauding the benefits which have been conferred upon Germany by this beneficent policy. Several wanted extensions, but there was not one who wanted to go back. The employers admitted that at first they did not quite like the new burdens it cast upon them, but they now fully realized the advantages which even they derived from the expenditure, for it had raised the standard of the workman throughout Germany." (My italics.)[63]

It is not only worry and anxiety that were removed, but definite and irregular sums that workers or their employers had formerly set aside for insurance against accident, sickness, and old age, were now calculated and regulated on a business basis more profitable to both parties to the labor contract. It is true that in Germany the employers only pay part of the cost, the rest being borne almost entirely by employees, while in Great Britain—as far as the old age pensions go—the government pays all, and is likely to pay a considerable part, perhaps a third, in the other insurance schemes. But the plan by which the government pays all may prove even[Pg 58] less costly to the employing class, since landlords and inactive capitalists on the one hand and the working people on the other, pay the larger part of the taxes—so that state insurance in this thoroughgoing form is perhaps destined to be even more popular than the German kind.

The most radical provision of the new bill is that which deals with unemployment. Though applying only to the engineering and building trades, it reaches 2,400,000 people. It proposes to give a weekly allowance to every insured person who loses employment through no fault of his own, though nothing is given in strikes and lockouts. And it is intended to extend this measure to other employments. This is only the first installment.

It is probable that Mr. Churchill's project that the State should undertake to abolish unemployment altogether is the most radical of all the proposed policies, excepting only that to gradually expropriate all the future unearned increment of land.

"An industrial disturbance in the manufacturing districts and the great cities of this country," says Mr. Churchill, "presents itself to the ordinary artisan in exactly the same way as the failure of crops in a large province in India presents itself to the Hindoo cultivator. The means by which he lives are suddenly removed, and ruin in a form more or less swift and terrible stares him instantly in the face. That is a contingency which seems to fall within the most primary and fundamental obligations of any organization of government. I do not know whether in all countries or in all ages that responsibility could be maintained, but I do say that here and now, in this wealthy country and in this scientific age, it does in my opinion exist, is not discharged, and will have to be discharged."[64]

Mr. Churchill proposes not only to guard against periods of unemployment which extend to all industries in the case of industrial crises, but also to provide more steady employment for those who are unoccupied during the slack seasons of the year or while passing from one employer to another. Above all he plans that the youth of the nation shall not waste their strength entirely in unremunerative employment or in idleness, but that every boy or girl under eighteen years of age should be learning a trade as well as making a living. Few will deny that the program of Mr. Churchill and his associates in this direction marks a great step towards that "more complete or elaborate social organization" which he advocates.

One of the most significant of all the measures by which[Pg 59] Mr. Churchill plans to lend the aid of the State to the raising of the level of the working classes is his "Development" Act. The object of this bill, in the language of Mr. Churchill, is "to provide a fund for the economic development of our country, for the encouragement of agriculture, for afforestation, for the colonization of England (the settlement of agricultural land), and for the making of roads, harbors, and other public works." Stated in these terms, the Development Act is a measure of "State Socialism" for the general industrial advance of the country, but the main argument in its behalf lies in that clause of the bill which provides, to quote from Mr. Churchill again: "that the prosecution of these works shall be regulated, as far as possible, by the conditions of the labor market, so that in a very bad year of unemployment they can be expanded, so as to increase the demand for labor at times of exceptional slackness, and thus correct and counterbalance the cruel fluctuations of the labor market."[65]

We have seen that Mr. Churchill has justified these measures, not as increasing the relative share of the working classes, but as adding to the total product. They are to add to the industrial efficiency of the nation as a whole, and so incidentally to bring a greater income to all,—but in much the same proportions as wealth now distributes itself.

In this country Mr. Roosevelt has advocated a typical "State Socialist" program of labor reforms including:—

"A workday of not more than eight hours."

"The abolition of the sweat-shop system."

"Sanitary inspection of factory, workshop, mine, and home."

"Liability of employers for injury to body and loss of life" and "an automatically fixed compensation."

"The passage and enforcement of rigid anti-child-labor laws which will cover every portion of this country."

"Laws limiting woman's labor."

All these measures except the first were adopted long ago, in considerable part at least, by the reactionary government of Prussia and are being introduced generally in monarchical and aristocratic Europe, and I have shown that the eight-hour day has been instituted for miners in Great Britain and that Mr. Winston Churchill proposed to extend it. Mr. Roosevelt himself concedes that "we are far behind the older and poorer countries" in such matters. But an examination[Pg 60] of the action of State legislatures during the year just past will show that we are making rapid progress in the same direction.

"Social" or "industrial" efficiency, promoted by the government, is already the central idea in American labor reform. Government insurance against old age, accident, sickness, and unemployment is regarded, not as the "workingmen's compensation" for injuries done them by society, but as an automatic means of forcing backward employers to economize the community's limited supply of labor power—not to wear it out too soon, not to overstrain it, not to damage it irreparably or lay it up unnecessarily for repairs, and not to leave it idle. Mr. Louis Brandeis points out that mutual fire insurance has appealed to certain manufacturers because in twenty years it has resulted in measures that have prevented more than two thirds of the expected losses by fire. Similarly, he says, "if society and industry and the individual were made to pay from day to day the actual cost of sickness, accident, invalidity, premature death, or premature old age consequent upon excessive hours of labor, of unhygienic conditions of work, of unnecessary risk, and of irregularity in employment, those evils would be rapidly reduced."[66]

This, as Mr. Brandeis says, is undoubtedly on the "road to social efficiency" and its practical application will convince employers better than "mere statements of cost, however clear and forceful." It will remove a vast sea of human misery, and the process will immensely enrich society. But like the other State Capitalist reforms (until they are supplemented by some more radical policy) it will at the same time automatically bring about an increase of existing inequalities of income and an intensification of social injustice.

Mr. William Hard in a study of workingmen's compensation for Everybody's Magazine has reached a similar conclusion to that of Mr. Brandeis: "Far from attacking the present relationship between employer and employee, automatic compensation specifically recognizes it. The backbone of the present so-called 'capitalism'; namely, the hiring of the unpropertied class by the propertied class to do work for wages, is not caused by automatic compensation to lose a single vertebra, and automatic compensation has nothing whatever to do with Socialism except that it is accomplished under the supervision of the State." If compulsory insurance against accidents "has nothing whatever to do with [Pg 61]Socialism," neither have compulsory insurance against sickness, against old age, against certain phases of unemployment.

The social reformers propose a labor policy that is for the people whether they like it or not; the only "rights" it gives them are "the right to live" and "the right to work." Its first object is to produce more efficient and profitable laborers, its second to have the government take control of organized charity, to which aspect I must now turn. Most of the labor reforms, enacted to secure for the laborer "what for the Nation's sake even the poorest of its subjects should have," have been urged more strongly by philanthropists and political economists than by representatives of the workers. In America "the minimum wage," for example, is being worked up by a special committee consisting almost exclusively of this class, while workmen's compensation has been indorsed by the most varied political and social elements, from the chief organ of American philanthropists, and Theodore Roosevelt, to the Hearst newspapers.

With "the national efficiency" in view, Mr. Webb asks the British government to take up the policy of a "national minimum," including not only a minimum below which wages are not to fall, but also a similar minimum of leisure, sanitation, and education.[67] Mr. Edward Devine, editor of the leading philanthropic and reform journal in America, the Survey, outlines an identical policy and also insists like Mr. Webb that the Socialist can lay no exclusive claim to it.

"The social economist [i.e. reformer]," writes Mr. Devine, "is sometimes confused with the Utopian [i.e. Socialist]. They are, however, very distinct types of reformers. The Utopian dreams of ideals. The social economist seeks to establish the normal.... The social worker is primarily concerned, not with the lifting of humanity to a higher level, but with eradicating the maladjustments and abnormalities, the needless inequalities, which prevent our realizing our own reasonable standards."

Speaking in the name of American reformers in general, Mr. Devine demands for the lower levels of society "normal standards" of life, which are equivalent to Mr. Webb's national minimum, and definitely denies the applicability of "the question-begging epithet of Socialism which is hurled at all the reformers engaged in such work."

"Whether it belongs to the Socialist program," Mr. Devine objects, "is a question so far as we can see of interest only[Pg 62] to the Socialists. Our advocacy of such laws as we enumerate has no Socialist origin." He claims that the "expenditures legitimately directed towards the removal of adverse social conditions, are not uneconomic and unproductive," and that "they do not represent a mere indulgence of altruistic sentiment," but are "investments"; of which prison reforms and the expenditures for the prevention of tuberculosis are examples.[68]

Another phrase for the proposed saving of the national labor resources and the introduction of minimum standards in its philanthropic aspect is "the abolition of poverty." When he speaks of this as a definite and by no means a distant reform, the reformer refers to that extreme form of poverty, so widely prevalent to-day, which results in the physical deterioration and the industrial inefficiency of a large part of the population.

This sort of poverty is a burden on industry and the capitalists, and Mr. Lloyd George was widely applauded when he said that it can and must be done away with. He has calculated, too, that this abolition can be accomplished at half the cost of the annual increase in armaments.

"This is a War Budget," said Mr. Lloyd George in presenting the reform program of 1910. "It is for waging implacable war against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step toward the time when poverty, and the wretchedness and the human degradation which always follows in its camp, will be as remote from the people of this country as the wolves which once infested its forests."

Mr. H. G. Wells, who has been a leading figure in the British reform world and in the Fabian Society for many years, speaks on this reform movement not merely as a keen outside observer. As an advocate of more radical measures, he argues that there is nothing Socialistic about "the national minimum." This "philanthropic administrative Socialism," as Mr. Wells calls it, is very remote, he says, from the spirit of his own.[69] Yet, critical as Mr. Wells is, he also advocates a policy that could be summed up in the single phrase, "industrial efficiency." "The advent of a strongly Socialistic government would mean no immediate revolutionary changes at all," he says. "There would be no doubt an educational movement to increase the economic value and productivity of the average citizen of the next generation,[Pg 63] and legislation upon the lines laid down by the principle of the 'minimum wage' to check the waste of our national resources by destructive employment. Also a shifting of the burden of taxation of enterprise to rent would begin." (My italics.) The Liberals who are already setting these reforms on foot disclaim any connection whatever with Socialism, but Mr. Wells argues that they do not realize the real nature of their policy.

The establishment of this paternal "State Socialism," whether based on a philanthropic "national minimum" or a scientific policy of "industrial efficiency," many other "Socialists" besides those of Great Britain consider to be the chief task of Socialism itself in our generation. Among the latter was the late Edmond Kelly, a member of the Socialist party in this country at the time of his death, who, in his posthumous work, "Twentieth Century Socialism," has summed up his political faith in much the same way as the anti-Socialist reformer might have done. He says that three of the four chief objects of Socialism are the organization of society, first "to prevent that overwork and unemployment which lead to drunkenness, pauperism, prostitution, and crime"; second, "to preserve the resources of the country"; and third, "to produce with the greatest economy, with the greatest efficiency."[70] Yet Mr. Carnegie and Mr. Rockefeller, as well as Mr. Roosevelt, agree to all three of these policies. They are precisely what the leading Socialists have called "State Socialism."

A part of the working people, also, are disposed to subordinate their own conceptions of what is just, in spite of their own better judgment, to an exclusive longing for an immediate trial of this kind of State benevolence. This is expressed in the widely used phrase, "every man to have the right to work and live,"—employed editorially, for example, by Mr. Berger, now Socialist Congressman. What is demanded by this principle is not a greater proportion of the national income or an increasing share of the control over the national government, but the "State Socialist" remedies, employment, and the minimum wage. In its origin this is the begging on the part of the economically lowest element, a class which Henry George well remarks has been degraded by poverty until it considers that "the chance to labor is a boon."

Some years ago the municipal platform of the Milwaukee Socialists said that it must be borne in mind "that the[Pg 64] famine-stricken is better served with a piece of bread than with the most brilliant program of the future" and that "in view of the hopelessness of an immediate radical betterment in the position of the working class" it is necessary to emphasize the importance of attaining "the next best."[71] Here again was admitted complete dependence on those who own the bread and have the disposition of "the next best" in political reforms. When capitalism is a little better organized, the working people will be guaranteed "the next best": steady work and the food, conditions, and training necessary to make that work efficient—just as surely as valuable slaves were given these rights by intelligent masters or as valuable horses even are given care and kindly treatment to-day.

"A Socialist Social Worker" has published anonymously in the Survey a letter which presents in a few words the whole Socialist position as to this type of reform. The writer claims that the very fact that he is a social worker shows that even as a Socialist he welcomes "every addition to the standard of living that may be wrested or argued from the Capitalist class," since all Socialists recognize that "no undernourished class ever won a fight against economic exploitation, but that the more is given the more will be demanded and secured." But he does not feel that the material betterments have any closer relation to Socialism.

"The new feudalism," he says, "will care for and conserve the powers of the human industrial tool as the lord of the manor looked after the human agricultural implement...." Here is the essential point: the efficiency of the human industrial tool is to be improved with or without his consent.

"Unrestrained Capitalism," says the same writer in explanation of his prediction, "has hitherto invariably meant the physical deterioration of the working class and the marginal disintegration of society—the loosening of social ties and the pushing of marginal members of society over the brink into poverty, pauperism, vagrancy, drunkenness, prostitution, wife desertion and crime, but this deterioration is not the main indictment against capitalism, and will be remedied by the wiser capitalists themselves. The main indictment of capitalism is that it selfishly and stupidly blocks the road of orderly and continuous progress for the race."

The proposal of the social reformers, as far as the workers are concerned aims to put an end to this deterioration, to standardize industry or to establish a minimum of wages,[Pg 65] leisure, health, and industrial efficiency. The writer says that the Socialists aim at something more than this.

"The criterion of social justice in every civilized community," he writes, "is, and always has been, not how large or how intense is the misery of the social debtor class, but what is done with the social surplus of industry? It was formerly used to build pyramids, to create a landed or ecclesiastical or literary aristocracy, to conduct wars, or to provide the means of a sensuous life for the majority of a privileged class, and the means of dilettantism for the minority of it. The difference between the near Socialist and the true Socialist is principally that the main attention of the former is given to the negative side of the social problem—the condition of the submerged classes, while that of the latter is given to the positive side of the problem—the wonderful development, power, and life that would come to that race and the individual if a wise and social use were to be made of the surplus of industry."

[Pg 66]

CHAPTER V

COMPULSORY ARBITRATION

So far I have spoken only of the constructive side of the new capitalism's labor program, its purpose to produce healthy and industrially efficient laborers so as to increase profits. "State Socialism" gives the workingman as a citizen certain carefully measured political rights, and legislates actively in his behalf as a profit-producing employee at work, but its policy is reversed the moment it deals with him and his organizations as owners and sellers of labor.

Towards the individual workers, who are completely powerless either politically or economically until they are organized, the new capitalism is, on the whole, both benevolent and actually beneficent. But it does not propose that organized labor shall obtain a power either in industry or in government in any way comparable to that of organized capital.

"Successful State Socialism," as Victor S. Clark says in writing of the Australian experiments, "depends largely upon perfecting public control over the individual."[72] But compulsory arbitration of labor disputes which reaches the wage earners' organizations, is far more important to "State Socialism" than any other form of control over individual. A considerable measure of individual liberty may be allowed without endangering this new social polity, and it is even intended systematically to encourage the more able among the workers by some form of individual or piece wages—or at least a high degree of classification of the workers—and by a scheme of promotion that will utilize the most able in superior positions, and incidentally remove them out of the way as possible leaders of discontent.

Nor is it intended to use any compulsion on labor organizations beyond that which is essential to prevent them from securing a power in society in any way comparable to that of property and capital. For this purpose compulsory arbitration is the direct and perfect tool. It can be limited[Pg 67] in its application to those industries where the unions really occupy a position of strategic importance like railroads and coal mines, and it can be used to attach to the government those employees that are unable to help themselves. I have mentioned those weaker groups of employees who would be unable to improve their condition very materially except by government aid, and, even when so raised to a somewhat higher level, have no power to harm capitalism. Compulsory arbitration or some similar device must therefore replace such crudely restrictive and oppressive measures as have hitherto been applied to the unions.

In the United States all "dangerous" strikes are at present throttled by court injunctions forbidding the strikers to take any effective action, and boycotts are held to be forbidden by the Sherman law originally directed against the "trusts." Recently the Supreme Court decided that the officers of the American Federation of Labor were not to be imprisoned for violation of the latter statute. But the decision was purely on technical grounds, and the court upheld unanimously the application of the law to the unions. There is little question that the attorney for the manufacturers, Daniel Davenport, was right when he thus summed up the court's opinion:—

"It held that the boycott is illegal; that the victim of the boycott has the right to go into court of equity for protection by injunction; that such court has the right to enjoin any and every act done in enforcing the boycott, including the sending out of boycott notices, circulars, etc., that the alleged constitutional right of free speech and free press affords the boycotter no immunity for such publication; that for a violation of the injunction the party violating it is liable to be punished both civilly and criminally."

Against this law and the use of injunctions in labor disputes the Federation of Labor has introduced a bill through Congressman W. B. Wilson, which aims to free the unions from these legal obstacles by enacting that no right to continue the relation of employer to employee or to carry on business shall be construed as property or a property right; and that no agreement between two or more persons concerning conditions of employment or its termination shall constitute a conspiracy or an offense against the law unless it would be unlawful if done by a single individual, and that, therefore, such an act is not subject to injunctions. While neither of the great parties has definitely promised to [Pg 68]support this particular measure, one party has made a vague promise to restrict injunctions, and the leaders of the progressive wings of both are quite definite about it. Nearly half of the House of Representatives voted for the repeal of the Sherman law as applied against union boycotts. Senator La Follette has demanded the abolition of this species of injunction, and Governor Woodrow Wilson has accused our federal courts of "elaborating a theory of conspiracy destined to bring 'the sympathetic strike' and what is termed 'the secondary boycott' under legal condemnation."

Such reforms are not as radical as might appear to Americans, for the boycott is legal in Germany, while the crime of "conspiracy" was repealed in Great Britain in 1875, and the rights of strikers were further protected in that country by the repeal of the Taff Vale decision against picketing a few years ago, and yet unions are in no very strong position there. And weak as they are, the talk of compulsory arbitration is growing, and it seems only question of time until some modification of it is adopted. And, though the abuse of injunctions and the other forms of anti-union laws and decisions now prevailing will probably be done away with in this country, there is little doubt that here also employers will use some great coal or railroad strike as a pretext for enacting a compulsory arbitration law.[73]

Similarly, as governments continue to take on new industrial functions, great importance is attached to the right of government employees, now denied, to organize and to join unions. Senator La Follette and other progressives also champion this right against President Taft, and will doubtless win their fight, but, as I shall show later a right to organize does not mean a right to strike—and there seems no probability that any government will fail to answer the effort[Pg 69] to strike on any very large scale either by punishment for conspiracy against the State or by excluding the strikers permanently from government employment. They will doubtless be offered, as in France, instead of the right to strike, the right to submit their grievances as a body, if they wish it, to some government board (see Part III, Chapter VI).

The Australasian labor leaders were the first and are still the chief advocates of compulsory arbitration among the unionists, and if they find it used against them they have nobody but themselves to blame. That Labor is disappointed in the result in those countries is shown by the fact that of late years, both in Australia and New Zealand, the most important strikes have been settled outside of the compulsory arbitration acts, and Mr. Clark states that he is unaware of any important exception.

But that the workers in Australia still hope to use this legislation for their purposes is shown by the referendum of 1911, by which they sought to nationalize the State laws on the subject. At the time of the railroad strike in Victoria, Australia, in 1903, a law was passed which imposed a penalty of "twelve months' imprisonment or a fine of one hundred pounds" for engaging in a strike on government railways, and made a man liable to arrest without warrant or bail "for advising a strike orally or by publication, or for attending any meetings of more than six persons for the purpose of encouraging strikers." Even then the limit had not been reached. In 1909 the Parliament of New South Wales passed an act especially directed against strikes in any industry which produced "the necessary commodities of life [these being defined as coal, gas, water, and food] the privation of which may tend to endanger human life or cause serious bodily injury," and the penalty of twelve months' imprisonment of the Victorian law was extended to all this vast group of industries also. The law of New South Wales was most stringent, providing that any one taking part in a strike meeting under these circumstances is also liable to twelve months' imprisonment, and that the police may break into the headquarters of any union and seize any documents "which they reasonably suspect to relate to any walk-out or strike." Under this law the well-known labor leader, Peter Bowling, was sentenced to one year of imprisonment.

The unions violently denounced this enactment, but chiefly[Pg 70] as they had denounced previous legislation, on the ground that it permitted unorganized workmen to apply for relief under the law. That is to say, while the employers were using the law to make striking a crime, they were extending such benefits as it produced to the nonunion workers who can often be used as tools for their purposes. But the astounding hold that "State Socialism" has on the Australian masses, especially on the working people, is shown by the steadfast belief that this measure can be amended so as to operate to their interest. Bowling and his unions made a serious agitation for the general strike against the coercive measure just mentioned, but it was only by a tie vote that the New South Wales Labour Congress even favored protest in the form of cancelling the agreement which the unions had made under the Industrial Disputes Acts, while in the next elections New South Wales returned a majority of labor representatives opposing Bowling's policy of radical protest. That is, the majority of the working people still express confidence in the possibilities of compulsory arbitration, and even want to extend it.

Professor Le Rossignol of the United States and Mr. William D. Stewart of New Zealand have undertaken a careful and elaborate investigation of compulsory arbitration in New Zealand.[74] A reference to a few of their quotations from original documents will show the nature and possibilities of this coercive measure as it has developed in the country of its origin. The original law in New Zealand was introduced by the Honorable William Pember Reeves, the Minister of Labor, in 1894, and was supported by the labor leaders. Mr. Reeves says: "What the act was primarily passed to do was to put an end to the larger and more dangerous class of strikes and lockouts. The second object of the act's framer was to set up tribunals to regulate the conditions of labor."

"Mr. Reeves' chief idea," say our authors, "was to prevent strikes, and a great deal more was said in Parliament about industrial peace than about the improvement in the conditions of labor which the act was to bring about. But there can be little doubt that the unionists, without whose help the act could not have been passed, thought more of the latter than of the former result, and looked upon the act as an important part of the new legislation for the benefit of the working class." Here is the contrast that we must[Pg 71] always keep in mind. The purpose of the unionists is to see if they cannot obtain improvements in their conditions; the purpose of the employers and also of "the public" is to prevent strikes. One of the most able students of the situation, Mr. MacGregor, has shown that since the passing of the law the latter purpose has been thoroughly accomplished, since it has been used not only as was originally intended, to settle labor disputes which become so serious as to threaten to "arrest the processes of industry," but that it has practically built up a "system of governmental regulation of wages and conditions of labor in general." That is to say, the law has accomplished rather the purposes of the employers than those of the employees.

In another point of the most fundamental importance the law has become something radically different from what the labor leaders who first favored it hoped it would be. The act of 1894 was entitled: "An act to encourage the formation of industrial unions and associations and to facilitate the settlement of industrial disputes by conciliation and arbitration." By the amendment of 1898 the words, "to encourage the formation of industrial unions and associations," were left out. Thus the law ceased to be directly helpful to the very unions which had done so much to bring it about and are the only means employees possess to make the law serve them instead of becoming a new weapon for employers.

An early decision of the Arbitration Court in 1896 had declared that preference should be given to the unionists. "Since the employer was the judge of the qualifications of his employees, the unionists did not gain much by this decision," say Le Rossignol and Stewart. "In later awards it was usually specified that preference was granted only when the union was not a closed guild, but practically open to every person of good character who desired to join." These later decisions brought it about that the so-called preference of unionists became no preference at all. "The Arbitration Court, except in a few minor cases, has refused to grant unconditional preference and the unionists, realizing that preference to an open union is no preference at all, now look to Parliament for redress and demand statutory unconditional preference to unionists."

In 1905 strikes and lockouts were made statutory offenses, and a single judge was given the power practically to force the individual worker to labor. After ten years of trial the[Pg 72] law had become almost unrecognizable from the workingman's standpoint, and from this moment on the resistance to it has grown steadily. In a decision rendered in 1906, the Chief Justice said: "The right of a workman to make a contract is exceedingly limited. The right of free contract is taken away from the worker, and he has been placed in a condition of servitude or status, and the employee must conform to that condition." Not only do judges have this power, but they have the option of applying or not applying it as they see fit, for the amendment of 1908 "expressly permits the court to refuse to make an award if for any reason it considers it desirable to do so." With a law, then, that in no way aids the unions, as such—however beneficial it may be at times to the individual workingman—and which leaves an arbitrary power in the hands of the judge elected by an agricultural majority, what has been the concrete result? Especially, what principles have been applied by the judges?

Of course the first principle has been that all the working people should get what is called a "minimum" or a "living" wage, but our authors show that merely to keep their heads above the sea of pauperism was not at all the goal of the workers of New Zealand. No doubt they were already getting such a wage in that relatively new and prosperous country, yet this was all the new law did or could offer, besides keeping existing wage scales up to the rising cost of living. Anything more would have required, not compulsory arbitration, but a series of revolutionary changes in the whole economic and political structure. "Another stumbling block in the way of advance in wages is the inefficient or marginal or no-profit employer, who, hanging on the ragged edge of ruin, opposes the raising of wages on the ground that the slightest concession would plunge him into bankruptcy. His protests have their effect on the Arbitration Court, which tries to do justice to all the parties and fears to make any change for fear of hurting somebody. But the organized workers, caring nothing for the interests of any particular employer, demand improved conditions of labor, though the inefficient employer be eliminated and all production be carried on by a few capable employers doing business on a large scale and able to pay the highest wages."

Here is the essential flaw in compulsory arbitration in[Pg 73] competitive industries (its limitations under monopolies will be mentioned later). The courts cannot apply a different standard to different employers. On the other hand, they cannot fix a wage which any employer cannot afford to pay or which will drive him out of business. That is to say, the standard tends to be fixed by what the poorest employer can pay, the employer who, from the standpoint either of capital or of labor or of efficient industry, really deserves to be driven from business. An exception is made only against such employers as cannot even afford to pay a living wage—these alone are eliminated.

Le Rossignol and Stewart show that in view of these considerations the court has repeatedly stated that "profit sharing could not be taken as a basis of awards, on the ground that it would involve the necessity of fixing differential rates of wages, which would lead to confusion, would be unfair to many employers, and unsatisfactory to the workers themselves."

With such a principle guiding the court, and it is probably a necessity under commercial competition, it is no wonder that some of the representatives of the unions have claimed that annual real wages have actually fallen. "It is not easy," say our authors, "to show that compulsory arbitration has greatly benefited the workers of the Colony. Sweating has been abolished, but it is a question whether it would not have disappeared in the years of prosperity without the help of the Arbitration Court. Strikes have been largely prevented, but it is possible that the workers might have gained as much or more by dealing directly with their employers than by the mediation of the court. As to wages, it is generally admitted that they have not increased more than the cost of living. A careful investigation by Mr. von Dalezman, the Registrar-General, shows that, while the average wages increased from 1895 to 1907 in the ratio of 84.8 to 104.9, the cost of food increased in the ratio of 84.3 to 103.3. No calculation was attempted for clothing or rent." If we take it into account that rents have risen very rapidly and are especially complained of by the working people, we can see that real wages, measured by their purchasing power, probably fell in the first twelve years of compulsory arbitration, notwithstanding that it was on the whole a period of prosperity in the Colony. For ten years, as a consequence, the complaints of the workers against the decisions have been growing, "not because the[Pg 74] wages were reduced, but because they were not increased and because other demands were not granted."

When the unions perceived that the principles for which they have been contending were not granted, and that their material conditions were not being improved, it was suggested that the judge of the Arbitration Court should be elected by the people, in the hope that the unions might control the election, "but this would be at variance with all British traditions and could not be brought about," say our authors. No doubt British tradition has had something to do with the matter, but the impracticability of this remedy is much more due to the fact that the employees confront an agricultural and middle class majority.

At first it was the employers who were displeased, but now they are becoming converted. The employers, say Le Rossignol and Stewart, "have come to realize that they might have lost more by strikes than they have ever lost by arbitration; and, since the workers have been dissatisfied, the employers are more disposed to stand by the act, or to maintain a neutral attitude, waiting to see what the workingmen will do."

It would seem, then, that the real gain from the law has been through the abolition of strike losses, and since these had previously been borne by employers and employees alike, this saving has been pretty equally divided between the two classes, neither making any relative gain over the other. But at the bottom this is a blow to the unions, for the purpose of every union policy is not merely to leave things where they were before, but to increase the workers' relative share. Any policy that brings mutual gain requires no organized struggle of any kind. It is the workers who are the plaintiffs, and the employers the defendants. When things are left in statu quo it is a moral and actual defeat for the employees.

This is why, in the last two or three years, the whole labor movement in New Zealand has arisen against the law. In 1908 the coal miners' union refused to pay a fine levied against it, alleging that it had no funds. "In this position the union was generally condemned by public opinion, but supported by a number of unions by resolutions of sympathy and gifts of money. Finally, the Arbitration Court decided to proceed against the men individually for their share of the fine. The whole of the fine, together with the costs of collection, amounting to over 147 pounds, was recovered by[Pg 75] means of attachment orders under the Wages Attachment Act of 1895. According to a recent decision of the Court of Appeals, the men could have been imprisoned, if they had refused to pay, for a maximum term of one year, but it was not necessary to do this, and public opinion was not in favor of imprisonment for the offense."

This and other strikes in 1907 and 1908 "caused a widespread opinion among employers and the general public that the act should be amended chiefly for the sake of preventing strikes. The laborers, as a class, were not enthusiastic about the matter, since the proposed amendments were designed to compel them to obey the law rather than to bring them any additional benefit." After having been debated for a year, a new law was passed, and went into effect January 1, 1909. This new law, though still compulsory, repeals some of the features of the previous legislation which were most obnoxious to the unions. Even this act, however, they found entirely unsatisfactory, and "during the year ending March 31, 1909, sixteen workers' unions, and a like number of employers' unions, had their registration cancelled for neglect, while two other unions formally cancelled their registration." This meant practically that these unions have withdrawn from the field of the act and expressed their disapproval of compulsory arbitration, even in its recently modified form. Not only have the unions been withdrawing, but, freed from its bondage, they began at once to win their most important strikes, indicating what its effect had been. Even the employees of the State have been striking, and successfully.

"The workers' position is embarrassing. The original act was passed for their benefit as well as to prevent strikes, but when it could no longer be used as a machine for raising wages, they were the first to rebel against it." There can be no doubt that our authors are correct, and that the working people are beginning to feel they have been trapped. In both New Zealand and Australia they have given their approval to an act which in actual practice may become more dangerous than any weapon that has ever been forged against them. The only possible way they could gain any advantage from it would be if they were able to elect the judge of the Arbitration Court, but, to obtain a political majority for this purpose, they would have to develop a broad social program which would appeal to at least a part of the [Pg 76]agriculturists as well as to the working people, but here we turn to the considerations to be brought out in the next chapter.

Mr. Charles Edward Russell, as the result of two visits to Australasia, has very ably summed up the Socialist view of compulsory arbitration in The Coming Nation, of which he is joint editor. Mr. Russell says:—

"The thing is a failure, greatly to the surprise of many capable observers, and yet just such a result might have been expected from the beginning, and for two perfectly obvious reasons, both of which, strange to say, were universally overlooked.

"In the first place, the court was nominally composed of three persons, and really of one. That one was the judge appointed by the government.

"The representative of the employers voted every time for the employers; the representative of the unions voted every time for the unions; the judge alone decided, and might as well have constituted the whole court.

"At first the judge decided most of the cases in favor of the policy of increasing wages. Fine, again. Many wage scales ascended.

"But the judge, as a rule, did not like his job. He desired to get to the Supreme Court as rapidly as possible; to the Supreme Court where the honors were. A succession of judges went by. At last came one that agreed with the employers that wages were too high for the welfare of the country. This had long been a complaint of the manufacturers in particular, who were fond of pointing out how high wages discouraged the opening of new factories, and consequently the development of the country. This judge, being of the same opinion, apparently, began to decide the cases the other way.

"Then, of a sudden the second fatal defect in the system opened up.

"The men grew restless under the adverse decisions of the court. That raised a new question.

"How are you going to compel men to work when they do not wish to work under the conditions you provide?

"Nobody had thought of that."

Referring, then, to the failure to prevent the strike of the slaughterers against the law in 1907, or to punish them after they had forced their employers to terms, Mr. Russell gives the Socialist opinion of the legislation of 1908, passed to remedy this situation:—

"At the next session of Parliament it amended the law to meet these unexpected emergencies and find a way to compel men to work.

[Pg 77]

"To strike after a case had been referred to the court was now made a crime, punishable by a fine, and if the fine were not paid, the strikers' goods could be distrained and he could be imprisoned. Any labor union that ordered a strike or allowed its members to strike was made subject to a fine of $500. Outside persons or organizations that aided or abetted a strike were made subject to severe penalties.

"Fine, again. But suppose the labor unions should try to evade the law by withdrawing from registry under the act? Government thought once more, and produced another amendment by which the penalties for striking were extended to all trades engaged in supplying a utility or a necessity, whether such trades were organized or not.

"You could hardly surpass this for ingenuity. 'Supplying a necessity' would seem to cover about everything under the sun and to make striking impossible. There must be no more strikes.

"Sounds like home, doesn't it? To do away with strikes. You see the employing class, which all around the world gets what it wants and controls every government, had put itself back of the arbitration law. It had discovered that the law could be made to be a good thing, so it was at the dictation of this class that the amendments were passed. What the injunction judges do in America, or try to do, the law was to do in New Zealand.

"Except that not Judge Goff nor Judge Guy, nor any other injunction judge of our own happy clime, has dared to go quite so far as to declare that all striking everywhere is a crime to be punished with imprisonment.

"How are you going to compel men to work? Why, thus, said the government of New Zealand. Put them in jail if they do not like the terms of their employment."

Mr. Russell then gives an account of the miners' strike, above referred to, which he points out was ended by the labor department paying the miners' fines. He concludes:—

"Mr. Edward Tregear, a scholar and thinker, had filled for many years the place of chief secretary for labor. It is not a cabinet office, but comes next thereto. He is a wise person and a sincere friend of the worker, as he has shown on many occasions. As soon as he heard that the ministry actually purposed to imprison the miners because they did not like the terms of their employment, he went to the minister of labor and earnestly protested, protested with tears in his eyes, as the minister himself subsequently testified, begged, argued, and pleaded. No possible good could come from such rigor, and almost certainly it would precipitate grave disaster.

"To all this the minister was obdurate. Then Mr. Tregear said that he would resign; he would not retain his office and see men imprisoned for exercising their inalienable right of choice, whether they would or would not work under given conditions.

[Pg 78]

"Now Mr. Tregear was one of the most popular men in New Zealand, and his resignation under such conditions would raise a storm that no ministry would care to face. Hence the government was in a worse situation than ever. On one side it fronted a dangerous venture with the certainty of a tremendous handicap in the resignation of the chief secretary, and on the other hand was an acknowledgment that the arbitration law was a failure and could be violated with impunity.

"In this emergency decision was halted for a few hours while the government people consulted. Meantime, by quick and desperate efforts, the strike was ended, and the men went back to work.

"This left the fines unpaid. The labor department solved that difficulty and allowed the defeated government to make its escape from a hopeless situation by paying the miners' fines.

"To all intents and purposes it was the end of compulsory arbitration in New Zealand. Not nominally, for nominally the thing goes on as before; but actually. It is only by breaking our shins upon a fact that most of us ever learn anything; and the exalted ministry of New Zealand had broken its shins aplenty on a fact that might have been discerned from the start.

"If you are to have compulsory arbitration, you must compel one side as much as the other.

"But in the existing system of society, when you come to compelling the workers to accept arbitration's awards, you are doing nothing in the world except to compel them to work, and, however the thing may be disguised, compulsory work is chattel slavery, against which the civilized world revolts.

"This is the way the thing works out, and the only way it ever can work out. There can be no such thing as compulsory arbitration without this ultimate situation.

"If, therefore, any one in America believes in such a plan for the settlement of labor troubles, I invite the attention of such a one to this plain record.

"For my own part, years ago I was wont to blame the labor leaders of America because they steadfastly rejected compulsory arbitration, and I now perceive them to have been perfectly right. The thing is impossible."[75]

A somewhat similar act to the Australasian ones, though less stringent, has been introduced in Canada. The Canadian law, which is a compromise between compulsory arbitration and compulsory investigation, applies to mines, railways, and other public utilities. Strikes have been prevented, but let us see what benefits the employees have received. Whatever its effect on wages and hours, the law has the tendency to weaken the unions, which hitherto have been the only reliable means by which employees were able to advance their[Pg 79] condition. Not only does it make organization seem less necessary, but it takes the most powerful weapon of the union, the ability to call a sudden strike. If we add to this the unfavorable influence on public opinion in case the unions are not contented with the rewards, and the fact that the law works against the union shop, which is the basis of some unions, we can understand the ground of their hostility.

"The Canadian Labour Disputes Investigation Act" is especially interesting and important because it is serving as a model for a campaign to introduce legislation along similar lines into the United States. Already Mr. Victor S. Clark, the author of the study of the Australian Labour Movement, to which I have referred at the beginning of the chapter, has been sent by Mr. Roosevelt and Mr. Taft to investigate into the working of the act. Ex-President Charles W. Eliot of Harvard has also advocated strenuously and at some length a similar statute, and it has been made the basis for the campaign in Massachusetts and other states. Mr. Clark reported: "Under the conditions for which it was devised, the Canadian law, in spite of some setbacks, is useful legislation, and it promises more for the future than most measures—perhaps more than any other measure—for promoting industrial peace by government intervention."

Here is the very keynote to compulsory arbitration, according to its opponents, whose whole attack is based on the fact that its primary purpose is not to improve the condition of the working people, but to promote "industrial peace by government intervention."

Mr. Clark concedes that "possibly workers do sacrifice something of influence in giving up sudden strikes," though he claims that they gain in other ways. "After such a law is once on the statute books, however, it usually remains, and in New Zealand, Australia, and Canada it has created a new public attitude toward industrial disputes. This attitude is the result of the idea—readily grasped and generally accepted when once clearly presented—that the public have an interest in industrial conflicts quite as immediate and important in its way as that of the conflicting parties. If the American people have this truth vividly brought to their attention by a great strike, the hopeful example of the Canadian act seems likely, so far as the present experience shows, to prove a guiding star in their difficulties." (Italics mine.)

In the agitation that was made in behalf of a similar law[Pg 80] in Massachusetts, just exactly what is meant by the word "public" began to appear. It refers not only to the consumers of the article produced by the industry in which the strike occurs, but also to other dependent industries, to the merchants of the locality where the workmen live, and to the real estate interests. Here, then, are definite economic interests which are concerned primarily in the prevention of strikes and in the uninterrupted operation of the industry, and only in a secondary way in rates of wages. It is not a disinterested and non-partisan public; it is not on the side of the employers nor on the side of the employees, but it is opposed to the most effective weapons the working people have yet found to advance their interests, namely, the strike and the boycott.

It is said that if the workers lose the right to strike, the employers lose the right to lockout. It has been customary to set the lockout over against the strike as being of equal importance, but this is not the truth. Employers can discharge their workingmen one at a time when they are dissatisfied with a limited number; and they can often find a business protest for temporarily shutting down or restricting their output. To abolish strikes, then, is to take away the employees' chief means of offense or defense; while to pretend to abolish strikes and lockouts is to leave in the hands of the employers the ability to discharge or punish in other ways the men with whom they are dissatisfied.

When it was proposed to introduce the Canadian law in Massachusetts, no unionists of prominence indorsed it, but it was favored by a very large number of employers, while those employers who objected did so for widely scattered reasons. Mr. Clark is probably right in suggesting that, while such a law will not be enacted in the United States as things are now, it is very probable that it can be secured after some industrial crisis—and there is little doubt that President Eliot and perhaps also Mr. Roosevelt, for whom Mr. Clark was investigating, and many other influential public men, are expecting this time to arrive soon.

The attitude of a large minority of British unions and of a considerable part of the British Socialists is similar to that of the Canadian and Australian majority. When in 1907 the railway employees of Great Britain were for the first time sufficiently aroused and organized, and on the point of a national strike, a settlement was entered into through the efforts of Mr. Lloyd George and the Board of Trade (and it[Pg 81] is said with the assistance of King Edward) which involved an entirely new principle for that country. A board was constituted to settle this and future strikes of which the Master of Rolls and other British functionaries were the leading elements. Actually the workers consented for several years to leave in the hands of the judges over whose election and appointment they have only an indirect and partial, if indeed any, control, complete power over their industrial life. The executive of the Fabian Society issued a manifesto congratulating the government on this "progressive" settlement, though few prominent labor leaders were willing to give it their full indorsement. The Fabian manifesto said that the advance in wages which could be secured by the settlement "will undoubtedly have been secured on the trade-union program, through the trade-union organization, by the trade union's representatives, and finally, in the argument before the arbitrator, by the ability of the trade union's secretary." But this settlement had nearly all the features of the Canadian law which I have just mentioned, and especially in failing to give any recognition to the unions, left the strongest possible weapon in the hands of their enemies. Nevertheless, more than a third of the members of the British Trade Union Congress voted since that time for a compulsory arbitration act, and British radicals like Percy Alden, M.P., to say nothing of conservatives, agitate for a law along New Zealand lines. The railway strike of 1911 has decreased the popularity of this proposal among unionists and Socialists, but has augmented it in still greater proportion among nearly all other classes. In the meanwhile, in spite of the employees' efforts, and external concessions by the employers, the power in the newest railway conciliation scheme lies also in the hands of the government (see Part III, Chapter V).

Statements by President Taft and other influential Americans lead us to believe it will be a very short period of years before similar legislation is applied to this country, in spite of the hostility of the unions, or perhaps with the consent of some of the weaker among them, which have little to gain by industrial warfare. While Secretary of War, Mr. Taft predicted a controversy between capital and labor which should decide once and for all how capital and labor should share the joint profits which they created. In this and many similar utterances there is foreshadowed the interference[Pg 82] of the State. Indeed, the settlement of the Pennsylvania coal strike in 1903 was a clear example of such interference, and there is no question that the precedents established will be followed up on the next occasion of the kind by some arrangement even less advantageous to employees who now almost universally feel, as the present demands of the miner's union show, that they got the worst of the former decision.

The railway and mining situations in Great Britain, and the demand for the government to take some measure to protect employees against the "trusts" in this country (to say nothing of the menace of a great coal strike), promise to make compulsory arbitration an issue of the immediate future. Mr. Roosevelt, who now proposes that the government should interfere between monopolies and their employees, is the very man who is responsible for the coal strike tribunal of 1903, which not only denounced sympathetic strike and secondary boycott, but failed to protect the men against discrimination on account of their unionism. Were he or any one like him President, the institution of government wage boards would be dreaded like the plague.

Similarly Mr. Winston Churchill, in Great Britain, recognizes the extreme seriousness of the situation. His position is ably summed up by the Saturday Evening Post:—

"Winston Churchill has propounded a capital-and-labor puzzle to his British constituents.

"To a modern state, he says in substance, railroad transportation is a necessity of life—and how literally true this is of England was shown in the general strike of last August, when the food supply in some localities ran down to only a few days' requirements. So the government cannot permit railroad transportation to be paralyzed indefinitely by a strike. It cannot sit by and see communities starve. A point will soon be reached where it must intervene and force resumption of transportation.

"Strikes, however, form one of the modern means of collective bargaining between employer and employees. They are, in fact, the workmen's final and most effective resource in driving a bargain. Denied the right to strike, labor unions would be so many wooden cannon at which employers could laugh. If the employer knew absolutely that the men could not strike, he might offer any terms he pleased. In wage bargaining the men would not stand on a level footing, but be bound and gagged.

"If, then, the government takes away, or seriously restricts, the right of the men to strike, isn't it bound to step into the breach and readjust the balance between them and the employer, by compelling[Pg 83] the employer to pay them fair wages? There can be no free bargaining if it is known that at a certain point the government will intervene on one side. Must it not, then, also be known that at a certain point the government will intervene on the other side and compel payment of adequate wages?

"Mr. Churchill carries his puzzle only that far. On our own account we add, How far will that leave us from regulation of wages as well as of rates by the government, and how far will that leave us from government ownership?"[76]

In a word, Mr. Churchill's remedy for the evils of "State Socialism" is more "State Socialism"—and undoubtedly there is an inevitable trend in that direction. But the government railway strikes of France, Austria, Italy, Hungary, and other countries ought to show him that his remedy, advantageous as it may be from many standpoints, is scarcely to be considered even as a first step towards the solution of the labor problem. As long as capitalists continue to control government, "State Socialism," on the contrary, makes the strike more necessary, more decisive, and invaluable, not only to employees, but to every class that suffers from the government or the economic system it supports.

The most representative of American Socialists, Eugene V. Debs, has given us an excellent characterization of this movement as it appears to most Socialists.

"Successful leaders are wise enough to follow the people. For instance, the following paragraph is to the point:—

"'Ultimately I believe that this control of corporations should undoubtedly, directly or indirectly, extend to dealing with all questions connected with their treatment of their employees, including the wages, the hours of labor, and the like.'

"And what Socialist made himself ridiculous by such a foolish utterance? No Socialist at all; only a paragraph from his latest article on the trusts by Theodore Roosevelt. Five years ago, or when he was still in office and had the power, he would not have dared to make that statement. But he finds it politically safe and expedient to make it now. It is not at all a radical statement. On the contrary, it is simply the echo of E. H. Gary, that is to say, John Pierpont Morgan, president of all the trusts.

"Mr. Roosevelt now proposes that Bismarck attempted in Germany forty years ago to thwart the Socialist movement, and that is State Socialism, so called, which is in fact the most despotic and degrading form of capitalism.

"President Roosevelt, who is popularly supposed to be hostile to the trusts, is in truth their best friend. He would have the government, the capitalist government, of course, practically[Pg 84] operate the trusts and turn the profits over to their idle owners. This would mean release from responsibility and immunity of prosecution for the trust owners, while at the same time the government would have to serve as strikebreaker for the trust owners, and the armed forces of the government would be employed to keep the working class in subjection.

"If this were possible, it would mark the halfway ground between industrial despotism and industrial democracy. But it is not possible, at least it is possible only temporarily, long enough to demonstrate its failure. The expanding industrial forces now transforming society, realigning political parties, and reshaping the government itself cannot be fettered in any such artificial arrangement as Mr. Roosevelt proposes. These forces, with the rising and awakening working class in alliance with them, will sweep all such barriers from the track of evolution until finally they can find full expression in industrial freedom and social democracy.

"In this scheme of State Socialism, or rather State capitalism, Mr. Roosevelt fails to inform us how the idle owners of the trusts are to function except as profit absorbers and parasites. In that capacity they can certainly be dispensed with entirely and that is precisely what will happen when the evolution now in progress culminates in the reorganization of society."[77] (My italics.)

[Pg 85]

CHAPTER VI

AGRARIAN "STATE SOCIALISM" IN AUSTRALASIA

Australia and New Zealand are commonly taken as the most advanced of all countries in government ownership, labor reforms, and "State Socialism." Indeed they are often pictured as almost ideally governed, and the credulity with which such pictures are received shows the widespread popularity of "State Socialism."

The central principle of the Australian and New Zealand reforms is, however, not government ownership or compulsory arbitration, as commonly supposed, but a land policy. By means of a progressive or graduated land tax it is hoped to break up all large estates and to establish a large number of small proprietors. When it was said to Mr. Fisher, the new "Labour Party" Premier of Australia, that this policy was not Socialism, he replied laconically, "It is my kind of Socialism."[78]

The "State Socialism" of Australia and New Zealand is fundamentally agrarian; its real basis is a modernized effort to establish a nation of small farm owners and to promote their welfare.

Next in importance and closely connected with the policy of gradually bringing about the division of the land among small proprietors, is the policy of the government ownership of monopolies. Already New Zealand is in the banking business, and the Australian Labour Party proposes a national bank for Australia. National life and fire insurance are instituted in New Zealand; the same measures are proposed for Australia. Already many railroads are nationally owned, and it is proposed that others be nationalized. Already extensive irrigation projects have been undertaken; it is proposed that the policy should be carried out on a wider scale. But the Australian Labour Party is not fanatical upon this form of "State Socialism." It does not argue, like the British Independent Labour Party, that the civilization of a community can be measured by the extent of collective[Pg 86] ownership, for Australasia's experience has already shown the immediate and practical limits of this kind of a movement. New Zealand is already burdened with a very large national debt; Australia proposes that its debt shall be increased only for the purpose of building commercially profitable railways or irrigation schemes, etc., and not in any case for the purpose of national defense or for other investments not immediately remunerative.

The national debt, aside from that based on profit-making governmental undertakings, like railways, is to be reduced, and nationalization of other monopolies is not to be undertaken until new measures of taxation have become effective. These are a graduated land tax and an extension of the graduated income and inheritance taxes.[79]

The program concludes with vigorous measures for national defense. Australia is to own her navy (supported not by loans, but by taxation), and is to be as independent as practicable of Great Britain. She feels a need for military defense, but she does not propose to have a military caste, however small; the whole people is to be made military, the Labour Party stands for a citizen defense force and not for a professional army. Finally, Australia is to be kept for the white race, especially for British and other peoples that the present inhabitants consider desirable.

There remains that part of the program which has attracted the most attention, namely, the labor reforms: workingmen's insurance, an eight-hour day, and an increase of the powers of the compulsory arbitration courts. Already in fixing wages it has been necessary for the court to decide what is a fair profit to the employers, so profits are already to some degree being regulated. It has been found that prices and the cost of living are rising still more rapidly than wages; it is proposed that prices should also be regulated by withdrawing the protection of the customs tariff from those industries that charge an unduly high price.

I have mentioned the labor element of the program last, for the Australian Labour Party is a democratic rather than merely a labor movement. The Worker's Union, and the Sheep Shearer's Society of the Eastern States, enrolled from the first all classes of ranch employees, and "even common country storekeepers and small farmers."[80] Some of the miners' organizations have been built on similarly broad lines, and these two unions constitute the backbone of the[Pg 87] Labour Party. The original program of the New South Wales Labour Electoral League, which formed the nucleus of the Labour Party in 1891, proposed to bring together "all electors in favor of democratic and progressive legislation," and was nearly as broad as the present program; that is to say, it was by no means confined to labor reforms.

But are there any other features in the Australian situation, besides the dominating importance of the land question, that rob this program of its significance for the rest of the world? It cannot be denied that there are. In the first place, it is only this recent social reform movement that has begun to put New Zealand and Australia under real democratic government, and this democratization is scarcely yet complete, since the constitutions of some of the separate Australian States and Tasmania contain extremely undemocratic elements; while the federal government is dominated by a Supreme Court, as in the United States. Consequently it is only a few years in some of the States since such elementary democratic institutions as free schools were instituted. It is evident, on the other hand, that countries establishing democratic or semidemocratic institutions under the conditions prevailing in the world as late as 1890, when the great change took place in New Zealand, or during the decade, 1900-1910, when the political overturn gave Australia to the Labour Party, should be more advanced than France, Germany, Great Britain, or the United States, where the latest great overturn in the democratic direction occurred in each instance a generation or more ago.

So also Australia and New Zealand which, on the one hand, are still suffering from the disadvantage of having lived until recently under a system of large landed estates, on the other hand have the advantage of dealing with the land question in a period when the governments of these new countries are becoming rich enough, through their own enterprises, to exist independently of land sales, and when farmers are more willing to increase the power of their governments, both in order to protect themselves from the encroachments of capital and of labor, and directly to advance the interests of agriculture. The campaign to break up the large estates has kept the farmers engrossed in politics, and this has occurred in a period when industrial organization has made possible a whole program of "Constructive State Socialism." By taking up this program the farmers and[Pg 88] those who wished to become farmers have at once looked to their own interests and secured the political support of other small capitalists and even of a large part of the workingmen.

But working against the nationalization of the unearned increment, against the policy of leasing instead of selling the public land, central features of every advanced "State Socialist" policy, is the fact that the small farmers, daily becoming more numerous, hope that they might themselves reap this increment through private ownership. In no national legislation is it proposed to tax away this increment in agricultural land, which preponderates both in New Zealand and Australia. But, while in other countries the agricultural population is decreasing relatively to the whole, in New Zealand the settlement of the country by the small farmers has hitherto led it to increase, and the new legislation in Australia must soon have the same result. So, in spite of the favorable auspices, it seems that the climax of the "State Socialism," the transformation of the small farmer into a tenant of the State is not yet to be undertaken, either in the shape of land nationalization or in the taxing away of unearned increment. And while the Australian Labour Party as an organization favors nationalization, a large part of those who vote for this party do not, and its leaders have felt that to have advocated nationalization hitherto would have meant that they would have failed to gain control of the government. And in proportion as the new land tax creates new farmers, the prospects will be worse than they are to-day.

The existing land laws of New Zealand are extremely moderate steps in the direction of nationalization. In 1907, after the best land had been taken up, a system of 66-year leases was introduced, but only as a voluntary alternative to purchase. After 1908 the annual purchases of large estates were divided into small lots and leased for terms of 33 years, but this applies only to a relatively small amount of land. It was only in 1907 that the graduated land tax began to be enforced in a way automatically to break up the large estates as it had been expected to do, and it was only in 1910 that the new and more heavily graduated scale went into effect. And finally it was only in 1907 that large landowners were forbidden to purchase, even indirectly, government land. It has taken all these years even to discourage large estates effectively, to say nothing of nationalization.

[Pg 89]

"Some writers have predicted that the appetite for reform by taxation will grow, and that the taxation will be increased and the exemptions diminished until all the rent will be taken and the land practically confiscated, according to the proposals of Henry George. But the landless man, when he becomes a landholder, ceases to be a single taxer, and is strongly opposed to Socialism. The land legislation of New Zealand, although apparently Socialistic, is producing results directly opposed to Socialism by converting a lot of dissatisfied people into stanch upholders of private ownership of land and other forms of private property. The small farmers, then, are breaking away from their former allies, the working people of the towns, who now find themselves in the minority, but who are increasing in numbers and who will demand, sooner or later, a large share in the product of industry as the price of loyalty to the capitalistic system."[81]

Without land nationalization the process of nationalizing industry cannot be expected to proceed faster than it pays for itself—for we cannot reckon as part of the national profits the increased land values national enterprises bring about. Nor will capitalist collectivism at this stage proceed even this fast. Not only do the small taxpayers oppose the government going into debt, but as taxpayers they are responsible for all deficiencies, and they want only such governmental enterprises as both produce a surplus and a sufficient one to pay the deficits of the nonproductive departments of government. To-day only about one fifth of the taxpayers pay either land or inheritance taxes. But the increasing military expenditures and the greater difficulty of securing large sums by indirect taxation will increase this proportion. It is likely, then, that State enterprises which, under private capitalism, were used recklessly as aids to land speculation will now be required, as in Germany and other continental countries, to produce a surplus to relieve taxpayers. Private capitalism used the State for promoting the private interests of its directors, State capitalism uses it to produce profits for its shareholders, the small farmers, as taxpayers, or in the form of profits distributed among them as consumers. Only as the government begins to take a considerable share of that increased value in land which nearly every public undertaking brings about, will all wisely managed government enterprises produce such profits.

The advance of "State Socialism," though it has several other aspects, can be roughly measured by the number of government enterprises and employees. The railways,[Pg 90] telegraphs, and the few government-owned mines of New Zealand, have been calculated to employ about one eighth of the population, a greater proportion than in America or Great Britain, but scarcely greater than in Germany or France—and not a very great stride even towards "State Socialism." And it seems likely that the present proportion in New Zealand will remain for some time where it is. Government banking, steamships, bakeries, and the government monopoly of the sale of liquor and tobacco might not prove immediately profitable, and are less heard of than formerly.

Where "State Socialism" has proceeded such a little distance, the material benefits it promises to labor (though in a lesser proportion than to other classes) have not yet accrued. "It must be admitted," write Le Rossignol and Stewart, "that the benefits of land reform and other Liberal legislation have accrued chiefly to the owners of land and other forms of property, and the condition of the landless and propertyless wage earners has not been much improved." Indeed, the condition of the workers is little, if any, better than in America. Mr. Clark writes: "The general welfare of the working classes in Australasia does not differ widely from that in the United States. The hours of work are fewer in most occupations, but the wage per hour is less than in America. The cost of living is about the same in both countries. There appears to be as much poverty in the cities of New Zealand as in the cities of the same size in the United States, and as many people of large wealth." It is no doubt true, as these writers say, that, of the people classed as propertyless, "many are young, industrious, and well-paid wage earners; who, if they have health and good luck may yet acquire a competency" in this as in any other new country. Yet it is only to those who "have saved something," i.e. to property holders, that the State really lends a helping hand.

Even when New Zealand becomes an industrial country, the writers quoted calculate that "it should be possible for the party of property to attach to itself the more efficient among the working class, by giving them high wages, short hours, pleasant conditions of labor, opportunities for promotion, a chance to acquire property, insurance benefits, and greater advantages of every kind than they could gain under any form of Socialism. If this can be done, the Socialists will be in a hopeless minority."

[Pg 91]

Here we have in a few words the universal labor policy of "State Socialism." Labor reforms are to be given to the working class first, to encourage in them as long as possible the hope to rise; second, when this is no longer effective, to make the upper layers contented, and finally to "increase industrial efficiency," as these same writers say—but at no time to put the workers on a level with the property-owning classes.

Indeed, it is impossible to do more on a national scale, as these writers point out, for both capital and labor are international. If "State Socialism" were carried to the point of equalizing the share of labor, either immigration would be attracted until wages were lowered again, or capital would emigrate, or the nation would have to defend its exclusiveness by being prepared for war.

"It is hard to see how any country, whether Socialistic or individualistic in its industrial organization, can long keep its advantage over other countries without some restriction of immigration. A thoroughgoing experiment in collectivism, therefore, could not be made under favorable conditions in New Zealand or any other country, unless that country were isolated from the rest of the world, or unless the whole world made the same experiment at the same time."

As between comparative isolation possibly in the near future and world-wide or at least international Socialism, certainly many years ahead, the Australian Labour Party, under similar circumstances to that of New Zealand, has chosen to attempt comparative isolation. It does not yet propose to keep out immigrants, but it makes a beginning with all non-white races, and it stands for a policy of high protection and a larger army and navy. Naturally it does not even seek admission into the International Socialist Congress, where if any Socialist principle is more insisted upon than another it is Marx's declaration that the Socialists are to be distinguished from the other working class parties only by the fact that they represent the interests of the entire working class independently of nationality or of groups within the nation.

Moreover, the militarism necessary to enforce isolation may cost the nation, capitalists and workers alike, far more heavily than to leave their country open to trade and immigration. Indeed, it must lead, not to industrial democracy, or even to capitalistic progress, but to stagnation and [Pg 92]reaction. The policy of racial exclusion will not only increase the dangers of war, but it will bring little positive benefit to labor, even of a purely material and temporary kind, since the farming majority will not allow it to be extended to the white race. Instead of restricting immigration, the new government projects require a thicker settlement, and everything is being done to encourage settlers of means and agricultural experience, and we cannot question that the coming of white laborers will be encouraged when they are needed.

The size of the farms the government is promoting in New Zealand proves that the country is deliberately preparing for a class of landless agricultural laborers, and Australia is following the example. Since these new farms average something like two hundred acres, we must realize that as soon as they are under thorough cultivation they will require one or more farm laborers in each case, to be obtained chiefly from abroad, producing a community resting neither on "State Socialism" nor even on a pioneer basis of economic democracy and approximate equality of opportunity similar to that which prevailed during the period of free land in our Western States.

Unmistakable signs show that in New Zealand an agrarian oligarchy by no means friendly to labor has already established itself. Even the compulsory arbitration act which bears anything but heavily on employers in general, is not applied to agriculture. After two years of consideration it was decided in 1908 that the law should not apply on the ground that "it was impracticable to find any definite hours for the daily work of general farm hands," and that "the alleged grievances of the farm laborers were insufficient to justify interference with the whole farming industry of Canterbury" (the district included 7000 farms). Whatever we may think of the first justification, the second certainly is a curious piece of reasoning for a compulsory arbitration court, and must be taken simply to mean that the employing farmers are sufficiently powerful politically to escape the law. The working people very naturally protested against this "despotic proceeding," which denied such protection as the law gave to the largest section of workers in the Dominion.

What is the meaning, then, of the victory of a "Labour Party" in Australia? Chiefly that every citizen of Australia who has sufficient savings is to be given a chance to own a[Pg 93] farm. A large and prosperous community of farmers is to be built up by government aid. Even without "State Socialism" or labor reform the working people would share temporarily in this prosperity as they did to a large degree in that of the United States immediately after the Civil War, until the free land began to disappear. It was impossible to pay exceptionally low wages to a workingman who could enter into farming with a few months' notice.

The Labour Party hopes to use nationalization of monopolies and the compulsory regulation of wages to insure permanently to the working classes their share of the benefit of the new prosperity. How much farther such measures will go when the agricultural element again becomes dominant is the question. It is already evident that the Australian reform movement, like that of New Zealand, includes, or at least favors, the same class of employing farmers. The fact that a Labour Party is in the opposition in New Zealand, while in Australia a Labour Party has led in the reforms and now rules the country, should not blind us to the farmers' influence. The very terms of the graduated land tax and the value of the farms chosen for exemption show mathematically the influence, not alone of the small, but even the middle-sized farmers. Estates of less than $25,000 in value are exempt, and those valued at less than $50,000 are to be taxed less than one per cent. Such farms, as a rule, must have one or more laborers. Will these employees come in under the compulsory arbitration law? If they do, will they get much benefit? The experience of New Zealand and the present outlook in Australia do not lead us to expect that they will.

Many indications point to a coming realignment of parties such as was recently seen in New Zealand, when in 1909 it was decided to form an opposition Labour Party. And it is likely to come, as in New Zealand, when the large estates are well broken up and the agricultural element can govern or get all they want without the aid of the working people. Already the Australian Labour Party is getting ready for the issue. Its leaders have kept the proposed land nationalization in the background, because they believe it cannot yet obtain a majority. But it may be that the party itself is now ready to fight this issue out on a Socialist basis, even if, like the Socialist parties in Europe, such a decision promises to delay for a generation their control of the government.[Pg 94] If the party is ready, it has the machinery to bring its leaders to time, as it has done on previous occasions. For it already resembles the Socialist parties in Europe in this, that it makes all its candidates responsible to the party and not to their constituents. That is to say, while it does not represent the working people exclusively, it is a class organization standing for the interests of that group of classes which has joined its ranks, and for other classes of the community only in so far as their interests happen to be the same.

Already the majority of the Labour Party voters are undoubtedly working people. When it takes a definite position on the land question, favoring one-family farms and short leases or else coöperative, municipal, or national large-scale operation, and states clearly that it intends to use compulsory arbitration to advance wages indefinitely, including those of farm laborers, there is every probability that, having lost the support of the employing farmers, it will gradually take its place as a party of permanent opposition to capitalism, like the Socialist parties of Europe—until industry finally and decisively surpasses agriculture, and the industrial working class really becomes the most powerful element in society.

Space does not permit the tracing of the "State Socialist" tendency in other countries than Great Britain, the United States, and Australasia. Originally a brief chapter was here inserted showing the similar tendencies in Germany. This is now omitted, but the frequent reference to Germany later in dealing with the Socialist movement makes a brief statement of the German situation essential. For this purpose it will be sufficient to quote a few of the principal statements of the excellent summary and analysis by William C. Dreher entitled "The German Drift towards Socialism":

"The German Reichstag passed a law in May, 1910, for the regulation of the potash trade, a law which goes further in the direction of Socialism than any previous legislation in Germany. It assigns to each mine a certain percentage of the total production of the country, and lays a prohibitory tax upon what it produces in excess of this allotment. It fixes the maximum price for the product in the home market, and prohibits selling abroad at a lower price. A government bureau supervises the industry, sees that the prices and allotments are observed, examines new mines to determine their capacity, and readjusts allotments as new mines reach the producing stage....

"But the radical features of the law are not completed in the foregoing description. The bill having reduced potash prices, the mine owners threatened to recoup themselves by reducing wages.[Pg 95] But the members of the Reichstag were not to be balked by such threats; they could legislate about wages just as easily as about prices and allotments. So they amended the bill by providing that if any owner should reduce wages without the consent of his employees, his allotment should be restricted in the corresponding proportion....

"While the law is indeed decidedly Socialistic in tendency, it is not yet Socialism. It hedges private property about with sharper restrictions than would be thought justifiable in countries where, as in the United States, the creed of individualism is still vigorous; and yet it is, in effect, hardly more than a piece of social reform legislation, though a more radical one than we have hitherto seen....

"In Germany, 'the individual withers' and the world of State and Society, with its multifarious demands upon him, 'is more and more.' This is, of course, a Socialistic tendency, but the substitute that the Germans are finding for unlimited competition is not radical Socialism, but organization....

"The State, of course, takes hold of the individual life more broadly, with more systematic purpose. The individual's health is cared for, his house is inspected, his children are educated, he is insured against the worst vicissitudes of life, his savings are invested, his transportation of goods or persons is undertaken, his need to communicate with others by telegraph or telephone is met—all by the paternal State or city.

"Twenty-five years ago the Prussian government was spending only about $13,500 a year on trade schools; now it is spending above three million dollars on more than 1300 schools....

"The Prussian State had also long been an extensive owner of coal, potash, salt, and iron mines. In 1907 a law was passed giving the State prior mining rights to all undiscovered coal deposits. In general, however, it must cede those rights to private parties on payment of a royalty; but the law makes an exception of 250 'maximum fields,' equal to about 205 square miles, in which the State itself will exercise its mining rights. It has recently reserved this amount of lands adjacent to the coal fields on the lower Rhine and in Silesia. The State has already about 80 square miles of coal lands in its hands, from which it is taking out about 10,000,000 tons of coal a year. Its success as a mine owner, however, appears to be less marked than as a railway proprietor; experienced business men even assert that the State's coal and iron mines would be operated at a loss if proper allowances were made for depreciation and amortization of capital, as must be done in the case of private companies. The State also derives comparatively small revenues from its forest and farming lands of some 830,000 acres, which were formerly the property of the Crown....

"The most important State tax is that on incomes, which is in all cases graduated down to a very low rate on the smallest income; in Prussia there is no tax on incomes less than $214. The cities also[Pg 96] collect the bulk of their revenues from incomes, using the same classification and sliding scale as the State.

"A highly interesting innovation in taxation is the 'unearned increment' tax on land values, first adopted by Frankfort-on-the-Main in 1904, and already applied by over 300 German cities and towns....

"The bill before the Reichstag [since become a law—W. E. W.] extends sick insurance to farm laborers and household servants, a change which will raise the burden of this system for employers from $24,000,000 to $36,000,000. The bill also provides for pensioning the widows and orphans of insured laborers at an estimated additional expense of about $17,000,000....

"A better result of the insurance systems than the modest pensions and the indemnities that they pay is to be found in their excellent work for protecting health and prolonging life. Many offices have their own hospitals for the sick, and homes for the convalescent....

"All these protective measures have already told effectively upon the death rate for tuberculous diseases. In the three years ending with 1908, deaths from pulmonary tuberculosis dropped from 226.6 to 192.12 per 100,000.

"The accident system has also had a powerful effect in stimulating among the physicians and surgeons the study of special ways and means for treating accident injuries, with reference to preserving intact the strength and efficiency of the patient....

"Bismarck once, in a speech in the Reichstag, explicitly recognized the laborer's right to work. Some twenty German cities have given practical effect to his words by organizing insurance against nonemployment; and the governments of Bavaria and Baden have taken steps to encourage this movement. Under the systems adopted, the laborer pays the larger part of the insurance money, and the city the rest; in a few cases money has been given by private persons to assist the insurance."[82] [N.B. The word "Socialistic" is used by Mr. Dreher in the sense of "State Socialism," as opposed to what he calls "radical Socialism."]

[Pg 97]

CHAPTER VII

"EQUALITY OF OPPORTUNITY"

Many reformers admit that no reforms can bring us towards democracy as long as class rule continues. Henry George, for example, recognizes that his great land reform, the government appropriation of rent for public purposes, is useless when the government itself is monopolized, "when political power passes into the hands of a class, and the rest of the community become merely tenants."[83] In precisely the same way every great "State Socialist" reform must fail to bring us a single step towards real democracy, as long as classes persist.

That strongly marked social classes do exist even in the United States is now admitted by Dr. Lyman Abbott, Andrew Carnegie, and by innumerable other, by no means Socialistic, observers.

"The average wage earner," says John Mitchell, "has made up his mind that he must remain a wage earner. He has given up the hope of a kingdom to come where he will himself be a capitalist."[84] This feeling is almost universally shared by manual wage earners, and very widely also by salaried brain workers. Large prizes still exist, and their influence is still considerable over the minds of young men. But, as was pointed out recently in an editorial of the Saturday Evening Post, they are "just out of reach," and the instances in which they actually materialize are "so relatively few as to be negligible." Even if these prizes were a hundred fold more numerous than they are, the children of the wage earners would still not have a tithe of the opportunity of the children of the well-to-do.

To-day in the country opportunities are no better than in the towns. The universal outcry for more farm labor can only mean that such laborers are becoming relatively fewer because they are giving up the hope that formerly kept them in the country, namely, that of becoming farm owners. Already Mr. George K. Holmes of the United States Bureau of Statistics estimates that in the chief agricultural section[Pg 98] of the country, the North Central States, a man must be rich before he can become a farmer, and so rapidly is this condition spreading to other sections that Mr. Holmes feels that the only hope of obtaining sufficient farm labor is to persuade the children of the farmers to remain on the farms.

"Fifty years ago," said McClure's Magazine in a recent announcement, which sums up some of the chief elements of the present situation, "we were a nation of independent farmers and small merchants. To-day we are a nation of corporation employees." There can be no question that we are seeing the formation in this country of very definitely marked economic and social classes such as have long prevailed in the older countries of Europe. And this class division explains why the political democracies of such countries as France, Switzerland, the United States, and the British Colonies show no tendency to become real democracies. Not only do classes defend every advantage and privilege that economic evolution brings them, but, what is more alarming, they utilize these advantages chiefly to give their children greater privileges still. Unequal opportunities visibly and inevitably breed more unequal opportunities.

The definite establishment of industrial capitalism, a century or more ago, and later the settlement of new countries, brought about a revolutionary advance towards equality of opportunity. But the further development of capitalism has been marked by steady retrogression. Yet nearly all capitalist statesmen, some of them honestly, insist that equality of opportunity is their goal, and that we are making or that we are about to make great strides in that direction. Not only is the establishment of equality of opportunity accepted as the aim that must underlie all our institutions, even by conservatives like President Taft, but it is agreed that it is a perfectly definite principle. Nobody claims that there is any vagueness about it, as there is said to be about the demand for political, economic, or social equality.

It may be that the economic positions in society occupied by men and women who have now reached maturity are already to some slight degree distributed according to relative fitness; and, even though this fitness is due, not to native superiority, but to unfair advantages and unequal opportunity, it may be that a general change for the better is here impossible until a new generation has appeared. But there is no reason, except the opposition of parents who want privileges for[Pg 99] their children, why every child in every civilized country to-day should not be guaranteed by the community an equal opportunity in public education and an equal chance for promotion in the public or semi-public service, which soon promises to employ a large part if not the majority of the community. No Socialist can see any reason for continuing a single day the process of fastening the burdens of the future society beforehand on the children of the present generation of wage earners, children as yet of entirely unknown and undeveloped powers and not yet irremediably shaped to serve in the subordinate rôles filled by their parents.

But the reformers other than the Socialists are not even working in this direction, and their claims that they are, can easily be disproved. Mr. John A. Hobson, for example, believes that the present British government is seeking to realize "equality of opportunity," which he defines as the effort "to give equal opportunities to all parts of the country and all classes of the people, and so to develop in the fullest and the farthest-sighted way the national resources."[85] But even the more or less democratic collectivism Mr. Hobson and other British Radicals advocate, if it stops short of a certain point, and its benefits go chiefly to the middle classes, may merely increase middle-class competition for better-paid positions, and so obviously decrease the relative opportunities of the masses, and make them less equal than they are to-day.

Edward Bernstein, the Socialist, says: "The number of the possessing classes is to-day not smaller, but larger. The enormous increase of social wealth is not accompanied by a decreasing number of large capitalists, but by an increasing number of capitalists of all degrees." Whether this is true or not, whether the well-to-do middle classes are gradually increasing in each generation, say, to 5, 10, or 15 per cent of the population, cannot be a matter of more than secondary importance to the overwhelming majority, the "non-possessing classes," that remain outside. Nobody denies that social evolution is going on even to-day. But the masses will probably not be willing to wait the necessary generations and centuries before present tendencies, should they chance to continue long enough (which is doubtful in view of the rapid formation of social castes), would bring the masses any considerable share of existing prosperity.

To secure anything approaching equality of opportunity,[Pg 100] the first and most necessary measure is to give equal educational facilities to all classes of the population. Yet the most radical of the non-Socialist educational reformers do not dare to hope at present even for a step in this direction. No man has more convincingly described what the first step towards a genuinely democratic education must be than Ex-President Charles W. Eliot of Harvard, perhaps our most influential representative of political as opposed to social democracy.

"Is it not plain," asks President Eliot, "that if the American people were all well-to-do they would multiply by four or five times the present average school expenditure per child and per year? That is, they would make the average expenditure per pupil for the whole school year in the United States from $60 to $100 for salaries and maintenance, instead of $17.36 as now. Is it not obvious that instead of providing in the public schools a teacher for forty or fifty pupils, they would provide a teacher for every ten or fifteen pupils?"[86]

The reform proposed by Dr. Eliot, if applied to all the twenty million children of school age in the United States, would mean the expenditure of two billion instead of three hundred and fifty million dollars per year on public education. Ex-President Eliot fully realizes the radical and democratic character of this proposed revolution in the public schools, and is correspondingly careful to support his demands at every point with facts. He shows, for instance, that while private schools expend for the tuition and general care of each pupil from two hundred to six hundred dollars a year, and not infrequently provide a teacher for every eight or ten pupils, the public school which has a teacher for every forty pupils is unusually fortunate.

Dr. Eliot says that while there has been great improvement in the first eight grades since 1870, progress is infinitely slower than it should be, and that the majority of children do not yet get beyond the eighth grade (the statistics for this country show that only one out of nineteen takes a secondary course). "Philanthropists, social philosophers, and friends of free institutions," he asks, "is that the fit educational outcome of a century of democracy in an undeveloped country of immense natural resources? Leaders and guides of the people, is that what you think just and safe? People of the United States, is that what you desire and intend?"

In order not only to bring existing public schools up to the[Pg 101] right standard, but to create new kinds of schools that are badly needed, the plan suggested by Dr. Eliot would take another billion or two. He advocates kindergartens and further development of the new subjects that have recently been added to the grammar school course; he opposes the specialization of the studies of children for their life work before the sixteenth or seventeenth year, favors complete development of the high school as well as the manual training, mechanics, art, the evening and the vacation schools, greater attention to physical education and development, and, finally, the greatest possible extension and development of our institutions of higher education. He also advocates newer reforms, such as the employment of skilled physicians in connection with the schools, the opening of public spaces, country parks, beaches, city squares, gardens, or parkways for the instruction of school children. He specifies in detail the improvements that are needed in school buildings, shows what is urgently demanded and is immediately practicable in the way of increasing the number of teachers, paying them better and giving them pensions, indicates the needed improvements in the administration of the school systems, urges the development of departmental instruction through several grades, and the addition of manual training to all the public schools along with a better instruction in music and drawing.

There are still other improvements in education which have already been tested and found to produce the most valuable results. Perhaps the most important ones besides those demanded by Dr. Eliot are the providing of free or cheap lunches for undernourished children, and the system, already widespread in England and the other countries, of furnishing scholarships to carry the brighter children of the impecunious classes through the college, high school, and technical courses. Even this policy of scholarships would lead us to full democracy in education only if by its means the child of the poorest individual had exactly the same opportunities as those of the richest. It is not enough that a few children only should be so advanced; but that of impecunious children, who constitute 90 per cent of the population, a sufficient number should be advanced to fill 90 per cent of those positions, in industry, government, and society, which require a higher education.

There is no doubt that this actual equality in the "battle of life" was the expectation and intention of those who settled[Pg 102] and built up the western part of the United States, as it has been that of all the democracies of new countries. But this reform alone would certainly require not one but several billion dollars a year; as much as all the other improvements mentioned by Dr. Eliot put together. We may estimate, then, that the application of the principle of democracy or equality of opportunity to education in accordance with the present national income, would require the immediate expenditure of three or four billion dollars on the nation's children of school age, or ten times the sum we now expend, and a corresponding increase as the wealth of the nation develops. This would be a considerable proportion of the nation's income, but not too much to spend on the children, who constitute nearly half the population and are at the age where the money spent is most productive.

Here is a program for the coming generation which would be indorsed by a very large part of the democrats of the past. But nothing could make it more clear that political democracy is bankrupt even in its new collective form, that it has no notion of the method by which its own ideals are to be obtained. For no reformer dreams that this perfectly sensible and practicable program will be carried out until there has been some revolutionary change in society. "I know that some people will say that it is impossible to increase public expenditure in the total, and therefore impossible to increase it for the schools," says Dr. Eliot. "I deny both allegations. Public expenditure has been greatly increased within the last thirty years, and so has school expenditure" (written in 1902). But Dr. Eliot doubtless realizes that what he advocates for the present moment, the expenditure of five times as much as we now invest in public schools, at the present rate of progress, might not be accomplished in a century, and that by that time society might well have attained a degree of development which would demand five or ten times as much again. Dr. Eliot is well aware of the opposition that will be made to his reform, but he has not given the slightest indication how it is to be overcome. The well-to-do usually feel obligated to pay for the private education of their own children, and even where public institutions are at their disposal they are forced to support these children through all the years of study. This is expensive, but this very expensiveness gives the children of the well-to-do a practical monopoly of the opportunities which[Pg 103] this education brings. How are they to be brought to favor, and, since they are the chief taxpayers, to pay for the extension of these same opportunities to ten times the number of children who now have them?

In the meanwhile Dr. Eliot himself seems to have become discouraged and to have abandoned his own ideal, for only seven years after writing the above he came to advocate the division of the whole national school system into three classes: that for the upper class, that for the middle class, and that for the masses of the people—and he even insisted that this division is democratic if the elevation of the pupil from one class to the other is made "easy."[87] Now democracy does not require that the advance of the child of the poor be made what is termed easy, but that he be given an equal opportunity with the child of the rich as far as all useful and necessary education is concerned. Democracy does not tolerate that in education the children of the poor should be started in at the bottom, while the children of the rich are started at the top.

Those few who do rise under such conditions only strengthen the position of the upper classes as against that of the lower. Tolstoi was right when he said that when an individual rises in this way he simply brings another recruit to the rulers from the ruled, and that the fact that this passage from one class to another does occasionally take place, and is not absolutely forbidden by law and custom as in India, does not mean that we have no castes.[88] Even in ancient Egypt, it was quite usual, as in the case of Joseph, to elevate slaves to the highest positions. This singling out and promotion of the very ablest among the lower classes may indeed be called the basis of every lasting caste system. All those societies that depended on a purely hereditary system have either degenerated or were quickly destroyed. If then a ruling class promotes from below a number sufficient only to provide for its own need of new abilities and new blood, its power to oppress, to protect its privileges, and to keep progress at the pace and in the direction that suits it will only be augmented—and universal equality of opportunity will be farther off than before. Doubtless the numbers "State Socialism" will take up from the masses and equip for higher positions will constantly increase. But neither will the opportunities of these few have been in any way equal to those of the higher classes, nor will even such opportunities be extended to any but an insignificant minority.

[Pg 104]

Nor does President Eliot's advocacy of class schools stand as an isolated phenomenon. Already in America the development of free secondary schools has been checked by the far more rapid growth of private institutions. The very classes of taxpayers who control city and other local governments and school boards are educating their own children privately, and thus have a double motive for resisting the further advance of school expenditure. As if the expense of upkeep during the period of education were not enough of a handicap, those few children of the wage earners who are brave enough to attempt to compete with the children of the middle classes are now subjected to the necessity of attending inferior schools or of traveling impracticable distances. The building of new high schools, for example, was most rapid in the Middle West in the decades 1880-1899, and in the Eastern States in the decade 1890-1900. But within a few years after 1900 the rate of increase had fallen in the Middle West to about one half, and in the East to less than one third, of what it formerly had been.[89] It might be thought that, the country being now well served with secondary schools, the rate of growth must diminish. This may be true of a part of the rural districts, but an examination of the situation or school reports of our large cities will show how far it is from being true there.

In Great Britain the public secondary schools for the most part and some of the primary schools, though supported wholly or largely by public funds, charge a tuition fee. The fact that a very small per cent of the children of the poor are given scholarships which relieve them of this fee only serves to strengthen the upper and middle classes, without in any appreciable degree depriving them of their privileged position. In London, for example, fees of from $20 to $40 are charged in the secondary schools, and their superintendents report that they are attended chiefly by the children of the "lower middle classes," salaried employees, clerks, and shopkeepers, with comparatively few of the children of the professional classes on the one hand or of the best-paid workingmen on the other. An organized campaign is now on foot in New York City also, among the taxpayers, to introduce a certain proportion of primary pay schools, for the frank purpose of separating the lower middle from the working classes, and to charge fees in all secondary schools so as to bring a new source of income and decrease the number[Pg 105] of students and the amounts spent on the schools. This in spite of the annual plea of Superintendent Maxwell for more secondary schools, more primary teachers, and primary school buildings. Instead of going in the direction indicated by Dr. Eliot and preparing to spend four or five times the present amount, there is a strong movement to spend less. And nothing so hastens this reactionary movement as the tendency, whether automatic or consciously stimulated, towards class (or caste) education—such as Dr. Eliot and so many other reformers now directly or indirectly encourage—usually under the cloak of industrial education.

The most anti-social aspects of capitalism, whether in its individualist or its collectivist form, are the grossly unequal educational and occupational privileges it gives the young. An examination of the better positions now being obtained by men and women not yet past middle age will show, let us say, that ten times as many prizes are going to persons who were given good educational opportunities as to those who were not. But as the children of those who can afford such opportunities are not a tenth as numerous as the children of the rest of the people, this would mean that the latter have only a hundredth part of the former's opportunities. Under this supposition, one tenth of the population secures ten elevenths of the positions for which a higher education is required. As a matter of fact, the existing inequality of opportunity is undoubtedly very much greater than this, and the unequal distribution of opportunities is visibly and rapidly becoming still less equal. In 1910, of nineteen million pupils of public and private schools in this country, only one million were securing a secondary, and less than a third of a million a higher, education. Here are some figures gathered by the Russell Sage Foundation in its recent survey of public school management. The report covers 386 of the larger cities of the Union. Out of every 100 children who enter the schools, 45 drop out before the sixth year; that is, before they have learned to read English. Only 25 of the remainder graduate and enter the high schools, and of these but 6 complete the course.

The expense of a superior education, including upkeep during the increasing number of years required, is rising many times more rapidly than the income of the average man. At the same time, both the wealth and the numbers of the well-to-do are increasing in greater proportion than those of the[Pg 106] rest of the people. While the better places get farther and farther out of the reach of the children of the masses, owing to the overcrowding of the professions by children of the well-to-do, the competition becomes ever keener, and the poor boy or girl who must struggle not only against this excessive competition, but also against his economic handicap, confronts an almost superhuman task.

It is obvious that this tendency cannot be reversed, no matter how rapidly the people's income is increased, unless it rises more rapidly than that of the well-to-do. And this, Socialists believe, has never happened except when the masses obtained political power and made full use of it against the class in control of industry and government.

No amount of material progress and no reorganization of industry or government which does not promise to equalize opportunity,—however rapid or even sensational it may be,—is of the first moment to the Socialists of the movement. Wages might increase 5 or 10 per cent every year, as profits increase to-day; hours might be shortened and the intensity of labor lessened; and yet the gulf between the classes might be growing wider than ever. If society is to progress toward industrial democracy, it is necessary that the people should fix their attention, not merely on the improvement of their own condition, but on their progress when compared with that of the capitalist classes, i.e. when measured by present-day civilization and the possibilities it affords.

No matter how fast wages increase, if profits increase faster, we are journeying not towards social democracy, but towards a caste society. Thus to insist that we must keep our eyes on the prosperity of others in order to measure our own seems like preaching envy or class hatred. But in social questions the laws of individual morality are often reversed. It is the social duty of every less prosperous class of citizens, their duty towards the whole of the coming generation as well as to their own children, to measure their own progress solely by a standard raised in accordance with the point in evolution that society has attained. What would have been comparative luxury a hundred years ago it is our duty to view as nothing less than a degrading and life-destroying poverty to-day.

Opportunity is not becoming equal. The tendency is in the opposite direction, and not all the reforms of "State Socialism" promise to counteract it. The [Pg 107]citizen owes it to society to ask of every proposed program of change, "Will it, within a reasonable period, bring equality of opportunity?" To rest satisfied with less—a so-called tendency of certain reforms in the right direction may be wholly illusory—is not only to abandon one's rights and those of one's children, but to rob society of the only possible assurance of the maximum of progress.

[Pg 108]

CHAPTER VIII

THE "FIRST STEP" TOWARDS SOCIALISM

"State Socialism" as I have described it will doubtless continue to be the guiding policy of governments during a large part, if not all, of the present generation. Capitalism, in this new collectivist form, must bring about extremely deep-seated and far-reaching changes in society. And every step that it takes in the nationalization of industry and the appropriation of land rent would also be a step in Socialism, provided the rents and profits so turned into the coffers of the State were not used entirely for the benefit either of industry or of the community as a whole, as it is now constituted, but were reserved in part for the special benefit of the less wealthy, less educated, and less advantageously placed, so as gradually to equalize income, influence, and opportunity.

But what, as matter of fact, are the ways in which the new revenues are likely to be used before the Socialists are either actually or practically in control of the government? First of all, they will be used for the further development of industry itself and of schemes which aid industry, as by affording cheaper credit, cheaper transportation, cheaper lumber, cheaper coal, etc., which will chiefly benefit the manufacturers, since all these raw materials and services are so much more largely used in industry than in private consumption.

Secondly, the new sources of government revenue will be used to relieve certain older forms of taxation. The very moderately graduated income and inheritance taxes which are now common, small capitalists have tolerated principally on the ground that the State is in absolute need of them for essential expenses. We may soon expect a period when the present rapid expansion of this form of taxation as well as other direct taxes on industry, building, corporations, etc., will be checked somewhat by the new revenues obtained from the profits of government enterprises and the taxation of ground values. Indirect taxation of the consuming public in general, through tariffs and internal revenue taxes, will also be[Pg 109] materially lightened. As soon as new and larger sources of income are created, the cry of the consumers for relief will be louder than ever, and since a large part of consumption is that of the capitalists in manufacture, the cry will be heard. This will mean lower prices. But in the long run salaries and wages accommodate themselves to prices, so that this reform, beneficial as it may be, cannot be accepted as meaning, for the masses, more than a merely temporary relief. A third form of tax reduction would be the special exemption of the poorer classes from even the smallest direct taxation. But as employers and wage boards, in fixing wages, will take this reduction into account, as well as the lower prices and rents, such exemptions will effect no great or lasting change in the division of the national income between capitalists and receivers of salaries and wages.

A third way in which the new and vastly increased incomes of the national and local governments can be expended is the communistic way, as in developing commercial and technical education, in protecting the public health, in building model tenements, in decreasing the cost of traveling for health or business, and in promoting all measures that are likely to increase industrial efficiency and profits without too great cost.

A fourth way in which the new revenue may be expended, before the Socialists are in actual or practical control, would be in somewhat increasing the wages and somewhat shortening the hours of the State and municipal employees, who will soon constitute a very large proportion of the community. Here again it is impossible to expect any but a Socialist government to go very far. As I have shown, it is to be questioned whether any capitalistic administration, however advanced, would increase real wages (wages measured by their purchasing power), except in so far as the higher wages will result in a corresponding or greater increase in efficiency, and so in the profits made from labor. And the same law applies to most other governmental (or private) expenditures on behalf of labor, whether in shortened hours, insurance, improved conditions, or any other form.

The very essence of capitalist collectivism is that the share of the total profits which goes to the ruling class should not be decreased, and if possible should be augmented. In spite of material improvements the economic gulf between the classes, during the period it dominates, will either remain as[Pg 110] it is, or become wider and deeper than before. On the ground of the health and ultimate working efficiency of the present and future generation, hours may be considerably shortened, and the labor of women and children considerably curtailed. Insurance against death, old age, sickness, and accident will doubtless be taken over by the government. Mothers who are unable to take care of their children will probably be pensioned, as now proposed in France, and many children will be publicly fed in school, as in a number of the British and Continental places. The most complete code of labor legislation is practically assured; for, as government ownership extends, the State will become to some extent the model employer.

A quarter of a century ago, especially in Great Britain and the United States, but also in other countries, the method of allaying discontent was to distract public attention from politics altogether by stimulating the chase after private wealth. But as private wealth is more and more difficult to attain, this policy is rapidly replaced by the very opposite tactics, to keep the people absorbed in the political chase after the material benefits of economic reform. For this purpose every effort is being used to stimulate political interest, to popularize the measures of the new State capitalism, to foster public movements in their behalf, and finally to grant the reforms, not as a new form of capitalism, but as "concessions to public opinion." At present it is only the most powerful of the large capitalists and the most radical of the small that have fully adapted themselves to the new policies. But this will cause no serious delay, for among policies, as elsewhere, the fittest are surely destined to survive.

Ten years ago it would have been held as highly improbable that we would enter into such a collectivist period in half a century. Already a large part of the present generation expect to see it in their lifetime. And the constantly accelerated developments of recent years justify the belief of many that we may find ourselves far advanced in "State Socialism" before another decade has passed.

The question that must now be answered by the statesman as opposed to the mere politician, by the publicist as opposed to the mere journalist, is, not how soon the program of "State Socialism" will be put into effect, but what is going to be the attitude of the masses towards it. A movement exists that is already expressing and organizing their discontent[Pg 111] with capitalism in whatever form. It promises to fill this function still more fully and vigorously in proportion as collectivist capitalism develops. I refer to the international revolutionary movement that finds its chief expression in the federated Socialist parties. The majority of the best-known spokesmen of this movement agree that social reform is advancing; yet most of them say, with Kautsky, that control of the capitalists over industry and government is advancing even more rapidly, partly by means of these very reforms, so that the Machtverhaeltnisse, or distribution of political and economic power between the various social classes, is even becoming less favorable to the masses than it was before. The one thing they feel is that no such capitalist society will ever be willing to ameliorate the condition of the non-capitalists to such a degree that the latter will get an increasing proportion of the products of industry or of the benefits of legislation, or an increased influence over government. The capitalists will never do anything to disturb radically the existing balance of power.

While Socialists have not always conceded that the capitalists will themselves undertake, without compulsion, large measures of political democracy and social reform,—even of the capitalistic variety,—nearly all of the most influential are now coming to base their whole policy on this now very evident tendency, and some have done so for many years past. For instance, it has been clear to many from the time of Karl Marx that it would be necessary for capitalist society itself to nationalize or municipalize businesses that become monopolized, without any reference to Socialism or the Socialists.

"These private monopolies have become unbearable," says Kautsky, "not simply for the wage workers, but for all classes of society who do not share in their ownership," and he adds that it is only the weakness of the bourgeois (the smaller capitalist) as opposed to capital (the large capitalist) that hinders him from taking effective action. Indeed, one of the chief respects in which history has pursued a somewhat different course from that expected by Marx has been in the failure of capitalist society to attempt immediately this solution of the trust problem through government ownership. Marx expected that this attempt would necessarily be made as soon as the monopolies reached an advanced state, and that the resulting economic revolution[Pg 112] would develop into a Socialist revolution. But this monopolistic period has come, the trusts are rapidly dominating the whole field of industry and government, and yet it seems improbable that they will be forced to any final compromise with the small capitalist investors and consumers for some years to come. In the meanwhile, no doubt, the process of nationalization will begin, but too late to fulfill Marx's expectation, for the large and small capitalists will have time to become better united, and their combined control over government will have had time to grow more secure than ever. The new partnership of capitalism and the State will, no doubt, represent the small capitalists as well as the large, but there is no sign that the working people will be able to take advantage of the coming transformation for any non-capitalist purpose. Nor did Marx expect national ownership to increase the relative strength of the workers unless it was accompanied by a political revolution.

Another vast capitalist reform predicted by Socialists since the Communist Manifesto (1847) is nationalization or municipalization of the ground rent or unearned increment of land. At first Kautsky and others were inclined to expect that nothing would be done in this direction until the working classes themselves achieved political power, but it has always been seen from the days of Marx that the industrial capitalists had no particular reason for wishing to be burdened with a parasitic class of landlords that weighed on their shoulders as much as on those of the rest of the people. Not only do industrial capitalists pay heavy rents to landlords, but the rent paid by the wage worker also has to be paid indirectly and in part by the industrial capitalist: "The quantity of wealth that a landlord can appropriate from the capitalist class becomes larger in proportion as the general demand for land increases, in proportion as population grows, in proportion as the capitalist class needs land, i.e. in proportion as the capitalist system of production expands. In proportion with all this, rent rises; that is to say, the aggregate amount of wealth increases which the landlord class can slice off—either directly or indirectly—from the surplus that would otherwise be grabbed by the capitalist class alone."[90]

The industrial capitalists, then, have very motive to put an end to this kind of parasitism, and to use the funds secured, through confiscatory taxation of the unearned increment of land, to lessen their own taxation, to nationalize[Pg 113] those fundamental industries that can only be made in this way to subserve the interests of the capitalist class as a whole (instead of some part of it merely), and to undertake through government those costly enterprises which are needed by all industry, but which give too slow returns to attract the capitalist investor.

This enormous reform, in land taxation, which alone would put into the hands of governments ultimately almost a third of the capital of modern nations, was considered by Marx, in all its early stages, as purely capitalistic, "a Socialistically-fringed attempt to save the rule of capitalism, and to establish it in fact on a still larger foundation at present."[91] Indeed, I have shown in a previous chapter that radical reformers who advocated this single-tax idea, along with the nationalization and municipalization of monopolies, do so with the conscious purpose of reviving capitalism and making it more permanent, precisely as Marx says. The great Socialist wrote the above phrase in 1881 (in a recently published letter to Sorge of New York) after reading Henry George's "Progress and Poverty," which had just appeared. He calls attention to the fact that James Mill and other capitalistic economists had long before recommended that land rent should be paid to the State so as to serve as a substitute for taxes, and that he, himself, had advocated it in the Manifesto of 1847—among transitional measures.

Marx says that he and Engels "inserted this appropriation of ground rent by the State among many other demands," which, as also stated in the Manifesto, "are self-contradictory and must be such of necessity." He explains what he means by this in the same letter. In the very year of the Manifesto he had written (in his book against Proudhon) that this measure was "a frank statement of the hatred felt by the industrial capitalist for the landowner, who seems to him to be a useless, unnecessary member in the organism of Capitalist society." Marx demanded "the abolition of property in land, and the application of all land rents to public purposes," not because this is in any sense the smallest installment of Socialism, but because it is a progressive capitalistic measure. While it strengthens capitalism by removing "a useless, unnecessary member," and by placing it "on a still larger foundation than it has at the present," it also matures it and makes it ready for Socialism—ready, that is to say, as soon as [Pg 114]the working people capture the government and turn the capitalists out, but not a day sooner.[92] Until that time even the most grandiose reform is merely "a Socialistically-fringed attempt to save the rule of capitalism."

Other "transitional measures" mentioned by Marx and Engels in 1847, some of which had already been taken up as "Socialistically-fringed attempts to save the rule of capitalism" even before their death were:—

The heavily graduated income tax.

The abolition of inheritance.

A government bank with an exclusive monopoly.

A partial nationalization of factories.

  (No doubt, the part they would select would be that operated by the trusts.)

Government cultivation of waste lands.

Here we have a program closely resembling that of "State capitalism." It omits the important labor legislation for increasing efficiency, since this was unprofitable under competitive and extra-governmental capitalism, and in Marx's time had not yet appeared; e.g. the minimum wage, a shorter working day, and workingmen's insurance. As Marx and Engels mention, however, the substitution of industrial education for child labor (one of the most important and typical of these reforms), they would surely have included other measures of the same order, had they been practicable and under discussion at the time.

There can be little doubt that Marx and Engels, in this early pronunciamento, were purposely ambiguous in their language. For example, they demand "the extension of factories and instruments of production owned by the state." This is plainly a conservatively capitalistic or a revolutionary Socialist measure entirely according to the degree to which, and the hands by which, it is carried out—and the same is evidently true of the appropriation of land rent and the abolition of inheritance. This is what Marx means when he says that every such measure is "self-contradictory and must be such of necessity." Up to a certain point they put capitalism on "a larger basis"; if carried beyond that, they may, in the right hands, become steps in Socialism.

Marx and Engels were neither able nor willing to lay out a program which would distinguish sharply between measures that would be transitional and those that would be Socialist sixty or seventy years after they wrote, but merely gave [Pg 115]concrete illustrations of their policy; they stated explicitly that such reforms would vary from country to country, and only claimed for those they mentioned that they would be "pretty generally applicable." Yet, understood in the sense in which it was originally promulgated and afterwards explained, this early Socialist program still affords the most valuable key we have as to what Socialism is, if we view it on the side of its practical efforts rather than on that of abstract theories. Marx and Engels recognize that the measures I have mentioned must be acknowledged as "insufficient and untenable," because, though they involve "inroads on the rights of property," they do not go far enough to destroy capitalism and establish a Socialistic society. But they reassure their Socialistic critics by pointing out that these "insufficient" and "transitory" measures, "in the course of the movement, outstrip themselves, necessitate further inroads on the old social order, and are indispensable as a means of entirely revolutionizing the mode of production." (My italics.)

That is, "State Socialism" is indispensable as a basis for Socialism, indeed necessitates it, provided Socialists look upon "State Socialist" measures chiefly as transitory means "to raise the proletariat to the position of ruling class"; for this rise of the proletariat to the position of ruling class is necessarily "the first step in the revolution of the working class."

From the day of this first step the whole direction of social evolution would be altered. For, while the Socialists expect to utilize every reform of capitalist collectivism, and can only build on that foundation, their later policy would be diametrically opposed to it. A Socialist government would begin immediately an almost complete reversal of the statesmanship of "State Socialism." The first measure it would undertake would be to begin at once to increase wages faster than the rate of increase of the total wealth of the community. Secondly, within a few years, it would give to the masses of the population, according to their abilities, all the education needed to fill from the ranks of the non-capitalistic classes a proportion of all the most desirable and important positions in the community, corresponding to their numbers, and would see to it that they got these positions.

It is undoubtedly the opinion of the most representative figures of the international Socialist movement that there is not[Pg 116] the slightest possibility that any of the non-Socialist reformers of to-day or of the near future are following or will follow any such policy, or even take the slightest step in that direction; and that there is nothing Socialists can do to force such a policy on the capitalists until they are actually or practically in power. Society may continue to progress, but it is surely inconceivable to any close observer, as it is inconceivable to the Socialists, that the privileged classes will ever consent, without the most violent struggle, to a program which, viewed as a whole, would lead, however gradually or indirectly, to a more equitable distribution of wealth and political power.

[Pg 117]

PART II

THE POLITICS OF SOCIALISM

CHAPTER I

"STATE SOCIALISM" WITHIN THE MOVEMENT

The Socialist movement must be judged by its acts, by the decisions Socialists have reached and the reasoning they have used as they have met concrete problems.

The Socialists themselves agree that first importance is to be attached, not to the theories of Socialist writers, but to the principles that have actually guided Socialist parties and their instructed representatives in capitalist legislatures. These and the proceedings of international and national congresses and the discussion that constantly goes on within each party, and not theoretical writings, give the only truthful and reliable impression of the movement.

In 1900 Wilhelm Liebknecht, who up to the time of his death was as influential as Bebel in the German Party, pointed out that those party members who disavowed Socialist principles in their practical application were far more dangerous to the movement than those who made wholesale theoretical assaults on the Socialist philosophy, and that political alliances with capitalist parties were far worse than the repudiation of the teachings of Karl Marx. In his well-known pamphlet No Compromise he showed that this fact had been recognized by the German Party from the beginning.

I have shown the Socialists' actual position through their attitude towards progressive capitalism. An equally concrete method of dealing with Socialist actualities is to portray the various tendencies within the movement. The Socialist position can never be clearly defined except by contrasting it with those policies that the movement has rejected or is in the process of rejecting to-day. Indeed, no Socialist policy can be viewed as at all settled or important unless it has proved itself "fit," by having survived struggles[Pg 118] either with its rivals outside or with its opponents inside the movement.

If we turn our attention to what is going on within the movement, we will at once be struck by a world-wide situation. "State Socialism" is not only becoming the policy of the leading capitalistic parties in many countries, but—in a modified form—it has also become the chief preoccupation of a large group among the Socialists. "Reformist" Socialists view most of the reforms of "State Socialism" as installments of Socialism, enacted by the capitalists in the hope of diverting attention from the rising Socialist movement.

To Marx, on the contrary, the first "step" in Socialism was the conquest of complete political power by the Socialists. "The proletariat," he wrote in the Communist Manifesto "will use its political supremacy to wrest, by degrees, all capital from the capitalists, to centralize all instruments of production in the hands of the State, i.e. of the proletariat organized as the ruling class." (My italics.) Here is the antithesis both of "reformist" Socialism within the movement and of "State Socialism" without. The working people are not expected to gain more and more political power step by step and to use it as they go along. It is only after gaining full political supremacy by a revolution (peaceful or otherwise) that they are to socialize industry step by step. Marx and his successors do not advise the working people to concentrate their efforts on the centralization of the instruments of production in the hands of governments as they now are (capitalistic), but only after they have become completely transformed into the tools of the working people "organized as the ruling class," to use Marx's expression.[93]

The central idea of the "reformist" Socialists is, on the contrary, that before Socialism has captured any government, and even before it has become an imminent menace, it is necessary that Socialists should take the lead in the work of social reform, and should devote their energies very largely to this object. It is recognized that capitalistic or non-Socialist reformers have taken up many of the most urgent reforms and will take up more of them, and that being politically more powerful they are in a better position to put them into effect. But the "reformist" Socialists, far from allowing this fact to discourage them, allege it as the chief reason why they must also enter the field. The non-Socialist reformers,[Pg 119] they say, are engaged in a popular work, and the Socialists must go in, help to bring about the reforms, and claim part of the credit. They then propose to attribute whatever success they may have gained, not to the fact that they also have become reformers like the rest, but to the fact that they happen to be Socialists. The non-Socialist reformers, they say again, are gaining a valuable experience in government; the Socialists must go and do likewise. Reforms which were steps in capitalism thus become to them steps in Socialism. It is not the fashion of "reformists" to try to claim that they are very great steps—on the contrary, they usually belittle them, but it is believed that agitation for such reforms as capitalist governments allow, is the best way to gain the public ear, the best kind of political practice, the most fruitful mode of activity.

One of the leading American Socialist weeklies has made a very clear and typical statement of this policy:—

"If we leave the field of achievement to the reformer, then it is going to be hard to persuade people that reform is not sufficient. If Socialists take every step forward as part of a general revolutionary program, and never fail to point out that these things are but steps forward in a stairway that mean nothing save as they lead to a higher stage of society, then the Socialist movement will carry along with it all those who are fighting the class struggle. The hopelessness of reform as a goal will become apparent when its real position in social evolution is pointed out."[94]

The leading questions this proposed policy arouses will at once come to the reader's mind: Will the capitalist reformers in control of national governments allow the Socialist "reformists" to play the leading part in their own chosen field of effort? If people tend to be satisfied with reform, what difference does it make as to the ultimate political or social ideals of those who bring it about? If the steps taken by reformers and "reformists" are the same, by what alchemy can the latter transform them into parts of a revolutionary program?

Mr. Simons, nevertheless, presents this "reformism" as the proper policy for the American Party at its present stage:—

"It has become commonplace," he says, "to say that the Socialist movement of the United States has entered upon a new stage, and that with the coming of many local victories and not a few in State[Pg 120] and nation, Socialist activity must partake of the character of preparation for the control of society.

"Yet our propaganda has been slow to reflect this change. This is natural. For more than a generation the important thing was to advertise Socialism and to inculcate a few doctrinal truths. This naturally developed a literature based on broad assertions, sensational exposures, vigorous denunciations, and revival-like appeals that resulted in sectarian organization.

"It has been hard to break away from this stage. It is easier to make a propaganda of 'sound and fury' than of practical achievement. Once the phrases have been learned, it is much simpler to issue a manifesto than to organize a precinct. It always requires less effort to talk about a class struggle than to fight it; to defy the lightning of international class rule than to properly administer a township. Yet, if Socialism is inevitable, if the Socialist Party is soon to rule in State and nation, then it is of the highest importance that Socialists should know something of the forces with which they are going to deal; something of the lines of evolution which they are going to further; something of the government which they are going to administer; something of the task which they profess to be eager to accomplish."

It might seem that, after the first stage has been passed, the next promising way to carry Socialism forward, the way actually to "fight" the class struggle and to achieve something practical is, as Mr. Simons says, to talk less and to go in and "administer a township." Revolutionary Socialists agree that advertising, the teaching of a few basic doctrines, emotional appeals, and the criticism of present society have hitherto taken up the principal share of the Socialist agitation, and that all these together are not sufficient to enable Socialists to achieve their aim, or even to carry the movement much farther. They agree that activity is the best teacher and that the class struggle must be actually fought. But they propose other activities and feel that a whole intermediate stage of Socialist evolution, including the capture of national governments, lies between the Socialist agitation of the past and any administration of a township that can do anything to bring recruits to Socialism and not merely to "State Socialist" reform.

This is the view of the revolutionary majority of the international movement. But the "reformist" minority is both large and powerful, and since it draws far more recruits than does the revolutionary majority from the ranks of the book educated and capitalistic reformers, its spokesmen and writers[Pg 121] attract a disproportionately large share of attention in capitalistic and reform circles, and thus give rise to widespread misunderstanding as to the position of the majority.

Not only are both the more or less Socialistic parties in Great Britain and the Labour parties of the British colonies "reformist" to the extent that they are either entirely outside or practically independent of the international movement, but the parties of Belgium, Italy, and South Germany have, for a number of years, concentrated their attention almost exclusively on such reforms as the capitalist governments of their countries are likely to allow to be enacted—the dominant idea being to obtain all that can be obtained for the working classes at the present moment, even when, for this purpose, it becomes necessary to subordinate or to compromise entirely the plans and hopes of the future. And it is only within the last year or two that the revolutionary wing in these last-named countries has begun to grow rapidly again and promises to regain control.

There can be no doubt that Socialist "reformism" has become very widespread. President Gompers of the American Federation of Labor, who had every facility of meeting European Socialists and unionists on a recent tour, made some observations which are by no means without a certain foundation.[95] He says that he talked to these people about Socialism and, though they all knew "the litany, service, and invocation" and the Socialist text for the coming revolution, they preserved this knowledge for their speech making, while in conversation it all faded away into the misty realms of the imagination. "Positively," writes Mr. Gompers, "I never found one man in my trip ready to go further into constructive Socialism than to repeat perfunctorily its time-worn generalities. On the other hand, I met men whom I knew years ago, either personally or through correspondence or by their work, as active propagandists of the Socialists' theoretical creed, who are now devoting their energies to one or other of the practical forms of social betterment—trade unionism, coöperation, legal protection to the workers—and who could not be moved to speak of utopianism [Mr. Gompers's epithet for Socialism]." It is doubtless true, as Mr. Gompers says, that the individuals he questioned have practically abandoned their Socialism, even though they remain members of the Socialist parties. For if such activities as he mentions could be claimed as "Socialism,"[Pg 122] then there is very little public work an intelligent and honest workingman can undertake, no matter how conservative it may be, which is not to go by that name.

The chief characteristic of the reformists is, indeed, frankly to claim, either that all the capitalist-collectivist reforms of the period are Socialist in origin, or that they cannot be put into execution without Socialist aid, or that such reforms are enacted only as concessions, for fear that Socialism would otherwise sweep everything before it.

Rev. Carl D. Thompson, formerly a Socialist member of the Wisconsin Legislature, and now Town Clerk of Milwaukee, for example, claims Millerand as a Socialist minister, though the French Socialist Party agreed by an almost unanimous vote that he is not to be so considered, and attributes to this minister a whole series of reforms in which he was only a single factor among many others. Many important legislative changes which have taken place in Italy since 1900, Mr. Thompson accredits to the opportunist Socialist leader, Turati, with his handful of members of the chamber, though it is certain that even at the present moment the Socialists have not yet arrived at a position where they can claim that they are shaping governmental action as strongly as their Radical allies. Mr. Thompson states that the "Socialist Independent Labour Party" of Great Britain had thirty-four representatives in Parliament at a time when the larger non-Socialist Labour Party, which included it, had only this number. He claimed that a majority of this latter party were Socialists, when, as a matter of fact, only a minority were members of any Socialist party even in the ultra-moderate sense in which the term is employed in England, and he accredits all the chief reforms brought about by the Liberal government to this handful of "Socialists," including even the old age pensions which were almost unanimously favored by the old parties.[96] He even lists among his signs of the progress of Socialism the fact that, at the time of writing, fifty-nine governments owned their railways, while a large number had instituted postal savings banks.

The same tendency to claim everything good as Socialism is very common in Great Britain. Even the relatively advanced Socialist, Victor Grayson, avoids the question whether there is any social reform which is not Socialism,[97] and it seems to be the general position of British Socialists that every real reform is Socialism—more or less.

[Pg 123]

August Bebel, on the contrary, is quoted as saying, "It is not a question of whether we achieve this or that; for us the principal thing is that we put forward certain claims which no other party can put forward." The great German Socialist sees clearly that if Socialism is to distinguish itself from the other parties it must rest its claims solely on demands which are made exclusively by Socialists. This is what those who claim that every reform is Socialism, or is best promoted by Socialists, fail to see. By trying to make the word, "Socialism" mean everything, they inevitably make it mean nothing.

It is true that for a time the very advertisement of the word "Socialism," by this method, and even the widest and loosest use of Socialist phrases had the effect of making people think about Socialist principles. But this cannot be long continued before the public begins to ask questions concerning the exact meaning of such expressions as applied to everyday life. The Socialist paper, Justice, of London, urged that "the very suggestion that any of the Liberal members of Parliament were connected with the Socialist movement created a more profound impression than all they ever said or did." This is doubtless true, but when the novelty has once worn off of this situation it is what so-called Socialists do that alone will count.

For example, the leading reformist Socialist of Great Britain, Mr. J. R. MacDonald, wishes to persuade the Socialists of America to carry on "a propaganda of immediately practicable changes, justified and enriched by the fact that they are the realization of great ideals."[98] Such a reduction of the ideal to what is actually going on, or may be immediately brought about, makes it quite meaningless. Evidently the immediately practicable changes that Mr. MacDonald suggests are themselves his ideal, and what he calls the ideal consists rather of phrases and enthusiasms that are useful, chiefly, for the purpose of advertising his Party and creating enthusiasm for it.

The underlying motive of the "reformists" when they claim non-Socialist reforms as their own, and relegate practically all distinctively Socialist principles and methods to the vague and distant future, is undoubtedly their belief that reforms rather than Socialism appeal to the working class.

"The mass of workingmen will support the Socialist Party," a Socialist reformer wrote recently, "not because[Pg 124] they are being robbed under capitalism, but because they are made to understand that this party can be relied upon to advance certain measures which they know will benefit them and their families here and now.

"The constructive Socialist believes that the coöperative commonwealth will be realized, not by holding it up in contrast to capitalism,—but only by the working class fighting first for this thing, then for that thing, until private enterprise is undermined by its rewards being eaten up by taxes and its incentive removed by the inroads made upon profits."

The working people, that is, are not intelligent enough to realize that they are "robbed under capitalism," and are not getting their proportionate share of the increase of wealth, nor courageous enough to take up the fight to overthrow capitalism; they appreciate only small advances from day to day, and every step by which "private capitalism" is replaced by State action is such an advance, while these advances are to be secured chiefly through a Socialist Party. In a word, the Socialist Party is to ask support because it can accomplish more than other parties for social reform under capitalism, which at the present period means "State Socialism."

For while "reformist" Socialists are taking a position nearly identical with that of the non-Socialist reformers, the latter are coming to adopt a political policy almost identical with that of the reformist Socialists. I have noted that one of America's leading economists advises all reformers, whether they are Socialists or not, to join the Socialist Party. Since both "reformist" Socialists and "Socialistic" reformers are interested in labor legislation, public ownership, democratic political reforms, graduated taxation, and the governmental appropriation of the unearned increment in land, why should they not walk side by side for a very considerable distance behind "a somewhat red banner," and "without troubling themselves about the unlike goals"—as Professor John Bates Clark recommends? The phrases of Socialism have become so popular that their popularity constitutes its chief danger. At a time when so many professed anti-Socialists are agreeing with the New York Independent that, though it is easy to have too much Socialism, at least "we want more" than we have, it becomes exceedingly difficult for non-Socialists to learn what Socialism is and to distinguish it from innumerable reform movements.

[Pg 125]

Less than a decade ago the pros and cons of Socialism were much debated. Now it is usually only a question of Socialism sooner or later, more or less. Socialism a century or two hence, or in supposed installments of a fraction of a per cent, is an almost universally popular idea. For the Socialists this necessitates a revolutionary change in their tactics, literature, and habit of thought. They were formerly forced to fight those who could not find words strong enough to express their hostility; they are rapidly being compelled to give their chief attention to those who claim to be friends. The day of mere repression is drawing to a close, the day of cajolery is at hand.

Liebknecht saw what was happening years ago, and, in one of the most widely circulated pamphlets the Socialists have ever published (No Compromise), issued an impressive warning to the movement:—

"The enemy who comes to us with an open visor we face with a smile; to set our feet upon his neck is mere play for us. The stupidly brutal acts of violence of police politicians, the outrages of anti-Socialist laws, penitentiary bills—these only arouse feelings of pitying contempt; the enemy, however, that reaches out the hand to us for a political alliance, and intrudes himself upon us as a friend and a brother,—him and him alone have we to fear.

"Our fortress can withstand every assault—it cannot be stormed nor taken from us by siege—it can only fall when we ourselves open the doors to the enemy and take him into our ranks as a fellow comrade."

"We shall almost never go right," says Liebknecht, "if we do what our enemies applaud." And we find, as a matter of fact, that the enemies of Socialism never fail to applaud any tendency of the party to compromise those acting principles that have brought it to the point it has now reached. For Liebknecht shows that the power which now causes a Socialist alliance to be sought after in some countries even by Socialism's most bitter enemies would never have arisen had the party not clung closely to its guiding principle, the policy of "no compromise."

There is no difficulty in showing, from the public life and opinion of our day, how widespread is this spirit of political compromise or opportunism; nor in proving that it enters into the conduct of many Socialists. Such an opposition to the effective application of broad and far-sighted plans to practical politics is especially common, for historical reasons, in Great Britain and the United States. In this[Pg 126] country it has been especially marked in Milwaukee from the earliest days of the Socialist movement there. In 1893 the Milwaukee Vorwaerts announced that "if you demand too much at one time you are likely not to get anything," and that "nothing more ought to be demanded but what is attainable at a given time and under given circumstances."[99] It will be noticed that this is a clear expression of a principle of action diametrically opposite to that adopted by the international movement as stated by Bebel and Liebknecht. Socialists are chiefly distinguished from the other parties by the fact that they concentrate their attention on demands beyond "what is attainable at a given time and under given circumstances." They might attempt to distinguish themselves by claiming that they stand for the ultimate goal of Socialism, though their immediate program is the same as that of other parties, but any politician can do that—as has been shown recently by the action of Briand, Millerand, Ferri, and other former Socialists in France and Italy—and the day seems near when hosts of politicians will follow their example.

Any static or dogmatic definition of Socialism, like any purely idealistic formulation, no matter how revolutionary or accurate it may be, necessarily invites purely opportunist methods. A widely accepted static definition declares that Socialism is "the collective ownership of the means of production and distribution under democratic management." As an ultimate ideal or a theory of social evolution, this is accepted also by many collectivist opponents of Socialism, and may soon be accepted generally. The chief possibility for a difference of opinion among most practical persons, whether Socialists or not, must come from the questions: How soon? By what means?

Evidently such a social revolution is to be achieved only by stages. What are these stages? Many are tempted to give the easy answer, "More and more collectivism and more and more democracy." But progress in political democracy, if it came first, might be accompanied by an artificial revival of small-scale capitalism, and a new majority made up largely of contented farmer capitalists might put Socialism farther off than it is to-day. Similarly, if installments of collectivism came first, they might lead us in the direction of the Prussia of to-day. And finally, even a combination of democracy and collectivism, up to a certain point, might produce a majority composed in part of small[Pg 127] capitalists and favored government employees. Collectivist democracy completed or far advanced would insure the coming of Socialism. But a policy that merely gave us more collectivism plus more democracy, might carry us equally well either towards Socialism or in the opposite direction. The ultimate goal of present society does not give us a ready-made plan of action by a mathematical process of dividing its attainment into so many mechanical stages.

A very similar political shibboleth, often used by Party Socialists, is "Let the nation own the trusts." Let us assume that the constitution of this country were made as democratic as that of Australia or Switzerland, and the suffrage made absolutely universal (as to adults). Let us assume, moreover, that the "trusts," including railways, public service corporations, banks, mines, oil, and lumber interests, the steel-making and meat-packing industries, and the few other important businesses where monopolies are established, were owned and operated by governments of this character. Taken together with the social and labor reforms that would accompany such a régime, this would be "State Socialism," but it would not necessarily constitute even a step towards Socialism—and this for two reasons.

The industries mentioned employ probably less than a third of the population, and, even if we add other government employments, the total would be little more than a third. The majority of the community would still be divided among the owners or employees of the competitive manufacturing establishments, stores, farms, etc.,—and the professional classes. With most of these the struggle of Capital and Labor would continue and, since they are in a majority, would be carried over into the field of government, setting the higher paid against the more poorly paid employees, as in the Prussia of to-day.

And, secondly, even if we supposed that a considerable part or all of the government employees received what they felt to be, on the whole, a fair treatment from the government, and if these, together with shopkeepers, farm owners, or lessees, and satisfied professional and salaried men, made up a majority, we would still be as far as ever from a social, economic, or industrial democracy. What we would have would be a class society, based on a purely political democracy, and economically, on a partly private (or individualist) and partly public (or collectivist) capitalism.

[Pg 128]

"Equal opportunities for all" would also mean Socialism. But equal opportunities for a limited number, no matter if that number be much larger than at present, may merely strengthen capitalism by drawing the more able of the workers away from their class and into the service of capitalism. Or opportunities more equal for all, without a complete equalization, may merely increase the competition of the lower classes for middle-class positions and so secure to the capitalists cheaper professional service. So-called steps towards equal opportunities, even if rapid enough to produce a very large surplus of trained applicants for whom capitalism fails to provide and so increase the army of malcontents, may simply delay the day of Socialism.

I have spoken of Socialists whose underlying object is opportunistic—to obtain immediate results in legislation no matter how unrelated they may be to Socialism. Others are impelled either by an inactive idealism, or by attachment to abstract dogma for its own sake. Their custom is in the one instance to make the doctrine so rigid that it has no immediate application, and in the other to "elevate the ideal" so high, to remove it so far into the future, that it is scarcely visible for the present-day purposes, and then to declare that present-day activity, even if theoretically subject to an ideal or a doctrine, must be guided also by quite other and "practical" principles, which are never clearly defined and sometimes are scarcely mentioned. Mr. Edmond Kelly, for instance, puts his "Collectivism Proper," or Socialism, so far into the future that he is forced to confess that it will be attained only "ultimately," or perhaps not at all, while "Partial Collectivism may prove to be the last stage consistent with human imperfection."[100] He acknowledges that this Partial Collectivism ("State Socialism") is not the ideal, and it is evident that his ideal is too far ahead or too rigid or theoretical, to have any connection with the ideals of the Socialist movement, which arise exclusively out of actual life.

This opportunism defends itself by an appeal to the "evolutionary" argument, that progress must necessarily be extremely slow. Progress in this view, like Darwin's variations, takes place a step at a time, and its steps are infinitesimally small. The Worker of Brisbane, Australia, says: "The complicated complaint from which society suffers can only be cured by the administration of homeopathic[Pg 129] doses.... Inculcate Socialism? Yes, but grab all you can to be going on with. Preach revolutionary thoughts? Yes, but rely on the ameliorative method.... The minds of men are of slow development, and we must be content, we fear, to accomplish our revolution piecemeal, bit by bit, till a point is come to when, by accumulative process, a series of small changes amounts to the Great Change. The most important revolutions are those that happen quietly without anything particularly noticeable seeming to occur."

What is a Great Change depends entirely, in the revolutionist's view, on how rapidly it is brought about, and "revolutionary thoughts" are empty abstractions unless accompanied by revolutionary methods. Once it is assumed that there is plenty of time, the difference between the conservative and the radical disappears. For even those who have the most to lose realize in these days the inevitability of "evolution." The radical is not he who looks forward to great changes after long periods of time, but he who will not tolerate unnecessary delay—who is unwilling to accept the so-called installments or ameliorations offered by the conservative and privileged (even when considerable) as being satisfactory or as necessarily contributing to his purpose at all. The radical spirit is rather that of John Stuart Mill, when he said, "When the object is to raise the permanent condition of a people, small means do not merely produce small effects; they produce no effect at all."

Some political standard and quantitative measure is as necessary to social progress as similar standards are necessary in other relations. If the political standard of the Socialists is so low as to regard social reform programs which on the whole are more helpful to the capitalists than to other classes—and therefore "produce no effect at all" as far as the Socialist purpose is concerned—as if they were concessions, then it follows naturally that the Socialists will be ready to pay a price for such concessions. They will not only view as a relative gain over the capitalists measures which are primarily aimed at advancing capitalist interests, but they will inevitably be ready at a price to relax to some extent the intensity of their opposition to other measures that are capitalistic and antipopular. For instance, if old age pensions are considered by the workers to be an epoch-making reform and a concession, they may be granted by the capitalists all the more readily. But if thus overvalued, advantage[Pg 130] will be taken of this feeling, and they will in all probability be accompanied by restrictions of the rights of labor organizations. On the other hand, if such pensions, however desirable, are considered as a reform which will result indirectly in great savings to the capitalist classes, to public and private charitable institutions, to employers, etc., then the Socialists will accept them and, if possible, hasten their enactment,—but, like the French, will refuse to pay for them out of their own pockets (even through indirect taxation, as the British workingmen were forced to do) and will allow them neither to be used as a cloak for reaction, nor as a substitute for more fundamental reforms.

In other words, a rational political standard would teach that a certain measure of political progress is normal in capitalist society as a result of the general increase of wealth and the general improvement in political and economic organization, especially now that the great change to State capitalism is taking place; while reforms of an entirely different character are needed if there is to be any relative advance of the political and economic power of the masses, any tendency that might lead in the course of a reasonable period of time to economic and social democracy.

"A new and fair division of the goods and rights of this world should be the main object of all those who conduct human affairs," said De Tocqueville. The economic progress and political reforms of this capitalistic age are doubtless bringing us nearer to the day when a new and fair division of goods and rights can take place, and they will make the great transformation easier when it comes, but this does not mean that in themselves they constitute even a first step in the new dispensation. That they do is denied by all the most representative Socialists from Marx to Bebel.

The most bitter opponents of Socialism, like its most thoroughgoing advocates, have come to see that the whole character of the movement has grown up from its unwillingness to compromise the aggressive tactics indispensable for the revolutionary changes it has in view, until it has become obvious that, just as Socialism as a social movement is the opposite pole to State capitalism, so Socialism as a social method is the opposite pole to opportunism.

[Pg 131]

CHAPTER II

"REFORMISM" IN FRANCE, ITALY, AND BELGIUM

The Socialist parties in Italy, Belgium, and France, where "reformism" is strong, are progressing less rapidly than the Socialists of these countries had reason to expect, and far less rapidly than in other countries. It would seem that in these cases the same cause that drives the movement to abandon aggressive tactics also checks its numerical growth.

For example, it is a matter of principle among Socialists generally to contest every possible elected position and to nominate candidates in every possible district. The revolutionary French Socialist, Jules Guesde, even stated to the writer that if candidates could be run by the party in every district of France, and if the vote could in this way be increased, he would be willing to see the number of Socialists in Parliament reduced materially, even to a handful—the object being to teach Socialism everywhere, and to prepare for future victories by concentrating on a few promising districts rather than to make any effort to become a political factor, at the present moment. Similarly, August Bebel declared that he would prefer that in the elections of 1912 the Socialists should get 4,000,000 votes and 50 Reichstag members rather than 3,000,000 votes and 100 members. In the latter case, of course, the Socialist members would have been elected largely on the second ballot by the votes of non-Socialists.

The policy actually carried out in both Italy and France has of late been exactly the opposite to that recommended by Guesde and Bebel. In the elections of 1909, the Socialist Party of Italy put up 114 less candidates for Parliament than they had in the election of 1904, while the number of candidates nominated in France was 50 less in 1910 than it had been in 1906. The consequence was that the French Party received an increase of votes less absolutely than that gained by the conservative republicans and scarcely greater than that of the radicals, while in Italy the Socialists actually cast a smaller percentage of the total vote in 1909 than they did in 1904, while the party membership materially decreased.

[Pg 132]

This policy had a double result; it sent more Socialists to the Parliaments, in each case increasing the number of members by about 50 per cent; on the other hand, it helped materially those radical and rival parties most nearly related to the Socialists, for in many districts where the latter had withdrawn their candidates these parties necessarily received the Socialist vote. A vast field of agitation was practically deserted, and even when the agitation was carried on, the distinction between the Socialist Party and the parties it had favored, and which in turn favored it, became less marked, and the chances of the spread of Socialism in the future were correspondingly diminished.

In France it is this policy which has brought forward the so-called "independent Socialists" of the recent Briand ministry. Being neither Socialists nor "Radicals," they are in the best position to draw advantages from the "rapprochement" of these forces, and it was thus that Millerand came into the ministry in 1900, that Briand became prime minister in 1910, and Augagneur minister in 1911. These are among the most formidable opponents of the Socialist movement in France to-day. It will seem from this and many other instances that the opportunist policy which leads at first to a show of success, later results in a weakening of the immediate as well as the future possibilities of the movement.

The opportunist policy leads not only to an abandonment of Socialist principle, an outcome that can never be finally determined in any case, but sometimes to an actual betrayal or desertion, visible to all eyes, as, for instance, when Ferri left the movement in Italy, or Briand and Millerand in France. That such desertions must inevitably result from the looseness taught by "reformist" tactics is evident. Yet all through Briand's early political career, Jaurès was his intimate associate, and even after the former had forsaken the party, the latter confessed that, like the typical opportunist, he had still expected to find in Briand's introductory address as minister "reasons for hoping for the progress of social justice."

The career of Briand is typical. "One must understand how to manage principles," he had said in 1900 at the very time he was making the revolutionary declarations I shall quote (in favor of the general strike and against the army). Two years later when he made his first speech in the Chamber, the conservative "Temps" said that Briand was[Pg 133] "ministrable"; that is, that he was good material for some future capitalistic ministry. Now Briand was making in this speech what appeared to be a very vigorous attack against the government and capitalism, but, like some prominent Socialists to-day, he had succeeded in doing it in such a way that he allowed the more far-seeing of the capitalistic enemy to understand clearly what his underlying principles were.[101]

At his first opportunity he became connected with the government, and justified this step on the ground of "his moral attitude," since he was the proposer of the famous bill for separating the Church and the State. He was immediately excluded from the party, since at the time of Millerand's similar step a few years before the party had reached the definite conclusion that Socialists should not be allowed to participate in their opponent's administrations.

When Briand became minister, and later (in 1909) prime minister, he did not fail at once to realize the worst fears of the Socialists, elevating military men and naval officers to the highest positions, and promoting that minister who had been most active in suppressing the post office strike to the head of the department of justice. So-called collectivist reforms that were introduced while he was minister, like the purchase of the Western Railway, were carried through, according to conservative Socialists like Jaurès, with a loss of 700,000,000 francs to the State. So that now Jaurès, who had done so much to forward Millerandism and Briandism felt obliged to propose a resolution condemning Briand and Millerand and Viviani as traitors who had allowed themselves to be used "for the purpose of 'capitalism.'"

"'Socialistic' ministers," says Rappoport, "have fallen below the level of progressive capitalistic governments. No 'Socialistic' minister has done near so much for democracy as honorable but narrow-minded democrats like Combes. 'Socialistic' ministers have before anything else sought the means of keeping themselves in office. In order to make people forget their past, they are compelled to give continuously new proofs of their zeal for the government."

In France, where strong radical, democratic, and "State Socialist" parties already exist, ready to absorb those who put reform before Socialism, the likelihood that such desertions will lead to any serious division of the party seems small, especially since the Toulouse Congress, when a platform was adopted unanimously. Of course, the leading factor in this[Pg 134] platform was Jaurès, who stands as strongly for a policy of unity and conciliation within the party as he has for an almost uninterrupted conciliation and coöperation with the more or less radical forces outside of it.

If Jaurès was able to get the French Party to adopt this unanimous program, it was because he is not the most extreme of reformists, and because he has hitherto placed party loyalty before everything. In the same way Bebel, voting on nearly every occasion with the revolutionists, is able to hold the German Party together because he is occasionally on the reformist side, as in a case to be mentioned below. Jaurès looks forward, for instance, to a whole series of "successful general strikes intervening at regular intervals," and even to the final use of a great revolutionary general strike, whenever it looks as if the capitalists can be finally overthrown and the government taken into Socialist hands—though he certainly considers that the day for such a strike is still many years off. Nor does he hesitate to extend the hand of Socialist fellowship to the most revolutionary Socialists and labor unionists of his country, though he says to them, "The more revolutionary you are, the more you must try to bring into the united movement not only a minority, but the whole working class." He says he is not against revolution, or the general strike, but that he is against "a caricature of the general strike and an abortive revolution."

It is only by actions, however, that men or parties may be judged, and though Jaurès has occasionally been found with the revolutionists, in most cases he acts with their rivals and opponents, the reformists, and in fact is the most eminent Socialist reformer the world has produced. No one will question that there are Socialists who are exclusively interested in reform at the present period, not because they are opposed to revolution, but because no greater movements are taking place at the present moment or likely to take place in the immediate future—and Jaurès may be one of these. But it is very difficult, even impossible, to distinguish by any external signs, between such persons and those for whom the idea of anything beyond the reforms of "State Socialism" is a mere ideal, which concerns almost exclusively the next or some future generation. Many of those who were formerly Jaurès's most intimate associates, like the ministers Briand and Millerand, the recent ministers Augagneur and Viviani, and many others, have deserted the Party and are[Pg 135] now proving to be its most dangerous opponents, while several other deputies, who are still members like Brousse, recently Mayor of Paris, are accused by a large part of the organization of taking a very similar position. Surely this shows that, even if Jaurès himself could be trusted and allowed to advocate principles and tactics so agreeable to the rivals and enemies of Socialism, there are certainly few other persons who can be safely left in such a compromising position.

In view of these great betrayals on the part of Jaurès's associates, the mere fact that his own position towards the Party has usually been correct in the end—after the majority have shown him just how far he can go—and will doubtless remain technically correct, becomes of entirely secondary importance. He has openly and repeatedly encouraged and aided those individuals and parties which later became the chief obstacles in the way of Socialist advance, as other Socialists had predicted. The result is, not that the Socialist Party has ceased to grow, but that a large part of the enthusiasm for Socialism, largely created by the party, has gone to elect so-called "Independent Socialists" to the Chamber and to elevate to the control of the government men like Briand, who, it was agreed by Socialists and anti-Socialists alike, was the most formidable enemy the Socialists have had for many years.

The program unanimously adopted by the French at the Congress of Toulouse must be viewed in the light of this internal situation. "The Socialist Party, the party of the working class and of the Social Revolution," it begins, "seeks the conquest of political power for the emancipation of the proletariat [working class] by the destruction of the capitalist régime and the suppression of classes." The goal of Socialism could not be more succinctly expressed than in these words: "The destruction of the capitalist régime and the suppression of classes." Any party that lives up to this preamble in letter and spirit can scarcely stray from the Socialist road.

"It is the party which is most essentially, most actively reformist," continues another section, "the only one which can push its action on to total reform; the only one which can give full effect to each working class demand; the only one which can make of each reform, of each victory, the starting point and basis of more extended demands and bolder[Pg 136] conquests...." Here we have the plank on which Jaurès undoubtedly laid the greatest weight, and it was supported unanimously partly because of the necessity of party unity. For this is as much as to say that no reform will ever be brought to a point that wholly satisfies the working people except through a working class government. But it cannot be denied that there are certain changes of very great importance to the working people, like those mentioned in previous chapters, which are at the same time even more valuable to the capitalists, and would be carried out to the end even if there were no Socialists in existence. If the revolutionary wing of the French Party once conceded to capitalism itself this possibility of bringing about certain reforms, they would be in a position effectively to oppose the reformist tactics of Jaurès within the Party. By giving full credit to the semi-democratic and semi-capitalistic reform parties for certain measures, they would go as far as he does in the direction of conciliation and common sense in politics; by denying the possibility of the slightest coöperation with non-Socialists on other and still more important questions, they could constantly intensify the political conflict, and since Jaurès is a perpetual compromiser, put him in the minority in every contested vote within the party. By attacking the capitalists blindly and on all occasions they have created the necessity of a conciliator—the rôle that Jaurès so ably and effectively fills.

But, however friendly the Toulouse program may have seemed to Jaurès's reform tactics, it is not on that account any less explicit in its indorsement of revolutionary methods whenever the moment happens to be propitious. It states that the Socialist Party "continually reminds the proletariat [working class] by its propaganda that they will find salvation and entire freedom only in a collectivist and communist régime"; that "it carries on this propaganda in all places in order to raise everywhere the spirit of demand and of combat," and that "the Socialists not only indorse the general strike for use in economic struggles, but also for the purpose of finally absorbing capitalism."

"Like all exploited classes throughout history," it concludes, "the proletariat affirms its right to take recourse at certain moments to insurrectionary violence."

The Toulouse Congress showed, not the present position of the French Party or of the International, but the points[Pg 137] on which Socialist revolutionists and reformers, everywhere else at sword's point, can agree. The reformers do not object to promising the revolutionaries that they shall have their own way in the relatively rare crises when revolutionary means are used or contemplated. The revolutionaries are willing to allow the reformers to claim all the credit for all reforms beneficial to the workers that happen to be enacted. Neither gives up their first principle, whether it be revolution or reform, but in the matter of secondary importance, reform or revolution, each side tolerates in the party an attitude in diametrical opposition to its principles and the tactics it requires. Both do this doubtless in the belief that by this opportunism they will some day capture the whole party, and that a split may thus be avoided in the meanwhile.

Since the Toulouse Congress the divisions within the French Party have become much more acute. Briand's conduct in the great railway strike in 1911 is discussed below. Yet in spite of this experience of how much the government is ready to pay for railways and how little it is ready to do to their employees, Jaurès's followers at the Party Congresses of 1911 and 1912 stood again for the policy of nationalization, and Guesde was impelled to warn the party that Briand's "State Socialism" was the gravest danger to the movement.

Briand's positive achievements are also defended by Jaurès. The recent workingmen's pension law, unlike that of England, demands a direct contribution from the employees. Nevertheless, it contained some slight advantages, and of the seventy-five Socialist members of the Chamber of Deputies, only Guesde voted against it. Even when the Federation of Labor was conducting a campaign against registration to secure these "benefits," Jaurès's organ, L'Humanité took the other side. The working people, as usual, followed their unions. Less than 5 per cent registered; in Paris only 2.5 per cent, and in Brest 22 out of 10,000.

The experience with Millerand and Briand has made it impossible for Jaurès to tie the French Party to "reformism." But reformism has brought it about that the Party is often split in its votes in the Chamber of Deputies. In the Party Congresses, however, Jaurès is outvoted where a clear difference arises, an outcome he does his best to avoid. The Congress of 1911 (at St. Quentin) reaffirmed the international decision at Amsterdam which prevents the party going in for reform as a part of a [Pg 138]non-Socialist administration. It declared that "Socialists elected to office are the representatives of a party of fundamental and absolute opposition to the whole of the capitalist class, and to the State, its tool." And Vaillant said that since the Amsterdam Congress in 1904 the question of participation in capitalist ministries had ceased to exist in France.

It is true that Jaurès secured at this Congress, by a narrow majority, an indorsement of his policy of accepting the government pension offer. But the orthodox followers of Guesde and the revolutionary disciples of Hervé joined to secure its condemnation first by the Paris organization, and later by the National Council of the Party by the decisive vote of 87 to 51. This resolution which marks a great turning point in the French Party, is in part as follows:—

"The National Council declares that each time a labor question is to be decided, the Socialist Party should act in accord with the General Confederation of Labor."

As the Confederation has indorsed Socialism both as an end and as a means, few, if any, Socialist parties would object to this resolution. But the Confederation is also revolutionary, and this policy, if adhered to, marks an end to the influence of the "reformism" of Jaurès.

The precise objections to the government's insurance proposal are also significant. The National Council protested against the following features:—

(1) The compulsory contributions.

(2) The capitalization (of the fund).

(3) The ridiculous smallness of the pension.

(4) The age required to obtain the pension.

(5) The reëstablishment of workingmen's certificates.

Among the working people there is no doubt that the first feature was the chief cause of unpopularity. But Socialists know that, through indirect taxes or the automatic fall in wages or rise in prices, the same object of charging the bill to the workers may be reached. The capitalization refers to the investment and management of the large fund required by a capitalist government, thereby increasing its power. The last point has to do with the tendency to restrict the workers' liberty in return for the benefits granted—a tendency more visible with the pensions of the railway employees which were almost avowedly granted to sweeten the bitter pill of a law directed against their organizations.

The same orthodox and revolutionary elements in the Party[Pg 139] overthrew the Monis Ministry by refusing to vote for it with Jaurès and his followers. But this ministry, perhaps the most radical France has had, was in part a creation of Jaurès, who had hailed it with delight in his organ, L'Humanité. The fact that it only lived for three months and was overthrown by Socialists was another crushing blow to Jaurès. As it came simultaneously with his defeat in the National Council, it is highly improbable that the reformists will succeed soon, if ever, in regaining that majority in the movement which they held for a brief moment at the time of the St. Quentin Congress and during the first days of the Monis Ministry.

It is now in Belgium and Italy only that "reformism" is dominant and still threatens to fuse the Socialists with other parties. In the last election in Italy the Socialists generally fused with the Republicans and Radicals, while the Belgian Party has decided to allow the local political organizations to do this wherever they please in the elections of 1912.

In Belgium, Vandervelde, who has usually represented himself as an advocate of compromise between the two wings in international congresses, has now come out for a position more reformistic than that of Jaurès and only exceeded by the British "Labourites." He was one of the movers of the Amsterdam resolution (see Chapter VII), which he now declares merely repeated the previous one of Paris (1900) which, he says, merely "forbids an individual Socialist to take a part in a capitalist government without the consent of the Party." On the contrary, this Amsterdam resolution, as Vaillant says, forbids Socialist Parties to allow their members to become members of capitalist ministries except under the most extraordinary and critical circumstances.[102]

We are not surprised after this to hear Vandervelde say that the Belgian Party has not decided whether it will take part in a future Liberal government or not, because, though the occasion for this might occur this year (1912), he considers it too far off in the future for present consideration—surely a strange position for a Party that pretends to be interested in a future society. We are also prepared to hear from him that Socialists might be ready to accept representation in such a ministry, not in proportion to their numerical strength, or even their votes, but in proportion to the number of seats an unequal election law gives them in Parliament. Whether, when the question actually presents itself, the Party will follow Vandervelde is more than questionable.

[Pg 140]

In Italy "reformism" has reached its furthermost limit. When last year (1911) Bissolati was offered a place in the Giolitti Ministry he hesitated for weeks and was openly urged by a number of other Socialist deputies to accept. After consultations with Giolitti and the king he finally refused, giving as a pretext that, as minister, he would be forced to give some outward obeisance to monarchy, but really because such an action would split the Socialist Party and perhaps, also, because he might not be able altogether to support Giolitti on the one ground of the military elements of his budget. Far from condemning Bissolati, the group of Socialist deputies passed a resolution that expressed satisfaction with his conduct and even appointed him to speak in their name at the opening of the new Parliament. All the deputies save two then voted confidence in the new ministry and approbation of its program.

The opinion of the revolutionary majority of the international movement on this situation was reflected in the position of the revolutionaries of the two chief cities of the country, Milan and Rome. At the former city where they had a third of the delegates to the local Socialist committee they moved that the Socialist Party could neither authorize its deputies to represent it in a capitalist ministry or give that ministry its support, "except under conditions determined, not by Parliamentary artifices, but by the needs and mature political consciousness of the great mass of workers." At Rome two thirds of the Socialist delegates voted a resolution condemning the action of Bissolati as "the direct and logical consequence of the thought, program, and practical action of the reformist group," and reproved both the proposal of immediate participation in a capitalist government and "the theoretical encouragement of such a possibility" as being opposed to all sound and consistent Socialist activity.

The "reformists," led by Turati, were of the opinion merely that the time was not yet ripe for the action Bissolati had contemplated. But the grounds given in the resolution proposed by Turati on this occasion show that it was not on principle that he went even this far. He declared that "in the present condition of the organization and the present state of mind of the Party" a participation in the government which was "not imposed by a real popular movement, would profoundly weaken Socialist action, aggravating the already existing lack of harmony between purely [Pg 141]parliamentary action and the development of the political consciousness and the capacity for victory on the part of the great mass of the workers."[103] In other words, as in France, the working people, especially those in the unions, will not tolerate a further advance in the reformist direction, but Turati and Bissolati, like Jaurès and Vandervelde are striving to compromise, just as far as they will be allowed to do so. There is thus always a possibility of splits and desertions in these countries, but none that the party will abandon the revolutionary path.

The tactics of the Italian "reformists" were immensely clarified at the Congress of Modena (October, 1911). For the question of supporting a non-Socialist ministry and of participating in it was made still more acute by the government's war against Tripoli, while the Bissolati case above mentioned was also for the first time before a national Party Congress. Nearly all Socialists had opposed the war, as had also many non-Socialists—but after war was declared, the majority of the Socialist members of Parliament voted against the general twenty-four hours' strike that was finally declared as a demonstration against it. This majority had finally decided to support the strike only after it was declared by a unanimous vote of the executive of the Federation of Labor, and then its chief anxiety had been lest the strike go too far. The revolutionary minority in the parliamentary group, however, which had consisted of only two at the time of the Bissolati affair, was now increased to half a dozen of the thirty-odd members, while the revolutionary opposition to "reformism" in the Modena Congress, as a result of these two issues, rose to more than 40 per cent of the delegates.

At this Congress the reformists were divided into three groups, represented by Bissolati, Turati, and Modigliani. All agreed that it was necessary not only to vote for certain reforms—to this the revolutionists are agreed—but also at certain times to vote for the whole budget and to support the administration. Modigliani, however, declared (against Bissolati) that no Socialist could ever become a member of a capitalist ministry; Turati, that while this principle held true at the present stage of the movement, he would not bind himself as to the future; while Bissolati was unwilling to make any pledge on this question. As Bissolati did not propose, however, that the Socialists should take part in the present ministry at the present moment, this question was not[Pg 142] an immediate issue. What had to be decided was whether, in order to hasten and facilitate the introduction of universal suffrage and other social reforms, the government is to be supported at the present moment—when it is waging a war of colonial conquest to which all Socialists are opposed.

The resolution finally adopted by the Congress was drawn up by Turati and others who represented the views of the majority of reformists. While purely negative, it was quite clear, and the fact that it was finally accepted both by Bissolati and by Modigliani is highly significant. It concluded that "the Socialist group in Parliament ought not any longer to support the government systematically with their votes." It did not declare for any systematic opposition to the administration, even at the time when it is waging this war. It did not even forbid occasional support, and it left full discretion in the hands of the same parliamentary group whose policy I have been recording.

As a consequence the Italian Party at this juncture intentionally tolerated two contradictory policies. Turati declared: "We are in opposition unless in some exceptional case, in which some situation of extreme gravity might present itself." Rigola, who was one of the three spokesmen appointed for the less conservative reformists (with Turati and Modigliani) said: "We have been ministerialists for ten years, but little or nothing has been done for the proletariat. Some laws have been approved, but it is doubtful if they are due to us rather than to the exigencies of progress itself." In other words, Turati and Rigola thought there could be occasions for supporting capitalist ministries, though the present was not such an occasion; while the latter practically confessed that the policy had always been a failure in Italy. But in the face of all criticism Bissolati announced that he refused absolutely to pass over to the opposition to the ministry of Giolitti. Turati and his followers, now in control of the Party, might tolerate this position; the large and growing revolutionary minority would not. This could only mean that Socialist group in the Italian Parliament, like that of France, and even of Germany, would divide its votes on many vital matters, or at least that the minority would abstain from voting. Which could only mean that on many questions of the highest importance there was no longer one Socialist Party, but two.[104]

Turati himself wrote of the Modena Congress:—

[Pg 143]

"Only two tendencies were to be seen in the discussion and the voting; two parties in their bases and principles: the Socialist Party as a party of the working people, a class party, a party of political, economic, and social reorganization, and on the other side a bourgeois radical party as a completion of, and perhaps also as a center of new life force for, the sleeping and half moribund bourgeois democratic radicalism."[105] That is, the "reformist" Turati denied that there is anything Socialistic about Bissolati's "ultra-reformist" faction. To this Bissolati answered that compromise and the political collaboration of the working people with other classes, was not to be reserved, as Turati had said, for accidental and extraordinary cases, but was "the very essence of the reformist method."[106] The revolutionaries, of course, agree with Bissolati that, if the Socialists hold that their prime function is to work for reforms favored by a large part of the capitalists, compromises and the habit of fighting with the capitalists instead of against them are inevitable.

Turati now began to approach the revolutionaries, said that they had given up their dogmatism, immoderation, and justification of violence, and that he only differed from them now on questions of "more or less." The revolutionaries, however, have made no overtures to Turati, and Turati's overtures to the revolutionaries have so far been rejected. Turati's "reformism" seems to be less opportunistic than it was, but as long as he insists, as he does to-day, that it is only conditions that have changed and not his reformist tactics, that the revolutionaries are moving towards the reformists, the relation of the two factions is likely to remain as embittered as ever. Only if the revolutionaries continue to grow more powerful, until Turati is obliged still further to moderate his "reformist" principles and to abandon some of his tactics permanently, instead of saying, as he does now, that he lays them aside only temporarily, will there be any real unity in the Italian Socialist Party.

Within a few weeks after the Modena Congress, Turati had already initiated a movement in this direction when he persuaded the executive committee of the Party, after a bitter conflict, and by a majority of one (12 to 13), to enter definitely into opposition to the government, which in the meanwhile had given a new cause for offense by delaying on a military pretext the convocation of the Chamber of Deputies.[107]

[Pg 144]

Among the opportunist and ultra "reformists" who were still anxious to take no definite action, were such well-known men as Bissolati, Podrecca, Calda, and Ciotti. Bissolati deplored all agitation in criticism of the war except a demand for the convocation of the Chamber. Turati and others who had at last decided to go over definitely to the opposition, did so on entirely non-Socialist and capitalist grounds such as the expense of the war, the unprofitable nature of Tripoli as a colony, the aid the war gave to clericals and other reactionaries (elements opposed also by progressive capitalists), and the interference it caused with other reforms (favored also by progressive capitalists). Turati, indeed, was frank enough to say that he had Lloyd George's successful opposition to the Boer War as a model, and called the attention of his associates to the fact that Lloyd George became Minister (it will be remembered that Turati is not on the whole opposed to Socialists also becoming ministers—even in a capitalist cabinet). Even now it was only the revolutionary Musatti who pointed out the true Socialist moral of the situation, that failure of the non-Socialist democrats to stand by their principles and to oppose the war, ought to lead the party to separate from them, not only temporarily, but permanently, and to make impossible forever either the participation of the Socialists in any capitalist administration or even the support of such an administration in the Chamber of Deputies.

It was only when Bissolati secured a majority of the Socialist deputies, and this majority decided to compel the minority to accept Bissolati's neutral tactics as to the war and his readiness actively to support the war government at every point where that government was in need of support, that Turati rebelled and demanded that his minority, which announced itself as willing as a unit to obey the decisions of the Party Congress, should be recognized as its official representative in the Chamber. Turati's position was the same as before, but Bissolati's greater popularity among the voters, including non-Socialists, gave the latter control of the Parliamentary group, and forced the former to a declaration of war. The effect was to throw Turati and his followers into the arms of the revolutionaries, where they form a minority.

And thus the situation becomes similar to that in France. The reformist "leaders," Jaurès and Turati, do all that is possible to lead the Socialist Parties of the two countries in the opposite direction from that in which these organizations[Pg 145] are going. But though these "leaders" are turned in the direction of class conciliation, they are constantly being dragged backwards in the direction of class war. Unconsciously they are doing all they can to retard Socialism—short of leaving the movement. But as long as they consent to go with Socialism when they are unable to make Socialism go with them, their ability to retard the movement is strictly limited.

[Pg 146]

CHAPTER III

"LABORISM" IN GREAT BRITAIN

The British Socialist situation is almost as important internationally as the German. The organized workingmen of the world are indeed divided almost equally into two camps. Most of those of Australia, South Africa, and Canada, as well as a large majority in the United States, favor a Labour Party of the British type, and even the reformist Socialist leaders, Jaurès in France, Vandervelde in Belgium, and Turati in Italy, often take the British Party as model. On the other hand the majority of the Socialists everywhere outside of Great Britain, including the larger part of all the working people in every country of continental Europe, look towards the Socialist Party of Germany as their model, the political principles and tactics of which are diametrically opposed to those of the British Labour Party.

Far from opposing their Socialism to the "State Socialism" of the government, the British Socialists in general frankly admit that they also are "State Socialists," and seem not to realize that the increased power and industrial functions of the State may be used to the advantage of the privileged classes rather than to that of the masses. The Independent Labour Party even claims in its official literature that the "degree of civilization which a state has reached may almost be measured by the proportion of the national income which is spent collectively instead of individually."[108]

"Public ownership is Socialism," writes Mr. J. R. MacDonald, until lately Chairman of the Labour Party,[109] while Mr. Philip Snowden says that the first principle of Socialism is that the interests of the State stand over those of individuals.[110]

"I believe," says Mr. Keir Hardie, "the collectivist state to be a preliminary step to a communist state. I believe collectivism or State Socialism is the next stage of evolution towards the communist state." "Every class in a community," he said in this same speech, "approves and accepts Socialism up to the point at which its class interests are being[Pg 147] served." It would appear, then, that Mr. Hardie means by "Socialism" a program of reforms a part of which at least is to the benefit of every economic class. He contends only that this "Socialism" could never be "fully" established until the working class intelligently coöperate with other forces at work in bringing Socialism into being.[111]

"State Socialism with all its drawbacks, and these I frankly admit," said Mr. Hardie, "will prepare the way for free communism." Mr. Hardie considers it to be the chief business of Socialists in the present day to fight for "State Socialism," and is fully conscious that this forces him to the necessity of defending the present-day State, as, for instance, when he writes elsewhere, "It is not the State which holds you in bondage, it is the private monopoly of those means of life without which you cannot live." Private property and war and not the State Mr. Hardie believes to have been the "great enslavers" of past history as of the present day, apparently ignoring periods in which the State has maintained a governing class which consisted not so much of property owners as of State functionaries; to periods which may soon be repeated, when private property served merely as one instrument of an all-powerful State.

Mr. MacDonald still more closely restricts the word "Socialism" to the "State Socialist" or State capitalist period into which we are now entering. "Socialism," says MacDonald, "is the next stage in social growth,"[112] and throughout his writings and policy leaves no doubt that he means the very next stage, the capitalist collectivism of which I have been speaking. The international brotherhood of the nations, which many Socialist thinkers feel is an indispensable condition for the establishment of anything like democratic Socialism, Mr. MacDonald expects only in the distant future, while the end of government based on force, which is also considered essential by the majority of Socialist writers, Mr. MacDonald postpones to "some far remote generation."[113] In other words, the position of the recent Chairman of the Labour Party is that what the world has hitherto known as Socialism can only be expected after a vast period of time, and his opinion accords with that of many bitter critics and opponents of the movement, who avoid a difficult controversy by admitting all Socialist arguments and merely asking for time—"Socialism, a century or two hence—but not now,"—for all practical purposes an endless postponement.

[Pg 148]

Mr. MacDonald, who is not only a leader of the Labour Party, but also one of the chief organizers also of the leading Socialist Party of that country, has given us by far the fullest and most significant discussion of that party's policy. He says that an enlightened bourgeoisie will be just as likely to be Socialist as the working classes, and that therefore the class struggle is merely "a grandiloquent and aggressive figure of speech."[114] Struggle of some kind, he concedes, is necessary. But the more important form of struggle in present-day society, he says, is the trade rivalry between nations and not the rivalry between social classes.[115] Here at the outset is a complete reversal of the Socialist attitude. Socialists aim to put an end to this overshadowing of domestic by foreign problems, principally for the very reason that it aids the capitalists to obscure the class struggle—the foundation, the guiding principle, and the sole reason for the existence of the whole movement.

Mr. MacDonald claims further that a class struggle, far from uniting the working classes, can only divide them the more; in other words, that it works in exactly the opposite direction from that in which the international organization believes it works. The only "natural conflicts" in the present or future, within any given society, according to the spokesman of the Labour Party, represent, not the conflicting interests of certain economic classes, but the "conflicting views and temperaments" of individuals.[116] And the chief divisions of temperament and opinion, he says, will be between the world-old tendencies of action and inaction—a view which does not differ one iota from that of Mr. Roosevelt.

Mr. MacDonald asserts that "it is the whole of society which is developing towards Socialism," and adds, "The consistent exponent of the class struggle must, of course, repudiate these doctrines, but then the class struggle is far more akin to Radicalism than to Socialism."[117] I have already pointed out how the older Radicalism, or political democracy, no matter how individualistic and anti-Socialist it may be, is often, as Mr. MacDonald says, more akin to International Socialism than that kind of "State Socialism" or State capitalism Mr. MacDonald represents.

Mr. MacDonald typifies the majority of British Socialists also in his opposition to every modern form of democratic advance, such as the referendum and proportional [Pg 149]representation. Far from being disturbed, as so many democratic writers are, because minorities are suppressed where there is no plan of proportional representation, he opposes the second ballot, which has been adopted in the majority of the countries of Continental Europe—and, in the form of direct primaries, also in the United States. The principal thing that the electors are to do, he says, is to "send a man to support or oppose a government."

Mr. MacDonald finds that there is quite a sufficiency of democracy when the elector can decide between two parties; and far from considering the members of Parliament as delegates, he feels that they fill the chief political rôle, while the people perform the entirely subordinate task either of approving or of disapproving what they have already done. Parliament "first of all initiates ideas, suggests aims and purposes, makes proposals, and educates the community in these things with a view to their becoming the ideals and aims of the community itself."[118]

While Mr. MacDonald continues to receive the confidence of the trade union party, including its Socialistic wing, the Trade Union Congress votes down proportional representation by a large majority, apparently because it does not desire its members to be constituted into a truly independent group in Parliament, does not care to work for any political principle however concrete, but prefers to take such share of the actual powers of government as the Liberal Party is disposed to grant. Proportional representation would send for the first time a few outright Socialists to Parliament, but the election returns demonstrate that the trade unionists, if more independent of the Liberals, would be fewer in number than at present. A part of the Socialist voters desire this result and, of course, believe it is their right. The majority of the trade unionists, however, who have won a certain modicum of authority in spite of the undemocratic constitution of their party, do not care to grant it—as possibly conflicting with the relatively conservative plans of "the aristocracy of labor."

The Fabian Society's "Report on Fabian Policy" says that the referendum, "in theory the most democratic of popular institutions, is in practice the most reactionary."[119] Mr. MacDonald refers to it as a "crude Eighteenth Century idea of democracy," "a form of Village Community government."[120] At the Conference of the Labour Party at[Pg 150] Leicester in 1911 he declared that it was "anti-democratic" and that if the government were to accept it, the Labour Party "would have to fight them tooth and nail at every step of that policy." As opposed to any plans for a more direct and more popular government, he defends the "dignity and authority" of Parliament and bespeaks the "reverence and deference" that the people ought to observe toward it.

Contrast with these views Mr. Hobson's presentation of the non-Socialist Radical doctrine. "Under a professed and real enthusiasm for a representative system," as opposed to direct government, Mr. Hobson finds that there is concealed "a deep-seated distrust of democracy." He acknowledges "that the natural conservatism of the masses of the people might be sufficient to retard some reforms." "But this is safer and better for democracy," he says, "than the alternative 'faking' of progress by pushing legislation ahead of the popular will. It is upon the whole far more profitable for reformers to be compelled to educate the people to a genuine acceptance of their reform than to 'work it' by some 'pull' or 'deal' inside a party machine."[121]

Mr. MacDonald not only puts a high value on British conservatism and a low one on the French Revolution and the Declaration of Independence, but declares that no change whatever in the mere structure of government can aid idealists and reformers in any way, and expects politics and parties to be much the same in the future as they are at the present moment. It is this attitude that Mr. Hobson has in mind when he protests that "the false pretense that democracy exists" in Great Britain has proved "the subtlest defense of privilege"—and that this has been the greatest cause of the waste of reform energy not only in England but also in France and in the United States.[122] Mr. MacDonald says explicitly, "The modern state in most civilized countries is democratic," and adds impatiently that "the remaining anomalies and imperfections" cannot prevent the people from obtaining their will.[123] To dismiss in so few words the monarchy, the restrictions of the suffrage, the unequal election districts and other shortcomings of political democracy in Great Britain, and to insist that the government is already democratic, is surely, as Mr. Hobson says, "the subtlest defense of privilege."

Mr. MacDonald comes out flatly with the statement that under what he calls the democratic parliamentary [Pg 151]government of Great Britain it is practically impossible to maintain a pure and simple Socialist Party. He says proudly that "nothing which the Labour Parties of Australia or Great Britain have ever done or tried to do under their constitutions departs in a hair's breadth from things which the Liberal and the Tory Parties in these countries do every day."[124] "Indeed, paradoxical though it may appear," he adds, "Socialism will be retarded by a Socialist Party which thinks it can do better than a Socialistic Party."[125]

The Independent Labour Party, indeed, has had a program of reform that is remarkably similar to that of Ministers Churchill and Lloyd George, and is indorsed in large part by capitalists—as for example, by Andrew Carnegie. The first measure of this program provided for a general eight-hour day. Mr. Carnegie protests that to put the Socialist label on this is as "frank burglary as was ever committed," and the trade union movement in general would agree with him.[126]

The second demand was for a "workable unemployment act." The Labour Party had previously introduced a more radical measure which very nearly received the support of a majority of Parliament. The third measure called for old-age pensions. Mr. Carnegie remarked of this with perfect justice: "Mr. MacDonald is here a day behind the fair. These have been established in Britain before this [Mr. Carnegie's "Problems of To-day"] appears in print, both political parties being favorable." It is true that the Labour party demands a somewhat more advanced measure than that to which Mr. Carnegie alludes, but there is no radical difference in principle, and the Labour Party accepted the present law as being a considerable installment of what they want.

Of the fourth point the "abolition of indirect taxation (and the gradual transference of all public burdens to unearned incomes)," Mr. Carnegie remarks that "we must read the bracketed works in the light of Mr. MacDonald's philosophy," and "that this is a consummation which cannot be reached (in Mr. MacDonald's words) 'until the organic structure of society has been completely altered.'" We have seen that Mr. Churchill also aims at the ultimate expropriation of the whole future unearned increment of the land.

The fifth point of the program was similar,—a series of land acts (aimed at the ultimate nationalization of the land).

The sixth point was the nationalization of the railroads[Pg 152] and mines. Mr. Carnegie reminds us that many conservative and reactionary governments own their own railroads. We have seen that Mr. Churchill is in favor of the same proposal. Mines also are now national property in several countries, and there is nothing particularly radical or unacceptable to well-informed conservatives in the proposal to nationalize them elsewhere.

The seventh demand of the program was for "democratic political reforms." While the Independent Labour Party and some of its leaders are in favor of a complete program of democratic reforms, I have shown that others like Mr. MacDonald are directly opposed even to many modern democratic measures already won in other countries.

It would certainly seem that the social reformers, Mr. Carnegie and others, have as much right as the Socialists to claim such measures as all those outlined.

Many of the other reforms proposed by the Independent Labour Party are such as might readily find acceptance among the most conservative. Indeed in urging the policy of afforestation, as one means of helping in the solution of the unemployed problem, the party actually uses the argument that even Prussia, Saxony, and many other highly capitalistic governments are undertaking it; though it does not mention the reactionary purposes of these governments, as for example, in Hungary where it is proposed to use the government's new army of labor to build up a scientific system of breaking strikes. Afforestation would add to the general wealth of the country in the future, and would be of considerable advantage to the capitalist classes, which makes the largest uses of lumber. Such a policy could undoubtedly be devised in carrying out this work as would absorb a considerable portion of the unemployed, and, since unemployment is a burden to the community and troublesome in many ways, besides tending to bring about a general deterioration of the efficiency of the working class, it is also to the ultimate interest of the employers to adopt it.

A leading organ of British Socialism, the New Age, went so far as to say of the Budget of 1910 that it was almost as good "as we should expect from a Socialist Chancellor in his first year of office," and said that if Mr. Philip Snowden, were Chancellor, the Budget would have been little different from what it was.[127] And it is true that the principles of the Budget as interpreted by Mr. Snowden only a few years[Pg 153] ago in his booklet, "The Socialist Budget," are in nearly every instance the same, though they are to be somewhat more widely applied in this Socialist scheme. Of course all Socialists would have desired a smaller portion of the Budget to go to Dreadnoughts and a larger part to education, though, in view of the popularity of the Navy, it is doubtful whether Labour Party Socialist's would materially cut naval expenditure (see Chapter V). It must also be noted that the Socialists are wholly opposed to the increase of indirect taxation on tobacco and liquor, some four fifths of which falls on the shoulders of the workingman. But aside from these points, there is more similarity than contrast between the two plans.

Mr. Snowden declared that it was the intention of the Socialists to make the rich poorer and the poor richer, that they were going to use the power of taxation for that purpose, and that the Budget marked the beginning of the new era, an opinion in strange contrast with Premier Asquith's statement concerning the same Budget, for which he was responsible, that one of its chief purposes was "to increase the stability and security of property."

Indeed the word "Socialism" has been extended in England to include measures far less radical than those contemplated by the present government. The Fabian Society, the chief advocate of "municipal Socialism" and a professed and recognized Socialist organization, considers even the post office and factory legislation as being installments of Socialism, while the Labour Party would restrict the term to the nationalization or municipalization of industries—but the difference is not of very great importance. The latter class of reform will undoubtedly mark a revolution in the policy of the British government, but, as Kautsky says, this revolution may only serve "to Prussianize it," i.e. to introduce "State Socialism."

"The best government," says Mr. Webb, "is no longer 'that which governs least,' but 'that which can safely and advantageously administer most.'"

"Wherever rent and interest are being absorbed under public control for public purposes, wherever the collective organization of the community is being employed in place of individual efforts, wherever in the public interest, the free use of private land or capital is being further restrained—there one more step toward the complete realization of the Socialist Ideal is being taken."

[Pg 154]

The fight of the British Socialists has thus been directed from the first almost exclusively against the abstraction, "individualism," and not against the concrete thing, the capitalist class. John Morley had said that the early Liberals, Cobden, Bright, and others, were systematic and constructive, because they "surveyed society and institutions as a whole," because they "connected their advocacy of political and legal changes with theories of human nature," because they "considered the great art of government in connection with the character of man, his proper education, his potential capacities," and could explain "in the large dialect of a definite scheme what were their aims and whither they were going."

"Is there," Mr. Morley had asked, "any approach to such a body of systematic political thought in our own day?" Mr. Webb announced that the Fabians proposed to fill in this void. It was primarily system and order rather than any particular principle at which he aimed. The keynote of his system was to be opposition to the individualistic theory of the philosophic Liberals whom the Fabians hoped to succeed rather than opposition to the principles of capitalism, which lend themselves equally well either to an individualistic or to a collectivistic application.

Just as Mr. Webb is the leading publicist, so Mr. Bernard Shaw is the leading writer, among the exponents of Fabian Socialism. It is now more than twenty years since he also began idealizing the State, and he is doing the same thing to-day. "Who is the people? What is the people?" he asked in the Fabian Essays in 1889. "Tom we know, and Dick; also Harry; but solely and separately as individuals: as a trinity they have no existence. Who is their trustee, their guardian, their man of business, their manager, their secretary, even their stockholder? The Socialist is stopped dead at the threshold of practical action by this difficulty, until he bethinks himself of the State as the representative and trustee of the people."[128] It will be noticed that Mr. Shaw does not say the State may become the representative and trustee of the people, but that it is their representative. "Hegel," he continues, "expressly taught the conception of the perfect State, and his disciples saw that nothing in the nature of things made it possible or even difficult to make the existing State if not absolutely perfect, at least trustworthy;" and then, after alluding with the greatest brevity to the anti-democratic elements of the British government, Mr.[Pg 155] Shaw proceeds to develop at great length the wonderful possibilities of the existing State as the practically trustworthy trustee, guardian, man of business, manager, secretary, and stockholder of the people.[129]

Yet Mr. Shaw says that a Social-Democrat is one "who desires through democracy to gather the whole people into the State, so that the State may be trusted with the rent of the country, and finally with the land and capital and the organization of national industry." He reasons that the transition to Socialism through gradual extensions of democracy and State action had seriously begun forty-five years before the writing of the Essays, that is, in the middle of the nineteenth century (when scarcely one sixth of the adult male population of Great Britain had a vote, and when, through the unequal election districts, the country squires practically controlled the situation—W. E. W.). In Mr. Shaw's reasoning, as in that of many other British Socialists, a very little democracy goes a long way.[130]

Later Mr. Shaw repudiated democracy altogether, saying that despotism fails only for want of a capable benevolent despot, and that what we want nowadays is not a new or modern form of democracy, but only capable benevolent representatives. He shelved his hopes for the old ideal, government by the people, by opposing to it a new ideal of a very active and beneficent government for the people. In "Fabianism and the Empire" Shaw and his collaborators say frankly: "The nation makes no serious attempt to democratize its government, because its masses are still in so deplorable a condition that democracy, in the popular sense of government by the masses, is clearly contrary to common sense."[131]

Mr. H. G. Wells, long a member of the Fabian Society, has well summed up the character of what he calls this "opportunist Socialist group" which has done so much to shape the so-called British Socialism. He says that Mr. Sidney Webb was, during the first twenty years of his career "the prevailing Fabian."

"His insistence upon continuity pervaded the Society, was re-echoed and intensified by others, and developed into something like a mania for achieving Socialism without the overt change of any existing ruling body. His impetus carried this reaction against the crude democratic idea to its extremest opposite. Then arose Webbites to caricature Webb. From saying that the unorganized people[Pg 156] cannot achieve Socialism, they passed to the implication that organization alone, without popular support, might achieve Socialism. Socialism was to arrive as it were insidiously.

"To some minds this new proposal had the charm of a schoolboy's first dark lantern. Socialism ceased to be an open revolution, and become a plot. Functions were to be shifted, quietly, unostentatiously, from the representative to the official he appointed; a bureaucracy was to slip into power through the mechanical difficulties of an administration by debating representatives; and since these officials would, by the nature of their positions, constitute a scientific government as distinguished from haphazard government, they would necessarily run the country on the lines of a pretty distinctly undemocratic Socialism.

"The process went even farther than secretiveness in its reaction from the large rhetorical forms of revolutionary Socialism. There arose even a repudiation of 'principles' of action, and a type of worker which proclaimed itself 'Opportunist-Socialist.' This conception of indifference to the forms of government, of accepting whatever governing bodies existed and using them to create officials and 'get something done,' was at once immediately fruitful in many directions, and presently productive of many very grave difficulties in the path of advancing Socialism." (Italics mine.)[132]

Besides the obvious absurdities of such tactics, Mr. Wells points out that they ignored entirely that reconstruction of legislative and local government machinery which is very often an indispensable preliminary to Socialization. He is speaking of such Socialism when he says:—

"Socialism has concerned itself only with the material reorganization of Society and its social consequences, with economic changes and the reaction of these changes on administrative work; it has either accepted existing intellectual conditions and political institutions as beyond its control or assumed that they will obediently modify as economic and administrative necessity dictates.... Achieve your expropriation, said the early Fabians, get your network of skilled experts over the country, and your political forms, your public opinion, your collective soul will not trouble you."[133]

Here Mr. Wells shows that, while the practical difficulties of making collectivism serve all the people were ignored on the one hand, the first need of the people, political education, was neglected on the other. It is true that during the first few years of its existence the Fabian Society made a great and successful effort to educate public opinion in a Socialist direction, but soon its leading members deserted all such larger work, to support various administrative "experiments."

[Pg 157]

Mr. Wells referred to this same type of Socialism in his "Misery of Boots":—

"Let us be clear about one thing: that Socialism means revolution, and that it means a change in the everyday texture of life. It may be a very gradual change, but it will be a very complete one. You cannot change the world, and at the same time not change the world. You will find Socialists about, or at any rate men calling themselves Socialists, who will pretend that this is not so, who will assure you that some odd little jobbing about municipal gas and water is Socialism, and backstairs intervention between Conservative and Liberal the way to the millennium.... Socialism aims to change, not only the boots on people's feet, but the clothes they wear, the houses they inhabit, the work they do, the education they get, their places, their honors, and all their possessions. Socialism aims to make a new world out of the old. It can only be attained by the intelligent, outspoken, courageous resolve of a great multitude of men and women. You must get absolutely clear in your mind that Socialism means a complete change, a break with history, with much that is picturesque; whole classes will vanish. The world will be vastly different, with different sorts of houses, different sorts of people. All the different trades and industries will be changed, the medical profession will be carried on under different conditions, engineering, science, the theatrical trade, the clerical trade, schools, hotels, almost every trade, will have to undergo as complete an internal change as a caterpillar does when it becomes a moth ... a change as profound as the abolition of private property in slaves would have been in ancient Rome or Athens." (The italics are mine.)

Here is the exact opposite view to that which has been taught for many years by the Fabian Society to no small audience of educated Englishmen (and Americans). For there are comparatively few who have neither read any of the Fabian pamphlets nor seen or read any of Bernard Shaw's plays in which the same standpoint is represented.

Mr. John A. Hobson classes the Socialist and non-Socialist reformers of Great Britain together as regards their opportunism. Though a Liberal himself, he objects that some Socialists are not radical enough, and that "the milder and more opportunist brand suffer from excessive vagueness." Of the prevailing tendency towards opportunism, Mr. Hobson writes:—

"This revolt against ideas is carried so far that able men have come seriously to look upon progress as a matter for the manipulation of wirepullers, something to be 'jobbed' in committee by[Pg 158] sophistical motions or other clever trickery. Great national issues really turn, according to this judgment, upon the arts of political management, the play of the adroit tactician and the complete canvasser. This is the 'work' that tells; elections, the sane expression of the national will, are won by these and by no other means.

"Nowhere has this mechanical conception of progress worked more disastrously than in the movement towards Collectivism. Suppose that the mechanism of reform were perfected, that each little clique of specialists and wirepullers were placed at its proper point in the machinery of public life, will this machinery grind out progress? Every student of industrial history knows that the application of a powerful 'motor' is of vastly greater importance than the invention of a special machine. Now, what provision is made for generating the motor power of progress in Collectivism? Will it come of its own accord? Our mechanical reformer apparently thinks it will. The attraction of some present obvious gain, the suppression of some scandalous abuse of monopolist power by a private company, some needed enlargement of existing Municipal or State enterprise by lateral expansion—such are the sole springs of action. In this way the Municipalization of public services, increased assertion of State control over mines, railways, and factories, the assumption under State control of large departments of transport trade, proceed without any recognition of the guidance of general principles. Everywhere the pressure of special concrete interests, nowhere the conscious play of organized human intelligence!...

"My object here is to justify the practical utility of 'theory' and 'principle' in the movement of Collectivism by showing that reformers who distrust the guidance of Utopia, or even the application of economic first principles, are not thrown back entirely upon that crude empiricism which insists that each case is to be judged separately and exclusively on its own individual merits."

Mr. Hobson then proposes his collectivist program, which he rightly considers to be not Socialist but Liberal merely—and we find it more collectivistic, radical, and democratic than that of many so-called Socialists. Moreover it expresses the views of a large and growing proportion of the present Liberal Party. Then he concludes as follows:—

"If practical workers for social and industrial reforms continue to ignore principles, the inevitable logic of events will nevertheless drive them along the path of Collectivism here indicated. But they will have to pay the price which shortsighted empiricism always pays; with slow, hesitant, and staggering steps, with innumerable false starts and backslidings, they will move in the dark along an unseen track towards an unseen goal. Social development may be conscious or unconscious. It has been mostly unconscious in the past, and therefore slow, wasteful, and dangerous. If we desire it[Pg 159] to be swifter, safer, and more effective in the future, it must become the conscious expression of the trained and organized will of a people not despising theory as unpractical, but using it to furnish economy in action."[134]

Practically all "State Socialists" hold a similar view to that of Shaw and Webb. Mr. Wells even, in his "First and Last Things," has a lengthy attack on what he calls democracy, when he tells us that its true name is "insubordination," and that it is base because "it dreams that its leaders are its delegates." His view of democracy is strictly consistent with his attitude toward the common man, whom he regards as "a gregarious animal, collectively rather like a sheep, emotional, hasty, and shallow."[135] Democracy can only mean, Mr. Wells concludes, that power will be put into the hands of "rich newspaper proprietors, advertising producers, and the energetic wealthy generally, as the source flooding the collective mind freely with the suggestions on which it acts."

The New Age, representing the younger Fabians, also despairs of democracy and advocates compromise, because "the democratic party have failed so far to be indorsed and inforced by popular consent." It acknowledges that the power of the Crown is "great and even temporarily overwhelming," but discourages opposition to monarchy for the reason that monarchy rests on the ignorance and weakness of the people and not on sheer physical coercion.[136] The New Age opposes those democratic proposals, the referendum and proportional representation, considers that the representative may so thoroughly embody the ideals and interests of the community as to become "a spiritual sum of them all," and admits that this ideal of a "really representative body of men" might be brought about under an extremely undemocratic franchise.[137] "Outside of a parish or hamlet the Referendum," it says, "is impossible. To an Empire it is fatal."[138] And finally, this Socialist organ is perfectly ready to grant another fifty million pounds for the navy, provided the money is drawn from the rich, as it finds that "a good, thumping provision for an increased navy would do a great deal to sweeten a drastic budget for the rich, as well as strengthen the appeal of the party which professes to be advancing the cause of the poor." Imperialism and militarism, which in most countries constitute the chief form in which capitalism is being fought by Socialists, are actually[Pg 160] considered as of secondary importance, on the ground that through acquiescing in them it becomes possible to hasten a few reforms, such as have already been granted by the capitalists of several other countries without any Socialist surrender and even without Socialist pressure of any kind.

The recent appeal of the New Age, for "a hundred gentlemen of ability" to save England, its regret that no truly intelligent and benevolent "governing class" or "Platonic guardians" are to be found, and its weekly disparagement of democracy do not offer much promise that it will soon turn in the radical direction. On the contrary it predicts that the firm possession of political power by the wealthy classes is foredoomed to result, as in the Roman Empire, in the creation of two main classes, each of which must become corrupt, "the one by wealth and the other by poverty," and that finally the latter must become incapable of corporate resistance. The familiar and scientifically demonstrated fact of the physical and moral degeneration of a considerable part of the British working people doubtless suggests to many persons such pessimistic conclusions. "It is hopeless in our view," the New Age concludes, "to expect that the poor and ignorant, however desperate and however numerous, will ever succeed in displacing their wealthy rulers. No slave revolt in the history of the world has ever succeeded by its own power. In these days, moreover, the chances of success are even smaller. One machine gun is equal to a mob."[139]

Indeed the distrust of democracy is so universal among British Socialists that Belloc, Chesterton and other Liberals accuse them plausibly, but unjustly, of actually representing an aristocratic standpoint. In an article entitled "Why I Am Not A Socialist," Mr. Chesterton expresses a belief, which he says is almost unknown among the Socialists of England, namely, a belief "in the masses of the common people."[140] Mr. Belloc, in a debate against Bernard Shaw, predicted that Socialism, if it comes in England, will probably be simply "another of the infinite and perpetually renewed dodges of the English aristocracy."

It may be well doubted if any of the more important of the world's conservative, aristocratic, or reactionary forces (except the doctrinaire Liberals) are opposed to Socialism as defined by the Fabian Society, i.e. a gradual movement in the direction of collectivism. Not only Czar and Kaiser[Pg 161] but even the Catholic Church may be claimed as Socialistic by this standard. Mr. Hubert Bland, one of the original Fabian Essayists and a very influential member of the Society, himself a Catholic, actually asserts that the Church never has attacked Fabian or true Socialism. In view of the fact that the Church is at war with the Socialist Parties of Italy, France, Belgium, Austria, Germany, the United States, and every country where both the Church and the Socialists are a political power, in view of the wholesale and most explicit denunciations by Popes and high ecclesiastics, and the war being waged against the Socialist Parties at every point, Mr. Eland's argument has some interest.

Having defined Socialism as "the increase of State rights" and "the tendency to limit the proprietary rights of the individual and to widen the proprietary rights and activities of the community" or as the "control of property by the State and municipality," Mr. Bland has, of course, no difficulty in showing that the Catholic Church has never opposed it—though many individualistic Catholics have done so.

"No fewer than two Popes," writes Mr. Bland, "are said to have condemned Socialism in authoritative utterances, but when I examine and analyze these condemnations, I find it is not Socialism in the sense I have defined it here, that is condemned."[141] It is indeed true that few of the most bitter and persistent enemies of the Socialist movement condemn "Socialism" as defined by Mr. Bland and his "State Socialist" associates.

This capitalistic collectivism promoted by the Fabian Society has embodied itself practically in the movement towards "municipal Socialism" of which so much was heard some years ago, first in Great Britain and later in other countries. It is now from ten to twenty years since many British cities, notably Glasgow, began municipal experiments on a large scale that were branded by Socialists and non-Socialists alike, as municipal Socialism. The first of these experiments included not only the municipalization of street railways, electric light and current, and so on, but even the provision of municipal slaughter houses, bathing establishments, and outdoor amusements. The later stages have developed in a somewhat different direction. The chief reforms under discussion everywhere seem now to be the proposals that the municipalities should provide housing[Pg 162] accommodations for the poorer elements of the population, and that the health of the children should be looked after, even to the extent of providing free lunches in public schools. If less had been heard of "municipal Socialism" in the last year or two, this is merely because reforms on a national scale have for the moment received the greater share of public attention. This does not necessarily mean that the national reforms are more important than the municipal, but only that the latter came first because they were easier to inaugurate, though perhaps more difficult to carry to a successful conclusion.

But the first popularity of the municipal reform movement, both in Great Britain and in other countries, has received at least a temporary setback as the relations between this "municipal Socialism" and taxation were recognized. Both the non-taxpaying working people and the small taxpaying middle class saw that the profits of the new municipal enterprises went to a considerable extent towards decreasing the taxation of the well-to-do instead of conferring benefits on the majority. This might appear strange, since under universal suffrage the non-taxpaying and non-landowning majority would be expected to dominate. But in Great Britain, as well as elsewhere, central governments, in the firm control of taxpayers and landowners, exercise a strict control over the municipalities, so that this kind of reform will prove advantageous chiefly to the landlords, by enabling them to raise rents in proportion to the benefits gained by tenants; and to the taxpaying minority, by making it possible to use the profits of municipal undertakings for the purpose of reducing taxes.

The tendency toward the extension of municipal enterprises to be noted in all the important cities of the world, is hastened by the public belief that there is no other possible means of preventing the exploitation of all classes, and consequent widespread injury to trade, building, and industry in general, by public service corporations. But it must be observed that whatever municipalization there is will continue to be under the control of the taxpayers, landowners, and business men and largely in their interest as long as national governments remain in capitalist hands.

The national social reform administrations that are coming into power in so many countries are encouraging various forms of taxpayers' "municipal Socialism." The [Pg 163]ultraconservative governments of Germany, Austria, and Belgium all permit the cities to engage even in the public feeding of school children, while the reactionary national government of Hungary has undertaken to provide for the housing of 25,000 working people at Budapest. The conservative London Daily Mail cries out that the Hungarian minister, Dr. Wekerle has "stolen a march on the Socialists," but that it is the "right sort of Socialism," and that "it has been left to the leader of the privileged Parliament [the Hungarian Parliament representing not the small capitalists, but the landed nobility and gentry] to make the first start." And there is little doubt that both the provision of houses for the working people and the public feeding of school children rest on precisely the same principles as the social reforms now being undertaken by national governments, such as that of Great Britain, and are, indeed, the "right sort of Socialism" from the capitalist standpoint.

Taking the municipal reformer as a type of the so-called Socialist, Mr. Belloc, a prominent Liberal Member of Parliament and an anti-Socialist, says that "in the atmosphere in which he works and as regards the susceptibilities which he fears to offend," that the municipal Socialist is entirely of the capitalist class. "You cannot make revolutions without revolutionaries," he continues, "and anything less revolutionary than your municipal reformer never trod the earth. The very conception is alien to this class of persons; usually he is desperately frightened as well. Yet it is quite certain that so vast a change as Socialism presupposes cannot be carried out without hitting. When one sees it verbally advocated (and in practice shirked) by men who have never hit anything in their lives, and who are even afraid of a scene with a waiter in a restaurant, one is not inclined to believe in the reality of the creed." Mr. Belloc concludes finally that all that this kind of Socialism has done during its moments of greatest activity has tended merely to recognize the capitalist more and more and to stereotype the gulf between him and the other classes.[142]

And just as Mr. Belloc has reproached the Socialists for their conservatism, so the New Age and other mouthpieces of Socialism condemn the non-Socialist radicals who constitute one of the chief elements among the supporters of the present government (including Mr. Belloc) as being too radical. In the literature of the Fabian Society also, the[Pg 164] accusation against the Liberals of being too revolutionary is quite frequent. Years ago Mr. Sidney Webb accused them of having "the revolutionary tradition in their bones," of conceiving society as "a struggle of warring interests," and said that they would reform nothing "unless it be done at the expense of their enemies." While this latter accusation is scarcely true, either of the British Liberals or of the revolutionary Socialists of the Continent, it is obvious that the most important reforms of the Socialists, those to which greatest efforts must necessarily be given, those which alone must be fought for, are precisely the ones that must be brought about "at the expense of the enemy."

In no other country has public opinion either within the Socialist movement or outside of it so completely despaired of democracy and the people. In none has the spirit of popular revolt and militant radicalism been so long dormant. Yet, there can be little doubt that the British masses, encouraged by those of France, Germany, and other countries, will one day recover that self-confidence and self-assertion they seem to have lost since the times of the "Levellers" of the Commonwealth, two hundred and fifty years ago. It may take years before this new revolutionary movement gains the momentum it already possesses in Germany and France. But the great strikes of 1910, 1911, and 1912 (see Part III, Chapter VI) and the changes in politics that have accompanied these strikes show that this movement has already begun. There is already a strong division of opinion within the Socialistic "Independent Labour Party," and this organization has also taken issue on several important matters with the non-Socialist Labour Party, of which, however, it is still a part.

After the unsatisfactory results of the elections of 1910 the conflict within the Independent Labour Party became more acute than ever. Mr. Barnes, then chairman of the Labour Party itself, and Mr. Keir Hardie, the chief figure in its Socialistic (Independent Labour Party) section, criticized severely the tactics that had been followed by the majority, led also by two members of the same "Socialistic" section, Mr. MacDonald and Mr. Snowden. It is true that the difference was not very fundamental, but it is interesting to note that MacDonald and Snowden and their avowed non-Socialist trade-union allies were accused of giving so much to the Liberals as even to weaken the position of the Labour[Pg 165] Party itself to say nothing of the still greater inconsistency of such compromises with anything approaching Socialism. Mr. Barnes and Mr. Hardie pointed out that the timid tactics pursued had endangered not only the fight against the House of Lords, but also the effort to keep down the naval budget and the proposed solution of the unemployment question that was to have acknowledged "the right to work." That is, Mr. MacDonald and Mr. Snowden had been so anxious to please the Liberal government, that they had risked even these moderate reforms, which were favored by many anti-Socialistic Radicals.

At the "Independents'" 1911 conference at Birmingham, again, a motion was proposed by the radical element, Hall, MacLachlan, and others, which demanded that this Party should cease voting perpetually for the government merely because the government claimed that every question required a vote of confidence, and that they should put their own issues in the foreground, and vote on all others according to their merits. This very consistent resolution, in complete accord with the position of Socialist Parties the world over, was however voted down by the "Independents," as it had been shortly previously at the conference of the non-Socialist Labour Party of which they are a section. The executive committee brought in an amendment in the contrary sense to that of the radical resolution, and this amendment was ably supported by MacDonald. Hardie and Barnes, however, persuaded the Congress to vote down both resolution and amendment on the ground that the "Independents" in Parliament ought to support the Liberal and Radical government, except in certain crises—as illustrations of which Barnes mentioned the Labourites' opposition to armaments and their demand for the right to work. Keir Hardie also declared that he was not satisfied with the conduct of the Labour Party in Parliament; his motion condemning the government's action in the Welsh coal strike, for example, had secured only seventeen of their forty votes. He claimed that the influence of the Liberals over the party was due, not to their social reform program, but to their passing of the trade-union law permitting picketing after the elections of 1906, and that he feared them more than he did the Conservatives. However, he thought that this Liberal influence was now on the decline, and said that if the Liberals attempted to strengthen the House of Lords, as suggested in the preamble[Pg 166] to their resolution, abolishing its veto power, the Labour Party would be ready to vote against the government.

The Labourites did, as a matter of fact, vote against this preamble, and the government was saved only because Balfour and the Conservatives lent it their support. It still remains to be seen if the Labourites will detach themselves from the Liberals on a really crucial question, one on which they know the Conservatives will remain in the opposition—in other words, whether they will do the only thing that can possibly show any real independence or make them a factor of first importance in the nation's politics, that is, overturn a government. Doubtless this day will come, but it does not seem to be at hand.

This discussion was much intensified by the decision of the executive of the Labour Party (in order to retain the legal right to use trade-union funds for political purposes) to relieve Labour members of Parliament of their pledge to follow a common policy. This decision again was opposed by the majority of the "Independent" section including Hardie and Barnes, but favored by a minority, led by MacDonald. With the aid of the non-Socialistic element, however, it was carried by a large majority at the Labour Party's conference in 1911. Thus while one element is growing more radical another is growing more conservative and the breach between the Independents and the other Labourites is widening.

Perhaps the closest and most active associate of Mr. MacDonald at nearly every point has been Mr. Philip Snowden. Even Mr. Snowden finally declared that a recent action of the Labour Party, when all but half a dozen of its members voted with the Liberals, against what Mr. Snowden states to have been the instructions of the Party conference, "finally completes their identity with official Liberalism." Mr. Snowden asserted that if the "Independents" would stand this they would stand anything, that the time had come to choose between principle and party, and that he was not ready to sacrifice the former for the latter.

Shortly after this incident, which Mr. MacDonald attributed to a misunderstanding, came the great railway strike and its settlement, in which he and Mr. Lloyd George were the leading factors. Received with enthusiasm by the Liberal press, this settlement was bitterly denounced by the Labour Leader, the official organ of the "Independents."[Pg 167] Mr. MacDonald on the other hand expressed in the House of Commons deep satisfaction with the final attitude of the government and predicted that if it was maintained no such trouble need arise again in a generation. No statement could have been more foreign to the existing feeling among the workers, a part of whom it will be remembered failed to return to work for several days after the settlement. The "Independents" as the political representatives of the more radical of the unionists, naturally embody this discontent, while the Labour Party, being partly responsible for the settlement, becomes more than ever the semi-official labor representative of the government—a divergence that can scarcely fail to lead to an open breach.

It was as a result of all of these critical situations, especially the great railway strike and its sequels, that an effort has been made to form a "British Socialist Party" to embrace all Socialist factions, and to free them from dependence on the Labour Party. It has succeeded in uniting all, except the Independent Labour Party and the Fabian Society, and includes even a number of local branches (though only a small minority of the total number) of the former organization. This Party has issued an outright revolutionary declaration of principles. Mr. Quelch, editor of the Social Democratic organ, Justice, had proposed the following declaration of principles, which was far in advance of the present position of the Independent Labour Party, if somewhat ambiguous in the clause printed in italics:—

"The Socialist Party is the political expression of the working-class movement, acting in the closest coöperation with industrial organizations for the socialization of the means of production and distribution—that is to say, the transformation of capitalist society into a collective or communist society. Alike in its object, its ideals, and in the means employed, the Socialist party, though striving for the realization of immediate social reforms demanded by the working class, is not a reformist but a revolutionary party, which recognizes that social freedom and equality can only be won by fighting the class war through to the finish, and thus abolishing forever all class distinctions."[143]

The phrase in italics was opposed by several of the revolutionary representatives of Independent Labour Party branches who were present as delegates and others, and by a narrow vote was expunged. The declaration as it now stands is as radical as that of any Socialist Party in the world.[Pg 168] The new organization is already making some inroads among the membership of the Independent Labour Party and there seems to be a chance that it will succeed before many years in its attempt to free that organization and British Socialism generally from their dependence on the Labour and Liberal Parties.

Perhaps the contrast between "Labour" Party and Socialist Party methods and aims comes out even more clearly in Australasia than in Great Britain. A typical view of the New Zealand reforms as being steps towards Socialism is given by Thomas Walsh, of the Auckland Voice of Labour (see New York Call, September 10, 1911).

After giving a list of things "already accomplished," including a mention of universal suffrage, state operation of the post office, prohibition of child labor, "free and compulsory secular education up to the age of fourteen years," and "State-assisted public hospitals"—besides the other more distinctively capitalist collectivist reforms, such as government railways, mines, telegraphs, telephones, parcel post, life and fire insurance, banks and old-age pensions and municipal ownership, Mr. Walsh concludes:—

"These are some of the things already done: there is a long list more. The revolutionary seize and hold group may label them palliatives, may howl down as red herrings across the scent, may declare that they obscure main issues, but I want to know which of the reforms they want to see abolished, which of them are useless, which of them are not necessary? Contrary to the fond delusion of the revolutionary group, the defenders of the present system don't and won't hand out anything; everything obtained is wrenched from them; and in the political arena, armed with the ballot box and the knowledge of its use, there is nothing that labor cannot obtain.

"Have the reforms secured blurred the main issue, have we lost sight of the goal? The objective of the New Zealand Labour Party to-day is the 'securing to all of the full value of their labour power by the gradual public ownership of all the means of production, distribution, and exchange.' Contrary to your critic's opinion, what has already been done has but whetted the appetite for more, and to-day New Zealand labour is marshaling its forces for further assaults on the fortress of the privileged.

"Every reform we have secured has been a step toward the goal; every step taken means one step less to take. The progressive legislation has not sidetracked the movement—it has cleared the road for further advancement.

"In New Zealand the enumerated reforms are law—made law in defiance of the wealth-owning class. At the moment labour does not[Pg 169] possess the power to administer the laws, but far from that being an argument to abandon the law, it has convinced New Zealand labor that the administrative control must be got possession of, and through the ballot box New Zealand labour will march to get that control. Given control of the national and local government, the food supplies can be nationalized and more competitive State-owned industries established. And by labour administration of the arbitration court the prices and wages can be so adjusted that the worker can buy out of the market all that his labor put into it.

"To the brothers in America I say, Go on. Don't waste time arguing about economic dogma. Get a unified labor movement and throw the whole industrial force into the political arena. Anything less than the whole force means delay. The whole force means victory. We have progressed. We have experimented. We have proved. Yours it is but to imitate—and improve."

I have put in italics the most important of Mr. Walsh's conclusions that are contradicted by the evidence I have given in this chapter and elsewhere in the present volume. The Socialist view of the last two statements may be best shown by a quotation from Mr. Charles Edward Russell, who is the critic referred to by Mr. Walsh, and has undertaken with great success to uproot among the Socialists of this country the fanciful pictures and fallacies concerning Australasia that date in this country from the time of the radical and fearless but uncritical and optimistic books of Henry D. Lloyd ("A Country Without Strikes," etc.). Mr. Russell shows that a Labor Party as in Australia may gain control of the forms of government, without actually gaining the sovereignty over society or industry. (See the International Socialist Review, September, 1911.) In an article that has made a greater sensation in the American movement than any that has yet appeared (with the exception of Debs's "Danger Ahead," quoted in the next chapter), Mr. Russell writes:—

"A proletarian movement can have no part, however slight, in the game of politics. The moment it takes a seat at that grimy board is the moment it dies within. After that, it may for a time maintain a semblance of life and motion, but in truth it is only a corpse.

"This has been proved many times. It is being proved to-day in Great Britain. It has been proved recently and most convincingly in the experience of Australia and New Zealand.

"In Australia the proletarian movement that began eighteen years ago has achieved an absolute triumph—in politics. Under the name of the Labor Party it has won all that any political [Pg 170]combination can possibly win anywhere. It has played the political game to the limit and taken all the stakes in sight. The whole national government is in its hands. It has attained in fullest measure to the political success at which it aimed. It not merely influences the government; it is the government.

"To make the situation clear by an American analogy, let us suppose the Socialists of America to join hands with the progressive element in the labor unions and with the different groups of advanced radicals. Let us suppose a coalition party to be formed called the Labor Party. Let us suppose this to have entered the State and national campaigns, winning at each successive election more seats in Congress, and finally, after sixteen years of conflict, electing its candidate for President and a clear majority of the Senate and the House of Representatives. This would be admitted to be the summit of such a party's aims and to mean great and notable success; and it would closely parallel the situation in Australia.

"Exactly such a Labor Party has administered the affairs of Australia since April, 1910. Its triumph was the political success of a proletarian movement that was steered into the political game. What has resulted?

"This has resulted, that the Labor Party of Australia is now exactly like any other political party and means no more to the working class except its name. Constituted as the political party of that class, it has been swept into power by working-class votes, and after almost a year and a half of control of national affairs, it can show nothing more accomplished for working-class interests than any other party has accomplished. The working class under the Labor Party is in essentially the same condition that it has been in under all the other administrations, nor is there the slightest prospect that its condition will be changed.

"In other words, the whole machine runs on exactly as before, the vast elaborated machine by which toilers are exploited and parasites are fed. Once in power, the Labor Party proceeded to do such things as other parties had done for the purpose of keeping in power, and it is these things that maintain the machine.

"On the night of the election, when the returns began to indicate the result, the gentleman that is now Attorney-General of the Commonwealth was in the Labor Party headquarters, jumping up and down with uncontrollable glee.

"'We're in!' he shouted. 'We're in! We're in!'

"That was an excellent phrase and neatly expressed the whole situation. The Labor Party was in; it had won the offices and the places of power and honor; it had defeated the opponents that had often defeated it. It was 'in.' The next thing was to keep in, and this is the object that it has assiduously pursued ever since. 'We are in; now let us stay in. We have the offices; let us keep the offices.'

"The first thing it does is to increase its strength with the [Pg 171]bourgeoisie and the great middle class always allied with its enemies. To its opponents in the campaigns the handiest weapon and most effective was always the charge that the Labor Party was not patriotic, that it did not love the dear old flag of Great Britain with the proper degree of fervor and ecstasy; that it was wobbly on the subject of war and held strange, erratic notions in favor of universal peace instead of yelling day and night for British supremacy whether right or wrong—which is well known to be the duty of the true and pure patriot. This argument was continually used and had great effect.

"Naturally, as the Labor Party was now in and determined to stay in, the wise play indicated in the game upon which it had embarked, was to disprove all these damaging allegations and to show that the Labor Party was just as patriotic as any other party could possibly be. So its first move was to adopt a system of universal military service, and the next to undertake vast schemes of national defense. The attention and admiration of the country were directed to the fact that the Labor administration was the first to build small arms factories, to revise the military establishment so as to secure the greatest efficiency and to prepare the nation for deeds of valor on the battlefield.

"At the time this was done there was a crying need for new labor legislation; the system or lack of system of arbitrating labor disputes was badly in need of repairs; workingmen were being imprisoned in some of the States for the crime of striking; the power of government was often used to oppress and overawe strikers, even when they had been perfectly orderly and their cause was absolutely just. These with many other evils of the workingman's condition were pushed aside in order to perfect the defense system and get the small arms factories in good working order, for such were the plain indications of the game that the Labor Party had started out to play. 'We're in; let us stay in.'

"Meantime there remains this awkward fact about the condition of the working class. It is no less exploited than before. It is as far, apparently, from the day of justice under the rule of the Labor Party as it was under the rule of the Liberal Party. What are you going to do about that? Why, there is nothing to be done about that as yet. The country, you see, is not ready for any radical measures on that subject. If we undertook to make any great changes in fundamental conditions, we should be defeated at the next election and then we should not be in, but should be out. True, the cost of living is steadily increasing, and that means that the state of the working class is inevitably declining. True, under the present system, power is steadily accumulating in the hands of the exploiters, so that if we are afraid to offend them now, we shall be still more afraid to offend them next year and the next. But the main thing is to keep in. We're in; let us stay in.

[Pg 172]

"Hence, also, the Labor administration has been very careful not to offend the great money interests and powerful corporations that are growing up in the country. These influences are too powerful in elections. Nothing has been done that could in the least disturb the currents of sacred business. It was recognized as not good politics to antagonize business interests. Let the administration keep along with the solid business interests of the country, reassuring them for the sake of the general prosperity and helping them to go on in the same, safe, sane, and conservative way as before. It was essential that business men should feel that business was just as secure under the Labor administration as under any other. Nothing that can in the least upset business, you know. True, this sacred business consists of schemes to exploit and rob the working class, and true, the longer it is allowed to go upon its way the more powerful it becomes and the greater are its exploitations and profits. But if we do anything that upsets business or tends to disturb business confidence, that will be bad for us at the next election. Very likely we shall not be able to keep in. We are in now; let us stay in, and have the offices and the power.

"Therefore, it is with the greatest pride that the Labor people point out that under the Labor administration the volume of business has not decreased, but increased; the operations of the banks have shown no falling off; they are still engaged as profitably as of yore in skinning the public; the clearings are in an eminently satisfactory condition; profits have suffered no decline; all is well in our marts of trade. The old machine goes on so well you would never know there had been any change in the administration. Business men have confidence in our Party. They know that we will do the right thing by them, and when in the next campaign the wicked orators of the opposition arise and say that the Labor Party is a party of disturbers and revolutionists, we can point to these facts and overwhelm them. And that will be a good thing, because otherwise we might not be able to keep in. We're in; let us stay in.

"If the capitalists had designed the very best way in which to perpetuate their power, they could not have hit upon anything better for themselves than this. It keeps the working class occupied, it diverts their minds from the real questions that pertain to their condition; it appeals to their sporting instincts; we want to win, we want to cheer our own victory, we want to stay in; this is the way to these results. And meantime the capitalists rake off the profits and are happy. We are infinitely better off in the United States. The Labor Party of Australia has killed the pure proletarian movement there. At least we have the beginnings of one here. If there had been no Labor Party, there would now be in Australia a promising working-class movement headed towards industrial emancipation. Having a Labor Party, there is no such movement in sight....

[Pg 173]

"You say: Surely it was something gained in New Zealand to secure limited hours of employment, to have sanitary factories, clean luncheon rooms, old-age pensions, workingmen's compensation. Surely all these things represented progress and an advance toward the true ideal.

"Yes. But every one of these things has been magnified, distorted and exaggerated for the purpose and with the result of keeping the workingman quiet about more vital things. How say you to that? Every pretended release from his chains has been in fact a new form of tether on his limbs. What about that? I should think meanly of myself if I did not rejoice every time a workingman's hours are reduced or the place wherein he is condemned to toil is made more nearly tolerable. But what shall we conclude when these things are deliberately employed to distract his thoughts from fundamental conditions and when all this state of stagnation is wrought by the alluring game of politics?

"I cannot help thinking that all this has or ought to have a lesson for the Socialist movement in America. If it be desired to kill that movement, the most effective way would be to get it entangled in some form of practical politics. Then the real and true aim of the movement can at once be lost sight of and this party can go the way of every other proletarian party down to the pit. I should not think that was a very good way to go.

"When we come to reason of it calmly, what can be gained by electing any human being to any office beneath the skies? To get in and keep in does not seem any sort of an object to any one that will contemplate the possibilities of the Coöperative Commonwealth. How shall it profit the working class to have Mr. Smith made sheriff or Mr. Jones become the coroner? Something else surely is the goal of this magnificent inspiration. In England the radicals have all gone mad on the subject of a successful parliamentary party, the winning of the government, the filling of offices, and the like. I am told that the leaders of the coalition movement have already picked out their prime minister against the day when they shall carry the country and be in. In the meantime they, too, must play this game carefully, being constantly on their guard against doing anything that would alarm or antagonize the bourgeoisie and sacred businesses and telling the workers to wait until we get in. I do not see that all this relieves the situation in Whitechapel or that any fewer men and women live in misery because we have a prospect of getting in.

"Furthermore, to speak quite frankly, I do not see where there is a particle of inspiration for Americans in any of these English-speaking countries. So far as I can make out the whole of mankind that dwells under the British flag is more or less mad about political success, Parliament and getting in. They say in New Zealand that the government can make a conservative of any radical, if he[Pg 174] threatens to become dangerous, by giving him some tin-horn honor or a place in the upper chamber. In England we have seen too often that the same kind of influences can silence a radical by inviting him to the king's garden party or allowing him to shake hands with a lord. I do not believe we have anything to learn from these countries except what to avoid."

[Pg 175]

CHAPTER IV

"REFORMISM" IN THE UNITED STATES

Because of our greater European immigration and more advanced economic development, the Socialist movement in this country, as has been remarked by many of those who have studied it, is more closely affiliated with that of the continent of Europe than with that of Great Britain.

The American public has been grievously misinformed as to the development of revolutionary Socialism in this country. A typical example is the widely noticed article by Prof. Robert F. Hoxie, entitled, "The Rising Tide of Socialism."

After analyzing the Socialist vote into several contradictory elements, Professor Hoxie concludes:—

"There seems to be a definite law of the development of Socialism which applies both to the individual and to the group. The law is this: The creedalism and immoderateness of Socialism, other things being equal, vary inversely with its age and responsibility. The average Socialist recruit begins as a theoretical impossibilist and develops gradually into a constructive opportunist. Add a taste of real responsibility and he is hard to distinguish from a liberal reformer."[144]

On the contrary, the "theoretical impossibilists," however obstructive, have never been more than a handful, and the revolutionists, in spite of the very considerable and steady influx of reformers into the movement, have increased still more rapidly. That is, revolutionary Socialism is growing in this country—as elsewhere—and a very large and increasing number of the Socialists are become more and more revolutionary. From the beginning the American movement has been radical and the "reformists" have been heavily outvoted in every Congress of the present Party—in 1901, 1904, 1908, and 1910, while the most prominent revolutionist, Eugene V. Debs, has been its nominee for President at each Presidential election, since its foundation (1900, 1904, and 1908).[145]

[Pg 176]

Aside from a brief experience with the so-called municipal Socialism in Massachusetts in 1900 and 1902, the national movement gave little attention to the effort to secure the actual enactment of immediate reforms until the success of the Milwaukee Socialists (in 1910) in capturing the city government and electing one of its two Congressmen. There had always been a program of reforms indorsed by the Socialists. But this program had been misnamed "Immediate Demands," as the Party had concentrated its attention almost exclusively on its one great demand, the overthrow of capitalist government.

In the fall elections of 1910 it was observed for the first time that certain Socialist candidates in various parts of the country ran far ahead of the rest of the Socialist ticket, and that some of those elected to legislatures and local offices owed their election to this fact. This appeared to indicate that these candidates had bid for and obtained a large share of the non-Socialist vote. A cry of alarm was thereupon raised by many American Socialists. The statement issued by Mr. Eugene V. Debs on this occasion, entitled "Danger Ahead," was undoubtedly representative of the views of the majority. As Mr. Debs has been, on three occasions, the unanimous choice of the Socialist Party of the United States as its candidate for the Presidency, he remains unquestionably the most influential member of the Party. I, therefore, quote his statement at length, as the most competent estimate obtainable of the present situation as regards reformism in the American Socialist movement:—

"The danger I see ahead," wrote Mr. Debs, "is that the Socialist Party at this stage, and under existing conditions, is apt to attract elements which it cannot assimilate, and that it may be either weighted down, or torn asunder with internal strife, or that it may become permeated and corrupted with the spirit of bourgeois reform to an extent that will practically destroy its virility and efficiency as a revolutionary organization.

[Pg 177]

"To my mind the working-class character and the revolutionary integrity of the Socialist Party are of the first importance. All the votes of the people would do us no good if our party ceased to be a revolutionary party or became only incidentally so, while yielding more and more to the pressure to modify the principles and program of the Party for the sake of swelling the vote and hastening the day of its expected triumph.... The truth is that we have not a few members who regard vote getting as of supreme importance, no matter by what method the votes may be secured, and this leads them to hold out inducements and make representations which are not at all compatible with the stern and uncompromising principles of a revolutionary party. They seek to make the Socialist propaganda so attractive—eliminating whatever may give offense to bourgeois sensibilities—that it serves as a bait for votes rather than as a means of education, and votes thus secured do not properly belong to us and do injustice to our Party as well as those who cast them.... The election of legislative and administrative officers, here and there where the Party is still in a crude state and the members economically unprepared and politically unfit to assume the responsibilities thrust upon them as the result of popular discontent, will inevitably bring trouble and set the Party back, instead of advancing it, and while this is to be expected and is to an extent unavoidable, we should court no more of that kind of experience than is necessary to avoid a repetition of it. The Socialist Party has already achieved some victories of this kind which proved to be defeats, crushing and humiliating, and from which the party has not even now, after many years, entirely recovered [referring, doubtless, to Haverhill and Brockton.—W. E. W.].

"Voting for Socialism is not Socialism any more than a menu is a meal....

"The votes will come rapidly enough from now on without seeking them, and we should make it clear that the Socialist Party wants the votes only of those who want Socialism, and that, above all, as a revolutionary party of the working class, it discountenances vote seeking for the sake of votes and holds in contempt office seeking for the sake of office. These belong entirely to capitalist parties with their bosses and their boodle and have no place in a party whose shibboleth is emancipation."[146] (My italics.)

After Mr. Debs, Mr. Charles Edward Russell is now, perhaps, the most trusted of American Socialists. His statement, made a few months later (see the International Socialist Review for March, 1912), reaches identical conclusions. As it is made from the entirely independent standpoint of the observations of a practical journalist as to political methods, it strongly reënforces and supplements Mr. Debs's conclusions, drawn chiefly from labor union experience.[Pg 178] As I have already quoted Mr. Russell at length in the previous chapter, a few paragraphs will give a sufficient idea of this important declaration:—

"Let us suppose in this country," writes Mr. Russell, "a political party with a program that proposes a great and radical transformation of the existing system of society, and proposes it upon lofty grounds of the highest welfare of mankind. Let us suppose that it is based upon vital and enduring truth, and that the success of its ideals would mean the emancipation of the race.

"If such a party should go into the dirty game of practical politics, seeking success by compromise and bargain, striving to put men into office, dealing for place and recognition, concerned about the good opinion of its enemies, elated when men spoke well of it, depresse