Chapter XI · STATE SOCIALISM. (continued 2)

The favourite theory on which the German State socialists proceed seems to be that men are entitled to an equalization of opportunities, to an immunity, as far as human power can secure it, from the interposition of chance and change. That at least is the view of Professor Adolph Wagner, whose position on the subject is of considerable consequence, because he is the economist-in-ordinary to the German Government, and has been Prince Bismarck's principal adviser in connection with all his recent social legislation. Professor Wagner may be taken as the most eminent and most authoritative exponent of the theory of State socialism, and he recently developed his views on the subject afresh in some articles in the Tübingen Zeitschrift für die Gesammten Staatswissenschaften for 1887, on "Finanz-politik und Staatsozialismus." According to Wagner, the chief aim of the State at present—in taxation and in every other form of its activity—ought to be to alter the national distribution of wealth to the advantage of the working class. All politics must become social politics; the State must turn workman's friend. For we have arrived at a new historical period; and just as the feudal period gave way to the absolutist period, and the absolutist period to the constitutional, so now the constitutional period is merging in what ought to be called the social period, because social ideas are very properly coming more and more to influence and control everything, alike in the region of production, in the region of distribution, and in the region of consumption. Now, according to Wagner, the business of the State socialist is simply to facilitate the development of this change—to work out the transition from the constitutional to the social epoch in the best, wisest, and most wholesome way for all parties concerned. He rejects the so-called "scientific socialism" of Marx and Rodbertus and Lassalle, and the practical policy of the social democratic agitation; and he will not believe either that a false theory like theirs can obtain a lasting influence, or that a party that builds itself on such a theory can ever become a real power. But, at the same time, he cannot set down the socialistic theory as a mere philosophical speculation, or the socialistic movement as merely an artificial product of agitation. The evils of both lie in the actual situation of things; they are products—necessary products, he says—of our modern social development; and they will never be effectually quieted till that development is put on more salutary lines. They have a soul of truth in them, and that soul of truth in the doctrines and demands of radical socialism is what State socialism seeks to disengage, to formulate, to realize. It is quite true, for example, that the present distribution of wealth, with its startling inequalities of accumulation and want, is historically the effect, first, of class legislation and class administration of law; and second, of mere blind chance operating on a legal régime of private property and industrial freedom, and a state of the arts which gave the large scale of production decided technical advantages. In one of his former writings, Professor Wagner contended that German peasants lived to this day in mean thatched huts, simply because their ancestors had been impoverished by feudal exactions and ruined by wars which they had no voice in declaring; and he seems to be now as profoundly impressed with the belief that the present liberty allowed to unscrupulous speculators to utilize the chances and opportunities of trade at the cost of others is producing evils in no way less serious, which ought to be checked effectively while there is yet time. So long as such tendencies are left at work, he says it is idle trying to treat socialism with any cunning admixture of cakes and blows, or charging State socialists with heating the oven of social democracy. State socialists, he continues, comprehend the disease which Radical socialists only feel wildly and call down fire to cure, and they are as much opposed to the purely working-class State of the latter, as they are to the purely constitutional State of our modern Liberalismus vulgaris, as Wagner calls it.

The true Social State lies, in his opinion, between the two. What the new social era demands—the era which is already, he thinks, well in course of development, but which it is the business of State socialism to help Providence to develop aright—is the effective participation of poor and rich alike in the civilization which the increased productive resources of society afford the means of enjoying; and this is to be brought about in two ways: first, by a systematic education of the whole people according to a well-planned ideal of culture, and second, by a better distribution of the income of society among the masses. Now, to carry out these requirements, the idea of liberty proper to the constitutional era must naturally be finally discarded, and a very large hand must be allowed to the public authority in every department of human activity, whether relating to the production, distribution, or consumption of wealth. In the first place, in order to destroy the effect of chance and of the utilization of chances in creating the present accumulations in private hands, it is necessary to divert into the public treasury as far as possible the whole of that part of the national income which goes now, in the form of rent, interest, or profit, into the pockets of the owners of land and capital, and the conductors of business enterprises. Wagner would accordingly nationalize (or municipalize) gradually so much of the land, capital, and industrial undertakings of the country as could be efficiently managed as public property or public enterprises, and that would include all undertakings which tend to become monopolies even in private hands, or which, being conducted best on the large scale, are already managed under a form of organization which, in his opinion, has most of the faults and most of the merits of State management—viz., the form of joint-stock companies. He would in this way throw on the Government all the great means of communication and transport, railways and canals, telegraphs and post, and all banking and insurance; and on the municipalities all such things as the gas, light, and water supply. Although he recognises the suitability of Government management as a consideration to be weighed in nationalizing an industry, he states explicitly that the reason for the change he proposes is not in the least the fiscal or economic one that the industry can be more advantageously conducted by the Government, but is a theory of social politics which requires that the whole economic work of the people ought to be more and more converted from the form of private into the form of public organization, so that every working man might be a public servant and enjoy the same assured existence that other public servants at present possess.

In the next place, since many industries must remain in private hands, the State is bound to see the existence of the labourers engaged in private works guaranteed as securely as those engaged in public works. It must take steps to provide them with both an absolute and a relative increase of wages by instituting a compulsory system of paying wages as a percentage of the gross produce; it must guarantee them a certain continuity of employment; must limit the hours of their labour to the length prescribed by the present state of the arts in the several trades; and supply a system of public insurance against accidents, sickness, infirmity, and age, together with a provision for widows and orphans.

In the third place, all public works are to be managed on the socialistic principle of supplying manual labourers with commodities at a cheaper rate than their social superiors. They are to have advantages in the matters of gas and water supply, railway fares, school fees, and everything else that is provided by the public authority.

In the fourth place, taxation is to be employed directly to mitigate the inequalities of wealth resulting from the present commercial system, and to save and even increase the labourer's income at the expense of the income of other classes. This is to be done by the progressive income-tax, and by the application of the product of indirect taxation on certain articles of working-class consumption to special working-class ends. For example, he thinks Prince Bismarck's proposed tobacco monopoly might be made "the patrimony of the disinherited."

In the fifth place, the State ought to take measures to wean the people not only from noxious forms of expenditure, like the expenditure on strong drink, but from useless and wasteful expenditure, and to guide them into a more economic, far-going, and beneficial employment of the earnings they make.

Now for all this work, involving as it does so large an amount of interference with the natural liberty of things, Wagner not unreasonably thinks that a strong Government is absolutely indispensable—a Government that knows its own mind, and has the power and the will to carry it out; a Government whose authority is established on the history and opinion of the nation, and stands high above all the contending political factions of the hour. And in Germany, such an executive can only be found in the present Empire, which is merely following "Frederician and Josephine traditions" in coming forward, as it did in the Imperial message of November, 1881, as a genuine "social monarchy."

In this doctrine of Professor Wagner we find the same general features we have already seen in the doctrine of Rodbertus. It is true he would not nationalize all industries whatsoever; he would only nationalize such industries as the State is really fit to manage successfully. He admits that uneconomic management can never contribute to the public good, and so far he accepts a very sound principle of limitation. But then he applies the principle with too great laxity. He has an excessive idea of the State's capacities. He thinks that every business now conducted by a joint-stock company could be just as well conducted by the Government, and ought therefore to be nationalized; but experience shows—railway experience, for example—that joint-stock management, when it is good, is better than Government management at its best. Then Professor Wagner thinks every industry which has a natural tendency to become in any case a practical monopoly would be better in the hands of the Government; but Government might interfere enough to restrain the mischiefs of monopoly—as it does in the case of railways in this country, for example—without incurring the liabilities of complete management. Professor Wagner would in these ways throw a great deal of work on Government which Government is not very fit to accomplish successfully, and he would like to throw everything on it, if he could overcome his scruples about its capabilities, because he thinks industrial nationalization would facilitate the realization of his particular views of the equitable distribution of wealth. It is true, again, that Wagner's theory of equitable distribution is not the theory of Rodbertus—he rejects the right of labour to the whole product; but his theory, if less definite, is not less unjustifiable. It is virtually the theory of equality of conditions which considers all inequalities of fortune wrong, because they are held to come either from chance, or—what is worse—from an unjust utilization of chance, and which, on that account, takes comparative poverty to constitute of itself a righteous claim for compensation as against comparative wealth. Now, a state of enforced equality of conditions would probably be found neither possible nor desirable, but it is in its very conception unjust. It may be well, as far as it can be done, to check refined methods of deceit, or cruel utilizations of an advantageous position, but it can never be right to deprive energy, talent, and character of the natural reward and incentive of their exertions. The world would soon be poor if it discouraged the skill of the skilful, as it would soon cease to be virtuous if it ostracized those who were pre-eminently honest or just. The idea of equality has been a great factor in human progress, but it requires no such outcome as this. Equality is but the respect we owe to human dignity, and that very respect for human dignity demands security for the fruits of industry to the successful, and security against the loss of the spirit of personal independence in the mass of the people. But while that is so, there is one broad requirement of that same fundamental respect for human dignity which must be admitted to be wholly just and reasonable—the requirement which we have seen to have been recognised by the English economists—that the citizens be, as far as possible, secured, if necessary by public compulsion and public money, in the elementary conditions of all humane living. The State might not be right if it gave the aged a comfortable superannuation allowance, or the unemployed agreeable work at good wages; but it is only doing its duty when, with the English law, it gives them enough to keep them, without taking away from the one the motives for making a voluntary provision against age, or from the other the spur to look out for work for themselves.

It will be said that this is a standard that is subject to a certain variability; that a house may be considered unfit for habitation now that our fathers would have been fain to occupy; that shoes seem an indispensable element of humane living now, though, as Adam Smith informs us, they were still only an optional decency in some parts of Scotland in his time. But differences of this nature lead to no practical difficulty, and the standard is fixity of measure itself when compared with the indefinite claims that may be made in the name of historical compensation, or wild theories of distributive justice, and it makes a wholesome appeal to recognised obligations of humanity instead of feeding a violent sense of unbounded hereditary wrong. At all events, it presents the true equality—equality of moral rights—over against the false equality of State socialism—equality of material conditions; and it is able to present a better face against that system, because it recognises a certain measure of material conditions among the original moral rights. For this reason the English theory of social politics is the best practical criterion for discriminating between socialistic legislation and wholesome social reforms. The State socialistic position cannot be advantageously attacked from the ground of Mr. Spencer and the adherents of laissez-faire, who merely say, Let misfortune and poverty alone; whether remediable or irremediable, they are not the State's affairs. The two theories nowhere come within range; but the English theory meets State socialism at every point, almost hand to hand, for it admits the State's competency to deal with poverty and misfortune, and to alter men's material conditions to the extent needed for the practical realization of their full moral rights.

III. State Socialism and Social Reform.

On this English theory of social politics, the State, though not socialist, is very frankly social reformer, and those schools of opinion, which are usually thought to have been most averse to Government intervention, have been among the most earnest in pressing that rôle upon the State. Cobden, I presume, may be taken as a fair representative of the Manchester school, and Cobden, with all his love of liberty, loved progress more, and thought the best Government was the Government that did most for social reform. When he visited Prussia in 1838, he was struck with admiration at the paternal but improving rule he found in operation there. "I very much suspect," he said, "that at present for the great mass of the people Prussia possesses the best Government in Europe. I would gladly give up my taste for talking politics, to secure such a state of things in England. Had our people such a simple and economical Government, so deeply imbued with justice to all, and aiming so constantly to elevate mentally and morally its population, how much better would it be for the twelve or fifteen millions in the British Empire, who, while they possess no electoral rights, are yet persuaded they are freemen!" So far from thinking, as the Manchester man of polemics is always made to think, that the State goes far enough when it secures to every man liberty to pursue his own interest his own way, as long as he does not interfere with the corresponding right of his neighbours, the Manchester man of reality takes the State severely to task for neglecting to promote the mental and moral elevation of the people; the chief end of Government being to establish not liberty alone, but every other necessary security for rational progress. The theory of laissez-faire would of course permit measures required for the public safety, but what Cobden calls for are measures of social amelioration. Provisions for the better protection of person and property, as they exist, against violence or fraud, make up but a small part of legitimate State duty, compared with provisions for their better development, for enlarging the powers of the national manhood, or the product of the national resources. The institution of property itself is a provision for progress, and could never have originated under the system of laissez-faire, which now makes it a main branch of State work to defend it. In the form of permanent and exclusive possession, it is undoubtedly a contravention of the equal freedom of all to the use of their common inheritance, committed for the purpose of securing their more productive use of it. It interferes with their access to the land, and with the equality of their opportunities, but then it enhances and concentrates the energies of the occupants, and it doubles the yield of the soil. It promotes two objects, which are quite as paramount concerns of the State as liberty itself—it improves the industrial manhood of the nation, and it increases the productivity of the natural resources; and institutions that conduce to such results are not really infractions of liberty, but rather complements of it, because they give people an ampler use of their own powers, and create, by means of the increase of production they work, more and better opportunities than those they take away.

Now the lines of legitimate intervention prescribed by the necessities of progress, and already followed in the original institution of property, will naturally, when extended through our complicated civilization, include a very considerable and varied field of social and industrial activity, and this has been all along recognised by the English economists and statesmen. While opposed to the State doing anything either moral or material for individuals, which individuals could do better, or with better results, for themselves, they agreed in requiring the State, first, to undertake any industrial work it had superior natural advantages for conducting successfully; and second, to protect the weaker classes effectively in the essentials of all rational and humane living—in what Adam Smith calls "an undeformed and unmutilated manhood"—not only against the ravages of violence or fear or insecurity, but against those of ignorance, disease, and want. Smith, we know, would even save them from cowardice by a system of military training, and from fanaticism by an established Church, because, he said, cowardice and fanaticism were as great deformities of manhood as ignorance or disease, and prevented a man from having command of himself and his own powers quite as effectually as violence or oppression. Laws which give every man better command and use of his own energies are in manifest harmony with liberty, and for the State to do such industrial work as it has special natural advantages for doing is conformable with the principle of free-trade itself, which has always prescribed to men and nations as the best rule for their prosperity, that they should concentrate their strength on the branches of industry they possess natural advantages for cultivating, and give up wasting their labour on less productive employment. Mr. Chamberlain is certainly wrong in thinking over-government an extinct danger under democratic institutions, a mere survival from times of oppression which haunts the people still, though they are their own masters, with foolish fears of over-governing themselves. In reality, the danger has much more probably increased, as John Stuart Mill believed, for if we cannot over-govern ourselves, we can very easily and cheerfully over-govern one another, and a majority may impose its brute will with even less scruple than a monarch; but however that may be, those who tremble most sincerely for the ark of liberty cannot see any undue contraction of the field of individual action in an extension of authority for either of the two purposes here specified, for the purpose of undertaking industrial work which private initiative cannot prosecute so advantageously, or of making more secure to the weaker citizens those primary conditions of normal humanity, which are really their natural right. The first of these purposes is quite consistent with the principles of men like W. von Humboldt, who contend that the best means of national prosperity is the cultivation to the utmost of the individual energy of the people, and who are opposed to Government interference because it represses or supplants that energy. They welcome everything that tends to economize and develop energy, to place things in the hands of those that can do them best, and generally to increase the productive capacity of the whole community. They believe that machinery, division of labour, factory systems, keenest conditions of competition, however they may at first seem to contract men's opportunities of employment, always end in multiplying them, and, because they increase or economize the productive powers of those actually employed, really expand the field of employment for all. Now Government management would of course have a like operation wherever Government management effected a like economy or increase in the productive powers of society, and would really expand the field of individual initiative which it appeared to contract; and those who believe most in individual energy and its power of seeking out for itself the most advantageous new outlets, will find least to complain of in an intervention of authority which releases men from work ill-suited to their powers to do, and sends them into work where their powers can be more fruitfully occupied.

The second purpose of legitimate intervention seems even less open to objection from that side. The State is asked to go in social reform only as far as it goes in judicial administration—it is asked to secure for every man as effectively as it can those essentials of all rational and humane living which are really every man's right, because without them he would be something less than man, his manhood would be wanting, maimed, mutilated, deformed, incapable of fulfilling the ends of its being. Those original requirements of humane existence are dues of the common nature we wear, which, we cannot see extinguished in others without an injury to our own self-respect, and the State is bound to provide adequate securities for one of them as much as for another. The same reason which justified the State at first in protecting person and property against violence, justified it yesterday in abolishing slavery, justifies it to-day in abolishing ignorance, and will justify it to-morrow in abolishing other degrading conditions of life. The public sense of human dignity may grow from age to age and be offended to-morrow by what it tolerates to-day, but the principle of sound intervention is all through the same—that the proposed measure is necessary to enable men to live the true life of a man and fulfil the proper ends of rational being. A thoughtful French writer defends State intervention for the purpose of social amelioration as being a mere duty of what he calls reparative justice. Popular misery and decadence, he would say, is always very largely the result of bad laws and other bad civil conditions, as we see it plainly to have been in the case of the Irish cottiers, the Scotch crofters, and the rural labourers of England, and when the community has really inflicted the injury, the community is bound in the merest justice to repair it. And the obligation would not be exhausted with the repeal of bad laws; it would require the positive restoration to the declining populations of the conditions of real prosperity from which they fell. But though this is a specific ground which may occasionally quicken the State's remedial action with something of the energy of remorse, it is no extension of its natural and legitimate sphere of intervention, and the State might properly take every measure necessary for the effectual restoration of a declining section of the population to conditions of real prosperity on the broad and simple principle already laid down, that the measure is necessary to put those people in a position to fulfil their vocation as human beings. Hopeless conditions of labour are as contrary to sound nature, and as fatal to any proper use of man's energies, as slavery itself, and their mere existence constitutes a sufficient cause for the State's intervention, apart from any special responsibility the State may bear for their historical origin. Even the measure of the required intervention is no way less, for if its purpose is to preserve some essential of full normal manhood, its only limit is that of being effectual to serve the purpose. The original natural obligation of the State needs no expansion then from historical responsibilities to cover any effectual form of remedial action against the social decadence of particular classes of the population, whether it be the constitution of a new right like the right to a fair rent, the adoption of administrative measures like the migration of redundant inhabitants, or the provision of wise facilities for the rest by the loan of public money.

It is plain, therefore, that we have here within the lines of accepted and even "orthodox" English theory a doctrine of social politics which gives the Government an ample and perfectly adequate place in the promotion of all necessary social reform; and if we are all socialists now, as is so often said, it is not because we have undergone any change of principles on social legislation, but only a public awakening to our social miseries. The Churches, for example, while they left Lord Shaftesbury to fight his battles for the helpless alone, have now shared in this social awakening, and show not only a general ardour to agitate social questions, but even some pains to understand them; but the Churches did not neglect Lord Shaftesbury fifty years ago, because they thought his Factory Bills proceeded from unsound views of the State's functions, but merely because their interest was not then sufficiently aroused in the temporal welfare of the poor, and with all their individual charities they responded little to the grievances of social classes. We are all socialists now, only in feeling as much interest in these grievances as the socialists are in the habit of doing, but we have not departed from our old lines of social policy, and there is no need we should, for they are broad enough to satisfy every claim of sound social reform.

It is only when these lines are transgressed that, strictly speaking, socialism begins; and though it is hopeless to think of confining the vulgar use of the word to its strict signification, it is at least essential to do so if we desire any clear or firm grasp of principle. The socialism of the present time extends the State's intervention from those industrial undertakings it is fitted to manage well to all industrial undertakings whatever, and from establishing securities for the full use of men's energies to attempting to equalize in some way the results of their use of them. It may be shortly described as aiming at the progressive nationalization of industries with a view to the progressive equalization of incomes. The common pleas for this policy are, first, the necessity of introducing a distribution of wealth more in accordance with personal merit by neutralizing the effects of chance, which at present throw some into opulence without any co-operation from their own labour, and press thousands into penury in spite of their most honest exertions; and second, the advantage society would reap from the mere economy of the resources at present wasted in unnecessary competition. Both pleas are, however delusive; it is neither good nor possible to suppress chance, and if competition involves some loss, it yields a much more abounding gain.

A sense of the blind play of chance in all things human lies indeed beneath all work of social relief. "Hodie mihi, cras tibi," wrote the good Regent Murray over his lintel to avert the grudge of envy, and the same feeling of the uncertainty of fortune quickens the thought of pity. Men reflect how much of their own comfort they owe to good circumstances rather than good deserts, and how much more bad circumstances have often to do with poverty than bad guiding. To change these bad conditions so far as to preserve for every man intact the essentials of common progressive manhood is a proper object of social work. But while mitigating the operation of chance to that extent is well, to try and suppress its operation altogether would be injurious, even if it were possible. For there is no pursuit under the sun in which chance has not its part as well as skill, and skill itself is often nothing but a quick grasp of happy chance. To discourage the alert from seizing good opportunities on the wing, by confiscating the results and distributing them among the languid and inactive, is the same thing as to discourage them by like means from exerting all their industry in any other way. It violates their individual right with no better effect than to cripple the national production. They are entitled to the best conditions for the successful use of their individual energies, and the best conditions for the use of individual energies are the true securities for national progress. The sound policy is not the greater equalization of opportunities, but their greater utilization. It may be right to make ships seaworthy and their masters competent navigators, but if one of them gets delayed in a calm or disabled by a storm, while another has caught a fair wind and is carried on to port, it would answer no good purpose to equalize their gains for the mere correction of the inequality in their opportunities. It would relax in both masters alike the supreme essentials of all successful labour—activity, vigilance, enterprise. State action with respect to the quips and arrows of fortune ought to go as far but no farther than State action with respect to the crimes and hostilities of men, or with respect to evil forces of nature like those of infectious diseases—it ought to content itself with effectually protecting the primary conditions of sound manhood against their outrages. It may do what it can, not merely to relieve the unfortunate in their extremity, but to prevent their coming to extremity, to arrest, if possible, their decline, to check or soften the trade fluctuations that often swamp them, and to facilitate their self-recovery; but, when it goes on to suppress or equalize the operation of fortune, it destroys the good with the evil, and even if it removed the tares, would find it had only spoiled the harvest of wheat. The present industrial system has its defects, but it certainly has one immense advantage which would be forfeited under socialism—it tends to elicit to their utmost the talents and energies alike of employers and employed. The languor of the "Government stroke" and the slow mechanism of a State department are unfavourable to an abundant production. The general slackening of industry, and the extinction of those innumerable sources of active initiative which at present are so busy pushing out new and fruitful developments, are too great a price to pay for the suppression of the evils of competition. To effect some economies in the use of capital, we damage or destroy the forces by which capital is produced, and really lose the pound to save the penny.

Even from the standing-point of a good distribution of wealth, if by a good distribution we mean, not an equal distribution of the produce, however small the individual share, but, what is surely much better, a high general level of comfort, though considerable inequalities may remain, then an abundant production is still the most indispensable thing, for it is the most certain of all means to that high general level of comfort. Even in those agricultural countries where this result is promoted by a land system favouring peasant properties, the result is largely due to the fact that occupying ownership is itself the best condition for high production; and if we compare the principal modern industrial nations, we shall find labour enjoying the best real remuneration in those where the rate of production is highest, where employers are most competent, machinery most perfected, and labour itself personally most efficient. And, on the other hand, while the general level of comfort rises under a policy that develops productivity even at the risk of widening inequality, the general level of comfort always sinks under the contrary policy which sacrifices productivity to socialistic ideas and claims.

We have practical experience of the working of socialism in various forms, and under the most opposite conditions of culture, and the experience is everywhere the same. Custom in Samoa, for example, gives a man a pretty strict right to go to his neighbour and requisition what he wants, or even to quarter himself in the house without payment, as long as he pleases. No one dares to refuse, for fear of losing credit and suffering reproach. Originating as a well-meant refuge for the distressed, the system has become still more a subterfuge for the lazy, and Dr. Turner sums up his account of it by saying, "This communistic system is a sad hindrance to the industrious, and eats like a canker-worm at the roots of individual and national progress." The disheartening of the industrious has an even worse effect than the encouragement of the indolent; the more they make, the more subject they are to the imposition. The English agricultural labourers belong to a very different state of society from the savages of Samoa. They are of an energetic race, which if it does not positively love work, has probably as little aversion to it as any nation in the world, and seems often really to delight in the hardest exertion; but in England the effect of giving the poor a similar socialistic right was precisely the same as in Samoa. While we are supposed to have been advancing in socialism with our Factory Acts, we were really retreating from it in our Poor Law. The old English laws which for centuries first fixed labourers' wages, and then made up the deficiencies of the wages, if such occurred, out of the poor rates, were certainly socialistic, and the commission that inquired into their working sixty years ago reported that their worst effect had been to make the labourers such poor workers that they were hardly worth the wages they got. The men were by law unable to earn more if they worked more, or to lose anything if they worked less, and so their very working powers drooped and withered. As most modern socialists put their trust entirely in the old motive of self-interest, and propose to pay every man according to his work, their only resource against such a result would be a stern system of poor-law administration, like the English, and that would of course involve a departure from their favourite ideal of furnishing the dependent poor with as decent and comfortable a living as the independent poor gain for themselves by their work. The change from Samoa to rural England is probably not so great as the change from rural England to Brook Farm and the other experimental communities of the United States, companies of cultivated and earnest people, coming from one of the best civilized stocks, and settling under the favourable material conditions of a new country for the very purpose of working out a socialist ideal. Yet in these American communities, socialistic institutions led to precisely the same results as they did in England and in Samoa, a slackening of industry, and a deterioration of the general level of comfort. No doubt, as Horace Greeley said, who knew these communities well, and lived for a time in more than one of them, there came to them along with the lofty souls, who are willing to labour and endure, "scores of whom the world is quite worthy, the conceited, the crotchety, the selfish, the headstrong, the pugnacious, the unappreciated, the played-out, the idle, the good-for-nothing generally, who, finding themselves utterly out of place, and at a discount in the world as it is, rashly conclude that they are exactly fitted for the world as it ought to be." But the proportion of difficult subjects would not be larger in Brook Farm or New Harmony than it is in the ordinary world outside, and in these communities they would be under the constant influence of leaders of the highest character and an almost religious enthusiasm. If the new and better economic motives, which romantic socialists like Mr. Bellamy always assure us are to carry us to such great things as soon as the suppression of the present pecuniary motive allows them to rise into operation—if the love of work for its own sake, the sense of public duty, the desire of public appreciation, could be expected to prevail anywhere to any purpose, it would be among the gifted and noble spirits who founded the community of Brook Farm. But the late W. H. Channing, who was a member of the community and looked back upon it with the tenderest feelings, explains its failure by saying: "The great evil, the radical, practical danger, seemed to be a willingness to do work half thorough, to rest in poor results, to be content amidst comparatively squalid conditions, and to form habits of indolence."[8]

The idleness of the idle was one of the chief standing troubles in all the socialistic experiments of the United States. Mr. Noyes gives us an account of forty-seven communistic experiments which had been made under modern socialist influences in the United States and had failed, while Mr. Nordhoff, on the other hand, furnishes a like account of seventy-two communities, established mainly under religious influences (fifty-eight of them belonging to the Shakers alone), which have been not merely social but economic successes, some of them for more than a hundred years; and one is struck with the degree in which the idler difficulty has contributed to the failure of the forty-seven, and in which the continual and comparatively successful conflict with that difficulty by means of their peculiar system of religious discipline has aided in the success of the other seventy-two. Mr. Noyes is himself founder of the Oneida community, and bases his descriptions of the rest on information supplied by men who were members of the communities he describes, or on the materials collected by Mr. Macdonald, a Scotch Owenite, who visited most of the American communities for the purpose of describing them. No causes of failure are more often mentioned by him than "too many idlers" and "bad management." Not that industry was relaxed all round. On the contrary, it seems to have been a peculiarity of the Owenite and Fourierist communities, that the industrious wrought much harder (and in most of them for much poorer fare) than labourers of ordinary life. Macdonald was surprised at the marvellous industry he saw as he watched them, and would say to himself: "If you fail, I will give it up, for never did I see men work so well and so brotherly with each other." But then a little way off he would come on people who "merely crawled about, probably sick (he charitably suggests), just looking on like myself at anything which fell in their way." A very common feeling among members of these communities seems to have been that they were far more troubled with idlers than the rest of the world, because their system itself presented special attractions to that unwelcome class. "Men came," says one of the Trumbull Phalanx, "with the idea that they could live in idleness at the expense of the purchasers of the estate, and their ideas were practically carried out, while others came with good heart for the work." The same testimony is given about the Sylvania Association. "Idle and greedy people," says the writer of this testimony, "find their way into such attempts, and soon show forth their character by burdening others with too much labour, and in times of scarcity supplying themselves with more than their allowance of various necessaries, instead of taking less." Idle and greedy people, no doubt, did get into these communities, but these idle and greedy people constitute, I fear, a very large proportion of mankind, and the point is that socialistic institutions unfortunately offer them encouragement and opportunity. The experience of American communism directly contradicts John Stuart Mill's opinion, that men are not more likely to evade their fair share of the work under a socialistic system than they are now. That difficulty in one form or another was their constant vexation. The members of Owen's community at Yellow Springs belonged in general to a superior class; but one of them, in stating the causes of the failure of that community, says: "The industrious, the skilful, and the strong saw the products of their labour enjoyed by the indolent, and the unskilled, and the improvident, and self-love rose against benevolence. A band of musicians insisted that their brassy harmony was as necessary to the common happiness as bread and meat, and declined to enter the harvest field or the workshop. A lecturer upon Natural Science insisted upon talking only while others worked. Mechanics whose day's labour brought two dollars into the common stock insisted that they should in justice work only half as long as the agriculturist, whose day's work brought only one." The same evil, according to R. D. Owen, contributed to the fall of New Harmony; "there was not disinterested industry," he says, "there was not mutual confidence." A lady who was a member of the Marlboro' Association in Ohio, a socialistic experiment that lasted four years and then failed, attributes the failure to "the complicated state of the business concerns, the amount of debt contracted, and the feeling that each would work with more energy, for a time at least, if thrown upon his own resources, with plenty of elbow-room, and nothing to distract his attention."

The magnitude of this difficulty only appears the greater when we turn from the forty-seven socialistic experiments which have failed to the seventy-two which have thriven. The Shakers and Rappists are undoubtedly very industrious people, who, by producing a good article, have won and kept for years a firm hold of the American market, and being, in consequence of their institution of celibacy, a community of adult workers exclusively, every man and every woman being a productive labourer, the wonder is they are not wealthier and more prosperous even than they are. Their economic prosperity is based, as economic prosperity always is and must be, on their general habits of industry, and the natural tendency of socialistic arrangements to relax these habits is in their case effectually, though not without difficulty, counteracted by their religious discipline. Idleness is a sin; next to disobedience to the elders, no other sin is more reprobated among them, because no other sin is at once so besetting and so dangerous there, and the conquest and suppression of idleness is a continual object of their vigilance, and of their ordinary devotional practice. Mr. Nordhoff publishes a few of their most popular hymns, and one is struck with the space the cultivation of personal industry seems to occupy in their thoughts. "Old Slug," as they delight to nickname the idler, is the "Old Adam" of the Shakers, and a public sentiment of hatred and contempt for the indolent man is sedulously fostered by them. As they not only work, but also live under one another's constant supervision, and within earshot of one another's criticism, they more than replace the eye of the master by the keener and more sleepless eye of moral and social police. And if all this discipline fails, they have the last resource of expulsion. They easily make the idler too uncomfortable to remain. "They have," says Mr. Nordhoff, "no difficulty in sloughing off persons who come with bad or low motives." They exercise, in short, the power of dismissal, the last sanction in ordinary use in the old state of society. Not that they make any virtue of strenuous labour. They work moderately, and avoid anything like fatigue or exhaustion. They frankly acknowledged to Mr. Nordhoff, once and again, that three hired men taken in from the ordinary world would do as much work as five or six of their members. Their wants are few and simple, and they are satisfied with the moderate exertion that suffices to supply them; but they will tolerate no shirking of that in any shape or form, and this alone saves them from disaster. The experiences of these successful Shaker and Rappist communities serve, therefore, to show, even better than the experiences of the unsuccessful Owenite and Fourierist communities, the gravity that the idleness difficulty would assume in a general socialistic régime, which possessed nothing in the nature of the power of dismissal, and in which we could not calculate either on the formation of an effective public opinion against idleness, or on its effective application if it were formed. The men who founded the unsuccessful communities were far superior to the Shakers in business ability and education, and they had more money to begin their experiments with, but where they failed the Shakers have succeeded through the indirect economic effects of their rigorous religious discipline. But the evidence is as plain in the one case as in the other as to the natural, and even powerful, effect of socialistic arrangements in relaxing the industry of many sorts and conditions of men.

The same sources of evidence prove with equal clearness the development under socialistic institutions of two other concurrent causes of decline. I have already quoted Mr. Channing's statement that the Brook Farm community showed a disposition to be content with comparatively squalid conditions of life. Mr. Nordhoff would probably not use the word squalid of anything he saw in the Shaker and Rappist communities he describes, except perhaps in certain instances of the state of the public streets; and in some points, such as the scrupulous cleanness of the interior of their houses, he would set them far above their neighbours—you could eat your dinner, he says, off their floors. Still the people he found everywhere content, if not exactly with squalid, certainly with poor and dull and rough conditions of life, much poorer, duller, and rougher than they might easily be. They enjoyed equality, security from harassing anxiety for the morrow, abundance even for their limited wants, independence from subjection to a master, but they were weak in the ordinary springs of progress. The spirit of material improvement was not much abroad among them. Give me the stationary state of society and contentment, you may exclaim; but then even this stationary state is only maintained in these sequestered communities by the constant play of peculiar religious influences which cannot be counted on everywhere, and it would soon change into a declining state in the great seething world outside if it were not effectively counter-worked by the most powerful incentives to progress. Now the same equalizing social arrangements which destroy one of the most essential of these incentives by guaranteeing men the results of industry without its exertion, enfeeble a second by predisposing them to rest content with the lower conditions of life to which they are reduced.

A third cause of decline to which the American experience shows socialistic institutions to be incident is a certain weakness in the management, produced sometimes by divided counsels, sometimes by the delay involved in getting the sanction of a Board to every little detail of business, and sometimes by a difficulty which we find also shattering similar experiments in France, that men were raised to the Committee by their gifts of persuasion rather than their gifts of administration. Well-meaning persons, with a great itch for managing things, and a great turn for bungling them, for whom there is, under the present order of society, a considerable safety-valve in philanthropy, contrive in a socialistic community to get appointed on the Council of Industry, and play sad havoc with the common good. While they preached and wasted, the really practical men who, with better power of talk, might have confounded them, could only sulk and grumble, and eventually lost heart in their work, and all interest and confidence in the concern. This had much to do, according to Mr. Meeker, an old Fourierist, with the ruin of the North American Phalanx, one of the most important of the transatlantic experiments, and it was the main cause apparently of the downfall of the community of Coxsackie—"They had many persons engaged in talking and law-making who did not work at any useful employment; the consequences were that after struggling on for between one and two years the experiment came to an end." A socialist State would probably have as many difficulties with this bustling but unsatisfactory class of persons as a socialist Phalanx, nor would the evils of divided counsels and departmental delays be a whit milder; and the extension of State management to branches of work for which it had not otherwise some sort of special natural qualification would have the same kind of ruinous operation.

In spirit and effect, therefore, as may be palpably seen from these actual experiments, the equalizing institutions of socialism stand quite apart from the very restricted use of State management and the remedial or invigorating legislation that a sound social policy prescribes. When England is accused of heading the nations in the race of State socialism, because England has nationalized the post and telegraph service, and passed a series of factory and agrarian Acts for the protection of the weaker classes of the people, the accusation is made without proper discrimination. It is not the frequency of the intervention, but its purpose and consequences that make it socialistic. If the post is better managed by the State than by private initiative, if the factory and agrarian laws merely reinstate weaker classes in the conditions essential for a normal human life, and neither seek nor produce that equalization of the differences of fortune or skill which is fatal to any high and progressive general level of comfort, then there is no State socialism in it at all. State management is not pushed beyond the limit of efficiency, nor popular rights beyond the positive claims of social justice. Let us go a little further into detail.

IV. State Socialism and State Management.

What are the conditions of efficient State administration? The State possesses several natural characteristics which give it a decided advantage as an industrial manager, some for one branch of work, some for another. It has stability, it has permanency, and it has—what is perhaps its principal industrial superiority—unrivalled power of securing unity of administration, since it is the only agency that can use force for the purpose. On the other hand, it has one great natural defect, its want of a personal stake in the produce of the business it conducts, its want of that keen check on waste and that pushing incentive to exertion which private undertakings enjoy in the eye and energy of the master. This is the great taproot from which all the usual faults of Government management spring—its routine, red-tape spirit, its sluggishness in noting changes in the market, in adapting itself to changes in the public taste, and in introducing improved methods of production. Government servants may very generally be men of a higher stamp and training than the servants of a private company, but they are proverbial, on the one hand, for a certain lofty disdain of the humble but valuable virtue of parsimony, and, on the other, for an unprogressive, unenterprising, uninventive administration of business.

Now the branches of industry which the State is fitted to carry on are of course those in which its great fault happens to have small scope for play, and in which its great merit or merits have great scope for play; those, for example, which gain largely in efficiency or economy by a centralized administration, and suffer little harm comparatively from a routine one. That is the reason Governments always manage the postal service well. In post-office work the specific industrial superiority of Government carries its maximum of advantage, and its specific industrial defect does its minimum of injury. The carrying and delivery of letters from one part of the empire to another require, for efficiency, a single co-ordinated system, and, on the other hand, those operations themselves are of so unvariable and routine a character that little harm is done by their being carried on in a routine spirit; they involve so little capital expenditure—the entire capital of the department in England is only £80,000—that the opportunity for waste and corruption is slight; and being conducted much more largely under the public eye than the affairs of other departments of State, they are consequently subject to the constant and interested criticism of the people whose wants they are meant to satisfy. The same reason explains why Government dockyards and arms factories are always managed so unsatisfactorily. There is, on the one hand, no need in them for any higher unity of administration than is wanted in any ordinary single business establishment; but, on the other, progressiveness and adaptability are of the first moment, routine and obstruction to improvement being indeed among their worst dangers. Then the risk of prodigality and corruption is high, for their capital expenditure is great, and the check of public criticism very distant and ineffectual. So exceptional a business is the post, that the telegraphs, though managed by the same department, have never been managed with the same success. They were bought at first at a ransom, they have involved an increasing loss nearly ever since, and the public have to pay practically as much for their telegrams—perhaps more—than the public of the United States pay to their telegraph companies. Even in the postal department, Government administration shows the usual official slowness in adopting much-needed and even lucrative reforms. Of this, a good example occurred only the other day. It was not until a Boys' Messenger Company was already in the field and doing the work, that the Postmaster-General was brought to recognise, as he said, "the desirability of providing a more rapid means of transmitting single letters for short distances and under special circumstances than at present exists."

It ought of course to be acknowledged that State management in England is tried under the very worst possible conditions, inasmuch as it is tied to the fortunes and exigencies of political party. No business could be expected to thrive where the supreme control is placed in the hands of a good parliamentary debater, who knows nothing about the special work of the department he undertakes; where, even at that, this inexperienced hand is changed for another inexperienced hand every three or four years; where policy shifts without continuity, to dodge the popular breeze of to-day, or to catch the popular breeze of to-morrow; and where the actual incumbent of office, is always able to evade censure by throwing the responsibility on his predecessors, who are out of office. Well may a sagacious man like Mr. Samuel Laing, with large experience of administration both in the affairs of State and of private companies, exclaim: "I often think what the result would be if the railway companies managed their affairs on the same principles as the nation applies to its naval and military expenditure. Suppose the Brighton Board were turned out every three years, and a new Board came in with new views and a new policy, and new men at the head of the locomotive, traffic, and other spending departments, how long would it be before expenses went up and dividends down?" If State management is to succeed—if it is to have fair play—it must be entirely divorced from party fortunes, while subject, of course, to the criticism of Parliament, under some system like that adopted in Victoria for the management of the railways. In such circumstances the question of the advisability of Government assuming the management of any industry, is a question of balancing the probable gains from the greater unity of the administration against the probable losses from its greater inertia.

There are some exceptional branches of industry in which Government does better than private persons, because private persons have too little interest to do the work well, or even to do it at all, and there are others in which the State's very want of personal interest is its advantage instead of its drawback. Forestry is the best example of the first sort. One generation must plant, and another cut down, so that the present owner is often unwilling to incur the expense of a speculation of which he is unlikely to live to reap the fruits; but the natural permanence of the State leads it to do more justice to this important branch of production, and experience everywhere shows that State forests are more productive than private ones. In Prussia and Belgium they are nearly twice as productive. The average annual produce of all forests in Prussia (including State forests) is 0.36 thaler per Morgen, but the produce of State forests alone is 0.66 thaler per Morgen. In Belgium the produce of all forests is 19.33 francs per hectare, and of State forests 34.42 francs.[9] The erection of lighthouses is also a public service, which falls to the State because of individual inability; it cannot be undertaken in any way to make it remunerative to private adventurers.

The best example of an industrial work for which the State's want of personal interest is its advantage is the Mint. Nobody would trust the stamp of a private assayer as he trusts the stamp of the Government, because the private assayer could never succeed in placing his personal disinterestedness so absolutely above the suspicion of fraud. The policy of the official attestation of the quality of commodities is often disputed on the ground that it discourages improvement above the pass standard, but it is never doubted that if a brand is wanted, the brand to command most confidence is the brand of the Crown. Our own Government, out of the infinity of commodities offered for sale, attests none but six—butter, herrings, plate, gun barrels, chains, and anchors—articles in which the dangers of deterioration probably exceed the chances of improvement, and in the case of some of these six there is a strong feeling abroad that the State's intervention is doing more harm than good. Scotch herrings have suffered lately in the German markets, because they were worse cured than the Norwegian, and the herring brand was blamed for the unprogressiveness of the cure. This class of interventions, therefore, is neither numerous now, nor likely to become very numerous in the future.

A more important class of undertakings in which the State's industrial advantage lies in its superiority to the temptations of self-interest, is that of industries which naturally assume something of the character of a monopoly, and in which self-interest lacks both the check on its rapacity, and the spur to its activity supplied by effective competition. It is true of more things than railways that when combination is possible, competition is impossible, and the growth of syndicates, trusts and pooling arrangements at the present day has led to considerable agitation for State interference, especially in the case of commodities like salt and coal, which are necessaries of life. Our experience of these things is as yet limited, but so far as it has gone it seems to show that the public dangers dreaded from them are apt to be exaggerated. The combinations fear to raise the price to the public so high as to provoke competition, and in most cases in America have not raised it at all, drawing their advantage rather from the reduction in expense of management, and the saving of capital; and the State would not be likely to manage industries producing for the markets any better than, or even so well as, the more keenly interested board of private directors. But if the balance of evidence seems against public management in this class of monopolies, it stands, I think, decidedly in favour of public management in another and not unimportant class. The gas and water supply of towns is a monopoly, and though the point is not undisputed, it appears to answer better on the whole in public than in private hands, because the management has no interest to serve except the interest of the public. Experience has not been everywhere the same, but usually it has been that under municipal control the quality of the gas has been improved and the price reduced. But this is municipal management of course, not State management, and the difference is material, inasmuch as municipal management, in the case of gas and water supply, is the management of the production of things of general consumption under the direct control of the very people who consume them, so that it is constantly exposed to effective public criticism, perhaps as good a substitute as things admit of for the eye of the master. The natural defect of public management is so mitigated by this circumstance, that probably of all forms of public management, municipal management is the best, and when applied to branches of production that tend to become monopolies at any rate, it answers well. The question is entirely different with proposals that are sometimes made for converting into municipal monopolies branches of production—such, for example, as the bread supply of the community—which are carried on by individual management under effective competition. To do as well as joint-stock management uncontrolled by competition is one thing; to do as well as individual management subject to competition is another; and so long as public management replaces nothing but the former class of enterprises, which are in any case a sort of natural monopolies, it will never contract the vast field of individual enterprise to any very serious extent.

When we pass from municipal monopolies to State monopolies, the problem becomes more grave. The two largest current proposals of this kind are those of land nationalization and railway nationalization. The former proposal, though much more noisily advocated than the other, has incomparably the weaker case. For apart altogether from the mischief of making every rent settlement a political question, and looking at the matter merely in its economic aspect, land, of all things, is that which is least suited for centralized administration, and yields its best results under the minute concentrated supervision of individual and occupying ownership. The magic of property is now a proverbial phrase; it is truer of land than anything else, and it merely means that for land interested administration is everything, comprehensive administration nothing, that the zeal of the resident owner to improve his own land knows no limit, whereas the obstructive forces of routine and official inertia have nowhere more power to blight than in land management. In Adam Smith's time, as he mentions in the "Wealth of Nations," the Crown lands were everywhere the least productive lands in their respective countries, and the experience is the same still. It is so even in Prussia, in spite of its economical and skilled bureaucracy. Professor Roscher says it is a common remark in Germany that Crown lands sell for a greater number of years' purchase than other lands, because they are known to be less improved, and are therefore expected to yield better results to the energy of the purchaser, and he quotes official figures for 1857, showing that the domain land of Prussia had not risen in value so much as the other land in the country. Great expectations are often entertained from the unearned increment, though there is not likely to be much of that in agricultural land for years to come; but what is a much more important consideration for the community is the earned increment, and under State management the earned increment would infallibly decline. Of course, this does not exclude the necessity of strict State control, so far as required by justice, humanity, and the growth and comfort of the general community. Under land nationalization here I have not considered schemes which do not give the State any real ownership in the land more than it at present enjoys, or, at any rate, place no real management of the land in its hands. The rival schemes of Mr. A. R. Wallace and Mr. Henry George are really only more or less objectionable methods of increasing the land-tax.

The question of a State railway is not so easily determined. There are certainly few branches of business where unity of administration is more advantageous, or where the public would benefit more from affairs being conducted from the public point of view of developing the greatest amount of gross traffic, instead of from the private point of view of making the greatest amount of net profit. A railway differs from other enterprises, because it affects all others very seriously for good or ill; it may for the sake of more profit give preferences that are hurtful to industrial development, or deny facilities that are essential to it. A private company may find it more profitable to carry a less quantity at a high rate than a greater quantity at a low, and it cannot be expected to run a line that does not pay, though the general community might benefit greatly more by the increase of traffic which the line creates than covers the loss incurred by running it. Now it is impossible to exaggerate the importance of having a public work like a railway, which can help or hinder every trade in the land, conducted from a public point of view instead of a private, and the present discussion in this country on rates and fares points to the desirability of changes to which private companies are not likely to resort of their own accord, nor the railway commission to be able to compel them. But, on the other hand, it is equally impossible to exaggerate the risks of the undertaking. The post office, with its capital of £80,000, is a plaything to the railways with their capital of £800,000,000, and their revenue little short of that of the State itself. The operations are of a most varied nature, and only some of them could be exposed to effective criticism. The mere transaction of purchase excites in many minds a not unreasonable fear. If Government made a bad bargain with the telegraph companies, it would be sure to make a worse with the railway companies, who are fifty times more powerful; and besides, it would very likely have to borrow its money at a higher figure, for though it could borrow two millions at 3 per cent., it could not therefore borrow eight hundred millions, for the simple reason that the number of people who want 3 per cent. is limited, most holders of stock preferring investments which, though more risky, offer a prospect of more gain. If in trying to balance these weighty pros and equally weighty cons one turns to the experience of State railways, he will find that as yet it affords few very sure or decisive data, because it varies in the different countries and times, and has been very differently interpreted.

Of the Continental State railways, those of Belgium and Germany are usually counted the most favourable examples. But Mr. Hadley, in his excellent work on Railway Transportation, shows that the State lines of Belgium were conducted in an extremely slovenly, perfunctory way until 1853, when private lines began to increase and compete with them, and that though the low rates which this competition was the means of introducing still remain after the private lines have been largely bought out, there has been, on the other hand, latterly a decline in the profits of the State system, an increasing tendency to slackness and inertia in the management, and growing complaints of creating posts to reward political services, and manipulating accounts to suit Government exigencies. In Germany the rates are certainly low and the management economical, but complaints are made that less is done for the encouragement of the national resources, and unprofitable traffic is more severely declined than by the private railways. On the whole, probably the best State railway system is that of Victoria; charging low rates, self-supporting, offering every encouragement to industrial development; and the opinion of England will probably be largely determined by further observation of that experiment.

The sister colony of New Zealand has made a successful experiment in another department of industrial enterprise, life insurance, for which Government management indeed is highly adapted, because, in the first place, it is a business in which absolute security is of the last consequence, and there is no security like Government guarantee; and in the second, it is a business in which the calculations of the whole administration are virtually matters of mechanical routine. The Government office was only opened in 1871, under the influence of a widespread distrust of private offices, caused by recent bankruptcies, and it now transacts one-third of the life insurance business of the colony; it has probably tended to encourage life insurance, for while there are only 26 policies per 1000 of population in the United Kingdom, there are 80 per 1000 in New Zealand, and its management is much cheaper than that of any other insurance company in the colony, except the Australian United. The proportion of expenses to revenue in the Australian United is 13.66 per cent., in the Government Office 17.23, and in none of the other companies (whose gross business, however, is much smaller) is it under 43.02.

Adam Smith thought there were only four branches of enterprise which were fitted to be profitably conducted by a joint-stock company. We have seen in our day almost every branch of industry conducted by such companies, and an idea is often expressed that whatever a joint-stock company can do, Government can do at least quite as well, because the defect of both is the same. The defect is the same, but Government has it in larger measure. Joint-stock management is certainly much less productive in most industries than private management. The Report of the Massachusetts Labour Bureau for 1878 contains some curious statistics on the subject. There were then in the Commonwealth of Massachusetts, 10,395 private manufacturing establishments, employing in all 166,588 persons, and 520 joint-stock manufacturing establishments, employing 101,337 persons, and the private establishments, while they paid a much higher average rate of wages than the joint-stock, produced at the same time not far from twice as much for the capital invested. The average wages per head in the private establishments was 474.37 dollars a year, and in the joint-stock was 383.47 dollars a year; while the produce per dollar of capital was 2.58 dollars' worth in the private, and 1.37 dollars' worth in the joint-stock, and though part of this difference is attributed to the circumstance that private manufacturers sometimes hire their factories and companies do not, the substance of it is believed to be due to the inferiority of the joint-stock management. Anyhow, that circumstance could have no influence in producing the very marked difference in the wages given by the two classes of enterprise, and the higher wages would not, and could not, be given unless the production was higher. If all the industries of the country, then, were put under joint-stock management, the result would be (1) a general reduction in the amount produced, and (2) a consequent reduction in the general remuneration of the working classes, and the general level of natural comfort; and the result would be still worse under universal Government management. One of the labourer's greatest interests is efficient management, and if he suffers from the replacement of individual employers by joint-stock companies, he would suffer much more by the replacement of both by the State, excepting only in those few departments of business for which the State happens to possess peculiar advantages and aptitude.

V. State Socialism and Popular Right.

The limits of the legitimate intervention of the public authority with respect to the moral development of the community are prescribed by a different rule from those with respect to its material development. Efficiency is still, indeed, a governing consideration, for perhaps more measures for popular improvement fail from sheer ineffectuality than from any other reason. The history of social reform is strewn thick with these dead-letter measures. There is a cry and a lamentation, and a feeling that something must be done; and an Act of Parliament is passed containing injunctions which no Act of Parliament can enforce, or which address themselves to mere accidental circumstances, and leave the real causes of the evil entirely unaffected. And there would be no impropriety in describing impracticable or ill-directed legislation of this kind as being socialistic, for, besides the old association of socialism with impracticable schemes, impracticable legislation is always unjust legislation, and unjust legislation for behoof of the labouring class is essentially socialistic. Every State interference necessarily involves a certain restriction of the liberty or other general rights of some class of persons; and although this restriction would be perfectly justifiable if it actually secured the prior or more urgent right of another and perhaps much more numerous class of persons, it is injustice, and nothing but injustice, when it merely hurts the former class without doing any good to the latter. It may hurt both classes even—well-meaning meddling often does; but what I desire to bring out here is that labour legislation, which may have been entirely just and free from socialism in its intention, may be unjust and full of socialism in its result. We may therefore, without any fault, include under the head of State socialism that common sort of proposal which, without urging any wrong claim, merely asks the State to do the wrong thing—to do either something it cannot do at all, or something that will not answer the purpose intended. It is socialistic not because it is impracticable, but because it is unjust.

Since well-meant legislation may thus become urgent, and therefore socialistic for want of result, it is plain that the efficiency of the intervention is a very important consideration in determining the State's duty with respect to popular rights. But the primary consideration here is the extent of the moral claim which the individual, by reason of his weakness, has upon the resources of society, and it is upon that consideration that the division of conflicting political theories on the subject turns. All the several theories are agreed that the enlargement of popular rights, when the enlargement is required by a just popular claim, is entirely within the proper and natural province of the State; where they differ, and differ seriously, is partly in their views of the justice of particular elements in the popular claim of the time being, but more especially in their whole conception of the nature and extent of the popular claim in general. There are still some persons to be found contending that there are no such things as natural rights, and there are plenty who cannot hear the words without a sensation of alarm. But it is now generally admitted, even by those who adopt the narrowest political theories, that legal rights are merely the ratification of moral rights already existing, and that the creation of new legal rights for securing the just aspirations of ill-protected classes of the people belongs to the ordinary daily duties of all civil government. Mr. Spencer very readily admits that some of the latest constituted rights in this country—the new seamen's right of the Merchant Shipping Act, and the new women's right of the Married Women's Property Act—are perfectly justifiable for the prevention in the one case of seamen being fraudulently betrayed into unseaworthy ships, and in the other of women being robbed of their own personal earnings. But then the new rights which he would most condemn—the right to public assistance, the right to education, the right to a habitable dwelling, the right to a fair rent—are quite as susceptible of justification on the ground of natural justice as either the right to a seaworthy ship or the right to one's own earnings. Mr. Spencer's theory errs by unduly contracting men's natural claim. They have a right to more than equal freedom; they have a right, to use Smith's phrase, to an undeformed and unmutilated humanity, to that original basis of human dignity which it is the business of organized society to defend for its weaker members against the assaults of fortune as well as the assaults of men. That is what I have called, for the sake of distinction, the English theory of social politics. On the other hand, socialism unduly extends this claim. The right to fair wages is one thing; the State could not realize it, but it at least represents no unjust aspiration; but the right to an equal dividend of the national income, claimed by utopian socialists, including Mr. Bellamy at the present day, and the right to the full produce of labour claimed by the revolutionary socialists, and meaning, as explained by them, the right to the entire product of labour and capital together, are really rights to unfair wages, and the whole objection to them is that they are at variance with social justice. If we keep these distinctions in view, we shall be able to discriminate between interventions of authority which are innocent, and interventions which are tainted with State socialism. Take an illustration or two, 1st, of interventions for settling the claims of the poor in society in general, and 2nd, of interventions for adjusting the differences between one class and another, between employer and labourer, between landlord and tenant, and the like.

1. Under the first head, the most important question is the question of public assistance. Prince Bismarck created a considerable European sensation when he first announced his new social policy in 1884, by declaring in favour of the three claims of labour, which have been so commonly regarded as the very alpha and omega of social revolution—the right to existence for the infirm, the right to labour for the able-bodied, and the right to superannuation for the aged. "Give the labourer," he said, "the right to labour when he is able-bodied; give him the right to relief when he is sick; give him the right to maintenance when he is old; and if you do so—if you do not shrink from the sacrifice, and do not cry out about State socialism whenever the State does anything for the labourer in the way of Christian charity—then I believe you will destroy the charm of the Wyden (i.e., Social Democratic) programme." These three rights are really two, the right of relief when one is sick and of maintenance when one is old being only different phases of the right to existence. Now the right to existence and the right to labour are in themselves both perfectly just claims, but the construction Prince Bismarck gave them passed decidedly over into State socialism.

The right to existence is seldom called in question. Malthus, it is true, said a man had a right to live only as he had a right to live a hundred years—if he could. He might as well have argued that a man had a right to escape murder only as he had a right to escape murder for a hundred years—if he could. It is really because he cannot that he has the right—it is because he cannot protect himself against violence that he has a right to protection from the State, and because, and as far as, he cannot protect himself against starvation that he has a just claim upon the State for food. And his claim is obviously bounded in the one case as in the other by the ability of society. If society cannot protect him, it is of course absurd to talk of any right to its protection, but if society can, society ought. To suffer a fellow-citizen to die of hunger is felt by a civilized community to be at least as just a disgrace to its government as it would be to leave him a prey to the knife of the assassin, or to the incursions of marauders from over the enemy's border. But as the State furnishes protection against human violence by its courts of justice, and against disease by its sanitary laws, so it furnishes protection against famine and indigence by its legal provision of relief. The claim of the perishing stands on the same footing as any other claim which is an admitted right of man to-day; it is a claim to an essential condition of normal manhood—to existence itself. But then, if the right to existence must be admitted, it can only be admitted where the individual is, for whatever reason, unable to make provision for himself, and it can only be admitted in such measure and form as will not discourage other individuals from trying to make independent provision for themselves before their day of disability comes, because that, in turn, is the way prescribed by normal manhood and true human dignity.

What State socialists claim, however, is not the right to existence, but the right to decent and comfortable existence—the right to the style of living which is customary among the independent poor. The labourer ought, in their eyes, to be treated as a public servant, and his sick pay and his pension ought both to be commensurate with the claims and dignity of honest labour. Now it is of course impossible not to sympathize much with this view, but the difficulty is that if you make assisted labour as good as independent labour, you shall soon have more assisted labour than you can manage, you shall have weakened the push, energy, and forethought of your labouring class, you shall have really done much to destroy that very dignity of labour which you desire to establish. The State may probably, with great advantage, do more for working-class insurance than it at present does. It could conduct the business of the burial benefit and the superannuation benefit better than any private company or friendly society, because it could offer a surer guarantee and the business is routine; Mr. Gladstone's excellent annuity scheme has remained sterile only because it has not been pushed, and the canvasser and collector are indispensable in working-class insurance. But the socialist proposal is that the State ought to give every man a pension after a certain age, irrespectively altogether of his own contributions. Mr. Webb is one of its most recent advocates, and, according to the useful figures he has taken the trouble to obtain, there are in the United Kingdom 1,700,000 persons over sixty-five years of age, of whom 1,300,000 contrive to pension themselves, either by their own savings or the assistance of their families, while the remaining 400,000 are supported by the rates at an average cost of ten guineas a year. Mr. Webb's proposal is that in order to save the feelings of the 400,000 dependants you are to make the other 1,300,000 persons dependants along with them, and give ten guineas a year all round. But you cannot make a public dole a pension by merely calling it a pension. A pension is a payment made by one's actual employer for work done—it is wages, and the man who has earned his own pension, or has provided it by his own saving, feels himself and is an independent man. It is right to maintain the 400,000—whether out of national or parochial funds is a detail—but sound policy would rather aim at raising the 400,000 to be as the 1,300,000, than at lowering the 1,300,000 to the level of the 400,000. With Mr. Webb it is not a question of giving the 400,000 better allowances than they receive at present—which might be most reasonably entertained—but it is a mere question of not suffering them to be looked down on by the 1,300,000 who have fought their own way, and that is not possible, nor, with all respect for them, is it, from a public point of view, desirable. It is right to support those who cannot support themselves, but it is neither right nor wise to remove all distinction between the dependent poor and the independent.

But the line between State socialism and sound social politics in the matter of public assistance may perhaps be better shown in another branch of Poor Law administration—the right to labour for the able-bodied. The socialist right to labour is the right of the unemployed to get labour in their own trades and at good or current rates of wages. That is the right which Bismarck substantially admitted in his famous speech. He said there was a crowd of suitable undertakings which the State could establish to furnish the unemployed with a fair day's wage for a fair day's work. It is also practically the right which prevailed in England between 1782, when Gilbert's Act abolished the old workhouse test, and 1835, when the new Poor Law restored it. Gilbert's Act gave the able-bodied poor the right (1) to obtain from the guardians work near their own residence and suited to their respective strength and capacity; (2) to receive for their labour all the money earned by it; and (3) if that sum fell short of their requirements, to have the difference made up out of the parochial funds. The effect of that, as we know, was, that public relief became too desirable, the dependants on it multiplied, the poor rate rose, the wages of labour fell, the very efficiency of the labourer himself withered, and the new Poor Law reverted to the workhouse test, which, harsh though it was considered to be, was in reality a necessary defence of the character and comfort of the labouring class from further decadence.

To provide the unemployed with work in their own trades is only to increase the evil you wish to remedy, for the very existence of the unemployed shows that those particular trades are slack at the time, that there is no demand for the articles they produce, and consequently any attempt by the State to throw fresh supplies of these articles on the already over-stocked market can have no other effect than to increase the depression and turn out of employ the men that are still at work. Paying relief work at the common market rate of wages is attended with the same objection. The remedy only aggravates the disease, and what ought to be merely the labourer's temporary resource against adversity tends to grow into his regular staff of life. Relief wages, while sufficient for the family's support, should remain below the current rates so as to give the labourer an effective inducement to seek better employment as soon as better employment can possibly be obtained. The true and natural defence against misfortune is the man's own personal exertion and provision, and the purpose of the public intervention is to stimulate and assist, not to supplant, that vis medicatrix naturæ.

But under these limitations a right to labour is a just claim of the unfortunate. It is admitted in the English Poor Law, and it is admitted in the Scotch parochial practice, which constructively considers want of employment a form of sickness or accident, and it requires in both countries to be better realized than it is. 1st: although it is unadvisable to give every man work at his own trade, and although the choice of trades for relief purposes is attended with as much difficulty as the choice of those for prison labour is found to be, yet certainly the circle of relief trades ought to be extended beyond stone-breaking and oakum-picking. Socialists themselves are among the foremost in complaining of the competition of prison labour with honest labour, although they fail to see that precisely the same objection attends the competition of relieved labor in public workshops with unrelieved labour in regular private employment. The kind of work most free from objection on this score would probably be the production of articles now imported from abroad, and there are a great many trades in which, while we make most of their products at home, we import particular articles or sorts of articles for one reason or another. Some of these might be found suitable for the purpose in view. Or the men in the public workshops might be employed in making a variety of things used in public offices, imperial or local. 2nd: what is even more important, a distinction ought to be made between the industrious poor and that residuum of confirmed failures for whom the stoneyard test is really intended, and the former ought not to be made to feel themselves any way degraded in their work, their small remuneration being trusted to act as a sufficient preventive against their permanent dependence on the public for employment. 3rd: then a third and most important requisite is to supplement the public provision of work with a public provision of information about the demand for labour over the country from day to day, so as not merely to support the men in adversity, but to facilitate their restoration to their normal condition of prosperity.

For we ought to recognise that though the problem of the unemployed is not, as many persons imagine, one of increasing gravity in our time—although, on the contrary, if we go back thirty years, sixty years, or a hundred years, we always find worse complaints and more distressing sufferings from that cause than at present, yet it is certainly a constant problem. The unemployed we have always with us, and even their numbers vary less from time to time than we are apt to suppose. Trades dependent on fine weather are, of course, slack in winter, but then trades dependent on fashion are slack in summer, while there are some large trades—such as the shoemakers—that are made brisk by bad weather. Even a general commercial crisis which throws the workpeople of many trades idle, makes those of others busy. The building trades are always busy in bad times, because money and labour are then cheap, and the opportunity is seized of building or extending factories, and laying down plant of every description. It was so to a very remarkable extent during the Lancashire cotton distress of 1862; it was so all over England in the depression of 1877-78, and the same fact was observed again in Scotland, and commented upon by the factory inspector in 1886. Other trades are brisker in a crisis for less happy causes, e.g., the bakers for the melancholy reason that the working classes are more generally driven from meat to bread. These natural corrections or compensations elicited by the depression itself prevent the numbers of the unemployed from growing so very much larger in a crisis than in ordinary times that their case would not be overtaken satisfactorily by the general systematic provision of relief work, if that were once established. The excess is met now so effectually by a few special local efforts, that we have sometimes far fewer able-bodied paupers in bad years than in good. The number of able-bodied paupers was very much less in the bad years 1876-1878 than in the good years immediately after them, or in the still better years immediately before them. The problem being, then, so largely constant from season to season, and from cycle to cycle, ought clearly to be solved by a permanent and systematic provision.

The same principle which governs this right to labour—the principle of preventing degradation and facilitating self-recovery—governs other social legislation for the unfortunate besides the Poor Law. It lies at the bottom of the homestead exemptions of America, and our own prohibition of arrestment of tools and wages for debt, and our occasional measures for cancelling arrears. It is the principle laid down by Pitt when he said that no temporary occasion should be suffered to force a British subject to part with his last shilling. He had a right to his last shilling, because he had a right to an undegraded humanity. The last shilling stopped his fall, and perhaps helped him to rise again.

Many persons will admit the right to public assistance, because it seems limited to saving men from extremities, who will see nothing but socialism of a perilous sort in other public provisions, for which popular claims are advanced. Schools, museums, libraries, parks, open spaces, footpaths, baths, are certainly means of intellectual and physical life, which keep the manhood of a community in normal vigour; but, it will be asked, if the State once begins to supply such things, where is it to stop? Is free education to go beyond the primary branches? What length are you to go? is the question Mr. Spencer always raises as a bar to your going at all. But the same question of degree can be raised about everything, about the duties Mr. Spencer himself imposes upon the State as really as about those he refuses to sanction. In the matter of protection, for instance, how many policemen are we required to detail to a district? Or how great an army and navy are we to maintain? During the excitement about the Jack the Ripper murders there was much clamour about the police being too few, and we are subject to periodical panics as to our imperial defences, in the course of which no two persons agree in answering the question, what length are we to go? The question can only be settled of course by measuring the length of our necessities with the length of our purse, and the same class of considerations rules in the other case, the importance and cost of the given provision to a community of such education and culture, together with the impossibility of getting it adequately supplied without public agency. The opinion of the time may vary as to what is essential for a whole and wholesome manhood, and its resources may vary as to what may be easily borne to supply it; but the same variation takes place with respect to the duties of national defence, or the administration of justice. The objection is therefore nothing more or less than the very ancient and famous logical fallacy with which the Greek sophists used to nonplus their antagonists. As in other affairs, the problem so far will settle itself practically as it goes along, and the important distinction to bear in mind is that to give every man the essential conditions of all humane living is a very different kind of aim from giving every man the same share in the national production, or a lien on his neighbour's luck or industry or alertness.