41. THE SORCERER’S APPRENTICE…

41. THE SORCERER’S APPRENTICE

Do not, however, disparage foreign trade. There is nothing wrong with foreign trade as such. We could have no gold without foreign trade; and gold has all sorts of uses and all sorts of beauties. I will not add that we could have no tea, because I happen to think that we should be better without this insidious Chinese stimulant. It is safer and probably healthier for a nation to live on the food and drink it can itself produce, as the Esquimaux manage to do under much harder conditions. But there are many necessaries of a high civilization that nations cannot find within their own boundaries, and must buy from oneanother. We must trade and travel and come to know oneanother all over the habitable globe. We have to make international institutions as well as national ones, beginning with Trading Treaties and Postal Conventions and Copyright Conventions, and going on to the Leagues of Nations. The necessities of travelling and trade, and the common interest of all nations in the works and discoveries of art, literature, and science, have forced them to make international agreements and treaties with oneanother which are making an end of “keeping ourselves to ourselves”, and throwing half bricks at foreigners and strangers. Honest foreign trade would never have got us into trouble.

Neither is the combination of little States in great Federations and Commonwealths undesirable: on the contrary, the fewer frontiers the better. The establishment of law and order in uncivilized places should not have made us hated there: it should have made us popular; and it often did--at first. The annexation of other countries under our flag, when it was really needed, should have been a welcome privilege and a strengthening partnership for the inhabitants of the annexed regions. Indeed we have always pretended that this was actually the case, and that we were in foreign countries for the good of the inhabitants and not for our own sake. Unfortunately we never could make these pretensions good in the long run. However noble the aspirations of our Imperialist idealists might be, our capitalist traders were there to make as much profit out of the inhabitants as they could, and for no other purpose. They had abandoned their own country because there was no more profit to be made there, or not so much; and it is not to be expected that they would become idealistically disinterested the moment they landed on foreign shores. They stigmatized the Stay-at-homes, the anti-Expansionists, the Little-Englanders, as friends of every country but their own; but they themselves were the enemies of every country, including their own, where there was a sweatable laborer to make dividends for them. They pretended that the civilization of the annexed country was “the white man’s burden”, and posed as weary Titans reluctantly shouldering the public work of other nations as a duty imposed on them by Providence; but when the natives, having been duly civilized, declared that they were now quite ready to govern themselves, the capitalists held on to their markets as an eagle holds on to its prey, and, throwing off their apostolic mask, defended their annexations with fire and sword. They said they would fight to the last drop of their blood for “the integrity of the Empire”; and they did in fact pay many thousands of hungry men to fight to that extremity. In spite of them half of North America broke loose, after a war which left a volcano of hatred that is still smouldering and winning Chicago elections after a century of American independence. Roman Catholic Ireland, South Africa, and Egypt have extorted self-government from us. India is doing the same. But they do not thank us for it, knowing how loth our Capitalism was to let them go.

On the other hand look at Australia, New Zealand, and Canada. We did not dare coerce them after our failure in North America. We provide a costly fleet gratuitously to protect their shores from invasion. We give them preferences in trade whilst allowing them to set up heavy protective duties against us. We allow them to be represented at international congresses as if they were independent nations. We even allow them access to the King independently of the London Cabinet. The result is that they hang on to us with tyrannical devotion, waving the Union Jack as enthusiastically as the Americans wave the Stars and Stripes. And this is not because they are of our own race. The Americans were that; yet they broke away; so were the Irish and their leaders. The French Canadians, who are of the same race with us only in the sense that we all belong to the human race, cling to us just as hard. They all follow us to war so boldly that we begin to have misgivings as to whether someday they may not make us follow them to war. The last land to strike for independence of the British Empire may be Protestant England herself, with Ulster and Scotland for allies, and the Irish Free State heading her Imperialist opponents.

But Capitalism can be depended on to spoil all these reconciliations and loyalties. True, we no longer exploit colonies capitalistically: we allow them to do it for themselves, and to call the process self-government. Whilst we persisted in governing them they blamed us for all the evils Capitalism brought upon them; and they finally refused to endure our government. When we left them to govern themselves they became less and less hostile to us. But the change always impoverishes them, and leaves them in comparative disorder. The capitalistic evils for which they blamed us still oppress them. Their self-government is more tyrannical than our alien government ever dared to be. Their new relation to the Imperial State becomes more dangerously strained than the old relation, precisely as the relation of England to Germany was more dangerously strained in 1913 than the relation of England to Ireland. The most liberal allowance of self-government cannot reconcile people as long as their capitalists are competing for markets. Nationalism may make Frenchmen and Englishmen, Englishmen and Irishmen, savage enemies when it is infringed. Frenchmen and Irishmen laid their own countries waste to get rid of English rule. But Capitalism makes all men enemies all the time without distinction of race, color, or creed. When all the nations have freed themselves Capitalism will make them fight more furiously than ever, if we are fools enough to let it.

Have you ever seen the curiosity called a Prince Rupert’s Drop? It is a bead of glass in such a state of internal strain that if you break off the tiniest corner the whole bead flies violently to bits. Europe was like that in 1914. A handful of people in Serbia committed a murder, and the next moment half Europe was murdering the other half. This frightful condition of internal strain and instability was not set up by human nature: it was, I repeat, intensely repugnant to human nature, being a condition of chronic terror that at last became unbearable, like that of a woman who commits suicide because she can no longer endure the dread of death. It was set up by Capitalism. Capitalism, you will say, is at bottom nothing but covetousness; and covetousness is human nature. That is true; but covetousness is not the whole of human nature; it is only a part, and one that vanishes when it is satisfied, like hunger after a meal, up to which point it is wholesome and necessary. Under Capitalism it becomes a dread of poverty and slavery, which are neither wholesome nor necessary. And, as we have just seen, capital is carried by its own nature beyond the control of both human covetousness and human conscience, marching on blindly and automatically, until we find on the one hand the masses of mankind condemned to poverty relieved only by horrible paroxysms of bloodshed, and on the other a handful of hypertrophied capitalists gasping under the load of their growing millions, and giving it away in heaps in a desperate attempt, partly to get rid of it without being locked up as madmen for throwing it into the sea, and partly to undo, by founding Rockefeller institutes and Carnegie libraries, and hospitals and universities and schools and churches, the effects of the welter of ignorance and poverty produced by the system under which it has accumulated on their hands. To call these unfortunate billionaires monsters of covetousness in the face of their wild disgorgings (to say nothing of their very ordinary portraits) is silly. They are rather to be compared to the sorcerer’s apprentice who called up a demon to fetch a drink for him, and, not knowing the spell for stopping him when he had brought enough, was drowned in an ocean of wine.

42. HOW WEALTH ACCUMULATES AND MEN DECAY

I want to stress this personal helplessness we are all stricken with in the face of a system that has passed beyond our knowledge and control. To bring it nearer home, I propose that we switch off from the big things like empires and their wars to little familiar things. Take pins for example! I do not know why it is that I so seldom use a pin when my wife cannot get on without boxes of them at hand; but it is so; and I will therefore take pins as being for some reason specially important to women.

There was a time when pinmakers could buy the material; shape it; make the head and the point; ornament it; and take it to market or to your door and sell it to you. They had to know three trades: buying, making, and selling; and the making required skill in several operations. They not only knew how the thing was done from beginning to end, but could do it. But they could not afford to sell you a paper of pins for a farthing. Pins cost so much that a woman’s dress allowance was called pin money.

By the end of the eighteenth century Adam Smith boasted that it took eighteen men to make a pin, each man doing a little bit of the job and passing the pin on to the next, and none of them being able to make a whole pin or to buy the materials or to sell it when it was made. The most you could say for them was that at least they had some idea of how it was made, though they could not make it. Now as this meant that they were clearly less capable and knowledgeable men than the old pinmakers, you may ask why Adam Smith boasted of it as a triumph of civilization when its effect was so clearly a degrading effect. The reason was that by setting each man to do just one little bit of the work and nothing but that, over and over again, he became very quick at it. The men, it is said, could turn out nearly five thousand pins a day each; and thus pins became plentiful and cheap. The country was supposed to be richer because it had more pins, though it had turned capable men into mere machines doing their work without intelligence, and being fed by the spare food of the capitalist as an engine is fed with coals and oil. That was why the poet Goldsmith, who was a farsighted economist as well as a poet, complained that “wealth accumulates, and men decay”.

Nowadays Adam Smith’s eighteen men are as extinct as the diplodocus. The eighteen flesh-and-blood machines are replaced by machines of steel which spout out pins by the hundred million. Even sticking them into pink papers is done by machinery. The result is that with the exception of a few people who design the machines, nobody knows how to make a pin or how a pin is made: that is to say, the modern worker in pin manufacture need not be one-tenth so intelligent and skilful and accomplished as the old pinmaker; and the only compensation we have for this deterioration is that pins are so cheap that a single pin has no expressible value at all. Even with a big profit stuck on to the cost-price you can buy dozens for a farthing; and pins are so recklessly thrown away and wasted that verses have to be written to persuade children (without success) that it is a sin to steal a pin.

Many serious thinkers, like John Ruskin and William Morris, have been greatly troubled by this, just as Goldsmith was, and have asked whether we really believe that it is an advance in wealth to lose our skill and degrade our workers for the sake of being able to waste pins by the ton. We shall see later on, when we come to consider the Distribution of Leisure, that the cure for this is not to go back to the old ways; for if the saving of time by modern machinery were equally divided among us, it would set us all free for higher work than pinmaking or the like. But in the meantime the fact remains that pins are now made by men and women who cannot make anything by themselves, and could not arrange between themselves to make anything even in little bits. They are ignorant and helpless, and cannot lift their finger to begin their day’s work until it has all been arranged for them by their employers, who themselves do not understand the machines they buy, and simply pay other people to set them going by carrying out the machine maker’s directions.

The same is true of clothes. Formerly the whole work of making clothes, from the shearing of the sheep to the turning out of the finished and washed garment ready to put on, had to be done in the country by the men and women of the household, especially the women; so that to this day an unmarried woman is called a spinster. Nowadays nothing is left of all this but the sheep-shearing; and even that, like the milking of cows, is being done by machinery, as the sewing is. Give a woman a sheep today and ask her to produce a woollen dress for you; and not only will she be quite unable to do it, but you are as likely as not to find that she is not even aware of any connection between sheep and clothes. When she gets her clothes, which she does by buying them at a shop, she knows that there is a difference between wool and cotton and silk, between flannel and merino, perhaps even between stockinet and other wefts; but as to how they are made, or what they are made of, or how they came to be in the shop ready for her to buy, she knows hardly anything. And the shop assistant from whom she buys is no wiser. The people engaged in the making of them know even less; for many of them are too poor to have much choice of materials when they buy their own clothes.

Thus the capitalist system has produced an almost universal ignorance of how things are made and done, whilst at the same time it has caused them to be made and done on a gigantic scale. We have to buy books and encyclopedias to find out what it is we are doing all day; and as the books are written by people who are not doing it, and who get their information from other books, what they tell us is from twenty to fifty years out of date, and unpractical at that. And of course most of us are too tired of our work when we come home to want to read about it: what we need is a cinema to take our minds off it and feed our imagination.

It is a funny place, this world of Capitalism, with its astonishing spread of ignorance and helplessness, boasting all the time of its spread of education and enlightenment. There stand the thousands of property owners and the millions of wage workers, none of them able to make anything, none of them knowing what to do until somebody tells them, none of them having the least notion of how it is that they find people paying them money, and things in the shops to buy with it. And when they travel they are surprised to find that savages and Esquimaux and villagers who have to make everything for themselves are more intelligent and resourceful! The wonder would be if they were anything else. We should die of idiocy through disuse of our mental faculties if we did not fill our heads with romantic nonsense out of illustrated newspapers and novels and plays and films. Such stuff keeps us alive; but it falsifies everything for us so absurdly that it leaves us more or less dangerous lunatics in the real world.

Excuse my going on like this; but as I am a writer of books and plays myself, I know the folly and peril of it better than you do. And when I see that this moment of our utmost ignorance and helplessness, delusion and folly, has been stumbled on by the blind forces of Capitalism as the moment for giving votes to everybody, so that the few wise women are hopelessly overruled by the thousands whose political minds, as far as they can be said to have any political minds at all, have been formed in the cinema, I realize that I had better stop writing plays for a while to discuss political and social realities in this book with those who are intelligent enough to listen to me.

43. DISABLEMENT ABOVE AND BELOW

You must not conclude from what I have just said that I grudge the people their amusements. I have made most of my money by amusing them. I recognize more clearly than most people that not only does all work and no play make Jill a dull girl, but that she works so that she may be able to enjoy life as well as to keep herself from dying of hunger and exposure. She wants, and needs, leisure as well as wages. But breadwinning must come before charabancs and cinemas. I have the strongest sympathy, as I daresay you have, with the French gentleman who said that if he could have the luxuries of life he could do without the necessities; but unfortunately Nature does not share our sympathy, and ruthlessly puts breadwinning first on pain of death. The French gentleman is less important than the women who are asking for an eight-hour working day, because, though what they are really asking for is for a few hours more leisure when they have rested and slept, cooked and fed and washed up, yet they know that leisure must be worked for, and that no woman can shirk her share of the work except by putting it on some other woman and cutting short her leisure.

Therefore when I say that Capitalism has reduced our people to a condition of abject helplessness and ignorance in their productive capacity as workers, you cannot reassure me by pointing out that factory girls are no fools when it comes to gossiping and amusing themselves; that they are resourceful enough to learn lip reading in the weaving-sheds, where the banging of the looms makes it impossible to hear each other speak; that their dances and charabanc excursions and whist drives and dressing and wireless concerts stimulate and cultivate them to an extent unknown to their grandmothers; that they consume frightful quantities of confectionery; and that they limit their families to avoid too much mothering. But all this is consumption, not production. When they are engaged in producing these amusements: when they take the money for the tickets at the pay-boxes, or do some scrap of the work of making a charabanc, or wind the wire on a coil for broadcasting, they are mere machines, taking part in a routine without knowing what came before or what is to follow.

In giving all the work to one class and all the leisure to another as far as the law will let it, the Capitalist system disables the rich as completely as the poor. By letting their land and hiring out their spare money (capital) to others, they can have plenty of food and fun without lifting their little fingers. Their agents collect the rent for the land, and lodge it in the bank for them. The companies which have hired their spare money lodge the half-yearly hire (dividends) in the same way. Bismarck said of them that they had only to take a pair of scissors and cut off a coupon; but he was wrong: the bank does even that for them; so that all they have to do is to sign the cheques with which they pay for everything. They need do nothing but amuse themselves; and they would get their incomes just the same if they did not do even that. They can only plead that their ancestors worked productively, as if everybody’s ancestors had not worked productively, or as if this were any excuse for their not following their ancestors’ excellent example. We cannot live on the virtues of our grandmothers. They may have farmed their own land, and invented the ways in which their spare money was applied to the land to make them richer; but when their successors found that all this trouble would be taken for them by others, they simply let the land and put out their spare money for hire (invested it).

Some of our great landholders inherit their land from feudal times, when there were no factories nor railways, and when towns were so small that they were walled in as gardens are now. In those days the landholders, with the king at their head, had to raise armies and defend the country at their own cost. They had to make the laws and administer them, doing military work, police work, and government work of all sorts. Henry IV, who died of overwork, found to his cost how true it was in those days that the greatest among us must be servant to all the rest. Nowadays it is the other way about: the greatest is she to whom all the rest are servants. All the chores and duties of the feudal barons are done by paid officials. In country places they may still sit on the Bench as unpaid magistrates; and there remains the tradition that military service as officers is proper for their sons. A few of them, with the help of solicitors and agents, manage the estates on which they actually live, or allow their wives to do it. But these are only vestiges of a bygone order, maintained mostly by rich purchasers of estates who are willing to take a little trouble to be ranked as country gentlemen and county ladies. There are always newly enriched folk who have this vanity for a while, and will buy the estate of a real country gentleman to take on his position in the country. But at any moment our landed gentry, whether they are so by descent or purchase, can sell their country houses and parks, and live anywhere they please in the civilized world without any public duties or responsibilities. Sooner or later they all do so, thus breaking the only link that binds them to the old feudal aristocracy save their names and titles. For all the purposes of the real world of today there is no longer a feudal aristocracy: it is merged in the industrial capitalist class, with which it associates and intermarries without distinction, money making up for everything. If it be still necessary to call the rich an ocracy of any kind, they must be called a plutocracy, in which the oldest ducal estate and the newest fortune made in business are only forms of capital, imposing no public duties on the owner.

Now this state of things may seem extremely jolly for the plutocracy from the point of view of those who are so overworked and underamused that they can imagine nothing better than a life that is one long holiday; but it has the disadvantage of making the plutocrats as helpless as babies when they are left to earn their own living. You know that there is nothing more pitiable on earth within the limits of good health than born ladies and gentlemen suddenly losing their property. But have you considered that they would be equally pitiable if their property were thrown on their own hands to make what they could of it? They would not know how to farm their lands or to work their mines and railways or to sail their ships. They would perish surrounded by what Dr Johnson called “the potentiality of growing rich beyond the dreams of avarice”. Without the hungry they would have to say “I cannot dig: to beg (even if I knew how) I am ashamed”. The hungry could do without them, and be very much the better for it; but they could not do without the hungry.

Yet most of the hungry, left to themselves, would be quite as helpless as the plutocrats. Take the case of a housemaid, familiar to the intelligent lady who can afford to keep one. A woman may be a very good housemaid; but you have to provide the house for her and manage the house before she can set to work. Many excellent housemaids, when they marry, make a poor enough job of their own housekeeping. Ask them to manage a big hotel, which employs dozens of housemaids, and they will think you are laughing at them: you might as well ask the porter at the Bank of England to manage the bank. A bricklayer may be a very good bricklayer; but he cannot build a house nor even make the bricks he lays. Any laborer can lay a plank across a stream, or place a row of stepping-stones in it; but just ask him to build a bridge, whether it be the simplest sort of canal bridge or a gigantic construction like the Forth Bridge! You might as well ask your baby to make its cot and knit its jumper, or your cook to design and construct a kitchen range and water supply.

This helplessness gets more and more complete as civilization advances. In villages you may still find carpenters and blacksmiths who can make things. They can even choose and buy their materials, and then sell the finished article. But in the cities on which our existence now depends you find multitudes of workers and plutocrats who cannot make anything; do not know how anything is made; and are so inept at buying and selling that without fixed-price-shops they would perish.

44. THE MIDDLE STATION IN LIFE

And now, if the landlords and capitalists can neither make anything nor even tell others how to make it; and if the workers can do nothing until they are told what to do, how does the world get on? There must be some third class standing between the propertied class on the one hand and the propertyless class on the other, to lease the land and hire the capital and tell the workers what to do with them.

There is. You can see for yourself that there is a middle class which does all the managing and directing and deciding work of the nation, besides carrying on the learned and literary and artistic professions. Let us consider how this class arose, and how it is continually recruited from the capitalist families.

The capitalists do something more than merely own. They marry and have children. Now an income which is comfortable for two people may not be enough for three or four children in addition, to say nothing of possibly twice or thrice that number. And when the three or four children grow up and marry and have three or four children each, what meant riches for the grandparents may mean poverty for the grandchildren.

To avoid this, propertied families may arrange that only the eldest son shall inherit the property, leaving the younger sons to shift for themselves, and the daughters to marry men of property if they can. This is called primogeniture. Until 1926 it was the law of the land in England when the owner of a landed estate died without leaving a will to the contrary. Where there is no such law, and all the children inherit equal shares of the parents’ property, as they do among the peasant proprietors in France, the family must come to an arrangement of the same kind between themselves, or else sell the property and leave its owners with a few pounds each that will not last them very long. Therefore they almost always do agree that the younger children shall live by working like the hungry, whilst the eldest keeps the farm and cultivates it. This cannot be done when the property is not land but capital, and all the members of the family are living on the interest of hired out spare money. Parents may make wills leaving all of it or most of it to one son; but they do not do this as a rule; and sooner or later the property gets divided and divided among children and other next-of-kin until the inheritors cannot live on their shares.

But please remark that the younger sons who are thus thrown on the world to earn their living have the tastes and habits and speech and appearance and education of rich men. They are well connected, as we say. Their near relations may be peers. Some of them have been schooled at Eton and Harrow, and have taken degrees at Oxford and Cambridge. Others have less distinguished connections. Their parents or grandparents may have made money in business; and they may have gone to the big city schools, or to day schools, instead of to Eton, and either to one of the new democratic universities or to no university at all. Their most important relative may be a mayor or alderman. But they are educated at secondary as distinguished from elementary schools; and though not what they themselves call great swells, they have the manners and appearance and speech and habits of the capitalist class, are described as gentlemen, and politely addressed by letter as Esquires instead of plain Misters.

All these propertyless people who have the ways and the culture of propertied ones have to live by their wits. They go into the army and navy as officers, or into the upper grades of the civil service. They become clergymen, doctors, lawyers, authors, actors, painters, sculptors, architects, schoolmasters, university professors, astronomers and the like, forming what we call the professional class. They are treated with special respect socially; but they see successful men of business, inferior to themselves in knowledge, talent, character, and public spirit, making much larger incomes. The highest sorts of mental work are often so unremunerative that it is impossible to make a living by practising them commercially. Spinoza lived by grinding lenses, and Rousseau by copying music. Einstein lives by professorships. Newton lived, not by discovering gravitation and measuring fluxions, but by acting as Master of the Mint, which other men could have done as well. Even when a profession is comparatively lucrative and popular, its gains are restricted by the fact that the work must all be done by the practitioner’s own hand; for a surgeon cannot employ a thousand subordinates to deal with a million patients as a soap king deals with a million customers, nor the President of the Royal Academy hand over a two thousand guinea portrait sitter to his secretary. The years of professional success are usually preceded by a long struggle with scanty means. I myself am held to be a conspicuous example of success in the most lucrative branch of the literary profession; but until I was thirty I could not make even a bare living by my pen. At thirty-eight I thought myself passing rich on six or seven pounds a week; and even now, when I am seventy, and have achieved all that can be achieved commercially at my job, I see in the paper every day, under the heading Wills and Bequests, that the widow of some successful man of business, wholly unknown to fame, has died leaving a fortune which reduces my gains to insignificance.

The consequence is that professional men and civil servants, when they are not incurable old-fashioned snobs who regard trade as beneath the dignity of their family, and when their sons have no overwhelming aptitude for one or other of the professions, advise them strongly to go in for business. The man of business may not have much chance of a public statue unless he pays for it and presents it to his native town with a spacious public park attached; and his occupation may be a dry one in itself, however exciting the prospect of pocketing more and more money may make it. But he can make profits not only out of his work, like the surgeon or painter, but out of the work of thousands of others as well. And his work is not necessarily dry: modern businesses tend to become more interesting and important, and even more scientific, than average professional work. Their activities are much more varied: in fact modern commercial magnates, when they control a dozen different businesses, become better informed and better developed mentally than the rank and file of the professions. What is more, they are learning to snap up the ablest university scholars and civil servants, and take them into partnership not as office managers but as thinkers, diplomatists, and commercial scientists. It is in industrially undeveloped countries that professional men rank as an aristocracy of learning and intellect: in European centres today commercial society is a more effective reserve of culture than professional society. When the professional man or the public servant tells his son that a berth in the civil service is a blind alley, or doctoring at the call of the night bell a dog’s life, contrasting them with the unlimited prospects and the infinite scope for personal initiative in business, he is recommending the young man to improve on his father’s condition instead of starting him on the downward path socially.

And what is business in the lump? It is hiring land from landlords and spare money from capitalists, and employing the hungry to make enough money out of them day by day to pay the wages for their keep and bring in a profit as well. Astonishing fortunes can be made in this way by men and women with the necessary ability and decision who have the particular sort of pecuniary keenness and pertinacity that business requires. Even more staggering profits are made sometimes by accident, the business man hitting by chance on something new that the public happens to fancy. Millions are made by medicines which injure people’s health instead of improving it (read Tono-Bungay), and hair restorers that leave the buyer as bald as before. Articles that nobody needs, and sham pleasures that give only fatigue and boredom at extravagant prices, are advertized and advertized until people are beglamored into thinking they cannot do without them.

But the main scope in business is for honorable and useful activity, from growing food and building houses and making clothes, or manufacturing spades and sewing-machines, to laying cables round the world, and building giant ships to turn the ocean or the air into a highway. The planning and management and ordering of this gives employment to able and energetic men who have no property, but have the education and social address of the propertied class. The educated who are neither able nor energetic, and who have no professions, find employment as agents or clerks carrying out the routine and keeping the accounts of businesses which the able ones have established and are directing. And the women of their class are forced to live by marrying them.

In this way we get, between the propertied class and the hungry mass, a middle class which acts as a sort of Providence to both of them. It cultivates the land and employs the capital of the property holders, paying them the rent of their lands and the hire of their spare money without asking them to lift a finger, and giving the hungry wages to live on without asking them to think or decide or know or do anything except their own little bit of the job in hand. The hungry have neither to buy the material nor to sell the product, neither to organize the service nor find the customer. Like children they are told what to do, and fed and lodged and clothed whilst they are doing it, not always very handsomely perhaps; but at worst they are kept alive long enough to produce a fresh set of hungry ones to replace them when they are worn out.

There are always a few cases in which this management is done, not by descendants of propertied folk, but by men and women sprung from the hungriest of the hungry. These are the geniuses who know most of the things that other people have to be taught, and who educate themselves as far as they need any education. But there are so few of them that they need not be taken into account. In great social questions we are dealing with the abilities of ordinary citizens: that is, the abilities we can depend on everyone except invalids and idiots possessing, and not with what one man or woman in ten thousand can do. In spite of several cases in which persons born in poverty and ignorance have risen to make vast fortunes, to become famous as philosophers, discoverers, authors, and even rulers of kingdoms, to say nothing of saints and martyrs, we may take it that business and the professions are closed to those who cannot read and write, travel and keep accounts, besides dressing, speaking, behaving, and handling and spending money more or less in the manner of the propertied classes.

This is another way of saying that until about fifty years ago the great mass of our people working for weekly wages were as completely shut out from the professions and from business as if there had been a law forbidding them on pain of death to attempt to enter them. I remember wondering when I was a lad at a man who was in my father’s employment as a miller. He could neither read nor write nor cipher (that is, do sums on paper); but his natural faculty for calculation was so great that he could solve instantly all the arithmetical problems that arose in the course of his work: for instance, if it were a question of so many sacks of flour at so much a sack, he could tell you the answer straight off without thinking, which was more than my father or his clerks could do. But because he did not know his alphabet, and could not put pen to paper, and had not the speech and manners and habits and dress without which he would not have been admitted into the company of merchants and manufacturers, or of lawyers, doctors, and clergymen, he lived and died a poor employee, without the slightest chance of rising into the middle class, or the faintest pretension to social equality with my father. And my father, though he was propertyless, and worked as a middle class civil servant and subsequently as a merchant, was not at all proud of being a member of the middle class: on the contrary, he resented that description, holding on to his connexion with the propertied class as a younger son of many former younger sons, and therefore, though unfortunately reduced to living not very successfully by his wits, a man of family and a gentleman.

But this was sixty years ago. Since then we have established Communism in education. If my father’s miller were a boy now, he would go to school for nine years, whether his parents liked it or not, at the expense of the whole community; and his mathematical gift would enable him to win a scholarship that would take him on to a secondary school, and another scholarship there that would take him to the university and qualify him for a profession. At the very least he would become an accountant, even were it only as a bookkeeper or clerk. In any case he would be qualified for middle class employment and pass into that class.

Now the social significance of this is that the middle class, which the younger sons and their descendants formerly had all to themselves as far as the most desirable positions in it were concerned, is now recruited from the working class as well. These recruits, with no gentlemanly nonsense about them, are not only better taught than the boys who go to cheapish middle class schools, but better trained to face the realities of life. Also the old differences in speech and dress and manners are much less than they were, partly because the working class is picking up middle class manners, but much more because they are forcing their own manners and speech on the middle class as standards. A man like my father, half a merchant, but ashamed of it and unable to make up his mind to it, and half a gentleman without any property to uphold his pretension, would, if he were a boy nowadays, be beaten hollow in the competition for land, for capital, and for position in the civil service by the sons of men whose grandfathers would never have dreamed of presuming to sit down in his presence. The futile propertyless gentlemen, the unserviceable and grossly insolent civil servants whom Dickens described, have to be content nowadays with the refuse of middle class employment. They are discontented, unhappy, impecunious, struggling with a false position, borrowing (really begging) from their relatives, and unable to realize, or unwilling to admit, that they have fallen out of the propertied class, not into an intermediate position where they have a monopoly of all the occupations and employments that require a little education and manners, but right down into the ranks of the hungry, without the hardening that makes the hungry life bearable.

And what of the daughters? Their business is to get married; and I can remember the time when there was no other hopeful opening in life for them. When they failed to find husbands, and no special provision had been made for them, they became governesses or school teachers or “companions” or genteel beggars under the general heading of poor relations. They had been carefully trained to feel that it was unladylike to work, and still more unladylike to propose marriage to men. The professions were closed to them. The universities were closed to them. The business offices were closed to them. Their poverty cut them off from propertied society. Their ladylikeness cut them off from the society of working people as poor as themselves, and from inter-marriage with them. Life was a ghastly business for them.

Nowadays, there are far more careers open to women. We have women barristers and women doctors in practice. True, the Church is closed against them, to its own great detriment, as it could easily find picked women, eloquent in the pulpit and capable in parish management, to replace the male refuse it has too often to fall back on; but women can do without ecclesiastical careers now that the secular and civil services are open. The closing of the fighting services is socially necessary, as women are far too valuable to have their lives risked in battle as well as in child-bearing. If ninety out of every hundred young men were killed we could recover from the loss, but if ninety out of every hundred young women were killed there would be an end of the nation. That is why modern war, which is not confined to battle fields, and rains high explosives and poison gas on male and female civilians indiscriminately in their peaceful homes, is so much more dangerous than war has ever been before.

Besides, women are now educated as men are: they go to the universities and to the technical colleges if they can afford it; and, as Domestic Service is now an educational subject with special colleges, a woman can get trained for such an occupation as that of manageress of a hotel as well as for the practice of law or medicine, or for accountancy and actuarial work. In short, nothing now blocks a woman’s way into business or professional life except prejudice, superstition, old-fashioned parents, shyness, snobbery, ignorance of the contemporary world, and all the other imbecilities for which there is no remedy but modern ideas and force of character. Therefore it is no use facing the world today with the ideas of a hundred years ago, when it was practically against the law for a lady who was not a genius to be self-supporting; for if she kept a shop, or even visited at the house of a woman who kept a shop, she was no lady. I know better than you (because I am probably much older) that the tradition of those bad old times still wastes the lives of single gentlewomen to a deplorable extent; but, for all that, every year sees an increase in the activities of gentlewomen outside the home in business and the professions, and even in perilous professional exploration and adventure with a cinematographic camera in attendance.

This increase is hastened by the gigantic scale of capitalist production, which, as we have seen, reduces the old household labor of baking and brewing, spinning and weaving, first to shopping at separate shops, and then to telephoning the day’s orders to one big multiple shop. We have seen also how it leads prematurely to Birth Control, which has reduced the number of children in the middle class households very notably. Many middle-class women who could formerly say with truth that there was no end to a woman’s work in the house are now underworked, in spite of the difficulty of finding servants. It is conceivable that women may drive men out of many middle class occupations as they have already driven them out of many city offices. We are losing the habit of regarding business and the professions as male employments.

Nevertheless males are in a vast majority in these departments, and must remain so as long as our family arrangements last, because the bearing and rearing of children, including domestic housekeeping, is woman’s natural monopoly. As such, being as it is the most vital of all the functions of mankind, it gives women a power and importance that they can attain to in no other profession, and that man cannot attain to at all. In so far as it is a slavery, it is a slavery to Nature and not to Man: indeed it is the means by which women enslave men, and thus create a Man Question which is called, very inappropriately, the Woman Question. Woman as Wife and Mother stands apart from the development we are dealing with in this chapter, which is, the rise of a business and professional middle class out of the propertied class. This is a sexless development, because when the unmarried daughters, like the younger sons, become doctors, barristers, ministers in the Free Churches, managers, accountants, shopkeepers, and clerks under the term typist (in America stenographer), they virtually leave their sex behind them, as men do. In business and the professions there are neither men nor women: economically they are all neuters, as far as that is humanly possible. The only disadvantage the woman is at in competition with the man is that the man must either succeed in his business or fail completely in life, whilst the woman has a second string to her bow in the possibility of getting married. A young woman who regards business employment as only a temporary support until she can find an eligible husband will never master her work as a man must.

45. DECLINE OF THE EMPLOYER

At first sight it would seem that the employers must be the most powerful class in the community, because the others can do nothing without them. So they were, a hundred years ago. The dominant man then was not the capitalist nor the landlord nor the laborer, but the employer who could set capital and land and labor to work. These employers began as office employees; for business in those days was mostly on so small a scale that any middle class employee who had learnt the routine of business as a clerk or apprentice, in his father’s office or elsewhere, and who could scrape together a few hundred pounds, could enter into partnership with another thrifty employee, and set up in almost any sort of business as an employer.

But as spare money accumulated in larger and larger quantity, and enterprise expanded accordingly, business came to be done on a larger and larger scale until these old-fashioned little firms found their customers being taken away from them by big concerns and joint stock companies who could, with their huge capitals and costly machinery, not only undersell them, but make a greater profit out of their lower prices. Women see this in their shopping. They used to buy their umbrellas at an umbrella shop, their boots at a boot shop, their books at a book shop, and their lunches-out at a restaurant. Nowadays they buy them all at the same shop, lunch and all. Huge bazaars like Selfridge’s and Whiteley’s in London, and the great multiple shops in the provincial cities, are becoming the only shops where you can buy anything, because they are taking away the trade of the small separate shops and ruining the shopkeepers who kept them. These ruined shopkeepers may think themselves lucky if they get jobs in the multiple shops as shop assistants, managers of departments, and the like, when they are not too old for the change.

Sometimes the change is invisible. Certain retail trades have to be carried on in small shops scattered all over the place. For example, oil shops, public houses, and tobacconists. These look like separate small businesses. But they are not. The public houses are tied houses practically owned in dozens by the brewers. A hundred oil shops or tobacco shops may belong to a single big company, called a Trust. Just as the little businesses conducted by a couple of gentlemen partners, starting with a capital which they counted in hundreds, had to give way to companies counting their capital in thousands, so these companies are being forced to combine into Trusts which count their capital in millions.

These changes involve another which is politically very important. When the employers had it all their own way, and were in business for themselves separately and independently, they worked with what we should call small capitals, and had no difficulty in getting them. Capital was positively thrown down their throats by the bankers, who, as we shall see later, have most of the spare money to keep. Those were the days of arrogant cotton lords and merchant princes. The man who could manage a business took every penny that was left in the till when the landlord had had his rent, the capitalist (who was often himself) his interest, and the employees their wages. If he were a capable man, what remained for him as profit was enough to make him rich enough to go into Parliament if he cared to. Sometimes it was enough to enable him to buy his way into the peerage. Capital being useless and Labor helpless without him, he was, as an American economist put it, master of the situation.

When joint stock companies, which were formerly supposed to be suitable for banking and insurance only, came into business generally, the situation of the employers began to change. In a joint stock concern you have, instead of one or two capitalists, hundreds of capitalists, called shareholders, each contributing what spare money she or he can afford. It began with £100 shares, and has gone on to £10 and £1 shares; so that a single business today may belong to a host of capitalist proprietors, many of them much poorer people than could ever have acquired property in pre-company days. This had two results. One was that a woman with a £5 note to spare could allow a company to spend it, and thereby become entitled to, say, five shillings a year out of the gains of that company as long as it lasted. In this way Capitalism was strengthened by the extension of property in industry from rich people with large sums of spare money to poor people with small ones. But the employers were weakened, and finally lost their supremacy and became employees.

It happened in this way. The joint stock company system made it possible to collect much larger capitals to start business with than the old separate firms could command. It was already known that the employer with a thousand pounds worth of machinery and other aids to production (called plant) could be undersold and driven out of the market by the employer with twenty thousand pounds worth. Still, employers could get twenty thousand pounds lent to them easily enough if it was believed that they could handle it profitably. But when companies came into the field equipped with hundreds of thousands of pounds, and these companies began to combine into Trusts equipped with millions, the employers were outdone. They could not raise such sums among their acquaintances. No bank would allow them to overdraw their accounts on such a gigantic scale. To get more capital, they had to turn their businesses into joint stock companies.

This sounds simple; but the employers did not find it so. You, I hope, would not buy shares in a new company unless you saw what are called good names on the prospectus, shewing that half a dozen persons whom you believe to be wealthy, trustworthy, good judges of business, and in responsible social stations were setting you the example. If ever you do you will regret it, possibly in the workhouse. Now the art of getting at the people with the good names, and interesting them, is one at which practical employers are for the most part incurably unskilled. Therefore when they want to raise capital on the modern scale they are forced to go to persons who, having made a special profession of it, know where to go and how to proceed. These persons are called Promoters, though they usually call themselves financiers. They naturally charge a very high commission for their services; and the accountants and solicitors whose reputations inspire confidence put a high price on their names also. They all find that they can make so much by raising large capitals that it is not worth their while to trouble themselves with small ones; and the quaint result of this is that an employer finds it easier to raise large sums than small ones. If he wants only £20,000, the promoters and financiers shew him the door contemptuously: the pickings on so small a sum are beneath their notice. If, however, he wants £100,000, they will listen superciliously, and perhaps get it for him. Only, though he has to pay interest on £100,000, and stand indebted in that amount, he is very lucky if he receives £70,000 in cash. The promoters and financiers divide the odd £30,000 among themselves for their names and their trouble in raising the money. The employers are helpless in their hands: it is a case of take it or leave it: if they refuse the terms they get no capital. Thus the financiers and their go-betweens are now masters of the situation; and the men who actually conduct and order the industry of the country, who would have been great commercial magnates in Queen Victoria’s reign, are now under the thumbs of men who never employed an industrial workman nor entered a factory or mine in their lives, and never intend to.

And that is not all. When an employer turns his business into a joint stock company he becomes an employee. He may be the head employee who orders all the other employees about, engaging and dismissing them as he thinks fit; but still he is an employee, and can be dismissed by the shareholders and replaced by another manager if they think he is taking too much for his services. Against this possibility he usually protects himself by selling his establishment to the company at first for a number of shares sufficient to enable him to outvote all the discontented shareholders (each share carries a vote); and in any case his position as the established head who has made a success of the business, or at least persuaded the shareholders that he has, is a strong one. But he does not live for ever. When he dies or retires, a new manager must be found; and this successor is not his heir, but a stranger entering as a removable employee, managing the concern for a salary and perhaps a percentage of the profits.

Now an able employee-manager can command a high salary, and have a good deal of power, because he is felt to be indispensable until he is worn out. But he can never be as indispensable as the old employers who invented their own methods, and clung to their “trade secrets” jealously. Their methods necessarily resolved themselves into an office routine which could be picked up, however unintelligently, by those employed in it. The only trade secret that really counted was the new machinery, which was not secret at all; for all the great mechanical inventions are soon communized by law: that is, instead of the inventor of a machine being allowed to keep it as his private property for ever and make all the employers who use it pay him a royalty, he is allowed to monopolize it in this way under a patent for fourteen years only, after which it is at everybody’s disposal.

You can guess the inevitable result. It may take a genius to invent, say a steam-engine, but once it is invented a couple of ordinary workmen can keep it going; and when it is worn out any ordinary engineering firm can replace it by copying it. Also, though it may need exceptional talent, initiative, energy, and concentration to set up a new business, yet when it is once set up, and the routine of working it established, it can be kept going by ordinary persons who have learnt the routine, and whose rule is “When in doubt as to what to do, see what was done the last time, and do it over again”. Thus a very clever man may build up a great business, and leave it to his quite ordinary son to carry on when he is dead; and the son may get on very well without ever really understanding the business as his father did. Or the father may leave it to his daughter with the certainty that if she cannot or will not do the directing work herself, she can easily hire employee-employers who can and will, for a salary plus a percentage. The famous Krupp factory in Germany belongs to a lady. I will not go so far as to say that managerial ability has become a drug in the market, though, in the little businesses which are still conducted in the old way in the poorer middle class, the employer often has to pay his more highly skilled employees more than he gets out of the business for himself. But the monopoly of business technique which made the capitalist-employer supreme in the nineteenth century has gone for ever. Employers today are neither capitalists nor monopolists of managerial ability. The political and social power which their predecessors enjoyed has passed to the financiers and bankers, who monopolize the art of collecting millions of spare money. That monopoly will be broken in its turn by the communization of banking, to which we shall come presently.

Meanwhile you, putting all these developments together in your mind, can now contemplate the Middle Class understandingly. You know now how it sprang from the propertied class as an educated younger-son class without property, and supported itself by practising the professions, and by doing the business of the propertied class. You know how it rose to supreme power and riches when the development of modern machinery (called the Industrial Revolution) made business so big and complicated that neither the propertied class nor the working class could understand it, and the middle class men who did (called generally employers), became masters of the situation. You know how, when the first generations of employers had found out how to do this work, and established a routine of doing it which any literate man could learn and practise, and when all that remained was to find more and more capital to feed it as its concerns grew bigger and bigger, the supremacy passed from the employers to the financiers who hold it at present. You know also that this last change has been accompanied by a change in the status of the employer, who instead of hiring the land and capital of the propertied classes for a fixed payment of rent and interest, and taking as his profit all that remains, is now simply employed to manage for companies and trusts, the shareholders taking everything that is left after they have paid rent and wages (including his salary). You see that in applying for such posts he has to meet the competition not only of other middle class men as of old, but of clever sons of the working class, raised into the middle class by education at the public expense by our system of scholarships, which act as ladders from the elementary school to the University or the Polytechnic. You see that this applies not only to employers, but much more to their clerks. Clerking was formerly a monopoly of the less energetic sons of the middle class. Now that everybody has to go to school the middle class monopoly of reading, writing, and ciphering is gone; and skilled manual workers are better paid than clerks, being scarcer. As to parlormaids, what ordinary typist does not envy their creature comforts?

The Middle Station in Life no longer justifies the pæan in its praise which Daniel Defoe raised in Robinson Crusoe. For those who possess no special talent of a lucrative kind, it is now the least eligible class in the community.

46. THE PROLETARIAT

We have disposed of the Middle Classes: let us turn to the Lower Classes, the Hungry Ones, the Working Classes, the Masses, the Mob, or whatever else you call them. Classical culture has invented a general name for all people, of whatever nation, color, sex, sect, or social pretension, who, having no land nor capital (no property), have to hire themselves out for a living. It calls them proletarians, or, in the lump, The Proletariat. Karl Marx, who was born in Rhenish Germany in 1818, and died in London in 1883, after spending the last thirty-four years of his life in England making a special study of the development of Capitalism among us, was, and still is, the most famous champion of the Proletariat as the really organic part of civilized society to which all the old governing and propertied classes must finally succumb. When Marx raised his famous slogan, “Proletarians of all lands: unite”, he meant that all who live by the sale or hire of their labor should combine to do away with private property in land and capital, and to make everyone do her or his bit of the labor of the world, and share the product without paying toll to any idler.

The difficulty at that time was that the employers, without whom the proletarians could do nothing, were, as we have seen, strong, rich, independent, and masterful. They not only owned a good deal of land and capital themselves, but fully intended to become propertied country gentlemen when they retired. It was not until they began to slip down into a salaried, or proletarian class, that they also began to listen to Karl Marx. You see, they were losing their personal interest in private property with its rents and dividends, and were becoming interested solely in the price that could be got out of the landlords and capitalists for active services: that is, for labor of hand and brain. Instead of wanting to give Labor as little as possible and get as much out of it as possible, they wanted property to get as little as possible, and the sort of labor they themselves did to get as much as possible. They found that skilled manual work, and even unskilled manual strength, was coming more and more to be better paid than bookkeeping work and routine managing and professional work.

Now it is no use pretending to be better than other people when you are poorer. It only leads to keeping up more expensive appearances on less money, and forbidding your children to associate with most people’s children whilst they forbid their children to speak to yours. If the parents do not realize the vanity of such pretension the children do. I remember thinking when I was a boy how silly it was that my father, whose business was wholesale business, should consider himself socially superior to his tailor, who had the best means of knowing how much poorer than himself my father was, and who had a handsome residence, with ornamental grounds and sailing-boats, at the seaside place where we spent the summer in a six-roomed cottage-villa with a small garden. The great Grafton Street shopkeepers of Dublin outshone the tailor with their palaces and yachts; and their children had luxuries that I never dreamt of as possible for me, besides being far more expensively educated. My father’s conviction that they were too lowly to associate with me, when it was so clear that I was too poor to associate with them, may have had some sort of imaginary validity for him; but for me it was snobbish nonsense. I lived to see those children entertaining the Irish peerage and the Viceroy without a thought of the old social barriers; and very glad the Irish peers were to be entertained by them. I lived to see those shops become multiple shops managed by salaried employees who have less chance of entertaining the peerage than a baked-potato man of entertaining the King.

My father was an employer whose whole capital added to that of his partner would not have kept a big modern company in postage stamps for a fortnight. But at my start in life I found it impossible to become an employer like him: I had to become a clerk at fifteen. I was a proletarian undisguised. Therefore, when I began to take an interest in politics, I did not join the Conservative Party. It was the party of the landlords; and I was not a landlord. I did not join the Liberal Party. It was the party of the employers; and I was an employee. My father voted Conservative or Liberal just as the humor took him, and never imagined that any other party could exist. But I wanted a proletarian party; and when the Karl Marx slogan began to take effect in all the countries in Europe by producing proletarian political societies, which came to be called Socialist societies because they aimed at the welfare of society as a whole as against class prejudices and property interests, I naturally joined one of these societies, and so came to be called, and was proud to call myself, a Socialist.

Now the significant thing about the particular Socialist society which I joined was that the members all belonged to the middle class. Indeed its leaders and directors belonged to what is sometimes called the upper middle class: that is, they were either professional men like myself (I had escaped from clerkdom into literature) or members of the upper division of the civil service. Several of them have since had distinguished careers without changing their opinions or leaving the Society. To their Conservative and Liberal parents and aunts and uncles fifty years ago it seemed an amazing, shocking, unheard-of thing that they should become Socialists, and also a step bound to make an end of all their chances of success in life. Really it was quite natural and inevitable. Karl Marx was not a poor laborer: he was the highly educated son of a rich Jewish lawyer. His almost equally famous colleague, Friedrich Engels, was a well-to-do employer. It was precisely because they were liberally educated, and brought up to think about how things are done instead of merely drudging at the manual labor of doing them, that these two men, like my colleagues in The Fabian Society (note, please, that we gave our society a name that could have occurred only to classically educated men), were the first to see that Capitalism was reducing their own class to the condition of a proletariat, and that the only chance of securing anything more than a slave’s share in the national income for anyone but the biggest capitalists or the cleverest professional or business men lay in a combination of all the proletarians without distinction of class or country to put an end to Capitalism by developing the communistic side of our civilization until Communism became the dominant principle in society, and mere owning, profiteering, and genteel idling were disabled and discredited. Or, as our numerous clergymen members put it, to worship God instead of Mammon. Communism, being the lay form of Catholicism, and indeed meaning the same thing, has never had any lack of chaplains.

I may mention, as illustrating the same point, that The Fabian Society, when I joined it immediately after its foundation in 1884, had only two rival Socialist Societies in London, both professing, unlike the Fabian, to be working-class societies. But one of them was dominated by the son of a very rich man who bequeathed large sums to religious institutions in addition to providing for his sons, to whom he had given a first-rate education. The other was entirely dependent on one of the most famous men of the nineteenth century, who was not only a successful employer and manufacturer in the business of furnishing and decorating palaces and churches, but an eminent artistic designer, a rediscoverer of lost arts, and one of the greatest of English poets and writers. These two men, Henry Mayers Hyndman and William Morris, left their mark on the working-class proletariat as preachers of Socialism, but failed in their attempts to organize a new working-class Socialist Party in their own upper middle class way under their own leadership and in their own dialect (for the language of ladies and gentlemen is only a dialect), because the working classes had already organized themselves in their own way, under their own leaders, and in their own dialect. The Fabian Society succeeded because it addressed itself to its own class in order that it might set about doing the necessary brain work of planning Socialist organization for all classes, meanwhile accepting, instead of trying to supersede, the existing political organizations which it intended to permeate with the Socialist conception of human society.

The existing form of working-class organization was Trade Unionism. Trade Unionism is not Socialism: it is the Capitalism of the Proletariat. This requires another chapter of explanation, and a very important one; for Trade Unionism is now very powerful, and occasionally leaves the Intelligent Woman without coals or regular trains for weeks together. Before we can understand it, however, we must study the Labor Market out of which it grew; and this will take several preliminary chapters, including a somewhat grim one on the special position of women as sellers in that market.

47. THE LABOR MARKET AND THE FACTORY ACTS

The workwoman working for weekly wages is like her employer in one respect. She has something to sell; and she has to live on the price of it. That something is her labor. The more she gets for it the better-off she is: the less she gets for it the worse-off she is: if she can get nothing for it she starves or becomes a pauper. When she marries, she finds her husband in the same position; and he has to pay for the upkeep of her domestic labor out of the price of his industrial labor. Under these circumstances they are both naturally keen on getting as much for his industrial labor as possible, and giving as little for its price as the purchaser (the employer) will put up with. This means that they want the highest wages and the shortest hours of work they can get. Unless they are exceptionally thoughtful and public spirited persons, their ideas are limited to that.

The employer is in the same predicament. He does not sell labor: he has to buy it: what he sells are the goods or services produced under his direction; and if he, as mostly happens, is neither thoughtful nor public spirited, his ideas are limited to getting as much for what he sells as possible and giving as little for the money as the purchaser will put up with. In buying labor his interest and policy are to pay as little and get as much as he can, being thus precisely the opposites of the workers’ interest and policy.

This not only produces that unhappy and dangerous conflict of feeling and interest between employers and employed called Class War, but leads to extremities of social wickedness that are hardly credible of civilized people. The Government has been forced again and again to interfere between the buyers and sellers of labor to compel them to keep their bargains within the barest limits of common humanity. To begin with, all the employers want is labor, and whether the labor is done by a child or a woman or a man is nothing to them: they buy whatever labor is cheapest. Also the effect of the work on the health and morals of the employed is nothing to the employer except in so far as they may make a difference in his profit; and when he takes them into consideration with this in view he may conclude that an inhuman disregard of all natural kindness will pay him better than any attempt to reconcile his interest with the welfare of his employees.

To illustrate this I may cite the case of the London tramways when the cars were drawn by horses, and of certain plantations in America before negro slavery was abolished there. The question to be decided by the tramway managers was, what is the most moneymaking way of treating tramway horses? A well-cared-for horse, if not overworked, may live twenty years, or even, like the Duke of Wellington’s horse, forty. On the other hand, reckless ill-usage will kill a horse in less than a year, as it will kill anyone else. If horses cost nothing, and a new horse could be picked up in the street when the old one died, it would be more profitable commercially to work horses to death in six months, say, than to treat them humanely and let them retire to the salt marshes of Norfolk at the age of eighteen or so. But horses cost money; and the tramway managers knew that if they wore out a horse too quickly he would not pay for his cost. After figuring it out they decided that the most profitable way of treating tram horses was to wear them out in four years. The same calculation was made on the plantations. The slave, like the horse, cost a substantial sum of money; and if he were worked to death too soon his death would result in a loss. The most businesslike planters settled that the most paying plan was to wear out their slaves in seven years; and this was the result they instructed their overseers to aim at.

The Intelligent Woman will naturally exclaim “What a dreadful thing to be a company’s horse or a slave!” But wait a moment. Horses and slaves are worth something: if you kill them you have to pay for new ones. But if instead of employing horses and slave you employ “free” children and women and men, you may work them to death as hard and as soon as you like: there are plenty more to be had for nothing where they came from. What is more, you need not support them, as you have to support slaves, during the weeks when you have no work for them. You take them on by the week; and when trade is slack, and you have no work for them, you just discharge them, leaving them to starve or shift for themselves as best they can. In the heyday of Capitalism, when this system was in full swing, and no laws had been made to limit its abuse, small children were worked to death under the whip until it was commonly said that the northern factory employers were using up nine generations in one generation. Women were employed at the mines under conditions of degradation which would have horrified any negress in South Carolina. Men were reduced to lives which savages would have despised. The places these unhappy people lived in were beyond description. Epidemics of cholera and smallpox swept the country from time to time; typhus was commoner than measles today; drunkenness and brutal violence were considered as natural to the working classes as fustian coats and horny hands. The respectability and prosperity of the propertied and middle classes who grew rich on sweated labor covered an abyss of horror; and it was by raising the lid from that abyss that Karl Marx, in his terrible and epoch-making book called Capital, became the prophet of that great revolt of outraged humanity against Capitalism which is the emotional force of the Socialist movement. However, your subject and mine just now is not Emotional Socialism but Intelligent Socialism; so let us keep calm. Anger is a bad counsellor.

Long before Marx published his book the Government had been forced to interfere. A succession of laws called the Factory Acts, which include regulation of mines and other industries, were passed to forbid the employment of children below a certain age; to regulate the employment of women and young persons; to limit the hours during which a factory employing such persons could be kept open; to force employers to fence in machines which crushed and tore to pieces the employees who brushed against them in moments of haste or carelessness; to pay wages in money instead of in credit at employers’ shops where bad food and bad clothes were sold at exorbitant prices; to provide sanitary conveniences; to limewash factory walls at frequent intervals; to forbid the practice of taking meals at work in the factory instead of during an interval and in another place; to frustrate the dodges by which these laws were at first evaded by the employers; and to appoint factory inspectors to see that the laws were carried out. These laws were the fruit of an agitation headed, not by Socialists, but by a pious Conservative nobleman, Lord Shaftesbury, who did not find in his Bible any authority for the Capitalist theory that you could and should produce universal well-being by breaking all the laws of God and Man whenever you could make a commercial profit by doing so. This amazing theory was not only put into practice by greedy people, but openly laid down and explicitly advocated in books by quite sincere and serious professors of political economy and jurisprudence (calling themselves The Manchester School) and in speeches made in opposition to the Factory Acts by moral and highminded orator-manufacturers like John Bright. It is still taught as authentic political science at our universities. It has broken the moral authority of university bred Churchmen, and reduced university bred Statesmen to intellectually self-satisfied impotence. It is perhaps the worst of the many rationalist dogmas that have in the course of human history led naturally amiable logicians to countenance and commit villainies that would revolt professed criminals.

Now one would suppose on first thoughts that the Factory Acts would have been opposed by all the employers and supported by all their employees. But there are good employers as well as bad ones; and there are ignorant and shortsighted laborers as well as wise ones. The employers who had tender consciences, or who, like some of the Quakers, had a form of religion which compelled them to think sometimes of what they were doing by throwing all the responsibility for it on themselves and not on any outside authority like the professors of Capitalist political economy, were greatly troubled by the condition of their employees. You may ask why, in that case, they did not treat them better. The answer is that if they had done so they would have been driven out of business and ruined by the bad employers.

It would have occurred in this way. Cheap sweated labor meant not only bigger profits: it also meant cheaper goods. If the good employer paid a decent living wage to his workpeople, and worked them for eight hours a day instead of from twelve to sixteen, he had to charge high enough prices for his goods to enable him to pay such wages. But in that case the bad employer could and would at once offer the same goods at a lower price and thus take all the good employer’s customers away from him. The good employer was therefore obliged to join Lord Shaftesbury in telling the Government that unless laws were passed to force all employers, good and bad alike, to behave better, there could never be any improvement, because the good employers would have either to sweat the workers like the bad ones, or else be driven out of business, leaving matters worse than ever. They found that social problems cannot be solved by personal righteousness, and that under Capitalism not only must men be made moral by Act of Parliament, but cannot be made moral in any other way, no matter how benevolent their dispositions may be.

The opposition to the Factory Acts by the workers themselves was actually harder to overcome in some ways than that of the employers, because the employers, when they were forced by law to try the experiment, found that extreme sweating, like killing the goose that laid the golden eggs, was not the best way to make business pay, and that they could more than make up for the cost of complying with the very moderate requirements of the Acts by putting a little more brains into their work. Even the stupid ones found that by speeding up their machinery, and thus making their employees pull themselves together and work harder, they could get more out of them in ten hours than in twelve. The Intelligent Woman, if she has travelled, may have noticed that in countries where there is no Shop Hours Act, and shops remain open until everyone has gone to bed, the shopkeepers and their assistants are far less tired and strained at nine in the evening than the assistants in a big shop in a big English city are at five in the afternoon, though the shop closes at six. Impossible as it may sound, in the ginning mills of Bombay, before any factory legislation was introduced, the children employed went into the factory, not for so many hours a day, but for months at a time; and there are such things in the world as Italian cafés that are open day and night without regular night and day waiters, the employees taking a nap when and where they can. And this lazy happy-go-lucky way of doing business may do no great harm, whilst an eight hour day at high wages under modern scientific management may mean work so intense that it takes the last inch out of the workers, and cannot be done except by persons in the prime of life, nor even by them for many consecutive months.

The employers had another resource in the introduction of machinery. When employers can get plenty of cheap labor they will not introduce machinery: it is too much trouble, and though the machine may do the work of several persons it may cost more. At this moment (1925) in Lisbon the very rough and dirty business of coaling steamships can be done by machinery. The machinery is actually there ready for use. But the work is done by women, because they are cheaper and there is no law against it. If a Portuguese Factory Act were passed, forbidding the employment of women, or imposing restrictions and regulations on it (possibly not really for the sake of the women, but only to keep them out of the job and thus reserve it for men), the machinery would be turned on at once; and it would soon be improved and added to until it became indispensable. But as the women would lose their employment, they would object to any such Factory Act much more vociferously than the employers.

All the protestations of the employers that they would be ruined by the Factory Acts were contradicted by experience. By better management, more and better machinery, and speeding up the work, they made bigger profits than ever. If they had been half as clever as they claimed to be, they would have imposed on themselves all the regulations the Factory Acts imposed on them, without waiting to be forced by law. But profiteering does not cultivate men’s minds as public service does. The greatest advances in industrial organization have been forced on employers in spite of their piteous protests that they would be unable to carry on under them, and that British industry must consequently perish. It may shock you to learn that the employees themselves resisted the Factory Acts at first because the Acts began by putting a stop to the ill treatment and overworking of children too young to be decently put to commercial work at all. At first these victims of unregulated Capitalism were little Oliver Twists, sold into slavery by the Guardians of the Poor to get rid of them. But the later generations were the children of the employees; and the wage on which the employee kept his family in squalid poverty was added to by the children’s earnings. When people are very poor the loss of a shilling a week is much worse than the loss of £500 a week to a millionaire: it means, for the woman who has a desperate struggle to keep the house and make both ends meet every Saturday, that her task becomes impossible. It is easy for comparatively rich people to say “You should not send your young children out to work under such inhuman conditions”, or, “You should rejoice in a new Factory Act which makes such infamies impossible”. But if the immediate result of listening to them is that the children who were only half starved before are now to be three-quarters starved, such pious remonstrances produce nothing but exasperation. The melancholy truth is that, as the Factory Acts were passed one after another, gradually raising the age at which children might be employed in factories from infancy to fourteen and sixteen, and half the children’s time below a certain age had to be spent in school, the parents were the fiercest opponents of the Acts; and when they got the vote, and became able to influence Parliament directly, they made it impossible for anybody to get elected as a member for a factory town where children’s labor was employed unless he pledged himself to oppose any extension of the laws restricting child labor. The common saying that the parents are the best people to take care of the interests of the children depends not only on the sort of people the parents are, but on whether they are well enough off to be able to afford to indulge their natural parental instinct. Only a small proportion of parents, and these not the poorest, will deliberately bring up their children to be thieves and prostitutes; but practically all parents will, and indeed must, sweat their children if they are themselves sweated so mercilessly that they cannot get on without the few pence their children can earn.

Now that I have explained the seeming heartlessness of the parents, you have still to ask me why these parents accepted wages so low that they were forced to sacrifice their children to the employers’ greed for profits. The answer is that the increase of population which produced the younger son class in the propertied class, and finally built up the middle class, went on also among the employees who lived from hand to mouth on the wages of manual labor. Now manual labor is like fish or asparagus, dear when it is scarce, cheap when it is plentiful. As the numbers of propertyless manual workers grew from thousands to millions the price of their labor fell and fell. In the nineteenth century everybody knew that wages were higher in America and Australia than in Great Britain and Ireland, because labor was scarcer there; and those who could afford it emigrated to these countries. Half the population of Ireland went to America, where labor was so scarce that immigrants were welcomed from all countries. But today the labor market in America is so choked with them that immigration is sternly restricted to a fixed number from each European country every year. Australia restricts its births artificially, and refuses to admit Chinamen or Japanese on any terms. America also excludes Japanese. But in the days when the Factory Acts were made really effective (the first ones were evaded by all sorts of employers’ tricks) emigration from our islands was unrestricted, and went on at a great rate among those who could afford the passage money.

This shewed that our labor market was overstocked. When the fish market is overstocked the fish are thrown back into the sea. Emigration was, in effect, throwing men and women into the sea with a ship to cling to and a chance of reaching another country in it. The value of men and women in England, unless they could do some sort of work that was still scarce, had fallen to nothing. Doctors and dentists and lawyers and parsons were still worth something (parsons shamefully little: £70 a year for a curate with a family); and exceptionally skilled or physically powerful workmen could earn more than the poorer clergy; but the mass of manual employees, those who could do nothing except under direction, and even under direction could do nothing that any ablebodied person could not learn to do in a very short time, were literally worth nothing: you could get them for what it cost to keep them alive, and to enable them to bring up children enough to replace them when they were worn out. It was just as if steam-engines had been made in such excessive quantities that the manufacturers would give them for nothing to anyone who would take them away. Whoever took them away would still have to feed them with coal and oil before they could work; but this would not mean that they had any value, or that they would be taken proper care of, or that the coal and oil would be of decent quality.

You see, people without property have no other way of living than selling themselves for their market value, or, when their value falls to nothing, offering to work for anyone who will feed them. They have no land, and cannot afford to buy any: and even if land were given to them few of them would know how to cultivate it. They cannot become capitalists, because capital is spare money, and they have no money to spare. They cannot set up in business for themselves with borrowed money, because nobody will lend them money: if anyone did, they would lose it all and become bankrupt for want of the requisite education and training. They must find an employer or starve; and if they attempt to bargain for anything more than a bare subsistence wage they are told curtly but only too truthfully that if they do not choose to take it there are plenty of others who will.

Even at this they cannot all get employment. Although the plea made for Capitalism by the professors of The Manchester School was that at least it would always provide the workers with employment at a living wage, it has never either kept that promise or justified that plea. The employers have had to confess that they need what is called “a reserve army of unemployed”, so that they can always pick up “hands” when trade is good and throw them back into the street when it is bad. Throwing them back into the street means forcing them to spend the few shillings they may have been able to put by while employed, selling or pawning their clothes and furniture, and finally going on the rates as paupers. The ratepayers naturally object very strongly to having to support the employer’s workmen whenever he does not happen to want them; consequently, when the Capitalist system developed on a large scale, the ratepayers made Poor Law relief such a disgraceful, cruel, and degrading business that decent working class families would suffer any extremity rather than resort to it. We said to the unemployed father of a starving family, “We must feed you and your children if you are destitute, because the Statute of Elizabeth obliges us to; but you must bring your daughters and sons into the workhouse with you to live with drunkards, prostitutes, tramps, idiots, epileptics, old criminals, the very dregs and refuse of human society at its worst, and having done that you will never be able to hold up your head again among your fellows”. The man naturally said “Thank you: I had rather see my children dead”, and starved it out as best he could until trade revived, and the employers had another job for him. And to get that job he would accept the barest wages the family could support life on. If his children could earn a little in a factory he would snatch at wages that were just enough, when the children’s earnings were thrown in, to support them all; and in this way he did not benefit in the long run by letting his children go out to work, as it ended in their earnings being used to beat down his own wages; so that, though he at first sent his children into the factories to get a little extra money, he was at last forced to do it to make up his own wages to subsistence point; and when the law stepped in to rescue the children from their slavery, he opposed the law because he did not see how he could live unless his children earned something instead of going to school.

48. WOMEN IN THE LABOR MARKET

The effect of the system on women was worse in some respects than on men. As no industrial employer would employ a woman if he could get a man for the same money, women who wished to get any industrial employment could do so only by offering to do it for less than men. This was possible, because even when the man’s wage was a starvation wage it was the starvation wage of a family, not of a single person. Out of it the man had to pay for the subsistence of his wife and children, without whom the Capitalist system would soon have come to an end for want of any young workers to replace the old ones. Therefore even when the men’s wages were down to the lowest point at which their wives and children could be kept alive, a single woman could take less without being any worse off than her married neighbors and their children. In this way it became a matter of course that women should be paid less than men; and when any female rebel claimed to be paid as much as a man for the same work (“Equal wages for equal work”), the employer shut her up with two arguments: first, “If you dont take the lower wage there are plenty of others who will”, and, second, “If I have to pay a man’s wages I will get a man to do the work”.

The most important and indispensable work of women, that of bearing and rearing children, and keeping house for them, was never paid for directly to the woman but always through the man; and so many foolish people came to forget that it was work at all, and spoke of Man as The Breadwinner. This was nonsense. From first to last the woman’s work in the home was vitally necessary to the existence of society, whilst millions of men were engaged in wasteful or positively michievous work, the only excuse for which was that it enabled them to support their useful and necessary wives. But the men, partly through conceit, partly through thoughtlessness, and very largely because they were afraid that their wives might, if their value were recognized, become unruly and claim to be the heads of the household, set up a convention that women earned nothing and men everything, and refused to give their wives any legal claim on the housekeeping money. By law everything a woman possessed became the property of her husband when she married: a state of things that led to such monstrous abuses that the propertied class set up an elaborate legal system of marriage settlements, the effect of which was to hand over the woman’s property to some person or persons yet unborn before her marriage; so that though she could have an income from the property during her life, it was no longer her property, and therefore her husband could not make ducks and drakes of it. Later on the middle classes made Parliament protect their women by The Married Women’s Property Acts under which we still live; and these Acts, owing to the confusion of people’s minds on the subject, overshot the mark and produced a good deal of injustice to men. That, however, is another part of the story: the point to be grasped here is that under the Capitalist system women found themselves worse off than men because, as Capitalism made a slave of the man, and then, by paying the woman through him, made her his slave, she became the slave of a slave, which is the worst sort of slavery.

This suits certain employers very well, because it enables them to sweat other employers without being found out. And this is how it is done. A laborer finds himself bringing up a family of daughters on a wage of twenty-nine shillings a week in the country (it was thirteen in the nineteenth century) or, in or near a city, of from thirty (formerly eighteen) to seventy, subject to deductions for spells of unemployment. Now in a household scraping along on thirty shillings a week another five shillings a week makes an enormous difference: far more, I repeat, than another five hundred pounds makes to a millionaire. An addition of fifteen shillings or a pound a week raises the family of a laborer to the money level of that of a skilled workman. How were such tempting additions possible? Simply by the big girls going out to work at five shillings a week each, and continuing to live at home with their fathers. One girl meant another five shillings, two meant another ten shillings, three another fifteen shillings. Under such circumstances huge factories sprang up employing hundreds of girls at wages of from four-and-sixpence to seven-and-sixpence a week, the great majority getting five. These were called starvation wages; but the girls were much better fed and jollier and healthier than women who had to support themselves altogether. Some of the largest fortunes made in business: for example in the match industry, were made out of the five shilling girl living with, and of course partly on, her father, or as a lodger on somebody else’s father, a girl lodger being as good as a daughter in this respect. Thus the match manufacturer was getting three-quarters of his labor at the father’s expense. If the father worked in, say, a brewery, the match manufacturer was getting three-quarters of his labor at the expense of the brewer. In this way one trade lives by sweating another trade; and factory girls getting wages that would hardly support a prize cat are plump and jolly and willing and vigorous and rowdy, whilst older women, many of them widows with young children, are told that if they are not satisfied with the same wages there are plenty of strong girls who will be glad to get them.

It was not merely the daughters but the wives of working men who brought down women’s wages in this way. In the cities young women, married to young men, and not yet burdened with many children or with more than a room or two to keep tidy at home (and they were often not too particular about tidiness), or having no children, used to be quite willing to go out as charwomen for an hour a day for five shillings a week, plus such little perquisites and jobs of washing as might be incidental to this employment. As such a charwoman had nothing to do at home, and was not at all disposed to go on to a second job when she had secured the five shillings that made all the difference between pinching and prodigality to her and her husband, the hour easily stretched to half a day. The five shillings have now become ten or so; but as they buy no more, the situation is not altered.

In this way the labor market is infested with subsidized wives and daughters willing to work for pocket money on which no independent solitary woman or widow can possibly subsist. The effect is to make marriage compulsory as a woman’s profession: she has to take anything she can get in the way of a husband rather than face penury as a single woman. Some women get married easily; but others, less attractive or amiable, are driven to every possible trick and stratagem to entrap some man into marriage; and that sort of trickery is not good for a woman’s self-respect, and does not lead to happy marriages when the men realize that they have been “made a convenience of”.

This is bad enough; but there are lower depths still. It may not be respectable to live on a man’s wages without marrying him; but it is possible. If a man says to a destitute woman “I will not take you until death do us part, for better for worse, in sickness and in health and so forth; nor will I give you my name and the status of my legal wife; but if you would like to be my wife illegally until tomorrow morning, here is sixpence and a drink for you, or, as the case may be, a shilling, or a pound, or ten pounds, or a hundred pounds, or a villa with a pearl necklace and a sable mantle and a motor car”, he will not always meet with a refusal. It is easy to ask a woman to be virtuous; but it is not reasonable if the penalty of virtue be starvation, and the reward of vice immediate relief. If you offer a pretty girl twopence halfpenny an hour in a match factory, with a chance of contracting necrosis of the jawbone from phosphorus poisoning on the one hand, and on the other a jolly and pampered time under the protection of a wealthy bachelor, which was what the Victorian employers did and what employers still do all over the world when they are not stopped by resolutely socialistic laws, you are loading the dice in favor of the devil so monstrously as not only to make it certain that he will win, but raising the question whether the girl does not owe it to her own self-respect and desire for wider knowledge and experience, more cultivated society, and greater grace and elegance of life, to sell herself to a gentleman for pleasure rather than to an employer for profit. To warn her that her beauty will not last for ever only reminds her that if she takes reasonable care of her beauty it will last long past the age at which women, “too old at twenty-four”, find the factory closed to them, and their places filled by younger girls. She has actually less security of respectable employment than of illicit employment; for the women who sell labor are often out of work through periods of bad trade and consequent unemployment; but the women who sell pleasure, if they are in other respects well conducted and not positively repulsive, are seldom at a loss for a customer. The cases which are held up as terrible warnings of how a woman may fall to the lowest depths of degradation by listening to such arguments are pious inventions, supported by examples of women who through drink, drugs, and general depravity or weakness of character would have fallen equally if they had been respectably married or had lived in the strictest celibacy. The incidental risks of venereal diseases are unfortunately not avoidable by respectable matrimony: more women are infected by their husbands than by their lovers. If a woman accepts Capitalist morality, and does what pays her best, she will take what district visitors call (when poor women are concerned) the wages of sin rather than the wages of sweated labor.

There are cases, too, where the wedding ring may be a drawback instead of a makeweight. Illicit unions are so common under the Capitalist system that the Government has had to deal with them; and the law at present is that if an unmarried woman bears a child she can compel its father to pay her seven-and-sixpence a week for its support until it is sixteen, at which age it can begin to help to support her. Meanwhile the child belongs to her instead of to the father (it would belong to him if they were married); and she is free from any obligation to keep his house or do any ordinary drudgery for him. Rather than be brought into court he will pay without demur; and when he is goodnatured and not too poor he will often pay her more than he is legally obliged to. The effect of this is that a careful, discreet, sensible, pleasant sort of woman who has not scrupled to bear five illegitimate children may find herself with a legally guaranteed steady income of thirty-seven-and-sixpence a week in addition to what she can earn by respectable work. Compared to a widow with five legitimate children she was on velvet until the Government, after centuries of blind neglect, began to pension widows.

In short, Capitalism acts on women as a continual bribe to enter into sex relations for money, whether in or out of marriage; and against this bribe there stands nothing beyond the traditional respectability which Capitalism ruthlessly destroys by poverty, except religion and the inborn sense of honor which has its citadel in the soul and can hold out (sometimes) against all circumstances.

It is useless to pretend that religion and tradition and honor always win the day. It is now a century and a half since the poet Oliver Goldsmith warned us that “Honor sinks where commerce long prevails”; and the economic pressure by which Capitalism tempts women grew fiercer after his time. We have just seen how in the case of the parents sending their children out to work in their infancy to add a little to the family income, they found that their wages fell until what they and the children between them could earn was no more than they had been able to earn by themselves before, so that in order to live they now had to send their children to work whether they liked it or not. In the same way the women who occasionally picked up a little extra money illicitly, presently found themselves driven to snatch at employment by offering to take lower wages and depending on the other resource to make them up to subsistence point. Then the women who stood on their honor were offered those reduced wages, and, when they said they could not live on them, were told as usual that others could, and that they could do what the others did.

In certain occupations prostitution thus became practically compulsory, the alternative being starvation. Hood’s woman clad in unwomanly rags, who sang the Song of the Shirt, represents either the woman who would starve rather than sell her person or the woman neither young enough nor agreeable enough to earn even the few pence she could hope for from the men within her reach. The occupations in which prostitution is almost a matter of course are by no means the sensationally abject and miserable ones. It is rather in the employments in which well-dressed and goodlooking but unskilled women are employed to attract the public, that wages are paid on which they cannot possibly keep up the appearance expected from them. Girls with thirty shillings a week come to their work in expensive motor cars, and wear strings of pearls which, if not genuine, are at least the best imitations. If one of them asks how she can dress as she is expected to on thirty shillings a week she is either met with the old retort, “If you wont take it there are plenty who will”, or else told quite frankly that she is very lucky to get thirty shillings in addition to such a splendid advertisement and show-case for her attractions as the stage or the restaurant, the counter or the showroom, afford her. You must not, however, infer from this that all theatres, restaurants, showrooms and so forth exploit prostitution in this way. Most of them have permanent staffs of efficient respectable women, and could not be conducted in any other way. Neither must it be inferred that the young gentlemen who provide the motor cars and furs and jewels are always allowed to succeed in their expensive courtship. Sir Arthur Pinero’s play Mind the Paint is instructively true to life on this point. But such relations are not made edifying by the plea that the gentlemen are bilked. It is safe to assume that when women are employed, not to do any specially skilled work, but to attract custom to the place by their sex, their youth, their good looks and their smart dressing, employers of a certain type will underpay them, and by their competition finally compel more scrupulous employers to do the same or be undersold and driven out of the business. Now these are extremities to which men cannot be reduced. It is true that smart ladies can and do hire dancing partners at fifty francs an evening on the Riviera; but this quite innocent transaction does not mean that Capitalism can as yet say to a man, “If your wages are not enough to live on, go out into the streets and sell pleasures as others do”. When the man deals in that commodity he does so as a buyer, not as a seller. Thus it is the woman, not the man, who suffers the last extremity of the Capitalist system; and this is why so many conscientious women are devoting their lives to the replacement of Capitalism by Socialism.

But let not anyone imagine that men escape prostitution under Capitalism. If they do not sell their bodies they sell their souls. The barrister who in court strives “to make the worse appear the better cause” has been held up as a stock example of the dishonesty of misrepresenting for money. Nothing could be more unjust. It is agreed, and necessarily agreed, that the best way of learning the truth about anything is not to listen to a vain attempt at an impartial and disinterested statement, but to hear everything that can possibly be said for it, and then everything that can possibly be said against it, by skilled pleaders on behalf of the interested parties on both sides. A barrister is bound to do his utmost to obtain a verdict for a client whom he privately believes to be in the wrong, just as a doctor is bound to do his utmost to save the life of a patient whose death would, in his private opinion, be a good riddance. The barrister is an innocent figure who is used to distract our attention from the writer and publisher of lying advertisements which pretend to prove the worse the better article, the shopman who sells it by assuring the customer that it is the best, the agents of drugging and drink, the clerk making out dishonest accounts, the adulterator and giver of short weight, the journalist writing for Socialist papers when he is a convinced Liberal, or for Tory papers when he is an Anarchist, the professional politician working for his party right or wrong, the doctor paying useless visits and prescribing bogus medicines to hypochondriacs who need only Abernethy’s advice, “Live on sixpence a day, and earn it”, the solicitor using the law as an instrument for the oppression of the poor by the rich, the mercenary soldier fighting for a country which he regards as the worst enemy of his own, and the citizens of all classes who have to be obsequious to the rich and insolent to the poor. These are only a few examples of the male prostitutions, so repeatedly and vehemently denounced by the prophets in the Bible as whoredoms and idolatries, which are daily imposed on men by Capitalism.

We see, then, that when the reproach of prostitution is raised neither woman nor man dares cast the first stone; for both have been equally stained with it under Capitalism. It may even be urged by special pleaders on behalf of women that the prostitution of the mind is more mischievous, and is a deeper betrayal of the divine purpose of our powers, than the prostitution of the body, the sale of which does not necessarily involve its misuse. As a matter of fact nobody has ever blamed Nell Gwynne for selling her body as Judas Iscariot for selling his soul. But whatever satisfaction the pot may have in calling the kettle blacker than itself the two blacks do not make a white. And the abstract identity of male and female prostitution only brings out more strongly the physical difference, which no abstract argument can balance. The violation of one’s person is a quite peculiar sort of outrage. Anyone who does not draw a line between it and offences to the mind ignores the plain facts of human sensitiveness. For instance, landlords have had the power to force Dissenters to send their children to Church schools, and have used it. They have also had a special power over women to anticipate a husband’s privilege, and have either used it or forced the woman to buy them off. Can a woman feel about the one case as about the other? A man cannot. The quality of the two wrongs is quite different. The remedy for the one could wait until after the next general election. The other does not bear thinking of for a moment. Yet there it is.

49. TRADE UNION CAPITALISM

Now we must go into the history of the resistance offered by the proletariat to the capitalists. It was evident, to begin with, that no woman or man could do anything against the employers single-handed. The stock retort, “If you will not take the wage offered, and do the work put upon you, there are plenty who will”, checkmated the destitute solitary bargainer for a decent living wage and a reasonable day’s work. The first necessity for effective resistance was that the employees should form some sort of union and stand together. In many cases this was impossible, because the employees did not know oneanother, and had no opportunities of coming together and agreeing on a joint course of action. For instance, domestic servants could not form unions. They were in private kitchens all over the country, more or less imprisoned in them, and working singly, or at most in groups of two or three, except in the houses of the very rich, where the groups might be as large as thirty or forty. Or take agricultural laborers. It is very difficult to organize them into unions, and still more difficult to keep their unions together for any length of time. They live too far apart. The same thing is true more or less of almost every kind of labor except labor in factories and mines or on railways.

In some callings there are such differences of pay and social position that even if all their members could be brought together they would not mix. Thus on the stage an actor may be a highly accomplished gentleman with a title, who plays Hamlet, or a lady who is an aristocrat and a Dame of the British Empire, and plays Portia: both of them receiving weekly salaries counted in hundreds of pounds. With them are working every night actors and actresses who never utter a word, because, if they did, their speech would betray the fact that, far from being the court lords and ladies they are dressed up to look like, they are not earning as much as the carpenters who shift the scenes. It is even possible for an acrobat or clown to be more highly paid than Hamlet, and yet in private life be so illiterate, and have such shocking table manners, that the titled Hamlet could endure neither his conversation nor his company at dinner. For this reason a union of actors is difficult: a class split is inevitable. Union is possible only in trades where the members work together in large bodies; live in the same neighborhoods; belong all to the same social class; and earn about the same money. The miners in the coalfields, the cotton spinners in the factory towns of Lancashire, the metal smelters and fitters in the Midlands, were the first to form enduring and powerful unions. The bricklayers, masons, carpenters, and joiners who come together in the building trades were also early in the field with attempts at unionism. Under the stress of some intolerable oppression they would combine to make the employers see their situation in some particular point; and when they had carried that point, or were defeated, the union would dissolve until another emergency arose. Then they began to subscribe to form little insurance funds against unemployment, which obliged them to keep the union together; and in this way the unions grew from momentary rebellions into permanent Trade Unions of the kind we know.

We now have to consider what a union of proletarians can do to defend their livelihood from the continual encroachments of Capitalism. First, when the union is sufficiently complete, it enables them to face the employer without any risk of being told that if they will not submit to his terms others will. If nearly all the bricklayers in a town form a union, and each pays into it week by week a small contribution until they have a little fund to fall back on, then, if their employers attempt to reduce their wages, they can, by refusing to work and living on their fund, bring the employers’ business to a dead stop for weeks or months, according to the size of the fund. This is called a strike. They can strike not only against a reduction of wages but for an increase, or for a reduction of their working hours, or for anything that may be in dispute between them and the employers. Their success will depend on the state of the employers’ business. The employers can practically always wait if they choose until the strike fund is exhausted, and thus starve the strikers into submission. But if trade is so flourishing at the moment, and the employers consequently in such a hurry to get on with their profit making, that they would lose more by an interruption to their business than by giving the strikers what they demand, then the employers will give in.

But the employers will bide their time for a counterstrike. When trade gets slack again, and they have little or nothing to lose by shutting up their works for a while, they reduce the wage, and lock out all the workers who will not submit to the reduction. This is why an employers’ strike is called a lock-out. The newspapers use the word strike for strikes and lock-outs indiscriminately, because their readers blame the workers instead of the employers for a strike; but some of the greatest so-called strikes should have been called lock-outs. A boom in trade always produces a series of strikes which are generally successful. A falling-off in trade produces a series of lock-outs; and they, too, are generally successful, the one series undoing the work of the other in a dreary see-saw. After the war we went through a gigantic boom followed by a disastrous slump, with strikes and lock-outs all complete. Your own experience of these civil wars of strike and lock-out must have left you convinced that they are public disasters which would have no sort of sense in a well ordered community. But let that pass for the moment. We have not yet finished our study of primitive Trade Unionism, nor seen what it led to besides saving up for a strike and then “downing tools”.

The first necessity of the situation was that everybody in the trade should join the union, as outsiders could be used by employers to break the strike by taking on the work that the strikers refused. Consequently a fierce hatred of the men who would not join the unions grew up. They were called scabs and blacklegs, and boycotted in every possible way by the unionists. But vituperation and boycotting were not sufficient to deter the scabs. The unions, when they declared a strike, stationed bodies of strikers at the gates of the works to persuade the scabs not to enter. No Intelligent Woman will need to be told that unless there was a strong force of police on the spot the persuasion was so vigorous that the scabs felt lucky when they survived it without broken bones. At last there came a time in Sheffield and Manchester when scabs working at furnaces found bombs there that blew them to pieces; when machinery and tools were tampered with so as to make them dangerous to those who used them (this was called rattening); and when factory chimneys were shattered by explosives like fulminate of mercury, so risky to handle that only very ignorant and desperate men would venture on their use. This was stopped less by punishing the perpetrators than by forcing the employers to relax the provocation. For instance, the Sheffield sawgrinders died prematurely, and suffered miserably during their lifetimes, because the air they breathed was half steel dust. It was quite easy to prevent this by using vacuum cleaners (as we call them) to suck away the deadly dust; but the employers would not fit them, because, as they cost extra capital on which there was no extra profit, an employer who fitted them could be undersold by those who did not. At that time a Sheffield steel worker of fifty (when he was lucky enough to reach that age) looked like a weedy and very unhealthy lad of seventeen. In the face of such murderous conditions, persisted in for a hundred years, the burst of outrage on the part of the victims seems trifling enough. At last the Government had to come to the rescue and force all the employers to fit suction fans. Sheffielders’ lungs are now no worse than most people’s, and better than those of many who are not so carefully protected by the law.

But accepting a lower wage than that demanded by the union was not the only way in which an employee could drag down his fellows. In many trades it was not much use fixing the wage the worker was to receive unless the quantity of work he gave for it was also fixed. You must be tired by this time of the silly joking of the Capitalist newspapers about bricklayers who are not allowed by their unions to lay more than three bricks a day. A bricklayer has clearly as much right to charge a day’s wages for laying three bricks as his employer has to sell the house when it is built for the biggest price he can get for it. Those who condemn either of them are condemning the Capitalist system, like good Bolshevists. The three-brick joke is only a comic exaggeration of what actually occurs. The employers, to find out how much work can be got out of a man, pick out an exceptionally quick and indefatigable man called a slogger, and try to impose what he can do in a day on all the rest. The unions naturally retort by forbidding any of their members to lay a brick more than he must do if he is to be worth employing at all. This practice of deliberately doing the least they dare instead of the most they can is the ca’canny of which the employers complain so much, though they all do the same thing themselves under the more respectable name of “restricting output” and selling in the dearest market. It is the principle on which the Capitalist system is avowedly founded.

Thus Capitalism drives the employers to do their worst to the employed, and the employed to do the least for them. And it boasts all the time of the incentive it provides to both to do their best! You may ask why this does not end in a deadlock. The answer is it is producing deadlocks twice a day or thereabouts. The King’s speeches in opening Parliament now contain regularly an appeal to the workers and employers to be good boys and not paralyze the industry of the nation by the clash of their quite irreconcilable interests. The reason the Capitalist system has worked so far without jamming for more than a few months at a time, and then only in places, is that it has not yet succeeded in making a conquest of human nature so complete that everybody acts on strictly business principles. The mass of the nation has been humbly and ignorantly taking what the employers offer and working as well as it can, either believing that it is doing its duty in that station of life to which it has pleased God to call it, or not thinking about the matter at all, but suffering its lot as something that cannot be helped, like the weather. Even late in the nineteenth century, when there were fourteen million wage workers, only a million and a half of them were in trade unions, which meant that only a million and a half of them were selling their labor on systematic Capitalist business principles. Today nearly four and a half millions of them are converts to Capitalism, and duly enrolled in militant unions. Between six and seven hundred battles a year, called trade disputes, are fought; and the number of days of work lost to the nation by them sometimes totals up to ten millions and more. If the matter were not so serious for all of us one could laugh at the silly way in which people talk of the spread of Socialism when what is really threatening them is the spread of Capitalism. The moment the propertyless workers refuse to see the finger of God in their poverty, and begin organizing themselves in unions to make the most money they can out of their labor exactly as they find the landlord doing with his land, the capitalist with his capital, the employer with his knowledge of business, and the financier with his art of promotion, the industry of the country, on which we all depend for our existence, begins rolling faster and faster down two opposite slopes, at the bottom of which there will be a disastrous collision which will bring it to a standstill until either Property drives Labor by main force into undisguised and unwilling slavery, or Labor gains the upper hand, and the long series of changes by which the mastery of the situation has already passed from the landlord-capitalist to the individual employer, from the individual employer to the joint stock company, from the joint stock company to the Trust, and finally from the industrialists in general to the financiers, will culminate in its passing to capitalized Labor. The battle for this supremacy is joined; and here we are in the thick of it, our country ravaged by strikes and lock-outs, a huge army of unemployed billeted upon us, the ladies and gentlemen declaring that it is all the fault of the workers, and the workers either declaring that it is all the fault of the ladies and gentlemen, or else, more sensibly, concluding that it is the fault of the Capitalist system, and taking to Socialism not so much because they understand it as because it promises a way out.

When this open war was first declared, the employers used their command of Parliament to have it punished as a crime. The unions were classed as conspiracies; and anybody who joined one was held to be a conspirator and punished accordingly. This did not prevent the unions: it only “drove them underground”: that is, made secret societies of them, and thereby put them into the hands of more determined and less law-abiding leaders. The Government at last found it impossible to go on with such coercion; for the few cases in which the law could be carried out had the effect of martyrdoms, producing noisy popular agitations, and stimulating Trade Unionism instead of suppressing it.

Then the employers tried what they could do for themselves. They refused to employ unionists. This was no use: they could not get enough non-unionist labor to go on with: and the unionists whom they had to employ refused to work with non-unionists. Then the employers refused to “recognize” the unions, which meant that they refused to negotiate questions of wages with the secretaries of the unions, and insisted on dealing with their employees directly and individually, one at a time. This also failed. Making a separate bargain with each employee is easy enough in the case of a woman engaging a domestic servant or an oldfashioned merchant engaging a clerk or warehouseman; but when men have to be taken on by the hundred, and sometimes by the thousand, separate bargaining is impossible. The big employers who talked about it at first really meant that there was to be no bargaining at all. The men were to come in and just take what they were told were the wages of the firm, and not presume to argue. The moment the formation of the unions enabled the men to bargain, the big employers, to save their own time, had to insist on its being done with a single representative of the men who was experienced in bargaining and qualified to discuss business: that is, with the secretary of the Trade Union; so that all the fuss ended in the unions being not only recognized by the big employers, but looked on as a necessary part of their industry. Finally the unions were legalized; and here, as in the case of the Married Women’s Property Acts, the change from outlawry to legal protection went a little beyond the mark, in its reaction against previous injustice, and gave the Trade Unions privileges and immunities which are not enjoyed by ordinary societies. The employers then found that they also must act together in dealing with the Trade Unions. Accordingly, they formed unions of their own, called Employers’ Federations. The war of Capital with Labor is now a war of Trade Unions with Employers’ Federations. Their battles, or rather blockades, are lock-outs and strikes, lasting, like modern military battles, for months.

Though some of the battles are about victimization (that is, discharging an employee for actively advocating Trade Unionism, or refusing to reinstate a prominent striker when the strike is over), all the disputes in which ground is won or lost are about wages or hours of work. You must understand that there are two sorts of wages: time wages and piecework wages. Time wages are paid for the employee’s time by the month, week, day, or hour, no matter how much or how little work may be done during those periods. Piecework wages are paid according to the work done: so much for each piece of work turned out.

Now you would suppose that the employees would be unanimously in favor of time wages, and the employers of piecework wages: indeed this was roughly so in early days. But the introduction of machinery altered the case. Piecework wages are really only time wages paid in such a way as to prevent the employee from slacking. He has to keep hard at it to earn the wage; but the amount of the wage is arrived at by considering whether what he can make in an hour or a day or a week at piecework will enable him to live in the way he is accustomed to live, or, as it is called, to maintain his standard of subsistence. Now suppose a machine is invented by which he can turn out twice as many pieces in a day as before. He will then find that he has earned as much in the week by Wednesday evening as he had previously earned by Saturday. What will he do? You may think, if you are a very energetic lady, that he will put in the whole week as usual, and rejoice his wife by bringing home twice as much money. But that is not what a man is like. He prefers a shillingsworth of leisure to another shillingsworth of bread and cheese or a new hat for his wife. What he actually does is to bring her just what he brought her before, and have a holiday on Thursday, Friday, and Saturday, leaving his employer with no labor to go on with, and perhaps with the most pressing contracts to be finished by a certain date. To force him to remain at work the whole week the employer has to “cut the rate”: that is, to reduce the piecework wage by half. Then the fat is in the fire: the Trade Union resists the reduction fiercely, and threatens that if the employees are to have no benefit from the new machine they will refuse to work it. There was a time when the introduction of machines led to riots and the wrecking of newly equipped factories by furious mobs of handworkers. When the mobs were replaced by Trade Unions the introduction of new machines was often followed by strikes and lock-outs. But when the heated personal disputes of hot-headed employers with resentful employees gave way to cool negotiations between experienced secretaries of Employers’ Federations and equally experienced secretaries of Trade Unions, who had settled similar difficulties many times before, it became an established practice to readjust the piecework wage so as to allow the employee to share the benefit of the machine with the employer. The only question was how much each could claim.

On time wages the employee gets no benefit from the introduction of a machine. The product of his labor may be multiplied a hundred times; but he remains as poor as before. That is why in many industries the employees insist on piecework wages, and the employers would be only too glad to pay time wages: all the more because, when machinery comes into play, the machine works the man instead of the man working the machine, and slacking becomes either impossible or easy to detect.

But it often happens that neither the time wage worker nor the piece wage worker has any say in the matter at all, for the very simple reason that the introduction of the machine enables the employer to “slack the lot” and replace them by girls who are only machine minders. And we have already seen what the effect of women’s and girls’ labor has on wages. Besides, Trade Unionism is weaker among women than among men, because, as most women regard industrial employment as merely a temporary expedient to keep them going until they get married, they will not take the duty of combination as seriously as the men, who know that they will be industrial employees all their lives. In the Lancashire weaving industry, where women do not retire from the factory when they marry, the women’s unions are as strong as the men’s.

In the long run the reserves of the employer are so much greater than those of the employees that though John Stuart Mill’s statement in the middle of last century that the wage workers had not benefited by the introduction of machinery is no longer quite true, yet they have gained so little in comparison with the prodigiously greater national output from the machines, that it is putting it very mildly to say that they have not only not gained but lost ground heavily relatively to the capitalists.

50. DIVIDE AND GOVERN

The weakness of Trade Unionism was that the concessions wrung from the employers when trade was good were taken back again when trade was bad, because, as the employers commanded the main national store of spare money, they could always stop working without starving for longer than their employees. The Trade Unions soon had to face the fact that unless they could get the concessions fixed and enforced by law, they were certain to lose by the lock-outs all they gained by the strikes. At the same time they saw that Parliament had put a permanent stop to the sweating of very young children in factories; and though, as I have explained, their members had been driven by poverty to object to this reform, nevertheless it convinced them that Parliament, if it liked, could fix any reform so firmly that the employers could not go back on it. They wanted a permanent reduction in the then monstrous length of the factory working day. The cry for a reduction to eight hours was set up. At first it seemed an unattainable ideal; and it is still very far from being completely attained. But a ten hours day for women and children and young persons seemed reasonable and possible. As to the men, they were told they were grown-up independent Britons, and that it would be an outrage on British liberty to prevent an Englishman from working as long as he liked. But when the women and young children go home the factory engine is stopped, because its work cannot go on without them. When the engine stops the men may as well go home too, as their work cannot go on without the engine. So the men got the factory hours shortened by law “behind the petticoats of the women”.

And how did the employees, who had no votes at that time, induce Parliament, in which there were only landlords, capitalists, and employers, to pass these benevolent Acts of Parliament for the protection of the employees against the employers?

If I were to reply that they were acts of pure conscience, nobody nowadays would believe me, because Capitalism has destroyed our belief in any effective power but that of self-interest backed by force. But even Capitalist cynicism will admit that however unconscionable we may be when our own interests are affected, we can be most indignantly virtuous at the expense of others. The Intelligent Woman must guard herself against imagining that the property owners and employers in Parliament a hundred years ago had read this book, and therefore understood that their interests were the same, though their occupations and habits and social positions were so very different. The country gentlemen despised the employers as vulgar tradesmen, and made them feel it. The employers, knowing that any fool might be a peer or a country gentleman if he had the luck to be born in a country house, whilst success in business needed business ability, were determined to destroy the privileges of the landed aristocracy. This had been done in France in 1789 by a revolution; and it was by threatening a similar revolution that the English employers, in 1832, forced the King and the peerage, after a long popular agitation, to pass into law the famous Reform Bill which practically transferred the command of Parliament in England from the hereditary landed aristocracy to the industrial employers.

You know what a popular agitation means. It means a little reasoning and a great deal of abuse of the other side. Before 1832 the employers did not confine themselves to pointing out the absurdity of allowing a couple of cottages owned by a county aristocrat to send a member to Parliament when the city of Birmingham was not represented there. Most people thought it quite natural that great folk should have great privileges, and cared nothing about Birmingham, which they had heard of only as a dirty place where most of the bad pennies (Brummagem buttons) came from. The employers therefore stirred up public feeling against the landed gentry by exposing all their misdeeds: their driving of whole populations out of the country to make room for sheep or deer; their ruthless enforcement of the Game Laws, under which men were transported with the worst felons for poaching a few hares or pheasants; the horrible condition of the laborers’ cottages on their estates; the miserable wages they paid: their bigoted persecution of Nonconformists not only by refusing to allow any places of worship except those of the Church of England to be built on their estates, but by nominating to the Church livings such clergymen as could be depended on to teach the children in the village schools that all Dissenters were disgraced in this world and damned in the next; their equally bigoted boycotting of any shopkeeper who dared to vote against their candidates at elections; with all the other tyrannies which in those days made it a common saying, even among men of business, that “the displeasure of a lord is a sentence of death”. By harping on these grievances the employers at last embittered public opinion against the squires to such a pitch that the fear of a repetition in England of the French Revolution broke down the opposition to the Reform Bill. The employers, after propitiating King William IV by paying his debts, were able to force Parliament to pass the Bill; and that event inaugurated the purseproud reign of the English middle class under Queen Victoria.

Naturally the squires were not disposed to take this defeat lying down. They revenged themselves by taking up Lord Shaftesbury’s agitation for the Factory Acts, and shewing that the employer’s little finger was thicker than the country gentleman’s loins; that the condition of the factory employees was worse than that of the slaves on the American and West Indian plantations; that the worst cottages of the worst landlords had at least fresher air than the overcrowded slums of the manufacturing towns; that if the employers did not care whether their “hands” were Church of England or Methodist, neither did they care whether they were Methodists or Atheists, because they had no God but Mammon; that if they did not persecute politically it was only because the hands had no votes; that they persecuted industrially as hard as they could by imprisoning Trade Unionists; and that the personal and often kindly relations between the peasantry and the landlords, the training in good manners and decent housekeeping traditions learnt by the women in domestic service in the country houses, the kindnesses shewn to the old and sick on the great estates, were all lost in the squalor and misery, the brutality and blasphemy, the incestuous overcrowding, and the terrible dirt epidemics in the mining and factory populations where English life was what the employer’s greed had made it.

All this, though quite true, was merely the pot again calling the kettle black; for the country gentlemen did not refuse the dividends made for them by the employers in the mines and factories, nor refuse to let factories and slums be built all over their estates in Lancashire; nor did the employers, when they had made fortunes, hesitate to buy country estates and “found families” to be brought up in the strictest county traditions, nor to disparage trade as vulgar when the generation that remembered what their grandfathers were had died out. But the quarrel between them explains how it was that when Parliament consisted exclusively of landlords and capitalist employers or their nominees, and the proletariat had no votes, yet the Factory Acts got passed. The Acts were the revenge of the squires for the Reform Act.

Also, the poor were not wholly voteless. The owner of a freehold worth forty shillings a year had a vote; and a number of odd old franchises existed which gave quite poor people a certain weight at elections. They could not return a Labor member (such a thing was then unheard of); but they could sometimes turn the scale as between the Conservative landlord and the Liberal employer. If the Conservatives and Liberals had understood that their political interests were the same, and that they must present a united front to Labor, the employees would have had no hope except in revolution. But the Conservatives and Liberals did not understand their commercial interests. The Conservative clung blindly to his old privileges: the Liberal followed the slot of his new profits as thoughtlessly as a hound follows the slot of a fox. Both of them wanted to be in Parliament because it gave them personal importance, opening the way to the front bench, where the Cabinet Ministers sit, and to knighthoods, baronetcies, and peerages. The Liberals considered themselves the party of reform because they had carried the Reform Bill, and, as the employees wanted all sorts of reform very badly, took it for granted that they would always vote gratefully for the Liberals.

Under this delusion a Liberal Government made a bid for popular support by offering votes to the working class. The Conservatives at first opposed this so fiercely that they turned the Liberals out at the next election; but a very clever Conservative leader named Benjamin Disraeli, afterwards Earl of Beaconsfield, a Jew who had begun his political career, like Karl Marx, as a champion of the proletariat, persuaded the Conservatives that they were really more popular in the country than the Liberals, and induced them to make the very extension of the franchise they had just been opposing. Naturally the employees, when they got some votes in this way, used them to get more votes; and the end of it was that everybody got a vote, including at long last the women, though the women had to make a special and furious fight for their inclusion, and did not win it until the national work they did when they took the place of the absent men during the war of 1914-18 shamed the country into enfranchising them.

The proletarian voters who could formerly only turn the scale between Conservative and Liberal can now turn out both Conservative and Liberal, and elect candidates of their own. They did not at first realize this, and have not fully realized it yet. They began by timidly sending into Parliament about a dozen men who were not called Labor members, but working class members of the Liberal Party. It became the custom for Liberal Governments to give a minor ministerial post to some mild middle class professor who was vaguely supposed to be interested in factory legislation and popular education, and who was openly treated as a negligible nobody by the rest of the Cabinet.

Meanwhile Socialist societies were growing up among students of Karl Marx’s famous exposure of the sins of Capitalism, and of a very widely circulated book called Progress and Poverty, written by an American named Henry George, who had seen within his own lifetime American villages, where people were neither poor enough to be degraded and miserable nor rich enough to be idle and extravagant, changed by the simple operation of private property in land and capital into cities of fabulous wealth, so badly divided that the mass of the people were weltering in shocking poverty whilst a handful of owners wallowed in millions. These Societies broke the tradition of proletarian attachment to the Liberal Party by making the workers what Marx called class-conscious, a phrase which the Intelligent Woman has probably met several times in the papers without knowing any more clearly than the newspaper writers exactly what it means. The voters who had believed that there were only two parties in politics, the Conservatives and the Liberals (or Tories and Whigs), representing the two great religious parties of the Churchmen and the Dissenters, and the two great economic interests of the country farmers with their landlords and the town men of business with their capitalists, were now taught that from the point of view of the employee there is not a penny to choose between Conservatives and Liberals, as the gain of either means the employee’s loss, and that the only two parties who really have opposed interests are the party of the propertied class on the one hand and the party of the propertyless proletariat on the other: in other words, the party of Capital and the party of Labor. What mattered was not the Parliamentary struggle between the Liberal Mr Gladstone and the Conservative Mr Disraeli as to which should be Prime Minister, or between their successors Mr Balfour, Mr Bonar Law, and Mr Baldwin of the one party, and Sir Henry Campbell-Bannerman, Mr Asquith, and Mr Lloyd George of the other. To the class-conscious proletarian all that is mere Tweedledum and Tweedledee: what is really moving the world is the Class Struggle, the Class War (both terms are in use) between the proprietors and the proletariat for the possession of the land and capital of the country (the Means of Production). When a man realized that, he was said to be class-conscious. These terms are misleading because they imply that all the proletarians are in one camp and all the bourgeoisie in the other, which is untrue; but as the Intelligent Woman who has read thus far now knows what they mean, let them pass for the moment.

The Socialist Societies had begun badly by treating Parliament as the enemy’s camp; boycotting the Churches as mere contrivances for doping the workers into submission to Capitalism; and denouncing Trade Unionism and Co-operation as mistaken remedies. Under Marx and Engels, Morris and Hyndman, Socialism was a middle class movement caused by the revolt of the consciences of educated and humane men and women against the injustice and cruelty of Capitalism, and also (this was a very important factor with Morris) against its brutal disregard of beauty and the daily human happiness of doing fine work for its own sake. Now the strongest and noblest feelings of this kind were quite compatible with the most complete detachment from and ignorance of proletarian life and history in the class that worked for weekly wages. The most devoted middle class champions of the wage workers knew what housemaids and gardeners and railway porters and errand boys and postmen were like; but factory hands, miners, and dockers might as well have been fairies for all their lady and gentleman sympathizers knew about them.

Whenever your sympathies are strongly stirred on behalf of some cruelly ill used person or persons of whom you know nothing except that they are ill used, your generous indignation attributes all sorts of virtues to them, and all sorts of vices to those who oppress them. But the blunt truth is that ill used people are worse than well used people: indeed this is at bottom the only good reason why we should not allow anyone to be ill used. If I thought you would be made a better woman by ill treatment I should do my best to have you ill treated. We should refuse to tolerate poverty as a social institution not because the poor are the salt of the earth, but because “the poor in a lump are bad”. And the poor know this better than anyone else. When the Socialist movement in London took its tone from lovers of art and literature who had read George Borrow until they had come to regard tramps as saints, and passionate High Church clergymen (Anglo-Catholics) who adored supertramps like St Francis, it was apt to assume that all that was needed was to teach Socialism to the masses (vaguely imagined as a huge crowd of tramplike saints) and leave the rest to the natural effect of sowing the good seed in kindly virgin soil. But the proletarian soil was neither virgin nor exceptionally kindly. The masses are not in the least like tramps; and they have no romantic illusions about oneanother, whatever illusions each of them may cherish about herself. When John Stuart Mill was a Parliamentary candidate in Westminster, his opponents tried to defeat him by recalling an occasion on which he had said flatly that the British workman was neither entirely truthful, entirely sober, entirely honest, nor imbued with a proper sense of the wickedness of gambling: in short, that he was by no means the paragon he was always assumed to be by parliamentary candidates when they addressed his class as “Gentlemen”, and begged for his vote. Mill probably owed his success on that occasion to the fact that instead of denying his opinion he uncompromisingly reaffirmed it. The wage workers are as fond of flattery as other people, and will swallow any quantity of it from candidates provided it be thoroughly understood that it is only flattery, and that the candidates know better; but they have no use for gushingly idealistic ladies and gentlemen who are fools enough to think that the poor are cruelly misunderstood angels.

In the eighteen-eighties the Socialists found out their mistake. The Fabian Society got rid of its Anarchists and Borrovians, and presented Socialism in the form of a series of parliamentary measures, thus making it possible for an ordinary respectable religious citizen to profess Socialism and belong to a Socialist Society without any suspicion of lawlessness, exactly as he might profess himself a Conservative and belong to an ordinary constitutional club. A leader of the society, Mr Sidney Webb, married Miss Beatrice Potter, who had made a study at first hand of working-class life and organization, and had published a book on Co-operation. They wrote the first really scientific history of Trade Unionism, and thereby not only made the wage-workers conscious of the dignity of their own political history (a very important step in the Marxian class-consciousness) but shewed the middle-class Socialists what the public work of the wage-working world was really like, and convinced them of the absurdity of supposing that Socialists could loftily ignore the organization the people had already accomplished spontaneously in their own way. Only by grafting Socialism on this existing organization could it be made a really powerful proletarian movement.

The Liberals, still believing themselves to be the party of progress, assumed that all progressive movements would be grafted on the Liberal Party as a matter of course, to be patronized and adopted by the Liberal leaders in Parliament as far as they approved. They were disagreeably surprised when the first effect of the adoption of constitutional parliamentarism by the Fabian Society was an attack on the Liberal Government of that day, published in one of the leading reviews, for being more reactionary and hostile to the wage-workers than the Conservatives. The Liberals were so astonished and scandalized that they could only suggest that the Fabian Society had been bribed by the Conservatives to commit what seemed to all Liberals to be an act of barefaced political treachery. They soon had their eyes opened much more widely. The Fabian Society followed up its attack by a proposal for the establishment of a Labor Party in Parliament to oppose both Conservatives and Liberals impartially. A working-class leader, Keir Hardie, formerly a miner, founded a Society called the Independent Labor Party to put this proposal into practice. Among the members of the Fabian Society who became a leader in this new Society was Mr Ramsay MacDonald, who, by his education and knowledge of the world outside the wage-working class, was better qualified than Keir Hardie for successful leadership in Parliament. From the Independent Labor Party sprang The Labor Party, a political federation, much more powerful, of Trade Unions and of Socialist Societies, whose delegates sat on its executive committee. As all the persons who were members of Trade Unions at that time could, by subscribing a penny a week each, have provided a political fund of over £325,000 (there are three times as many now), this combination with the Trade Unionists was decisive. At the election of 1906 enough Labor members were elected to form an independent party in Parliament. By 1923 they had encroached so much that neither the Liberals nor the Conservatives had a majority in the House; and Mr Ramsay MacDonald was challenged to form a Government and shew whether Labor could govern or not. He accepted the challenge, and became British Prime Minister with a Cabinet of Socialists and Trade Unionists. It was a more competent government than the Conservative Government that preceded it, partly because its members, having risen from poverty or obscurity to eminence by their personal ability, were unhampered by nonentities, and partly because it knew what the world is like today, and was not dreaming, as even the cleverest of the Conservative leaders still were, of the Victorian mixture of growing cotton lordship and decaying feudal lordship in the capitalist class, with starved helpless ignorance and submissive servitude in the proletariat, which had not even lasted out Queen Victoria’s lifetime. In fact, the Labor leaders were to an extraordinary degree better educated and more experienced than their opponents, who infatuatedly took it for granted that rich men must be superior in education because they graduate in the two aristocratic universities instead of in the school of economically organic life.

The Liberals and Conservatives, disgusted with this result, and ruefully sorry that by derisively giving Labor a chance to prove its relative incompetence it had proved the opposite, combined to throw Mr MacDonald out of office in 1924. Although he had as yet no real chance of a majority in the country, he had so scared the plutocrats in Parliament by his comparative success as Secretary of State for Foreign Affairs, which they had regarded as the department in which Labor was certain to break down ridiculously, that they overdid their attack by persuading the country that he was connected with the Communist Government of Russia. The panic which followed, lasting until the election was over, wiped out at the polls, not the Labor Party, which just managed to hold its own, but the innocent Liberal Party.

The danger of stampeding a general election is that all sorts of political lunatics, whom no one would dream of taking seriously in quiet times, get elected by screaming that the country is in danger, whilst sober candidates are defeated ignominiously. In 1906, when a general election was stampeded by an alarm of Chinese labor, third rate Liberal candidates ousted first rate Conservative ones by the score. In 1924 the Red Russian scare enabled third rate Conservatives to oust first rate Liberals. In both cases the result was a grave falling-off in the quality of the victorious party. When the Sirdar, our representative in Egypt, was unluckily assassinated just after the election, the Conservatives, drunk with their victory, could not be restrained by the Prime Minister, Mr Baldwin, from hurling at the assassins an insane threat to cut off the water supply of Egypt. This extravagance, which startled all Europe, was felt to be just the sort of thing that Mr MacDonald would not have done. The Government had to climb down rather abjectly when it discovered that it could neither carry out its threat nor expect anything but reprobation from all sides, both at home and abroad, for having been so absurd as to make it; for though a forceful wickedness is, I am sorry to say, rather popular than otherwise when our Governments indulge in it at the expense of foreigners, we expect it to be successful. A climb-down is unpopular in proportion to the arrogance of the climb-up. Consequently the Government lost on the Egyptian fiasco the support won by the Russian scare; but it lost its head again at a crazy threat of a general strike by the Trade Unions. The Russians sent us a very handsome subscription to the strike funds; and the Government, frightened and infuriated, and quite incapable of measuring the danger (which need not have alarmed a mouse) brought in a futile but provocative Bill to make Trade Unionism illegal, and broke off diplomatic relations with Russia after raiding the offices of the Russian Government in London. Meanwhile, Labor in Parliament, having recovered from the shock of the election, settled into its place as the official Opposition.

To sum up the story to the point it has now reached (1927), the Proletariat, having begun its defensive operations in the Class War by organizing its battalions into Trade Unions, only to discover that it could not retain its winnings without passing them into law, organized itself politically as a Labor Party, and returned enough members to Parliament to change the House of Commons from a chamber in which two capitalist parties, calling themselves Conservative and Liberal, contended for the spoils of office and the honor and glory of governing, to an arena in which the Proletariat and the Proprietariat face each other on a series of questions which are all parts of two main questions: first, whether the national land and capital and industry shall be held and controlled by the nation for the nation, or left in the hands of a small body of private men to do as they please with; second, whilst the capitalist system lasts, which shall be top dog, the provider of capital or the provider of labor. The first is a Socialist question, because until land and capital and the control of industry are in the hands of the Government it cannot equalize the distribution either of the product or of the labor of producing it.

The second is a Trade Unionist question. The Labor Party consists not only of Socialists aiming at equality of income, but of Trade Unionists who have no objection to the continuance of the capitalist method in industry provided that Labor gets the lion’s share. It should be easier to maintain the capitalist system with the proletarians taking the lion’s share, and the landlords, capitalists, and employers reduced to comparative penury, than to maintain it as at present; for the laborers and mechanics and their wives and daughters form about nine-tenths of the nation; and on all accounts it should be safer and steadier to have only one discontented person to every nine contented ones than nine discontented persons to every one contented one. To put it another way, it should be easier for a government supported by nine-tenths of the voters to collect income tax and supertax from landlords and capitalists until they had to sell their country houses and motor cars to their tenants and employees, and live in the gardener’s cottage themselves, than it is for a landlord to collect his rents or a capitalist to find investments on which he can live in luxury. An engineer designing a Forth Bridge, or an architect a cathedral or a palace, can quite easily be reduced to accept less money for his work than the riveters and fitters and masons and bricklayers and painters who carry out the designs. It is true that labor could no more do without them than they could do without labor; but labor would have the advantage in bargaining, because the talented worker, sooner than waste his talent, would rather exercise it for a low wage than fix rivets or pile bricks for a high one. At his own job he will work on any terms for the pleasure of working, and loathe any other job; whilst the reluctant laborer will do nothing for nothing and very little for a halfpenny.

Thus a Trade Unionist Government, with the mass of the people at its back, could, by ruthless taxation of unearned incomes, by Factory Acts, by Wages Boards fixing wages, by Commissions fixing prices, by using the income tax to subsidize trades in which wages were low (all of these devices are already established in parliamentary practice) could redistribute the national income in such a way that the present rich would become the poor, and the laborer would be cock of the walk. What is more, that arrangement would be much more stable than the present state of affairs in which the many are poor and the few rich. The only threat to its permanence would come from the owners of property refusing to go on collecting rent and interest merely to have it nearly all seized by the tax collector. If you have a thousand a year and a turn for business, you must sometimes feel that you are really only collecting money for the Government at a commission of seventy per cent or thereabouts. Suppose the commission were reduced to twenty-five per cent, what could you do but pay £750 out of your thousand as helplessly as you now pay £250? Just as the owners of property, when they controlled Parliament, used their power to extort the utmost farthing from Labor, Labor can and probably will use its power to extort the utmost farthing from Property unless equal distribution for all is made a fundamental constitutional dogma. At present the propertied classes are looking to capitalist Trade Unions to save them from Socialism. The time is coming when they will clamor for Socialism to save them from capitalist Trade Unionism: that is, from Capitalized Labor. Already in America Trade Unionism is combining with Big Business to squeeze the sleeping partner. More of that later on.

51. DOMESTIC CAPITAL

After talking so long about Capitalism in the lump, let us take a few chapters off to examine it as it affects you personally if you happen to be a lady with a little capital of your own: one who, after living in the style customary in her class, still has some money to spare to use as capital so as to increase her income. I will begin by the simple case of a woman earning money, not as an employer, but by her own work.

Let us assume that her work involves doing sums (she is an accountant), or writing (she is an author or scrivener), or visiting clients instead of waiting in an office to receive them (she is a doctor). It is evident that if she can spare money enough to buy an adding-machine which will enable her to do the work of three ordinary bookkeepers, or a sewing-machine, or a typewriter, or a bicycle, or a motor car, as the case may be, the machine will enable her to get through so much more work every day that she will be able to earn more money with them than without them. The machine will be carelessly called her capital (most people muddle themselves with that mistake when they discuss economics); but the capital was the money saved to pay for the machine, and as it was eaten up by the workers who made the machine, it no longer exists. What does exist is the machine, which is continually wearing out, and can never be sold secondhand for its price when new. Its value falls from year to year until it falls to nothing but the value of the old iron of which it is made.

Now suppose she marries, thus changing her profession for that of wife, mother, housekeeper, and so forth! Or suppose that the introduction of an electric tram service, and the appearance of plenty of taxis in the streets, enable her to do all the travelling she wants as well and more cheaply than her private car! What is she to do with her adding-machine or sewing-machine, her typewriter or her car? She cannot eat them or wear them on her back. The adding-machine will not iron shirt fronts: the sewing-machine will not fry eggs: the typewriter will not dust the furniture: the motor car, for all its marvels, will not wash the baby.

If you shew what I have just written to the sort of male who calls himself a practical business man, he will at once say that I am childishly wrong: that you can eat an adding-or sewing-machine; dust the furniture with a typewriter; and wash a hundred babies with a motor car. All you have to do is to sell the sewing-machine and buy food with the price you get for it; sell the typewriter and buy a vacuum cleaner; sell the motor car and hire a few nurses after buying a bath and soap and towels. And he will be so far right that you certainly can do all these things provided too many other people are not trying to do them at the same time. It is because the practical business man always forgets this proviso that he is such a hopeless idiot politically. When you have sold the sewing-machine and bought food with the price, you have not really turned the sewing-machine into food. The sewing-machine remains as uneatable as ever: not even an ostrich could get a tooth into it or digest it afterwards. What has happened is that you, finding yourself with a sewing-machine which you no longer want, and being in want of food, find some other woman who has some spare food which she does not want, but who wants a sewing-machine. You have a sewing-machine for which you have no use, and an unsatisfied appetite. She has food for which she has no appetite, and wants a sewing-machine. So you two make an exchange: and there you are! Nothing could be simpler.

But please remark that it takes two to make the bargain, and that the two must want opposite things. If they both want the same thing, or want to get rid of the same thing, there will be no deal. Now suppose the Chancellor of the Exchequer took it into his head as a practical business man to raise money by a tax on capital instead of on income. Suppose he were to say that as thousands of women have capital in the form of sewing-machines which they can sell for, say, £5 apiece, they can each afford to pay a tax of £3. Suppose he actually induced the House of Commons to impose such a tax under the title of a Capital Levy or some such practical business nonsense, and that every woman had to sell her sewing-machine to pay the tax! What would be the result? Each woman trying to sell her machine would find all the other women trying to sell their machines too, and nobody wanting to buy them. She could sell it as old iron for a shilling perhaps, but that would not enable her to pay the tax. The tax collector, not being paid, would distrain on her goods: that is, he would seize the sewing-machine. But as he also could not sell it, he would have to hand it over unsold to the Chancellor of the Exchequer, who would find himself heaped up with thousands of unsellable sewing-machines instead of the thousands of pounds he was looking forward to. He would have no money; and the women would have no sewing-machines: all because the practical business men told him that sewing-machines could be turned into bread.

If you consider this a little you will see that the difference between private affairs and State affairs is that private affairs are what people can do by themselves, one at a time and once in a way, whereas State affairs are what we are all made to do by law at the same moment. At home you are a private woman dealing with your own private affairs; but if you go into Parliament and perhaps into the Cabinet, you become a stateswoman. As a private woman all you have to consider is, “Suppose I were to do this or that”. But as a stateswoman you must consider “Suppose everybody had to do this or that”. This is called the Kantian test.

For instance, if you become Chancellor of the Exchequer, your common sense as a private woman will save you from such a folly as supposing that a sewing-machine in the house is the same as £5 in the house. But that very same private common sense of yours may persuade you that an income of £5 a year is the same as £100 ready money, because you know that if you want £100 your stockbroker can get it for you in exchange for £5 a year of your income. You might therefore be tempted to lay a tax of £30 on everyone with £5 a year, and imagine that you would not only get the £30, but that the taxpayer would have £70 left to go on with. Let me therefore explain the nature of this business of £5 a year being worth £100 cash to you privately, and worth just £5 a year to the Chancellor publicly and not a rap more.

When we were dealing with the impossibility of saving I pointed out that there are certain everyday transactions that are like saving and that are called saving, very much as selling a sewing-machine and buying food with the price may be called eating the sewing-machine. Do not bother to try to remember this now: it is easier to go over it again. Suppose you have £100 and you wish to save it: that is, to consume it at some future time instead of immediately! The objection is that as the things the money represents will rot unless they are used at once, what you want to do is impossible. But suppose there is in the next street a woman who has been left by the death of her parents with nothing but an income of £5 a year. Evidently she cannot live on that. But if she had £100 in ready money she could emigrate, or set up a typewriting office, or stock a little shop, or take lessons in some moneymaking art, or buy some smart clothes to improve her chances of getting respectable employment, or any of the things that poor women imagine they could do if only they had a little ready money. Now nothing is easier than for you to make an exchange with this woman. She gives you her right to take £5 every year fresh-and-fresh out of each year’s harvest as it comes; and you give her your hundred pounds to spend at once. Your stockbroker or banker will bring you together. You go to him and say that you want him to invest your £100 for you at five per cent; and she goes to him and says that she wants to sell her £5 a year for ready money. He effects the change for a small commission. But the transaction is disguised under such fantastic names (like the water and breadcrumb in doctors’ prescriptions) that neither you nor the other woman understands what has really happened. You are said to have invested £100, and to be “worth” £100, and to have added £100 to the capital of the country: and she is said to have “realized her capital”. But all that has actually occurred is that your £100 has been handed over to be spent and done for by the other woman, and that you are left with the right to take £5 out of the income of the country without working for it year after year for ever, or until you in your turn sell that right for £100 down if you should unhappily find yourself in the same predicament as the other lady was in when you bought it.

Now suppose you brought in your tax of £30 on every £5 a year in the country! Or suppose a Conservative Government, led by the nose by practical business men who know by experience that people who have £5 a year can sell it for £100 whenever they want to, were to do it! Or suppose a Labor Government, misled by the desire to take capital out of private hands and vest it in the State, were to do it! They would call it a levy of thirty per cent on capital; and most of them would vote for it without understanding what it really meant. Its opponents would vote against it in equal ignorance of its nature; so that their arguments would convince nobody. What would happen? Evidently no woman could pay £30 out of £5 a year. She would have to sell the £5 a year for £100, and then reinvest the odd £70. But she would not get the £100 because, as the tax would not fall on her alone, but on all the other capitalists as well, her stockbroker would find everybody asking him to sell future incomes for ready money and nobody offering ready money for future incomes. It would be the story of the sewing-machines over again. She would have to tell the tax collector that she could not pay the tax, and that he might sell her furniture and be damned (intelligent women use recklessly strong language under such circumstances). But the tax collector would reply that her furniture was no good to him; for as he was selling up all the other capitalists’ furniture at the same time, and as only those who were too poor to have any capital to be taxed were buying it, Chippendale chairs were down to a shilling a dozen and dining room tables to five shillings; so that it would cost him more to take her furniture away and sell it or store it than it would fetch. He would have to go away empty handed; and all the Government could do would be to take her £5 a year from her for six years and four months, the odd months being for the interest to pay for waiting. In other words it would find that her income was real, and her capital imaginary.

But even this would not work if the tax were imposed every year, like the income tax, because at the end of the six years she would owe £180, incurring a debt of £30 every year and getting only £5 to pay it with; so that it would be much better for her to give up her £5 a year for ever and support herself entirely by work. And the Government would have to admit that a tax on capital is an impossibility, for the unanswerable reason that the capital has no existence, having been eaten up long ago.

There is a tax on capital actually in existence which is often referred to as proving that such taxes are possible. When we die, taxes called Death Duties (officially Estate Duties) are levied on the fictitious capital value of our estates, if we leave any. The reason people manage to pay them is that we do not all die simultaneously every year on the 5th April and thus incur death duties payable on the following 31st December. We die seldom and slowly, less than twenty out of every thousand of us in one year, and out of that twenty not more than two at the outside have any capital. Their heirs, one would think, would find it easy to sell part of their income for enough ready money to pay the duties, the purchasers being capitalists whose fathers or uncles have not died lately. And yet the Government has to wait for its money often and long. The tax is a stupid one, not because it confiscates property by making the State inherit part of it (why not?) but because it operates cruelly and unfairly. One estate, passing by death from heir to heir three times in a century, will hardly feel the duties. Another, passing three times in one year (as happens easily during a war), is wiped out by them, and the heirs reduced from affluence to destitution. When you make your will, be careful how you leave valuable objects to poor people. If they keep them they may have to pay more for them in death duties than they can afford. Probably they will have to sell them to pay the duty.

This is so little understood, that men not otherwise mad are found estimating the capital of the country at sums varying from ten thousand millions before the war to thirty thousand millions after it (as if the war had made the country richer instead of poorer), and actually proposing in the House of Commons to tax that thirty thousand millions as available existing wealth and to pay off the cost of the war with it. They all know that you cannot eat your cake and have it too; yet, because we have spent seven thousand millions on a frightful war, and, as they calculate, twenty thousand millions more on mines and railways and factory plant and so on, and because these sums are written down in the books of the Bank of England and the balance sheets of the Companies and Trusts, they think they still exist, and that we are an enormously rich nation instead of being, as anyone can see by the condition of nine-tenths of the population, a disgracefully poor one.

52. THE MONEY MARKET

And now, still assuming that you are a lady of some means, perhaps I can be a little useful to you in your private affairs if I explain that mysterious institution where your investments are made for you, called the Money Market, with its chronic ailment of Fluctuations that may at any moment increase your income pleasantly without any trouble to you, or swallow it up and ruin you in ways that a man can never make a woman understand because he does not understand them himself.

A market for the purchase and sale of money is nonsense on the face of it. You can say reasonably “I want five shillingsworth of salmon”; but it is ridiculous to say “I want five shillingsworth of money”. Five shillingsworth of money is just five shillings; and who wants to exchange five shillings for five shillings? Nobody buys money for money except money changers, who buy foreign coins and notes to sell to you when you are going abroad.

But though nobody in England wants to buy English money, we often want to hire it, or, as we say, to borrow it. Borrow and hire, however, do not always mean the same thing. You may borrow your neighbor’s frying-pan, and return it to her later on with a thank you kindly. But in the money market there is no kindness: you pay for what you get, and charge for what you give, as a matter of business. And it is quite understood that what you hire you do not give back: you consume it at once. If you ask your neighbor to lend you, not a frying-pan, but a loaf of bread and a candle, it is understood that you eat the bread and burn the candle, and repay her later on by giving her a fresh loaf and a new candle. Now when you borrow money you are really borrowing what it will buy: that is, bread and candles and material things of all sorts for immediate consumption. If you borrow a shilling you borrow it because you want to buy a shillingsworth of something to use at once. You cannot pay that something back: all you can do is to make something new or do some service that you can get paid a shilling for, and pay with that shilling. (You can, of course, borrow another shilling from someone else, or beg it or steal it; but that would not be a ladylike transaction.) At all events, not until you pay can the lender consume the things that the shilling represents. If you pay her anything additional for waiting you are really hiring the use of the money from her.

In that case you are under no obligation to her whatever, because you are doing her as great a service as she is doing you. You may not see this at first; but just consider. All money that is lent is necessarily spare money, because people cannot afford to lend money until they have spent enough of it to support themselves. Now this spare money is only a sort of handy title deed to spare things, mostly food, which will rot and perish unless they are consumed immediately. If your neighbor has a loaf left over from her week’s household supply you are doing her a service in eating it for her and promising to give her a fresh loaf next week. In fact a woman who found herself with a tenpenny loaf on her hands over and above what her family needed to eat, might, sooner than throw the loaf into the dustbin, say to her neighbor, “You can have this loaf if you will give me half a fresh loaf for it next week”: that is to say, she might offer half the loaf for the service of saving her from the total loss of it by natural decay.

The economists call this paying negative interest. What it means is that you pay people to keep your spare money for you until you want it instead of making them pay you for allowing them to keep it, which the economists call paying positive interest. One is just as natural as the other; and the sole reason why nobody at present will pay you to borrow from them, whereas everyone will pay you to lend to them, is that under our system of unequal division of income there are so very few of us with spare money to lend, and so very many with less than they need for immediate consumption, that there are always plenty of people offering not only to spend the spare money at once, but to replace it later on in full with fresh goods and pay the lenders for waiting into the bargain. The economists used to call this payment the reward of abstinence, which was silly, as people do not need to be rewarded for abstaining from eating a second dinner, or from wearing six suits of clothes at a time, or living in a dozen houses: on the contrary, they ought to be extremely obliged to anyone who will use these superfluities for them and pay them something as well. If instead of having a few rich amid a great many poor, we had a great many rich, the bankers would charge you a high price for keeping your money; and the epitaph of the dead knight in Watts’s picture, “What I saved I lost”, would be true materially as well as spiritually. If you then had £100 to spare, and wanted to save it until next year, and took it to the manager of your bank to keep it for you, he would say “I am sorry, madam; but your hundred pounds will not keep. The best I can do for you is to promise you seventy pounds next year (or fifty, or twenty, or five, as the case might be); and you are very fortunate to be able to get that with so much spare money lying about. You had really much better not save. Increase your expenditure; and enjoy your money before what it represents goes rotten. Banking is not what it was.”

This cannot happen under Capitalism, because Capitalism distributes the national income in such a way that the many are poor and the few enormously rich. Therefore for the present you may count on being able to lend (invest) all your spare money, and on being paid so much a year for waiting until the borrower replaces what you have lent. The payment for waiting is called interest, or, in the Bible, usury. Interest is the polite word. The borrower, in short, hires the use of your spare money from you; and there is nothing dishonest nor dishonorable in the transaction. You hand over your spare ready money (your capital) to the borrower; and the borrower binds herself to pay you a certain yearly or monthly or weekly income until she repays it to you in full.

The money market is the place in the city where yearly incomes are bought for lump sums of spare ready money. The income you can buy for £100 (which is the measuring figure) varies from day to day, according to the plenty or scarcity of spare money offered for hire and of incomes offered for sale. It varies also according to the security of the income and the chances of its fluctuating from year to year. When you take your spare £100 to your stockbroker to invest for you (that is, to hire out for an income in the money market) he can, at the moment when I write these lines (1926) get you £4: 10s. a year certain, £6 a year with the chance of its rising or falling, or £10 a year and upwards if you will take a sporting chance of never receiving anything at all.

The poor do not meddle with this official money market, because the only security they can give when borrowing ready money from anyone but the pawnbroker is their promise to pay so much a week out of their earnings. This being much more uncertain than a share certificate or a lease of land, they have to pay comparatively prodigious prices. For instance, a poor working woman can hire a shilling for a penny a week. This is the usual rate; and it seems quite reasonable to very poor people; but it is more than eighty-six times as much as the Government pays for the hire of money. It means paying at the rate of £433: 10s. a year for the use of £100, or, as we say, interest at 433½ per cent: a rate no rich man would dream of paying. The poorer you are the more you pay, because the risk of your failing to pay is greater. Therefore when you see in the paper that the price of hiring money has been fixed by the Bank of England (that is why it is called the Bank Rate) at five per cent, or reduced to four-and-a-half per cent, or raised to six per cent, or what not, you must not suppose that you or anyone else can hire money at that rate: it means only that those who are practically certain to be able to pay, like the Government or the great financiers and business houses, can borrow from the banks at that rate. In their case the rate changes not according to any risk of their being unable to pay, but according to the quantity of spare money available for lending. And no matter how low the rate falls, the charwoman still has to pay 433½ per cent, partly because the risk of her being unable to pay is great, partly because the expense of lending money by shillings and collecting the interest every week is much greater than the expense of lending it by millions and collecting the interest every six months, and partly because the charwoman is ignorant and helpless and does not know that the slum usurer, whom she regards as her best friend in need, is charging her anything more than a millionaire is charged.

The price of money varies also according to the purpose for which it is borrowed. You are, I hope, concerned with the money market as a lender rather than as a borrower. Do not be startled at the notion of being a moneylender (not, I repeat, that there is anything dishonorable in it): nobody will call your investments loans. But they are loans for all that. Only, they are loans made, not to individuals, but to joint stock companies on special conditions. The business people in the city are always forming these companies and asking you to lend them money to start some big business undertaking, which may be a shop in the next street, or a motor bus service along it, or a tunnel through the Andes, or a harbor in the Pacific, or a gold mine in Peru, or a rubber plantation in Malaya, or any mortal enterprise out of which they think they can make money. But they do not borrow on the simple condition that they pay you for the hire of the money until they pay it back. Their offer is that when the business is set up it shall belong to you and to all your fellow lenders (called shareholders); so that when it begins to make money the profits will be distributed among you all in proportion to the amount each of you has lent. On the other hand, if it makes no profits you lose your money. Your only consolation is that you can lose no more. You cannot be called on to pay the Company’s debts if it has spent more than you lent it. Your liability is limited, as they say.

This is a chancy business; and to encourage you if you are timid (or shall we say cautious?) these companies may ask you to lend your spare money to them at the fixed rate of, say, six or seven per cent, on the understanding that this is to be paid before any of the ordinary lenders get anything, but that you will get nothing more no matter how big the profits may be. If you accept this offer you are said to have debentures or preference shares in the company; and the others are said to have ordinary shares. There are a few varieties both of preference and ordinary shares; but they are all ways of hiring spare money: the only difference is in the conditions on which you are invited to provide it.

When you have taken a share, and it is bringing you in an income, you can at any time, if you are pressed for ready money, sell your share for what it may be worth in the money market to somebody who has spare money and wants to “save” it by exchanging it for an income. The department of the money market in which shares are bought and sold in this way is called the Stock Exchange. To sell a share you have to employ an agent (called a stockbroker), who takes your share to the Exchange and asks another agent (called a stockjobber) to “make him a price”: It is the jobber’s business to know what the share is worth, according to the prospects of the company, the quantity of spare money being offered for incomes, and the number of income producing shares being offered for sale. Never speak disrespectfully of stockjobbers: they are very important people, and consider themselves greater masters of the money business than the stockbrokers.

The legitimate business of the Stock Exchange is this selling and buying of shares in companies already established. It is largely occupied also with a curious game called speculation, in which phantom prices are offered for imaginary shares; but for the moment let us keep to the point that the shares dealt in are practically all in established companies, because what is nationally important is the application of spare money, not to the purchase of shares in old companies, but to the foundation of new ones, or at least to the extension of the plant and operations of the old ones. Now the business done on the Stock Exchange is no index to this, and indeed may have nothing to do with it. Suppose, for example, that you have £50,000 to spare, and you invest it all in railway shares! You will not by doing so create a single yard of railway, nor cause a single additional train to be run, nor even supply an existing train with an extra footwarmer. Your money will have no effect whatever on the railways. All that will happen is that your name will be substituted for some other name or names in the list of shareholders, and that for the future you will get the income the owners of those names would get if they had not sold their shares to you. Also, of course, that they will get your £50,000 to do what they like with. They may spend it on the gambling tables at Monte Carlo, or on the British turf; or they may present it to the funds of the Labor Party. You may disapprove strongly of gambling; and you may have a horror of the Labor Party. You may say “If I had thought this was going to happen to my money, I would have bought shares privately from some persons whose principles were well known to me and whom I could trust not to spend it foolishly instead of from that wicked stockjobber who has no more conscience than a cash register, and does not care what becomes of my money”. But your protest will be vain. In practice you will find that you must buy your shares in established companies on the Stock Exchange; that your money will never go into the company whose shares you buy; and that its real destination will be entirely beyond your control. A day’s work on the Stock Exchange, nominally a most gratifying addition of hundreds of thousands of pounds of spare money to the industrial capital of the country, may be really a waste of them in extravagant luxury, or ruinous vice, to say nothing of the possibility of their being sent abroad to establish some foreign business which will capture the business of the company whose shares you have bought, and thus reduce you to indigence.

And now you will say that if this is so, you will take particular care to buy nothing but new shares in new companies, sending the money directly to their bankers according to the form enclosed with the prospectus, without allowing any stockbroker or stockjobber to know anything about it, thus making sure that your money will be used to create a new business and add it to the productive resources of your country’s industry. My dear lady, you will lose it all unless you are very careful, very well informed as to the risks involved, and very intelligent in money matters. Company promotion, I am sorry to say, is a most rascally business in its shadier corners. Act after Act of Parliament has been passed, without much effect, to prevent swindlers from forming companies for some excellent object, and, when they have collected as much money as they can by selling shares in it, making no serious attempt to carry out that object, but simply taking offices, ordering goods, appointing themselves directors and managers and secretaries and anything else that carries a salary, taking commissions on all their orders, and, when they have divided all the plunder in this way (which is perfectly legal), winding up the company as a failure. All you can do in that case is to go to the shareholders’ meeting and make a row, being very careful not to tell the swindlers that they are swindlers, because if you do they will immediately take an action against you for slander and get damages out of you. But making a row will not save your money. The amount that is stolen from innocent women every year in this way is appalling; and it has been done as much by sham motor bus companies, which if genuine would have been very sensible and publicly useful investments, as by companies to work bogus gold mines, which are suspect on the face of them.

Even if you escape this swindling by blackguards who know what they are doing, and would be as much disconcerted by the success of their companies as a burglar if he found himself politely received and invited to dinner in a house he had broken into, you may be tempted by the companies founded by genuine enthusiasts who believe in their scheme, who are quite right in believing in it, who are finally justified by its success, and who put all their own spare money and a great deal of hard work into it. But they almost always underestimate its cost. Because it is new, they have no experience to guide them; and they have their own enthusiasm to mislead them. When they are half way to success the share money is all used up; and they are forced to sell out all they have done for an old song to a new company formed expressly to take advantage of them. Sometimes this second company shares the fate of the first, and is bought out by a third. The company which finally succeeds may be built on the money and work of three or four successive sets of pioneers who have run short of the cash needed for completion of the plant. The experienced men of the city know this, and lie in wait until the moment has come for the final success. As one of them has put it “the money is made by coming in on the third reconstruction”. For them it may be a splendid investment; but the original shareholders, who had the intelligence to foresee the successful future of the business, and the enterprise to start it, are cleaned out. They see their hopes fulfilled and their judgment justified; but as they have to look through the workhouse windows, they are a warning rather than an example to later investors.

You can avoid these risks by never meddling with a new company, but calling in your stockbroker to buy shares in a well established old one. You will not do it any good; but at all events you will know that it is neither a bogus company nor one which has started with too little capital and will presently have to sell out at a heavy or total loss. Beware of enterprise: beware of public spirit: beware of conscience and visions of the future. Play for safety. Lend to the Government or the Municipalities if you can, though the income may be less; for there is no investment so safe and useful as a communal investment. And when you find journalists glorifying the Capitalist system as a splendid stimulus to all these qualities against which I have just warned you, restrain the unladylike impulse to imitate the sacristan in the Ingoldsby Legends, who said no word to indicate a doubt, but put his thumb unto his nose, and spread his fingers out.

53. SPECULATION

In the preceding chapter I have been assuming that you are a capitalist. I am now going to assume that you are perhaps a bit of a gambler. Even if you abhor gambling it is a necessary part of your education in modern social conditions to know how most of it is done. Without such knowledge you might, for instance, marry a gambler after having taken the greatest pains to assure yourself that he had never touched a playing card, sat at a roulette table, or backed a horse in his life, and was engaged solely in financial operations on the Stock Exchange. You might find him encouraging you to spend money like water in one week, and in the next protesting that he could not possibly afford you a new hat. In short, you might find yourself that tragic figure, the gambler’s wife who is not by temperament a gambler.

A page or two ago I dropped a remark about a game played on the Stock Exchange and called Speculation, at which phantom prices are offered for imaginary shares. I will explain this game to you, leaving it to your taste and conscience to decide whether you will shun it or plunge into it. It is by far the most widely practised and exciting form of gambling produced by Capitalism.

To understand it you must know that on the London Stock Exchange you can buy a share and not have to pay for it, or sell a share and not have to hand over the share certificate, until next settling day, which may be a fortnight off. You may not see at first what difference that makes. But a great deal may happen in a fortnight. Just recollect what you have learnt about the continual fluctuations in the prices of incomes and of spare subsistence in the Money Market! Think of the hopes and fears raised by the flourishing and decaying of the joint stock companies as their business and prospects grow or shrink according as the harvests are good or bad: rubber harvests, oil harvests, coal harvests, copper harvests, as well as the agricultural harvests: all meaning that there will be more or less money to divide among the shareholders as yearly income, and more or less spare money available to buy shares with. The prices of shares change not only from year to year but from day to day, from hour to hour, and, in moments of excitement on the Stock Exchange, from minute to minute. The share that was obtained years ago or centuries ago by giving £100 spare money to start a new company may bring its owner £5000 a year, or it may bring her thirty shillings, or it may bring her nothing, or it may bring her all three in succession. Consequently that share, which cost somebody £100 spare money when it was new, she may be able to sell for £100,000 at one moment, for £30 at another, whilst at yet another she may be unable to sell it at all, for love or money. As she opens her newspaper in the morning she looks at the city page, with its list of yesterday’s prices of stocks and shares, to see how rich she is today; and she seldom finds that her shares are worth the same price for a week at a time unless she has been prudent enough to lend it to the Government or to a municipality (in which case she has communal security) instead of to private companies.

Now put these two things together: the continual change in the prices of shares, and the London Stock Exchange rule that they need not be paid for nor delivered until next settling day. Suppose you have not a penny of spare cash in your possession, nor a share (carrying an income) to sell! Suppose you believe for some reason or other that the price of shares in a certain company (call it company A) is going to rise in value within the next few days! And suppose you believe that the price of shares in a certain other company (company B) is going to fall. If you are right, all you have to do to make some money by your good guessing is to buy shares in company A and sell shares in company B. You may say “How am I to buy shares without money or sell them without the share certificates?” It is very simple: you need not produce either the money or the certificates until settling day. Before settling day you sell the A shares for more than you bought them for on credit; and you buy the B certificates for less than you pretended to sell them for. On settling day you will get the money from the people you sold to, and the certificates from the people you bought from; and when you have paid for the A shares and handed over the B certificates, you will be in pocket by the difference between their values on the day you bought and sold them and their values on settling day. Simple enough, is it not?

This is the game of speculation. Nobody will blame you for engaging in it; but on the Stock Exchange they will call you a bull for pretending to buy the A shares, and a bear for pretending to sell the B shares. If you pay a small sum to get shares allotted to you in a new company on the chance of selling them at a profit before you have to pay up, they will call you a stag. If you ask why not a cow or a hind, the reply is that as the Stock Exchange was founded by men for men its slang is exclusively masculine.

But, you may say, suppose my guess was wrong! Suppose the price of the A shares goes down instead of up, and the price of the B shares up instead of down! Well, that often happens, either through some unforeseen event affecting the companies, or simply because you guessed badly. But do not be too terrified by this possibility; for all you can lose is the difference between the prices; and as this may be only a matter of five or ten pounds for every hundred you have been dealing in you can pawn your clothes and furniture and try again. You can even have your account “carried over” to next settling day by paying “contango” if you are a bull, or “backwardation” if you are a bear, on the chance of your luck changing in the extra fortnight.

I must warn you, however, that if a great many other bears have guessed just as you have, and sold imaginary shares in great numbers, you may be “cornered”. This means that the bears have sold either more shares than actually exist, or more than the holders will sell except at a great advance in price. Bulls who are cunning enough to foresee this and to buy up the shares which are being beared may make all the money the bears lose. Cornering the bears is a recognized part of the game of speculation.

As the game is one of knowledge and skill and character (or no character) as well as of chance, a good guesser, or one with private (inside) information as to facts likely to affect share prices, can make a living at it; and some speculators have made and lost princely fortunes. Some women play at it just as others back horses. Sometimes they do it intelligently through regular stockbrokers, with a clear understanding of the game. Sometimes they are blindly tempted by circulars sent out from Bucket Shops; so I had better enlighten you as to what a bucket shop is.

You will remember that a speculator does not stand to lose the whole price she offers for a share, or the whole value of the share she pretends to buy. If she loses she loses only the difference between the prices she expected and the prices she has to pay. If she has a sufficient sum in hand to meet this she escapes bankruptcy. This sufficient sum is called “cover”. A bucket shop keeper is one who undertakes to speculate for anyone who will send him cover. His circulars say, in effect, “Send me ten pounds, and the worst that can happen to you is to lose it; but I may be able to double it for you or even double it many times over. I can refer you to clients who have sent me £10 and got back £50 or £100.” A lady, not understanding the business in the least, is tempted to send him £10, and very likely loses it, in which case she usually tries to get it back by risking another £10 note if she has one left. But she may be lucky and pocket some winnings; for bucket shops must let their clients win sometimes or they could hardly exist. But they can generally prevent your winning, if they choose, by taking advantage of some specially low price of shares to shew that your cover has disappeared, or even by selling two or three shares themselves at a low price and quoting it against you. Besides, if you sue them for your winnings they can escape by pleading the Gaming Act. They cannot be mulcted or expelled by the Stock Exchange Committee; for they are not members of the Stock Exchange, and have given no securities. A bucket shop keeper is not necessarily a swindler any more than a bookmaker is necessarily a welsher; but if he fleeces you you have no remedy, whereas if a stockbroker cheats you it may cost him his livelihood.

If you speculate through a regular stockbroker you must bear in mind that he is supposed to deal in genuine investments only: that is, in the buying of shares by clients who have the money to pay for them, and the sale of shares by those who really possess them and wish to exchange them for a lump sum of spare money. The difference is that if you go into a bucket shop and say frankly “Here is a five pound note, which is all I have in the world. Will you take it as cover, and speculate with it for me in stocks of ten times its value”, the bucket shop will oblige you; but if you say this to a stockbroker he must have you shewn out. You must allow him to believe, or pretend to believe, that you really have the spare money or the shares in which you want to deal.

You will now understand what gambling on the London Stock Exchange means. The game can be played with certain variations, called options and double options and so on, which are as easily picked up as the different hazards of the roulette table; and the foreign stock exchanges have rules which are not so convenient for the bears as our rules; but these differences do not change the nature of the game. Every day speculative business is done in Capel Court in London, on Wall Street in New York, in the Bourses on the Continent, to the tune of millions of pounds; and it is literally only a tune: the buyers have no money and the sellers no goods; and their countries are no richer for it all than they are for the gaming tables at Monte Carlo or the bookmakers’ settlements at the end of a horse race. Yet the human energy, audacity, and cunning wasted on it would, if rightly directed, make an end of our slums and epidemics and most of our prisons in fewer hours than it has taken days of Capitalism to produce them.

54. BANKING

The Stock Exchange is only a department of the money market. The commonest way of hiring money for business purposes is to keep an account at a bank, and hire spare money there when you want it. The bank manager will lend it to you if he feels reasonably sure that you will be able to repay him: in fact that is his real business, as we shall see presently. He may do it by letting you overdraw your account. Or if somebody with whom you are doing business has given you a written promise to pay you a sum of money at some future time (this written promise is called a bill of exchange) and the bank manager thinks the promise will be kept, he will give you the money at once, only deducting enough to pay him for its hire until your customer pays it. This is called discounting the bill. All such transactions are forms of hiring spare money; and when you read in the city articles in the papers that money is cheap or money is dear, it means that the price you have to pay your banker for the hire of spare money is low or high as the case may be.

Sometimes you will see a fuss made because the Bank of England has raised or lowered the Bank Rate. This means that the Bank of England is going to charge more or less, as the case may be, for discounting bills of exchange, because spare money has become dearer or cheaper: that is to say, because spare subsistence has become scarcer or more plentiful. If you are overdrawn at your bank, the announcement that the Bank Rate is raised may bring you a letter from the manager to say that you must not overdraw any more, and that he will be obliged to you if you will pay off your overdraft as soon as possible. What he means is that as spare subsistence has become scarce and dear he cannot go on supplying you with it, and would like you to replace what he has already supplied. This may be very inconvenient to you, and may prevent you from extending your business. That is why there is great consternation and lamentation among business people when the Bank Rate goes up, and jubilation when it goes down. For when the terms on which spare money can be hired at the Bank of England go up, they go up everywhere; so that the Bank Rate is an index to the cost of hiring spare money generally.

And now comes the question, where on earth do the banks get all the spare money they deal in? To the Intelligent Woman who is not engaged in business, or who, if she has a bank account, never overdraws it or brings a bill to be discounted, a bank seems only a place where they very kindly pay her cheques and keep her money safe for her for nothing, as if she were paying them a compliment by allowing them to do it. They will even hire money from her when she has more than enough to go on with, provided she will agree not to draw it out without giving them some days’ notice (they call this placing it on deposit). She must ask herself sometimes how they can possibly afford to keep up a big handsomely fitted building and a staff of respectably dressed clerks with a most polite and sympathetic manager to do a lot of her private business for her and charge her nothing for it.

The explanation is that people hardly ever draw as much money from the bank as they put in; and even when they do, it remains in the bank for some time. Suppose you lodge a hundred pounds in the bank on Monday to keep it safe because you will have to draw a cheque for it on Saturday! That cheque will not be presented for payment until the following Monday. Consequently the bank has your hundred pounds in its hands for a week, and can therefore hire it out for a week for a couple of shillings.

But very few bank transactions are as unprofitable as this. Most people keep their bank accounts open all the year round; and instead of paying in every week exactly what they want to spend and drawing it out again by their cheques as they spend it, they keep a round sum always at their call so as to be ready when they may happen to want it. The poorest woman who ever dreams of keeping a bank account at all is not often driven to draw the last half crown out: when her balance falls as low as that, she knows it is time to put in another pound or two. Indeed it is not every bank that will do business on so small a scale as this: the Governor of the Bank of England would turn blue and order the porters to remove you if you offered him an account of that sort. Bank customers are people some of whom keep £20 continually at call, some £100, some £1000, and some many thousands, according to the extent of their business or the rate at which they are living. This means that no matter how much money they may put into the bank or take out, there always remains in the bank a balance that they never draw out; and when all these balances are added up they come to a huge amount of spare money in the hands of the bank. It is by hiring out this money that the banks make their enormous profits. They can well afford to be polite to you.

And now the Intelligent Woman who keeps a bank account, and most conscientiously never lets her balance fall below a certain figure, may ask in some alarm whether her bank, instead of keeping her balance always in the bank ready for her to draw out if she should need it, actually lends it to other people. The reply is, Yes: that is not only what the bank does, but what it was founded to do. But, the Intelligent Woman will exclaim, that means that if I were to draw a cheque for my balance there would be no money in the bank to pay it with. And certainly that would happen if all the other customers of the bank drew cheques for their balances on the same day. But they never do. “Still”, you urge, “they might.” Never mind: the bank does not trouble about what might happen. It is concerned only with what does happen; and what does happen is that if out of every pound lodged with them the bankers keep about three shillings in the till to pay their customers’ cheques it will be quite sufficient.

Only, please remember that the woman who has a bank account should never frighten the others by letting them know this. They would all rush to the bank and draw out their balances; and when the bankers had paid to the first comers all the three shillingses they had kept, they would stop payment and put up the shutters. This sometimes actually happens when a report is spread that some particular bank is not to be trusted. Something or somebody starts a panic; there is “a run on the bank”; the bank is broken; and its customers are very angry with the directors, clamoring to have them prosecuted and sent to prison, which is unreasonable; for they ought to have known that banks, with all the services they give for nothing, can exist only on condition that their customers do not draw out their balances all on the same day.

Perhaps, by the way, you know some woman who not only always draws her full balance, but overdraws it; so that she is always in debt to the bank. Her case is very simple. The bank lends her the other customers’ money to go on with, and charges her for the hire of it. That sort of business pays them very well.

And now that you know what banking is from the inside, and how the bankers get all the spare money they let on hire, may I remind you again, if I am not too tiresome, that this spare money is really spare subsistence, mainly perishable stuff that must be used at once. One of the greatest public dangers of our day is that the bankers do not know this, because they never handle or store the stuff themselves; and the right to take it away and use it which they sell on the hire system is disguised under the name of Credit. Consequently they come to think that credit is something that can be eaten and drunk and worn and made into houses and railways and factories and so on, whereas real credit is only the lender’s opinion that the borrower will be able to pay him.

Now you cannot feed workmen or build houses or butter parsnips with opinions. When you hear of a woman living on credit or building a house on credit or having a car on credit you may rest assured that she is not doing anything of the kind: she is living on real victuals; having her house built of bricks and mortar by men who are eating substantial meals; and driving about in a steel car full of highly explosive petrol. If she has not made them nor paid for them somebody else has; and all that her having them on credit means is that the bank manager believes that at some future time she will replace them with equally substantial equivalent goods of the same value after paying the bank for waiting meanwhile. But when she goes to the bank manager she does not ask for food and bricks and cars: she says she wants credit. And when the bank manager allows her to draw the money that is really an order for so much food and so many bricks and a car, he says nothing about these things. He says, and thinks, that he is giving her credit. And so at last all the bankers and the practical business men come to believe that credit is something eatable, drinkable, and substantial, and that bank managers can increase or diminish the harvest by becoming more credulous or more sceptical as to whether the people to whom they lend money will pay them or not (issuing or restricting credit, as they call it). The city articles in the papers, the addresses of bank chairmen at the annual shareholders’ meetings, the financial debates in Parliament, are full of nonsensical phrases about issuing credit, destroying credit, restricting credit, as if somebody were shovelling credit about with a spade. Clever men put forward wonderful schemes based on the calculation that when a banker lends five thousand pounds worth of spare subsistence he also gives the borrower credit for five thousand pounds, the five thousand credit added to the five thousand spare subsistence making ten thousand altogether! Instead of being immediately rushed into the nearest lunatic asylum, these clever ones find disciples both in Parliament and in the city. They propose to extend our industries (that is, build ships and factories and railway engines and the like) with credit. They believe that you can double the quantity of goods in the country by changing the cipher 2 into the cipher 4. Whenever a scarcity of spare subsistence forces the Bank of England to raise the Bank Rate they accuse the directors of playing them a dirty trick and preventing them from extending their business, as if the Governor and Company of the Bank of England could keep the rate down any more than the barometer can keep the mercury down in fair weather. They think they know, because they are “practical business men”. But for national purposes they are maniacs with dangerous delusions; and the Governments who take their advice soon find themselves on the rocks.

What is it, then, that really fixes the price you have to pay if you hire ready money from your bank, or that you receive for lending it to the bank (on deposit), or to trading companies by buying shares, or to the Government or the Municipalities? In other words, what fixes the so-called price of money, meaning the cost of hiring it? And what fixes the price of incomes when their owners sell them for ready money in the Stock Exchange?

Well, it depends on the proportion between the quantity of spare subsistence (“saved” money) there may be in the market to be hired, and how much the people who want to use it up are able and willing to pay for the hire of it. On the one hand you have the property owners who are living on less than their incomes and therefore want to dispose of their spare stuff before it goes rotten. On the other are the business men who want what the property owners have not consumed to feed the proletarians whose labor they need to start new businesses or extend old ones. Beside these, you have the spendthrift property owners who have lived beyond their incomes, and must therefore sell the incomes (or part of them) for ready money to pay their debts. Between them all, you get a Supply and Demand according to which spare money and incomes are cheap or dear. The price runs up when the supply runs short or the demand becomes more pressing. It runs down when the supply increases or the demand slackens.

By the way, now that we are picking up the terms Supply and Demand, remember that Demand in the money market sense does not mean want alone: it means only the want that the wanter can afford to satisfy. The demand of a hungry child for food is very strong and very loud; but it does not count in business unless the mother has money to buy food for the child. But with this rather inhuman qualification supply and demand (called “effective demand”) settle the price of everything that has a price.

Banks are safe when they lend their money (or rather yours) judiciously. If they make bad investments, or trust the wrong people, or speculate, they may ruin themselves and their customers. This happened occasionally when there were many banks. But now that the big ones have swallowed up the little ones they are so few and so big that they could not afford to let one another break, nor indeed could the Government. So you are fairly safe in keeping your money at a big bank, and need have no scruple about availing yourself of its readiness to oblige you in many ways, including acting as your stockbroker, borrowing from you at interest (on deposit account), and lending you, though at a considerably higher rate, any ready money for the repayment of which you can offer reasonably satisfactory security.

As we now see why the hiring terms for money vary from time to time, sometimes from hour to hour, let us amuse ourselves by working out what would happen at the banks if the Government, misled by the practical business men, or by the millennial amateurs, were to attempt to raise say £30,000 millions by a tax on capital, and another £30,000 millions by a tax on credit.

The announcement of the tax on credit would make an end of that part of the business at once by destroying all credit. The financial magnate who the day before could raise a million at six or seven per cent by raising his finger would not be able to borrow five shillings from his butler unless the butler let him have it for the sake of old times without the least hope of ever seeing it again.

To pay the tax the capitalists would have to draw out every farthing they had in the bank, and instruct their stockbrokers to sell out all their shares and debentures and Government and municipal stock. There would be such a prodigious demand for ready money that the Governor and Company of the Bank of England would meet at eleven o’clock and resolve, after some hesitation, to raise the Bank Rate boldly to ten per cent. After lunch they would be summoned hurriedly to raise it to a hundred per cent; and before they could send out this staggering announcement they would learn that they might save themselves the trouble, as all the banks, after paying out three shillings in the pound, had stopped payment and stuck up a notice on their closed doors that they hoped to be able to pay their customers the rest when they had realized their investments: that is, called in their loans and sold their stocks and shares. But the stockbrokers would report only one price for all stocks, that price being no pounds, no shillings, and no pence, not even farthings. For that is the price in a market where there are all sellers and no buyers.

When the tax collector called for his money, the taxpayer would have to say “I can get no money for you; so instead of paying the tax on my capital, here is the capital itself for you. Here is a bundle of share certificates which you can sell to the waste paper dealer for a halfpenny. Here is a bundle of bonds payable to bearer which you can try your luck with, and a sheet of coupons which in a few years’ time will be as valuable as rare and obsolete postage stamps. Here is a transfer which will authorize the Bank of England to run its pen through my name in the War Loan register and substitute your own. And much good may they all do you! I must shew you out myself, as my servants are in the streets starving because I have no money to pay their wages: in fact, I should not have had anything to eat myself today if I had not pawned my evening clothes; and precious little the pawnbroker would give me on them, as he is short of money and piled up to the ceiling with evening suits. Good morning.”

You may ask what, after all, would that matter? As nine out of every ten people have no capital and no credit in the financial sense (that is to say, though a shopkeeper might trust them until the end of the week, no banker would dream of lending them a sixpence), they could look on and laugh, crying “Let the rich take their turn at being penniless, as we so often are”. But what about the great numbers of poor who live on the rich, the servants, the employers and employed in the luxury trades, the fashionable doctors and solicitors? Even in the productive trades what would happen with the banks all shut up and bankrupt, the money for wages all taken by the Government, no cheque payable and no bill of exchange discountable? Unless the Government were ready instantly to take over and manage every business in the country: that is, to establish complete nationalization of industry in a thunderclap without ever having foreseen or intended such a thing, ruin and starvation would be followed by riot and looting: riot and looting would only make bad worse; and finally the survivors, if there were any, would be only too glad to fall on their knees before any Napoleon or Mussolini who would organize the violence of the mob and re-establish the old state of things, or as much of it as could be rescued from the chaos, by main force applied by a ruthless dictator.