55. MONEY…

55. MONEY

You now know more than most people about the money market. But it is not enough to know what settles the value of stocks and shares in spare money from day to day. All money is not spare money. Few of us spend as much on shares as on food and clothes and lodging. Most of us, having no spare money, would as soon dream of buying shooting lodges in Scotland as of investing or speculating on the Stock Exchange; yet we use money. Suppose there were no spare money on earth, what would fix the value of money? What is money?

Take a gold coin for instance. You are probably old enough to remember such things before the war swept them away and substituted bits of paper called Treasury notes; and you may be young enough to live until they come back again. What is a gold coin? It is a tool for buying things in exactly the same sense as a silver spoon is a tool for eating an egg. Buying and selling would be impossible without such tools. Suppose they did not exist, and you wanted to go somewhere in a bus! Suppose the only movable property you had was twenty ducks and a donkey! When the bus conductor came round for the fare you would offer him the donkey and ask for the change in potatoes, or offer him a duck and ask for the change in eggs. This would be so troublesome, and the bargaining so prolonged, that next time you would find it cheaper to ride the donkey instead of taking the bus: indeed there would be no buses because there would be nobody willing to take them, unless buses were communized and fares abolished.

Now it is troublesome to take a donkey about, even when it takes you, but quite easy to carry as much gold as a donkey is worth. Accordingly, the Government cuts up gold into conveniently shaped bits weighing a little over 123 grains of standard gold (22 carat) apiece, to be used for buying and selling. For transactions that are too small to be settled by a metal so costly as gold it provides bronze and silver coins, and makes a law that so many of these coins shall pass as worth one of the gold coins. Then buying and selling become quite easy. Instead of offering your donkey to the bus conductor you exchange it for its worth in coins; and with these in your pocket you can pay your bus fare in two seconds without having any words about it.

Thus you see that money is not only a necessary tool for buying and selling, but also a measure of value; for when it is introduced we stop saying that a donkey is worth so many ducks or half a horse, and say instead that it is worth so many pounds or shillings. This enables accounts to be kept, and makes commerce possible.

All this is as easy as A B C. What is not so easy is the question why the donkey should be worth, say, three-quarters of a sovereign (fifteen bob, it would be called at this price), or, to put it the other way, why fifteen bob should be worth a donkey. All you can say is that a buyer at this price is a person with fifteen shillings who wants a donkey more than she wants the fifteen shillings, and a seller at this price a person with a donkey who would rather have fifteen shillings than keep the donkey. The buyer, though she wants a donkey, does not want it badly enough to give more than fifteen shillings for it; and the seller, though she wants money, will not let the donkey go for less than fifteen; and so they exchange. Their respective needs just balance at that figure.

Now a donkey represents just a donkey and nothing else; but fifteen shillings represents fifteen shillingsworth of anything you like, from food and drink to a cheap umbrella. Any fund of money represents subsistence; but do not forget that though you can eat and drink and wear subsistence, you cannot eat or drink or wear Treasury notes and metal coins. Granted that if you have two shillings the dairyman will give you a pound of butter for it; still, a pound of butter is no more a round piece of metal than a cat is a flat iron; and if there were no butter you would have to eat dry bread, even if you had millions and millions of shillings.

Besides, butter is not always two shillings: it is sometimes two and twopence or even two and sixpence. There are people now living who have bought good fresh butter for fourpence a pound, and complained of its being dear at that. It is easy to say that butter is cheap when it is plentiful, and dear when it is scarce; but this is only one side of the bargain. If ten pounds of butter cost a sovereign on Monday and a sovereign and a quarter on Saturday, is that because there is less butter or more gold?

Well, it may be one or the other or both combined. If the Government were to strike off enough new sovereigns at the Mint to double the number in circulation we should have to pay two sovereigns for ten pounds of butter, not because butter would be scarcer but because gold would be more plentiful. But there is no danger of this happening, because gold is so scarce and hard to get that if the Government turned more of it into sovereigns than were needed to conduct our buying and selling, the superfluous ones would be melted down, and the gold used for other purposes, in spite of the law against it; and this would go on until sovereigns were so scarce that you could get more for gold in the form of sovereigns than in the form of watch chains or bracelets. For this reason people feel safe with gold money: the gold in the sovereign keeps its value for other purposes than buying and selling; and if the worst came to the worst, and the British Empire were annexed by the planet Mars, and only Martian money were current, the sovereigns would still be taken in exchange for as much butter or anything else as before, not as money, but as so much gold; so that the British sovereign would buy as much as a Martian gold sovereign of equal weight.

Suppose, however, you had a dishonest Government! Suppose the country and its Mint were ruled by a king who was a thief. Suppose he owed large sums of money, and wished to cheat his creditors. He could do it by paying in sovereigns which were made of lead, with just gold enough in them to make them look genuine. Henry the Eighth did it less crudely by giving short weight in silver coins; and he was not the only ruler who played the same trick when pressed for money. When such frauds are discovered prices go up and wages follow them. The only gainers were those who, like the king, had borrowed heavy money and were paying it in light; and what they gained the creditors lost. But it was a low trick, damaging English as well as royal credit, as all English debtors were inextricably and involuntarily engaged in the swindle as deeply as the king.

The moral is that a dishonest ruler is one of the greatest dangers a nation has to dread. People who do not understand these things make a great fuss because Henry married six wives and had very bad luck with most of them, and because he allowed the nobles to plunder the Church. But we are far more concerned today with his debasement of the coinage; for that is a danger that is hanging over our own heads. Henry’s trick is now played not only by kings, but by republican governments with Socialist majorities and by the Soviets of proletarian States, with the result that innocent women, provided comfortably for by years of self-denial on the part of their parents in paying insurance premiums, find themselves starving; pensions earned by lifetimes of honorable and arduous service lose their value, leaving the pensioners to survive their privations as castaways survive in a boat at sea; and enormous fortunes are made without the least merit by A, B, and C, whilst X, Y, and Z, without the least fault, go bankrupt. The matter is so serious and so menacing that you must summon all your patience while I explain it more particularly.

At present (1927) we do not use sovereigns. We use bits of paper, mostly dirty and smelly, with the words One Pound printed in large letters on them, and a picture of the Houses of Parliament on the back. There is also a printed notice that the bit of paper is a currency note, and that by Act of Parliament IV and V Geo. V, ch. XIV, if you owe anyone a pound you can pay him by handing him the bit of paper, which he must accept as a full discharge of your debt to him whether he likes or not.

Now there is no use pretending that this bit of paper which you can pass as a pound is worth anything at all as paper. It is too small and too crowded with print and pictures to be usable for any of the uses to which paper can be put, except that of a short title deed to a poundsworth of goods. Yet there is no law to prevent the Government, which owes 7700 million pounds to its creditors, from printing off 7700 millions of these one pound Treasury notes, and paying off all its home creditors with them, even though a thousand of them would not buy a cigarette.

You may say that this is too monstrous to be possible. But it has been done, and that quite recently, as I know to my cost. The German Government did it after the war when the conquerors, with insane spite, persisted in demanding sums of money that the Germans had not got. The Austrian Government did it. The Russian Government did it. I was owed by these countries sums sufficient to support me for the rest of my days; and they paid me in paper money, four thousand million pounds of which was worth exactly twopence halfpenny in English money. The British Government thought it was making Germany pay for the war; but it was really making me and all the other creditors of Germany pay for it. Now as I was a foreigner and an alien enemy, the Germans probably do not feel very sorry for me. But the same occurred to the Germans who were owed German money, whether by foreigners or by other Germans. Merchants who had obtained goods for bills payable in six months paid those bills with paper Marks and thus got the goods for nothing. Mortgages on land and houses, and debentures and loan stocks of every redeemable sort, were cleared off in the same way. And one very unexpected result of this was that German employers, relieved of the burden of mortgages and loans such as the English employers were bearing, were able to undersell the English even in the English market. All sorts of extraordinary things happened. Nobody saved money, because its value fell from hour to hour: people went into a restaurant for a five million lunch, and when they came to pay found that the price had gone up to seven millions whilst they were eating. The moment a woman got a scrap of money she rushed to the shops to buy something with it; for the thing she bought would keep its usefulness, but the money that bought it, if she kept it until tomorrow, might not purchase half so much, or a tenth so much, or indeed anything at all. It was better to pay ten million marks for a frying-pan, even if you had two frying-pans already, than to buy nothing; for the frying-pan would remain a frying-pan and fry things (if you had anything to fry) whatever happened; but the ten million marks might not pay a tram fare by five o’clock the same evening.

A still better plan in Germany then was to buy shares if you could get them; for factories and railways will keep as well as frying-pans. Thus, though people were in a frantic hurry to spend their money, they were also in a frantic hurry to invest it: that is, use it as capital; so that there was not only a delusive appearance of an increase in the national capital produced by the simple expedient of calling a spare loaf of bread fifty thousand pounds, but a real increase in the proportion of their subsistence which people were willing to invest instead of spending. But however the money was spent, the object of everyone was to get rid of it instantly by exchanging it for something that would not change in value. They soon began to use foreign money (American dollars mostly); and this expedient, eked out with every possible device for doing without money altogether by bartering, tided them over until the Government was forced to introduce a new gold currency and leave the old notes to be thrown into the waste paper basket or kept to be sold fifty years hence as curiosities, like the famous assignats of the French Revolution.

This process of debasement of the currency by a Government in order that it may cheat its creditors is called by the polite name, which few understand, of Inflation; and the reversal of the process by going back to a currency of precious metal is called Deflation. The worst of it is that the remedy is as painful as the disease, because if Inflation, by raising prices, enables the debtor to cheat the creditor, Deflation, by lowering them, enables the creditor to cheat the debtor. Therefore the most sacred economic duty of a Government is to keep the value of money steady; and it is because Governments can play tricks with the value of money that it is of such vital importance that they should consist of men who are honest, and who understand money thoroughly.

At present there is not a Government in the world that answers fully to this description. Between our own Government, which took advantage of the war to substitute Treasury notes for our gold currency, and the German and Russian Governments, which issued so many notes that a vanload of them would hardly buy a postage stamp, the difference is only one of degree. And this degree was not in the relative honesty of Englishmen, Russians, and Germans, but in the pressure of circumstances on them, and consequently of temptation. Had we been defeated and forced to pay impossible sums to our conquerors, or momentarily wrecked as Russia was by the collapse of the Tsardom, we should not have been any honester; for though the doubling of prices that occurred here seems to have been caused by scarcity of goods and labor rather than by an excessive issue of paper money, we still treat with great respect as high financial authorities gentlemen who recommend Inflation as a means of providing industry with additional capital. Whether these gentlemen really believe that we could double our wealth by simply printing twice as many Treasury notes, or whether they owe so much money that they would be greatly relieved if only they could be let pay it in paper pounds worth only ten shillings, is not always easy to guess. But if you catch your Parliamentary representative advocating Inflation, and ask him, at the risk of being told that you are no lady, whether he is a fool or a rogue, you will give him a salutary shock, and force him to think for a moment instead of merely grabbing at the illusion of enriching the nation by calling a penny twopence.

And now, if you agree with me that it is the duty of a Government to keep the value of its money always as nearly as possible at the same level, we are both up against the question, “What level?” Well, you may take it as a rule of thumb that the answer always is the existing level, unless it has been tampered with and has wobbled badly, in which case the easiest answer is “Whatever level it had before it began to wobble”. But if you want a real explanation and not a mere rule of thumb, you must think of coins and notes as useful articles which you carry about because without them you cannot take a bus or a taxi or a train, or buy a bun. There must be enough of them to supply you and all the other people who have purchases to make. In short, coins and notes are like needles or shovels; and their value is settled in the same way. If the manufacturers make ten times as many needles as anyone wants, then their needles will fetch nothing as needles, because no woman will pay anything for the one needle she wants if there are nine lying about to be had for nothing. So all that can be done is to take the nine worthless needles and use the steel in them to make something else (say steel pens), after which there will be no longer any useless needles, and the remaining useful ones will be worth at least what it cost to make them, because sempstresses will want them badly enough to be willing to pay that price. An intelligent community will try to regulate the supply of needles so as to keep their value at that level as nearly as possible. A Capitalist community, on the contrary, will regulate it so as to make needles yield the utmost profit to the capitalist. But anyhow the value will depend on the quantity available.

Now just as a needle is for sewing, and is of no legitimate use for anything else, so coins and notes are for enabling people to buy and sell, and no use for anything else. And one coin will do for many sales as it passes from hand to hand, just as one needle will do to hem many handkerchiefs. This makes it very difficult to find out how many needles and coins are wanted. You cannot say “There are so many handkerchiefs in the country which must be hemmed; so we will make a needle for every one of them”, or “There are so many loaves of bread to be sold every morning; so we will make coins or issue notes for the price of every one of them”. No person or Government on earth can say beforehand how many needles or coins will be enough. You can count the mouths you have to feed, and say how many loaves will be required to fill them, because a slice of bread can be eaten only once, and is destroyed by being eaten; but a needle or a sovereign or a Treasury note can be used over and over again. One pound may be lying in an old stocking until the landlord calls for it, whilst another may be changing hands fifty times a day and effecting a sale every time. How then is a Government to settle how many coins and notes it shall issue? And how is a needle manufacturer to decide how many needles he shall make?

There is only one way of doing it. The needle makers just keep on making needles at a fancy price until they find they cannot sell them all without charging less for them; and then they go on charging less and less, but selling more and more (because of the cheapness), until the price is so low that they would make less profit if it went any lower, after which they make no more needles than are necessary to keep the supply, and consequently the price, just at that point. The Government has to do the same with gold coins. At first, because gold is more useful for coins than for anything else, an ounce of gold coined into sovereigns will be worth more than an ounce of uncoined gold (called bar or bullion). But if the Government issues more sovereigns than are needed for our buying and selling there will be more sovereigns than are wanted; and their value per ounce of gold will fall below that of gold bullion. This will be shewn by all prices going up, including that of gold in bars and ingots. The result will be that gold merchants will find it profitable to melt down sovereigns into bars of gold to be made into watches and bracelets and other things than coins. But this melting down reduces the number of sovereigns, which immediately begin to rise in value as they become scarcer until gold in the form of sovereigns is worth as much as gold in any other form. In this way, as long as money consists of gold, and melting down cannot be prevented as soon as it becomes profitable, the value of the coinage fixes and maintains itself automatically. It is against the British law to melt down a British sovereign in the British Empire; but as this silly law cannot restrain, say, a Dutch goldsmith in Amsterdam from melting down as many British sovereigns as he pleases, it does not count.

Though this settles the value of gold money, and all prices can be fixed in terms of gold, a penny being the two hundred and fortieth part of a sovereign, half a crown the eighth part of a sovereign, and so on, yet you cannot have gold pennies or even sixpences: they would be too small to handle. Also, if you want to make or receive a payment of five thousand pounds, you would find five thousand sovereigns more than you would care to carry. We get out of the penny and sixpenny difficulty by using coins of bronze and silver, making a law that bronze pennies shall be accepted, provided not more than twelve are offered at a time, as worth the two hundred and fortieth part of a sovereign, and that silver coins shall pass up to £2. We get over the five thousand pound difficulty by allowing the Bank of England to issue promissory notes, payable at sight in gold at the Bank, for sums of five pounds, ten pounds, a hundred pounds, and so on. People hand these notes from one to another in buying and selling, knowing them to be “as good as gold”. Certain Scottish and Irish banks have the same privilege on condition that they hold sufficient gold in their cellars to redeem the notes when presented, and, of course, that they do not pay their debts in their own notes.

In this way we all get used to paper money as well as to bronze and silver coins: that is, we get used to pretending that a scrap of paper with a water mark is worth 615 grains of gold or thereabouts; that a bit of metal that is only half silver is worth a much larger piece of pure silver; that 240 bits of bronze are worth a sovereign, and so on. We find these cheap substitutes do just as well as gold coins; and we naturally begin to ask what is the use of having any gold money at all, seeing that we get on quite well without it. Paper is just as effective as an instrument of exchange, and much less heavy to handle. We measure prices in quantities of gold; but imaginary gold does for that as well as real gold, just as you can measure fluids by pints and quarts without having a drop of beer in the house. If only the honesty of Governments could be depended on, the use of gold for money would be a pure luxury, like using gold safety pins and diamond shirt studs instead of common ones, which fasten quite as well.

But that is a very large If. When there is a genuine gold currency, the purchasing power of the coins does not depend on the honesty of the Government: they are valuable as precious metal, and can be turned to other purposes if the Government issues more of them than are needed for buying and selling. But the Government can go on printing and issuing paper money until it is worthless. Where should it stop when the check of gold is removed? As we have seen, it should stop the moment there is any sign of a general rise of prices, because the only thing that can cause a general rise of prices is a fall in the value of money. This or that article may become cheaper by the discovery of new ways of making it, or dearer by a failure in the crops, or worthless by a change of fashion; but all the articles do not move together from these causes: some rise and others fall. When they all rise or fall simultaneously, then it is not the articles that are changing in value but the money. In a paper money country the Government should watch carefully for such movements; and when prices all rise together they should withdraw notes from circulation until prices all fall again. When all prices fall simultaneously the Government should issue fresh notes until they rise again. What is needed is just enough money to do all the ready money selling and buying in the country. When less is issued money gets a scarcity value; so that when you go into a grocer’s shop he will give you more for your money (falling prices); and when more is issued there is a glut of it and the grocer will give less for it (rising prices). The business of an honest and understanding Government is to keep it steady by adjusting the supply to the demand. When Governments are either dishonest or ignorant, or both, there is no safety save in a currency of precious metal.

Remember, by the way, that modern banking makes it possible to do an enormous quantity of business without coinage or notes or money of any sort. Suppose Mrs John Doe and Mrs Richard Roe are both in business. Suppose Mrs Doe sells Mrs Roe five hundred pounds’ worth of goods, and at the same time buys goods from her to the value of five hundred pounds and one penny. They do business to the amount of a thousand pounds and one penny; yet all the money they need to settle their accounts is the odd penny. If they keep their accounts at the same bank even the penny is not necessary. The banker transfers a penny from Mrs Doe’s account to Mrs Roe’s; and the thing is done. When you have to pay a business debt you do not give your creditor the money: you give him an order on your banker for it (a cheque); and he does not go to your bank and cash the cheque: he gives it to his own banker to collect. Thus every bank finds every day that it has to pay a heap of money to other banks which hold cheques on it for collection, and at the same time to receive a heap of money for the cheques it has received for collection from the other banks. These cheques taken together may amount to hundreds of thousands of pounds, yet the difference between the ones to be paid and the ones to be collected may be only a few pounds or less. So the banks began by setting up a Clearing House, as they call it, to add up all the cheques and find out what each bank ought to pay or receive on balance. This saved a great deal of money handling, as the transfer of a single pound from one bank to another would settle transactions involving huge sums. But it presently occurred to the banks that even this pound might be saved if they all kept an account at the same bank. So the banks themselves opened accounts at the Bank of England; and now their accounts with oneanother are settled by a couple of entries in the Bank of England’s books; and trade to the amount of millions and millions is done by pure figures without the use of coinage or notes. If we were all well enough off to have banking accounts money might disappear altogether, except for small transactions between strangers whose names and addresses were unknown to oneanother: for instance, you give an order and pay by a cheque in a shop because you can count on finding the shopkeeper in the same place if there is anything wrong with the goods; and he can count on finding you similarly if there is anything wrong with your cheque; but if you take a taxi on the way home, you can hardly expect the driver to open an account for you; so you settle with him by handing him his fare in coin.

This need for pocket money (change) is greatly reduced by Communism. In the days of turnpike roads and toll bridges every traveller had to keep a supply of money to pay tolls at every turnpike gate and bridge head. Now that the roads and bridges are communized he can travel by road from London to Aberdeen in his car without having to put his hand in his pocket once to pay for the roads, because he has already paid when taking out the communal license for his car. If he pays his hotel bills by cheque he needs no money for his journey except for tips; and when these fall into disuse, as the old custom of making presents to judges has done, it is easy to conceive motoring trips, in the Communist future, being carried out in the greatest luxury by highly prosperous but literally penniless persons.

In this way actual money is coming to be replaced more and more by money of account: that is, we still count our earnings and our debts in terms of money, and value our position in the same way, earning hundreds of pounds, paying hundreds of pounds, owning hundreds of poundsworth of furniture and clothes and motor cars, and yet never having more than a few pounds and a handful of silver in our pockets from one end of our lives to the other. The cost of providing coins and notes for the nation to buy and sell with is dwindling continuously to a smaller and smaller percentage of the value of the goods bought and sold.

It may amuse you to realize that when coinage disappears altogether it does not matter whether we call our debts sovereigns and pennies and shillings or millions and billions and trillions. When the Germans were paying millions for tram fares and postage stamps, no harm was done by the apparent magnitude of the price: poor men could still ride in trams and send letters. If only those prices could have been depended on to stay put, so that the poor man (or the rich one for that matter) could have felt sure that his million mark note would buy as much tomorrow as today, and as much next year as this year, it would not have inconvenienced him in the least that the million mark note used to be a bronze coin. Germany has now stabilized her currency at the old rate of twenty marks to the English pound. Austria stabilized hers at first at the startling rate of 300,000 tenpences to the English pound but had to alter this to 34½ sevenpenny schillings later on. Except for the look of the thing the change made no great difference to the marketing housekeeper. When prices are in millions she soon gets into the habit of dropping the six noughts in conversation across the counter. Such prices seem silly to us because we are not accustomed to millionaire scavengers and beef at billions a pound. We are accustomed to pounds worth 160 ounces of butter; but pounds worth half a grain of butter or ten tons of butter will do as long as they are stabilized at that, and as long as the money is either money of account, existing only as ink marks in ledgers, or paper notes of no intrinsic value. If a tram ticket costs a million pounds it can be paid more cheaply than by a penny, provided the million pounds be only a scrap of paper costing less than a disk of bronze.

To sum up, the most important thing about money is to maintain its stability, so that a pound will buy as much a year hence or ten years hence or fifty years hence as today, and no more. With paper money this stability has to be maintained by the Government. With a gold currency it tends to maintain itself even when the natural supply of gold is increased by discoveries of new deposits, because of the curious fact that the demand for gold in the world is practically infinite. You have to choose (as a voter) between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.

56. NATIONALIZATION OF BANKING

You now know enough about banking and the manufacture of money to understand that they are necessities of civilization. They are in some respects quite peculiar businesses. Banking heaps up huge masses of capital in the banker’s hands for absolutely nothing but the provision of a till to put it in, and clerks to keep an account of it. Coinage is useless without a Government guarantee of the genuineness of the coins, and a code of laws making it a serious crime for any private person to make counterfeit coins, besides settling the limits within which coins that are stamped with more than their value as metal (called token coinage) can be used for paying debts.

As it is impossible for any private person or company to fulfil these coinage conditions satisfactorily, the manufacture of money is a nationalized business, unlike the manufacture of boots. You do not see a mint in every street as you see a bootmaker’s. All the money is made in THE Mint, which is a Government factory of coins. If, in your disgust at the disagreeable white metal shillings which have been substituted since the war for the old silver ones, you were to set up a private mint of your own, you would be sent to prison for coining, even though you could prove that your nice shillings were worth more than the nasty ones of the Government. Formerly, if you had a quantity of gold, you could take it to the Mint, and have it made into sovereigns for you at a small charge for the King’s image and guarantee called seignorage; but you were not allowed to make the coins for yourself out of your own gold. Today the Mint will not do that for you because it is easier for you to give your gold to your banker, who will give you credit for its worth in money. Thus the whole business is as strictly nationalized as that of the Post Office. Perhaps you do not know that you can be prosecuted for carrying a letter for hire instead of giving it to the Postmaster-General to carry. But you can, just as you can be prosecuted for making a coin, or for melting one down. And nobody objects. The people who, when it is proposed to nationalize the coal mines and the railways, shriek into your ears that nationalization is robbery and ruin, are so perfectly satisfied with the nationalization of the Mint that they never even notice that it is nationalized, poor dears!

However, private persons can issue a currency of their own, provided it is not an imitation of the Government currency. You may write a cheque, or a bill of exchange, and use it as paper money as often as you please; and no policeman can lay a finger on you for it provided (a) that you have enough Government money at your bank to meet the cheque when it is presented for payment, and (b) that the piece of paper on which your cheque is printed, or your bill of exchange drawn, bears no resemblance to a Treasury note or a bank note. An enormous volume of business is done today by these private currencies of cheques and bills of exchange. But they are not money: they are only title deeds to money, just as money itself is only a title deed to goods. If you owe money to your grocer he may refuse to take a cheque in payment; but if you offer him Treasury notes or sovereigns, he must take them whether he likes them or not. If you are trading with a manufacturer, and offer him a bill of exchange pledging you to pay for his goods in six months, he may refuse it and insist on Government money down on the nail. But he may not refuse Government money. Your offer of it is “legal tender”.

Besides, money, as we have seen, is a measure of value; and cheques and bills are not. The cheques and bills would have no meaning and no use unless they were expressed in terms of money. They are all for so many pounds, shillings, and pence; and if there were no pounds, shillings, and pence in the background, a cheque would have to run “Pay to Emma Wilkins or Order two pairs of secondhand stockings, slightly laddered, my share of the family Pekingese dog, and half an egg”. No banker would undertake to pay cheques of that sort. Both cheques and banking depend on the existence of nationalized money.

Banking is not yet nationalized; but it will be, because the public gain from nationalization will lead people to vote for it when they understand it just as they will vote for nationalization of the coal mines. Business people need capital to start and extend their businesses just as they need coal to warm themselves. As we have seen, when they want hundreds of thousands they get them by paying enormous commissions to financiers, who are so spoiled by huge profits that they will not deign to look at what they regard as small business. Those who want tens of thousands are not catered for: and those who want modest hundreds are often driven to borrow from money lenders at high rates of interest because the bank manager does not think it worth the bank’s while to let them overdraw. If you could shew these traders a bank working not to make profits at the expense of its customers but to distribute capital as cheaply as possible for the good of the country to all the businesses, large or small, which needed it, they would rush to it and snap their fingers at the profiteering financiers. A national or municipal bank would be just that. It would bring down the price of capital just as nationalization of the coal mines would bring down the price of coal, by eliminating the profiteer; and all the profiteers except the money profiteers (financiers and bankers) will be finally converted to it by this prospect, because, though they aim at making as much profit as possible out of you when you go shopping, they are determined that other people shall make as little profit as possible out of them.

Nationalization of Banking therefore needs no Socialist advocacy to recommend it to the middle class. It is just as likely to be finally achieved by a Conservative Government as by a Labor one. The proof is that the first municipal bank has been established in Birmingham, which returns twelve members to Parliament of whom eleven are Conservatives, and strong ones at that. Only one is Labor. The Birmingham municipal bank has been so easily and brilliantly successful that unless it be deliberately sabotaged in the interests of the financiers by a press campaign against it, which is practically impossible in a city of manufacturers, it will lead to a development of municipal banking all over the manufacturing districts. Already there are several others.

Meanwhile the bankers and financiers continue to assure us that their business is such a mysteriously difficult one that no Government or municipal department could deal with it successfully. They are right about the mystery, which is due to the fact that they only half understand their own business, and their customers do not understand it at all. By this time I hope you understand it much better than an average banker. But the difficulty is all nonsense. Let us see again what a bank has to do.

By simply offering to keep people’s money safe for them, and to make payments out of it for them to anyone they choose to name (by cheque), and to keep a simple cash account of these payments for them, it gets into its hands a mass of spare money which it professes to keep at its customers’ call, but which it finds by experience it can hire out to the extent of about sixteen shillings in the pound because each customer keeps a balance to his credit all the time. There is no mystery or difficulty about this. It can be done by government or municipal banks as easily as petty banking, with its currency of postal notes and stamps, is done by our national post offices and savings banks. The only part of it that is not automatically successful is the hiring out of the money when it is paid in. A bank manager whose judgment was bad would very soon get his bank into difficulties by hiring out the spare money to traders who are in a bad way, either because their businesses were being superseded by new businesses, or because they were too honest, or not honest enough, or extravagant, or drunken, or lazy, or not good men of business, or poetically unfitted to succeed. But a manager who was too cautious to lend any money at all would be still more disastrous; for we must continually remember that the things represented by the spare money in the bank will not keep, and that if fifty billions’ worth of food were saved out of the year’s harvest and lodged in a State bank (or any other bank) it would be a dead loss and waste if it were not eaten pretty promptly by workers building up facilities for producing future harvests. The bank manager can choose the person to whom he lends the bank’s spare money; but he cannot choose not to lend it at all; just as a baker, when he has sold all the bread he can for ready money, must either give credit for the rest to somebody or else throw the loaves into the dustbin.

Only, there is this difference between the baker and the banker. The baker can refrain from baking more loaves than he can reasonably expect to sell; but the banker may find himself heaped up with far more spare money than he can find safe hirers for; and then he has not only to take chances himself, but to tempt tradesmen by low rates of hire to take them (“the banks are granting credit freely” the city articles in the papers will say), whereas at other times his spare money will be so short that he will pick and choose and charge high interest (“the bankers are restricting credit”); and this is why it takes more knowledge and critical judgment to manage a bank than to run a baker’s shop.

No wonder the bankers, who make enormous profits, and consequently have the greatest dread of having these cut off by the nationalization of banking, declare that no Government could possibly do this difficult work of hiring out money, and that it must be left to them, as they alone understand it! Now, to begin with, they neither understand it nor do it themselves. Their bad advice produced widespread ruin in Europe after the war, simply because they did not understand the rudiments of their business, and persisted in reasoning on the assumption that spent capital still exists, and that credit is something solid that can be eaten and drunk and worn and lived in. The people who do the really successful work of hiring out the heaps of spare money in the bank for use in business are not the bankers but the bank managers, who are only employees. Their position as such is not more eligible either in money or social standing than that of an upper division civil servant, and is in many respects much less eligible. They would be only too glad to be civil servants instead of private employees. As to the superior direction which deals with what may be called the wholesale investment of the banked spare money as distinguished from its retail hirings to ordinary tradesmen and men of business, the pretence that this could not be done by the Treasury or any modern public finance department is a tale for the marines. The Bank of England is as glad to have a former Treasury official on its staff as the London Midland and Scottish Railway to have a former civil servant for its Chairman.

57. COMPENSATION FOR NATIONALIZATION

By the way, when demonstrating the need for the nationalization of banking to you I did not forget that you may be a bank shareholder, and that your attention may have been distracted by your wonder as to what will become of your shares when the banks are nationalized. I have had to consider this question rather closely myself, because, as it happens, my wife is a bank shareholder. We might have to cut down our household expenses if everyone went to a national or municipal bank instead of to her bank. In fact, when banking is nationalized, private banking will probably be made a crime, like private coining or letter carrying. So we shall certainly insist on the Government buying her shares when it nationalizes banking.

The Government will buy them willingly enough, for the excellent reason that it will get the money by taxing all capitalists’ incomes; so that if my wife were the only capitalist in the country the transaction would be as broad as it was long: the Government would take from her with one hand what it gave her with the other. Fortunately for her there are plenty of other capitalists to be taxed along with her; so that instead of having to provide all the money to buy herself out, she will have to provide only a little bit of it; and all the little bits that the other capitalists will have to provide will go into her pocket. This transaction is called Compensation.

It is very important that you should grasp this quaint process which seems so perfectly fair and ordinary. It explains how Governments compensate without really compensating, and how such compensation costs the nation nothing, being really a method of expropriation. Just consider. If the Government purchases a piece of land or a railway or a bank or a coal mine, and pays for it out of the taxes, it is evident that the Government gets it for nothing: it is the taxpayers who pay. And if the tax is a tax like the income tax, from which the bulk of the nation is wholly or partially exempt, or the supertax and estate duties, which fall on the capitalist classes only, then the Government has compelled the capitalist class to buy out one of themselves and present her property to the nation without any compensation whatever. The so-called compensation is only an adjustment by which the loss is shared by the whole capitalist class instead of being borne wholly by the particular member of it whose piece of land or bank shares or other property the Government happens to want. Even that member pays her share of the tax without compensation.

Some ladies may find this clearer if an imaginary case is put before them in figures. Suppose the Government wants a piece of land of the market value of £1000! Suppose it raises that sum, not by taxing the nation, but by taxing the incomes of a hundred rich landlords, including the owner of the piece of land, making each of them contribute £10! The Government then takes the piece of land, and solemnly hands £1000 to its former owner, telling him that he has nothing to complain of, as he has been paid the full market value of his land instead of having had it wrested from him violently in a revolutionary manner, as the Bolshevists took the land from the Russian landlords in 1917. Nothing can be more reasonable and constitutional and customary; the most Conservative Government might do it; in fact (except for the substitution of all the landlords for a hundred selected ones) Conservative Governments have done it over and over again. None the less, at the end of the transaction a piece of land has passed from private property into national property; and a hundred landlords have had their incomes reduced by ten shillings a year each (the interest on £10 at 5 per cent). It is quite clear that if such a transaction is repeated often enough the nation will have all the land, and the incomes of the landlords will be reduced to nothing, although every acre has been bought from its owner at full market price. The process can be applied to bank shares or any other shares as easily as to acres.

Let me repeat that this is not something that may be done: it is something that has been done and is being done. It has gone so far already that a huge quantity of property formerly owned by private persons is now owned by the Government and the municipalities: that is, by the nation; whilst taxation has risen to such a point that the rich have to remind themselves continually that their pounds are only thirteen-and-fourpences or less, because the Government will take the other six and eightpence or more as income tax and supertax, and that even out of the thirteen and fourpence the municipalities of the places where their houses are (rich men keep from two to five houses) will take a considerable dollop in rates for pure Communism. At present they are selling their houses in all directions to speculators and contractors who have made large fortunes out of inflation and War; but these New Rich will in their turn be forced to buy oneanother out just as the Old Rich, now called the New Poor, were.

In this way you get the constitutional rule for nationalization of private property, which is, always to pay the full market price or more to the proprietors for every scrap of property nationalized. Pay for it by taxing incomes derived from property (there is, of course, no compensation for taxation). Your own rule as a voter should be never to vote for a candidate who advocates expropriation without compensation, whether he calls himself a Socialist or Communist, in which case he does not understand his own political business, or a Liberal. The Liberal impulse is almost always to give a dog a bad name and hang him: that is, to denounce the menaced proprietors as enemies of mankind, and ruin them in a transport of virtuous indignation. But Liberals are not, as such, hostile to capitalists, nor indeed to anybody but publicans and imaginary feudal landlords. Conservatives are practically always for compensation to property owners; and they are right; but they do not see through the trick of it as you now do.

Anyhow, always vote against the no-compensation candidate unless you are opposed to nationalization, and are subtle enough to see that the surest way to defeat it is to advocate its being carried out vindictively without a farthing of compensation.

There is, however, an alternative to compensated nationalization of private industries. Why should not the Government set up for itself in the industry it desires to nationalize, and extinguish its private competitors just as the big multiple shops extinguish the small shops, by underselling them, and by all the other methods of competitive trade? The Birmingham municipality has begun the nationalization of banking without troubling itself about the private banks: it has simply opened its bank in the street and gone ahead. The parcel post was established without any compensation to private carriers; and the Cash on Delivery development of it was effected without any consideration for the middlemen whom it superseded. Private employers have always proceeded in this manner on competitive principles; why should not the State, as public employer, do just the same?

The reason is that the competitive method is an extremely wasteful one. When two bakeries are set up in a district that could be quite well served by one, or two milk carts ply in the same street, each trying to snatch the other’s custom, it means that the difference between the cost of running two and one is sheer waste. When a woman wears out her hat, or rather when the hatmakers change the fashion so as to compel her to buy a new hat before the one she is wearing is half worn out, and fifty shops make new hats on the chance of selling that one to her, there is overproduction, with its sequel of unemployment.

Now apply this to, for example, the nationalization of railways. The Government could, no doubt, construct a network of State railways parallel with the existing railways; so that you could go from London to Penzance either by the Great Western or by a new State line running side by side with it. The State could then, by introducing the system of Penny Transport proposed by Mr Whately Arnold on the lines of Penny Postage, undersell the separate private companies and take all their traffic from them. That would be the competitive method. Then there would be two railways to Penzance and Thurso and Bristol and Cromer and everywhere else, one of them carrying nearly all the traffic, and the other carrying only its leavings and holiday overflows until it fell into hopeless and dangerous decay and ruin.

But can you imagine anything more idiotically wasteful? The cost of making the competing State railway would be enormous, and quite unnecessary. The ruin of the private railway would be sheer destruction of a useful and sufficient means of communication which had itself cost a huge sum. The land occupied by one of the railways would be wasted. What Government in its senses would propose such a thing when it could take over the existing railways by compensating the shareholders in the manner I have described: that is, distributing their loss over the propertied class without a farthing of expense to the nation as a whole?

The same considerations must lead the State to take over the existing banks. Municipal banks on the Birmingham model may be competing banks; but when a national banking service comes, it will come by way of nationalizing the existing private banks.

There is another objection to the competitive method. If the State is to compete with private enterprise, it must allow private enterprise to compete with it. Now this is not practicable if the full advantage of nationalization is to be obtained. The Post Office is able to establish a letter service and C.O.D. parcel post in every village in the country, and a telephone and telegraph service in most of them, with charges reckoned in pence and halfpence, on condition that profiteers are not allowed to come in and pick out the easy bits of the business to exploit for themselves. The Postmaster-General does things for the nation that no profiteer would or could do; but his rule is All or Nothing.

A Banker-General would have to insist on the same rule. He would establish banks, if not literally everywhere, at least in hundreds of places where the private banks would no more dream of opening a branch, even on the open-once-a-week scale, than of building a Grand Opera House. But he, too, would say “All or Nothing: I will not have any intelligent Jewish gentleman, or rapacious Christian person trained in the intelligent Jewish gentleman’s office, picking the plums out of my pudding”.

Yet do not conclude that all State activities will be State monopolies. Indeed the nationalization of banking will certainly enlarge the possibilities of private activity in all sorts of ways. But as the big public services will have to be made practically ubiquitous, charging more than they cost in one place and less in another, they must be protected against sectional private competition. Otherwise we should have what prevails at present in municipal building, where all the lucrative contracts for the houses of the rich and the offices of the capitalists and the churches and institutions and so forth go to the private employer, whilst the municipality may build only dwellings for the poor at a loss, which they conceal from the ratepayers by fictitious figures as to the value of the land. Municipal building is always insolvent. If it had a monopoly it could afford to make every town in the land a ratepayers’ and tenants’ paradise.

This reminds me to remind you that every nationalization of an industry or service involves the occupation of land by the State. This land should always be nationalized by purchase and compensation. For if it is merely rented, as I am sorry to say it sometimes is, the charges made to the public must be raised by the amount of the rent, thus giving the ground landlord the money value of all the advantages of the nationalization.

I have said nothing about one of the cruelest effects of superseding an industry by competition instead of buying it up. The process consists fundamentally of the gradual impoverishment and ruin of those who are carrying on the superseded business. Capitalism is ruthless on this point: its principle is “Each for himself; and devil take the hindmost!” But the State has to consider the loser as well as the winner. It must not impoverish anybody. It must let the loser down easily; and there is no other way of doing this except the way of purchase and compensation.

58. PRELIMINARIES TO NATIONALIZATION

You now see that nationalization and municipalization are so desirable as a means of cheapening the things we all need that the most violently anti-Socialist Parliaments and municipal corporations have established nationalized and municipalized industries in the past, and are quite likely to do so in future under electoral pressure from Conservative voters. You see also that the alleged enormous expense of buying out private owners, which has been alleged by a Coal Commission as an insuperable objection to the nationalization of our coal mines, is a bogey, because, though the coalowners (of whom, by the way, I am one) will be fully compensated, the proprietary class as a whole will pay the bill out of their unearned incomes, leaving the nation richer instead of poorer by the transaction. So far so good. Theoretically, nationalization is perfectly sound.

Practically, it takes, as the people very accurately put it, a lot of doing. A mere proclamation that such and such an industry is nationalized can do nothing but just put a stop to it. Before any industry or service can be effectively nationalized a new department of the Civil Service must be created to carry it on. Unless we had a War Office we could not have an army, because no soldier could get his pay, or his uniform, or his weapons. Without an Admiralty, no navy. Without a General Post Office and a Postmaster-General, no letters in the morning. Without a Royal Mint and a Master of the Mint, no money. Without Scotland Yard in London, and Watch Committees in the country, no police. And as in the present so in the future. Without a great extension of the Treasury, banking cannot be nationalized, nor coal without the creation of a Department of Mines much bigger than our existing Department of Woods and Forests, nor railways without a Railway Board and a Railroadmaster-General as important as the Post Office and the Postmaster-General.

Such institutions can be set up by stable and highly organized States only, which means--and here is the political moral of it--that they cannot be done by revolutions, or by improvised dictatorships, or even by permanent States in which, as in America, where in some cases the civil services are still regarded as the spoils of office, a new set of officials oust the old ones whenever the Opposition ousts the Government. What a revolution can do towards nationalization is to destroy the political power of the class which opposes nationalization. But such a revolution by itself cannot nationalize; and the new Government it sets up may be unable even to carry on the nationalized services it finds in existence, and be obliged to abandon them to private enterprise.

A nationalizing Government must also be financially honest, and determined to make the nationalization a success, and neither plunder it to eke out the general revenue, nor discredit and wreck it so to have an excuse for giving the nationalized service back to the private profiteers. State railways have sometimes been standing examples of what State management can be at its worst. The Governments, instead of keeping the railways in proper repair, grabbed all the money paid by the public in fares and freightage; applied it to the relief of general taxation; and let the stations and rolling stock decay until their railways were the worst in the world, and there was a general clamor for their denationalization. Private profiteering enterprises have gone to pieces in the same way and worse; but, as they have been responsible to themselves only, their failures and frauds have passed unnoted, whilst the failures and frauds of Governments have raised great popular agitations and even provoked revolutions. The misdeeds of Governments are public and conspicuous: the misdeeds of private traders are practically invisible; and thus an illusion is created that Governments are less honest and efficient than private traders. It is only an illusion; but all the same, honesty and good faith are as necessary in nationalized businesses as in private ones. Our British nationalized services are held up as models of integrity; yet the Postmaster-General overcharges us a little for our letters, and puts the profit into the pockets of the propertied class in the form of reduced income tax; and the Admiralty is continually fighting against the tendency to keep down taxation by starving the navy. These depredations do not amount to much; but they illustrate what may be done when voters are not vigilant and well instructed.

59. CONFISCATION WITHOUT COMPENSATION

Our study of nationalization by compensated or distributed confiscation has no doubt relieved you from all anxiety as to the need for nationalization without compensation. But there is always a loud-mouthed, virtuously indignant political group, still saturated with the revolutionary traditions of Liberalism, which opposes compensation. If the property owner is, in effect, a thief, they say, why should he be compensated for being compelled to cease to do evil and learn to do well? If by taxation we can make the whole capitalist class find the money to buy out the coalowners, and thus transfer their property to the nation to that extent, why not take the rest of their property simply for the sake of transferring it also to the nation? Our joint stock companies work as well with one set of shareholders as with another: in fact their shares change hands so continually in the Money Market that they never have the same set of shareholders from one working day to the next. If all the railway shares in the country were held on Monday by the inhabitants of Park Lane, and on Tuesday by the British Government, the railways would go on just the same. In like case so would any other of the great industrial services now in joint stock ownership. If a landlord had to hand over the title-deeds of half a dozen farms and an urban street to the Exchequer, the farmers would go on farming, and the tenants go on living in the street, unaffected by the obligation to pay their rents in future to an agent of the Government instead of to the agent of a duke or any other plutocrat. The business of a bank would proceed just as smoothly after as before the owners had handed over their claims on its profits to the Chancellor of the Exchequer. Then why not at once push taxation of capital to the point at which the capitalist taxpayer, unable to find the money, will be forced to surrender to the Government his share certificates, his War Loan interest, and his title-deeds? The share certificates would not be worth a farthing on the Stock Exchange, because there would be all sellers and no buyers there; but none the less each certificate would, like the title-deeds to the land, carry the right to an income out of the future harvests of the country; and if the Government could immediately use that income for the benefit of the nation, it would be extremely well worth its while to get hold of it by accepting the certificates at their face value.

It could even do so with a show of generosity; for it could say to the capitalist, “You owe the tax collector a thousand pounds (say); but instead of selling you up we are authorizing him to give you a clean receipt, not for the money, but for ten paper certificates marked a hundred pounds each, for which the cleverest stockbroker in London could not get you twopence”. “But”, exclaims the cornered capitalist, “what becomes of my income? What am I to do for a living?” “Work for it, as others have to do”, is the reply. In short, from the point of view of its Socialist advocates, taxation of capital, though absurd as a means of raising ready money for the expenses of Government, is a way of confiscating without compensation the title-deeds of, and thereby nationalizing, the land and the mines and the railways and all the other industries which the capitalists now hold as their private property.

The scheme is plausible enough.

60. REVOLT OF THE PARASITIC PROLETARIAT

But there is an objection to it; and that objection may be learnt from the stupidest woman you ask in the street. She will tell you that you must not take away the property of the rich, because “they give employment”. Now, as we have seen, it is quite true that fundamentally it is nonsense to say that an unproductive rich person can give employment in any other sense than as a lunatic gives employment to her keeper. An idle rich woman can give no productive employment: the employment she gives is wasteful. But wasteful or not, she gives it and pays for it. She may not have earned the money she pays with; but it will buy as good bread and clothes for her employee as the most honestly earned money in the kingdom. The idler is a parasite: and the idler’s employee, however industrious, is therefore a parasite on a parasite; but if you leave the parasite destitute you leave the parasite’s parasites destitute; and unless you have productive employment ready for them they will have to starve or steal or rebel; and as they will certainly not choose to starve, their choice of the remaining two alternatives (which they will probably combine) may upset the Government if they are numerous enough. And they are, as a matter of fact, very numerous, as you may see by counting the Conservative votes that are given at every General Election by people who work for weekly wages in wholly or partly parasitic occupations. The plunder of the proletariat is shared handsomely by the plunderers with the proletarians. If our capitalists could not plunder our proletarians, our proletarians and their middle class organizers, from the Bond Street art dealers and jewellers to the errand boys of Bournemouth, could not live on the custom of our capitalists. That is why neither Bond Street nor Bournemouth can be persuaded to vote for uncompensated expropriation, and why, if it came to fighting instead of voting, they would fight against it.

The trouble would begin, not with the nationalized industries, but with the others. As we have seen, the mines and banks and railways, being already organized as going concerns, and managed by directors elected by the votes of the shareholders, could be confiscated by taxing the shareholders heavily enough to oblige them to transfer their shares to the Government in payment of the tax. But the income derived from these shares would therefore go into the pocket of the Government instead of into the pockets of the shareholders. Thus the purchasing power of the shareholders would pass to the Government; and every shop or factory that depended on their custom would have to shut up and discharge all its employees. The saving power of the shareholders, which means, as we now understand, the power of supplying the spare money needed for starting new industrial enterprises or extending old ones to keep pace with civilization, would also pass to the Government. These powers, which must be kept in action without a moment’s interruption, operate by continual expenditure (mainly household expenditure) and continual investment of the enormous total of all our private incomes.

What could the Government do with that total? If it simply dropped it into the national till, and sat on it, most of it would perish by natural decay; and meanwhile a great many of the people would perish too. There would be a monster epidemic of bankruptcy and unemployment. The tide of calamity would sweep away any Government unless it proclaimed itself a Dictatorship, and employed, say, a third of the population to shoot down another third, whilst the remaining third footed the bill with its labor. What could the Government do to avert this, short of handing back the confiscated property to the owners with apologies for having made a fool of itself?

61. SAFETY VALVES

It could distribute the money in doles; but that would only spread the very evil the confiscation was intended to destroy: that is to say, the evil of unearned income. A much sounder plan (and do not forget this when next you are tempted to give a spare £5 note to a beggar instead of putting it on deposit at your bank) would be to throw all the money into the confiscated banks, and lend it to employers at unprecedentedly cheap rates. Another expedient would be to raise wages handsomely in the confiscated industries. Another, the most desperate of all, but by no means the least probable, would be to go to war, and waste on the soldier the incomes formerly wasted on the plutocrat.

These expedients do not exclude oneanother. Doles, cheap capital available in Government-owned banks, and high wages, could be resorted to simultaneously to redistribute purchasing power and employing power. The doles and pensions would tide over the remaining years of those discharged servants of the ruined rich who were incapable of changing their occupations, and of the ruined rich themselves. The cheap capital at the banks would enable employers to start new businesses, or modify old ones, and to cater for the increased purchasing power of the workers whose wages had been raised, thereby giving employment to the workers who had lost their jobs in Bournemouth or Bond Street. The art dealers could sell pictures to the National Gallery and the provincial municipal galleries. There would be a crisis: but what of that? Capitalism has often enough produced displacements of purchasing power and loss of livelihood to large bodies of citizens, and fallen back on doles in the shape of Mansion House Funds and the like as safety valves to ease the pressure when the unemployed began to riot and break windows. Why should we not muddle through as we have always done?

Well, we might. But serious as the biggest crises of Capitalism have been, they have never been as big as the crash that would follow confiscation by the Government of the entire property of the whole propertied class without any preparation for the immediate productive employment not only of the expropriated owners (who are too few to give much trouble) but of the vast parasitic proletariat who produce their luxuries. Would the safety valves act quickly enough and open widely enough? We must examine them more closely before we can judge.

A civilized country depends on the circulation of its money as much as a living animal depends on the circulation of its blood. A general confiscation of private property and its incomes would produce an unprecedented congestion in London, where the national Treasury is, of money from all over the kingdom; and it would become a matter of life or death for the Government to pump that congested money promptly back again to the extremities of the land. Remember that the total sum congested would be much larger than under the capitalist system, because, as the capitalists spend much more of their incomes than they save, the huge amount of this expenditure would be saved and added to the Government revenue from the confiscated property.

Now for the safety valves. A prodigious quantity of the congested money would come from the confiscated ground rents of our cities and towns. The present proprietors spend these rents where they please; and they seldom please to spend them in the places where they were produced by the work of the inhabitants. A plutocrat does not decide to live in Bootle when he is free to live in Biarritz. The inhabitants of Bootle do not get the benefit of his expenditure, which goes to the west end of London and to the pleasure resorts and sporting grounds of all the world, though perhaps a little of it may come back if the town manufactures first class boots and riding breeches and polo mallets. The dwellers in the town enjoy a good deal of municipal communism; but they have to pay for it in rates which are now oppressively heavy everywhere. And they would be heavier still if the Government did not make what are called Grants-in-Aid to the municipalities.

An obvious safety valve, and a popular one with the ratepayers, would be the payment of the rates by the Treasury through greatly increased grants. If you are a ratepaying householder, and your landlord were suddenly to announce that in future he would pay the rates, you would rejoice in the prospect of having that much more money to spend on yourself. A similar announcement by the Chancellor of the Exchequer would be equally welcome. It would relieve the congestion at the Treasury, and send a flood of money back from the heart to the extremities.

Then there is the combination of raised wages in the confiscated industries with a flood of cheap capital pumped to all the business centres through the confiscated banks. The raised wages would check the flow of income to the Treasury by reducing dividends; and the cheapening of capital would enable new businesses to be started and old ones re-equipped to meet the demand created by the increased purchasing power (pocket money) of the wage workers and the disburdened ratepayers.

And there is always a good deal to be done in the way of public expenditure on roads; on reclamations of land from the sea; on afforestation; on building great dams across valleys and barrages across rivers and tideways to concentrate waterflow on turbine engines; on stations for the distribution of the power thus gained; on the demolition of slum towns that should never have been built, and their replacement by properly planned, healthy and handsome garden cities; and on a hundred other things that Capitalism never dreams of doing because it is impossible to appropriate their advantages as commercial profit. The demand for labor created by such operations would absorb all the employable unemployed, and leave only the superannuated and the incurably unemployable on the dole, with, of course, the children, on whom much more money could and should be spent than at present, with great uncommercial profit to the next generation.

All this sounds very reassuring, and costs little to describe on paper. But a few minutes’ reflection will dispel all hope that it could occur instantly and spontaneously through the uncompensated transfer of all existing shares and title-deeds to the Government. The Ministry of Health would have to produce a huge scheme for the grants-in-aid to the cities; and Parliament would wrangle for months over it. As to glutting the existing banks with spare money to lend without any further interference with them, the results would include an orgy of competitive enterprise, overcapitalization, overproduction, hopeless shops and businesses started by inexperienced or silly or rash people or people who are all three: in short, a boom followed by a slump, with the usual unemployment, bankruptcies, and so forth. To keep that part of the program under control, it would be necessary to set up a new department of the Treasury to replace the present boards of predatory company directors; to open banks wherever the post offices are doing substantial business; and to staff the new banks with specially trained civil servants. And all that would take longer than it takes a ruined citizen to starve.

As to raising industrial wages and reducing prices with the object of eliminating profit, that is so precisely the contrary of the policy which the existing managers of our industry have trained themselves to pursue, and which alone they understand, that their replacement by civil servants would be just as necessary as in the case of the banks. Such replacements could be effected only as part of an elaborate scheme requiring long preliminary cogitation and a practical preparation involving the establishment of new public departments of unprecedented magnitude.

Public works, too, cannot be set on foot offhand in the manner of Peter the Great, who, when asked to dictate the route to be taken by his new road from Moscow to Petrograd, took up a ruler and drew a straight line on the map from the word Moscow to the Neva. If Peter had had to get a proposal for a turbine barrage through a parliament with a fiery Welsh contingent determined that it should be across the Severn, and an equally touchy Scots contingent bent on having it across the Kyle of Tongue, he would have found many months slipping by him before he could set the first gang of navvies to work.

I need not weary you by multiplying instances. Wholesale nationalization without compensation is catastrophic: the patient dies before the remedy has time to operate. If you prefer a mechanical metaphor, the boiler bursts because the safety valves jam. The attempted nationalization would produce a revolution. You may say “Well, why not? What I have read in this book has made me impatient for revolution. The fact that any measure would produce a revolution is its highest recommendation”.

If that is yours view, your feelings do you credit: they are or have been shared by many good citizens. But when you go thoroughly into the matter you will realize that revolutions do not nationalize anything, and often make it much more difficult to nationalize them than it would have been without the revolution if only the people had had some education in political economy. If a revolution were produced by unskilled Socialism (all our parliamentary parties are dangerously unskilled at present) in the teeth of a noisy and inveterate Capitalist Opposition, it would produce reaction instead of progress, and give Capitalism a new lease of life. The name of Socialism would stink in the nostrils of the people for a generation. And that is just the sort of revolution that an attempt to nationalize all property at a blow would provoke. You must therefore rule out revolution on this particular issue of out-and-out uncompensated and unprepared general nationalization versus a series of carefully prepared and compensated nationalizations of one industry after another.

Later on, we shall expatiate a little on what revolutions can do and what they cannot. Meanwhile, note as a canon of nationalization (economists like to call their rules for doing anything canons) that all nationalizations must be prepared and compensated. This will be found an effectual safeguard against too many nationalizations being attempted at a time. We might even say against more than one nationalization being attempted at a time; only we must not forget that industries are now so amalgamated before they are ripe for nationalization that it is practically impossible to nationalize one without nationalizing half a dozen others that are inextricably mixed up with it. You would be surprised to learn how many other things a railway company does besides running trains. And if you have ever gone to sea in a big liner you have perhaps sometimes looked round you and wondered whether the business of making it was called shipbuilding or hotel building, to say nothing of engineering.

62. WHY CONFISCATION HAS SUCCEEDED HITHERTO

Now that I have impressed on you at such length as a canon of nationalization that Parliament must always buy the owners out and not simply tax them out, I am prepared to be informed that the canon is dead against the facts, because the direct attack on property by simple confiscation: that is, by the Government taking the money of the capitalists away from them by main force and putting it into the public treasury, has already, without provoking reaction or revolution, been carried by Conservative and Liberal Governments to lengths which would have seemed monstrous and incredible to nineteenth century statesmen like Gladstone, proving that you can introduce almost any measure of Socialism or Communism into England provided you call it by some other name. Propose Socialistic confiscation of the incomes of the rich, and the whole country will rise to repel such Russian wickedness. Call it income tax, supertax, and estate duties, and you can lift enough hundreds of millions from the pockets of our propertied class to turn the Soviet of Federated Russian Republics green with envy.

Take a case or two in figures. Gladstone thought it one of his triumphs as Chancellor of the Exchequer to reduce the income tax to twopence in the pound, and hoped to be able to abolish it altogether. Instead of which it went up to six shillings in 1920, and stopped at that only because it was supplemented by an additional income tax (Supertax or Surtax) on the larger incomes, and a partial abolition of inheritance which makes the nation heir to a considerable part of our property when we die possessed of any. Just imagine the fuss there would have been over this if it had been proposed by a Socialist Prime Minister as Confiscation, Expropriation, and Nationalization of Inheritance on the Communist principles of the prophet Marx! Yet we took it lying down.

You have perhaps not noticed how this taxation is arrived at in Parliament at present. The Chancellor of the Exchequer is the Minister who has to arrange the national housekeeping for the year, and screw out of a reluctant House of Commons its consent to tax us for the housekeeping money; for with the negligible exception of the interest on certain shares in the Suez Canal and in some ten companies who had to be helped to keep going during the war the nation has no income from property. Whom he will be allowed to tax depends on the sort of members who have been returned to Parliament. Without their approval his Budget, as he calls his proposals for taxation, cannot become law; and until it becomes law nobody can be compelled to pay the taxes. In Gladstone’s time Parliament consisted practically of landlords and capitalists and employers, the handful of working class members being hopelessly outvoted by the other three sections combined, or even single. Each of these sections naturally tried to throw as much of the burden of taxation as possible on the others; but all three were heartily agreed in throwing on the working class as much of it as they could without losing too many working class votes at the next election. Therefore the very last tax they wished to sanction was the income tax, which all of them had to pay directly, and which the wage workers escaped, as it does not apply to small incomes. Thus the income tax became a sort of residual tax or last resort: an evil to be faced only when every other device for raising money had been found insufficient. When Gladstone drove it down from sixpence to fourpence, and from fourpence to twopence, and expressed his intention of doing without it altogether, he was considered a very great Chancellor of the Exchequer indeed. To do this he had to raise money by putting taxes on food and drink and tobacco, on legal documents of different kinds, from common receipts and cheques and contracts to bills of exchange, share certificates, marriage settlements, leases and the like. Then there were the customs, or duties payable on goods sent into the country from abroad. The industrial employers, who were great importers of raw materials, and wanted food to be cheap because cheap food meant low wages, said “Let them come in free, and tax the landlords”. The country gentlemen said “Tax imports, especially corn, to encourage agriculture”. This created the great Free Trade controversy on which the Tories fought the Liberals for so many years. But both parties always agreed that income tax should not be imposed until every other means of raising the money had been exhausted, and that even then it should be kept down to the lowest possible figure.

When Socialism became Fabianized and began to influence Parliament through a new proletarian Labor Party, budgeting took a new turn. The Labor Party demanded that the capitalists should be the first to pay, and not the last, and that the taxation should be higher on unearned than on earned incomes. This involved a denial of the need for keeping Government expenditure and taxation down to the lowest possible figure. When taxation consists in taking money away from people who have not earned it and restoring it to its real earners by providing them with schools, better houses, improved cities, and public benefits of all sorts, then clearly the more the taxation the better for the nation. Where Gladstone cried “I have saved the income tax payers of the country another million. Hurrah!” a Labor Chancellor will cry “I have wrung another million from the supertaxed idlers, and spent it on the welfare of our people! Hooray!”

Thus for the last fifteen years we have had a running struggle in Parliament between the Capitalist and Labor parties: the former trying to keep down the income tax, the supertax, the estate duties, and public expenditure generally, and the latter trying to increase them. The annual debates on the Budget always turn finally on this point, though it is seldom frankly faced; and the capitalists have been losing bit by bit until now (in the nineteen-twenties) we have advanced from Gladstone’s income tax of 2d. in the pound to rates of from four to six shillings, with, on incomes exceeding £2000, surtaxes that range from eighteen pence to six shillings according to the amount of the income; whilst on the death of a property owner his heirs have to hand over to the Government a share of the estate ranging from one per cent of its fictitious capital value when it is a matter of a little over £100, to forty per cent when it exceeds a couple of millions.

That is to say, if your uncle leaves you five guineas a year you have to pay the Government seventy-three days income. If he leaves you a hundred thousand a year you pay eight years income, and starve for the eight years unless you can raise the money by mortgaging your future income, or have provided for it by insuring your life at a heavy premium for the nation’s benefit.

Now suppose this income of a hundred thousand a year belongs to an aristocratic family in which military service as an officer is a tradition which is practically obligatory. In a war it may easily happen, as it did sometimes during the late war, that the owner of such a property and his two brothers next in succession are killed within a few months. This would bring the income of £100,000 a year down to £12,000, the difference having been confiscated by the Government. If we were to read in The Morning Post that the Russian Soviet had taken £78,000 a year from a private family without paying a penny of compensation, most of us would thank heaven that we were not living in a country where such Communistic monstrosities are possible. Yet our British anti-Socialist Governments, both Liberal and Conservative, do it as a matter of routine, though their Chancellors of the Exchequer go on making speeches against Socialistic confiscation as if nobody outside Russia ever dreamt of such a thing!

That is just like us. All the time we are denouncing Communism as a crime, every street lamp and pavement and water tap and police constable is testifying that we could not exist for a week without it. Whilst we are shouting that Socialistic confiscation of the incomes of the rich is robbery and must end in red revolution, we are actually carrying it so much further than any other fully settled country that many of our capitalists have gone to live in the south of France for seven months in the year to avoid it, though they affirm their undying devotion to their native country by insisting that our national anthem shall be sung every Sunday on the Riviera as part of the English divine service, whilst the Chancellor of the Exchequer at home implores heaven to “frustrate their knavish tricks” until he can devise some legal means of defeating their evasions of his tax collectors.

But startling from the Victorian point of view as are the sums taken annually from the rich, they have not in the lump gone beyond what the property owners can pay in cash out of their incomes, nor what the Government is prepared to throw back into circulation again by spending it immediately. They have transferred purchasing power from the rich to the poor, producing minor commercial crises here and there, and often seriously impoverishing the old rich; but they have been accompanied by such a development of capitalism that there are more rich, and richer rich, than ever; so that the luxury trades have had to expand instead of contract, giving more employment instead of less. And they have proved that you may safely confiscate income derived from property provided you can immediately redistribute it. But you cannot tax it to extinction at a single mortal blow. You have always to consider most carefully how far and how fast you can go without crashing. The rule that the Government must not tax at all until it has an immediate use for the money it takes is fundamental: it holds in every case. The rule that if it uses it to nationalize an already established commercial industry or service it must have a new public department ready to take the business over, and must compensate the owners from whom it takes it, is also invariable. When the object is not nationalization, but simple redistribution of income within the capitalist system by transferring purchasing power from one set of people to another, usually from a richer set to a poorer set, thus changing the demand in the shops from dear luxuries to comparatively cheap necessities, then the process must go no faster than the capitalist shops can adapt themselves to this change. Else it may produce enough bankruptcies to make the Government very unpopular at the next election.

Let us study a sensational instance in which we have incurred a heavy additional burden of unearned income, so strongly resented by the mass of the people that our Governments, whether Labor or Conservative, may not long be able to resist the demand for its redistribution.

63. HOW THE WAR WAS PAID FOR

In 1914 we went to war. War is frightfully expensive and frightfully destructive: it results in a dead loss as far as money is concerned. And everything has to be paid for on the nail; for you cannot kill Germans with promissory notes or mortgages or national debts: you must have actual stores of food, clothing, weapons, munitions, fighting men, and nursing, car driving, munition making women of military age. When the army has worn out the clothes and eaten up the food, and fired off the munitions, and shed its blood in rivers, there is nothing eatable, drinkable, wearable, or livable-in left to shew for it: nothing visible or tangible but ruin and desolation. For most of these military stores the Government in 1914-18 went heavily into debt. It took the blood and work of the young men as a matter of course, compelling them to serve whether they liked it or not, and breaking up their businesses, when they had any, without compensation of any kind. But being a Capitalist Government it did not take all the needed ready money from the capitalists in the same way. It took some of it by taxation. But in the main, it borrowed it.

Naturally the Labor Party objected very strongly to this exemption of the money of the rich from the conscription that was applied ruthlessly to the lives and livelihoods and limbs of the poor. Its protests were disregarded. The spare subsistence needed to support the soldiers and the workers who were producing food and munitions for them, instead of being all taken without compensation by taxation, was for the most part hired from capitalists, their price being the right to take without working, for every hundred pounds worth of spare subsistence lent, five pounds a year out of the future income of the country for waiting until the hundred pounds they put down was repaid to them in full.

Roughly, and in round figures, what happened was that the National Debt of 660 millions owing in 1914 from former wars was increased by the new war to over 7000 millions. Until we are able to repay this in full we have to pay more than 350 millions a year to the lenders for waiting; and as the current expenses of our civil services (300 millions), with our army, our navy, our air force, and all the other socialized national establishments, come to more than as much again, the Chancellor of the Exchequer has now to budget for more than two millions a day, and get that out of our pockets as best he can. And as it is no use asking the proletarians for it at a time when perhaps a million or so of them are unemployed, and have to be supported out of the taxes instead of paying any, he has to make the property holders contribute, in income tax, supertax, and estate duties, over 380 millions a year: that is, a million and fifty thousand a day, or more than half the total taxation. This is confiscation with a vengeance.

Does it strike you that there is something funny about this business of borrowing most of the 7000 millions from our own capitalists by promising to pay them, say 325 millions a year whilst they are waiting for repayment, and then taxing them to the tune of 382 millions a year to pay not only their own waiting money but that of the foreign lenders as well? They are paying over 50 millions a year more than they are getting, and are therefore, as a class, losing by the transaction. The Government pays them with one hand, and takes the money back again, plus over 17 per cent interest, with the other. Why do they put up with it so tamely?

The explanation is easy. If the Government took back from each holder of War Loan exactly what it had paid him plus three and sixpence in the pound, all the holders would very promptly cry “Thank you for worse than nothing: we will cancel the debt; and much good may it do you”. But that is not what happens. The holders of War Loan Stock are only a part of the general body of property owners; but all the property owners have to pay income tax and death duties, and, when their income exceeds £2000, supertax. Those who did not lend money to the Government for the war get nothing from it. Those who did lend get the 325 millions a year all to themselves; but their liability for the taxation out of which it is paid is shared with all the other property owners. Therefore, though the property owners as a whole lose by the transaction, those property owners who hold War Loan Stock gain by it at the expense of those who do not. The Government not only robs capitalist Peter to pay capitalist Paul, but robs both of more than it pays to Paul; yet though Peter and Paul taken together are poorer, Paul taken by himself is richer, and therefore supports the Government in the arrangement, whilst Peter complains that the burden of taxation is intolerable.

To illustrate, my wife and I are capitalists, but I hold some War Loan stock, whilst all her money is in bank, railway, and other stocks. We are both taxed equally to pay me the interest on my War Loan; but as the Government pays me that interest and does not pay her anything, I gain by the transaction at her expense; so that if we were not, as it happens, on the communal footing of man and wife, we should never agree about it. Most capitalists do not understand the deal, and are in effect humbugged by it; but those who do understand it will never be unanimous in resisting it; consequently it is voteproof at the parliamentary elections.

This quaint state of things enables the Labor Party to demonstrate that it would pay the propertied class, as a whole, to cancel the National Debt, and put an end to the absurdity of a nation complaining that it is staggering under an intolerable burden of debt when as a matter of fact it owes most of the money to itself. The cancellation of the debt (except the fraction due to foreigners) would be simply a redistribution of income between its citizens without costing the nation, as a whole, a single farthing.

The plan of raising public money by borrowing money from capitalists instead of confiscating it by direct taxation is called funding; and lending money to the Government used to be called putting it in the Funds. And as the terms of the borrowing are that the lender is to have an income for nothing by waiting until his money is repaid, we get the queer phenomenon of lenders who, instead of being anxious to get their money back, dread nothing more; so that the Government, in order to get the loans, has actually to promise that it will not pay back the loan before a certain date, the further off the better. According to Capitalist morality people who live on their capital instead of on interest (as the payment for waiting is called) are spendthrifts and wasters. The capitalist must never consume his spare subsistence himself even when it is of a kind that will keep until he is hungry again. He must use it to purchase an income; and if the purchaser stops paying the income and repays the sum lent him, the lender must not spend that sum, but must immediately buy another income with it, or, as we say, invest it.

This is not merely a matter of prudence: it is a matter of necessity; for as investing capital means lending it to be consumed before it rots, it can never really be restored to the investor. Investing it means, as we have seen, allowing a body of workmen to eat it up whilst they are engaged in preparing some income producing concern like a railway or factory; and when it is once consumed no mortal power can bring it back into existence. If you do a man or a company or a Government the good turn of letting them use up what you can spare this year, he or she or they may do you the good turn of letting you have an equivalent if they can spare it twenty years hence, and pay you for waiting meanwhile; but they cannot restore what you actually lend them.

The war applied our spare money, not to a producing concern but to a destroying one. In the books of the Bank of England are written the names of a number of persons as the owners of capital to the value of 7000 million pounds. They are said in common speech to be “worth 7000 millions”. Now they are in fact “worth” nothing at all. Their 7000 millions have long since been eaten, drunk, worn out, or blown to smithereens, along with much other valuable property and precious lives, on battle-fields all over the world. We are therefore in the ridiculous position of pretending that our country is enriched by property to the value of 7000 millions when as a matter of fact it is impoverished by having to find 350 fresh millions a year for people who are not doing a stroke of work for her in return: that is, who are consuming a huge mass of wealth without producing any. It is as if a bankrupt, asked if he has any assets, should reply proudly, “Oh no: I have made ducks and drakes of all my assets; but then I have a tremendous lot of debts”. The 7000 millions of capital standing in the names of the stockholders in the Bank of England is not wealth, it is debt. If we flatly repudiated it, the nation would be richer not only by 350 millions a year, but by the work the stockholders would have to do to support themselves when their incomes were cut off. The objection to repudiating it is not that it would make the nation poorer, but that repudiation would seem a breach of contract after which nobody would ever lend money to the Government again. Besides, the United States, which lent us a thousand millions of it, might distrain on us for that amount by force of arms. Therefore we protest that nothing would induce us to commit such an act of cynical dishonesty. But that does not prevent us, as far as the debt is due to our own capitalists, from paying them honestly with one hand, and forcibly taking back the money plus seventeen per cent interest with the other.

By the way, lest somebody should come along and assure you that these figures are inaccurate, and that I am not to be trusted, I had better warn you that the figures are in round numbers; that they vary from year to year through paying off and fluctuation of values; that the thousand millions borrowed from America were lent by us to allies of whom some cannot afford to pay us at all, and others, who can, are trying how little we can be induced to take; that the rest of the money was raised through the banks in such a way that indignant statisticians have proved that we accepted indebtedness for nearly twice what we actually spent; that the rise in the market price of hiring spare money must have enriched the capitalists more than the war taxation impoverished them: in short, that the simplicity of the case can be addled by a hundred inessential circumstances when the object is to addle and not to elucidate. My object being elucidatory, I have left them all out, as I want to shew you the nest, not the hedge.

The point is that the war has produced an enormous consumption of capital; and instead of this consumption leaving behind it an addition to our industrial plant and means of communication and other contrivances for increasing our output of wealth, it has effected a wholesale destruction of such things, leaving the world with less income to distribute than before. The fact that it has swept away three empires, and substituted republicanism for monarchy as the prevalent form of government in Europe, thus bringing Europe into line with America as a republican continent, may seem to you to be worth the money; or, as this is not in the least what was intended by the British or any other of the belligerent Powers, it may seem to you a scandalous disaster. But that is a matter of sentiment, not of economics. Whether you regard the political result with satisfaction or dismay, the cost of the war remains the same, and so does the effect of our way of paying it on the distribution of our national income. We are all heavily taxed to enable that section of the capitalist class which invested in War Loan for five per cent interest (a high rate considering the security), to draw henceforth a million a day from the fruits of our daily labor without contributing to them. True, we take that much, and more, back from the whole capitalist class by taxation; so that what really happens is a redistribution of income among the capitalists, leaving the proletariat rather better off than worse, though unfortunately it is not the sort of redistribution that makes for equality of income or discredit of idleness. But it illustrates the point of this chapter, which is that a virtual confiscation of capital to the amount of thousands of millions proved perfectly feasible when the Government had employment in the shape of national service, even in work of destruction, instantly ready for an unlimited number of proletarians, male and female. Those had been halcyon days but for the bloodshed.

64. NATIONAL DEBT REDEMPTION LEVIES

Although the taxation of capital is nonsensical, it does not follow that every proposal presented to you in that form must necessarily be impracticable. It is true that the Government, if it wants ready money, can obtain it only by confiscating income; but this does not rule out operations for which no ready money is required, nor does it prevent the Government from taking not only the income of a proprietor, but the source of his income: that is, his property, as well. To take a possibility that is quite likely to become a fact in your experience, suppose the Government were driven to the conclusion that the National Debt, or some part of it, must be wiped out, either because the taxation needed to pay the interest of it is hampering capitalist enterprise, which would be a Conservative Government’s reason, or for the sake of redistributing income more equally, which would be a Socialist Government’s reason! To pay off what we have borrowed from America, or from foreigners of any nationality, would need ready money; and therefore the simple wiping out of this part of the national debt would be impossible except by flat repudiation, which would destroy our credit abroad and probably involve us in a war of distraint. But that part of the debt which we owe to ourselves could be wiped out without a farthing of ready money by a tax presented and assessed as a tax on capital, or rather a levy on capital (to indicate that it was not to be an annual tax but only a once-in-a-way tax). Take the war debt as an illustration of the possibility of a total wipe-out. Let us suppose for the sake of simplicity that as much of the National Debt as the Government owes to its own subjects is £100, all lent to it by one woman (call her Mary Anne) for the war, and, of course, long since spent and blown to bits, leaving nothing behind but the obligation of the Government to pay Mary Anne £5 a year out of the taxes. Imagine also that there is only one other capitalist in the country (say Sarah Jane), whose property consists of £100 from stocks and land yielding an income of £5 a year. That is, Sarah Jane owns the entire industrial plant of the country; and Mary Anne is the sole domestic (as distinguished from foreign) national creditor. The Chancellor of the Exchequer brings in a tax of 100 per cent on capital, and demands £100 from Sarah Jane and £100 from Mary Anne. Neither of them can pay £100 ready money out of their £5; but Sarah Jane can hand over all her share certificates to the Government; and the Government can transfer Mary Anne’s War Loan of £100 to itself. Mary and Sarah, left destitute, will have to work for their livings; and all the industrial plant of the country will have passed into the hands of the Government; that is, been nationalized.

In this transaction there is no physical impossibility, no selling of worthless shares for non-existent ready money, no rocketing of the Bank Rate, nothing but simple expropriation. The fact that the £200 at stake are really thousands of millions, and that there are many Marys and many Sarahs, each with her complement of Toms and Dicks, alters the size of the transaction, but not its balance. The thing could be done. Further, if the disturbance created by a sudden and total expropriation would be too great, it could be done in instalments of any desired magnitude. The 100 per cent tax on capital could be 50 per cent or 5 per cent or 2½ per cent every ten years or what you please. If 100 per cent meant a catastrophe (as it would) and 10 per cent only a squeeze, then the Government could content itself with the squeeze.

By such a levy the Government could take off the taxation it had formerly imposed to pay the home War Loan interest, and use the dividends of the confiscated shares to pay the interest on our war debt to America, taking off also the taxation that now pays that interest. If it were a Conservative Government it would take it off in the form of a reduction of income tax, supertax, excess profits tax (if any), death duties, and other taxes on property and big business. A Labor Government would leave these taxes untouched, and take taxes off food, or increase its contributions to the unemployed fund, its grants-in-aid to the municipalities for public work, or anything else that would benefit the proletariat and make for equality of income. Thus the levy could be manipulated to make the rich richer as easily as to raise the general level of well-being; and this is why it is just as likely to be done by a Capitalist as by a Labor Government until the domestic war debt is--shall we say liquidated, as repudiated sounds so badly?

The special objection to such practicable levies is that they are raids on private property rather than orderly and gradual conversions of it into public property. The objection to raids is that they destroy the sense of security which induces the possessors of spare money to invest it instead of spreeing it. Insecurity discourages saving among those who can afford to save, and encourages reckless expenditure. If you have a thousand pounds to spare, and have not the slightest doubt that by investing it you can secure a future income of £50 a year, subject only to income tax, you will invest it. If you are led to think it just as likely as not that if you invest it the Government will presently take it or some considerable part of it from you under pretext of a Debt Redemption Levy, you will probably conclude that you may as well spend it while you are sure of it. It would be much better for the country and for yourself if you could feel sure that if the Government took your property it would buy it from you at full market price, or, if that were for any reason impracticable, compensate you fully for it. It is true that, as we found when we went into the question of compensation, this apparently conservative way of doing it is really as expropriative as the direct levy, because the Government raises the purchase money or compensation by taxing property; so that the proprietors buy each other out and are not as a body compensated at all; but the sense of insecurity created by the raiding method is demoralizing, as you will understand if you read the description by Thucydides of the plague at Athens, which applies to all plagues, pathological or financial. Plagues destroy the sense of security of life: people come to feel that they will probably be dead by the end of the week, and throw their characters away for a day’s pleasure just as capitalists throw their money away when it is no longer safe. A raid on property, as distinguished from a regular annual income tax, is like a plague in this respect. Also it forms a bad precedent and sets up a raiding habit. Thus domestic debt redemption levies, though physically practicable, are highly injudicious.

65. THE CONSTRUCTIVE PROBLEM SOLVED

You may now stop for breath, as you are at last in possession not only of the object of Socialism, which is simply equality of income, but of the methods by which it can be attained. You know why coal mining and banking should be nationalized, and how the expropriation of the coalowners and bankers can be compensated so as to avoid injustice to individuals or any shock to the sense of security which is necessary to prevent the continued investment of spare money as capital. Now when you have the formula for these two nationalizations, one of a material industry involving much heavy manual work, and the other a service conducted by sedentary brain work, you have a formula for all nationalizations. And when you have the formula for the constitutional compensated expropriation of the coalowners and bankers by taxation you have the formula for the expropriation of all proprietors. Knowing how to nationalize industry you know how to place the Government in control of the distribution of the income produced by industry. We have not only found these formulas, but seen them tested in practice in our existing institutions sufficiently to have no more doubt that they would work than we have that next year’s budget will work. Therefore we need no longer be worried by demands for what people call a constructive program. There it is for them; and what will surprise them most about it is that it does not contain a single novelty. The difficulties and the novelty are not, as they imagine, in the practical part of the business, which turns out to be quite plain sailing, but in the metaphysical part: that is, in the will to equality. We know how to take the distribution of the national income out of the hands of the private owners of property and place it under the control of the Government. But the Government can distribute it unequally if it decides to do so. Instead of destroying the existing inequality it can intensify it. It can maintain a privileged class of idlers with huge incomes, and give them State security for the continuance of those incomes.

It is this possibility that may enlist and to a certain extent has already enlisted the most determined opponents of Socialism on the side of nationalization, expropriative taxation, and all the constructive political machinery of Socialism, as a means of redistributing income, the catch in it being that the redistribution at which they aim is not an equal distribution, but a State-guaranteed unequal one. John Bunyan, with his queer but deep insight, pointed out long ago that there is a way to hell even from the gates of heaven; that the way to heaven is therefore also the way to hell; and that the name of the gentleman who goes to hell by that road is Ignorance. The way to Socialism, ignorantly pursued, may land us in State Capitalism. Both must travel the same road; and this is what Lenin, less inspired than Bunyan, failed to see when he denounced the Fabian methods as State Capitalism. What is more, State Capitalism, plus Capitalist Dictatorship (Fascism), will compete for approval by cleaning up some of the dirtiest of our present conditions: raising wages; reducing death rates; opening the career to the talents; and ruthlessly cashiering inefficiency, before in the long run succumbing to the bane of inequality, against which no civilization can finally stand out.

This is why, though you are now equipped with a complete answer to those who very properly demand from Socialists constructive plans, practical programs, a constitutional parliamentary routine, and so forth, you are still not within eight score pages of the end of this book. We have still to discuss not only the pseudo-Socialism against which I have just warned you, but other things which I cannot omit without leaving you more or less defenceless against the alarmist who, instead of being sensibly anxious about constructive methods, is quite convinced that the world can be turned upside down in a day by an unwashed Russian in a red tie and an uncombed woman with a can of petrol if only they are wicked enough. These poor scared things will ask you what about revolution? what about marriage? what about children? what about sex? when, as they assume, Socialism will have upset all our institutions and substituted for our present population of sheep a raving pack of mad dogs. No doubt you can tell them to go away, or to talk about such matters as they are capable of understanding; but you will find that they are only the extreme instances of a state of mind that is very common. Not only will plenty of your most sensible friends want to discuss these subjects in connection with Socialism, but you yourself will be as keen about them as they. So now that we know exactly what Socialism aims at and how it can be done, let us leave all that as settled, and equip ourselves for general conversation on or around the subject.

66. SHAM SOCIALISM

The example of the war shews how easy it is for a government to confiscate the incomes of one set of citizens, and hand them over to another without any intention of equalizing distribution or effecting any nationalization of industries or services. If any class or trade or clique can obtain control of Parliament, it can use its power to plunder any other class or trade or clique, to say nothing of the nation as a whole, for its own benefit. Such operations are of course always disguised as reforms of one kind or another, or as political necessities; but they are really intrigues to use the State for selfish ends. They are not on that account to be opposed as pernicious: rogues with axes to grind must use popular reforms as bait to catch votes for Acts of Parliament in which they have some personal interest. Besides, all reforms are lucrative to somebody. For instance, the landlords of a city may be the warmest supporters of street improvements, and of every public project for making the city more attractive to residents and tourists, because they hope to reap the whole money value of the improvements in raised rents. When a public park is opened, the rents of all the houses looking on that park go up. When some would-be public benefactor endows a great public school for the purpose of making education cheap, he unintentionally makes all the private houses within reach of it dear. In the long run the owners of the land take from us as rent in one form or another everything that we can do without. But the improvements are none the less improvements. Nobody would destroy the famous endowed schools of Bedford because rents are higher there than in towns which possess no such exceptional advantage. When Faust asked Mephistopheles what he was, Mephistopheles answered that he was part of a power that was always willing evil and always doing good; and though our landlords and capitalists are certainly not always either willing evil or doing good, yet Capitalism justifies itself and was adopted as an economic principle on the express ground that it provides selfish motives for doing good, and that human beings will do nothing except for selfish motives. Now though the best things have to be done for the greater glory of God, as some of us say, or for the enlargement of life and the bettering of humanity, as others put it, yet it is very true that if you want to get a philanthropic measure enacted by a public body, parliamentary or municipal, you may find it shorter to give the rogues an axe to grind than to stir up the philanthropists to do anything except preach at the rogues. Rogues, by which perhaps rather invidious name I designate persons who will do nothing unless they get something out of it for themselves, are often highly effective persons of action, whilst idealist talkers only sow the wind, leaving the next generation of men of action to reap the whirlwind.

It is already a well-established method of Capitalism to ask the Government to provide for some private enterprise on the ground of its public utility. Some good has been done in this way: for instance, some of our modern garden cities and suburbs could not have been built if the companies that built them had not been enabled, under the Industrial and Provident Societies Act, to borrow a large share of their capital from the Government on the understanding that the shareholders were poor people holding no more than £200 capital apiece. But this limitation is quite illusory, because, though the companies may not issue more than £200 in shares to any individual, they may and do borrow unlimited sums by creating what is called Loan Stock; and the very same person who is not allowed to have more than £200 in shares may have two hundred millions in Loan Stock if the company can use them. Consequently these garden cities, which are most commendable enterprises in their way, are nevertheless the property of rich capitalists. As I hold a good deal of stock in them myself I am tempted to claim that their owners are specially philanthropic and public-spirited men, who have voluntarily invested their capital where it will do the most good and not where it will make the most profit for them; but they are not immortal; and we have no guarantee that their heirs will inherit their disinterestedness. Meanwhile the fact remains that they have built up their property largely with public money: that is, by money raised by taxing the rest of the community, and that this does not make the nation the owner of the garden city, nor even a shareholder in it. The Government is simply a creditor who will finally be paid off, leaving the cities in the hands of their capitalist proprietors. The tenants, though led to expect a share in the surplus profits of the city, find such profits practically always applied to extending the enterprise for the benefit of fresh investors. The garden cities and suburbs are an enormous improvement on the manufacturing towns produced by unaided private enterprise; but as they do not pay their proprietors any better than slum property, nor indeed as well, it is quite possible that this consideration may induce the future owners to abolish their open spaces and overcrowd them with houses until they are slums. To guarantee the permanence of the improvement it would be safer for the Government to buy out the shareholders than for the shareholders to pay off the Government, though even that would fail if the Government acted on Capitalist principles by selling the cities to the highest bidders.

A more questionable development of this exploitation of the State by Capitalism and Trade Unionism is the subsidy of £10,000,000 paid by the Government to the coalowners in 1925 to avoid a strike. The coal miners said they would not work unless they got such and such wages. The employers vowed they could not afford to keep their mines open unless the men would accept less; and a great press campaign was set up to persuade us that the country was on the verge of ruin through excessive wages when as a matter of fact the country was in a condition that at many earlier periods would have been described as cheerfully prosperous. Finally the Government, to avert a strike which would have paralyzed the main industries of the country, had either to make up out of the taxes the wages offered by the employers to the wages demanded by the men, or else nationalize the mines. Being a Capitalist Government, pledged not to nationalize anything, it chose to make up the wages out of the taxes. When the £10,000,000 was exhausted, the trouble began again. The Government refused to renew the subsidy; the employers refused to go on without it unless the miners worked eight hours a day instead of seven; the miners refused to work more or take less; there was a big strike, in which the workers in several other industries at first took part “sympathetically” until they realized that by using up the funds of the Trade Unions on strike pay they were hindering the miners instead of helping them; and many respectable people were, as usual on such occasions, frightened out of their wits and into the belief that the country was on the verge of revolution. And there was this excuse for them: that under fully-developed Capitalism civilization is always on the verge of revolution. We live as in a villa on Vesuvius.

During the strike the taxpayer was no longer exploited by the owners; but the ratepayer was exploited by the workers. A man on strike has no right to outdoor relief; but his wife and children have. Consequently a married miner with two children could depend on receiving a pound a week at the expense of the ratepayers whilst he was refusing to work. This development of parochial Communism really knocks the bottom out of the Capitalist system, which depends on the ruthless compulsion of the proletariat to work on pain of starvation or imprisonment under detestable conditions in the workhouse. Thus you have had the Government first giving outdoor relief (the ten million subsidy) to the owners at the expense of the taxpayers, and then the local authorities giving outdoor relief to the proletariat at the expense of the ratepayers, the Government being manned mostly by capitalists and the local authorities by proletarians.

It was in the proletarian quarters of London, notably in Poplar, that the Poor Law Guardians first claimed the right to give outdoor relief at full subsistence rates to all unemployed persons, thereby freeing their proletarian constituents from “the lash of starvation”, and enabling them to hold out for the highest wages their trades could afford. The mining districts followed suit during the coal strike of 1926. This right was contested by the Government, which tried to supplant the parochial authorities by the central Ministry of Health. The Ministry, through the auditors of public accounts, surcharged the Guardians with the part of the outdoor relief which they considered excessive; but as the Guardians could not have paid the surcharge even if the proceedings taken against them had not failed, the Government took the administration of the Poor Law into its own hands, and passed Acts to confirm its powers to do so. This was essentially an attempt by the Capitalist central Government to recover the weapon of starvation which the proletarian local authorities had taken out of the owners’ hands. But the day had gone by for the ultra-capitalist relief rules of the nineteenth century, when, as I well recollect, the Registrar-General’s returns of the causes of the deaths during the year always included starvation as a matter of course. The lowest scale of relief which the Government ventured to propose would have seemed ruinously extravagant and demoralizing to the Gradgrinds and Bounderbys denounced by Dickens in 1854.

As to the demoralization, they would not have been very far wrong. If mine-owners, or any other sort of owners, find that when they get into difficulties through being lazy, or ignorant, or too grasping, or behind the times, or all four, they can induce the Government to confiscate the taxpayers’ incomes for subsidies to get them out of their difficulties, they will go from bad to worse. If miners, or any other sort of workers, find that the local authorities will confiscate the incomes of the ratepayers to feed them when they are idle, their incentive to pay their way by their labor will be, to say the least, perceptibly slackened. Yet it is no use simply refusing to make these confiscations. If the nation will not take its industries out of the hands of private owners it must enable them to carry them on, whether they can make them pay or not. If the owners will not pay subsistence wages the nation must; for it cannot afford to have its children undernourished and its civil and military strength weakened, though it was fool enough to think it could in Queen Victoria’s time. Subsidies and doles are demoralizing, both for employers and proletarians; but they stave off Socialism, which people seem to consider worse than pauperized insolvency, Heaven knows why!

Still, governments need not be so shamelessly unbusinesslike as they are when subsidies are in question. The subsidizing habit was acquired by the British Government during the war, when certain firms had to be kept going at all costs, profit or no profit, because their activities were indispensable. It was against all Capitalist principles; but in war economic principles are thrown to the wind like Christian principles; and the habits of war are not cured instantly by armistices. In 1925, when the Government was easily blackmailed into paying the mine-owners ten millions of the money of the general taxpayer (your money and mine), it might at least have secured for us an equivalent interest in the mines. It might have obliged the owners to mortgage their property to the nation for the means to carry on, as they would have had to do if they had raised the money in the ordinary commercial way. As to the miners, they felt no responsibility, because, as the owners bought labor in the market exactly as they bought pit props, there was no more excuse for asking the miners to admit indebtedness for the subsidy than the dealers in pit props. On every principle of Capitalism the Government should either have refused to interfere, and have let the comparatively barren mines which could not afford to pay the standard wage for the standard working day go smash, or else it should have advanced the millions by way of mortgage, not on the worthless security of the defaulting mines, but on that of all the coal mines, good and bad. The interest on the mortgage would in that case have been paid to the nation by the good mines, which would thus have been compelled to make up the deficits of the bad ones; and if the interest had not been paid, the Government could finally have nationalized the mines by simple foreclosure instead of by purchase.

But capitalists are by no means in favor of having Capitalist principles applied to themselves in their dealings with the State. Besides, why should the fortunate owners of solvent mines subsidize the owners of insolvent ones? If the Government chooses to subsidize bad mines, let it be content with the security of the bad mines. It ended in the Government making the owners a present of the ten millions. The owners had to pass it on to the miners as wages: at least that was the idea; and it was more or less the fact also. But whether we regard it as a subsidy to the miners or to the owners or to both, it was none the less confiscated from the general taxpayer and handed as alms to favored persons.

The people who say that such subsidies are Socialistic, whether with the object of discrediting them or recommending them, are talking nonsense: they might as well say that the perpetual pensions conferred by Charles II on his illegitimate children were Socialistic. They are frank exploitations of the taxpayer by bankrupt Capitalism and its proletarian dependents. Socialist agitators, far from supporting such subsidies, will shout at you that you are paying part of the men’s wages whilst the mine-owners take all the profits; that if you will stand that, you will stand anything; that you are paying for nationalization and not getting it; that you are being saddled with a gigantic system of outdoor relief for the rich in addition to their rents, their dividends, and the doles they have left you to pay to their discarded employees; that the capitalists, having plundered everything else, land, capital, and labor, are now plundering the Treasury; that, not content with overcharging you for every article you buy, they are now taxing you through the Government collector; and that as they will have to hand over a share of what they take from you in this way as wages, the Trade Unions are taking good care to make the Labor Party support the subsidies in Parliament.

Meanwhile you hear from all quarters angry denunciations of Poplarism as a means by which the rate collector robs you of your possibly hardearned money, often to the tune of twentyfour shillings for every pound of the value of your house, to keep idle ablebodied laborers eating their heads off at a higher rate of expenditure than you, perhaps, can afford in your own house.

All this, with due allowance for platform rhetoric, is true. The attempt to maintain a failing system by subsidies plus Poplarism burns the candle at both ends, and makes straight for industrial bankruptcy. But you will not, if you are wise, waste your forces in resentful indignation. The capitalists are not making a conscious attempt to rob you. They are the flies on the wheel of their own system, which they understand as little as you did before we sat down to study it. All they know is that Trade Unionism is playing their own game against them with such success that more and more of the overcharges (to you) that formerly went to profit are now going to wages. They cry to the Government to save them, and it saves them (at your expense) partly because it is afraid of a big strike; partly because it wants to put off the alternative of nationalization as long as possible; partly because it has to consider the proletarian vote at the next general election; and mostly because it can think of nothing better to do in the rare moments when it has time to think at all. The British employers, the British Trade Unionists, and the British Government have no deep designs: so far it is just hand to mouth with them; and you need not waste any moral indignation on them. But please note the word British, thrice repeated in the last sentence, and also the words “so far”. The American employers and financiers are far more self-conscious than our business men and working men are; and the Americans are teaching our people their methods. Modern scientific discoveries have set them dreaming of enormously increased production; and they have found out that as the world depends on the people who work, whether with head or hand, they can by combining prevent idle and incapable owners of land and capital from getting too much of the increase. They know that they can neither realize their dream nor combine properly by using their own brains; and they are now paying large salaries to clever persons whose sole business is to think for them. Suppose you were the managing head of a big business, and that you were determined not to tolerate Trade Unionism among your workpeople, and therefore had to treat them well enough to prevent them feeling the want of a union. In England your firm would be called “a rat house”, in America simply a non-union house. Imagine yourself visited by a well-dressed lady or gentleman with the pleasant nonchalance of a person of proved and conscious ability and distinction. She (we will assume that she is a lady) has called to suggest that you should order all your workpeople to join the union of their trade, of which she is the pampered representative. You gasp, and would order her out if you dared; but how can one shew the door to a superior and perfectly self-confident person. She proceeds to explain whilst you are staring at her. She says it will be worth your while: that her union is prepared to put some new capital into your business, and that it will come to a friendly arrangement with you as to the various trade restrictions to which you so much object. She points out that if instead of working to increase the dividends of your idle shareholders you were just to give them what they are accustomed to expect, and use the rest of the profit for bettering the condition of the people who are doing the work (including yourself), the business would receive a fresh impulse, and you and all the really effective people in it make much more money. She suggests ways of doing it that you have never dreamt of. Can you see any reason except stupid conservatism for refusing such a proposal?

This is not a fancy picture. It has actually occurred in America as the result of the Trade Unions employing first-rate business brains to think for them, and not grudging them salaries equal to the wages of a dozen workmen. When English Trade Unions become Americanized as English big business is becoming Americanized they will do the same. Our big businesses are already picking out brainy champions from the universities and the public services to do just such jobs for them. Both big business and skilled labor will presently be managing their affairs scientifically, instead of dragging heavily and unimaginatively through the old ruts. And when this is accomplished they will enslave the unskilled, unorganized proletariat, including, as we have seen, the middle-class folk who have no aptitude for money making. They will enslave the Government. And they will do it mostly by the methods of Socialism, effecting such manifest improvements in the condition of the masses that it will be inhuman to stop them. The organized workers will live, not in slums, but in places like Port Sunlight, Bournville, and the Garden Cities. Employers like Mr Ford, Lord Leverhulme and Mr Cadbury will be the rule and not the exception; and the sense of helpless dependence on them will grow at the expense of individual adventurousness. The old communal cry of high rates and a healthy city will be replaced by Mr Ford’s cry of high wages and colossal profits.

Those profits are the snag in the stream of prosperity. If they are unequally distributed they will wreck the system that has produced them, and involve the nation in the catastrophe. In spite of all the apparent triumphs of increased business efficiency the Socialists will still have to insist on public control of distribution and equalization of income. Without that, capitalist big business, in league with the aristocracy of Trade Unionism, will control the Government for its private ends; and you may find it very difficult, as a voter, to distinguish between the genuine Socialism that changes private into public ownership of our industries, and the sham Socialism that confiscates the money of one set of citizens without compensation only to hand it over to another set, not to make our incomes more equal, but to give more to those who have already too much.

67. CAPITALISM IN PERPETUAL MOTION

And now, learned lady reader (for by this time you know much more about the vital history and present social problems of your country and of the world than an average Capitalist Prime Minister), do you notice that in these ceaseless activities which keep all of us fed and clothed and lodged, and some of us even pampered, NOTHING STAYS PUT? Human society is like a glacier: it looks like an immovable and eternal field of ice; but it is really flowing like a river; and the only effect of its glassy rigidity is that its own unceasing movement splits it up into crevasses that make it frightfully dangerous to walk on, all the more as they are beautifully concealed by natural whitewash in the shape of snow. Your father’s bankruptcy, your husband’s, or your own may precipitate you at any moment into a little crevasse. A big one may suddenly swallow a whole empire, as three of them were swallowed in 1918. If, as is most likely, you have been brought up to believe that the world is a place of permanent governments, settled institutions, and unchangeable creeds in which all respectable people believe, to which they all conform, and which are unalterable because they are founded for all eternity on Magna Carta, the Habeas Corpus Act, the Apostles’ Creed, and the Ten Commandments, what you have gathered here of the continual and unexpected changes and topsy-turvy developments of our social order, the passing of power from one class to another, the changes of opinion by which what was applauded as prosperity and honor and piety at the beginning of the nineteenth century came to be execrated as greedy villainy at the end of it, and what were prosecuted as criminal conspiracies under George IV are legalized and privileged combinations, powerful in Parliament, under George V, may have driven you to ask, what is the use of your drudging through all these descriptions and explanations if by the time you have reached the end of the book everything will have changed? I can only assure you that the way to understand the changes that are going on is to understand the changes that have gone before, and warn you that many women have spoilt their whole lives and misled their children disastrously by not understanding them.

Besides, the things I have been describing have not passed wholly away. There are still old-fashioned noblemen who lord it over the countryside as their ancestors have done for hundreds of years, sometimes benevolently, sometimes driving the inhabitants out to make room for sheep or deer at their pleasure. There are still farmers, large and small. There are still many petty employers carrying on small businesses singly or in firms of two or three partners. There are still joint stock companies that have not been merged in Trusts. There are still multitudes of employees who belong to no Trade Union, and are as badly sweated as the woman who sat in unwomanly rags and sang the Song of the Shirt. There are still children and young persons who are cruelly over-worked in spite of the Acts of Parliament that reach only the factories and workshops. The world at large, though it contains London and Paris and New York, also contains primitive villages where gas, electric light, tap water and main drainage are as unknown as they were to King Alfred. Our famous universities and libraries and picture galleries are within travelling distance of tribes of savages and cannibals, and of barbarian empires. Thus you can see around you living examples of all the stages of the Capitalist System I have described. Indeed, if you come, or your parents came (like mine) from one of those families of more than a dozen children in the genteel younger-son class which were more common formerly than they are today, you are certain to have found, without going further than your parents, your brothers and sisters, your uncles and aunts, your first cousins, and perhaps yourself, examples of every phase of the conditions produced by Capitalism in that class during the last two centuries, to say nothing of the earlier half medieval phases in which most women, especially respectable women, are still belated.

Beside the Changing and the Changed stand the Not Yet Changed; and we have to deal with all three in our daily business. Until we know what has happened to the Changed we shall not understand what is going to happen to the Not Yet Changed, and may ourselves, with the best intentions, effect mischievous changes, or oppose and wreck beneficial ones. If we look for guidance to the articles in our party newspapers (all living on profiteers’ advertisements) or the speeches of party politicians, or the gossip of our politically ignorant and class-prejudiced neighbors and relatives, which is unfortunately just what most of us do, we are sure to be either misguided and corrupted or exasperated.

Take, as a warning, those adventures of Capitalism in pursuit of profits which I sketched for you in Chapter 37 and the few following ones. They are always described to you in books and newspapers as the history of the British race, or (in France) the French nation, or (in Germany or Italy) the grand old German or Latin stock, dauntlessly exercising its splendid virtues and talents in advancing civilization at home and establishing it among the heathen abroad. Capitalism can be made to look very well on paper. But beware of allowing your disillusion to disable you by plunging you into disgust and general cynical incredulity. Our thrilling columns of national self-praise and mutual admiration must not be dismissed as mere humbug. Without great discoverers and inventors and explorers, great organizers and engineers and soldiers, hardy and reckless sailors, great chemists and mathematicians, devoted missionaries and desperate adventurers, our capitalists would be no better off today than they would have remained in Greenland or Thibet. But the extraordinary men whose exploits have made the capitalists rich were not themselves capitalists. The best of them received little or no encouragement from capitalists, because there was seldom any prospect of immediate profit from their labors and adventures. Many of them were and are not only poor but persecuted. And when the time comes, mostly after their deaths, to bring their discoveries and conquests into everyday use, the work is done by the hungry ones: the capitalists providing only the spare food they have neither sown nor reaped, baked nor brewed, but only collected from the hungry as rent or interest, and appropriated under laws made by capitalist legislators for that purpose. British brains, British genius, British courage and resolution have made the great reputation of Britain, as the same qualities in other nations have made the other great national reputations; but the capitalists as such have provided neither brains, genius, courage, nor resolution. Their contribution has been the spare food on which the geniuses have lived; and this the capitalists did not produce: they only intercepted it during its transfer from the hungry ones who made it to the hungry ones who consumed it.

Note that I say the capitalists as such; for the accident of a person being both a capitalist and a genius may happen just as easily as the accident of being both a genius and a pauper. Nature takes no notice of money. It is not likely that a born capitalist (that is, the inheritor of a fortune) will be a genius, because it is not likely that anybody will be born a genius, the phenomenon being naturally rare; but it may happen to capitalists occasionally, just as it has happened to princes. Queen Elizabeth was able to tell her ministers that if they put her into the street without anything but her petticoat she could make her living with the best of them. At the same time Queen Mary of Scotland was proving that if she had been put into the street with a hundred millions of money and an army of fifty thousand men she would have made a mess of it all somehow and come to a bad end. But their being queens had nothing to do with that: it was their personal quality as women that made the difference. In the same way, when one born capitalist happens to be a genius and another a waster, the capital produces neither the ability nor the worthlessness. Take away their capital, and they remain just the same: double it, and you double neither their ability nor their imbecility. The stupidest person in the country may be the richest: the cleverest and greatest may not know where tomorrow’s dinner is to come from. I repeat, capitalists as such need no special ability, and lose nothing by the lack of it. If they seem able to feed Peter the Laborer it is only because they have taken the food from Paul the Farmer; and even this they have not done with their own hands: they have paid Matthew the Agent to do it, and had his salary from Mark the Shopkeeper. And when Peter is a navvy, Paul an engineer, Matthew the manager of a Trust, and Mark a banker, the situation remains essentially unchanged. Peter and Paul, Matthew and Mark, do all the work: the capitalist does nothing but take as much of what they make as she can without starving them (killing the goose that lays the golden eggs).

Therefore you may disregard both the Capitalist papers which claim all the glories of our history as the fruit of Capitalist virtue and talent, and the anti-Capitalist papers which ascribe all our history’s shames and disgraces to the greed of the capitalists. Waste neither your admiration nor your indignation. The more you understand the system, the better you will see that the most devout personal righteousness cannot evade it except by political changes which will rescue the whole nation from it.

But though the capitalist as such does nothing but invest her money, Capitalism does a great deal. When it has filled the home markets with all the common goods the people can afford to pay for out of their wages, and all the established fashionable luxuries the rich will buy, it must apply its fresh accumulations of spare money to more out-of-the-way and hazardous enterprises. It is then that Capitalism becomes adventurous and experimental; listens to the schemes of hungry men who are great inventors or chemists or engineers; and establishes new industries and services like telephones, motor charabancs, air services, wireless concerts, and so forth. It is then that it begins to consider the question of harbors, which, as we saw, it would not look at whilst there was still room for new distilleries. At the present moment an English company has undertaken to build a harbor at a cost of a million pounds for a Portuguese island in the Atlantic, and even to make it a free port (that is, charge no harbor dues) if the Government of the island lets it collect and keep the customs duties.

The capitalists, though they are very angry when the hungry ask for Government help of any kind, have no scruples about asking it for themselves. The railways ask the Government to guarantee their dividends; the air services ask for large sums from the Government to help them to maintain their aeroplanes and make money out of them; the coalowners and the miners between them extort subsidies from the Government by threatening a strike if they do not get it; and the Government, under the Trades Facilities Acts, guarantees loans to private capitalists without securing any share in their enterprises for the nation, which provides them with capital cheaply, but has to pay profiteering prices for their goods and services all the same. In the end there is hardly any conceivable enterprise that can be made to pay dividends that Capitalism will not undertake as long as it can find spare money; and when it cannot it is quite ready to extract money from the Government--that is, to take it forcibly from the people by taxes--by assuring everyone that the Government can do nothing itself for the people, who must always come to the capitalists to get it done for them in return for substantial profits, dividends, and rents. Its operations are so enormous that it alters the size and meaning of what we call our country. Trading companies of capitalists have induced the Government to give them charters under which they have seized large and populous islands like Borneo, whole empires like India, and great tracts of country like Rhodesia, governing them and maintaining armies in them for the purpose of making as much money out of them as possible. But they have taken care to hoist the British flag, and make use directly or indirectly, of the British army and navy at the cost of the British taxpayers to defend these conquests of theirs; and in the end the British Commonwealth has had to take over their responsibilities and add the islands and countries they have seized to what is called the British Empire, with the curious result, quite unintended by the British people, that the centre of the British Empire is now in the East instead of in Great Britain, and out of every hundred of our fellow subjects only eleven are whites, or even Christians. Thus Capitalism leads us into enterprises of all sorts, at home and abroad, over which we have no control, and for which we have no desire. The enterprises are not necessarily bad: some of them have turned out well; but the point is that Capitalism does not care whether they turn out well or ill for us provided they promise to bring in money to the shareholders. We never know what Capitalism will be up to next; and we never can believe a word its newspapers tell us about its doings when the truth seems likely to be unpopular.

It is hard to believe that you may wake up one morning, and learn from your newspaper that the Houses of Parliament and the King have moved to Constantinople or Baghdad or Zanzibar, and that this insignificant island is to be retained only as a meteorological station, a bird sanctuary, and a place of pilgrimage for American tourists. But if that did happen, what could you do? It would be a perfectly logical development of Capitalism. And it is no more impossible than the transfer of the mighty Roman empire from Rome to Constantinople was impossible. All you could do, if you wished to be in the fashion, or if your business or that of your husband could be conducted only in a great metropolitan centre, would be to go east after the King and Parliament, or west to America and cease to be a Briton.

You need not, however, pack up just yet. But what you really need do is rid your mind of the notion that mere Conservatism, in its general sense of a love for the old ways and institutions you were brought up with, will be of any avail against Capitalism. Capitalism, in its ceaseless search for investment, its absolute necessity for finding hungry men to eat its spare bread before it goes stale, breaks through every barrier, rushes every frontier, swallows every religion, levels every institution that obstructs it, and sets up any code of morals that facilitates it, as soullessly as it sets up banks and lays cables. And you must approve and conform, or be ruined, and perhaps imprisoned or executed.

68. THE RUNAWAY CAR OF CAPITALISM

Capitalism, then, keeps us in perpetual motion. Now motion is not a bad thing: it is life as opposed to stagnation, paralysis, and death. It is novelty as opposed to monotony; and novelty is so necessary to us that if you take the best thing within your reach (say the best food, the best music, the best book, the best state of mind, or the best anything that remains the same always), and if you stick to it long enough you will come to loathe it. Changeable women, for instance, are more endurable than monotonous ones, however unpleasant some of their changes may be: they are sometimes murdered but seldom deserted; and it is the ups and downs of married life that make it bearable. When people shake their heads because we are living in a restless age, ask them how they would like to live in a stationary one and do without change. Nobody who buys a motor car says “the slower the better”. Motion is delightful when we can control it, guide it, and stop it when it is taking us into danger.

Uncontrolled motion is terrible. Fancy yourself in a car which you do not know how to steer and cannot stop, with an inexhaustible supply of petrol in the tank, rushing along at fifty miles an hour on an island strewn with rocks and bounded by cliff precipices! That is what living under Capitalism feels like when you come to understand it. Capital is running away with us; and we know that it has always ended in the past by taking its passengers over the brink of the precipice at the foot of which are strewn the ruins of empires. The desperately pressing present problem for all governments is how to get control of this motion; make safe highways for it; and steer it along those highways. If only we could stop it whilst we sit down and think! But no: the car will not stop: on the contrary it goes faster and faster as capital accumulates in greater and greater quantities, and as we multiply our numbers. One statesman after another snatches at the wheel and tries his hand. Kings try their hands; dictators try their hands; democratic prime ministers try their hands; committees and Soviets try their hands; and we look hopefully to them for a moment, imagining that they have got control because they do it with an air of authority, and assure us that it will be all right if only we will sit quiet. But Capital runs away with them all; and we palpitate between relief when our ungovernable vehicle blunders into a happy valley, and despair when we hear the growl of the waves at the foot of the cliffs grow louder and louder instead of dying away in the distance. Blessed then are those who do not know and cannot think: to them life seems a joyride with a few disagreeable incidents that must be put up with. They sometimes make the best rulers, just as the best railway signalman is he who does not feel his responsibility enough to be frightened out of his wits by it. But in the long run civilization depends on our governments gaining an intelligent control of the forces that are running away with Capitalism; and for that an understanding of them is necessary. Mere character and energy, much as we admire them, are positively mischievous without intellect and knowledge.

Our present difficulty is that nobody understands except a few students whose books nobody else reads, or here and there a prophet crying in the wilderness and being either ignored by the press or belittled as a crank. Our rulers are full of the illusions of the money market, counting £5 a year as £100. Our voters have not got even so far as this, because nine out of ten of them, women or men, have no more experience of capital than a sheep has of a woollen mill, though the wool comes off its own back.

But between the government and the governed there is a very important difference. The governments do not know how to govern; but they know that government is necessary, and that it must be paid for. The voters regard government as a tyrannical interference with their personal liberty, and taxation as the plunder of the private citizen by the officials of a tyrannous state. Formerly this did not matter much, because the people had no votes. Queen Elizabeth, for instance, told the common people, and even the jurymen and the Knights of the Shires who formed the Parliament in her time, that affairs of State were not their business, and that it was the grossest presumption on their part to have any opinion of their own on such matters. If they attempted to argue with her she threw them into prison without the smallest hesitation. Yet even she could not extract money enough from them in taxes to follow up her political successes. She could barely hold her own by being quite right about the incompetence of the commoners and knights, and being herself the most competent person of her time. These two advantages made her independent of the standing armies by which other despots maintained themselves. She could depend on the loyalty of her people because she was able, as we say, to deliver the goods. When her successors attempted to be equally despotic without being able to deliver the goods, one of them was beheaded, and the other driven out of the country. Cromwell rivalled her in ability; but though he was a parliament man, he was finally driven to lay violent hands on Parliament, and rule by armed force.

As to the common people, the view that their poverty and political ignorance disqualified them for any share in the government of the country was accepted until within my own lifetime. Within my father’s lifetime the view that to give every man a vote (to say nothing of every woman) was ridiculous and, if acted on, dangerous, seemed a matter of course not only to Tories like the old Duke of Wellington, but to extreme revolutionaries like the young poet Shelley. It seems only the other day that Mr Winston Churchill declared that Labor is not fit to govern.

Now you probably agree with Queen Elizabeth, Cromwell, Wellington, Shelley, and Mr Winston Churchill. At all events if you do you are quite right. For although Mr Ramsay MacDonald easily convinced the country that a Labor Government can govern at least as well as either the Liberal or Conservative Governments who have had the support of Mr Churchill, the truth is that none of them can govern: Capitalism runs away with them all. The hopes that we founded on the extension of the franchise, first to working men and finally to women, which means in effect to all adults, have been disappointed as far as controlling Capitalism is concerned, and indeed in most other respects too. The first use the women made of their votes was to hurl Mr MacDonald out of Parliament and vote for hanging the Kaiser and making Germany pay for the war, both of them impossibilities which should not have imposed on even a male voter. They got the vote mainly by the argument that they were as competent politically as the men; and when they got it they at once used it to prove that they were just as incompetent. The only point they scored at the election was that the defeat of Mr MacDonald by their vote in Leicester shewed that they were not, as the silliest of their opponents had alleged, sure to vote for the best-looking man.

What the extension of political power to the whole community (Democracy, as they call it) has produced is a reinforcement of the popular resistance to government and taxation at a moment when nothing but a great extension of government and taxation can hope to control the Gadarene rush of Capitalism towards the abyss. And this has produced a tendency which is the very last that the old Suffragists and Suffragettes dreamt of, or would have advocated if they had dreamt of it: namely, a demand for the abandonment of parliamentary government and the substitution of a dictatorship. In desperation at the failure of Parliament to rescue industry from the profiteers, and currency from the financiers (which means rescuing the livelihood of the people from the purely predatory side of Capitalism), Europe has begun to clamor for political disciplinarians to save her. Victorious France, with her currency in the gutter, may be said to be advertising for a Napoleon or a political Messiah. Italy has knocked its parliament down and handed the whip to Signor Mussolini to thrash Italian democracy and bureaucracy into some sort of order and efficiency. In Spain the king and the military commander-in-chief have refused to stand any more democratic nonsense, and taken the law into their own hands. In Russia a minority of devoted Marxists maintain by sheer force such government as is possible in the teeth of an intensely recalcitrant peasantry. In England we should welcome another Cromwell but for two considerations. First, there is no Cromwell. Second, history teaches us that if there were one, and he again ruled us by military force after trying every sort of parliament and finding each worse than the other, he would be worn out or dead after a few years; and then we should return like the sow to her wallowing in the mire and leave the restored profiteers to wreak on the corpse of the worn-out ruler the spite they dared not express whilst he was alive. Thus our inability to govern ourselves lands us in such a mess that we hand the job over to any person strong enough to undertake it; and then our unwillingness to be governed at all makes us turn against the strong person, the Cromwell or Mussolini, as an intolerable tyrant, and relapse into the condition of Bunyan’s Simple, Sloth, and Presumption the moment his back is turned or his body buried. We clamor for a despotic discipline out of the miseries of our anarchy, and, when we get it, clamor out of the severe regulation of our law and order for what we call liberty. At each blind rush from one extreme to the other we empty the baby out with the bath, learning nothing from our experience, and furnishing examples of the abuses of power and the horrors of liberty without ascertaining the limits of either.

Let us see whether we cannot clear up this matter of government versus liberty a little before we give up the human race as politically hopeless.

69. THE NATURAL LIMIT TO LIBERTY

Once for all, we are not born free; and we never can be free. When all the human tyrants are slain or deposed there will still be the supreme tyrant that can never be slain or deposed, and that tyrant is Nature. However easygoing Nature may be in the South Sea Islands, where you can bask in the sun and have food for the trouble of picking it up, even there you have to build yourself a hut, and, being a woman, to bear and rear children with travail and trouble. And, as the men are handsome and quarrelsome and jealous, and, having little else to do except make love, combine exercise with sport by killing oneanother, you have to defend yourself with your own hands.

But in our latitudes Nature is a hard taskmaster. In primitive conditions it was only by working strenuously early and late that we could feed and clothe and shelter ourselves sufficiently to be able to survive the rigors of our climate. We were often beaten by famine and flood, wolves and untimely rain and storms; and at best the women had to bear large families to make up for the deaths of children. They had to make the clothes of the family and bake its bread as well as cook its meals. Such leisure as a modern woman enjoys was not merely reprehensible: it was impossible. A chief had to work hard for his power and privileges as lawgiver, administrator, and chief of police; and had even his most pampered wife attempted to live as idly and wastefully as thousands of ordinary ladies now do with impunity, he would certainly have corrected her with a stick as thick as his thumb, and been held not only guiltless, but commendably active in the discharge of his obvious social duty. And the women were expected to do the like by their daughters instead of teaching them, as Victorian ladies did, that to do anything useful is disgraceful, and that if, as inevitably happens, something useful has to be done, you must ring for a servant and by no means do it yourself.

Now commercial civilization has been at root nothing more than the invention of ways of doing Nature’s tasks with less labor. Men of science invent because they want to discover Nature’s secrets; but such popular inventions as the bow and spear, the spade and plough, the wheel and arch, come from the desire to make work easier out of doors. Indoors the spinning wheel and loom, the frying-pan and poker, the scrubbing brush and soap, the needle and safety pin, make domestic work easier. Some inventions make the work harder, but also much shorter and more intelligent, or else they make operations possible that were impossible before: for instance, the alphabet, Arabic numerals, ready reckoners, logarithms, and algebra. When instead of putting your back into your work you put the horse’s or ox’s back into it, and later on set steam and explosive spirits and electricity to do the work of the strained backs, a state of things is reached in which it becomes possible for people to have less work than is good for them instead of more. The needle becomes a sewing machine, the sweeping brush becomes a vacuum cleaner, and both are driven from a switch in the wall by an engine miles away instead of being treadled and wielded by foot and hand. In Chapter 42 we had a glance at the way in which we lost the old manual skill and knowledge of materials and of buying and selling, first through division of labor (a very important invention), and then through machinery. If you engage a servant today who has been trained at a first-rate institution in the use of all the most modern domestic machinery, and take her down to a country house, I will not go quite so far yet as to warn you that though she knows how to work the buttons on an automatic electric lift or step on and off an escalator without falling on her nose, she cannot walk up or downstairs; but it may come to that before long. Meanwhile you will have on your hands a supercivilized woman whom you will be glad to replace by a girl from the nearest primitive village, if any primitive villages are left in your neighborhood.

Let us, however, confine ourselves to the bearing of all this on that pet topic of the leisured class, our personal liberty.

What is liberty? Leisure. What is leisure? Liberty. If you can at any moment in the day say “I can do as I please for the next hour” then for that hour you are at liberty. If you say “I must now do such and such things during the next hour whether I like it or not” then you are not at liberty for that hour in spite of Magna Carta, the Declaration of Rights (or of Independence), and all the other political title-deeds of your so-called freedom.

May I, without being too intrusive, follow you throughout your daily routine? You are wakened in the morning, whether you like it or not, either by a servant or by that nerve-shattering abomination an alarum clock. You must get up and light the fire and wash and dress and prepare and eat your breakfast. So far, no liberty. You simply must. Then you have to make your bed, wash up the breakfast things, sweep and tidy-up the place, and tidy yourself up, which means that you must more or less wash and re-dress your person until you are presentable enough to go out and buy fresh supplies of food and do other necessary shopping. Every meal you take involves preparation, including cooking, and washing up afterwards. In the course of these activities you will have to travel from place to place, which even in the house often means treadmill work on the stairs. You must rest a little occasionally. And finally you must go to sleep for eight hours.

In addition to all this you must earn the money to do your shopping and pay your rent and rates. This you can do in two main ways. You can work in some business for at least eight hours a day, plus the journeys to and from the place where you work. Or you can marry, in which case you will have to do for your husband and children all the preparation of meals and marketing that you had to do for yourself, to wash and dress the children until they are able to wash and dress themselves, and to do all the other things that belong to the occupation of wife and mother, including the administration of most of the family income. If you add up all the hours you are forced to spend in these ways, and subtract them from the twenty-four hours allowed you by Nature to get through them in, the remainder will be your daily leisure: that is, your liberty. Historians and journalists and political orators may assure you that the defeat of the Armada, the cutting off of King Charles’s head, the substitution of Dutch William for Scottish James on the throne, the passing of the Married Women’s Property Acts, and the conquest by the Suffragettes of Votes for Women, have set you free; and in moments of enthusiasm roused by these assurances you may sing fervently that Britons never never will be slaves. But though all these events may have done away with certain grievances from which you might be suffering if they had not occurred, they have added nothing to your leisure and therefore nothing to your liberty. The only Acts of Parliament that have really increased liberty: that is, added to the number of minutes in which a woman’s time is her own, are the Factory Acts which reduced her hours of industrial labor, the Sunday Observance Acts which forbid commercial work on every seventh day, and the Bank Holiday Acts.

You see, then, that the common trick of speaking of liberty as if we were all either free or slaves, is a foolish one. Nature does not allow any of us to be wholly free. In respect of eating and drinking and washing and dressing and sleeping and the other necessary occasions of physical life, the most incorrigible tramp, sacrificing every decency and honesty to freedom, is as much a slave for at least ten or eleven hours a day as a constitutional king, who has to live an almost entirely dictated life. An enslaved negress who has six hours a day to herself has more liberty than a “free” white woman who has only three. The white woman is free to go on strike, and the negress is not; but the negress can console herself by her freedom to commit suicide (fundamentally much the same thing), and by pitying the Englishwoman because, having so much less liberty, she is only poor white trash.

Now in our desire for liberty we all sympathize with the tramp. Our difference from him, when we do differ, is that some of us want leisure so that we may be able to work harder at the things we like than slaves, except under the most brutal compulsion, work at the things they must do. The tramp wastes his leisure and is miserable: we want to employ our leisure and be happy. For leisure, remember, is not rest. Rest, like sleep, is compulsory. Genuine leisure is freedom to do as we please, not to do nothing.

As I write, a fierce fight between the miners and the mine-owners has culminated in the increase of the miners’ daily working hours from seven to eight. It is said that the miners want a seven hours working day. This is the wrong way to put it. What the miners want is not seven hours mining but seventeen hours off, out of which Nature will take at least ten for her occasions, and locomotion another. Thus the miner, by rigidly economizing his time, cutting out all loafing, and being fortunate in the weather and season, might conceivably manage to have six hours of effective leisure out of the twenty-four on the basis of seven hours earning and eleven hours for sleep, recreation, loafing and locomotion. And it is this six hours of liberty that he wants to increase. Even when the immediate object of his clamor for shorter hours of work is only a mask for his real intention of working as long as before but receiving overtime pay (half as much again) for the last hour, his final object is to obtain more money to spend on his leisure. The pieceworker, the moment the piecework rate enables him to earn as much in three or four days as he has been accustomed to earn in a week, is as likely as not to take two or three days off instead of working as long as before for twice as much money. He wants leisure more than money.

But the conclusive instance is that of property. Women desire to be women of property because property secures to them the maximum of leisure. The woman of property need not get up at six in the morning to light the fire. She need not prepare her husband’s breakfast nor her own. She need not wash-up nor empty the slops nor make the beds. She need not do the marketing, nor any shopping except the sort she enjoys. She need not bother more about her children than she cares to. She need not even brush her own hair; and if she must still eat and sleep and wash and move from place to place, these operations are made as luxurious as possible. She can count on at least twelve hours leisure every day. She may work harder at trying on new dresses, hunting, dancing, visiting, receiving, bridge, tennis, mountain climbing, or any other hobby she may have, than a laborer’s wife works at her compulsory housekeeping; but she is doing what she likes all the time, and not what she must. And so, having her fill of liberty, she is usually an ardent supporter of every political movement that protects her privilege, and a strenuous and sometimes violently abusive opponent of every political movement that threatens to curtail her leisure or reduce the quantity of money at her disposal for its enjoyment. She clings to her position because it gives her the utmost possible liberty; and her grievance is that she finds it difficult to obtain and retain domestic servants because, though she offers them higher wages and better food and lodging and surroundings than they can secure for themselves as industrial employees, she also offers them less freedom. Their time, as they say, is never their own except for occasional evenings out. Formerly women of all classes, from governesses to scullery maids, went into domestic service because the only alternative was rough work in unbearably coarse company, and because, with comparatively gentle dispositions, they were for the most part illiterate and ignorant. Nowadays, being imprisoned in schools daily for at least nine years, they are no longer illiterate; and there are many occupations open to them (for instance, in city offices) that were formerly reserved for men. Even in rough employment the company is not so rough as it used to be; besides, women of gentle nurture are no longer physically disabled for them by the dress and habits that made the Victorian woman half an invalid. A hundred years ago a housemaid was so different from a herring-gutter or a ragpicker that she was for all business purposes an animal of another species. Today they are all “young ladies” in their leisure hours; and the single fact that a housemaid has less leisure than an industrial employee makes it impossible to obtain a housemaid who is not half imbecile in a factory town, and not easy to get one in a fishing port.

It is the same with men. But do not conclude that every woman and every man desires freedom above all things. Some people are very much afraid of it. They are so conscious that they cannot fend for themselves either industrially or morally that they feel that the only safe condition for them is one of tutelage, in which they will always have someone to tell them not only what to do but how to behave. Women of this kind seek domestic service, and men military service, not in spite of the forfeiture of their freedom but because of it. Were it not for this factor in the problem it would be harder to get domestic servants and soldiers than it is. Yet the ideal of the servant and soldier is not continual tutelage and service: it is tutelage relieved by an occasional spree. They both want to be as free as they dare. Again, the very last thing the ordinary industrial male worker wants is to have to think about his work. That is the manager’s job. What he wants to think about is his play. For its sake he wants his worktime to be as short, and his playtime as long, as he can afford. Women, from domestic necessity and habit, are more accustomed to think about their work than men; for a housewife must both work and manage; but she also is glad when her work is over.

The great problem of the distribution of the national income thus becomes also a problem of the distribution of necessary work and the distribution of leisure or liberty. And this leisure or liberty is what we all desire: it is the sphere of romance and infinite possibilities, whilst worktime is the sphere of cut and dried compulsory reality. All the inventions and expedients by which labor is made more productive are hailed with enthusiasm, and called progress, because they make more liberty possible for us. Unfortunately, we distribute the leisure gained by the invention of the machines in the most absurd way that can be conceived. Take your woman of property whom we have just discussed, with her fifteen hours leisure out of the twenty-four. How does she obtain that leisure? Not by inventing anything, but by owning machines invented by somebody else and keeping the leisure they produce all to herself, leaving those who actually work the machines with no more leisure than they had before. Do not blame her: she cannot help herself, poor lady! that is Capitalist law.

Look at it in the broader case of the whole nation. Modern methods of production enable each person in the nation to produce much more than they need consume to keep themselves alive and reproduce themselves. That means that modern methods produce not only a national fund of wealth but a national fund of leisure or liberty. Now just as you can distribute the wealth so as to make a few people monstrously rich whilst leaving all the rest as poor as before, you can distribute the leisure in such a way as to make a few people free for fifteen hours a day whilst the rest remain as they were, with barely four hours to dispose of as they please. And this is exactly what the institution of private property has done, and why a demand for its abolition and for the equal distribution of the national leisure or liberty among the whole population has arisen under the banner of Socialism.

Let us try to make a rough picture of what would happen if leisure, and consequently productive work, were equally distributed. Let us pretend that if we all worked four hours a day for thirtyfive years each of us could live as well as persons with at least a thousand a year do now. Let us assume that this state of things has been established by general agreement, involving a compromise between the people who want to work only two hours and live on a five-hundred-a-year scale and those who want to work four hours and live twice as expensively!

The difficulty then arises that some kinds of work will not fit themselves into instalments of four hours a day. Suppose you are married, for example. If your husband is in business there is no trouble for him. He does every day what he now does on Saturday: that is, begins at nine and knocks off at one. But what about your work? The most important work in the world is that of bearing and rearing children; for without that the human race would presently be extinct. All women’s privileges are based on that fact. Now a woman cannot be pregnant for four hours a day, and normal for the rest of it. Nor can she nurse her infant for four hours and neglect it until nine next morning. It is true that pregnancy does not involve complete and continuous disablement from every other productive activity: indeed, no fact is better established by experience than that any attempt to treat it as such is morbid and dangerous. As some writers inelegantly express it, it is not a whole time job. Nursing is much more continuously exacting, as children in institutions who receive only what ignorant people call necessary attention mostly die, whilst home children who are played with and petted and coddled and tossed and sung-to survive with a dirty rag or two for clothing, and a thatched cabin with one room and a clay floor for habitation.

A four hours working day, then, does not mean that everybody can begin work at nine and leave off at one. Pregnancy and nursing are only items in the long list of vitally important occupations that cannot be interrupted and resumed at the sound of a hooter. It is possible in a factory to keep a continuous process going by having six shifts of workers to succeed oneanother during the twentyfour hours, so that each shift works no more than four hours; but a ship, being a home as well as a workplace, cannot accommodate six crews. Even if we built warships big enough to hold 5000 and carry food for them, the shifts could not retire from Jutland battles at the end of each spell of four hours. Nor is such leisure as is possible on board ship the equivalent of shore leisure, as the leisured passengers, with their silly deck games, and their agonized scamperings fore and aft for exercise know only too well.

Then there are the jobs that cannot be done in shifts because they must be done by the same person throughout with a continuance that stretches human endurance to the utmost limit. A chemist or physicist watching an experiment, an astronomer watching an eclipse, a doctor or nurse watching a difficult case, a Cabinet minister dealing with news from the front during a war, a farmer saving his hay in the face of an unfavorable weather forecast, or a body of scavengers clearing away a snowfall, must go on if necessary until they drop, four hours or no four hours. Handel’s way of composing an oratorio was to work at it night and day until it was finished, keeping himself awake as best he might. Explorers are lucky if they do not die of exhaustion, as many of them have, from prolonged effort and endurance.

A four hour working day therefore, though just as feasible as an eight hour day is now, or the five day week which is the latest cry, is in practice only a basis of calculation. In factory and office work, and cognate occupations out of doors, it can be carried out literally. It may mean short and frequent holidays or long and rare ones. I do not know what happens to you in this respect; but in my own case, in spite of the most fervent resolutions to order my work more sensibly, and of the fact that an author’s work can as a rule quite well be divided into limited daily periods, I am usually obliged to work myself to the verge of a complete standstill and then go away for many weeks to recuperate. Eight or nine months overwork, and three or four months change and overleisure, is very common among professional persons.

Then there is a vital difference between routine work and what is called creative or original work. When you hear of a man achieving eminence by working sixteen hours a day for thirty years, you may admire that apparently unnatural feat; but you must not conclude that he has any other sort of ability: in fact you may quite safely put him down as quite incapable of doing anything that has not been done before, and doing it in the old way. He never has to think or invent. To him today’s work is a repetition of yesterday’s work. Compare him, for example, with Napoleon. If you are interested in the lives of such people you are probably tired of hearing how Napoleon could keep on working with fierce energy long after all the members of his council were so exhausted that they could not even pretend to keep awake. But if you study the less often quoted memoirs of his secretary Bourrienne you will learn that Napoleon often moodled about for a week at a time doing nothing but play with children or read trash or waste his time helplessly. During his enforced leisure in St Helena, which he enjoyed so little that he probably often exclaimed, after Cowper’s Selkirk, “Better live in the midst of alarms than dwell in this horrible place”, he was asked how long a general lasted. He replied, “Six years”. An American president is not expected to last more than four years. In England, where there is no law to prevent a worn-out dotard from being Prime Minister, even so imposing a parliamentary figure as Gladstone had to be practically superannuated when he tried to continue into the eighteen-nineties the commanding activities which had exhausted him in the seventies. To descend to more commonplace instances you cannot make an accountant work as long as a bookkeeper, nor a historian as continuously as a scrivener or typist, though they are performing the same arithmetical and manual operations. One will be tired out in three hours: the other can do eight without turning a hair with the help of a snack or a cup of tea to relieve her boredom occasionally. In the face of such differences you cannot distribute work equally and uniformly in quantities measured by time. What you can do is to give the workers, on the whole, equal leisure, bearing in mind that rest and recuperation are not leisure, and that periods of necessary recuperation in idleness must be counted as work, and often very irksome work, to those who have been prostrated by extraordinary efforts excessively prolonged.

The long and short of it is that freedom with a large F, general and complete, has no place in nature. In practice the questions that arise in its name are, first, how much leisure can we afford to allow ourselves? and second, how far can we be permitted to do what we like when we are at leisure? For instance, may we hunt stags on Dartmoor? Some of us say no; and if our opinion becomes law, the liberty of the Dartmoor Hunt will be curtailed to that extent. May we play golf on Sundays during church hours? Queen Elizabeth would not only have said no, but made churchgoing compulsory, and thereby have made Sunday a half-holiday instead of a whole one. Nowadays we enjoy the liberty of Sunday golf. Under Charles II, on the other hand, women were not allowed to attend Quaker meetings, and were flogged if they did. In fact attendance at any sort of religious service except that of the Church of England was a punishable offence; and though it was not possible to enforce this law fully against Roman Catholics and Jews, its penalties were ruthlessly inflicted on George Fox and John Bunyan, though King Charles himself sympathized with them. It cost us a revolution to establish comparative “liberty of conscience”; and we can now build and attend handsome temples of The Church of Christ Scientist, and form fantastic Separatist sects by the score if it pleases us.

On the other hand many things that we were free to do formerly we may not do now. In England until quite lately, as in Italy to this day, when a woman married, all her property became her husband’s; and if she had the ill luck to marry a drunken blackguard, he could leave her to make a home for herself and her children by her own work, and then come back and seize everything she possessed and spend it in drink and debauchery. He could do it again and again, and sometimes did. Attempts to remedy this were denounced by happily married pious people as attacks on the sanctity of the marriage tie; and women who advocated a change were called unwomanly; but at last commonsense and decency prevailed; and in England a married woman is now so well protected from plunder and rapine committed by her husband that a Married Men’s Rights agitation has begun.

Outside the home a factory owner might and did work little children to death with impunity, and do or leave undone anything he liked in his factory. Today he can no more do what he likes there than you can do what you like in Westminster Abbey. He is compelled by law to put up in a conspicuous place a long list of the things he must do and the things he may not do, whether he likes it or not. And when he is at leisure he is still subject to laws that restrict his freedom and impose duties and observances on him. He may not drive his motor car faster than twenty miles an hour (though he always does), and must drive on the left and pass on the right in England, and drive to the right and pass on the left in France. In public he must wear at least some clothing, even when he is taking a sunbath. He may not shoot wild birds or catch fish for sport except during certain seasons of the year; and he may not shoot children for sport at all. And the liberty of women in these respects is limited as the liberty of men is.

I need not bother you with more instances: you can think of dozens for yourself. Suffice it that without leisure there is no liberty, and without law there is no secure leisure. In an ideal free State, the citizen at leisure would find herself headed off by a police officer (male or female) whenever she attempted to do something that her fellow citizens considered injurious to them, or even to herself; but the assumption would be that she had a most sacred right to do as she pleased, however eccentric her conduct might appear, provided it was not mischievous. It is the contrary assumption that she must not do anything that she is not expressly licensed to do, like a child who must come to its mother and ask leave to do anything that is not in the daily routine, that destroys liberty. There is in British human nature, and I daresay in human nature in general, a very strong vein of pure inhibitiveness. Never forget the children in Punch, who, discussing how to amuse themselves, decided to find out what the baby was doing and tell it it mustnt. Forbiddance is an exercise of power; and we all have a will to personal power which conflicts with the will to social freedom. It is right that it should be jealously resisted when it leads to acts of irresponsible tyranny. But when all is said, the people who shout for freedom without understanding its limitations, and call Socialism or any other advance in civilization slavery because it involves new laws as well as new liberties, are as obstructive to the extension of leisure and liberty as the more numerous victims of the Inhibition Complex who, if they could, would handcuff everybody rather than face the risk of having their noses punched by somebody.

70. RENT OF ABILITY

Having cleared up the Liberty question by a digression (which must have been a relief) from the contemplation of capital running away with us, perhaps another digression on the equally confused question of the differences in ability between one person and another may not be out of place; for the same people who are in a continual scare about losing the liberty which they have mostly not got are usually much troubled about these differences. Years ago I wrote a small book entitled Socialism and Superior Brains which I need not repeat here, as it is still accessible. It was a reply to the late William Hurrell Mallock, who took it as a matter of course, apparently, that the proper use of cleverness in this world is to take advantage of stupid people to obtain a larger share than they of the nation’s income. Rascally as this notion is, it is too common to be ignored. The proper social use of brains is to increase the amount of wealth to be divided, not to grab an unfair share of it; and one of the most difficult of our police problems is to prevent this grabbing, because it is a principle of Capitalism that everyone shall use not only her land and capital, but her cunning, to obtain as much money for herself as possible. Capitalism indeed compels her to do so by making no other provision for the clever ones than what they can make out of their cleverness.

Let us begin by taking the examples which delight and dazzle us: that is, the possessors of some lucrative personal talent. A lady with a wonderful voice can hire a concert room to sing in, and admit nobody who does not pay her. A gentleman able to paint a popular picture can hang it in a gallery with a turnstile at the door, passable only on payment. A surgeon who has mastered a dangerous operation can say to his patient, in effect, “Your money or your life”. Giants, midgets, Siamese twins, and two-headed singers exhibit themselves for money as monsters. Attractive ladies receive presents enough to make them richer than their plainer or more scrupulous neighbors. So do fascinating male dancing partners. Popular actresses sometimes insist on being pampered and allowed to commit all sorts of follies and extravagances on the ground that they cannot keep up their peculiar charm without them; and the public countenances their exactions fondly.

These cases need not worry us. They are very scarce: indeed if they became common their power to enrich would vanish. They do not confer either industrial power or political privilege. The world is not ruled by prima donnas and painters, two-headed nightingales and surgical baronets, as it is by financiers and industrial organizers. Geniuses and monsters may make a great deal of money; but they have to work for it: I myself, through the accident of a lucrative talent, have sometimes made more than a hundred times as much money in a year as my father ever did; but he, as an employer, had more power over the lives of others than I. A practical political career would stop my professional career at once. It is true that I or any other possessor of a lucrative talent or charm can buy land and industrial incomes with our spare money, and thus become landlords and capitalists. But if that resource were cut off, by Socialism or any other change in the general constitution of society, I doubt whether anyone would grudge us our extra spending money. An attempt by the Government to tax it so as to reduce us to the level of ordinary mortals would probably be highly unpopular, because the pleasure we give is delightful and widespread, whilst the harm we do by our conceit and tantrums and jealousies and spoiltness is narrowly limited to the unfortunate few who are in personal contact with us. A prima donna with a rope of pearls ten feet long and a coronet of Kohinoors does not make life any worse for the girl with a string of beads who, by buying a five shilling ticket, helps to pay for the pearls: she makes it better by enchanting it.

Besides, we know by our own experience, not only of prima donnas but of commercial millionaires, that regular daily personal expenditure cannot be carried beyond that of the richest class to be found in the community. Persons richer than that, like Cecil Rhodes, Andrew Carnegie, and Alfred Nobel, the inventor of dynamite (to name only the dead), cannot spend their incomes, and are forced to give away money in millions for galleries and museums which they fill with magnificent collections and then leave to the public, or for universities, or churches, or prizes, or scholarships, or any sort of public object that appeals to them. If equality of income were general, a freak income here and there would not enable its possessor to live differently from the rest. A popular soprano might be able to fill the Albert Hall for 100 nights in succession at a guinea a head for admission; but she could not obtain a lady’s maid unless ladies’ maids were a social institution. Nor could she leave a farthing to her children unless inheritance were a social institution, nor buy an unearned and as yet unproduced income for them unless Capitalism were a social institution. Thus, though it is always quite easy for a Government to checkmate any attempt of an individual to become richer than her neighbors by supertaxing her or directly prohibiting her methods, it is unlikely that it will ever be worth while to do so where the method is the exercise of a popular personal talent.

But when we come to that particular talent which makes its money out of the exercise of other people’s talents, the case becomes gravely different. To allow Cleopatra to make money out of her charms is one thing: to allow a trader to become enormously rich by engaging five hundred Cleopatras at ten pounds a week or less, and hiring them out at ten pounds a day or more, is quite another. We may forgive a burglar in our admiration of his skill and nerve; but for the fence who makes money by purchasing the burglar’s booty at a tenth of its value it is impossible to feel any sympathy. When we come to reputable women and honest men we find that they are exploited in the same way. Civilization makes matters worse in this respect, because civilization means division of labor. Remember the pin makers and pin machines. In a primitive condition of society the maker of an article saves the money to buy the materials, selects them, purchases them, and, having made the article out of these materials, sells it to the user or consumer. Today the raising of the money to buy the materials is a separate business; the selection and purchasing is another separate business; the making is divided between several workers or else done by a machine tended by a young person; and the marketing is yet another separate business. Indeed it is much more complicated than that, because the separate businesses of buying materials and marketing products are themselves divided into several separate businesses; so that between the origin of the product in raw material from the hand of Nature and its final sale across the counter to you there may be dozens of middlemen, of whom you complain because they each take a toll which raises the price to you, and it is impossible for you to find out how many of them are really necessary agents in the process and how many mere intercepters and parasites.

The same complication is found in that large part of the world’s work which consists, not in making things, but in service. The woman who once took the wool that her husband had just shorn from their sheep, and with her own hands transformed it into a garment and sold it to the wearer, or clothed her family with it, is now replaced by a financier, a shipper, a woolbroker, a weaving mill, a wholesaler, a shopkeeper, a shop assistant, and Heaven knows how many others besides, each able to do her own bit of the process but ignorant of the other bits, and unable to do even her own bit until all the others are doing their bits at the same time. Any one of them without the others would be like an artillery man without a cannon or a shop assistant with nothing to sell.

Now if you go through all these indispensable parties to any industry or service, you will come on our question of exceptional ability in its most pressing and dangerous form. You will find, for instance, that whereas any ablebodied normal woman can be trained to become a competent shop assistant, or a shorthand typist and operator of a calculating machine (arithmetic is done by machines nowadays), or a factory hand, or a teacher, hardly five out of every hundred can manage a business or administer an estate or handle a large capital. The number of persons who can do what they are told is always greatly in excess of the number who can tell others what to do. If an educated woman asks for more than four or five pounds a week in business, nobody asks whether she is a good woman or a bad one: the question is, is there a post for her in which she will have to make decisions, and if so, can she be trusted to make them. If the answer is yes, she will be paid more than a living wage: if not, no.

Even when there is no room for original decisions, and there is nothing to do but keep other people hard at their allotted work, and maintain discipline generally, the ability to do this is an exceptional gift and has a special value. It may be nothing more admirable than the result of a combination of brute energy with an unamiable indifference to the feelings of others; but its value is unquestionable: it makes its possessor a forewoman or foreman in a factory, a wardress in a prison, a matron in an institution, a sergeant in the army, a mistress in a school, and the like. Both the managing people and the mere disciplinarians may be, and often are, heartily detested; but they are so necessary that any body of ordinary persons left without what they call superiors, will immediately elect them. A crew of pirates, subject to no laws except the laws of nature, will elect a boatswain to order them about and a captain to lead them and navigate the ship, though the one may be the most insufferable bully and the other the most tyrannical scoundrel on board. In the revolutionary army of Napoleon an expeditionary troop of dragoons, commanded by an officer who became terrified and shammed illness, insisted on the youngest of their number, a boy of sixteen, taking command, because he was an aristocrat, and they were accustomed to make aristocrats think for them. He afterwards became General Marbot: you will find the incident recorded in his memoirs. Every woman knows that the most strongminded woman in the house can set up a domestic tyranny which is sometimes a reign of terror. Without directors most of us would be like riderless horses in a crowded street. The philosopher Herbert Spencer, though a very clever man, had the amiable trait in his character of an intense dislike to coercion. He could not bring himself even to coerce his horse; and the result was that he had to sell it and go on foot, because the horse, uncoerced, could do nothing but stop and graze. Tolstoy, equally a professed humanitarian, tamed and managed the wildest horses; but he did it by the usual method of making things unpleasant for the horse until it obeyed him.

However, horses and human beings are alike in that they very seldom object to be directed: they are usually only too glad to be saved the trouble of thinking and planning for themselves. Ungovernable people are the exception and not the rule. When authority is abused and subordination made humiliating, both are resented; and anything from a mutiny to a revolution may ensue; but there is no instance on record of a beneficially and tactfully exercised authority provoking any reaction. Our mental laziness is a guarantee of our docility: the mother who says “How dare you go out without asking my leave?” presently finds herself exclaiming “Why cant you think for yourself instead of running to me for everything?” But she would be greatly astonished if a rude motor car manufacturer said to her, “Why cant you make a car for yourself instead of running to me for it?”

I am myself by profession what is called an original thinker, my business being to question and test all the established creeds and codes to see how far they are still valid and how far worn out or superseded, and even to draft new creeds and codes. But creeds and codes are only two out of the hundreds of useful articles that make for a good life. All the other articles I have to take as they are offered to me on the authority of those who understand them; so that though many people who cannot bear to have an established creed or code questioned regard me as a dangerous revolutionary and a most insubordinate fellow, I have to be in most matters as docile a creature as you could desire to meet. When a railway porter directs me to number ten platform I do not strike him to earth with a shout of “Down with tyranny!” and rush violently to number one platform. I accept his direction because I want to be directed, and want to get into the right train. No doubt if the porter bullied and abused me, and I, after submitting to this, found that my train really started from number seven platform and that the number ten train landed me in Portsmouth when my proper destination was Birmingham, I should rise up against that porter and do what I could to contrive his downfall; but if he had been reasonably civil and had directed me aright I should rally to his defence if any attempt were made to depose him. I have to be housekept-for, nursed, doctored, and generally treated like a child in all sorts of situations in which I do not know what to do; and far from resenting such tutelage I am only too glad to avail myself of it. The first time I was ever in one of those electric lifts which the passengers work for themselves instead of being taken up and down by a conductor pulling at a rope, I almost cried, and was immensely relieved when I stepped out alive.

You may think I am wandering from our point; but I know too well by experience that there is likely to be at the back of your mind a notion that it is in our nature to resent authority and subordination as such, and that only an unpopular and stern coercion can maintain them. Have I not indeed just been impressing on you that the miseries of the world today are due in great part to our objection, not merely to bad government, but to being governed at all? But you must distinguish. It is true that we dislike being interfered with, and want to do as we like when we know what to do, or think we know. But when there is something that obviously must be done, and only five in every hundred of us know how to do it, then the odd ninetyfive will not merely be led by the five: they will clamor to be led, and will, if necessary, kill anyone who obstructs the leaders. That is why it is so easy for ambitious humbugs to get accepted as leaders. No doubt competent leadership may be made unpopular by bad manners and pretension to general superiority; and subordination may be made intolerable by humiliation. Leaders who produce these results should be ruthlessly cashiered, no matter how competent they are in other respects, because they destroy self-respect and happiness, and create a dangerous resentment complex which reduces the competence and upsets the tempers of those whom they lead. But you may take it as certain that authority and subordination in themselves are never unpopular, and can be trusted to re-establish themselves after the most violent social convulsion. What is to be feared is less their overthrow than the idolization of those who exercise authority successfully. Nelson was idolized by his seamen; Lenin was buried as a saint by revolutionary Russia; Signor Mussolini is adored in Italy as The Leader (Il Duce); but no anarchist preaching resistance to authority as such has ever been popular or ever will be.

Now it is unfortunately one of the worst vices of the Capitalist system that it destroys the social equality that is indispensable to natural authority and subordination. The very word subordination, which is properly co-ordination, betrays this perversion. Under it directing ability is sold in the market like fish; and, like sturgeon, it is dear because it is scarce. By paying the director more than the directee it creates a difference of class between them; and the difference of class immediately changes a direction or command which naturally would not only not be resented but desired and begged for, into an assertion of class superiority which is fiercely resented. “Who are you that you should order me about? I am as good as you”, is an outburst that never occurs when Colonel Smith gives an order to Lieutenant the Duke of Tencounties. But it very often rises to the lips of Mrs Hicks (though she may leave it unspoken out of natural politeness or fear of consequences), who lives in a slum, when she receives from Mrs Huntingdon Howard, who lives in a square, an order, however helpful to her, given in a manner which emphasizes, and is meant to emphasize, the lady’s conviction that Mrs Hicks is an inferior sort of animal. And Mrs Howard sometimes feels, when Lady Billionham refuses to know her, that Lord Billionham’s rank is but the guinea’s stamp: her man Huntingdon’s the gowd for a’ that. Nothing would please her better than to take her super-incomed neighbor down a peg. Whereas if Mrs Hicks and Mrs Huntingdon Howard and Lady Billionham all had equal incomes, and their children could intermarry without derogation, they would never dream of quarrelling because they (or their husbands) could tell oneanother what to do when they did not know themselves. To be told what to do is to escape responsibility for its consequences; and those who fear any dislike of such telling between equals know little of human nature.

The worst of it is that Capitalism produces a class of persons so degraded by their miserable circumstances that they are incapable of responding to an order civilly given, and have to be fiercely scolded or cursed and kicked before any work can be got out of them; and these poor wretches in turn produce a class of slavedrivers who know no other methods of maintaining discipline. The only remedy is not to produce such people. They are abortions produced by poverty, and will disappear with it.

Reluctance to command is a more serious difficulty. When a couple of soldiers are sent on any duty one of them must be made a corporal for the occasion, as there must be someone to make the decisions and be responsible for them. Usually both men object: each trying to shove the burden on to the other. When they differ in this respect the Platonic rule is to choose the reluctant man, as the probability is that the ambitious one is a conceited fool who does not feel the responsibility because he does not understand it. This kind of reluctance cannot be overcome by extra pay. It may be overcome by simple coercion, as in the case of common jurors. If you are a direct ratepayer you may find yourself at any moment summoned to serve on a jury and make decisions involving the disgrace or vindication, the imprisonment or freedom, the life or death of your fellowcreatures, as well as to maintain the rights of the jury against the continual tendency of the Bench to dictate its decisions. You are not paid to do this: you are forced to do it, just as men were formerly pressed into the navy or forced to sit in Parliament against their will and that of their constituents.

But though in the last resort coercion remains available as a means of compelling citizens to undertake duties from which they shrink, it is found in practice that fitness for special kinds of work carries with it a desire to exercise it, even at serious material disadvantages. Mozart could have made much more money as a valet than he did as the greatest composer of his time, and indeed one of the greatest composers of all time; nevertheless he chose to be a composer and not a valet. He knew that he would be a bad valet, and believed that he could be a good composer; and this outweighed all money considerations with him. When Napoleon was a subaltern he was by no means a success. When Nelson was a captain he was found so unsatisfactory that he was left without a ship on half pay for several years. But Napoleon was a great general and Nelson a great admiral; and I have not the smallest doubt, nor probably have you, that if Napoleon and Nelson had been forced to choose between being respectively a drummer boy and a cabin boy and being a general and an admiral for the same money, they would have chosen the job in which their genius had full scope. They would even have accepted less money if they could have secured their proper job in no other way. Have we not already noted, in Chapter 6, how the capitalist system leaves men of extraordinary and beneficent talent, poor whilst making nonentities and greedy money hunters absurdly rich?

Let us therefore dismiss the fear that persons of exceptional ability need special inducements to exercise that ability to the utmost. Experience proves that even the most severe discouragements and punishments cannot restrain them from trying to do so. Let us return to the real social problem: that of preventing them from taking advantage of the vital necessity and relative scarcity of certain kinds of ability to extort excessive incomes.

In socialized services no difficulty arises. The civil servant, the judge, the navy captain, the field marshal, the archbishop, however extraordinary able, gets no more than any routineer of his rank and seniority. A real gentleman is not supposed to sell himself to the highest bidder: he asks his country for a sufficient provision and a dignified position in return for the best work he can do for it. A real lady can say no less. But in capitalist commerce they are both forced to be cads: that is, to hold up to ransom those to whom their services are indispensable, and become rich at their expense. The mere disciplinarian cannot extort very much because disciplinarians of one sort or another are not very scarce. But the organizer and financier is in a strong position. The owner of a big business, if his employees ask for anything more than a subsistence wage as their share of its product, can always say “Well, if you are not satisfied, take the business and work it yourself without me”. This they are unable to do. The Trade Union to which his employees belong may be tempted to take him at his word; but it soon finds itself unable to carry on, that sort of management not being its job. He says in effect, and often in so many words, “You cannot do without me; so you must work on my terms”. They reply with perfect truth “Neither can you do without us: let us see you organize without any workers to organize”. But he beats them; and the reason is not that he can do without them any more than they can do without him (or her), but that his bargain for the use of his ability is not really made with them but with the landlords whose land he is using and the capitalists who have lent him the capital for his enterprise. It is to them that he can say unanswerably “You cannot do without me”. They may say “Yes we can. We can tell the workers that unless they give up everything they can make out of our land and capital to us except what is enough to keep them alive and renew themselves from generation to generation they shall starve; because they cannot produce without land and capital, and we own all there is available of both”. “That is true” retorts the able organizer and financier; “but please to remember that without an elaborate scientific organization of their labor they can produce no more than a mob of allotment holders, or of serfs on a tenth century manor, whereas if I organize them for you industrially and financially I can multiply their product a thousandfold. Even if you have to pay me a large share of the increase due to my ability you are still far richer than if you did without me.” And to this there is no reply. In this way there arises under Capitalism not only a rent of land and a rent of capital (called interest), but a rent of ability (called profit); and just as in order to secure equality of income it becomes necessary to nationalize land and capital, so it becomes necessary to nationalize ability. We already do this in part by taxing profits. But we do it completely only when, as in the public services, we give it direct national or municipal employment.

Note that rent of ability is a form of rent of labor. Rent is a word that it is very necessary to understand, and that very few people do understand: they think it is only what they have to pay to their landlord. But technically rent is a price that arises whenever there are differences in the yield of any particular source of wealth. When there is a natural difference between the yield of one field and another, or one coal-mine and another, or between the advantages of one building site and another, people will pay more for the better than for the worse; and that extra price is rent. Similarly, when there is a difference between the business ability of one person and another, the price of that difference is rent. You cannot abolish rent, because you cannot abolish the natural difference between one cornfield and another, one coal-field and another, or one person and another; but you can nationalize it by nationalizing the land, the mines, and the labor of the country either directly or by national appropriation of their product by taxation, as to which latter method, as we have seen, there are limits. Until this is done, rent of ability in profiteering will make its possessors rich enough to make their children idle landlords and capitalists and destroy economic equality. Great astronomers, chemists, mathematicians, physicists, philosophers, explorers, discoverers, teachers, preachers, sociologists, and saints may be so poor that their wives are worn-out in a constant struggle to keep up appearances and make both ends meet; but the business organizers pile millions on millions whilst their unfortunate daughters carry about diamonds and sables to advertize their parent’s riches, and drink cocktails until they feel so bad inside that they pay large sums to surgeons to cut them open and find out what is the matter with them. If you reproach these organizers for their inordinate gains, they tell you--or they would tell you if they understood their own position and could express it intelligibly--that every penny they make is made by making money for other people as well; that before they can spend a farthing on themselves they must provide rent for the landlord, interest for the capitalist, and wages for the proletarian on a scale that would be impossible without them; and that England can support five times the number of people she could a hundred years ago because her industries are better organized and more amply financed by them and their like. This is true; but you need not be abashed by it; for which of us has not to provide rent for the landlord, interest for the capitalist, and wages for the laborer before we can spend a penny on ourselves? And why should the organizer and financier be paid more for the exercise of his particular faculty than we who have to co-operate with him by the exercise of our particular faculties before he can produce a loaf of bread or a glass of milk? It is not natural necessity but the capitalist system that enables him to snatch more than his fellow workers from the welter of competitive commerce; and while this lasts we shall have the financier’s daughter saying to the scavenger’s daughter “What would your common dirty father do without my father, who is going to be made a lord?” and the scavenger’s daughter retorting “What would your greedy robber of a father do if my father did not keep the streets clean for him?” Of course you have never heard a lady or a young person talk like that. And probably you never will. They are too polite and too thoughtless to discuss their father’s positions. Besides, they never speak to oneanother. But if they did, and anything upset their tempers, their last words before they came to blows would be just those which I have imagined. If you doubt it, read what the capitalist papers say about Trade Unionists and Socialists, and what the proletarian papers say about landlords and capitalists and bosses. Do you suppose that the charwoman, who has worked in her own necessary way all her life as hard as or harder than any financier, and in the end has nothing to leave to her daughter but her pail and scrubbing brush, really believes, or ever will believe, that Lady Billionham, inheriting a colossal income from her father the financier, has any moral right to her money? Or, if your father had discovered and worked out the theory of relativity, and was acknowledged throughout the world to have the greatest mind since Newton’s, would you consider it morally satisfactory to be obliged to jump at an offer of marriage from a Chicago pork king to enable your illustrious parent to have more than one presentable suit of clothes, knowing all the time that if it had not been for the work of men like your father in pure science not a wheel in the whole vast machinery of modern production would be turning, nor a bagman be able to travel faster than Marco Polo? Privately appropriated rent, whether of land, capital, or ability, makes bad blood; and it is of bad blood that civilizations die. That it is why it is our urgent business to see that Lord Billionham gets no more than Einstein, and neither of them more than the charwoman. You cannot equalize their abilities, but fortunately you can equalize their incomes. Billionham’s half-crown is as good as Einstein’s two-and-sixpence; and the charwoman’s thirty pennies will buy as much bread as either. Equalize them in that respect, and their sons and daughters will be intermarriageable, which will be a very good thing for them, and lead to an enormous improvement of our human stock, the quality of which is the most important thing in the world.

71. PARTY POLITICS

You are now in possession of enough knowledge of Socialism and Capitalism to enable you to understand what is going on in the world industrially and politically. I shall not advise you to discuss these matters with your friends. They would listen in distressed silence and then tell the neighborhood that you are what they imagine a Bolshevik to be.

It is possible, however, that you may be interested in current party politics yourself, even to the extent of attending party meetings, applauding party candidates, canvassing for party votes, and experiencing all the emotions of party enthusiasm, party loyalty, and party conviction that the other party and its candidate are enemies of the human race. In that case I must give you a warning.

Do not rush to the conclusion that Socialism will be established by a Socialist party and opposed by an anti-Socialist party. Within my lifetime I have seen the Conservatives, when in opposition, vehemently opposing and denouncing a measure proposed by the Liberals, and, when they had defeated the Liberals and come into power, pass that very measure themselves in a rather more advanced form. And I have seen the Liberals do the same, and this, too, not in matters of no great consequences, but in such far-reaching social changes as Free Trade, the enfranchisement of the working classes, the democratization of local government, and the buying-out of the Irish landlords. The Spanish lady in Byron’s poem, who, “swearing she would ne’er consent, consented”, was a model of consistency compared to our party governments. We have at present a Capitalist party opposed by a Labor party; but it is quite possible that all the legislative steps towards Socialism will be taken when the anti-Socialist party is in power, and pretty certain that at least half of them will. When they are proposed by a Capitalist Government they will be opposed by the Labor Opposition, and when they are proposed by a Labor Government they will be opposed by the Capitalist Opposition, because “it is the business of an Opposition to oppose”.

There is another possibility which may disappoint your expectation. The Labor Party is growing rapidly. Twenty years ago it did not exist officially in Parliament. Today it is the official Opposition. If it continues to grow at this rate the time is not very far off when it will take practically complete possession of the House of Commons. The Conservatives and Liberals left will, even in coalition, be too few to constitute an effective Opposition, much less form a Government. But beware of assuming that the result will be a unanimous House of Commons with an unopposed Labor Government carrying everything before it. Do not even assume that the Labor Party will split into two parties, one Conservative and the other Progressive. That would be the happiest of the possibilities. The danger is that it may split into half a dozen or more irreconcilable groups, making parliamentary government impossible. That is what happened in the Long Parliament in the seventeenth century, when men were just what they are now, except that they had no telephones nor airplanes. The Long Parliament was united at first by its opposition to the King. But when it cut off the King’s head, it immediately became so disunited that Cromwell, like Signor Mussolini today, had at last to suppress its dissensions by military force, and rule more despotically than ever the King had dared. When Cromwell died, it reassembled and split up again worse than ever, bringing about such a hopeless deadlock in government that there was no way out of the mess but to send for the dead King’s son and use him, under his father’s title, as the figurehead of a plutocratic oligarchy exercising all the old kingly powers and greatly extending them.

If six hundred Labor members were returned at the next General Election history might repeat itself. The Socialists, the Trade Unionists who are not Socialists, the Communists who are not Communists but only pseudo-Bolshevists, the Republicans, the Constitutional-Monarchists, the old Parliamentary hands who are pure Opportunists, and the uncompromising Idealists, to say nothing of the Churchmen and Anti-clericals (Episcopalians and Separatists), the Deists and Atheists, would come to loggerheads at once. As far as I can see, nothing could avert a repetition of the seventeenth century catastrophe, or the modern Italian and Spanish ones, except a solid Socialist majority of members who really know what Socialism means and are prepared to subordinate all their traditional political and religious differences to its establishment. Unfortunately most of the people who call themselves Socialists at present do not know what Socialism means, and attach its name to all sorts of fads and faiths and resentments and follies that have nothing to do with it. A Labor electoral triumph may end either in another Cromwell or Napoleon III or Mussolini or General Primo di Rivera if there happens to be one at hand, or in the passing of power to any party that is solid enough to keep together and vote together, even though its solidarity be the solidarity of sheepish stupidity or panic-stricken retreat. Stupidity and cowardice never lose this advantage. You must have noticed among your acquaintances that the very conventional ones have all the same old opinions, and are quite impervious to new ones, whilst the unconventional ones are all over the shop with all sorts of opinions, and disagree with and despise oneanother furiously. That is why, though all progress depends on the unconventional people who want to change things, they have so little influence politically. They pull hard; but they do not pull together; and they pull in different directions. The people whom in your moments of impatience with their dullness you call stick-in-the-muds either pull all together and in the same direction (generally backwards), or, more formidably still, stand together solid and foursquare, refusing to move in any direction. Against stupidity, said Schiller, the gods themselves fight in vain. Long before Schiller, Solomon said “Let a bear robbed of her whelps meet a man, rather than a fool in his folly”. They were both right.

Yet it is a mistake to vote for stupidity on the ground that stupid people do not quarrel among themselves. Within the limits of their conservatism they quarrel more irreconcilably, because more unreasonably, than comparatively clever people. That is why we call them pigheaded. If six hundred of them were returned at the next General Election, so that they had no longer anything to fear from Labor or Liberalism or any other section, it would be just as impossible to keep them together as if they were proletarians. In 1924 the country was stampeded by a ridiculous anti-Russian scare into returning anti-Socialists in a majority of more than two to one. The result was, not a very solid Government, but a very fragmentary one. It soon split up into reckless Diehard Coercionists, timid Compromisers, cautious Opportunists, Low Church Protestants, Anglican Catholics, Protectionists from the Midlands, Free Traders from the ports, country gentlemen, city bosses, Imperialists, Little Englanders, innocents who think that Trade Unions ought to be exterminated like nests of vipers, and practical business men who know that big business could not be carried on without them, advocates of high expenditure on the fighting forces as Empire Insurance, blind resisters of taxation as such, Inflationists, Gold Bugs, High Tories who would have Government authority and interference everywhere, Laisser-faire doctrinaires who would suffer it as nearly as possible nowhere, and Heaven knows how many others, all pulling the Cabinet different ways, paralyzing it and neutralizing oneanother, whilst the runaway car of Capitalism kept rushing them into new places and dangerous situations all the time.

During the first half of my own lifetime: that is, during the latter half of the nineteenth century, the Conservative and Liberal parties were much more equally balanced than at present. The Governments were on their good behavior because their majorities were narrow. The House of Commons was then respected and powerful. With the South African war a period of large majorities set in. Immediately the House of Commons began to fall into something very like contempt in comparison with its previous standing. The majorities were so large that every Government felt that it could do what it liked. That quaint conscience which was invented by English statesmen to keep themselves honest, and called by everybody Public Opinion, was overthrown as an idol, and the ignorance, forgetfulness, and follies of the electorate were traded on cynically until the few thinkers who read the speeches of the political leaders and could remember for longer than a week the pledges and statements they contained, were amazed and scandalized at the audacity with which the people were humbugged. The specific preparations for war with Germany were concealed, and finally, when suspicion became acute, denied; and when at last we floundered into the horror of 1914-18, which left the English Church disgraced, and the great European empires shattered into struggling Republics (the very last thing that the contrivers of the war intended), the world had lost faith in parliamentary government to such an extent that it was suspended and replaced by dictatorship in Italy, Spain, and Russia without provoking any general democratic protest beyond a weary shrug of the shoulders. The old parliamentary democrats were accomplished and endless talkers; but their unreal theory that nothing political must be done until it was understood and demanded by a majority of the people (which meant in effect that nothing political must ever be done at all) had disabled them as men of action; and when casual bodies of impatient and irresponsible proletarian men of action attempted to break up Capitalism without knowing how to do it, or appreciating the nature and necessity of government, a temper spread in which it was possible for Signor Mussolini to be made absolute managing director (Dictator or Duce) of the Italian nation as its savior from parliamentary impotence and democratic indiscipline.

Socialism, however, cannot perish in these political storms and changes. Socialists have courted Democracy, and even called Socialism Social-Democracy to proclaim that the two are inseparable. They might just as plausibly argue that the two are incompatible. Socialism is committed neither way. It faces Caesars and Soviets, Presidents and Patriarchs, British Cabinets and Italian Dictators or Popes, patrician oligarchs and plebeian demagogues, with its unshaken demonstration that they cannot have a stable and prosperous State without equality of income. They may plead that such equality is ridiculous. That will not save them from the consequences of inequality. They must equate or perish. The despot who values his head and the crowd that fears for its liberty are equally concerned. I should call Socialism not Democratic but simply Catholic if that name had not been taken in vain so often by so many Churches that nobody would understand me.